Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”): (i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan; (ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity; (iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender; (iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate; (v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property; (vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate; (vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents; (viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges; (ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120 (x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances); (xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits); (xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or (xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan Agreement (Alexanders Inc)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under pursuant to the Guaranty, any Alteration Deficiency Guaranty ) or any other guaranty provided in connection with legal representatives, successors or assigns of any of the Loanforegoing (collectively, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Gross Revenues or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents Gross Revenues and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties, in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty Documents or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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; (f) impair the enforcement of the assignment of leases and rents contained in the Mortgage and in any other Loan Documents; or (hg) 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 reasonably Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by gross negligence or willful misconduct of Borrower of or any representation, warranty, covenant or indemnification provision Borrower Party in connection with the Environmental IndemnityLoan;
(iii) any litigation or other legal proceeding related to the intentional misappropriation Debt filed by any Borrower of Party that intentionally interferes with Lender exercising any Reserve Funds disbursed rights and remedies available to Borrower, or any intentional failure to deposit rents into Lender as provided herein and in the Clearing Account other Loan Documents only to the extent a court of competent jurisdiction, in a final non-appealable decision, finds the control of Borrower, unless applicable defenses were not raised in good faith by such rents are otherwise delivered to LenderBorrower Party;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of to the Property (or any portion thereof) caused by Borrower intentional acts or intentional omissions of Borrower, or any Borrower AffiliateParty, or any intentional wrongful the removal or destruction disposal of a material any portion of the Property (including, without limitation, any personal Property) after an Event of Default (except to the extent (i) the same was replaced with Property of the same utility and of the same or damage to a material greater value or (ii) such portion of the Property was obsolete and no longer required or beneficial for the operation of the Property, in which case no replacement shall be required); provided, however, “waste” shall not include (a) any waste at the Property caused by willful misconduct a lack of sufficient cash flow at the Property or gross negligence (b) Lender’s refusal to permit such cash flow to be applied (provided, however, the foregoing clause (b) shall not apply if Lender cannot release cash flow because such cash flow is being held by Lender and Lender’s access to such amounts is restricted or constrained in any manner by applicable Legal Requirements, injunction or other court order, or as a result of Borrower any action, inaction or omission by Borrower, Guarantor or any other Borrower AffiliateParty);
(v) the commission of any criminal act misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Party of (A) any Insurance Proceeds actually received paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, (C) any Gross Revenues (including Rents, Insurance Proceeds and security deposits, advance deposits or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Defaultother deposits), the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in each case, in violation of express conditions of the Loan Documents;
(viiivi) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Lender upon a foreclosure by Lender under the Loan Documentsof such Individual Property or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)action in lieu thereof;
(xiivii) the termination seizure or forfeiture of any Individual Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by Borrower or any Borrower Parties;
(viii) the breach of any representation, warranty, covenant or indemnification provision in the Mortgage or in any other Loan Document concerning environmental laws, hazardous substances and/or asbestos and any indemnification of Lender with respect thereto in either document;
(ix) Borrower fails to obtain Lender’s prior consent to any subordinate financing secured by the Property (other than Permitted Indebtedness) or other voluntary Lien encumbering the Property (it being acknowledged that the foregoing shall not apply to Liens arising from Taxes, labor, materials or other charges that result in Liens on any portion of any of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by BorrowerProperties); and/or
(xiiix) (i) if the Ground Lease is terminated, failure by Borrowerto pay Taxes and/or charges for labor or materials, or other charges that can create Liens on any Borrower Affiliate and/or any other owner portion of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) Property (other than Lender Permitted Encumbrances or any Affiliate Lien being contested in good faith in accordance with the terms hereof); provided, however, Borrower shall not be liable to the extent (A) cash flow from the Property is insufficient to pay such Taxes or charges for labor or materials or other charges that can create Liens on any portion of Lenderthe Property or (B) sums sufficient to comply pay such Taxes have been deposited with Lender in accordance with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”)this Agreement and Lender’s access to such sums is not restricted or constrained in any manner by applicable Legal Requirements, (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have injunction or other court order, or as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Leaseany action, at law inaction or in equity)omission by Borrower, including, without limitation, Guarantor or any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Defaultother Borrower Party. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): ):
(i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(ii) Borrower or Guarantor expressly consents to a substantive consolidation with any other Person; unless such consolidation is discharged, stayed or dismissed within thirty (30) days following the occurrence of such consolidation;
(iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower colludes with or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with otherwise assists such Person, and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; ;
(viv) Borrower files an answer consenting to, or otherwise acquiescing in, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; ;
(v) Borrower or any Affiliate, officer, director or representative which controls Borrower consents in writing to, or acquiesces in, or joins in, an application for the appointment of a custodian, receiver, trustee or examiner for Borrower or any portion of the Property;
(vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or ;
(vii) there is a voluntary Borrower fails to obtain Lender’s prior consent to any Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either casecase as required by the Mortgage or this Agreement other than a Permitted Transfer; provided, in violation however, that there shall be no liability under this clause (vii) for a Transfer that would be a Permitted Transfer but for Borrower’s failure to provide (A) notice or copies of the Loan Documentsdocumentation related to such Transfer to Lender or (B) Lender the opportunity to review any documentation in connection with such Transfer; or
(viii) Borrower fails to comply with any provision of Section 4.4 hereof and such failure causes a substantive consolidation of Borrower with any other Person in connection with any federal or state bankruptcy proceeding unless such consolidation was involuntary and not consented to by Borrower or Guarantor and is discharged, stayed or dismissed within thirty (30) days following the occurrence of such consolidation.
Appears in 1 contract
Exculpation. Subject Notwithstanding any other provision in the Loan Documents to the contrary, but subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or Operating Lessee to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Operating Lessee, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest and rights under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower and Operating Lessee only to the extent of Borrower’s and Operating Lessee’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, Lender shall not sus▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower or Operating Lessee in any such action or proceeding under or by reason of or under or in connection with any Loan Document. In addition, for the Noteavoidance of doubt, this Agreementin no event shall the Debt or any other liabilities or obligations of Borrower or Operating Lessee be recourse to the Borrower Representative or any Person that directly or indirectly owns any equity interests or otherwise controls any Borrower Representative, or any partner, member, director officer or representative thereof (other than, in each case, the Mortgage or the other Loan DocumentsGuarantor). The provisions of this Section 10.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of Loan Document, except to the Loan Documentsextent Lender has expressly waived in this Section 10.1 the right to s▇▇ Borrower and Operating Lessee for a money judgment; (bii) impair the right of Lender to name Borrower or Operating Lessee as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty Documents or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder, except to the extent Lender has expressly waived in this Section 10.1 the right to s▇▇ Borrower and Operating Lessee for a money judgment; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (gvi) 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 fully realize the security granted by the Security Instrument or to exercise its remedies against the any Individual Property; or (hvii) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
): (ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower Borrower, Operating Lessee, Guarantor, any Cindat Entity or any Borrower Affiliate of the foregoing in connection with the Loan;
; (iib) the gross negligence or willful misconduct of Borrower or Operating Lessee; (c) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the any Loan Document concerning Environmental Indemnity;
Laws or Hazardous Substances, including Sections 4.19 and 5.7, and clauses (iiiviii) the through (xi) of Section 5.18; (d) intentional misappropriation by Borrower physical waste of any Reserve Funds disbursed to Borrower, Individual Property resulting from the acts or any intentional failure to deposit rents into the Clearing Account to the extent in the control omissions of Borrower, unless such rents are otherwise delivered to Lender;
(iv) Operating Lessee, Guarantor, any intentional (other than, in each case, as part of Cindat Entity or to facilitate any alteration that is permitted hereunder) material physical waste Affiliate of the Property by Borrower foregoing or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower removal or any Borrower Affiliate disposal of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of any Individual Property without the Propertyconcurrent replacement thereof with property of at least equivalent utility and value, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any unless such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the such Individual Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.is obsolete 100
Appears in 1 contract
Exculpation. Subject (a) Notwithstanding anything to the contrary herein or in any of the other Loan Documents but subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, manager, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor subject to the terms of the Guaranty) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsseparate written indemnity or guaranty (including, without limitation, the Guaranty or any other guaranty Guaranty) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender's right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally in such separate written indemnity or guaranty and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the enforcement of the Environmental Indemnityintentionally omitted; (g7) constitute a prohibition against Lender to seek seeking a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument (but not to impose personal liability upon Borrower contrary to this Section 13.1) or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h) 8) 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 reasonably Losses incurred by Lender (including out-of-pocket attorneys’ ' fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) directly arising out of or in connection with caused by the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, fraud or willful misconduct or material intentional misrepresentation by Borrower Borrower, any SPE Component Entity, any of the Exculpated Parties or any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of Borrower, any representationSPE Component Entity, warranty, covenant any of the Exculpated Parties or indemnification provision in the Environmental IndemnityGuarantor;
(iii) material physical waste to the Property (or any portion thereof) caused by the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, acts or any intentional failure to deposit rents into the Clearing Account to the extent in the control omissions of Borrower, unless such rents are otherwise delivered to Lenderany SPE Component Entity, any of the Exculpated Parties or Guarantor;
(iv) the removal or disposal of any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste portion of the Property by Borrower Borrower, any SPE Component Entity, any of the Exculpated Parties or any Borrower Affiliate, Guarantor after an Event of Default unless replaced with property of similar utility and of equal or any intentional wrongful removal or destruction of a material better value than the portion of the Property so removed or damage to a material portion of the Property caused disposed of, as determined by willful misconduct or gross negligence of Borrower or any Borrower AffiliateLender in its reasonable judgment;
(v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any Casualty to the Property (or any Borrower Affiliate portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually Property, which such proceeds or Award are received by Borrower and not applied as required hereunder or any Borrower Affiliateunder the other Loan Documents;
(viivi) after the occurrence and misapplication, misappropriation or conversion by Borrower of any Rents during the continuance of an Event of Default, the intentional misappropriation which are received by Borrower and not applied by Borrower to the payment of either (i) normal and necessary Operating Expenses or (ii) the Debt;
(vii) failure by Borrower to pay, or cause to be paid, prior to delinquency any Taxes or Other Charges if non-payment of the same would create liens senior to the lien of the Security Instrument on all or any Borrower Affiliate of any Rents in violation portion of the Loan DocumentsProperty, but only to the extent the Property generates sufficient revenue for the immediately preceding twelve (12) month period (or, if applicable, such shorter period that Borrower has owned each the Property) to pay the same;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by of Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property to Lender, upon a foreclosure by Lender under of the Loan DocumentsProperty (or any portion thereof) or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document action in lieu thereof;
(ix) the material breach of any representation, warranty, covenant or Borrower did not have indemnification provision in the legal rightEnvironmental Indemnity, because this Agreement or in the Security Instrument concerning environmental laws, hazardous substances and asbestos and any indemnification of a bankruptcyLender with respect thereto in either document;
(x) Borrower's failure to comply with the indemnification obligations in Sections 11.2 and 12.3 hereof;
(xi) the breach of any material representation, receivership warranty or similar judicial proceeding, to direct disbursement of such deposits)covenant contained in Article 5 hereof;
(xii) the termination seizure or forfeiture of the Condominium Property, or the removal of any Unit portion thereof, or Borrower's interest therein, resulting from the Condominium, in each case, in violation criminal wrongdoing by Borrower or Guarantor;
(xiii) Borrower's failure to cause any tenant of the terms Property to obtain a certificate of this Agreement, which was voted for or consented to or approved by Borrower (or occupancy in accordance with the members requirements of the Condominium Board appointed by applicable Lease;
(xiv) Borrower)'s failure to cause the cure of the Autozone Violation;
(xv) Borrower's failure to maintain flood insurance for the Property with a deductible of not more than $25,000; provided, however, Borrower's liability under this clause (xv) shall be limited to the amount of the deductible under the flood insurance policy; and/or
(xiiixvi) Borrower's failure to maintain the Environmental Insurance Policy.
(ib) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or SPE Component Entity files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (iiiii) an Affiliate, officer, director, or representative which Controls, directly or indirectly, Borrower files an application for the appointment of a receiverfiles, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) joins in the filing of of, an involuntary petition against Borrower or any SPE Component Entity under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by or any SPE Component Entity from any Person; (viii) Borrower or any SPE Component Entity files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency lawcauses to be solicited petitioning creditors for any involuntary petition against it; (viiv) any Affiliate, officer, director, or representative which Controls Borrower or any SPE Component Entity consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any SPE Component Entity or any portion of the Property (other than a receiver requested by Lender in connection with enforcement of its rights under the Loan Documents); (v) Borrower or any SPE Component Entity makes an assignment for the benefit of creditors creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code ; (vi) [Intentionally omitted]; (vii) Borrower or any other Federal SPE Component Entity (or any Restricted Party) contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency law by a Person other than Lender proceeding involving the Guarantor or its Affiliates; (except for viii) Borrower (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer Restricted Party) accepts from any Guarantor or Guarantor solicits or provides any debtor-in-possession financing to Borrower in the event Borrower (or any Restricted Party) is the subject of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) a bankruptcy or that Borrower cannot refinance the Loan on the Maturity Date)insolvency proceeding; or (viiix) there any covenant contained in Article 6 hereof is a voluntary Transfer of all violated or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsbreached.
Appears in 1 contract
Sources: Loan Agreement (Cole Credit Property Trust Iv, Inc.)
Exculpation. Subject to the qualifications below, Lender Agent shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability of more than $10,000,000 of outstanding Obligations shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant rights to the Loan DocumentsCollateral securing the Loan; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding in excess of $10,000,000 shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral Collateral given to LenderAgent, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, Agent shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other any Loan DocumentsDocument. The provisions of this Section 10.1 13.13 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan DocumentsDocument; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan Documents or any of the rights and remedies of Lender Agent thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (gc) 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 fully realize the Propertysecurity granted by the Collateral; or (hd) 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 actual, out-of-pocket loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, any willful misconduct or material intentional misrepresentation or gross negligence by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach any acts of fraud, misappropriation of funds or theft by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower;
(iii) the any unauthorized, consensual and intentional misappropriation by Borrower transfer, assignment, sale or encumbrance of any Reserve Funds disbursed to Borrower, Collateral under the Loan caused by the acts or any intentional failure to deposit rents into the Clearing Account to the extent in the control omissions of Borrower, unless such rents are otherwise delivered to Lenderother than as permitted under the Loan Documents;
(iv) any intentional (other thanmaterial damage, in each case, as part of destruction or waste to facilitate any alteration that is permitted hereunder) material physical waste of Collateral or the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property Resort caused by willful misconduct the acts or gross negligence omissions of Borrower Borrower, its agents or any Borrower Affiliate;employees;
(v) the commission removal or disposal by, or at the direction of Borrower, of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture portion of the PropertyCollateral, other than as permitted under the Loan Documents;
(vi) the intentional misappropriation any failure by Borrower to pay taxes, assessments, or other charges affecting the Resort or any Collateral as may be required by Borrower Affiliate pursuant to the Loan Agreement;
(vii) any failure by Borrower to maintain insurance as required by Borrower pursuant to the Loan Agreement; and/or
(viii) the misapplication or conversion by Borrower of (A) any Insurance Proceeds actually insurance proceeds received by Borrower which are paid by reason of any loss, damage or any Borrower Affiliate destruction to the Collateral, or (B) any Awards awards or other amounts received by Borrower in connection with the Condemnation condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) Resort in violation of the Loan Documents, or Borrower’s failure to pay any charges in each of the foregoing clauses (including, without limitation, charges for labor A) and materials(B) that create Liens on the Property, regardless of whether arising by operation of law, only to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes proceeds received or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed misapplied by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Amendment or any of the other Loan Documents, (A) Lender Agent shall not be deemed to have waived any right which Lender Agent may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) Agent’s agreement not to pursue personal liability of Borrower as set forth above SHALL BECOME NULL AND VOID and shall be of no further force and effect, and the Obligations shall be fully recourse to Borrower in the event that any one or more of the following occur (each, a “Springing Recourse Event”): occurs:
(i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect under any Debtor Relief Law or consents to Borrower under the Bankruptcy Code any such filing, or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application commences a proceeding for the appointment of a receiver, trustee trustee, liquidator or examiner for conservator of Borrower or any portion of the Propertywhole or any substantial part of the Collateral or the Resort or the whole or any substantial part of Borrower’s assets;
(ii) an officer, except at the request of director, representative or with the consent of LenderPerson which controls, (iv) directly or indirectly, Borrower, files, or joins in the filing of of, an involuntary petition against Borrower under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law by any other Person in which Borrower law, or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by from any Person; ;
(viii) Borrower files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it Borrower, by any other Person under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person;
(viiv) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency case or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition proceeding under the Bankruptcy Code or in any other Federal or state bankruptcy or insolvency law by judicial proceeding, Borrower makes application to a Person other than Lender (except for court to (A) declare that all or any admissions that portion of the lien of Agent or the Obligations of Borrower believes to pay principal and interest as specified in good faith are truthful when made and the Loan Documents be rescinded, set aside, or determined to be void or unenforceable, or (B) modify any such admission to Lender or of the terms of any servicer of the Loan Documents without Agent’s consent;
(v) the voluntary dissolution or liquidation of the Borrower;
(vi) Borrower or any of its Affiliates asserts any claim, defense or offset against Agent that Borrower canhas waived or agreed not pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsto assert.
Appears in 1 contract
Sources: Loan and Security Agreement (Bluegreen Vacations Corp)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the "Borrower Parties") or any other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Borrower Parties or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Person, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to this Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Lender to name any of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower Leases and Rents executed 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 Propertyconnection herewith; or (hvi) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower (but not against any members of Borrower (other than Guarantor to the extent provided in the Non-Recourse Guaranty) or their direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, ; expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ ' fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Guarantor in connection with the Loan;
(iib) intentional physical waste of the Property (including, but not limited to, waste due to gross negligence) by Borrower or any affiliate thereof, provided, however, such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by Borrower or any affiliate thereof,
(c) the material breach by Borrower of any representation, warranty, covenant or indemnification provision in the that certain Environmental Indemnityand Hazardous Substance Indemnification Agreement of even date herewith given by Borrower to Lender or in this Agreement concerning Environmental Laws, Hazardous Substances and Asbestos;
(iiid) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, removal or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property disposal by Borrower or any Borrower Affiliate, or affiliate thereof of any intentional wrongful removal or destruction of a material portion of the Property or damage to a material after an Event of Default has occurred and while it is continuing, unless such portion of the Property caused is replaced by willful misconduct an item of equal or gross negligence of Borrower or any Borrower Affiliategreater value as determined by Lender in its reasonable discretion;
(ve) the commission of any criminal act misapplication or conversion by Borrower or any Borrower Affiliate which results in the forfeiture affiliate thereof of
(i) any insurance proceeds paid by reason of any loss, damage or destruction to the Property;,
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Aii) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property, (iii) any Rents following an Event of Default or (iv) any Rents paid more than one month in advance;
(f) failure to pay charges for labor or materials or taxes or other charges that can create liens superior to the lien of the Mortgage on any portion of the Property actually received unless such taxes or other charges are being contested in accordance herewith or such taxes or charges have been delivered to Lender in accordance with Section 3.3 or Borrower has complied with Section 5.2; and
(g) any security deposits collected by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected affiliate thereof with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because terms and conditions of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination any of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented Leases prior to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Defaultthe Event of Default that gave rise to such foreclosure or action in lieu thereof. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents,
(Ai) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (Bii) the Obligations Debt shall be become fully recourse to Borrower (but not its members (other than Guarantor solely to the extent provided in the Non-Recourse Guaranty) or other direct or indirect constituent members or partners or any other Person) in the event that any that: (A) the first full Monthly Payment Amount (as defined in the Note) under the Note is not paid when due; (B) other than in connection with a default under subsection (x) of the following occur (each, a “Springing Recourse Event”): (i) a breach definition of the covenants Special Purpose Bankruptcy Remote Entity set forth in Schedule V hereof 5 hereof, Borrower fails to maintain its status as a Special Purpose Bankruptcy Remote Entity in accordance with the provisions of this Agreement and such failure results in the substantive consolidation of Borrower with another Person; (C) except as otherwise permitted pursuant to the Loan Documents, Borrower fails to obtain Lender's prior written consent to any subordinate financing or other voluntary lien encumbering the Property; (D) except as otherwise permitted pursuant to the Loan Documents, Borrower fails to obtain Lender's prior written consent to any assignment, transfer, or conveyance of the Property or any interest therein as and to the extent required by this Agreement or the Mortgage; or (E)
(1) a receiver (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported receiver appointed by Lender); (ii) , liquidator or trustee of Borrower or Guarantor shall be appointed which is not dismissed within ninety (90) days, or (2) if any Borrower Affiliatepetition for bankruptcy, officerreorganization or arrangement pursuant to federal bankruptcy law, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal similar federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for shall be filed by Borrower or any portion of the PropertyGuarantor, except at the request of or with the consent of Lender, (iv3) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which if Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower Guarantor files an answer consenting to, or otherwise joining in, any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law filed against it by any other Person under the Bankruptcy Code Person, or is found pursuant to a final, unappealable order of a court of competent jurisdiction to have solicited or caused to be solicited creditors to file any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any other Federal similar federal or state bankruptcy law against Borrower or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admitsGuarantor, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii4) there is if Borrower or Guarantor are found, pursuant to a voluntary Transfer final unappealable order of all a court of competent jurisdiction, to have been in collusion with creditors that initiate a bankruptcy action or any material portion of the Property proceeding against Borrower or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsGuarantor.
Appears in 1 contract
Exculpation. Subject Effective as of the Effective Date, the Exculpated Parties shall neither have nor incur any liability to any Person or Entity for any claims or Causes of Action or for any act taken or omitted to be taken on or after the qualifications belowPetition Date and prior to or on the Effective Date in connection with, Lender shall not enforce or related to, the liability administration of the Chapter 11 Cases, commencement of the Chapter 11 Cases, pursuit of Confirmation and obligation consummation of Borrower to perform and observe this Plan, making Distributions, the Obligations contained in Disclosure Statement, the NoteSale Process, the 363 Sale Order, or the solicitation of votes for, or Confirmation of, this Agreement, Plan; the Mortgage occurrence of the Effective Date; the administration of this Plan or the other Loan Documents by any action property to be distributed under this Plan; the issuance of securities under or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representativesin connection with this Plan; the purchase, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agentssale, or Affiliates rescission of the purchase or sale of any asset or security of the Debtors; or the transactions or documentation in furtherance of any of the foregoing (collectivelyforegoing, including but specifically excluding Guarantor not limited to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty RSA; or any other guaranty provided postpetition act taken or omitted to be taken in connection with or in contemplation of the Loanrestructuring of the Debtors, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance approval of the Disclosure Statement or any other appropriate action Confirmation or proceeding to enable Lender to enforce and realize upon its interest under the Note, consummation of this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan DocumentsPlan; provided, however, thatthat the foregoing provisions of this exculpation shall not operate to waive or release: (i) any Causes of Action arising from willful misconduct, except actual fraud, or gross negligence of such applicable Exculpated Party as specifically provided herein, any judgment in any such action determined by Final Order of the Bankruptcy Court or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given court of competent jurisdiction; and/or (ii) the rights of any Person or Entity to Lenderenforce this Plan and the contracts, instruments, releases, indentures, and Lender, by accepting the Note, this Agreement, the Mortgage other agreements and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or documents delivered under or in connection with the Note, this Agreement, the Mortgage Plan or the other Loan Documents. The provisions of assumed pursuant to this Section 10.1 shall not, however, (a) constitute a waiver, release Plan or impairment of any obligation evidenced or secured by any Final Order of the Loan DocumentsBankruptcy Court; (b) impair provided, further, that each Exculpated Party shall be entitled to rely upon the right advice of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documentscounsel concerning its respective duties pursuant to, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with with, the following 119 (all such liability and obligation of Borrower for any above referenced documents, actions or all inactions. The foregoing exculpation shall be effective as of the following being referred Effective Date without further notice to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actsor order of the Bankruptcy Court, willful misconduct act or material intentional misrepresentation by Borrower action under applicable law, regulation, order, or any Borrower Affiliate in connection with rule or the Loan;
(ii) the breach by Borrower vote, consent, authorization or approval of any representationPerson. Notwithstanding the foregoing, warrantynothing in this Article IX.D shall or shall be deemed to prohibit the Debtors or the Reorganized Debtors from asserting and enforcing any claims, covenant obligations, suits, judgments, demands, debts, rights, Causes of Action or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower liabilities they may have against any Person that is based upon an alleged breach of any Reserve Funds disbursed to Borrower, a confidentiality or any intentional failure to deposit rents into the Clearing Account non-compete obligation owed to the extent in Debtors or the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other thanReorganized Debtors, in each casecase unless otherwise expressly provided for in this Plan. The Exculpation will be in addition to, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliateand not in limitation of, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower andreleases, during a Trigger Periodindemnities, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or exculpations, and any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any rules protecting such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsExculpated Parties from liability.
Appears in 1 contract
Sources: Restructuring Support Agreement (Starry Group Holdings, Inc.)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any direct or indirect principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperties, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not sus▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgageany Security Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in each Security Instrument; (f6) impair the enforcement of the Environmental Indemnity[intentionally omitted]; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instruments or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperties; or (h) 8) 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 reasonably Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or intentional material intentional misrepresentation by Borrower Borrower, any SPE Component Entity, Guarantor or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach willful misconduct of Borrower, any SPE Component Entity, Guarantor or any Borrower Party or the commission of a criminal act by Borrower, any SPE Component Entity, Guarantor or any Borrower Party which results in any seizure or forfeiture of the Property, or any representationportion thereof, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower’s interest therein;
(iii) any intentional material physical waste at any Individual Property committed by Borrower, any SPE Component Entity, Guarantor or any Borrower Party (including, without limitation, any arson of the intentional misappropriation by Borrower Property) and/or the removal or disposal of any Reserve Funds disbursed to portion of the Property after an Event of Default by Borrower, any SPE Component Entity, Guarantor or any intentional Borrower Party (except for personal property that is worn out or obsolete or that is replaced with personal property that is of equal or greater value and utility); provided, however, there shall be no liability under this clause (iii) for failure to deposit rents into maintain the Clearing Account Properties (collectively) unless there is sufficient revenue from the Property to pay the cost of such maintenance prior to the extent in payment of any other costs or expenses other than Taxes, Other Charges, amounts payable under the control of BorrowerGround Lease, unless such rents are otherwise delivered to LenderInsurance Premiums and amounts that can create liens on the Property(ies);
(iv) any the misappropriation, conversion or intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property misapplication by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or destruction to any Borrower Affiliate or Individual Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of any Individual Property, (C) any Rents or (D) any Tenant security deposits or Rents collected more than thirty (30) days in advance;
(v) failure to pay any Taxes or Other Charges, charges for labor or materials or any other charges that create liens on any portion of the Property actually received to the extent that the revenue from the Properties (collectively) is sufficient to pay such amounts prior to the payment of any other costs or expenses other than amounts payable under the Ground Lease (other than (x) amounts deposited with Lender as Tax Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such Taxes or Other Charges owed and Lender’s access to such sums is not restricted or constrained in any manner or (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents);
(vi) failure to maintain insurance as required by Borrower this Agreement to the extent that the revenue from the Properties (collectively) is sufficient to pay the Insurance Premiums relating thereto prior to the payment of any other costs or expenses other than Taxes and Other Charges and amounts payable under the Ground Lease (other than the failure to pay amounts deposited with Lender as Insurance Reserve Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of such Insurance Premiums and Lender’s access to such sums is not restricted or constrained in any Borrower Affiliatemanner);
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents[intentionally omitted];
(viii) all [intentionally omitted];
(ix) the breach of any representation, warranty or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower covenant contained in Article 5 hereof (i.e., not arising by operation of lawexcept there shall be no liability under this clause (ix) in violation of the Loan Documents, or due to Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on trade payables within the Property, regardless of whether arising by operation of law, timeframes as required thereunder solely to the extent cash flow from that such failure is due to (1) the Property is Properties (collectively) not generating revenue sufficient to make pay such payments andamounts prior to the payment of any other costs or expenses other than Taxes and Other Charges, during amounts payable under the Ground Leases, insurance premiums and amounts that could result in a Trigger Period, funds are made available to Borrower lien being filed against any of the Properties or (2) amounts deposited with Lender for the payment of such charges;
(ix) trade payables where Lender elects not to apply such funds toward payment of such trade payables owed and Lender’s access to such sums is not restricted or constrained in any manner); provided that the foregoing shall not be deemed to limit Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120liability under clause (B)(i) below;
(x) a Prohibited Transfer, provided that the voluntary incurrence by Borrower foregoing shall not be deemed to limit Borrower’s liability under clause (B)(ii) of any Indebtedness for borrowed money in violation this Section 13.1; and provided, further, there shall be no liability under this subsection (x) solely as a result of the provisions failure of Borrower to provide a required notice to Lender of a transfer provided that the related transfer would otherwise have been a Permitted Transfer had such notice been given as required by this Agreement or any other Loan Document (other than Permitted Encumbrances)Agreement;
(xi) the failure by Borrower to deliver to Lender any security depositsZoning, advance deposits Use or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)Occupancy Nonconformance;
(xii) any litigation or other legal proceeding related to the termination Debt filed by Borrower, any SPE Component Entity, Guarantor or any Borrower Party with the intent to (and which actually does) delay, impede, obstruct, hinder, enjoin or otherwise interfere with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the Condominium other Loan Documents, except for any defenses raised in good faith by the Borrower, any SPE Component Entity, Guarantor or any Borrower Party;
(xiii) failure to pay rent, additional rent or any other amounts due and payable under any Ground Lease to the removal extent that the revenue from the Properties (collectively) is sufficient to pay such amounts in the priority required by Section 4.27(a)(i) (except in the event that amounts sufficient to pay Ground Rent are deposited with Lender as Ground Rent Reserve Funds and Lender elects not to apply such funds toward payment of such Ground Rent and Lender’s access to such sums is not restricted or constrained in any manner);
(xiv) failure to pay any amounts due under the Bond Documents to the extent that the revenue from the Properties (collectively) is sufficient to pay such amounts prior to the payment of any Unit from other costs or expenses other than amounts payable under the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower)Ground Lease and Taxes and Insurance Premiums; and/or
(xiiixv) (i) the failure by Borrowerany amendment, modification or supplement of any Borrower Affiliate and/or Ground Lease or any other owner of the Upper Option Space and/or Bond Documents without the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate prior written consent of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) Borrower fails to maintain its status as a breach of the covenants Single Purpose Entity or comply with any representation, warranty or covenant set forth in Schedule V Article 5 hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or and such failure is cited as a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results factor in a substantive consolidation of the assets and liabilities of Borrower or any SPE Component Entity with any other Person in connection with a any case, proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower action under the Bankruptcy Code or any other Federal Creditors Rights Laws; (ii) a Prohibited Transfer resulting in a transfer of any Borrower’s fee or state bankruptcy leasehold interest, as applicable, in any Individual Property, or insolvency lawa change in Control of Borrower or the day-to-day operations of any Individual Property, or results in the Guarantor no longer being a publicly traded entity with its shares traded on the New York Stock Exchange or another nationally recognized stock exchange; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary SPE Component Entity files a voluntary petition against Borrower under the Bankruptcy Code or any other Federal Creditors Rights Laws; (iv) an Affiliate, officer, director, or state bankruptcy representative which Controls, directly or insolvency law by indirectly, Borrower or any SPE Component Entity files, or joins in the filing of, an involuntary petition against Borrower or any SPE Component Entity under the Bankruptcy Code or any other Person in which Borrower Creditors Rights Laws, or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by or any SPE Component Entity from any Person; (v) Borrower or any SPE Component Entity files an answer consenting to, to or joining in, in or failing to oppose (unless there is no good faith basis to oppose such petition) any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency lawcauses to be solicited petitioning creditors for any involuntary petition from any Person; (vi) any Affiliate, officer, director, or representative which Controls Borrower or any SPE Component Entity consents to or joins in or fails to oppose an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, any SPE Component Entity or any portion of the Property, except if any of the foregoing are appointed at Lender’s request; (vii) Borrower or any SPE Component Entity makes an assignment for the benefit of creditors or admits, in writing or admits in any legal proceeding, proceeding its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code ; (viii) Borrower or any other Federal SPE Component Entity (or any Restricted Party) contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency law by a Person other than Lender proceeding involving the Guarantor or its Affiliates; (except ix) the Ground Lease is terminated, cancelled, rejected in bankruptcy or otherwise ceases to exist for any reason; provided, that, (A) there shall be no liability under this clause (ix) unless there is sufficient revenue from the Properties (collectively) to pay amounts necessary to prevent termination or cancellation prior to the payment of any admissions that Borrower believes other Operating Expenses or if during an Cash Trap Event Period Lender has collected sufficient funds for the payment of such amount, Lender elects not to apply such funds toward payment of such Ground Rent and Lender’s access to such sums is not restricted or constrained in good faith are truthful when made any manner, and (B) any such admission Borrower’s liability pursuant to Lender or any servicer of this clause (ix) shall not exceed Allocated Loan Amount for the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date)applicable Individual Property; or (viix) a Bond Lease is terminated, cancelled, or rejected in bankruptcy or otherwise ceases to exist for any reason, including, without limitation, Borrower’s failure to timely exercise its purchase option (and complete the purchase thereof) for the fee interest of the Home Depot Property or the sub-sub-leasehold interest in the Express Scripts Property, as applicable; provided, that (A) there shall be no liability under this clause (x) unless there is a voluntary Transfer sufficient revenue from the Properties (collectively) to pay amounts necessary to prevent such termination or cancellation or to exercise such purchase option or if during an Cash Trap Event Period Lender has collected sufficient funds for the purpose of all payment of such amounts, Lender elects not to apply such funds toward payment of such amounts and Lender’s access to such sums is not restricted or constrained in any material portion of manner, and (B), Borrower’s liability pursuant to this clause (x) shall not exceed the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of Allocated Loan Amount for the Loan Documents.applicable Individual Property;
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained Except as otherwise specifically provided in the NotePlan (including Article III.B.19, this III.B.20, and III.B.22), no Exculpated Party shall have or incur liability for, and each Exculpated Party is hereby released and exculpated from, any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, Filing, or termination of the Terminated Restructuring Support Agreement and related prepetition transactions, the Disclosure Statement, the Plan, the Plan Support Agreement, the Mortgage New EFH/EFIH Plan Support Agreement, the EFH/EFIH Committee Settlement, the Original Confirmed Plan, the Transaction Agreements, or any Restructuring Transaction, contract, instrument, release or other agreement or document (including providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the other Loan Documents reliance by any action Exculpated Party on the Plan or proceeding wherein a money judgment the Confirmation Order in lieu of such legal opinion) created or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided entered into in connection with the LoanDisclosure Statement, the “Exculpated Parties”)Plan, except that Lender may bring a foreclosure actionthe Original Confirmed Plan, an action for specific performance the Plan Support Agreement, the New EFH/EFIH Plan Support Agreement, the EFH/EFIH Committee Settlement, the Transaction Agreements, or the DIP Facilities, the Filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance of Securities pursuant to the Plan, or the distribution of property under the Plan, the Transaction Agreements, or any other appropriate action related agreement, except for claims related to any act or proceeding omission that is determined in a final order to enable Lender to enforce and realize upon its interest under the Notehave constituted actual fraud, this Agreement, the Mortgage and the other Loan Documentswillful misconduct, or gross negligence, but in all respects such Entities shall be entitled to reasonably rely upon the Property, the Rents or any other collateral given advice of counsel with respect to Lender their duties and responsibilities pursuant to the Loan Documents; providedPlan. The Exculpated Parties have, however, that, except as specifically provided herein, any judgment in any such action or proceeding and upon completion of the Plan shall be enforceable against Borrower only deemed to have, participated in good faith and in compliance with the applicable laws with regard to the extent solicitation of, and distribution of, consideration pursuant to the Plan and, therefore, are not, and on account of Borrower’s interest such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan. For the avoidance of doubt, notwithstanding anything to the contrary in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreementforegoing, the Mortgage and exculpation set forth above does not exculpate any (i) claims or Causes of Action by the other Loan DocumentsHolders of TCEH First Lien Claims, shall not su▇ ▇orthe TCEH First Lien Agent, seek or demand any deficiency judgment the TCEH First Lien Notes Trustee against any Exculpated Party in any such action one or proceeding under more Holders of TCEH First Lien Claims, the TCEH First Lien Agent, or by reason of or under the TCEH First Lien Notes Trustee arising from or in connection with the NoteTCEH First Lien Creditor Allocation Disputes, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach claims or Causes of Action asserted by Borrower any Holder of any representation, warranty, covenant Allowed Class C3 Claims against one or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower more Holders of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document Allowed Class C3 Claims (other than Permitted Encumbrances);
(xithe TCEH First Lien Agent, except in the TCEH First Lien Agent’s capacity as a nominal defendant to declaratory judgment claims in respect of which no monetary recovery is sought) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected solely with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsTCEH First Lien Creditor Deposit L/C Collateral Allocation Dispute.
Appears in 1 contract
Sources: Merger Agreement (Energy Future Intermediate Holding CO LLC)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower, any other Borrower Party, or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any Affiliate of other Borrower Party or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the Property, the Rents Collateral (or any portion thereof), or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents Collateral and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgagePledge Agreement; (c3) affect the validity or enforceability of any of indemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Loan DocumentsGuaranty, the Payment Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, L▇▇▇▇▇’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the rights of L▇▇▇▇▇ to (A) obtain the appointment of a receiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (5) impair the enforcement of the Pledge Agreement or any other Loan Documents; (6) impair the right of Lender to obtain the appointment enforce Section 4.12(e) of a receiverthis Agreement; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Pledge Agreement or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperty (or any portion thereof) and/or the Collateral (or any portion thereof); or (h) 8) 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 reasonably Loss actually incurred by Lender L▇▇▇▇▇ (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or intentional material intentional misrepresentation by Borrower B▇▇▇▇▇▇▇, Mortgage Borrower, any SPE Component Entity, any Mortgage SPE Component Entity, Sponsor, any Affiliated Manager, Guarantor or any Borrower Affiliate director, officer, beneficiary, shareholder, partner, member, employee or agent acting on behalf of any of the foregoing (each, a “Recourse Party”) in connection with the Loan;
(ii) the breach by Borrower willful misconduct of any representation, warranty, covenant or indemnification provision Recourse Party in connection with the Environmental IndemnityLoan;
(iii) the intentional misappropriation by Borrower breach of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent indemnification provision in the control Loan Documents or the Mortgage Loan Documents concerning environmental laws, hazardous substances and asbestos and any indemnification of Borrower, unless such rents are otherwise delivered to LenderLender with respect thereto;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or to any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct the intentional acts of any Recourse Party, but only to the extent there is sufficient cash flow from the Properties to prevent such physical waste and such cash flow is made available by (x) Mortgage Administrative Agent for the purpose of preventing such physical waste from the applicable Mortgage Loan Reserve Accounts after all conditions to such release had been met to the extent sums sufficient to pay or gross negligence perform such liability have been deposited with Mortgage Administrative Agent in accordance with the terms of Borrower the Mortgage Loan Agreement or any Borrower Affiliate(y) Lender for the purpose of preventing such physical waste from Accounts (if any) after all conditions to such release had been met to the extent sums sufficient to pay or perform such liability have been deposited with Lender in accordance with the terms of this Agreement;
(v) the commission removal of any criminal act by Borrower or any Borrower Affiliate which results property in contravention of the Loan Documents during the continuance of an Event of Default other than in the forfeiture ordinary course of the Propertybusiness;
(vi) the intentional misappropriation or conversion of any of the following by Borrower or any Borrower Affiliate a Recourse Party in contravention of the Loan Documents: (A) any Insurance Proceeds actually insurance proceeds received by Borrower or by reason of any Borrower Affiliate or Casualty, (B) any Awards or other amounts received by Borrower from a governmental authority in connection with the a Condemnation of all or a portion of the Property actually Property, (C) any revenues generated by the Properties, (E) any proceeds received by Mortgage Borrower or Borrower under any Borrower Affiliateowner’s title insurance policy, (F) any distributions or other payments made in violation of this Agreement, or (G) Net Liquidation Proceeds After Debt Service;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security depositsSecurity Deposits, advance deposits or any other deposits collected with respect to the any Property which are not delivered to Lender upon a foreclosure by Lender under the Loan Documentsof such Property or action in lieu thereof, unless previously applied (except to the extent that any such deposits Security Deposits were delivered to Mortgage Administrative Agent in accordance with the Mortgage Loan Agreement and/or applied in accordance with the terms and conditions of any of the applicable lease Lease;
(viii) any litigation or other governing document legal proceeding related to the Loan filed by a Recourse Party with the effect of delaying, opposing, impeding, obstructing, hindering, enjoining or otherwise interfering with the efforts of L▇▇▇▇▇ to exercise any rights and remedies available to Lender during the continuance of an Event of Default;
(ix) Borrower fails to obtain L▇▇▇▇▇’s prior written consent to any additional indebtedness or voluntary lien encumbering any Property, the Collateral and not permitted by the Loan Documents;
(x) Intentionally omitted;
(xi) any voluntary termination, or any voluntary, material modification of any Ground Lease by Mortgage Borrower or Borrower did without L▇▇▇▇▇’s prior written consent other than as expressly permitted under this Agreement; provided, that the liability with respect to this Section 13.1(a)(xi) shall not have exceed the legal right, because Allocated Loan Amount of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)the applicable Ground Leased Property;
(xii) the (A) any voluntary termination of any PILOT Lease and/or PILOT Document or transfer or surrender of any PILOT Lease and/or PILOT Document (including any PILOT Bond) by Mortgage Borrower without L▇▇▇▇▇’s prior written consent other than in connection with Mortgage Borrower acquiring the Condominium fee estate from the applicable PILOT Lessor or as otherwise expressly permitted under this Agreement or (B) Mortgage Borrower’s or the removal applicable Tenant’s failure to comply with or Mortgage Borrower’s or the applicable Tenant’s breach of any Unit from PILOT Lease and/or PILOT Document that results in (x) a reduction of any tax abatement and/or mandatory repayment of any past or current tax abatement under such PILOT Lease and/or PILOT Document, as applicable, (y) termination of such PILOT Lease and/or PILOT Document, as applicable, and the Condominiumbenefits thereunder in favor of Mortgage Borrower or Tenant or (z) a default by such Mortgage Borrower under the applicable Lease for such PILOT Property (and, in any such case, Losses shall include lost rental income); provided, that, in each case, the liability with respect to this Section 13.1(a)(xii) shall not exceed the Allocated Loan Amount of the applicable PILOT Property;
(xiii) other than as set forth in Section 13.1(b)(v), a breach by Borrower of any covenant of Article 5 of this Agreement documents (excluding any provision requiring Borrower to remain solvent, maintain adequate capital or pay its debts as they come due);
(xiv) the Condominium Documents are amended, modified, supplemented, terminated, cancelled or otherwise cease to exist without Lender’s prior written consent;
(xv) any Losses related to title defects with respect to the Hawaii Easement Properties in excess of any amount paid on the Title Insurance Policies for such Hawaii Easement Properties;
(xvi) any breach or violation of the representations and warranties in Section 3.18 hereof with respect to any Leases for which a tenant estoppel certificate was not delivered on or prior to the Closing Date;
(xvii) any liability or obligation of Borrower or Mortgage Borrower relating to the Previously-Owned Property;
(xviii) incurrence of liens encumbering any Property, the Collateral or the direct or indirect interests in Borrower or Mortgage Borrower;
(xix) any Borrower Party enters into Material Agreements in violation of the terms of this Agreement;
(xx) unsecured indebtedness and indemnification obligations of Mortgage Borrower, which in each instance, in contravention of the Loan Documents;
(xxi) if any Affiliate of Borrower purchases all or any part of the Mortgage Loan;
(xxii) any obligation of Borrower or Mortgage Borrower (a) to indemnify any Person that, immediately prior to any acquisition of title to the Collateral pursuant to a UCC foreclosure sale, a UCC strict foreclosure, an assignment in lieu of foreclosure or other enforcement action under the Loan Documents (collectively, an “Equity Collateral Enforcement Action”) was voted for an Affiliate of Borrower or consented Mortgage Borrower, (b) to pay any amounts due under any contract or approved agreement between Borrower or Mortgage Borrower, on the one hand, and any Person that, immediately prior to an Equity Collateral Enforcement Action, was an Affiliate of Borrower or Mortgage Borrower, on the other hand; and/or (c) to pay legal fees to any legal counsel engaged by Borrower (or Mortgage Borrower or any Affiliate of Borrower or Mortgage Borrower prior to the members date of the Condominium Board appointed by Borrowerconsummation of an Equity Collateral Enforcement Action;
(xxiii) failure of Borrower to cause Mortgage Borrower to transfer all Properties located in Hawaii other than the Hawaii Individual Property and the Hawaii Easement Properties in accordance with Section 6.4 (Hawaii Special Purpose Entity Transfer); provided that liability under this clause (xxiii) shall not exceed the Mortgage Loan Allocated Loan Amount of the Properties that Borrower fails to cause Mortgage Borrower to transfer under the Mortgage Loan and the Allocated Loan Amounts of such Properties under the Loan; and/or
(xiiixxiv) (i) the failure by Borrowerany breach of any representation, any Borrower Affiliate and/or any other owner warranty or covenant contained in Section 10 of the Upper Option Space and/or the Lower Option Space Pledge Agreement.
(as defined in the Original Bloomberg Leaseb) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that:
(i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code SPE Component Entity or any other Federal Affiliate thereof files, or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) joins in the filing of an involuntary of, a petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower law, or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited (or otherwise colludes with) petitioning creditors for any involuntary petition against Borrower by any Person; Borrower,
(vii) Borrower or any SPE Component Entity or any Affiliate thereof files an answer consenting to, or joining in, any to an involuntary petition filed against it Borrower (other than any answer which is required to be made by applicable law), by any other Person person under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law; ,
(viiii) Borrower or any SPE Component Entity consents to or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower (other than with the prior written consent of L▇▇▇▇▇),
(iv) Borrower makes an assignment for the benefit of creditors (other than to Lender in connection with the Loan or admitswith the prior written consent of Lender), provided, that, with respect to the Mortgage Loan only, (x) the exercise of remedies under the Mortgage Loan or the Loan shall not by itself trigger recourse liability to Mortgage Borrower or Guarantor, and (y) Guarantor shall not have liability for matters first arising after a foreclosure or assignment-in-lieu of foreclosure of the Mortgage Loan or the Loan or for actions taken by Mortgage Administrative Agent or by Lender pursuant to the exercise of any voting proxy or similar rights to exercise control over the Collateral, except, in writing each case, to the extent due to the actions of Guarantor or its Affiliates;
(v) there is a breach of any provision of Article 5 (Single Purpose Entity Covenants) hereof or the separateness covenants contained in the Borrower’s or SPE Component Entity’s organizational documents (excluding, in each case, any legal proceedingprovision requiring Borrower to remain solvent, its insolvency maintain adequate capital or inability to pay its debts as they become come due, which admission ) and such breach is used as evidence cited by a court of Borrower’s insolvency competent jurisdiction in connection with an involuntary petition a final order in a proceeding under the Bankruptcy Code as a material factor in ordering the substantive consolidation of Borrower or Mortgage Borrower with any other Federal Person; provided that the motion or state bankruptcy pleading seeking substantive consolidation was not brought or insolvency law supported by L▇▇▇▇▇ and, as a result thereof, Borrower is subsequently substantively consolidated in a case under the Bankruptcy Code with any Person other than Lender (except for (A) any admissions that a co-Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of under the Loan,
(vi) Borrower fails to obtain L▇▇▇▇▇’s prior consent to (a) the transfer or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer conveyance of all or any material portion of the any Property or any direct or indirect interest therein or any Transfer the Collateral, (b) the transfer of any direct or indirect interest equity interests in Borrower, any SPE Component Entity, any Mortgage Borrower or any Mortgage SPE Component Entity, or (c) the granting of any security interest in either casethe direct equity interests in any Mortgage Borrower or any Mortgage SPE Component Entity, in each case in violation of the Loan Documents.,
(vii) Borrower fails to cause Mortgage Borrower to cooperate with or effectuate a Hawaii Loan Bifurcation or pay all costs and expenses related thereto as required pursuant to Section 6.7 hereof, provided that liability with respect to this Section 13.1(b)(vii) shall not exceed the Allocated Loan Amount of the Hawaii Individual Property under this Agreement and the Mortgage Loan Allocated Loan Amount of the Hawaii Individual Property, plus any and all third-party costs incurred by L▇▇▇▇▇ (including attorneys’ fees and costs reasonably incurred) in connection with the collection of amounts due hereunder,
(viii) Borrower fails to cause Mortgage Borrower to pay to Mortgage Administrative Agent any Excess Cash Flow in violation of Section 2.6(b) of the Mortgage Loan Agreement; provided that liability with respect to this Section 13.1(b)(viii) shall not exceed the amount of such Excess Cash Flow required to be paid to Mortgage Administrative Agent, plus any and all third-party costs incurred by L▇▇▇▇▇ (including attorneys’ fees and costs reasonably incurred) in connection with the collection of amounts due hereunder,
(ix) Following a Casualty or Condemnation, Borrower fails to cause Mortgage Borrower to cause Tenant to and fails to cause Mortgage Borrower to promptly commence and diligently prosecute the completion of the Restoration of the applicable Individual Property, subj
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Exculpation. (a) Subject to the qualifications below, Lender Administrative Agent shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the NoteNotes, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Borrower, except that Lender Administrative Agent may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender Administrative Agent to enforce and realize upon its interest under the NoteNotes, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the Property, the Rents Operating Income or any other collateral given to Lender Administrative Agent pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents Operating Income and in any other collateral given to LenderAdministrative Agent in the Loan Documents as security for the Loan, and LenderAdministrative Agent, by accepting the NoteNotes, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, agrees for itself and its successors and assigns that it and its successors and assigns shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower (except to the extent set forth in subclause (vii) below) in any such action or proceeding under under, or by reason of or under of, or in connection with with, the NoteNotes, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents. The provisions of this Section 10.1 19.1(a) shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Lender Administrative Agent to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgagePledge Agreement; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty Guarantees or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender Administrative Agent and Lenders thereunder; (div) impair the right of Lender Administrative Agent to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of LeasesPledge Agreement; (f) impair the enforcement of the Environmental Indemnity; (gvi) constitute a prohibition against Lender to seek Administrative Agent seeking a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Pledge Agreement or to commence commencing any other appropriate action or proceeding in accordance with the terms of this Agreement in order for Lender Administrative Agent to exercise its remedies against the Property; or (hvii) constitute a waiver of the right of Lender Administrative Agent to enforce the liability and obligation of BorrowerBorrower under the terms of this Agreement, by money judgment or otherwise, to the extent of any actual out-of-pocket loss, actual damage, cost, out-of-pocket cost and expense, liability, claim or other obligation reasonably actually suffered or actually incurred by Lender Administrative Agent or the Lenders (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 but expressly excluding any and all punitive, special and exemplary damages, and any and all consequential damages in the nature of “lost profits” or “lost opportunities” or diminution in value (which diminution in value results solely from general market conditions) (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Borrower Recourse Liabilities”):
(iA) fraudulent acts, willful misconduct fraud or material intentional misrepresentation in writing by Borrower Borrower, Mortgage Borrower, Hotel Lessee, Guarantor or any of the Borrower Affiliate Group in connection with the Loan;
(iiB) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by any of the Borrower Group or any Borrower Affiliate, or Person at the direction of any intentional wrongful of the foregoing;
(C) the removal or destruction disposal of a material any portion of the Property by Borrower, Hotel Lessee or damage to a material portion Mortgage Borrower in violation of the Property caused by willful misconduct or gross negligence Loan Documents after an Event of Borrower or any Borrower AffiliateDefault;
(vD) the commission misappropriation or conversion by or at the direction of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Group of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or Proceeds, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Revenues, (C) Advances or any Borrower Affiliate;
funds disbursed from the Collateral Accounts, (viiD) any Revenues received after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower (E) any Revenues paid more than one (1) month in advance; or (F) any Borrower Affiliate of any Rents in violation of the Loan DocumentsGross Sales Proceeds or Net Sales Proceeds;
(viiiE) all failure to pay charges for labor or materials or other charges that create a Lien on any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, except to the extent cash flow from such Lien is subordinate to the Property Security Instrument and is sufficient to make such payments andbeing contested by Borrower, during a Trigger Period, funds are made available to Hotel Lessee or Mortgage Borrower for payment in accordance with the terms of such chargesthis Agreement;
(ixF) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any unapplied security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Administrative Agent upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that (A) any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases, or other governing document or (B) such delivery to Administrative Agent is prohibited by Applicable Law;
(G) failure of the Borrower did to purchase and maintain any Interest Rate Cap Agreement in accordance with Article XI (it being agreed that Administrative Agent shall have no obligation to purchase an Interest Rate Cap Agreement on behalf of Borrower, and that Lenders’ losses on account of Borrower’s failure to purchase an Interest Rate Cap Agreement are not have limited to the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement cost of such depositsInterest Rate Cap Agreement at the time the same was required to be purchased);
(xiiH) Borrower’s, Hotel Lessee’s or Mortgage Borrower’s failure to obtain and maintain the fully paid for Policies in accordance with Section 8.1, except (i) as a result of the failure of any Lender to make an Advance for such payment of such Policies when required to have been made by the Lenders pursuant to this Agreement or (ii) during a Cash Management Event, to the extent Revenues are insufficient to pay same;
(I) Borrower’s, Hotel Lessee’s or Mortgage Borrower’s failure to pay all Impositions prior to the same becoming delinquent, except (i) as a result of the failure of any Lender to make an Advance for such payment of such Impositions when required to have been made by the Lenders pursuant to this Agreement or (ii) during a Cash Management Event, to the extent Revenues are insufficient to pay same;
(J) except to the extent the same constitutes a Springing Recourse Event as set forth in Section 19.1(b)(G), the failure of Borrower, Mortgage Borrower or any SPE Entity to maintain its status as a Single Purpose Entity; provided, however, the foregoing shall not require any direct or indirect shareholder, partner or member of Borrower, Hotel Lessee, Mortgage Borrower or any SPE Entity to make additional capital contributions to Borrower, Hotel Lessee, Mortgage Borrower or any SPE Entity, directly or indirectly;
(K) [intentionally omitted];
(L) any litigation disclosed on Schedule V attached hereto;
(M) the termination occurrence of the Condominium or the removal of any Unit from the Condominium, in each case, a voluntary Transfer in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower Agreement (or the members other than those that result in a Springing Recourse Event as expressly set forth in clause (H) of the Condominium Board appointed by Borrowerdefinition of Springing Recourse Event set forth below); and/or
(xiiiN) (i) reasonable attorney’s fees and expenses incurred by Administrative Agent or any Lender in connection with the failure by Borrower, enforcement of its rights and remedies and any Borrower Affiliate and/or legal proceeding filed on account of any other owner of the Upper Option Space and/or the Lower Option Space foregoing clauses (as defined in the Original Bloomberg LeaseA) through (other than Lender or any Affiliate of LenderN).
(b) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Notes or any of the other Loan Documents, (Ai) Lender Administrative Agent shall not be deemed to have waived any right which Lender Administrative Agent may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt secured by the Pledge Agreement or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (Bii) the Obligations Debt shall be fully recourse to Borrower in the event that of any of the following occur (each, a “Springing Recourse Event”): ):
(iA) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”Borrower, in each caseHotel Lessee, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Mortgage Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files SPE Entity filing a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; ;
(iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (ivB) the filing of an involuntary petition against any Borrower, Hotel Lessee, Mortgage Borrower or any SPE Entity under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any of the Borrower Group or any other Person in which any of the Borrower Group colludes;
(C) any of the Borrower Group soliciting or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower, Hotel Lessee, Mortgage Borrower by or any Person; SPE Entity from any Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(vD) Borrower files an answer consenting toBorrower, Hotel Lessee, Mortgage Borrower, any SPE Entity, or any of Borrower Group consenting to or joining in, in any involuntary petition filed against it Borrower, Hotel Lessee, Mortgage Borrower or any SPE Entity by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; ;
(viE) Borrower, Hotel Lessee, Mortgage Borrower, any SPE Entity, or any of the Borrower makes Group consenting to or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, Hotel Lessee, Mortgage Borrower or an SPE Entity or all or any portion of the Property or the Collateral (other than an application by Administrative Agent or any Lender in connection with the enforcement of Administrative Agent’s or any Lender’s remedies under the Loan Documents);
(F) Borrower, Hotel Lessee, Mortgage Borrower or any SPE Entity making an assignment for the benefit of creditors creditors;
(G) the failure of Borrower, Hotel Lessee, Mortgage Borrower or admitsany SPE Entity to be a Single Purpose Entity, in writing or and such failure is cited as a material factor in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence order for substantive consolidation of Borrower’s insolvency , Hotel Lessee, Mortgage Borrower or such SPE Entity with any other Person provided, however, the foregoing shall not require any direct or indirect shareholder, partner or member of Borrower, Hotel Lessee, Mortgage Borrower or any SPE Entity to make additional capital contributions to Borrower, Hotel Lessee, Mortgage Borrower or any SPE Entity, directly or indirectly;
(H) other than (i) Permitted Transfers or (ii) Transfers which violate the provisions of this Agreement solely as a result of the failure of Borrower to deliver to Administrative Agent notice or other information required to be delivered in connection with an involuntary petition under such Transfer (provided that the Bankruptcy Code applicable Transferee is not a Prohibited Person and otherwise qualifies as a permitted transferee in accordance with the provisions of Article X hereof), the occurrence of one or any other Federal or state bankruptcy or insolvency law by a Person other than Lender more of the following Transfers in violation of this Agreement beyond applicable notice and cure periods (except for if any): (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer sale, conveyance, master or ground lease, assignment or mortgage of all or any material portion of the fee interest in the Property or any (B) a Transfer of the direct or indirect interest therein or any Transfer of any direct or indirect interest Equity Interests in Borrower, Hotel Lessee or Mortgage Borrower that results in either a change of Control of Borrower, Hotel Lessee or Mortgage Borrower (other than a foreclosure of the Loan);
(I) the voluntary incurrence by Borrower, Hotel Lessee, Mortgage Borrower or any SPE Entity of any Indebtedness secured by the Property or the Collateral in violation of this Agreement; and/or
(J) if any Borrower Party, in any judicial or quasi-judicial case, action or proceeding contests (or any Borrower Party colludes with or otherwise assists any other Person, or solicits or causes to be solicited any other Person to contest) the validity or enforceability of the Loan Documents or contests or intentionally hinders, delays or obstructs (or any Borrower Party colludes with or otherwise assists any other Person, or solicits or causes to be solicited any other Person to contest, hinder, delay or obstruct) the pursuit of any rights or remedies by Administrative Agent or Lenders (including the commencement and/or prosecution of a foreclosure action, judicial or non-judicial, the appointment of a receiver for the Property or the Collateral or any portion thereof or any enforcement of the terms of the Assignment of Leases), and a court of competent jurisdiction has determined by a final non-appealable order of the court that such actions taken by such Borrower Party were in violation bad faith.
(c) Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, none of (i) any present or future Constituent Member in Borrower, or (ii) any present or future officer, director, employee, trustee, beneficiary, advisor, principal, participant, representative or agent of or in any Borrower or of or in any Person that is or becomes a Constituent Member in Borrower, shall have any personal liability, directly or indirectly, under or in connection with this Agreement or any of the Loan Documents, and Administrative Agent on behalf of itself, the Lenders and their respective successors and assigns, hereby waives any and all such personal liability, provided, however, that the foregoing shall not limit or modify any liability or obligation of any Guarantor under any Guaranty. As used in this Agreement, the term “Constituent Member” shall mean (x) any direct shareholder, member or partner in Borrower and (y) any Person that, indirectly through one or more other corporations, limited liability companies, partnerships, or other entities, is a shareholder, member or partner in Borrower.
Appears in 1 contract
Sources: Mezzanine Loan and Security Agreement (NRI Real Token Inc.)
Exculpation. Subject 19-22911-rdd Doc 134-1 Filed 07/19/19 Entered 07/19/19 13:46:56 Exhibit A Pg 49 of 66 Neither the Administrative Agent nor any of its directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under any Credit Document, or in connection therewith, except for its own willful misconduct or gross negligence, nor responsible for any recitals or warranties herein or therein, nor for the qualifications beloweffectiveness, enforceability, validity or due execution of any Credit Document, nor for the creation, perfection or priority of any Liens purported to be created by any of the Credit Documents, or the validity, genuineness, enforceability, existence, value or sufficiency of any collateral security, nor to make any inquiry respecting the performance by any Credit Party of its Obligations. Any such inquiry which may be made by the Administrative Agent shall not obligate it to make any further inquiry or to take any action. The Administrative Agent shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, consent, certificate, statement or writing which the Administrative Agent believes to be genuine and to have been presented by a proper Person. To the fullest extent permitted by applicable law, no Lender shall not enforce assert, and each Lender hereby waives, any claim against the liability Administrative Agent, its sub-agents and obligation their respective Affiliates in respect of Borrower any actions taken or omitted to perform and observe the Obligations contained be taken by any of them, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in the Noteconnection with, or as a result of, this Agreement, any other Credit Document or any agreement or instrument contemplated herby or thereby, the Mortgage transactions contemplated hereby or thereby, any Loan or the other Loan Documents by any action or proceeding wherein a money judgment use of the proceeds thereof. No provision of this Agreement or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower Credit Document or any Affiliate of Borrower agreement or any legal representativesinstrument contemplated hereby or thereby or the transactions contemplated hereby or thereby, successors shall require the Administrative Agent to: (i) expend or assigns of Borrower risk its own funds or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates provide indemnities in the performance of any of its duties hereunder or the foregoing exercise of any of its rights or power or (collectivelyii) otherwise incur any financial liability in the performance of its duties or the exercise of any of its rights or powers unless it is indemnified to its satisfaction and the Administrative Agent shall have no liability to any person for any loss occasioned by any delay in taking or failure to take any action while it is awaiting an indemnity satisfactory to it. The Administrative Agent shall not be required to qualify in any jurisdiction in which it is not presently qualified to perform its obligations as Administrative Agent. The Administrative Agent has accepted and is bound by the Credit Documents executed by the Administrative Agent as of the date of this Agreement and, but specifically excluding Guarantor to as directed in writing by the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the LoanRequired Lenders, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding Administrative Agent shall execute additional Credit Documents delivered to enable Lender to enforce and realize upon its interest under it after the Note, date of this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, thatthat such additional Credit Documents do not adversely affect the rights, except as specifically provided hereinprivileges, any judgment in any such action benefits and immunities of the Administrative Agent. The Administrative Agent will not otherwise be bound by, or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreementheld obligated by, the Mortgage provisions of any credit agreement, indenture or other agreement governing the Obligations (other than this Agreement and the other Loan DocumentsCredit Documents to which the Administrative Agent is a party). 19-22911-rdd Doc 134-1 Filed 07/19/19 Entered 07/19/19 13:46:56 Exhibit A Pg 50 of 66 No written direction given to the Administrative Agent by the Required Lenders or the Borrower that in the sole reasonable judgment of the Administrative Agent imposes, purports to impose or might reasonably be expected to impose upon the Administrative Agent any obligation or liability not set forth in or arising under this Agreement and the other Credit Documents will be binding upon the Administrative Agent unless the Administrative Agent elects, at its sole option, to accept such direction. The Administrative Agent shall not su▇ ▇or, seek be responsible or demand liable for any deficiency judgment against any Exculpated Party failure or delay in any such action or proceeding the performance of its obligations under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Agreement or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) Credit Documents arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; business interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action. The Administrative Agent shall not be under any obligation to exercise any of its rights or powers vested in connection with it by this Agreement or the following 119 (all such liability and obligation of Borrower for any other Credit Documents, at the request, order or all direction of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with Required Lenders unless the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account same is given pursuant to the extent in express provisions of this Agreement or the control of Borrowerother Credit Documents and the Required Lenders shall have offered to the Administrative Agent security or indemnity reasonably satisfactory to the Administrative Agent against the costs, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence expenses and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges liabilities (including, without limitation, charges attorneys’ fees and expenses) which might be incurred therein or thereby. Beyond the exercise of reasonable care in the custody of the Collateral in its possession, the Administrative Agent will have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto. The Administrative Agent will be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and the Administrative Agent will not be liable or responsible for labor and materials) that create any loss or diminution in the value of any of the Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Administrative Agent in good faith without gross negligence or willful misconduct. The Administrative Agent will not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens on in any of the PropertyCollateral, regardless of whether arising impaired by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes law or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower reason of any Indebtedness for borrowed money in violation of the provisions of this Agreement action or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower omission to deliver to Lender any security depositsact on its part hereunder, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with action or omission constitutes gross negligence or willful misconduct on the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination part of the Condominium Administrative Agent, as determined by a court of competent jurisdiction in a final, nonappealable order, for the validity or sufficiency of the removal Collateral or any agreement or assignment contained therein, for the validity of the title of any Unit from grantor to the CondominiumCollateral, in each casefor insuring the Collateral or for the payment of taxes, in violation charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the terms Collateral. The 19-22911-rdd Doc 134-1 Filed 07/19/19 Entered 07/19/19 13:46:56 Exhibit A Pg 51 of this Agreement, which was voted for 66 Administrative Agent hereby disclaims any representation or consented warranty to or approved by Borrower (or the members present and future Secured Parties concerning the perfection of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined Liens granted hereunder or in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach value of any of the certifications set forth Collateral. In the event that the Administrative Agent is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any fiduciary or trust obligation for the benefit of another, which in the Administrative Agent’s sole reasonable discretion may cause the Administrative Agent to be considered an “Recycled Entity Certificate”owner or operator” under any environmental laws or otherwise cause the Administrative Agent to incur, in each caseor be exposed to, that results in a substantive consolidation of the assets and liabilities of Borrower with any environmental liability or any liability under any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion local law, the Administrative Agent reserves the right, instead of taking such action, either to resign as Administrative Agent or pleading seeking to arrange for the transfer of the title or control of the asset to a substantive consolidation brought or actively supported by Lender); (ii) Borrower court appointed receiver. The Administrative Agent will not be liable to any person for any environmental liability or any Borrower Affiliateenvironmental claims or contribution actions under any federal, officerstate or local law, director rule or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion regulation by reason of the PropertyAdministrative Agent’s actions and conduct as authorized, except at the request empowered and directed hereunder or relating to any kind of discharge or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code release or any other Federal threatened discharge or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer release of any direct or indirect interest in Borrower, in either case, in violation of hazardous material into the Loan Documentsenvironment.
Appears in 1 contract
Exculpation. Subject to Upon the qualifications belowEffective Time, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent permitted by law, each Party does for itself and each of Guarantorits Related Parties that it has the power to bind (by such Party’s acts or signature) or over which such Party directly or indirectly exercises control acting in any and all capacities to which they may be entitled, hereby exculpate one another and each other and each of their respective Related Parties from, and agree that each shall have and incur no liability under to, nor be subject to any right or action by one another for acts, omissions, events or occurrences prior to the Guaranty, any Alteration Deficiency Guaranty Release Date directly or any other guaranty provided in connection with indirectly relating to or arising out of the LoanNotes, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant indentures relating to the Loan DocumentsNotes or the Exchange Offers; provided, however, thatnothing in this Section 3 shall exculpate the Company from liability for: (A) any obligation of the Company and its subsidiaries to indemnify or to advance fees or reimburse any costs to their current and former directors or officers under its organizational documents, except by-laws, employee-indemnification policies, state law, or any other agreement; (B) any right of any Party under the Credit Agreement and the Receivables Agreement; (C) any right of any party to receive the exchange consideration as specifically provided herein, any judgment set forth in any such action or proceeding shall be enforceable against Borrower only the final prospectus relating to the extent Exchange Offers and related transactions thereto and any right such party to make a Claim if the Company fails to implement the changes to its board of Borrower’s interest directors described in the Property, section entitled “Summary of the Restructuring Plan” of the Prospectus; (D) any failure by the Company to seek the Shareholder Approval or the Merger in each case in the Rents and manner described in the Prospectus or any other collateral given to Lenderviolation by the Company of the Securities Act of 1933, and Lenderas amended or the Securities Exchange Act of 1934, by accepting the Noteas amended, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the NoteExchange Offer which cannot be released hereby; (E) any claims arising under, this Agreementthrough or otherwise relating to any Notes that remain outstanding after the Effective Time, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured as such obligations may be amended by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made supplemental indentures entered into in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 PropertyExchange Offer; or (hF) constitute a waiver of any agreement or transaction entered into after the right of Lender to enforce the liability and obligation of BorrowerEffective Time, by money judgment or otherwiseexcept for, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
case of clauses (iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”C), (iiD) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default and (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitationF) above, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsMerger Claims.
Appears in 1 contract
Sources: Mutual Release (Yrc Worldwide Inc)
Exculpation. Subject (a) Notwithstanding anything to the qualifications belowcontrary contained in this Note, the Security Instrument or any Other Security Document (but subject to the provisions of subsections (b), (c) and (d) of this Article 11), Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instrument by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing any personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent or affiliate of Borrower or any person owning, directly or indirectly, any legal representativesor beneficial interest in Borrower, or any successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the this Note, this Agreementthe Security Instrument, the Mortgage Other Security Documents, and the other Loan Documents, or interest in the Property, the Rents or (as defined in the Security Instrument) and any other collateral given to Lender pursuant to the Loan Documentssecure this Note; provided, however, thatsubject to the provisions of subsections (b), except as specifically provided herein(c) and (d) of this Article 11, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of BorrowerB▇▇▇▇▇▇▇’s interest in the Property, in the Rents and in any other collateral given to Lender, and LenderLender to secure this Note. L▇▇▇▇▇, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instrument, agrees that it shall not su▇ ▇ornot, except as otherwise provided in this Article 11, sue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties, in any such action or proceeding proceeding, under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Security Instrument or the other Loan Other Security Documents. The provisions of this Section 10.1 Article 11 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Note, the Loan DocumentsSecurity Instrument or the Other Security Documents delivered to Lender; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the MortgageSecurity Instrument; (ciii) affect the validity or enforceability of any of the Loan Documentsindemnity, the Guaranty guaranty, master lease or any other guaranty similar instrument made in connection with this Note, the Loan Security Instrument, or any of the rights and remedies of Lender thereunderOther Security Documents; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of LeasesLeases and Rents executed in connection herewith; (fvi) impair the enforcement right of Lender to enforce the provisions of Section 12.2 of the Environmental IndemnitySecurity Instrument or of Section 3.12(e) of the Security Instrument; or (gvii) constitute a prohibition against impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or .
(hb) constitute a waiver Notwithstanding the provisions of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, this Article 11 to the extent of any losscontrary, damage, cost, expense, liability, claim or other obligation reasonably incurred by Borrower shall be personally liable to Lender for the Losses (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesas defined in the Security Instrument) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
Lender incurs due to: (i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate of the Exculpated Parties in connection with the Loan;
; (ii) the breach by Borrower gross negligence or willful misconduct of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
Borrower; (iii) the intentional misappropriation by Borrower removal or disposal of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property after an Event of Default; (iv) Borrower’s misapplication, misappropriation or damage to a material portion conversion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually Rents received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default; (v) Borrower’s misapplication, misappropriation or conversion of tenant security deposits or Rents collected more than one (1) month in advance which are not delivered to Lender for application to the intentional Loan; (vi) the misapplication, misappropriation or conversion of insurance proceeds or condemnation awards; (vii) Personal Property of Borrower (as defined in the Security Instrument) taken from the Property by or on behalf of Borrower or any of the Exculpated Parties and not replaced with Personal Property of the same utility and of the same or greater value; (viii) any act of arson by Borrower or any of the Exculpated Parties; (ix) any fees or commissions paid by Borrower Affiliate after the occurrence of an Event of Default to any Rents Exculpated Party in violation of the Loan terms of this Note, the Security Instrument or the Other Security Documents;
; (viiix) all failure to pay charges for labor or materials or other charges that can create liens on any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected under leases with respect to the Property not being delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination terms and conditions of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space applicable Leases (as defined in the Original Bloomberg LeaseSecurity Instrument) prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof; (other than xii) any failure by Borrower to permit on-site inspections of the Property as required by the Security Instrument and/or the Other Security Documents; (xiii) any failure of Borrower to appoint a new property manager upon the request of Lender as required by the terms of the Security Instrument and/or the Other Security Documents; (xiv) Borrower’s material breach of, or failure to comply with, the representations, warranties and covenants contained in Articles 5.8(b), 5.19 and/or 12 of the Security Instrument; (xv) Borrower’s failure to provide financial information to Lender as required by Section 3.12 of the Security Instrument; (xvi) any Affiliate of Lender) failure by Borrower to comply with the terms any provision of Section 36 of the Original Bloomberg Lease 4.2(a), (an “Expansion Space Default”f), (h), (i), (j), (k), (1), (n), (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd), (ee), (ff), (gg), (hh), (ii), (jj), (kk), (ll) or (mm) of the exercise Security Instrument. Borrower’s failure to deliver to Lender any Letter of any rights Credit (as defined in that certain Springing Letter of Credit and Security Agreement, of even date herewith, given by Borrower in favor of Lender (the Tenant under the Original Bloomberg Lease may have as a result “Springing Letter of an Expansion Space Default (whether Credit Agreement”)) required to be delivered by Borrower to Lender pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease Springing Letter of Credit and Security Agreement; and/or (iiixvi) paying the failure of any amount or performing any obligation tenant at the Property to obtain a permanent certificate of occupancy with respect to the Upper Option Space and/or space occupied by each such tenant at the Lower Option Space after the occurrence Property; provided, however, that this subsection (xvi) shall be of an Expansion Space Default. Notwithstanding anything no further force and effect upon delivery by Borrower to the contrary in this Agreement or any Lender of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing evidence satisfactory to Lender in accordance its reasonable discretion that each tenant at the Property has obtained a permanent certificate of occupancy with respect to the Loan Documentsspace occupied by each such tenant at the Property.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability against Borrower as set forth in subsection (a) above, as to Borrower, SHALL BECOME NULL AND VOID and (B) shall be of no further force and effect and the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that; (i) a breach the first full monthly payment of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy interest under Section l(b) of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)this Note is not paid when due; (ii) Borrower fails to comply with any provision of Section 4.2(b), (c), (d), (e), (g) or any (m) of the Security Instrument; (iii) Borrower Affiliate, officer, director or representative which Controls defaults under Article 8 of the Security Instrument; (iv) Borrower consents to or files a voluntary petition with respect to Borrower under the U.S. Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iiiv) Borrower files an application for the appointment of a receiveraffiliate, trustee officer, director or examiner for Borrower representative which controls Borrower, directly or any portion of the Propertyindirectly, except at the request of files, or with the consent of Lender, (iv) joins in the filing of of, an involuntary petition against Borrower under the U.S. Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower law, or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by from any Personperson or entity; (vvi) Borrower files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person person or entity under the U.S. Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any person or entity; (vivii) any affiliate, officer, director or representative which controls Borrower consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Property; or (viii) Borrower makes an assignment for the benefit of creditors creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due.
(d) Nothing herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a), which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code 506(b), 11 11(b) or any other Federal provision of the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness secured by the Security Instrument or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions to require that Borrower believes in good faith are truthful when made and (B) any such admission all collateral shall continue to secure all of the indebtedness owing to Lender or any servicer of in accordance with this Note, the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of Security Instrument and the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Other Security Documents.
Appears in 1 contract
Sources: Promissory Note (AmREIT Monthly Income & Growth Fund III LTD)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or Borrower, Operating Tenant, Guarantor, any Affiliate of Borrower Borrower, Operating Tenant or Guarantor, any Person owning, directly or indirectly, any legal or beneficial ownership interest in Borrower, Guarantor or Operating Tenant, or any legal representativesdirector, successors officer, member, partner, shareholder, employee or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates agent of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)foregoing, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest and rights under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, Lender shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other any Loan DocumentsDocument. The provisions of this Section 10.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan DocumentsDocument; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty Documents or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (gvi) 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 fully realize the security granted by the Mortgage or to exercise its remedies against the Property; or (hvii) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower, Operating Tenant, Sole Borrower Member, Sole OT Member or any Borrower Affiliate Guarantor in connection with obtaining the Loan;
(iib) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any portion thereof by or on behalf of Borrower, Operating Tenant, Sole Borrower AffiliateMember, Sole OT Member or Guarantor, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, Default the intentional misappropriation by Borrower removal or any Borrower Affiliate disposal of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by or on behalf of Borrower, Operating Tenant, Sole Borrower Member, Sole OT Member or Guarantor;
(c) any Proceeds paid by reason of any Insured Casualty or any Award received in connection with a Lien voluntarily granted by Borrower (i.e., Condemnation or other sums or payments attributable to the Property not arising by operation of law) applied in violation accordance with the provisions of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied Documents (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower and Operating Tenant did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such depositssums or payments);
(xiid) all Rents of the Property received or collected by or on behalf of the Borrower or Operating Tenant during the continuance of an Event of Default and not applied to payment of Principal and interest due under the Note, and/or to the payment of actual and reasonable operating expenses of the Property, as they become due or payable (except to the extent that such application of such funds is prevented by bankruptcy, receivership, or similar judicial proceeding in which Borrower or Operating Tenant is legally prevented from directing the disbursement of such sums);
(e) misappropriation of tenant security deposits and Rents collected in advance, including the failure to deliver such amounts to Lender upon foreclosure or a deed in lieu thereof, except to the extent that the same were applied in accordance with the provisions of the applicable Lease prior to the date of such foreclosure or deed in lieu thereof;
(f) the termination failure to pay Taxes, provided Borrower shall not be liable to the extent funds to pay such amounts are available in the Deposit Account;
(g) the breach of any representation, warranty, covenant or indemnification in any Loan Document concerning Environmental Laws or Hazardous Substances, including Sections 4.21 and 5.8, and clauses (viii) through (xi) of Section 5.30;
(h) a breach of the Condominium or the removal covenants set forth in Section 5.13 (other than a breach of any Unit from the Condominium, in each case, in violation of the terms covenants described in clauses (ix)(D), (x) and (xxi) set forth in the definition of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower“Special Purpose Bankruptcy Remote Entity” on Schedule 5); and/oror
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (an involuntary Transfer other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may a Permitted Transfer shall have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Defaultoccurred. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations owing to Lender Debt in accordance with the Loan Documents, and (B) Lender’s agreement not to pursue personal liability of Borrower as set forth above SHALL BECOME NULL AND VOID and shall be of no further force and effect, and the Obligations Debt shall be fully recourse to Borrower in the event that any one or more of the following occur occurs (each, a “Springing Recourse Event”): ):
(i) a voluntary Transfer other than a Permitted Transfer shall have occurred (other than with respect to the entering into of Leases, easements, restrictive covenants, licenses or occupancy agreements not permitted pursuant to the terms of the Loan Documents); or
(ii) a breach of the covenants set forth in Schedule V hereof (Section 5.13, other than those single purpose entity the covenants that relate set forth in clauses (ix)(D), (x) and (xxi) in the definition of “Special Purpose Bankruptcy Remote Entity” on Schedule 5 (provided, however, with respect to solvency or adequacy of capital) or a breach of any of the certifications covenants described in clauses (xi) - (xx), clause (xxiv), clause (xxvi), clause (xxvii), clause (xxix) and clause (xxxii) set forth in the definition of “Recycled Entity Certificate”Special Purpose Bankruptcy Remote Entity” on Schedule 5, and clause (ii) in each casethe definition of “Single Member Bankruptcy Remote LLC” on Schedule 5, that results the foregoing recourse shall only be triggered if in connection with a pending bankruptcy proceeding a court of competent jurisdiction has ordered the substantive consolidation of the assets and liabilities of either Borrower or Operating Tenant with any other Person Person; or
(iii) the occurrence of any condition or event described in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law either Section 8.1(f)(i) (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or Operating Tenant only) or Section 8.1(g) (with respect to Borrower or Operating Tenant only) and, with respect to such condition or event described in Section 8.1(g), either Borrower, Operating Tenant, Sole Borrower Member, Sole OT Member, Guarantor or any other Federal or state bankruptcy or insolvency law; Person owning an interest (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (vindirectly) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either caseOperating Tenant, in violation Sole Borrower Member, Sole OT Member or Guarantor (other than shareholders of the Loan DocumentsGuarantor so long as Guarantor is a public company) knowingly aids, solicits, supports, or otherwise cooperates or colludes to cause such condition or event or knowingly fails to contest such condition or event.
Appears in 1 contract
Sources: Loan Agreement (Behringer Harvard Opportunity REIT II, Inc.)
Exculpation. Subject Neither Borrower nor any Guarantor shall be personally liable for payment of the principal of the Note or interest thereon, and in the event of any failure by Borrower to pay any portion of such principal or interest, Lenders will look, with respect to the qualifications belowthen outstanding balance of such principal and interest, Lender solely to the Mortgaged Property and such other collateral as has been, or hereafter shall be, given to secure payment of the Note. The foregoing limitation on liability shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage impair or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) otherwise affect the validity or enforceability of (a) the debt evidenced by the Note or the Loan Agreement or of any other obligations evidenced by the Note, the Loan Agreement, the Mortgage or any of the Loan DocumentsDocuments or (b) Lenders' liens, the Guaranty or any other guaranty made in connection with the Loan or any of the security interests, rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materialsthe remedies of foreclosure and/or sale) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Mortgaged Property upon a foreclosure or any other property, security, collateral and/or assets (including the proceeds thereof) encumbered, pledged or assigned by Lender under the Loan DocumentsMortgages or any other security for the Loan. In addition, unless previously applied (except to the extent that such deposits were applied in accordance foregoing limitation on liability shall not limit anyone's obligations or be applicable with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) respect to: (i) the failure by Borrower, liability under any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(bguaranty(ies) or any other provisions of the Bankruptcy Code indemnity(ies) delivered or afforded to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)Lenders; (ii) Borrower any fraud or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawmaterial misrepresentation; (iii) Borrower files an application for taxes of any kind (whether characterized as transfer, gains or other taxes) payable in connection with the appointment of a receiver, trustee or examiner for Borrower or any portion foreclosure sale of the Mortgaged Property, except at the request irrespective of or with the consent of Lender, who pays such taxes; (iv) the filing application of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer proceeds of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due to any purpose other than as provided in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.;
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower, any other Borrower Party, or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any Affiliate of other Borrower Party or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the Property, the Rents Collateral (or any portion thereof), or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents Collateral and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgagePledge Agreement; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, ▇▇▇▇▇▇’s right to enforce said rights and remedies against ▇▇▇▇▇▇▇▇ and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the rights of Lender to (A) obtain the appointment of a receiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (5) impair the enforcement of the Pledge Agreement or any other Loan Documents; (6) impair the right of Lender to obtain the appointment enforce Section 4.12(e) of a receiverthis Agreement; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Pledge Agreement or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperty (or any portion thereof) and/or the Collateral (or any portion thereof); or (h) 8) 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 reasonably Loss actually incurred by Lender (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or intentional material intentional misrepresentation by Borrower ▇▇▇▇▇▇▇▇, Mortgage Borrower, Mezzanine B Borrower, any SPE Component Entity, any Mortgage SPE Component Entity, any Mezzanine B SPE Component Entity, Sponsor, any Affiliated Manager, Guarantor or any Borrower Affiliate director, officer, beneficiary, shareholder, partner, member, employee or agent acting on behalf of any of the foregoing (each, a “Recourse Party”) in connection with the Loan;
(ii) the breach by Borrower willful misconduct of any representation, warranty, covenant or indemnification provision Recourse Party in connection with the Environmental IndemnityLoan;
(iii) the intentional misappropriation by Borrower breach of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent indemnification provision in the control Loan Documents or the Mortgage Loan Documents concerning environmental laws, hazardous substances and asbestos and any indemnification of Borrower, unless such rents are otherwise delivered to LenderLender with respect thereto;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or to any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct the intentional acts of any Recourse Party, but only to the extent there is sufficient cash flow from the Properties to prevent such physical waste and such cash flow is made available by (x) Mortgage Lender for the purpose of preventing such physical waste from the applicable Mortgage Loan Reserve Accounts after all conditions to such release had been met to the extent sums sufficient to pay or gross negligence perform such liability have been deposited with Mortgage Lender in accordance with the terms of Borrower the Mortgage Loan Agreement or any Borrower Affiliate(y) Lender for the purpose of preventing such physical waste from Accounts (if any) after all conditions to such release had been met to the extent sums sufficient to pay or perform such liability have been deposited with Lender in accordance with the terms of this Agreement;
(v) the commission removal of any criminal act by Borrower or any Borrower Affiliate which results property in contravention of the Loan Documents during the continuance of an Event of Default other than in the forfeiture ordinary course of the Propertybusiness;
(vi) the intentional misappropriation or conversion of any of the following by Borrower or any Borrower Affiliate a Recourse Party in contravention of the Loan Documents: (A) any Insurance Proceeds actually insurance proceeds received by Borrower or by reason of any Borrower Affiliate or Casualty, (B) any Awards or other amounts received by Borrower from a governmental authority in connection with the a Condemnation of all or a portion of the Property actually Property, (C) any revenues generated by the Properties, (E) any proceeds received by Mortgage Borrower or Borrower under any Borrower Affiliateowner’s title insurance policy, (F) any distributions or other payments made in violation of this Agreement, or (G) Net Liquidation Proceeds After Debt Service;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security depositsSecurity Deposits, advance deposits or any other deposits collected with respect to the any Property which are not delivered to Lender upon a foreclosure by Lender under the Loan Documentsof such Property or action in lieu thereof, unless previously applied (except to the extent that any such deposits Security Deposits were delivered to Mortgage Lender in accordance with the Mortgage Loan Agreement and/or applied in accordance with the terms and conditions of any of the applicable lease Lease;
(viii) any litigation or other governing document legal proceeding related to the Loan filed by a Recourse Party with the effect of delaying, opposing, impeding, obstructing, hindering, enjoining or otherwise interfering with the efforts of ▇▇▇▇▇▇ to exercise any rights and remedies available to Lender during the continuance of an Event of Default; provided, however, that there shall be no liability hereunder on account of, and the foregoing shall not restrict, ▇▇▇▇▇▇▇▇’s or Guarantor’s right to, dispute, in good faith, whether the relevant Event of Default shall have occurred or whether an action taken by Lender pursuant to the Loan Documents is permitted thereby, nor shall Borrower did be restricted from, or have liability hereunder for, bringing a good faith counterclaim which if not have raised in the legal rightforeclosure proceeding would be barred, because of a bankruptcyand which does not seek to enjoin the enforcement action by ▇▇▇▇▇▇;
(ix) Borrower fails to obtain ▇▇▇▇▇▇’s prior written consent to any additional indebtedness or voluntary lien encumbering any Property, receivership or similar judicial proceeding, to direct disbursement of such deposits)the Collateral and not permitted by the Loan Documents;
(x) Intentionally omitted;
(xi) intentionally omitted;
(xii) the (A) any voluntary termination of any PILOT Lease and/or PILOT Document or transfer or surrender of any PILOT Lease and/or PILOT Document (including any PILOT Bond) by Mortgage Borrower without ▇▇▇▇▇▇’s prior written consent other than in connection with Mortgage Borrower acquiring the Condominium fee estate from the applicable PILOT Lessor or as otherwise expressly permitted under this Agreement or (B) Mortgage Borrower’s or the removal applicable Tenant’s failure to comply with or Mortgage Borrower’s or the applicable Tenant’s breach of any Unit from PILOT Lease and/or PILOT Document that results in (x) a reduction of any tax abatement and/or mandatory repayment of any past or current tax abatement under such PILOT Lease and/or PILOT Document, as applicable, (y) termination of such PILOT Lease and/or PILOT Document, as applicable, and the Condominiumbenefits thereunder in favor of Mortgage Borrower or Tenant or (z) a default by such Mortgage Borrower under the applicable Lease for such PILOT Property (and, in any such case, Losses shall include lost rental income); provided, that, in each case, the liability with respect to this Section 13.1(a)(xii) shall not exceed the Allocated Loan Amount of the applicable PILOT Property;
(xiii) other than as set forth in Section 13.1(b)(v), a breach by Borrower of any covenant of Article 5 of this Agreement documents (excluding any provision requiring Borrower to remain solvent, maintain adequate capital or pay its debts as they come due);
(xiv) any liability or obligation of Borrower or Mortgage Borrower relating to the Previously-Owned Property;
(xv) incurrence of liens encumbering any Property, the Collateral or the direct or indirect interests in Borrower or Mortgage Borrower;
(xvi) any Borrower Party enters into Material Agreements in violation of the terms of this Agreement;
(xvii) unsecured indebtedness and indemnification obligations of Mortgage Borrower, which in each instance, in contravention of the Loan Documents;
(xviii) if any Affiliate of Borrower purchases all or any part of the Mortgage Loan;
(xix) any obligation of Borrower or Mortgage Borrower (a) to indemnify any Person that, immediately prior to any acquisition of title to the Collateral pursuant to a UCC foreclosure sale, a UCC strict foreclosure, an assignment in lieu of foreclosure or other enforcement action under the Loan Documents (collectively, an “Equity Collateral Enforcement Action”) was voted for an Affiliate of Borrower or consented Mortgage Borrower, or (b) to pay any amounts due under any contract or approved agreement between Borrower or Mortgage Borrower, on the one hand, and any Person that, immediately prior to an Equity Collateral Enforcement Action, was an Affiliate of Borrower or Mortgage Borrower, on the other hand; and/or (c) to pay legal fees to any legal counsel engaged by Borrower (or Mortgage Borrower or any Affiliate of Borrower or Mortgage Borrower prior to the members date of the Condominium Board appointed by Borrower)consummation of an Equity Collateral Enforcement Action; and/or
(xiiixx) (i) the failure by Borrowerany breach of any representation, any Borrower Affiliate and/or any other owner warranty or covenant contained in Section 10 of the Upper Option Space and/or the Lower Option Space Pledge Agreement.
(as defined in the Original Bloomberg Leaseb) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code SPE Component Entity or any other Federal Affiliate thereof files, or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) joins in the filing of an involuntary of, a petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower law, or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited (or otherwise colludes with) petitioning creditors for any involuntary petition against Borrower by any Person; Borrower, (vii) Borrower or any SPE Component Entity or any Affiliate thereof files an answer consenting to, or joining in, any to an involuntary petition filed against it Borrower (other than any answer which is required to be made by applicable law), by any other Person person under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law; , (viiii) Borrower or any SPE Component Entity consents to or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for ▇▇▇▇▇▇▇▇ (other than with the prior written consent of Lender), (iv) Borrower makes an assignment for the benefit of creditors (other than to Lender in connection with the Loan or admitswith the prior written consent of Lender), provided, that, with respect to the Mortgage Loan only, (x) the exercise of remedies under the Mortgage Loan or the Loan shall not by itself trigger recourse liability to Borrower or Guarantor, and (y) Guarantor shall not have liability for matters first arising after a foreclosure or assignment-in-lieu of foreclosure of the Mortgage Loan or the Loan or for actions taken by Mortgage Lender or by Lender pursuant to the exercise of any voting proxy or similar rights to exercise control over the Collateral, except, in writing each case, to the extent due to the actions of Guarantor or its Affiliates; (v) there is a breach of any provision of Article 5 (Single Purpose Entity Covenants) hereof or the separateness covenants contained in the Borrower’s or SPE Component Entity’s organizational documents (excluding, in each case, any legal proceedingprovision requiring Borrower to remain solvent, its insolvency maintain adequate capital or inability to pay its debts as they become come due, which admission ) and such breach is used as evidence cited by a court of Borrower’s insolvency competent jurisdiction in connection with an involuntary petition a final order in a proceeding under the Bankruptcy Code as a material factor in ordering the substantive consolidation of Borrower or Mortgage Borrower with any other Federal Person; provided that the motion or state bankruptcy pleading seeking substantive consolidation was not brought or insolvency law supported by ▇▇▇▇▇▇ and, as a result thereof, Borrower is subsequently substantively consolidated in a case under the Bankruptcy Code with any Person other than Lender (except for (A) any admissions that a co-Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of under the Loan, (vi) Borrower fails to obtain ▇▇▇▇▇▇’s prior consent to (a) the transfer or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer conveyance of all or any material portion of the any Property or any direct or indirect interest therein or any Transfer the Collateral, (b) the transfer of any direct or indirect interest equity interests in Borrower, any SPE Component Entity, any Mortgage Borrower, any Mortgage SPE Component Entity, or Mezzanine B Borrower, or (c) the granting of any security interest in either casethe direct equity interests in any Mortgage Borrower or any Mortgage SPE Component Entity, in each case in violation of the Loan Documents, or (vii) violation of covenants regarding opting into Article 8 of the UCC.
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, ▇▇▇▇▇▇’s right to enforce said rights and remedies against ▇▇▇▇▇▇▇▇ and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the rights of Lender to (A) obtain the appointment of a receiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (5) impair the enforcement of the assignment of leases and rents contained in the Security Instrument and in any other Loan Documents; (6) impair the right of Lender to obtain the appointment enforce Section 4.12(e) of a receiverthis Agreement; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperty (or any portion thereof); or (h) 8) 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 reasonably Loss incurred by Lender (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by Borrower willful misconduct of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower Party;
(iii) any litigation or other legal proceeding related to the intentional misappropriation Debt filed by any Borrower Party or any other action of any Reserve Funds disbursed Borrower Party exercised in bad faith that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to Borrower, or exercise any intentional failure rights and remedies available to deposit rents into the Clearing Account to the extent Lender as provided herein and in the control of Borrower, unless such rents are otherwise delivered to Lenderother Loan Documents;
(iv) waste to the Property caused by the intentional acts or intentional omissions of any intentional (other than, in each case, as part Borrower Party and/or the removal or disposal of or to facilitate any alteration that is permitted hereunder) material physical waste portion of the Property by Borrower (or on behalf of) any Borrower Affiliate, or any intentional wrongful removal or destruction Party after an Event of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower AffiliateDefault;
(v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Party of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or destruction to the Property (or any Borrower Affiliate or portion thereof), (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or Property, (C) any Borrower Affiliate;
(vii) after the occurrence and during the continuance of Rents following an Event of Default, the intentional misappropriation by Borrower (D) any Security Deposits or Rents collected in advance or (E) any Borrower Affiliate of any Rents in violation of other monetary collateral for the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, any Reserve Funds and/or any portion thereof disbursed to (or at the direction of) Borrower);
(vi) failure to pay Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property in accordance with the terms and materials) that create Liens on the Propertyprovisions hereof, regardless of whether arising by operation of lawin each case, to the extent there existed sufficient cash flow from the Property to do so (provided, however, that there shall be no personal liability under this subsection (vi) solely for the failure to pay Taxes if (A) sufficient sums had been reserved hereunder for the express purpose of paying the Taxes in question and Lender failed to pay same, (B) ▇▇▇▇▇▇’s access to such sums was not restricted or constrained in any manner and (C) no Event of Default was continuing);
(vii) failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the same, in each case, as expressly provided herein (provided, however, that there shall be no personal liability under this subsection (vii) for the aforementioned failures to the extent that, in each case, (A) each applicable failure is itself a failure to pay Insurance Premiums or is solely as a result of a failure to pay Insurance Premiums and (B)(1) there existed insufficient cash flow from the Property to pay Insurance Premiums or (2)(I) sufficient sums had been reserved hereunder for the express purpose of paying the Insurance Premiums in question and Lender failed to make pay same, (II) Lender’s access to such payments andsums was not restricted or constrained in any manner and (III) no Event of Default was continuing);
(viii) any Security Deposits which are not delivered to Lender upon a foreclosure of the Property or action in lieu thereof, during a Trigger Period, funds are made available except to Borrower for payment the extent any such Security Deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such chargesforeclosure or action in lieu thereof;
(ix) Borrowerany tax on the making and/or recording of the Security Instrument, the Note or any of the other Loan Documents or any transfer or similar taxes (whether due upon the making of the same or upon ▇▇▇▇▇▇’s failure to pay Taxes exercise of its remedies under the Loan Documents), but excluding any income, franchise or transfer other similar taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120;
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation seizure or forfeiture of the provisions of this Agreement Property, or any other Loan Document (other than Permitted Encumbrances)portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party;
(xi) the failure by Borrower to deliver (A) make any True Up Payment and/or (B) provide the Required Financial Items, in each case, as and when required herein; provided, however, that there shall be no personal liability under this subsection (xi) solely for the failure to Lender make any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except True Up Payment to the extent that there existed insufficient cash flow from the Property to make such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)True Up Payment;
(xii) the termination (A) any violation or breach of the Condominium Violations Provisions, the Property Document Provisions, (B) any Property Document Event, (C) any violation or the removal breach of any Unit from Regulatory Document and/or the CondominiumRegulatory Document Provisions, and/or (D) any termination and/or cancellation of any Regulatory Document;
(xiii) the Violations;
(xiv) the breach by Borrower of its obligations under the IH Regulatory Agreement which results in the City of New York having an exercisable right to terminate (and/or actually terminating) the IH Regulatory Agreement;
(xv) any Regulatory Damages;
(xvi) any indemnity obligations of Lender to Bank under the Restricted Account Agreement;
(xvii) the failure of Borrower to appoint a New Manager upon the request of ▇▇▇▇▇▇ and/or the failure of Borrower to comply with any limitations on instructing the Manager, each caseas required by and in accordance with, in violation of as applicable, the terms and provisions of this Agreement, which was voted for or consented to or approved by Borrower (or the members Assignment of Management Agreement and the Condominium Board appointed by Borrower); and/orSecurity Instrument;
(xiiixviii) any representation, warranty or covenant contained in Article 5 is breached or violated;
(ixix) the failure by Borrowerany representation, any Borrower Affiliate warranty or covenant contained in Article 6 hereof is violated or breached (including, without limitation, in connection with and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of the occurrence of an Expansion Space Default Immaterial Prohibited Transfer);
(whether pursuant xx) any violation or breach of the Cash Management Provisions;
(xxi) any claims to divest, subordinate or extinguish the Original Bloomberg Lease, at law or in equity), lien of the Security Instrument (including, without limitation, any rights such claims resulting from any breach or other failure to set off comply with Section 22 of the New York Lien Law); and/or
(xxii) (A) an actual violation or breach by Borrower, Guarantor or any payments required under Affiliate thereof, of any Rent Regulations, or any representation or covenant related to Rent Regulations (including, without limitation, any rent overcharges, rent rollbacks or the Original Bloomberg Lease and/or (iiiincorrect representation or covenant by Borrower that the Property or any residential unit at the Property is or will be exempt from any Rent Regulations, and damages of any kind awarded in connection with the same) paying any amount whether the same occurred prior to or performing any obligation after the Closing Date with respect to the Upper Option Space and/or Property or the Lower Option Space after residential units at the occurrence Property or (B) diminution in value to the Loan or the Property as a result of an Expansion Space Default. any rent reductions or rollbacks, judgment or determination of rent overcharge, imposition of treble damages or other penalties imposed by the applicable Governmental Authority due to the violation or breach described in clause (A) if Borrower fails to maintain the tax exemption or other benefits for the Property under the Regulatory Programs.
(b) Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, Documents and (B) the Obligations Debt shall be fully recourse to Borrower in the event that that: (i) any representation, warranty or covenant contained in Article 5 hereof is violated or breached, provided, that, with respect to any such violation or breach of the following occur Article 5 hereof, such violation or breach is evidenced by a court, in a proceeding with respect to Creditors Rights Laws involving any one or more Constituent Owner(s) of Borrower and/or SPE Component Entity (eachany such Person, a “Springing Recourse EventBankrupt Person”): (i) a breach of ), ordering the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower and/or SPE Component Entity with the assets and liabilities of any Bankrupt Person on the basis of, among other Person things, such violation or breach), (ii) a Prohibited Transfer occurs in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law violation of Article 6 hereof (other than on motion an Immaterial Prohibited Transfer), or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application a Bankruptcy Event occurs. For purposes of clarification and for the appointment avoidance of a receiverdoubt, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (ivrecourse carveouts in Section 13.1(a) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes above and this Section 13.1(b) shall not be deemed to be solicited petitioning creditors for any involuntary petition against Borrower by any Personmutually exclusive or otherwise limit one another; without limiting the foregoing, if a particular event, condition, circumstance or occurrence would trigger recourse liability both under Section 13.1(a) above and this Section 13.1(b), recourse liability shall apply under all of such Sections (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under as and to the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, extent provided in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity DateSections); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan Agreement (Clipper Realty Inc.)
Exculpation. Subject Effective as of the Effective Date and to the qualifications belowfullest extent authorized by applicable law, Lender no Exculpated Party shall not enforce have or incur, and each Exculpated Party is hereby released and exculpated from, any Exculpated Claim or any obligation, Cause of Action, or liability for any Exculpated Claim; provided that each Exculpated Party shall be entitled to rely upon the advice of counsel concerning his, her or its duties pursuant to, or in connection with, the Plan or any other related document, instrument, or agreement; provided, further, that the foregoing “Exculpation” shall have no effect on the liability and obligation of Borrower any Exculpated Party to perform and observe the Obligations contained extent determined in a Final Order to have resulted from actual fraud, gross negligence or willful misconduct of such Exculpated Party; provided, further, that the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability foregoing “Exculpation” shall be sought deemed to include any and all claims and Causes of Action arising before the Effective Date which may be asserted against Borrower any Exculpated Party or any Affiliate of Borrower or any legal representativestheir respective predecessors, successors or assigns of Borrower or its Affiliate or any and assigns, and current and former shareholders, affiliates, subsidiaries, principals, employees, agents, officers, directors, officersmanagers, employees, beneficiaries, shareholderstrustees, partners, members, trusteesprofessionals, agentsrepresentatives, or Affiliates of any of the foregoing (collectivelyadvisors, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guarantyattorneys, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loanfinancial advisors, the “Exculpated Parties”)accountants, except that Lender may bring a foreclosure actioninvestment bankers, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Propertyconsultants, in the Rents and each case in their capacity as such, at any other collateral given to Lendertime, and Lenderincluding (without limitation) arising from, by accepting the Noterelated to, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with any prepetition debt purchases or exchanges by the Note, this Agreement, the Mortgage or the other Loan DocumentsPrepetition Secured Parties. The provisions of this Section 10.1 Exculpated Parties have, and upon Confirmation shall notbe deemed to have, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant participated in any action or suit for foreclosure good faith and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance compliance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code with regard to file a claim the solicitation of acceptances and rejections of the Plan and the making of distributions pursuant to the Plan and, therefore, are not and shall not be liable at any time for the full amount violation of any applicable, law, rule, or regulation governing the solicitation of acceptances or rejections of the Obligations Plan or such distributions made pursuant to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsPlan.
Appears in 1 contract
Sources: Restructuring Support Agreement (DENVER PARENT Corp)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or Operating Lessee to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower, Operating Lessee or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower or any Affiliate of Borrower Operating Lessee (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower and/or Operating Lessee only to the extent of Borrower’s or Operating Lessee’s, as applicable, interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or Operating Lessee or any of the Exculpated Party Parties, in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower and/or Operating Lessee as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c) affect the validity or enforceability of any of the Loan Documentsindemnity, the Guaranty guaranty, or any other guaranty similar instrument made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f) impair the enforcement right of Lender to enforce the provisions of the Environmental IndemnityIndemnity or of Section 4.1.6(i) hereof; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the security granted by the Mortgage Loan or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Propertysuch security; or (h) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower and/or Operating Lessee, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, fraud or willful misconduct or material intentional misrepresentation by Borrower Borrower, Operating Lessee, any of the Exculpated Parties or any Borrower Affiliate Party in connection with the Loan;
(ii) the gross negligence or willful misconduct of Borrower, Operating Lessee, any of the Exculpated Parties or any Borrower Party in connection with the Loan;
(iii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower Indemnity or in any other Loan Document concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lenderdocument;
(iv) any intentional (other than, in each case, as part of or waste to facilitate any alteration that is permitted hereunder) material physical waste of the Property (or any portion thereof) caused by Borrower intentional acts or intentional omissions of Borrower, Operating Lessee, any Exculpated Party, or any Borrower AffiliateParty, or any intentional wrongful the removal or destruction disposal of a material any portion of the Property or damage to a material portion after an Event of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower AffiliateDefault;
(v) the commission of misapplication, misappropriation or conversion by Borrower, Operating Lessee, any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) Exculpated Parties or the intentional misappropriation by Borrower or any Borrower Affiliate Parties of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property, or (C) any Rents following an Event of Default or (D) any Tenant security deposits or Rents collected in advance;
(vi) any Personal Property actually received taken from the Property by or on behalf of Borrower, Operating Lessee, any of the Exculpated Parties or the Borrower Parties, and not replaced with Personal Property of the same utility and of the same or any Borrower Affiliategreater value;
(vii) any act of arson by Borrower, Operating Lessee, any of the Exculpated Parties, or any Borrower Parties;
(viii) any fees or commissions paid by Borrower or Operating Lessee, or on behalf of Borrower or Operating Lessee, as applicable, after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower Default to any Exculpated Party or any Borrower Affiliate of any Rents Party in violation of the terms of the Note, this Agreement, the Security Instrument or the other Loan Documents;
(viiiix) all failure to pay Taxes, charges for labor or materials, or other charges that can create Liens on any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of and/or the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on Insurance Premiums in accordance with the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such chargesterms hereof;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Lender upon a foreclosure by Lender under the Loan Documentsof such Individual Property or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof;
(xi) any failure by Borrower and/or Operating Lessee to permit on-site inspections of any Individual Property as required by this Agreement and/or the other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)Loan Documents;
(xii) any failure of Operating Lessee to appoint a new property manager upon the termination request of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of Lender as required by the terms of this Agreement, which was voted for or consented to or approved by Borrower (or Agreement and/or the members of the Condominium Board appointed by Borrower); and/orother Loan Documents;
(xiii) (i) Borrower’s and/or Operating Lessee’s breach of, or failure to comply with, the failure by Borrowerrepresentations, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined warranties and covenants contained in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Franchise Provisions, Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents4.1.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding (i) ALX to the extent of ALX’s obligations and liabilities under the ALX Letter of Credit Agreement and (ii) any Qualified Guarantor to the extent of such Qualified Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty, Completion Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120;
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (iA) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Additional Option Space (as defined in the Bloomberg Lease) and/or the Lower Option Space (as defined in the Original Bloomberg LeaseOption Agreement) (other than Lender or any Affiliate of Lender) to comply with the terms of Section Article 36 of the Original Bloomberg Lease and/or Article 2 of the Option Agreement or any other provision of the Option Agreement (an “Expansion Space Space/Option Agreement Default”), (iiB) the exercise of any rights that the Tenant under the Original Bloomberg Lease and/or the Option Agreement may have as a result of an Expansion Space Space/Option Agreement Default (whether pursuant to the Original Bloomberg Lease, the Option Agreement, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iiiC) paying any amount or performing any obligation with respect to the Upper Additional Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Space/Option Agreement Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan Agreement (Alexanders Inc)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained Except as otherwise specifically provided in the NotePlan, this Agreementno Exculpated Party shall have or incur liability for, and each Exculpated Party is hereby released and exculpated from, any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out, in whole or in part, from the Petition Date through the Effective Date, of the Chapter 11 Cases, the Debtors, the governance, management, transactions, ownership, or operation of the Debtors, the purchase, sale or rescission of any security of the Debtors or the Reorganized Debtors, the DIP Facility, the Convertible Notes Agreements, the Miner Equipment Lender Agreements, the Mortgage Agreements, the General Contracts, any and all agreements relating to M&M Liens, and related agreements, instruments, or other documents, the formulation, preparation, dissemination, solicitation, negotiation, entry into, or filing of the Plan (including the Plan Supplement), the Disclosure Statement, or any Restructuring Transaction, contract, instrument, release, or other agreement or document (including any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the other Loan Documents reliance by any action Released Party on the Plan or proceeding wherein a money judgment Confirmation Order in lieu of such legal opinion) created or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided entered into in connection with the LoanPlan, the “Exculpated Parties”)Plan Supplement, except that the Disclosure Statement, the Plan Settlements, the New Secured Convertible Notes Documents, the New Secured Notes Documents, the Contingent Payment Obligations Documents, the New Miner Equipment Lender may bring a foreclosure actionDebt Documents, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the NoteExit Facility Documents, this the New Warrants Agreement, the Mortgage and the other Loan Documents, or in the PropertyRights Offering, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this AgreementBackstop Commitment Letter, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Initial DIP Loan Documents, the Guaranty DIP Facility, the Terminated RSA, the RSA, the Chapter 11 Cases, the pursuit of confirmation and consummation of the Plan, the administration and implementation of the Plan or Confirmation Order, including the issuance or distribution of securities pursuant to the Plan (including, but not limited to, the New Common Interests), or the distribution of property under the Plan, or any other guaranty made related agreement, except for Claims or Causes of Action arising from an act or omission that is judicially determined in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender a Final Order to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actshave constituted actual fraud, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrowermisconduct, or any intentional failure gross negligence, but in all respects, such Exculpated Parties shall be entitled to deposit rents into reasonably rely upon the Clearing Account to the extent in the control advice of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected counsel with respect to their duties and responsibilities. The Exculpated Parties have, and upon completion of the Property upon a foreclosure by Lender under the Loan DocumentsPlan, unless previously applied (except shall be deemed to have, participated in good faith and in compliance with all applicable laws with regard to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal rightsolicitation and distribution of, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether consideration pursuant to the Original Bloomberg LeasePlan and, therefore, are not, and on account of such distributions shall not be, liable at law any time for the violation of any applicable law, rule, or in equity), including, without limitation, any rights to set off any payments required under regulation governing the Original Bloomberg Lease and/or (iii) paying any amount solicitation of acceptances or performing any obligation with respect rejections of the Plan or such distributions made pursuant to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space DefaultPlan. Notwithstanding anything to the contrary in the foregoing, the exculpations set forth in this Agreement or any of Section 10.7 (i) shall only be applicable to the other Loan Documents, maximum extent permitted by law; and (Aii) Lender shall not be deemed construed as (a) exculpating any Exculpated Party from Claims or Causes of Action arising from an act or omission that is judicially determined by a Final Order to have waived constituted actual fraud (provided that actual fraud shall not exempt from the scope of these exculpations any right which Lender may have Claims or Causes of Action arising under Section 506(a), 506(b), 1111(b) sections 544 or any other provisions 548 of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documentsstate laws governing fraudulent or otherwise avoidable transfers or conveyances), and willful misconduct, or gross negligence, or (Bb) the Obligations shall be fully recourse to Borrower in the event that exculpating any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach post-Effective Date obligations of any of party or Entity under the certifications Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of Plan Supplement) executed to implement the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsPlan.
Appears in 1 contract
Sources: Restructuring Support Agreement (Core Scientific, Inc./Tx)
Exculpation. Subject (a) Neither the Administrative Agent, nor any of its Related Parties, shall be liable to the qualifications below, any Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by L/C Issuer for any action taken or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall omitted to be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability taken by it under the Guaranty, any Alteration Deficiency Guaranty this Agreement or any other guaranty provided Loan Document, or in connection herewith or therewith, except as determined by a final non appealable judgment of a court of competent jurisdiction to have resulted from its or his own willful misconduct or gross negligence. Under no circumstances shall the Administrative Agent or its Related Parties be responsible for, incur any liability with respect to, or have any duty to ascertain or inquire into: (i) any representations or warranties or statements made by any Loan Party in connection with any Loan Document; (ii) the Loaneffectiveness, enforceability, validity or due execution of any Loan Document; (iii) the “Exculpated Parties”)creation, except that Lender may bring a foreclosure action, an action for specific performance perfection or priority of any Liens purported to be created by any Collateral Document or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided(iv) the validity, howevergenuineness, thatenforceability, except as specifically provided hereinexistence, value or sufficiency of, or taking any action with respect to the care, protection or preservation of, any judgment in Collateral; (v) the performance or observance by any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced covenants or secured by any of agreements or other terms or conditions contained in the Loan Documents; (bvi) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability contents of any of the Loan Documentscertificate, the Guaranty report or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender document delivered pursuant to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with any Loan Document; (vii) the following 119 satisfaction of any conditions (all such liability and obligation including any conditions set forth in Article V) set forth in the Loan Documents; (viii) the existence of Borrower for any Default or all Event of Default; (ix) the financial condition of any Loan Party or (x) compliance with the provisions hereof relating to Disqualified Institutions. Without limiting the generality of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actsforegoing, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of Administrative Agent shall not (A) be obligated to ascertain, monitor or inquire as to whether any Insurance Proceeds actually received by Borrower Lender or any Borrower Affiliate Participant or prospective Lender or Participant is a Disqualified Institution or (B) have any Awards liability with respect to or other amounts received in connection with the Condemnation arising out of all any assignment or a portion participation of the Property actually received by Borrower Loans, or disclosure of confidential information, to any Borrower Affiliate;Disqualified Institution.
(viib) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
The Administrative Agent (viiii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., is not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient required to make such payments and, during a Trigger Period, funds are made available to Borrower for payment any inquiry respecting the performance by any Loan Party of such charges;
(ix) Borrower’s failure to pay Taxes its obligations hereunder or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or under any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver confirm receipt of items expressly required to Lender any security deposits, advance deposits or any other deposits collected with respect be delivered to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”Administrative Agent), and any such inquiry which may be made by the Administrative Agent shall not obligate it to make any further inquiry or to take any action; (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have shall not, except as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or expressly set forth herein and in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, have any duty to disclose, or be liable for the failure to disclose, any information relating to any Loan Party or any of their Affiliates that is communicated to or obtained by the Administrative Agent or any of its Affiliates; (Aiii) Lender shall not be deemed to have waived knowledge of the existence of any right which Default or Event of Default unless it has received written notice from an Authorized Officer or a Lender may that specifically refers to and describes the same; (iv) shall not be subject to any fiduciary or other implied duties, regardless of whether any Default or Event of Default has occurred and is continuing; and (v) shall not have under Section 506(aany duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other percentage of the Lenders as shall be expressly provided for herein), 506(b)provided that the Administrative Agent shall not, 1111(b) in any event, be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any other provisions Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the Bankruptcy Code to file automatic stay under any Debtor Relief Law or that may effect a claim for the full amount forfeiture, modification or termination of the Obligations or to require that all collateral shall continue to secure all property of the Obligations owing to a Defaulting Lender in accordance violation of any Debtor Relief Law.
(c) The Administrative Agent shall not in any event be liable for any action taken or not taken by it with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency consent or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of the Required Lenders (or with such other number or percentage of the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to Lenders as shall be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting tonecessary, or joining in, any involuntary petition filed against it by any other Person under as the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes Administrative Agent shall believe in good faith are truthful when made and (B) any such admission to Lender or any servicer of shall be necessary, under the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due circumstances as provided in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity DateSection 11.1); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Credit Agreement (Wayfair Inc.)
Exculpation. Subject to the qualifications of this Section 10.4 below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Mortgages or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower Borrower, any Principal, Manager or any Affiliate of Borrower direct or indirect member, partner, shareholder, any legal representativesPrincipal officer, successors director or assigns of Borrower employee, disclosed or its Affiliate or any principalsundisclosed, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the GuarantyBorrower, any Alteration Deficiency Guaranty Principal or any other guaranty provided in connection with the Loan, Manager (the “Exculpated Parties”), ) except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge, and the other Loan Documents, or in the PropertyPledged Collateral, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyPledged Collateral, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Mortgages and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the other Exculpated Party Parties in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage Pledge or the other Loan Documents. The provisions of this Section 10.1 10.4 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under any of the MortgagePledge; (c) affect the validity or enforceability of any of the Loan DocumentsGuaranty, the Guaranty or any other guaranty made in connection with the Loan Environmental Indemnity or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of any of the Assignment of LeasesLoan Documents; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage extent necessary to (i) preserve or to commence any other appropriate action or proceeding in order for Lender to exercise enforce its rights and remedies against any Property or (ii) obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under the Propertyterms of this Agreement or the Mortgages; or (hg) 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 reasonably incurred by Lender (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actsthe misapplication or misappropriation of Rents in violation of the provisions of the Loan Documents;
(ii) the misapplication or misappropriation of Insurance Proceeds or any Award in violation of the provisions of the Loan Documents;
(iii) Borrower’s or Owner’s failure to return or to reimburse Lender for all Personal Property taken from the Property by or on behalf of Borrower or Owner and not replaced with Personal Property of the same utility and of the same or greater value;
(iv) any act of actual waste or arson of the Property by Owner, willful misconduct Borrower, any principal, affiliate, general partner or member thereof or by any Guarantor;
(v) any fees or commissions paid by Owner or Borrower to any principal, affiliate, general partner or member of Owner or Borrower, or any Guarantor in violation of the terms of this Agreement or the other Loan Documents;
(vi) any fraud or material intentional misrepresentation by Borrower Borrower, its respective general partners, if any, its respective members, if any, its principals, its affiliates, or its employees or by any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(ivvii) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received Loan by Borrower Owner, Borrower, Guarantor or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation entity Controlled by Borrower or any Borrower Affiliate of any Rents in violation of the Loan DocumentsGuarantor;
(viii) all any breach or any material portion default under Section 4.24 of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;this Agreement; or
(ix) Borrower’s failure to pay Taxes any breach or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation default under Section 5.2.10 of the provisions of this Senior Loan Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space DefaultDRM Partners LLC. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt secured by the Mortgages or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, each a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency Property or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results part thereof becomes an asset in a substantive consolidation of the assets and liabilities of Borrower with voluntary bankruptcy or voluntary insolvency proceeding initiated by Borrower, Guarantor or any other Person holding a direct or indirect equity interest in connection with a proceeding under the Bankruptcy Code Borrower, or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower any breach or default under Section 5.2.10 of the Senior Loan Agreement, other than a breach or default arising from any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment transfer of a receiver, trustee or examiner for Borrower all or any portion of DRM Partners, LLC’s direct or interest in the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in BorrowerDRM Partners, in either case, in violation of the Loan DocumentsLLC.
Appears in 1 contract
Sources: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, L▇▇▇▇▇’s right to enforce said rights and remedies against B▇▇▇▇▇▇▇ and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the rights of Lender to (A) obtain the appointment of a receiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (5) impair the enforcement of the assignment of leases and rents contained in the Security Instrument and in any other Loan Documents; (6) impair the right of Lender to obtain the appointment enforce Section 4.12(e) of a receiverthis Agreement; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperty (or any portion thereof); or (h) 8) 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 reasonably Loss actually incurred by Lender L▇▇▇▇▇ (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or intentional material intentional misrepresentation by Borrower B▇▇▇▇▇▇▇, M▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, any SPE Component Entity, any Mezzanine SPE Component Entity, Sponsor, any Affiliated Manager, Guarantor or any Borrower Affiliate director, officer, beneficiary, shareholder, partner, member, employee or agent acting on behalf of any of the foregoing (each, a “Recourse Party”) in connection with the Loan;
(ii) the breach by Borrower willful misconduct of any representation, warranty, covenant or indemnification provision Recourse Party in connection with the Environmental IndemnityLoan;
(iii) the intentional misappropriation by Borrower breach of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent indemnification provision in the control Loan Documents concerning environmental laws, hazardous substances and asbestos and any indemnification of Borrower, unless such rents are otherwise delivered to LenderLender with respect thereto;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or to any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence the intentional acts of Borrower or any Borrower AffiliateRecourse Party, but only to the extent there is sufficient cash flow from the Properties to prevent such physical waste and such cash flow is made available by Lender for the purpose of preventing such physical waste;
(v) the commission removal of any criminal act by Borrower or any Borrower Affiliate which results property in contravention of the Loan Documents during the continuance of an Event of Default other than in the forfeiture ordinary course of the Propertybusiness;
(vi) the intentional misappropriation or conversion of any of the following by Borrower or any Borrower Affiliate a Recourse Party in contravention of the Loan Documents: (A) any Insurance Proceeds actually insurance proceeds received by Borrower or by reason of any Borrower Affiliate or Casualty, (B) any Awards or other amounts received by Borrower from a governmental authority in connection with the a Condemnation of all or a portion of the Property actually received Property, or (C) any revenues generated by Borrower or any Borrower Affiliatethe Properties;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security depositsSecurity Deposits, advance deposits or any other deposits collected with respect to the any Property which are not delivered to Lender upon a foreclosure by Lender under the Loan Documentsof such Property or action in lieu thereof, unless previously applied (except to the extent that any such deposits Security Deposits were applied in accordance with the terms and conditions of any of the applicable lease Lease;
(viii) any litigation or other governing document legal proceeding related to the Loan filed by a Recourse Party with the effect of delaying, opposing, impeding, obstructing, hindering, enjoining or otherwise interfering with the efforts of L▇▇▇▇▇ to exercise any rights and remedies available to Lender during the continuance of an Event of Default; provided, however, that there shall be no liability hereunder on account of, and the foregoing shall not restrict, B▇▇▇▇▇▇▇’s or Guarantor’s right to, dispute, in good faith, whether the relevant Event of Default shall have occurred or whether an action taken by Lender pursuant to the Loan Documents is permitted thereby, nor shall Borrower did be restricted from, or have liability hereunder for, bringing a good faith counterclaim which if not have raised in the legal rightforeclosure proceeding would be barred, because and which does not seek to enjoin the enforcement action by L▇▇▇▇▇;
(ix) Borrower fails to obtain L▇▇▇▇▇’s prior written consent to any additional indebtedness or voluntary lien encumbering any Property and not permitted by the Loan Documents;
(x) a material breach by Borrower of a bankruptcySection 5.5;
(xi) any voluntary termination, receivership or similar judicial proceedingany voluntary, material modification of any Ground Lease by Borrower without L▇▇▇▇▇’s prior written consent other than as expressly permitted under this Agreement; provided, that the liability with respect to direct disbursement this Section 13.1(a)(xi) shall not exceed the Allocated Loan Amount of such deposits)the applicable Ground Leased Property;
(xii) the (A) any voluntary termination of any PILOT Lease and/or PILOT Document or transfer or surrender of any PILOT Lease and/or PILOT Document (including any PILOT Bond) by Borrower without L▇▇▇▇▇’s prior written consent other than in connection with Borrower acquiring the Condominium fee estate from the applicable PILOT Lessor or as otherwise expressly permitted under this Agreement, (B) any termination of any PILOT Lease and/or PILOT Document as a result of a foreclosure of the applicable Security Instrument or deed in lieu thereof or (C) Borrower’s or the removal applicable Tenant’s failure to comply with or Borrower’s or the applicable Tenant’s breach of any Unit from PILOT Lease and/or PILOT Document that results in (x) a reduction of any tax abatement and/or mandatory repayment of any past or current tax abatement under such PILOT Lease and/or PILOT Document, as applicable, (y) termination of such PILOT Lease and/or PILOT Document, as applicable, and the Condominiumbenefits thereunder in favor of Borrower or Tenant or (z) a default by such Borrower under the applicable Lease for such PILOT Property (and, in any such case, Losses shall include lost rental income); provided, that, in each case, the liability with respect to this Section 13.1(a)(xii) shall not exceed the Allocated Loan Amount of the applicable PILOT Property;
(xiii) other than as set forth in Section 13.1(b)(v), a breach by Borrower of any covenant of Article 5 of this Agreement documents (excluding any provision requiring each Borrower to remain solvent, maintain adequate capital or pay its debts as they come due);
(xiv) the Condominium Documents are amended, modified, supplemented, terminated, cancelled or otherwise cease to exist without Lender’s prior written consent;
(xv) any breach or violation of the terms representations and warranties in Section 3.18 hereof with respect to any Leases for which a tenant estoppel certificate was not delivered on or prior to the Closing Date;
(xvi) any liability or obligation of this Agreement, which was voted for or consented Borrower relating to or approved by Borrower (or the members of the Condominium Board appointed by Borrower)Previously-Owned Property; and/or
(xiiixvii) failure to pay (iA) Taxes when the failure by same become delinquent, subject to Borrower’s right to contest the same as provided in this Agreement or (B) Insurance Premiums on or prior to the date the same is due; provided, any Borrower Affiliate and/or any other owner of in each case, there shall be no liability under this Section 13.1(a)(xvii) if (x) there is insufficient cash flow from the Upper Option Space and/or Properties to pay such Taxes or Insurance Premiums prior to the Lower Option Space date upon which such payment becomes delinquent or (as defined y) there are sufficient funds in the Original Bloomberg Lease) (other than Lender Tax Account or any Affiliate of Lender) the Insurance Account, as applicable, to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant pay such Taxes or Insurance Premiums prior to the Original Bloomberg Lease, at law date upon which such payment becomes delinquent and Lender is required to use such amounts for the payment of such Taxes or Insurance Premiums and fails to make such payment in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or accordance with this Agreement.
(iiib) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that:
(i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code SPE Component Entity or any other Federal Affiliate thereof files, or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) joins in the filing of an involuntary of, a petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower law, or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited (or otherwise colludes with) petitioning creditors for any involuntary petition against Borrower by any Person; Borrower,
(vii) Borrower or any SPE Component Entity or any Affiliate thereof files an answer consenting to, or joining in, any to an involuntary petition filed against it Borrower (other than any answer which is required to be made by applicable law), by any other Person person under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law; ,
(viiii) Borrower or any SPE Component Entity consents to or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower (other than with the prior written consent of L▇▇▇▇▇),
(iv) B▇▇▇▇▇▇▇ makes an assignment for the benefit of creditors (other than to Lender in connection with the Loan or admitswith the prior written consent of L▇▇▇▇▇),
(v) there is a breach of any provision of Article 5 (Single Purpose Entity Covenants) hereof or the separateness covenants contained in the Borrower’s or SPE Component Entity’s organizational documents (excluding, in writing each case, any provision requiring each Borrower to remain solvent, maintain adequate capital or in any legal proceeding, its insolvency or inability to pay its debts as they become come due, which admission ) and such breach is used as evidence cited by a court of Borrower’s insolvency competent jurisdiction in connection with an involuntary petition a final order in a proceeding under the Bankruptcy Code or as a material factor in ordering the substantive consolidation of Borrower with any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that a co-Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of under the Loan; provided that the motion or pleading seeking substantive consolidation was not brought or supported by L▇▇▇▇▇ and, as a result thereof, Borrower is subsequently substantively consolidated in a case under the Bankruptcy Code with any Person other than a co-Borrower under the Loan, or
(vi) Borrower fails to obtain L▇▇▇▇▇’s prior consent to (a) the transfer or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer conveyance of all or any material portion of any Property, or (b) the Property or any transfer of direct or indirect interest therein equity interests in Borrower or any Transfer of any direct or indirect interest in Mezzanine Borrower, in either case, each case in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan Agreement (Industrial Logistics Properties Trust)
Exculpation. Subject Notwithstanding anything herein or in any other Loan Document to the qualifications belowcontrary, except as otherwise set forth in this Section 18.32 to the contrary, Lender shall not enforce the liability and obligation of Borrower and (a) if Borrower is a partnership, its constituent partners or any of their respective partners, (b) if Borrower is a trust, its beneficiaries or any of their respective Partners (as hereinafter defined), (c) if Borrower is a corporation, any of its shareholders, directors, principals, officers or employees, or (d) if Borrower is a limited liability company, any of its members and their respective legal, equitable and beneficial owner (the Persons described in the foregoing clauses (a) - (d), as the case may be, are hereinafter referred to as the “Partners”) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Partners, except that Lender may bring a foreclosure action, an action for specific performance performance, or any other appropriate action or proceeding (including, without limitation, an action to enable obtain a deficiency judgment) solely for the purpose of enabling Lender to enforce and realize upon its (i) Borrower’s interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or Property and (ii) any other collateral given to Lender pursuant to under the Loan DocumentsDocuments (the “Default Collateral”); provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower and the Partners only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan DocumentsDefault Collateral. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release impair the validity of the Debt evidenced by the Note or impairment in any way affect or impair the lien of any obligation evidenced this Security Instrument or secured by any of the other Loan DocumentsDocuments or the right of Lender to foreclose this Security Instrument following the occurrence of an Event of Default; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgagethis Security Instrument; (c) affect the validity or enforceability of any of the Loan DocumentsNote, the Guaranty or any other guaranty made in connection with the Loan this Security Instrument, or any of the rights and remedies other Loan Documents, or impair the right of Lender thereunderto seek a personal judgment against Guarantor; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of LeasesAssignment; (f) impair the enforcement right of Lender to bring suit for monetary judgment with respect to damages incurred by Lender resulting from fraud or intentional misrepresentation by Borrower, or any other Person in connection with this Security Instrument, the Environmental IndemnityNote or the other Loan Documents, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower or the Partners with respect to same; (g) constitute a prohibition against impair the right of Lender to seek bring suit for a deficiency monetary judgment against with respect to Borrower’s misappropriation of tenant security deposits or Rent, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower in order or the Partners with respect 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 Propertysame; or (h) constitute a waiver impair the right of Lender to obtain Loss Proceeds due to Lender pursuant to this Security Instrument; (i) impair the right of Lender to enforce the provisions of Sections 2.02(g), 12.01, 16.01 or 16.02, inclusive of this Security Instrument, even after repayment in full by Borrower of the Debt or to bring suit for a monetary judgment against Borrower or the Partners with respect to any obligation set forth in said Sections; (j) prevent or in any way hinder Lender from exercising, or constitute a defense, or counterclaim, or other basis for relief in respect of the exercise of, any other remedy against any or all of the collateral securing the Note as provided in the Loan Documents; (k) impair the right of Lender to bring suit for a monetary judgment with respect to damages incurred by Lender resulting from any misapplication or conversion of Loss Proceeds, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower or the Partners with respect to same; (l) impair the right of Lender to ▇▇▇ for, seek or demand a deficiency judgment against Borrower solely for the purpose of foreclosing the Property or any part thereof, or realizing upon the Default Collateral; provided, however, that any such deficiency judgment referred to in this clause (l) shall be enforceable against Borrower and obligation of Borrower, by money judgment or otherwise, the Partners only to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably of the Default Collateral; (m) impair the ability of Lender to bring suit for a monetary judgment with respect to damages incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special resulting from arson or punitive damages) arising out of waste to or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act committed by Borrower or any Borrower Affiliate which results its Affiliates; (n) impair the right of Lender to bring a suit for a monetary judgment in the forfeiture event of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that right or remedy under any federal, state or local forfeiture laws resulting in the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any loss of the other Loan Documentslien of this Security Instrument, or the priority thereof, against the Property; (Ao) Lender shall not be deemed to have waived a waiver of any right which Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations owing Debt; (p) impair the right of Lender to bring suit for monetary judgment with respect to damages incurred by Lender resulting from any losses resulting from any claims, actions or proceedings initiated by Borrower (or any Affiliate of Borrower) alleging that the relationship of Borrower and Lender is that of joint venturers, partners, tenants in common, joint tenants or any relationship other than that of debtor and creditor; (q) impair the right of Lender to bring suit for a monetary judgment for damages incurred by Lender in accordance with the Loan Documentsevent of a Transfer in violation of the provisions of Article IX hereof, including, without limitation, the failure to obtain Lender’s consent to a Transfer as, when and to the extent required thereunder; (Br) impair the Obligations shall be fully recourse right of Lender to Borrower bring suit for a monetary judgment in the event that any Borrower moves its principal place of business or its books and records relating to the following occur Property which are governed by the UCC, or changes its name, its jurisdiction of organization, type of organization or other legal structure or, if it has one, organizational identification number, without first giving Lender thirty (each, 30) days prior written notice or (s) impair the right of Lender to bring suit for a “Springing Recourse Event”): (i) a breach monetary judgment in the event that Borrower changes its name of otherwise does anything which would make the covenants information set forth in Schedule V hereof any UCC Financing Statements relating to the Property materially misleading without giving Lender thirty (other than those single purpose entity covenants that relate 30) days prior written notice thereof. The provisions of this Section 18.32 shall be inapplicable to solvency Borrower if (a) any proceeding, action, petition or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding filing under the Bankruptcy Code Code, or under federal, any similar state or foreign insolvency federal law (other than on motion now or pleading seeking a substantive consolidation brought hereafter in effect relating to bankruptcy, reorganization or actively supported by Lender); (ii) Borrower insolvency, or any Borrower Affiliatethe arrangement or adjustment of debts, officershall be filed by, director or representative which Controls Borrower consents consented to or files a voluntary petition acquiesced in by or with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting toBorrower, or joining inif Borrower shall institute any proceeding for its dissolution or liquidation, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes shall make an assignment for the benefit of creditors or admits, in writing (b) Borrower or any Affiliate contests or in any legal proceedingmaterial way interferes with, its insolvency directly or inability indirectly (collectively, a “Contest”) any foreclosure action, UCC sale or other material remedy exercised by Lender upon the occurrence of any Event of Default whether by making any motion, bringing any counterclaim, claiming any defense, seeking any injunction or other restraint, commencing any action, or otherwise (provided that if any such Person obtains a non-appealable order successfully asserting a Contest, Borrower shall have no liability under this clause (b)), in which event Lender shall have recourse against all of the assets of Borrower including, without limitation, any right, title and interest of Borrower in and to pay its debts as they become due, which admission is used as evidence the Property and any partnership interests in Borrower (but excluding the other assets of Borrower’s insolvency in connection with an involuntary petition under such Partners to the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person extent Lender would not have had recourse thereto other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer accordance with the provisions of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Datethis Section 18.32); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or Operating Lessee to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower, Operating Lessee or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, or affiliate of Borrower or any Affiliate of Borrower Operating Lessee (but specifically excluding Guarantor pursuant to the Guaranty) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower and/or Operating Lessee only to the extent of Borrower’s or Operating Lessee’s, as applicable, interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or Operating Lessee or any of the Exculpated Party Parties, in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower and/or Operating Lessee as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, the Guaranty guaranty, or any other guaranty similar instrument made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the enforcement right of Lender to enforce the provisions of the Environmental Indemnity; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the security granted by the Mortgage Loan or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against such security (provided that, Guarantor shall not be liable for such deficiency judgment unless there is a Guaranteed Recourse Obligation of Borrower (as defined in the PropertyGuaranty) for which Guarantor is liable pursuant to the terms of the Guaranty); or (h) 8) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower and/or Operating Lessee, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or intentional material intentional misrepresentation by Borrower Borrower, Operating Lessee, any of the Exculpated Parties or any Borrower Affiliate Party in connection with the Loan;
(ii) the gross negligence or willful misconduct of Borrower, Operating Lessee, any of the Exculpated Parties or any Borrower Party in connection with the Loan;
(iii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower Indemnity or in any other Loan Document concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lenderdocument;
(iv) the intentional misapplication, misappropriation or conversion by Borrower, Operating Lessee, any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Exculpated Parties or the Borrower or Parties of any Borrower AffiliateRents following an Event of Default, or any intentional wrongful the removal or destruction disposal of a material any portion of the Property or damage to a material portion Property, which removal is not in the ordinary course of business, during the Property caused by willful misconduct or gross negligence continuance of Borrower or any Borrower Affiliatean Event of Default;
(v) the commission misapplication, misappropriation or conversion by Borrower, Operating Lessee, any of the Exculpated Parties or the Borrower Parties of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property;
(vi) if any Franchise Agreement or Brand Management Agreement is canceled, terminated or surrendered, expires pursuant to its terms or otherwise ceases to be in full force and effect, and in any Borrower Affiliatesuch case, Operating Lessee or Borrower, in connection with such cancellation, termination, surrendered, expiration or cessation, fails to enter into a Replacement Franchise Agreement with a Qualified Franchisor or Replacement Brand Management Agreement with a Qualified Brand Manager, in each case, in accordance with the applicable terms and provisions hereof within sixty (60) days of such cancellation, termination, surrender or expiration of the Franchise Agreement or Brand Management Agreement, as applicable;
(vii) after Borrower’s failure to make the occurrence and during the continuance of an Event of DefaultCondemnation Payment, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documentsif required pursuant to Section 5.3.3 hereof;
(viii) all Borrower and/or Operating Lessee fail to comply with the provisions of Section 3.1.24 hereof; provided, however, such failure shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender a New Non-Consolidation Opinion to the effect that such failure does not negate or any material portion of impair the Property being encumbered by a Lien opinion previously delivered to Lender;
(ix) Borrower voluntarily granted by Borrower (i.e., not arising by operation of law) incurs additional secured indebtedness in violation breach of the Loan Documents, or Documents without Lender’s prior written consent;
(x) Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances)PIP Reserve True-Up;
(xi) the (A) failure by Borrower to deliver to Lender any security depositspay rent, advance deposits additional rent or any other deposits collected with respect to amounts due and payable under the Property upon a foreclosure Ground Lease and/or (B) any costs or expenses incurred by Lender in connection with curing any breach or default by Borrower under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);Ground Lease; and/or
(xii) the termination of the Condominium Ground Lease is terminated, cancelled or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented otherwise ceases to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/orexist.
(xiiib) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach Borrower fails to comply with the provisions of Section 4.2.1 hereof or Article 8 hereof, except any transfer of all or any portion of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate Property to solvency Lender or adequacy of capital) to any purchaser at a foreclosure sale or a breach deed in lieu of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person foreclosure in connection with a proceeding the exercise of Lender’s rights and remedies under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)Loan Documents; (ii) Borrower, SPC Party and/or Operating Lessee fail to comply with any provision of Section 3.1.24 hereof and such failure results in the substantive consolidation of Borrower and/or Operating Lessee with any other Person; (iii) Borrower, Operating Lessee, or any Borrower SPC Party files a voluntary petition under the Bankruptcy code or any other Federal or state bankruptcy or insolvency law; (iv) an Affiliate, officer, director director, or representative which Controls Borrower consents to Controls, directly or files a voluntary indirectly, Borrower, Operating Lessee or any SPC Party, files, or joins in the filing of, an involuntary petition with respect to Borrower against Borrower, Operating Lessee or any SPC Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by Borrower, Operating Lessee or any SPC Party from any Person; (v) Borrower Borrower, Operating Lessee or any SPC Party files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (vi) Borrower any Affiliate, officer, director, or representative which Controls Borrower, Operating Lessee or any SPC Party consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, Operating Lessee or any SPC Party or any portion of the Property, unless such consent is given in response to a request from Lender; (vii) Borrower, Operating Lessee or any SPC Party makes an assignment for the benefit of creditors creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission ; (viii) there is used as evidence substantive consolidation of Borrower’s insolvency Borrower (or any Restricted Party) with any other Person in connection with an involuntary petition under any federal or state bankruptcy proceeding involving the Bankruptcy Code Guarantor or any other Federal of its Affiliates, (ix) Borrower (or any Restricted Party) contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency law by proceeding involving the Guarantor or its Affiliates; or (x) Borrower (or any Restricted Party) accepts from any Guarantor or Guarantor solicits or provides any debtor-in-possession financing to Borrower in the event Borrower (or any Restricted Party) is the subject of a Person bankruptcy or insolvency proceeding. The obligations and liabilities of Borrower and Operating Lessee, as applicable, under this Section 11.22 shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the Security Instrument; provided, however, notwithstanding the foregoing or anything herein, in the Guaranty, the Environmental Indemnity or the other than Lender (except for Loan Documents to the contrary, (A) any admissions that Borrower believes in good faith are truthful when made and Guarantor shall have no liability under this Section 11.22, the Guaranty or the Environmental Indemnity to the extent such liability solely arises (i) following appointment of a receiver over the Individual Property or following Lender (or its nominee) taking title to the Property pursuant to its exercise of remedies under the Loan Documents by foreclosure, deed-in-lieu of foreclosure, assignment-in-lieu of foreclosure or otherwise or (ii) as a result of Lender’s gross negligence, fraud or willful misconduct; and (B) Guarantor shall have no liability under this Section 11.22, the Guaranty or the Environmental Indemnity to the extent such liability solely arises following a Permitted Equity Transfer which results in any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of Guarantor no longer owning any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectivelybut, but in each case, specifically excluding Guarantor to the extent of Guarantor’s liability its liabilities under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loanand Environmental 112 Indemnity) (collectively, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, in the Guaranty or any other guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lend▇▇’▇ ▇ight to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13, as expressly set forth therein); (d4) impair the right of Lender to Lend▇▇ ▇▇ obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the enforcement of the Environmental Indemnityintentionally omitted; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property or any Individual Property; or (h) 8) 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 reasonably Losses incurred by Lender Lend▇▇ (including out-of-pocket ▇▇cluding attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”(excluding, in each case, punitive and consequential damages):
(i) fraudulent acts(A) fraud by Borr▇▇▇▇, willful misconduct ▇▇arantor, or any Affiliate of Borrower or Guarantor, or any of their respective partners, shareholders, members, officers, or directors in connection with the Loan and/or (B) material intentional misrepresentation by Borr▇▇▇▇, ▇▇arantor, any Affiliate of Borrower or any of their respective representatives (that were acting at the direction of Borr▇▇▇▇, ▇▇arantor or Sponsor or that were actually authorized to take the action resulting in personal liability to Borrower Affiliate pursuant to this subsection (i)) in connection with the Loan, which was known by Borrower, Guarantor, any Affiliate of Borrower or any of their respective authorized representatives to be false when made;
(ii) the breach willful misconduct of Borrower, Guarantor, Sponsor, or any Borrower Party in connection with the Loan or the Property or the commission of a criminal act by Borr▇▇▇▇, ▇▇arantor, Sponsor or any Borrower Party, in each case, which results in any seizure or forfeiture of the Property, or any representationportion thereof, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower’s interest therein;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or with respect to any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct the intentional acts or gross negligence intentional omissions (which intentional omissions occurred prior to the Property Transfer Date) of Borrower Borrower, Guarantor, Sponsor, or any Borrower AffiliateParty (including, without limitation, any arson or abandonment of the Property) (provided, however, that (a) the failure to maintain the Property shall not be considered waste hereunder to the extent that (1) there is insufficient cash flow from the Property to pay the costs of such maintenance or (2) the Property Transfer Date has occurred and (b) the failure to restore the Property following a Casualty or Condemnation 113 shall not be considered waste hereunder to the extent (1) that Net Proceeds are not made available to Borrower hereunder, (2) the amount so made available to Borrower is insufficient to pay the costs necessary to restore the Property or (3) the Property Transfer Date has occurred) and/or the removal or disposal of any material Personal Property in which Lender has a Lien, in violation of the terms of the Loan Documents, except for the removal or disposition of any personal property in the normal course of business which is replaced with personal property of substantially the same value and utility;
(viv) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Property, (C) any Rents after Lender has notified Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of DefaultDefault (or Borrower otherwise has actual knowledge that an Event of Default has occurred), the intentional misappropriation less only that portion of such revenues which is actually used by Borrower to operate the Property in the ordinary course of business, provided such use is approved in writing by Lender, or (D) any Borrower Affiliate Tenant security deposits or Rents collected in advance, less (with respect to security deposits only) only that portion of any Rents in violation such security deposits which are used as required pursuant to the terms of the Loan Documents;
applicable Lease (viiibut not retained by Borrower), provided, however, that (x) all any funds applied as specifically required or any material portion of the Property being encumbered as then permitted by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan DocumentsDocuments shall not be considered misapplied, misappropriated or Borrower’s failure to pay any charges converted hereunder and (including, without limitation, charges for labor and materialsy) that create Liens on the Property, regardless of whether arising by operation of law, Borrower shall not be liable to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because right to direct disbursement of a such funds due to an involuntary bankruptcy, receivership or similar judicial proceeding;
(v) failure to pay any unpaid Taxes or Other Charges, charges for labor or materials or any other charges that can create liens on any portion of the Property (in each case, that were incurred or are attributable to any period prior to the Property Transfer Date) that continues for thirty (30) days after receipt by Borrower of written notice thereof, to direct disbursement the extent that the revenue from the Property is (I) sufficient to pay such amounts and (II) available to Borrower to pay such amounts (provided that, without limiting the foregoing, Borrower shall not be liable hereunder for any such failure resulting from (x) amounts deposited with Lender as Tax Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such depositsTaxes or Other Charges owed or (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents);
(xiivi) failure to maintain insurance prior to the Property Transfer Date as required by this Agreement to the extent that the revenue from the Property is (I) sufficient to pay the Insurance Premiums relating thereto and (II) available to Borrower to pay such Insurance Premiums (provided that, without limiting the foregoing, (x) Borrower shall not be liable hereunder for any such failure resulting from the failure to pay amounts deposited with Lender as Insurance Reserve Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of such Insurance Premiums and (y) Borrower shall not be liable to the extent Borrower did not have the legal right to pay such Insurance Premiums due to an involuntary bankruptcy, receivership or similar proceeding);
(vii) the termination of the Condominium or the removal material breach of any Unit from representation, warranty, covenant or indemnification provision in the CondominiumEnvironmental Indemnity concerning Environmental Laws and Hazardous Substances;
(viii) any fees or commissions paid by Borr▇▇▇▇ ▇▇▇er the occurrence of an Event of Default (of which Borrower has been notified by Lender) to Guarantor, in each caseSponsor and/or any Affiliate of Borrower, Guarantor and/or Sponsor in violation of the terms of the Note, this Agreement, which was voted for or consented to or approved by Borrower (the Security Instrument or the members other Loan Documents;
(ix) Borr▇▇▇▇’▇ ▇reach (following notice and the expiration of any cure periods) of, or failure to comply with, the provisions of Section 12.3 hereof;
(x) any representation, warranty or covenant contained in Section 5.1 hereof is violated or breached in any material respect and any such material breach or violation with respect to Section 5.1 does not result in the substantive consolidation of the Condominium Board appointed by Borrower)assets of Borrower with any other Person in a bankruptcy or similar proceeding; and/or
(xiiixi) any representation, warranty or covenant contained in Article 6 hereof (inot including any covenant to give notice or to pay any costs or fees) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) is violated or breached (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”a Major Transfer Violation), provided, however that Borrower shall not be liable under this subsection (iixi) for any involuntary Lien or for the exercise failure of Borrower to pay any rights permitted Indebtedness to the extent that there are insufficient funds generated from the Tenant under Property and/or sufficient funds from the Original Bloomberg Lease may have Property are not otherwise made available to Borrower to pay such permitted Indebtedness (it is acknowledged and agreed that any circumstance or condition that arises as a result of an Expansion Space Default insufficient cash flow from the Property and/or Lender not making cash flow from the Property available to Borrower shall not be construed to arise from a “voluntary” act or omission of the Borrower).
(whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iiib) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a any representation, warranty or covenant contained in Article 5 hereof is violated or breached and any such breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate or violation with respect to solvency or adequacy of capital) or a breach of any of the certifications set forth Article 5 results in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding bankruptcy or similar proceeding; (ii) a Major Transfer Violation; (iii) any Borrower files a voluntary petition under the Bankruptcy Code or under federal, state or foreign insolvency law (any other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)Creditors Rights Laws; (iiiv) Borrower or any Borrower an Affiliate, officer, director director, or representative which Controls Borrower consents to or files a voluntary petition (with respect to each of the foregoing) Controls, directly or indirectly, any Borrower files, or joins in the filing of, an involuntary petition against any Borrower under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against any Borrower by from any Person; (v) any Borrower files an answer consenting to, to or joining in, in any involuntary petition filed against it (other than a petition filed against it by Lend▇▇), ▇y any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person or colludes with other creditors to cause an involuntary bankruptcy or insolvency lawfiling with respect to any Borrower; (vi) any Affiliate, officer, director, or representative which (with respect to each of the foregoing) Controls Borrower consents to or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Property or colludes with other creditors to cause an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Property; (vii) any Borrower makes an assignment for the benefit of creditors creditors, or admits, in writing or admits in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence due (unless to do otherwise would require a false statement or violate Rule 9011 of the Federal Rules of Bankruptcy Procedure or other applicable rules requiring sufficient legal and factual basis for filing papers in a proceeding under Federal or state insolvency laws); (viii) intentionally omitted; or (ix) any Borrower (or any Affiliate of Borrower’s insolvency ) contests or opposes any motion made by Lend▇▇ ▇▇ obtain relief from the automatic stay or seeks to reinstate the automatic stay in connection with an involuntary petition under the Bankruptcy Code or event of any other Federal federal or state bankruptcy or insolvency law by a Person other than Lender proceeding involving Borrower (except provided, however, that Borrower shall not have any 115 liability under (and the Debt shall not be fully recourse to Borrower under) this subsection (ix) for (Aa) contesting or opposing any admissions motion made by Lender to obtain relief from the automatic stay or seeking to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency proceeding involving Borrower to the extent that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); same was required by Applicable Law or (viib) there is a voluntary Transfer of all providing requested or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsrequired information).
Appears in 1 contract
Sources: Loan Agreement (Creative Media & Community Trust Corp)
Exculpation. Subject to the qualifications below, Lender shall not enforce the The liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage Landlord or the other Loan Documents Landlord Parties to Tenant for any default by any action Landlord under this Lease or proceeding wherein a money judgment arising in connection herewith or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representativeswith Landlord's operation, successors or assigns of Borrower or its Affiliate or any principalsmanagement, directorsleasing, officersrepair, employeesrenovation, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty alteration or any other guaranty matter relating to the Project or the Premises shall be limited solely and exclusively to an amount which is equal to the lesser of (a) the interest of Landlord in the Building or (b) the equity interest Landlord would have in the Building if the Building were encumbered by third-party debt in an amount equal to eighty percent (80%) of the value of the Building (as such value is determined by Landlord), provided that in no event shall such liability extend to any sales or insurance proceeds received by Landlord or the Landlord Parties in connection with the LoanProject, the “Exculpated Parties”)Building or Premises. Neither Landlord, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by nor any of the Loan Documents; Landlord Parties shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations of liability contained in this Section 30.13 shall inure to the benefit of Landlord's and the Landlord Parties' present and future partners, beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns. Under no circumstances shall any present or future partner of Landlord (b) impair the right of Lender to name Borrower as if Landlord is a party defendant in any action partnership), or suit for foreclosure and sale under the Mortgage; trustee or beneficiary (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty if Landlord or any other guaranty made in connection with partner of Landlord is a trust), have any liability for the Loan performance of Landlord's obligations under this Lease. Notwithstanding any contrary provision herein, neither Landlord nor the Landlord Parties shall be liable under any circumstances for, and Tenant, on behalf of itself and its agents, contractors, subcontractors, employees, invitees and licensees, hereby waives any claim for, any injury or damage to, or interference with, Tenant's business, and any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrowerindirect, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special consequential or punitive damages) arising out , including but not limited to, loss of profits, loss of rents or in connection with the following 119 (all such liability and obligation other revenues, loss of Borrower for any business opportunity, loss of goodwill or all loss of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other thanuse, in each case, as part of however occurring. Notwithstanding any contrary provision herein, neither Tenant nor the Tenant Parties shall be liable under any circumstances for injury or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliatedamage to, or any intentional wrongful removal or destruction interference with, Landlord's business, including but not limited to, loss of a material portion profits, loss of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards rents or other amounts received in connection with the Condemnation revenues, loss of all business opportunity, loss of goodwill or a portion loss of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominiumuse, in each case, however occurring, other than such damages (including any loss of profits or business opportunity) incurred by Landlord in connection with Tenant's violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation Article 25 above with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Hazardous Materials or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower holding over by Tenant in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants Premises as set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsArticle 16 above.
Appears in 1 contract
Sources: Lease (Bloom Energy Corp)
Exculpation. Subject to Notwithstanding anything in this Mortgage, the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in Note or any other security instrument securing the Note, in order to affirm the absence of personal liability on the part of Mortgagor, Mortgagee agrees that in any action brought to enforce the obligation of Mortgagor to pay or perform any indebtedness or obligation created or arising under the Note or this AgreementMortgage, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability decree shall be sought enforceable against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor Mortgagor only to the extent of Guarantor’s the joint and several interests of Mortgagor in the Mortgaged Property, and any such judgment shall not be subject to execution on, nor be a lien on, assets of Mortgagor other than the joint and several interests in the Mortgaged Property. The foregoing limitation of liability under of the GuarantyMortgagor or its general partner shall not apply, however, to any Alteration Deficiency Guaranty of the following:
(a) Fraud or misrepresentation on the part of the Mortgagor or any of its partners, or any waste of the Mortgaged Property.
(b) Any rents, issues or profits collected more than one (1) month in advance of their due dates.
(c) Any misapplication of proceeds, rents, issues or profits, security deposits, and any other guaranty provided in connection with the Loanpayments from tenants or occupancy (including, without limitation, lease termination fees), insurance proceeds, condemnation awards, or other sums of a similar nature.
(d) Mortgagor's or any of its partners otherwise committing any wrongful act, the “Exculpated Parties”)apparent purpose or intent of which is to deprive Mortgagee of any of its security for the Secured Indebtedness.
(e) Liability under any environmental covenants, except that Lender may bring a foreclosure actionconditions, an action for specific performance and indemnity contained in this Mortgage and in any separate environmental indemnity agreement executed by Mortgagor.
(f) Rents or other income not properly applied to any portion then due of the Secured Indebtedness or the normal operating expenses incurred or accrued.
(g) Personalty or fixtures removed or allowed to be removed by or on behalf of Mortgagor or any other appropriate action of its partners and not replaced by items of equal or proceeding greater value than the personalty or fixtures so removed; however, this provision shall not apply to enable Lender those items destroyed in the ordinary course of business or those items removed in the ordinary course of business and not intended to enforce and realize upon deprive Mortgagee of any of its interest security for the Secured Indebtedness.
(h) An amount equal to the sum of all payments made by Mortgagor to any junior lienholders during any period in which a monetary default exists under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, loan agreement executed by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or Mortgagor in connection with the NoteSecured Indebtedness.
(i) Failure to pay any taxes or assessments prior to delinquency, this Agreementor to pay charges for labor, materials or other charges which can create liens on any portion of the Mortgage Mortgaged Property and any sums expended by Mortgagee in the performance of or compliance with the other Loan Documents. The provisions obligations of this Section 10.1 shall not, however, (a) constitute a waiver, release Mortgagor or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in its partners under any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made loan agreement executed by Mortgagor in connection with the Loan Secured Indebtedness, including, without limitation, sums expended to pay taxes or assessments or hazard insurance premiums, capital improvement expenditures, bills for utilities or other service or products for the benefit of the Mortgaged Property.
(j) The cost of compliance with all federal, state and local laws and regulations, as well as the cost of investigating any action or charge thereunder, and/or damages suffered by Mortgagee as a result of the failure of Mortgagor or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender its partners to obtain the appointment of a receiver; (e) impair the enforcement pay or comply with any of the Assignment of Leases; foregoing.
(fk) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 Tortious or other obligation reasonably acts or omissions giving rise to claims against Mortgagee, including, without limitation, claims by tenants for damages or offsets.
(l) Attorneys' fees, court costs and other expenses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or Mortgagee in connection with the following 119 (all such Mortgagee's enforcement of Mortgagor's personal liability and obligation as set forth herein. In addition to the foregoing, nothing contained in this Section shall in any manner limit the liability of Borrower for Mortgagor to pay over to Mortgagee any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct Rents and Profits or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste proceeds of the Property Mortgaged Property, if the same are received or held by Borrower Mortgagor after Mortgagor is made aware, by written notice from Mortgagee or any Borrower Affiliateotherwise, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentshereinbefore defined.
Appears in 1 contract
Sources: Mortgage, Assignment of Rents and Security Agreement (Angeles Partners Viii)
Exculpation. Subject Notwithstanding anything herein or in any other Loan Document to the qualifications belowcontrary, except as otherwise set forth in this Section 18.32 to the contrary, Lender shall not enforce the liability and obligation of Borrower or any Person holding a direct or indirect interest in Borrower or (a) if Borrower or any of its direct or indirect owners is a partnership, its or their direct or indirect constituent partners or any of their respective partners, (b) if Borrower or any of its direct or indirect owners is a trust, its or their beneficiaries or any of their respective Partners (as hereinafter defined), (c) if Borrower or any of its direct or indirect owners is a corporation, any of its or their direct or indirect shareholders, directors, principals, officers or employees, or (d) if Borrower or any of its direct or indirect owners is a limited liability company, any of its or their direct or indirect members (the Persons described in the foregoing clauses (a) — (d), as the case may be, are hereinafter referred to as the “Partners”) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or any of the other Loan Documents by any action or proceeding, including, without limitation, any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Partners, except that Lender may bring a foreclosure action, an action for specific performance performance, or any other appropriate action or proceeding (including, without limitation, an action to enable obtain a deficiency judgment) against Borrower solely for the purpose of enabling Lender to enforce and realize upon its (i) Borrower’s interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, (ii) the Rents Rent to the extent received by Borrower during the existence of an Event of Default (all Rent covered by this clause (ii) being hereinafter referred to as the “Recourse Distributions”) and not applied towards Debt Service or the operation or maintenance of the Property and (iii) any other collateral given to Lender pursuant then subject to the Loan DocumentsDocuments (the collateral described in the foregoing clauses (i) — (iii) is hereinafter referred to as the “Default Collateral”); provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower and the Partners only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan DocumentsDefault Collateral. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release impair the validity of the Debt evidenced by the Note or impairment in any way affect or impair the lien of any obligation evidenced this Security Instrument or secured by any of the other Loan DocumentsDocuments or the right of Lender to foreclose this Security Instrument during the existence of an Event of Default; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgagethis Security Instrument; (c) affect the validity or enforceability of any of the Loan DocumentsNote, the Guaranty or any other guaranty made in connection with the Loan this Security Instrument, or any of the rights and remedies of Lender thereunderother Loan Documents; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of LeasesAssignment; (f) impair the enforcement right of Lender to bring suit for a monetary judgment against Borrower with respect to fraud or material misrepresentation by Borrower, or any Affiliate of Borrower in connection with this Security Instrument, the Environmental IndemnityNote or the other Loan Documents, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower; (g) constitute a prohibition against impair the right of Lender to seek bring suit for a deficiency monetary judgment to obtain the Recourse Distributions received by Borrower and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower with respect to same; (h) impair the right of Lender to bring suit for a monetary judgment against Borrower with respect to Borrower’s misappropriation of tenant security deposits or Rent collected more than one (1) month in order advance and not applied to fully realize the security granted by operation of the Mortgage Property (including the Basic Carrying Costs), and the foregoing provisions shall not modify, diminish or to commence any other appropriate action or proceeding in order for discharge the liability of Borrower; (i) impair the right of Lender to exercise its remedies against the Propertyobtain Loss Proceeds due to Lender pursuant to this Security Instrument; or (hj) constitute a waiver of impair the right of Lender to enforce the provisions of Sections 2.02(g) (other than the provisions of clause (vii) thereof), 16.01 or 16.02, inclusive of this Security Instrument, even after repayment in full by Borrower of the Debt or to bring suit for a monetary judgment against Borrower with respect to any obligation set forth in said Sections; (k) prevent or in any way hinder Lender from exercising, or constitute a defense, or counterclaim, or other basis for relief in respect of the exercise of, any other remedy against any or all of the collateral securing the Note as provided in the Loan Documents; (l) impair the right of Lender to bring suit for a monetary judgment against Borrower with respect to any misapplication or conversion of Loss Proceeds, and the foregoing provisions shall not modify, diminish or discharge the liability and obligation of Borrower; (m) impair the right of Lender to s▇▇ for, by money seek or demand a deficiency judgment against Borrower solely for the purpose of foreclosing the Property or otherwiseany part thereof, or realizing upon the Default Collateral; provided, however, that any such deficiency judgment referred to in this clause (m) shall be enforceable against Borrower only to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred Default Collateral; (n) impair the ability of Lender to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct bring suit for a monetary judgment against Borrower with respect to arson or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower to or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by resulting from the gross negligence or willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) or, to the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Defaultextent that there is sufficient cash flow, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such PoliciesImposition, or pay in lieu thereof, deposit a sum equal to any Condominium Charges Impositions into the Basic Carrying Costs Sub-Account; (o) impair the right of Lender to the extent cash flow from the Property is sufficient to make such payments and all other payments required of bring a suit for a monetary judgment against Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate event of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that right or remedy under any federal, state or local forfeiture laws resulting in the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any loss of the other Loan Documentslien of this Security Instrument, or the priority thereof, against the Property; (Ap) Lender shall not be deemed to have waived a waiver of any right which Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations owing Debt; (q) impair the right of Lender to bring suit for monetary judgment against Borrower with respect to any actual losses resulting from any claims, actions or proceedings initiated by Borrower (or any Affiliate of Borrower) alleging that the relationship of Borrower and Lender is that of joint venturers, partners, tenants in accordance with common, joint tenants or any relationship other than that of debtor and creditor; or (r) impair the Loan Documents, and (B) the Obligations shall be fully recourse right of Lender to bring suit for a monetary judgment against Borrower in the event that any of a Transfer in violation of the following occur provisions of Article IX hereof. The provisions of this Section 18.32 shall be inapplicable to Borrower if (eacha) any proceeding, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency action, petition or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding filing under the Bankruptcy Code Code, or under federal, any similar state or foreign insolvency federal law now or hereafter in effect relating to bankruptcy, reorganization or insolvency, or the arrangement or adjustment of debts, shall be (other than on motion A) filed by Borrower or pleading seeking a substantive consolidation brought (B) filed against Borrower and consented to or actively supported acquiesced in by Lender); (ii) Borrower or if any Affiliate of Borrower, or if Borrower or any Affiliate of Borrower Affiliate, officer, director shall institute any proceeding for Borrower’s dissolution or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting toliquidation, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes shall make an assignment for the benefit of creditors creditors, or admits, in writing (b) Borrower or any Affiliate contests or in any legal proceedingmaterial way interferes with, its insolvency directly or inability to pay its debts as they become dueindirectly (collectively, which admission is used as evidence a “Contest”), any foreclosure action, UCC sale or other material remedy exercised by Lender upon the occurrence of Borrower’s insolvency in connection with an involuntary petition Event of Default under the Bankruptcy Code Loan Documents whether by making any motion, bringing any counterclaim (other than a compulsory counterclaim), claiming any defense, seeking any injunction or other restraint, commencing any action, or otherwise (provided that if any such Person obtains a non-appealable order successfully asserting a Contest, Borrower shall have no liability under this clause (b) and provided, further, that the liability under this clause (b) shall be limited to the actual costs, expenses and damages of Lender which result from any such Contest). Nothing contained in this Section 18.32 is intended to impose any liability upon the Partners or any other Federal of them which the Partners would not otherwise have as a matter of law or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsequity. Section 18.33. Intentionally Omitted.
Appears in 1 contract
Sources: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Grubb & Ellis Co)
Exculpation. Subject to 7.1.1 Except as otherwise provided herein or in the qualifications belowother Loan Documents, Lender Administrative Agent shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Borrower, except that Lender Administrative Agent may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender Administrative Agent to enforce and realize upon its interest under the Note, this Agreement, the Note(s), the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Lender pursuant to created by this Agreement, the Note(s), the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and LenderAdministrative Agent. Administrative Agent, by accepting the Note, this Agreement, the Note(s), the Mortgage and the other Loan Documents, agrees that it shall not sunot, except as otherwise provided in this Section 7.1, ▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Note(s), the Mortgage or the other Loan Documents. The provisions of this Section 10.1 7.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note(s), the Mortgage or the other Loan Documents; (bii) impair the right of Lender Administrative Agent to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage; (ciii) affect the validity or enforceability of any indemnity (including, without limitation, those contained in Section 6.1, of the Loan Documentsthis Agreement), the Guaranty guaranty, master lease or any other guaranty similar instrument made in connection with this Agreement, the Note(s), the Mortgage and the other Loan or any of the rights and remedies of Lender thereunderDocuments; (div) impair the right of Lender Administrative Agent to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) impair the enforcement right of the Environmental Indemnity; (g) constitute a prohibition against Lender Administrative Agent to seek obtain a deficiency judgment or other judgment on the Note(s) against Borrower in order if necessary to fully realize the security granted by the Mortgage obtain any insurance proceeds or condemnation awards to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Propertywhich Administrative Agent would otherwise be entitled under this Agreement; or (h) constitute a waiver of the right of Lender to provided however, Administrative Agent shall only enforce the liability and obligation of Borrower, by money such judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
7.1.2 Notwithstanding the provisions of this Section 7.1 to the contrary, damageBorrower, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or Franklin Street Properties Corp. in connection with the following 119 (all such liability and obligation of event that Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actstransfers the Property to FSP Transferee; (ii) merges with FSP Transferee; or (iii) is acquired by FSP Transferee, willful misconduct shall be personally liable to Administrative Agent and Lenders on a joint and several basis for any and all losses, claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties, charges, fees, judgments, awards, amounts paid in settlement of whatever kind or material nature (including but not limited to reasonable legal fees and other costs of defense) due to:
(a) fraud or intentional misrepresentation by Borrower or any other Affiliate of Borrower Affiliate in connection with the Loan;
(ii) execution and the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms delivery of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”Note(s), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg LeaseMortgage, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any certificate, report, financial statement or other provisions instrument or document furnished to Administrative Agent at the time of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer closing of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect or during the term of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.;
Appears in 1 contract
Exculpation. Subject Except with respect to the qualifications matters set forth in subsections (a) and (b) below, Lender’s source of satisfaction of the indebtedness evidenced by this Note and all other covenants and obligations under this Note and any other of the Loan Documents shall be limited to the Property, and Lender shall not enforce the liability and obligation seek to procure payment out of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate assets of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agentsBorrower, or Affiliates of seek a judgment (except as hereinafter provided) for any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability sums which are or may be payable under the Guaranty, any Alteration Deficiency Guaranty this Note or any other guaranty provided in connection with of the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in claim or seek judgment for any deficiency remaining after foreclosure of the Property, the Rents or any other collateral given to Lender pursuant to the Loan DocumentsSecurity Instrument; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to that the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, foregoing clause shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) constitute a waiver of prejudice the right of Lender to enforce the liability and obligation lien of Borrower, by the Security Instrument or other security given for the payment thereof or to exercise any of its remedies at law other than the entry of a personal money judgment against the Borrower. The foregoing notwithstanding:
(a) Borrower shall be and remain personally liable for all losses, costs, damages, or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably expenses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or ▇▇▇▇▇▇ in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):instances:
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the LoanReserved;
(ii) the breach as a result of waste (except ordinary wear and tear), arson committed or instigated by Borrower of ▇▇▇▇▇▇▇▇, any representationGuarantor or any partner, warranty, covenant member or indemnification provision shareholder in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender Security Instrument regarding removal, demolition or any Affiliate structural alteration of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at subject to the request terms and conditions of or with Section 1.32 of the consent of Lender, Security Agreement;
(iii) Reserved;
(iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; Reserved;
(v) Borrower files an answer consenting toBorrower’s breach or failure to perform or comply with Section 1.03 (captioned “Hazardous Waste”) of the Security Instrument, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code Borrower’s or any other Federal Guarantor’s breach or state bankruptcy failure to perform or insolvency law; (vi) comply with the provisions of the Environmental Indemnification Agreement of even date herewith executed by Borrower makes an assignment for the benefit of creditors ▇▇▇▇▇▇;
(vi) misapplication of or admitsfailure to deliver to Lender (in accordance with the terms of the Loan Documents) the following: (1) any insurance or condemnation proceeds; (2) rents, issues or profits received by ▇▇▇▇▇▇▇▇/Guarantor or its agent after ▇▇▇▇▇▇ makes written demand therefor pursuant to any Loan Document; or (3) prepaid rents or tenant security deposits; or
(vii) violation of any of the provisions of Sections 1.29 and 1.30 (captioned “Single Purpose Entity” and “ERISA”, respectively) of the Security Instrument.
(b) Borrower shall be and remain personally liable without exculpation or limitation of liability whatsoever for the entire amount of the indebtedness evidenced by the Note (including all principal, interest, and other charges) and all other sums due or to become due under the other Loan Documents, whether at maturity or by acceleration or otherwise, in writing the following instances:
(i) violation of any of the provisions of Sections 1.15(c) and (d) of the Security Instrument (captioned, “No Sale/Encumbrance” and “Permitted Transfers”, respectively);
(ii) fraud or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency intentional misrepresentation in connection with an involuntary petition under the Bankruptcy Code Property, Loan Documents, or Loan Application; or
(iii) the Property or any other Federal or state part thereof becomes an asset in: (1) a voluntary bankruptcy or insolvency law proceeding commenced by a Person other than Lender Borrower; or (except for 2) an involuntary bankruptcy or insolvency proceeding in which: (A) such proceeding was commenced by any admissions that entity controlling, controlled by or under common control with Borrower believes (individually or collectively, “Affiliate”), including but not limited to any creditor or claimant acting in good faith are truthful when made and concert with Borrower or any Affiliate; or (B) any such admission Affiliate objects to a motion by Lender for relief from any stay or injunction from the foreclosure of the Security Instrument or any servicer of other remedial action permitted under the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) Note, Security Instrument or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the other Loan Documents.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the “Borrower Parties”) or any other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Borrower Parties or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Person, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to this Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Lender to name any of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 PropertyLeases and Rents; or (hvi) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower (but not against any members of Borrower (other than Guarantor to the extent provided in the Non-Recourse Guaranty and/or the Partial Payment Guaranty) or their direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably (but excluding any punitive, consequential or speculative damages) incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Guarantor in connection with the Loan;
(iib) intentional physical waste of the Property (including, but not limited to, waste due to gross negligence) by Borrower or any affiliate thereof; provided, however, such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by Borrower or any affiliate thereof;
(c) the material breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityIndemnity or in this Agreement concerning Environmental Laws, Hazardous Substances and Asbestos;
(iiid) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, removal or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property disposal by Borrower or any Borrower Affiliate, or affiliate thereof of any intentional wrongful removal or destruction of a material portion of the Property or damage to a material after an Event of Default has occurred and while it is continuing, unless such portion of the Property caused is replaced by willful misconduct an item of equal or gross negligence of Borrower or any Borrower Affiliategreater value as determined by Lender in its reasonable discretion;
(ve) the commission of any criminal act misapplication or conversion by Borrower or any Borrower Affiliate which results in the forfeiture affiliate thereof of (i) any insurance proceeds paid by reason of any loss, damage or destruction to the Property;
, (vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Aii) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property, (iii) any Rents following an Event of Default or (iv) any Rents paid more than one (1) month in advance;
(f) failure to pay charges for labor or materials or taxes or other charges that can create liens superior to the lien of the Mortgage on any portion of the Property actually received unless such taxes or other charges are being contested in accordance herewith or such taxes or charges have been delivered to Lender in accordance with Section 3.3 hereof or Borrower has complied with Section 5.2 hereof; and
(g) any security deposits collected by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected affiliate thereof with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach conditions of any of the certifications set forth in Leases prior to the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation occurrence of the assets and liabilities Event of Borrower with Default that gave rise to such foreclosure or action in lieu thereof.
(1) if any other Person in connection with a proceeding under the Bankruptcy Code petition for bankruptcy, reorganization or under federalarrangement pursuant to federal bankruptcy law, or any similar federal or state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported law, shall be filed by Lender); (ii) Borrower or any Borrower AffiliateGuarantor, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii2) Borrower files an application for the appointment of a receiver, trustee or examiner for if Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower Guarantor files an answer consenting to, or otherwise joining in, any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law filed against it by any other Person under the Bankruptcy Code Person, or is found pursuant to a final, unappealable order of a court of competent jurisdiction to have solicited or caused to be solicited creditors to file any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any other Federal similar federal or state bankruptcy law against Borrower or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admitsGuarantor, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii3) there is if Borrower or Guarantor are found, pursuant to a voluntary Transfer final unappealable order of all a court of competent jurisdiction, to have been in collusion with creditors that initiate a bankruptcy action or any material portion of the Property proceeding against Borrower or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsGuarantor.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any direct or indirect principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, manager or Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not su▇ ▇orsue for, seek or demand any deficiency or other monetary judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth herein, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, L▇▇▇▇▇’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Section 10.7); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g6) 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 (h7) impair the right of Lender to obtain a deficiency judgment (or other judgment on the Note) against Borrower (but not against any Guarantor), if (and only to the extent) necessary to obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under the terms of the Loan Documents, it being agreed that Lender shall only enforce any deficiency judgment (or other such judgment) pursuant to this clause (7) to the extent of such Insurance Proceeds or Awards, as applicable; or (8) impair the right of Lender to enforce Section 7.1 hereof or the other Cash Management Provisions. Further, the provisions of this Section 10.7 shall in no event 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 of, and Borrower shall be and at all times remain fully and personally liable to Lender for (and shall and does hereby agree to indemnify and hold harmless Lender from and against), any and all actual loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesby L▇▇▇▇▇ in connection with exercising its rights and remedies) arising out of or in connection with the following 119 (all such liability and obligation first arising before Lender or L▇▇▇▇▇’s agents, including a receiver appointed at the request of Borrower for any L▇▇▇▇▇ takes possession or all control of the following being referred to herein as “Borrower’s Recourse Liabilities”):Property, whether by foreclosure, deed in lieu or other transfer of the Property:
(i) fraudulent actsfraud, willful misconduct misrepresentation, or willful failure to disclose a material intentional misrepresentation fact, in each case, by (or at the direction of) Borrower or any Borrower Affiliate Party in connection with the Loan;Loan or Property; or
(ii) conversion, misapplication or misappropriation of Rents, security deposits, Awards or insurance payments by (or at the direction of) Borrower or any Borrower Party; or
(iii) gross negligence or willful misconduct of (or at the direction of) Borrower or any Borrower Party in connection with the Loan or Property; or
(iv) intentional material physical waste to the Property by (or at the direction of) any Borrower Party, or damage to the Property caused by the intentional acts or intentional omissions of any Borrower Party, and/or (during the continuance of an Event of Default) the removal or disposal of any portion of the Property which is not replaced by Property of equivalent use or value; or
(v) subject to applicable contest rights as set forth herein, failure to pay Taxes or Other Charges, in each case to the full extent of revenues received from ownership and operation of the Property except to the extent the funds to pay such Taxes were in possession of Lender and L▇▇▇▇▇’s access to such funds were not restricted or constrained in any manner; or
(vi) failure to pay Insurance Premiums, to the full extent of revenues received from ownership and operation of the Property, or to maintain the Policies in full force and effect and/or to provide Lender evidence of the same, in each case, as expressly provided herein, in each case except to the extent the funds to pay the Insurance Premiums were in possession of Lender and L▇▇▇▇▇’s access to such funds were not restricted or constrained in any manner; or
(vii) any breach or misrepresentation of the SPE Provisions, other than one described in Section 10.7(b)(iii) below; or
(viii) any litigation or other legal proceeding related to the Debt filed by, or any other act or omission by, any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein or in any other Loan Document or to realize on any collateral for the Loan, including, without limitation, the assertion by any Borrower Party of any defenses (other than defenses raised in good faith) or counterclaims against Lender; or
(ix) failure to pay charges for labor or materials or other charges that can create Liens on any portion of the Property, to the extent such Liens are not bonded over or discharged in accordance with the Loan Documents or otherwise approved by Lender; or
(x) any indemnification obligation arising under any of Section 10.6.2 and/or Section 10.6.3 of this Agreement; or
(xi) seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party; or
(xii) any breach of the Cash Management Provisions other than those covered by Section 10.7(b)(v) below; or
(xiii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;, the Mortgage or any other Loan Document concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in any such document; or
(iiixiv) Borrower fails to (A) permit on-site inspections of the intentional misappropriation by Borrower Property, as and when required herein, and such failure continues for a period of any Reserve Funds disbursed more than three (3) Business Days after delivery of written notice of such failure to Borrower, provided, however, if any Tenant at the Property shall refuse to provide Lender with access to such Tenant’s leased space at the Property, then no Borrower Party shall have any liability under this subsection (xiv) for any Loss incurred by L▇▇▇▇▇ as a direct result of L▇▇▇▇▇’s inability to access such T▇▇▇▇▇’s leased space at the Property, (B) provide financial information, or any intentional (C) obtain Lender’s approval prior to termination or replacement of the property manager or timely appoint a new property manager at the request of Lender, each as required by, and in accordance with, the terms and provisions of, the Loan Documents; or
(xv) the failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
purchase or replace (ivas applicable) any intentional (other thanInterest Rate Cap Agreement or Replacement Interest Rate Cap Agreement, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property and when required by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease 2.8 hereof.
(an “Expansion Space Default”), (iib) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt secured by the Mortgage or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents. Furthermore, and (Bnotwithstanding the provisions of Section 10.7(a) above, the Obligations Debt shall be fully recourse to Borrower (but not to any partner, member, manager or stockholder of Borrower, other than any party to the Guaranty from time to time), and Borrower (but not any partner, member, manager or stockholder of Borrower, other than any party to the Guaranty from time to time) shall be and remain fully and personally liable to Lender for the full amount of the Debt, in the event that of any of the following occur (each, a “Springing Recourse Event”): following:
(i) a Bankruptcy Recourse Event occurs; or
(ii) the Transfer Provisions are breached; or
(iii) any breach of the covenants set forth SPE Provisions, but only to the extent that such breach is cited as a factor in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth judicial decision resulting in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person Person; or
(iv) if Guarantor, Borrower or any Affiliate of any of the foregoing, in connection with any enforcement action or exercise or assertion of any right or remedy by or on behalf of Lender under or in connection with the Note, the Mortgage or any other Loan Document, seeks a defense (other than defenses raised in good faith), judicial intervention or injunctive or other equitable relief of any kind or asserts in a pleading filed in connection with a judicial proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower any defense against Lender or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition right in connection with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application security for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any PersonLoan; or
(v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under material breach of the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for Cash Management Provisions resulting in the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability failure to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and open the Lockbox Account, (B) deliver the Lockbox Agreement, (C) open the Cash Management Account, (D) deliver the Cash Management Agreement or (E) deposit Rents into the Lockbox Account.
(c) Notwithstanding anything to the contrary in the Note, this Loan Agreement or any such admission of the other Loan Documents, and in addition to the other provisions set forth in this Section 10.7, upon a failure of Borrower to make a Trigger Period True Up Deposit, Borrower shall be and remain fully and personally liable to Lender for the payment of the amount of the Trigger Period True Up Deposit.
(d) Notwithstanding anything to the contrary in the Note, this Loan Agreement or any servicer of the other Loan that Documents, and in addition to the other provisions set forth in this Section 10.7, Borrower canshall be personally liable for the Debt, not pay its operating expenses (including Debt Service payments due to exceed and in respect of an amount equal to the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer amount of any direct Rents that are not deposited with Lender (or indirect interest in Borrower, in either case, into the Lockbox Account) in violation of the Loan Documents.
Appears in 1 contract
Sources: Building Loan Agreement (ACRES Commercial Realty Corp.)
Exculpation. Subject The liability of Landlord or the other Landlord Parties to Tenant (or any person or entity claiming by, through or under Tenant) for any default by Landlord under this Lease or arising in connection herewith or with Landlord’s operation, management, leasing, repair, renovation, alteration or any other matter relating to the qualifications below, Lender Project or the Premises shall be limited solely and exclusively to an amount which is equal to the equity interest of Landlord in the Building. The Landlord Parties shall not enforce have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations of liability contained in this Section 29.13 shall inure to the benefit of the Landlord Parties’ present and future partners, beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns. Under no circumstances shall any present or future partner, member, shareholder, trustee or beneficiary of Landlord, have any liability and obligation for the performance of Borrower Landlord’s obligations under this Lease. Neither party shall be liable to perform and observe the Obligations other party for any special or consequential damages, loss of profits, loss of business opportunity or loss of goodwill from the failure of such party to meet its obligations under this Lease. Notwithstanding the limitation contained in the Note, this Agreementforegoing sentence, the Mortgage or parties acknowledge and agree that (i) if Landlord is required to ▇▇▇▇▇ the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate rent of Borrower or any legal representativesanother tenant at the Project, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates as the result of any Alteration constructed by or on behalf of the foregoing (collectivelyTenant, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance any repair or any other appropriate action maintenance performed by or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documentson behalf of Tenant, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Tenant’s negligence or breach of this Lease, at law which interferes with such tenant’s use of its premises Tenant shall be liable to Landlord for such abated rent, and (ii) Tenant shall be liable for any and all claims or damages which Landlord may suffer because of Tenant’s holding over in equity), including, without limitation, any the Premises following the expiration of the Lease Term. Nothing in this Section 29.13 shall affect or limit Landlord’s rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect file legal actions to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any recover possession of the other Loan DocumentsPremises, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a)or for injunctive relief against Tenant, 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender non-monetary relief provided in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsthis Lease.
Appears in 1 contract
Sources: Sublease Agreement (Snowflake Inc.)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the this Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the this Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the this Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 11 of the Loan DocumentsSecurity Instrument, in the Guaranty or any other guaranty and the Environmental Agreement) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, ▇▇▇▇▇▇’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Section 10); (d4) impair the right rights of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) impair the enforcement right of Lender to enforce Section 3.8(e) of the Environmental IndemnitySecurity Instrument; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h) 8) 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 reasonably loss incurred by Lender ▇▇▇▇▇▇ (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower Party;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, litigation or any intentional failure to deposit rents into the Clearing Account other legal proceeding related to the extent Debt filed by any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the control of Borrower, unless such rents are otherwise delivered to Lenderother Loan Documents;
(iv) any intentional (other than, in each case, as part of or waste to facilitate any alteration that is permitted hereunder) material physical waste of the Property caused by Borrower the intentional acts or intentional omissions of any Borrower Affiliate, or any intentional wrongful Party and/or the removal or destruction disposal of a material any portion of the Property or damage to a material portion after an Event of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower AffiliateDefault;
(v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Party of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property, (C) any Rents following an Event of Default or (D) any tenant security deposits or Rents collected in advance;
(vi) failure to pay or otherwise discharge Taxes or charges for labor or materials or other charges that can create liens on any portion of the Property actually received by Borrower or any Borrower Affiliatein accordance with the terms and provisions hereof;
(vii) after failure to pay Insurance Premiums, to maintain the occurrence Policies in full force and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation effect and/or to provide Lender evidence of the Loan Documentssame, in each case, as expressly provided herein;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)action in lieu thereof;
(xiiix) any tax on the making and/or recording of the Security Instrument, this Note or any of the other Loan Documents or any transfer or similar taxes (whether due upon the making of the same or upon ▇▇▇▇▇▇’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other similar taxes;
(x) the termination seizure or forfeiture of the Condominium Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party; and/or
(xi) the removal failure to permit on-site inspections of the Property and/or to provide any Unit from documents required pursuant to Section 3.8 of the CondominiumSecurity Instrument, in each case, in violation of as and when required by the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/orSecurity Instrument.
(xiiib) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach any representation, warranty or covenant contained in Section 4.3 or Article 8 of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency Security Instrument is violated or adequacy of capital) breached or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) a Bankruptcy Event occurs. The obligations of Borrower to Lender for which ▇▇▇▇▇▇ has recourse against Borrower, or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes is personally liable to Lender pursuant to this Section 10, entitled “Exculpation,” shall be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under referred to as the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence “Recourse Obligations of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents”.
Appears in 1 contract
Sources: Note (Reading International Inc)
Exculpation. Subject to the qualifications below, Lender Administrative Agent, on behalf of Lender, shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Mortgages or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Borrower, except that Lender Administrative Agent, on behalf of Lender, may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender Administrative Agent to enforce and realize upon its ▇▇▇▇▇▇’s interest under the Note, this Agreement, the Mortgage Mortgages and the other Loan Documents, or in the PropertyProperties, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower▇▇▇▇▇▇▇▇’s interest in the PropertyProperties, in the Rents and in any other collateral given to LenderAdministrative Agent, on behalf of ▇▇▇▇▇▇, pursuant to the Loan Documents, and Administrative Agent and Lender, by accepting the Note, this Agreement, the Mortgage Mortgages and the other Loan Documents, agrees that it shall not su▇ ▇orsue for, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage Mortgages or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (aA) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bB) impair the right of Lender Administrative Agent, on behalf of ▇▇▇▇▇▇, to name Borrower as a party defendant in any action or suit for foreclosure and sale under any of the MortgageMortgages; (cC) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan Environmental Indemnity or any of the rights and remedies of Administrative Agent and Lender thereunder; (dD) impair the right of Lender Administrative Agent, on behalf of ▇▇▇▇▇▇, to obtain the appointment of a receiver; (eE) impair the enforcement of the Assignment collateral assignment of Leasesleases and rents contained in the Mortgage; (f) impair the enforcement of the Environmental Indemnity; (gF) constitute a prohibition against Lender Administrative Agent, on behalf of Lender, to seek a deficiency judgment against Borrower in order to fully realize the security granted by each of the Mortgage Mortgages or to commence any other appropriate action or proceeding in order for Lender Administrative Agent to exercise its remedies against all of the PropertyProperties; or (hG) constitute a waiver of the right of Administrative Agent and 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 reasonably Losses to the extent actually incurred by Administrative Agent or Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.following:
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or Sponsor or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, or in the PropertyProperties, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgageany Security Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the any Assignment of Leases; (f6) impair the enforcement right of the Environmental IndemnityLender to enforce Section 4.12(e) of this Agreement; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage any Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the any Individual Property; or (h) 8) 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 reasonably Loss incurred by Lender (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower Party;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, litigation or any intentional failure to deposit rents into the Clearing Account other legal proceeding related to the extent Debt filed by any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the control other Loan Documents and such litigation or proceeding is not withdrawn, ceased or terminated by such Borrower Party within ten (10) Business Days after written notice to withdraw, cease or terminate such litigation or proceeding, which notice shall specifically reference clause (iii) of Borrowerthis Section 13.1(a), unless the Borrower Party is the prevailing party in such rents are otherwise delivered to Lenderlitigation or legal proceeding in which case there shall be no liability under this clause (iii);
(iv) waste to any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Individual Property caused by willful misconduct the intentional acts or gross negligence intentional omissions of Borrower or any Borrower AffiliateParty and/or the removal or disposal of any portion of any Individual Property after an Event of Default;
(v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Party of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or destruction to the any Borrower Affiliate or Individual Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of any Individual Property, (C) any Rents following an Event of Default or (D) any Tenant security deposits or Rents collected in advance;
(vi) failure to pay Taxes and/or failure to pay Insurance Premiums in accordance with the terms and provisions hereof (except to the extent that sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof and there exists no legal impediment to Lender’s utilization thereof), charges for labor or materials or other charges that can create liens on any Individual Property actually received by Borrower or beyond any Borrower Affiliateapplicable notice and cure periods specified herein to the extent that the Properties generated sufficient revenue for the immediately preceding twelve (12) month period to pay the same;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Lender upon a foreclosure by Lender under the Loan Documentsof such Individual Property or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof;
(viii) any tax on the making and/or recording of any Security Instrument, the Note or any of the other Loan Documents (whether due upon the making of the same or upon Lender’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other governing document similar taxes;
(ix) the seizure or forfeiture of any Individual Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower did Party;
(x) failure to pay any deductible required under any Policy;
(xi) in the event any insurance coverage required hereunder is self-insured, failure to pay any amounts that otherwise would have been paid in the event that such insurance coverage was not have the legal right, because of self-insured but instead covered under a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)Policy;
(xii) the termination of the Condominium intentionally omitted;
(xiii) Section 3.34 or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for Section 4.22 hereof is violated or consented to breached or approved by Borrower (or the members of the Condominium Board appointed by Borrower)a Property Document Event occurs; and/or
(xiii) (ixiv) the failure by Borrower, to make any Borrower Affiliate and/or any other owner of True Up Payment (but only to the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights extent that the Tenant under Property generated net operating income for the Original Bloomberg Lease may have as a result of an Expansion Space Default immediately preceding twelve (whether pursuant 12) month period sufficient to pay the Original Bloomberg Lease, at law or in equitysame), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or .
(iiib) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach the first full monthly payment of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets principal and liabilities of Borrower with any other Person in connection with a proceeding interest under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)Note is not paid when due; (ii) Borrower fails to comply with any provisions hereof relating to cash management, each as required by and in accordance with the terms and provisions of this Agreement; (iii) any representation, warranty or any covenant contained in Article 5 or Article 6 hereof is violated or breached; (iv) Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (iiiv) any Borrower files an application for the appointment of a receiverParty files, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) joins in the filing of of, an involuntary petition against Borrower under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by from any Person; (vvi) Borrower files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency lawcauses to be solicited petitioning creditors for any involuntary petition from any Person, other than with respect to any such petition filed by Lender; (vivii) any Borrower Party consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Property, other than with respect to an action commenced by Lender concerning the Property; (viii) Borrower makes an assignment for the benefit of creditors creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, (ix) Section 11.1 or Section 11.6 is breached (and such breach continues for five (5) Business Days after written notice of such breach which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Datespecifically references this Section 13.1); or (viix) there is a voluntary Transfer of all or in the event any material portion of the Borrower shall bring an action for partition with respect to any Borrower’s ownership interest in any Individual Property or to compel any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentssale thereof.
Appears in 1 contract
Sources: Loan Agreement (American Realty Capital Trust III, Inc.)
Exculpation. Subject to the qualifications belowset forth in this Section 6.3, Lender Administrative Agent shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the NoteNotes, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representativesBorrower, successors or assigns of Borrower or its Affiliate direct or indirect owners (other than pursuant to any principalsseparate agreement, directorsindemnity or guaranty, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor including pursuant to the extent of Guarantor’s liability under Guaranty and the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”Environmental Indemnity), except that Lender Administrative Agent may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender Administrative Agent to enforce and realize upon its interest under the NoteNotes, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Revenues, or any other collateral given to Lender Administrative Agent pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment awarded in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower▇▇▇▇▇▇▇▇’s interest in the Property, in the Rents Revenues and in any other collateral given to LenderAdministrative Agent as collateral security for the Debt, and LenderAdministrative Agent, by accepting without limitation of the Noteforegoing and in addition thereto, this Agreement, the Mortgage agrees for itself and the other Loan Documents, its successors and assigns that it and its successors and assigns shall not su▇ ▇orsue for, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding under under, or by reason of or under of, or in connection with with, the NoteNotes, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 6.3(a) shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Lender Administrative Agent to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (ciii) affect the validity or enforceability of any of the Loan Documentsseparate agreement, indemnity or guaranty (including the Guaranty or any other guaranty made in connection with and the Loan Environmental Indemnity), or any of the rights and remedies of Administrative Agent or Lender thereunder; (div) impair the right of Lender Administrative Agent to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; or (f) impair the enforcement of the Environmental Indemnity; (gvi) constitute a prohibition against Lender to seek Administrative Agent seeking a deficiency judgment against Borrower not otherwise prohibited by this Section 6.3(a) in order to fully realize the security granted by the Mortgage Security Instrument or to commence commencing any other appropriate action or proceeding in order for Lender Administrative Agent to exercise its remedies against the Property; or (h) constitute a waiver of the right of Lender to enforce , provided, that, the liability and obligation of Borrower, by money judgment or otherwiseBorrower in connection with any such deficiency action shall be limited (Y) to the Recourse Liabilities and (Z) if a Springing Recourse Event has occurred, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsDebt.
Appears in 1 contract
Sources: Loan Agreement (Nexpoint Diversified Real Estate Trust)
Exculpation. Subject (a) Notwithstanding any contrary provisions contained herein, the Security Instrument or the other Loan Documents (other than a provision herein or therein which expressly states that it is intended to the qualifications belowoverride any exculpatory provisions of this Note), Lender shall not enforce the liability and obligation of Borrower Borrower, to perform and observe the Obligations obligations contained in the this Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate partner or member of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Borrower, except that Lender may bring a foreclosure actionaction (where no deficiency judgment is sought against Borrower or any partner or member of Borrower), an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the this Note, this Agreementthe Security Instrument, the Mortgage and the other Loan Documents, or and the interests in the Property, the Rents or ; and any other collateral given to Lender pursuant to the Security Instrument and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall not be enforceable against Borrower only (or any partner or member of Borrower) except to the extent of Borrower’s interest in the Property, in the Rents Property and in any other collateral given to LenderLender as security, and Lender, by accepting the this Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not su▇ ▇orsue for, seek or demand any deficiency judgment against ▇▇▇▇▇▇▇▇ (or any Exculpated Party partner or member of Borrower) in any such action or proceeding proceeding, under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Note, the Security Instrument or the other Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument, where Lender is required to do so in order to properly pursue such action (and subject to the above-described prohibition on suing for, seeking or demanding any deficiency judgment); (c3) affect the validity or enforceability of any of the Loan Documents, the Guaranty guaranty or any other guaranty indemnity made in connection with this Note, the Security Instrument or the other Loan Documents (including, without limitation, the Environmental Indemnity and the Indemnity Agreement) or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, ▇▇▇▇▇▇’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 14); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 Propertyassignment; or (h6) 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 reasonably incurred actual losses suffered by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ out of or the following:
(i) in connection with the following 119 (all such liability and obligation of Borrower for any Loan or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Sponsor or any of their respective affiliates, agents or representatives, engages in any action constituting fraud, material misrepresentation, willful misrepresentation, Gross Negligence or willful misconduct. As used above, “Gross Negligence” shall mean, as to any Person, the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) act or any other provisions omission of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other such Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment reckless disregard of a receiver, trustee legal duty or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes obligation to be solicited petitioning creditors for any involuntary petition against Borrower by any another Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.;
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the "Borrower Parties") or any other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Borrower Parties or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Person, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to this Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Lender to name any of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower Leases and Rents executed 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 Propertyconnection herewith; or (hvi) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower (but not against any members of Borrower (other than Guarantor to the extent provided in the Non-Recourse Guaranty) or their direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ ' fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Guarantor in connection with the Loan;
(iib) intentional physical waste of the Property (including, but not limited to, waste due to gross negligence) by Borrower or any affiliate thereof; provided, however, such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by Borrower or any affiliate thereof;
(c) the material breach by Borrower of any representation, warranty, covenant or indemnification provision in the that certain Environmental Indemnityand Hazardous Substance Indemnification Agreement of even date herewith given by Borrower to Lender or in this Agreement concerning Environmental Laws, Hazardous Substances and Asbestos;
(iiid) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, removal or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property disposal by Borrower or any Borrower Affiliate, or affiliate thereof of any intentional wrongful removal or destruction of a material portion of the Property or damage to a material after an Event of Default has occurred and while it is continuing, unless such portion of the Property caused is replaced by willful misconduct an item of equal or gross negligence of Borrower or any Borrower Affiliategreater value as determined by Lender in its reasonable discretion;
(ve) the commission of any criminal act misapplication or conversion by Borrower or any Borrower Affiliate which results in the forfeiture affiliate thereof of
(i) any insurance proceeds paid by reason of any loss, damage or destruction to the Property;,
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Aii) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property actually received by Borrower or Property, (iii) any Borrower Affiliate;
(vii) after the occurrence and during the continuance of Rents following an Event of Default, the intentional misappropriation by Borrower Default or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person Rents paid more than one month in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.advance;
Appears in 1 contract
Exculpation. Subject None of the Debtors or Reorganized Drug Emporium, or any of their respective officers, directors, employees, advisors, attorneys, or agents, have or may incur any liability to any holder of a Claim or Equity Interest, including the qualifications belowholder of any Equity Related Claim, Lender shall not enforce or any other party in interest, or any of their respective members or former members, agents, employees, representatives, financial advisors, attorneys, or affiliates, or any of their successors or assigns, for any act or omission in connection with, relating to, or arising out of, the liability Chapter 11 Cases, the negotiation and obligation execution of Borrower to perform and observe the Obligations contained in the Note, this prepetition Reorganization Agreement, the Mortgage negotiation and pursuit of Confirmation of the Plan, or the other Loan Documents consummation of the Plan, or the administration of the Plan except for their acts or omissions constituting willful misconduct, as finally determined by any action a court of competent jurisdiction and in all respects are entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities under the Plan or proceeding wherein in the context of the Chapter 11 Cases. No holder of a money judgment Claim, Equity Interest, or Equity Related Claim, or any deficiency judgment other party in interest, including their respective agents, employees, representatives, financial advisors, attorneys, or other judgment establishing personal liability shall be sought affiliates, have any right of action against Borrower the Debtors or Reorganized Drug Emporium, or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principalstheir respective officers, directors, officers, employees, beneficiariesadvisors, shareholdersattorneys, partners, members, trustees, or agents, for any act or Affiliates of any omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the negotiation and execution of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this prepetition Restructuring Agreement, the Mortgage negotiation and pursuit of Confirmation of the other Loan DocumentsPlan, the consummation of the Plan, or in the Propertyadministration of the Plan, except for their acts or omissions constituting willful misconduct as finally determined by a court of competent jurisdiction. In addition, as of the Effective Date, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding Debtors shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived released its current and prior directors and officers from any right which Lender claims or causes of action the Debtors may have under Section 506(a)against such parties, 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits unless such claims or causes to be solicited petitioning creditors for any involuntary petition against Borrower of action arise out of acts or omissions by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsparties constituting willful misconduct.
Appears in 1 contract
Sources: Acquisition and Reorganization Agreement (Drug Emporium Inc)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower Borrower, Operating Lessee or any other Loan Party to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representativesBorrower, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Operating Lessee or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Loan Party, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, or in the PropertyCollateral, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, Operating Lessee and the other Loan Parties only to the extent of Borrower’s their interest in the PropertyCollateral, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower, Operating Lessee or any Exculpated other Loan Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents. The provisions of this Section 10.1 9.4 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower Borrower, Operating Lessee or any other Loan Party as a party defendant in any action or suit for foreclosure and sale under any of the MortgageSecurity Instruments; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leasesintentionally omitted; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower Borrower, Operating Lessee or any other Loan Party in order to fully realize the security granted by each of the Mortgage Security Instruments or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against all of the PropertyCollateral; or (hg) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, Operating Lessee and the other Loan Parties, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability it being acknowledged that with respect to subsection (v) below, losses, damages, liabilities, and obligation claims shall in no event be less than the amount misappropriated, converted, or distributed, as applicable) on the part of Borrower for Guarantor, Indemnitor, Borrower, Operating Lessee, Principal, any other Loan Party or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):any Affiliated Manager:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower Borrower, Operating Lessee, any other Loan Party, Indemnitor or any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of Borrower, Operating Lessee, any representationother Loan Party, warranty, covenant Indemnitor or indemnification provision in the Environmental IndemnityGuarantor;
(iii) (A) material physical waste to the intentional misappropriation by Borrower of Properties, any Reserve Funds disbursed to Borrower, Individual Property (or any portion thereof) caused by the willful misconduct or willful and intentional failure to deposit rents into the Clearing Account to the extent in the control omissions of Borrower, unless such rents are otherwise delivered to LenderOperating Lessee, any other Loan Party, Indemnitor or Guarantor and/or (B) the removal or disposal by Borrower, Operating Lessee, any other Loan Party, Indemnitor or Guarantor of any Personal Property or other Collateral during the continuance of an Event of Default;
(iv) any intentional (litigation or other thanlegal proceeding related to the Debt filed by Borrower, Operating Lessee, any other Loan Party, Indemnitor or Guarantor that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliateother Loan Documents;
(v) the commission of misappropriation or conversion by Borrower, Operating Lessee, any criminal act by Borrower other Loan Party, Indemnitor or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Guarantor, of (A) any Insurance Proceeds actually received paid by Borrower or reason of any Borrower Affiliate or Casualty, (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property actually received by Borrower Properties, (C) any Rents or (D) any Rents paid more than one month in advance;
(vi) failure to pay Taxes, charges for labor or materials or other charges that can create liens on any portion of the Properties or any Individual Property in accordance with the terms and provisions hereof (except, with respect to Taxes, to the extent that sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms of Section 7.2 hereof and except to the extent that Borrower Affiliatedoes not have sufficient revenue from such Properties or Individual Property with which to make such payment);
(vii) after failure to pay Insurance Premiums, to maintain the occurrence Policies in full force and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation effect and/or to provide Lender evidence of the Loan Documentssame, in each case, as expressly provided herein (except to the extent that sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms of Section 7.2 hereof and except to the extent that Borrower does not have sufficient revenue from such Properties or Individual Property with which to make such payment);
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Properties or any Individual Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperties, unless previously applied any Individual Property (or any portion thereof) or action in lieu thereof, except to the extent that any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof;
(ix) any tax on the making and/or recording of the Security Instruments, the Note or any of the other Loan Documents solely to the extent that the title company fails to pay such tax pursuant to the applicable lease Title Insurance Policy;
(x) failure of Borrower to obtain Lender’s prior written consent to any voluntary termination or other governing document or Borrower did not have cancellation of the legal rightGround Lease, because surrender of a bankruptcyGround Lease or any amendment or modification to a Ground Lease, receivership in each case by Borrower and to the extent that Lender’s consent is required pursuant to this Agreement;
(xi) if Borrower, Operating Lessee or similar judicial proceedingany other Loan Party is in material breach of Section 4.1.30 hereof (except with respect to Borrower, Operating Lessee or any other Loan Party remaining solvent or maintaining adequate capital or complying with clause (xi) of the definition of Special Purpose Entity with respect to direct disbursement Trade Payables or Permitted Equipment Leases solely to the extent such failure to comply results from the insufficiency of such depositsGross Income from Operations);
(xii) the termination seizure or forfeiture of the Condominium Properties or the removal of any Unit Individual Property, or any portion thereof, or Borrower’s interest therein, resulting from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed criminal wrongdoing by Borrower); and/or, Operating Lessee, any other Loan Party, Indemnitor and/or Guarantor;
(xiii) any violation or breach of Section 4.1.47 hereof or Section 5.1.29 hereof;
(ixiv) the failure any covenants contained in Section 5.1.28 hereof is violated or breached; and
(xv) any amounts paid by Borrower, any Borrower Affiliate and/or any other owner Lender to Marriott Manager in respect of the Upper Option Space and/or the Lower Option Space (as defined unreimbursed or unamortized key money in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply connection with the terms termination of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant Marriott Manager under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation Management Agreement with respect to the Upper Option Space and/or Individual Property commonly known as the Lower Option Space after the occurrence of an Expansion Space Default. Marriott Redmond, Washington.
(b) Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt secured by the Security Instruments or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, Documents and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): of:
(i) Borrower, Operating Lessee or any other Loan Party filing a breach voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(ii) the filing of an involuntary petition against Borrower, Operating Lessee or any other Loan Party under the covenants set forth Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any Affiliate of Borrower and/or Operating Lessee or any other Loan Party under the control of Guarantor and/or Indemnitor soliciting or causing to be solicited petitioning creditors for such involuntary petition against Borrower, Operating Lessee or any other Loan Party from any Person;
(iii) Borrower, Operating Lessee or any other Loan Party filing an answer consenting to or joining in Schedule V hereof any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or Borrower, Operating Lessee or any other Loan Party, any Affiliate of Borrower, Operating Lessee, Indemnitor or Guarantor colluding with or soliciting or causing to be solicited petitioning creditors for any involuntary petition against Borrower, Operating Lessee or any other Loan Party;
(iv) Borrower, Operating Lessee or any other than those single purpose entity covenants that relate Loan Party consenting to solvency or adequacy joining in an application for the appointment of capital) a custodian, receiver, trustee, or a breach examiner for Borrower, Operating Lessee or any other Loan Party or any portion of any Individual Property or the Collateral;
(v) Borrower, Operating Lessee or any other Loan Party making an assignment for the benefit of the certifications set forth in the “Recycled Entity Certificate”creditors;
(vi) Borrower, in each case, that results in a Operating Lessee or any other Loan Party seeking substantive consolidation of the assets and liabilities of Borrower with any other Person itself in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (or similar law permitting a debtor to obtain a stay or a compromise of the claims of its creditors against it) involving Borrower, Operating Lessee any other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower Loan Party, or any Borrower Affiliaterespective Affiliate thereof;
(vii) if any Security Instrument or other Loan Document is deemed a fraudulent conveyance or preference or is otherwise deemed void pursuant to any principles limiting the rights of creditors, officerwhether such claims, director demands or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower assertions are made under the Bankruptcy Code Code, including, without limitation, under Sections 544, 547 or 548 thereof, or under any applicable state fraudulent conveyance statues or similar laws;
(viii) if Borrower, Operating Lessee or any other Federal Loan Party fails to obtain Lender’s prior written consent to any borrowing of money or state bankruptcy monies evidenced by notes or insolvency law; (iii) Borrower files an application for similar instruments, which such borrowings encumber the appointment of a receiverTransfer Collateral, trustee or examiner for Borrower or any portion of the Property, except at the request of or if such consent is required in accordance with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation applicable provisions of the Loan Documents; and
(ix) if Borrower, Operating Lessee or any other Loan Party fails to obtain Lender’s prior written consent to any Sale or Pledge of the Transfer Collateral or a Transfer of the ownership interests in Borrower, Operating Lessee or any other Loan Party as required by Section 5.2.10 hereof; provided however, for the avoidance of doubt, a Transfer resulting from the consummation of an enforcement action by the holder of any Mezzanine Loan shall not be a Transfer in violation of Section 5.2.10 hereof.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan DocumentsGuaranty, the Guaranty or Environmental Indemnity and/or any other guaranty made set forth in connection with the Loan Section 11.2 hereof or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its security interest in the Accounts as provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f) impair the enforcement of the Environmental Indemnity; (g6) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperty (or any portion thereof); or (h7) 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 reasonably Loss incurred by Lender (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional willful misrepresentation by Borrower or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by Borrower willful misconduct of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower Party;
(iii) the any intentional misappropriation by Borrower act or omission of any Reserve Funds disbursed to BorrowerBorrower Party made frivolously or in bad faith, including any assertion of defenses or counterclaims asserted in bad faith by any intentional failure to deposit rents into Borrower Party and which, in bad faith, hinders, delays or interferes in any material respect with the Clearing Account to Lender’s enforcement of its rights under the extent in Loan Documents or the control realization of Borrower, unless such rents are otherwise delivered to Lenderthe collateral;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunderA) material physical waste of to the Property by Borrower (or any Borrower Affiliateportion thereof) and/or (B) after the occurrence and during the continuance of an Event of Default, or any intentional wrongful removal or destruction disposal of a material any portion of the Property or damage to a material portion of other than in the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliateordinary course;
(v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or (I) any Borrower Affiliate which results Party and/or (II) any Affiliated Manager that is Controlled by Borrower, any SPE Component Entity and/or any of their respective Affiliates, in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate each instance, of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or destruction to the Property (or any Borrower Affiliate or portion thereof), (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, (C) any Rents, (D) any Tenant security deposits or Rents collected in advance or (E) any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of other monetary collateral for the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, any Reserve Funds and/or any portion thereof disbursed to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or at the members of the Condominium Board appointed by direction of) Borrower); and/or
(xiiivi) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined to pay Taxes in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply accordance with the terms of Section 36 of and provisions hereof to the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights extent that the Tenant under Property has generated sufficient net operating income for the Original Bloomberg Lease may have as immediately preceding twelve (12) month period to pay the same, unless such charges are the subject to a result of an Expansion Space Default (whether pursuant to bona fide dispute in which the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under Borrower is contesting the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation validity thereof in accordance with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. terms and conditions set forth herein.
(b) Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach of any Borrower and/or any SPE Component Entity fails to obtain Lender’s prior written consent to any indebtedness or voluntary lien encumbering the covenants set forth in Schedule V hereof (Property to the extent required by this Agreement or the other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”Loan Documents, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director and/or any SPE Component Entity fails to obtain Lender’s prior written consent to any transfer in violation of Article 6 hereof to the extent required by this Agreement or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawLoan Documents; (iii) Borrower files an application for the appointment of a receiver, trustee Bankruptcy Event occurs; or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) any representation, warranty or covenant contained in Article 5 is violated or breached and such breach or violation is cited as a material contributing factor by the filing applicable bankruptcy court in the substantive consolidation of an involuntary petition against Borrower under the Bankruptcy Code or and/or any SPE Component Entity with any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan Agreement (American Realty Capital New York City REIT, Inc.)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower, any other Borrower Party or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower, any other Borrower Party or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Collateral, the Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower and any other Borrower Party only to the extent of Borrower’s and any other Borrower Party’ s interest in the Property, in the Collateral, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower, any other Borrower Party or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower or any other Borrower Party as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of indemnity, guaranty or similar instrument (including , without limitation , indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Loan Documents, Environmental Indemnity and in the Guaranty or any other guaranty Guaranty) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including , without limitation, ▇▇▇▇▇▇’s right to enforce said rights and remedies against ▇▇▇▇▇▇▇▇ personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the rights of Lender to (A) obtain the appointment of a receiver and/or (B) enforce its rights and remedies provided in Articles 8 and 2. hereof; (5) impair the enforcement of the assignment of leases and rents contained in the Security Instrument and in any other Loan Documents; (6) impair the right of Lender to obtain the appointment enforce Section 4.12(e) of a receiverthis Agreement; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower or any other Borrower Party in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyCollateral or the Property (or any portion thereof); or (h) 8) 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 reasonably Loss incurred by Lender ▇▇▇▇▇▇ (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or intentional material intentional misrepresentation by any Borrower Party or any Borrower Affiliate of their respective Affiliates in connection with the Loan;
(ii) willful misconduct any Borrower Party or any of their respective Affiliates in connection with the breach by Borrower of Loan or any representation, warranty, covenant or indemnification provision in the Environmental IndemnityIndividual Property;
(iii) any litigation or other legal proceeding related to the intentional misappropriation by Debt in which any Borrower of Party or their respective Affiliates files or raises a defense that intentionally interferes with ▇▇▇▇▇▇ exercising any Reserve Funds disbursed rights and remedies available to Borrower, or any intentional failure to deposit rents into Lender as provided in under this Agreement and the Clearing Account other Loan Documents only to the extent a court of competent jurisdiction, in a final non-appealable decision, finds the control of applicable defenses were not raised in good faith by Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste to any Individual Property caused by the intentional acts or intentional omissions by any Borrower Party or any of their respective Affiliates (provided that the foregoing is not the result of the Property insufficiency of cash flow from the Properties to prevent such intentional omissions, and if there is any insufficiency of cash flow, such insufficiency is not a result of misappropriation of Rents by Borrower or any Borrower Affiliate, or any intentional wrongful Party and/or the removal or destruction disposal of a material any portion of the Property or damage to a material portion of the Property caused property by willful misconduct or gross negligence of any Borrower Party or any Borrower Affiliateof their respective Affiliates after an event of default other than in the ordinary course of owning and managing the Properties or otherwise in violation of this Agreement and the other Loan Documents);
(v) the commission of misappropriation by any criminal act by Borrower Party or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate their respective Affiliates of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or insurance proceeds with respect to the Properties, (B) any Awards or other amounts received in connection with the any Condemnation of all or a any portion of any Individual Property, or (C) any Rents (provided that, in each case there shall be no liability under this subsection to the Property actually received extent that the turnover of such funds is prohibited by Borrower any applicable law or any Borrower Affiliatecourt order);
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ixvi) Borrower’s failure to pay Taxes (or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, cause to be paid) real property taxes or pay other charges due in connection with the Properties that results in liens on any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower portion of any Indebtedness for borrowed money Individual Property in violation of accordance with the terms and provisions of this Agreement or any and the other Loan Document Documents (other than Permitted Encumbrancesif such failure is caused by the acts of a Tenant) to the extent that (i) any such liens are not bonded over or discharged in accordance with this Agreement and the other Loan Documents and (ii) the Properties generated sufficient revenue in the immediately preceding six (6) month period to pay the same and Borrower failed to apply such revenue to such real property taxes or other charges, unless such charges are the subject of a bona fide dispute in which Borrower is contesting the amount or validity thereof in accordance with the terms of this Agreement and the other Loan Documents (provided, however, that there shall be no personal liability under this subsection solely for the failure to pay real property taxes if sufficient sums had been reserved hereunder for the express purpose of paying the real property taxes or charges in question and ▇▇▇▇▇▇ failed to pay same and ▇▇▇▇▇▇’s access to such sums was not restricted as a result of any action, inaction or omission by any Borrower Party or any Affiliate thereof);
(xivii) Borrower’s failure to pay Insurance Premiums or the amount of any deductible following a Casualty, Condemnation or other insurance claim, to maintain the Policies in full force and effect, in each case, as expressly provided herein (provided, however, that there shall be no personal liability under this subsection for the aforementioned failures to the extent that, in each case, (A) the failure Properties generated insufficient revenue in the immediately preceding six (6) month period to pay the Insurance Premiums in question or (B) sufficient sums had been reserved hereunder for the express purpose of paying the Insurance Premiums in question and Lender failed to pay same and ▇▇▇▇▇▇’s access to such sums was not restricted as a result of any action, inaction or omission by any Borrower to deliver to Lender Party or any Affiliate thereof);
(viii) any security deposits, advance deposits or any other deposits collected by any Borrower Party or any of their respective Affiliates in connection with respect the Properties which are not delivered to the Property Lender upon request upon a foreclosure by Lender under the Loan Documents, unless previously applied (or action in lieu thereof except to the extent that such deposits were amounts have been previously applied by Borrower in accordance with this Agreement and the other Loan Documents, the existing leases or in accordance with a court order (provided that, in each case there shall be no liability under this subsection to the extent that the failure to tum over such funds is prohibited by any applicable lease law or other governing document court order);
(ix) the seizure or forfeiture of any Individual Property resulting from criminal wrongdoing by any Borrower did not have Party or (y) any of their respective Affiliates;
(x) breach or violation by any Borrower Party or any of their respective Affiliates of any of the legal right, because material terms of Sections 11.2(d) of this Agreement;
(xi) any liability or obligation pursuant to any purchase and sale agreement entered into by a Borrower for the sale by Borrower of a bankruptcy, receivership Previously-Owned Property or similar judicial proceeding, any other liability or obligation otherwise related to direct disbursement of such deposits)a Previously-Owned Property;
(xii) failure to comply with the termination terms and provisions of Article 15 hereof;
(xiii) Borrower’s failure to pay all Ground Rent prior to the same becoming delinquent (provided that Borrower shall not have liability pursuant to this clause (xiii) to the extent that sufficient amounts have been deposited with Lender to specifically to pay the same, Borrower has complied with all disbursement obligations with respect thereto, and Lender fails to pay the same, unless such failure is due to ▇▇▇▇▇▇’s access to such funds being restricted as a result of any action, inaction or omission by any Borrower Party or any Affiliate thereof);
(xiv) any amendment or modification of the Condominium or the removal of any Unit from the Condominium, in each case, Ground Lease in violation of the terms hereof or any cancellation, expiration or termination (for any reason whatsoever) of the Ground Lease, or the surrender of the leasehold estate thereunder in violation of the terms hereof;
(xv) Borrower’s failure to pay all Condominium Charges prior to the same becoming delinquent (provided that Borrower shall not have liability pursuant to this clause (xv) to the extent that sufficient amounts have been deposited with Lender to specifically to pay the same, Borrower has complied with all disbursement obligations with respect thereto, and Lender fails to pay the same, unless such failure is due to ▇▇▇▇▇▇’s access to such funds being restricted as a result of any action, inaction or omission by any Borrower Party or any Affiliate thereof);
(xvi) any amendment or modification of the Condominium Documents in violation of the terms hereof or any cancellation, expiration or termination (for any reason whatsoever) of the Condominium Documents in violation of the terms hereof;
(xvii) without limiting Section 13.l(b)(B)(ii) below, any voluntary debt, lien or transfer of any Individual Property or the Collateral in violation of the Loan Documents (other than liens being contested in good faith in accordance with the terms and provisions of this Agreement);
(xviii) without limiting Section 13.l(b)(B)(i) below, any breach or violation by Borrower and/or any SPE Component Entity of Article 5 hereof, other than immaterial breaches which was voted are promptly cured by Borrower;
(xix) any breach or violation by Borrower of Section 8.1(d) and/or Section 15.2(c)(ii) hereof;
(xx) any breach or violation by Borrower of Section 4.29 hereof;
(xxi) any breach or violation by Borrower of Section 4.30 hereof; provided, however, Lender shall not be required to prove Losses in connection with this clause (xxi) and the Losses of Lender with respect to this clause (xxi) shall be deemed to be an amount equal to the sum of (1) 125% of the Allocated Loan Amount for or consented the related Individual Property, plus (2) if the Debt Yield with respect to all Properties other than the related Individual Property is less than the Debt Yield with respect to all Properties including the related Individual Property, the amount which, if applied to the prepayment of the Debt, would result in a Debt Yield with respect to all Properties other than the related Individual Property which is at least the greater of (x) 13.0% and (y) the Debt Yield with respect to all Properties including the related Individual Property, plus (3) if prior to the Spread Maintenance End Date, the Spread Maintenance Premium which would be applicable to a prepayment of the Debt in the amount of the sum of the foregoing clauses (1) and (2);
(xxii) any shortfall in insurance proceeds payable to or approved on behalf of Borrower or Lender with respect to any property-related (including terrorism) insurance policy pertaining to the common elements relating to the Individual Property known as The Blocks;
(xxiii) any shortfall in insurance proceeds payable to or on behalf of Borrower or Lender with respect to any act of terrorism which is not covered by the liability insurance policy pertaining to the common elements relating to the Individual Property known as The Blocks;
(xxiv) any shortfall in insurance proceeds payable to or on behalf of Borrower or Lender with respect to any riot, riot attending a strike, civil commotion and/or vandalism affecting any Individual Property which is not covered by the Policy required to be maintained by Borrower pursuant to Section 7.1(a)(i) hereof;
(or the members xxv) any purchase option of the Condominium Board appointed by Borrower)any Tenant under any Lease; and/or
(xiiixxvi) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space Ground Lease relating to the Individual Property known as Flatacres Marketcenter, Borrower’s acquisition of the fee interest in the premises demised under such Ground Lease and/or the Lower Option Space after subordination of such Ground Lease to any mortgage other than the occurrence of an Expansion Space Default. Security Instrument.
(b) Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b111l(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that of: (i) any breach or violation by Borrower or any SPE Component Entity of Article 5 hereof, as a result of which, a court orders the following occur substantive consolidation of Borrower or any SPE Component Entity with one or more constituent owner(s) of Borrower and/or SPE Component Entity (eachany such person or entity, a “Springing Recourse EventBankrupt Person”): (i) and which court cites such breach or violation as a breach of material factor in ordering the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower and/or SPE Component Entity with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)assets and liabilities of the Bankrupt Person; (ii) Borrower any violation or breach of Article 6 hereof caused by (1) any Borrower Affiliate, officer, director voluntary transfer of the Collateral or representative which Controls Borrower consents fee simple title to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower all or any portion of the PropertyProperty (other than with Lender’s prior written consent or as expressly permitted by this Agreement or the other Loan Documents) or (2) any sale or pledge of the ownership interests in any Restricted Party in violation of the terms of the Loan Documents, except at which, in the request case of any sale or pledge described in this clause (2) remains uncured for a period of ten (10) days following Borrower’s obtaining knowledge of such violation (or Borrower’s receipt of notice from Lender of such violation); (iii) a Bankruptcy Event with the consent of Lenderoccurs, or (iv) the filing incurrence of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law voluntary debt secured by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the any Individual Property or other Collateral or any direct or indirect interest therein or any Transfer of any direct or indirect interest interests in Borrower, except Indebtedness and liens (including, liens being contested in either case, good faith in violation accordance with the terms and provisions of the Loan Documentsthis Agreement) expressly permitted pursuant to this Agreement.
Appears in 1 contract
Sources: Loan Agreement (SITE Centers Corp.)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the “Borrower Parties”) or any other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Borrower Parties or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Person, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents all or any other collateral given to Lender pursuant to portion of the Loan DocumentsCollateral; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents and in any other collateral given to LenderCollateral, and Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Lender to name any of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale in connection with exercising its remedies under the MortgageSecurity Documents and the Pledged Securities; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (hv) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower (but not against any members of Borrower (other than Guarantor to the extent provided in the Non-Recourse Guaranty) or their direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably (but excluding any punitive, consequential or speculative damages) incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower Borrower, Senior Mezzanine Loan Borrower, Owner or any Borrower Affiliate Guarantor in connection with the Loan;
(iib) intentional physical waste of the Property (including, but not limited to, waste due to gross negligence) by Borrower, Senior Mezzanine Loan Borrower, Owner or any affiliate thereof; provided, however, such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by Borrower, Senior Mezzanine Loan Borrower, Owner or any affiliate thereof;
(c) the material breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityIndemnity or in this Agreement concerning Environmental Laws, Hazardous Substances or Asbestos;
(iiid) the intentional misappropriation removal or disposal by Borrower Borrower, Senior Mezzanine Loan Borrower, Owner or any affiliate thereof of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material after an Event of Default has occurred and while it is continuing, unless such portion of the Property caused is replaced by willful misconduct an item of equal or gross negligence of Borrower or any Borrower Affiliategreater value as determined by Lender in its reasonable discretion;
(ve) the commission misapplication or conversion by Borrower, Senior Mezzanine Loan Borrower, Owner or any affiliate thereof of (i) any insurance proceeds paid by reason of any criminal act by Borrower loss, damage or any Borrower Affiliate which results in the forfeiture of destruction to the Property;
, (vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Aii) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property actually received by Borrower Property, (iii) any Rents following an Event of Default or (iv) any Borrower AffiliateRents paid more than one (1) month in advance;
(viif) after failure to pay charges for labor or materials or taxes or other charges that can create liens superior to the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation lien of the Loan Documents;
(viii) all or Mortgage on any material portion of the Property unless such taxes or other charges are being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) contested in violation accordance with the Senior Loan Documents or in accordance with the terms herewith or such taxes or charges have been delivered to Senior Lender in accordance with the terms of the Senior Loan Documents, Documents or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such chargeshas complied with Section 5.2 hereof;
(ixg) any security deposits collected by Borrower’s failure to pay Taxes or transfer taxes, maintain required PoliciesSenior Mezzanine Loan Borrower, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement Owner or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected affiliate thereof with respect to the Property which are not delivered to Lender (subject to the rights of Senior Lender) upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)action in lieu thereof;
(xiih) the termination failure by Borrower to cause Senior Mezzanine Loan Borrower to cause Owner to deposit with Senior Lender all Rents, as required under Article 3 of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Senior Loan Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or;
(xiii) (i) the failure by Borrower, Borrower to cause Senior Mezzanine Loan Borrower to cause Owner to use any Borrower Affiliate and/or funds released by Senior Lender from any other owner subaccount provided for in the Senior Loan Agreement for the intended use therefor in default of the Upper Option Space and/or requirements of the Lower Option Space Senior Loan Agreement; or
(as defined j) any cost or expense incurred by Lender in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply connection with the terms enforcement of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any its rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) and remedies hereunder or any other provisions of the Bankruptcy Code Loan Document.
(1) if any petition for bankruptcy, reorganization or arrangement pursuant to file a claim for the full amount of the Obligations federal bankruptcy law, or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documentsany similar federal or state law, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (eachfiled by Owner, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”Senior Mezzanine Loan Borrower, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower AffiliateGuarantor, officeror (2) if Owner, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiverSenior Mezzanine Loan Borrower, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower Guarantor files an answer consenting to, or otherwise joining in, any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law filed against it by any other Person Person, or is found pursuant to a final, unappealable order of a court of competent jurisdiction to have solicited or caused to be solicited creditors to file any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law against Owner, Senior Mezzanine Loan Borrower, Borrower or Guarantor, or (3) if Owner, Senior Mezzanine Loan Borrower, Borrower or Guarantor are found, pursuant to a final unappealable order of a court of competent jurisdiction, to have been in collusion with creditors that initiate a bankruptcy action or proceeding against Owner, Senior Mezzanine Loan Borrower, Borrower or Guarantor; (F) an Event of Default described in Section 8.1(s) hereof shall have occurred or (G) if Guarantor, Borrower or any Affiliate of any of the foregoing, in connection with any enforcement action or exercise or assertion of any right or remedy by or on behalf of Lender under or in connection with the Bankruptcy Code Note, the Pledge or any other Federal Loan Document, seeks a defense, judicial intervention or state bankruptcy injunctive or insolvency law; (vi) Borrower makes an assignment for the benefit other equitable relief of creditors any kind or admits, asserts in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency a pleading filed in connection with an involuntary petition under the Bankruptcy Code or a judicial proceeding any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to defense against Lender or any servicer of right in connection with any security for the Loan which the court in any such action or proceeding, determines that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) Borrower’s defense is without merit, or that Borrower cannot refinance the Loan on the Maturity Date); such request for judicial intervention or (vii) there injunctive or other equitable relief is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsunwarranted.
Appears in 1 contract
Sources: Junior Mezzanine Loan Agreement (Maguire Properties Inc)
Exculpation. Subject (a) Notwithstanding anything to the contrary herein or in any of the other Loan Documents but subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage any Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, manager, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor subject to the terms of the Guaranty) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage each Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral Collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral Collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage each Security Instrument and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage any Security Instrument or the other Loan Documents. The provisions of this Section 10.1 11.3 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgageany Security Instrument; (c) affect the validity or enforceability of any of the Loan DocumentsDocuments or any guaranty or indemnity (including, without limitation, the Guaranty and the Environmental Indemnity) or any other guaranty similar instrument made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the any Assignment of Leases; (f) impair the enforcement right of Lender to enforce the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security Collateral granted by any of the Mortgage Loan Documents, including, without limitation, by any Security Instrument, or by any Assignment of Leases, or by this Agreement (including with respect to the Accounts Collateral) or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyCollateral (but not to impose personal liability upon Borrower contrary to this Section 11.3); or (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan or the Property (including, without limitation, any Lease, or the execution and delivery of this Agreement, the Note, any Security Instrument, or the other Loan Documents or at any time during the term of the Loan) Borrower, SPC Party, any Guarantor, any Affiliate of any of the foregoing, or any of their respective agents or representatives, engages in any action constituting fraud, willful misrepresentation or willful misconduct;
(ii) the breach by Borrower of Borrower, SPC Party, any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to BorrowerGuarantor, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Affiliate or Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of SPC Party or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower AffiliateGuarantor, or any intentional wrongful removal of their respective agents or destruction of a material portion of the Property representatives, misappropriates or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
misapplies (v) the commission of any criminal act by Borrower or any Borrower Affiliate which results based on limitations contained in the forfeiture of the Property;
(viLoan Documents) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or Proceeds, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received Property, (C) Rents, or (D) funds disbursed by Borrower or any Borrower AffiliateLender from the Reserve Funds;
(viiiii) after the occurrence and during the continuance criminal acts of an Event Borrower, SPC Party, any Guarantor, any Affiliate of DefaultBorrower, the intentional misappropriation by Borrower SPC Party or any Borrower Affiliate Guarantor, or any of any Rents their respective agents or representatives resulting in violation the seizure, forfeiture or loss of the Loan DocumentsProperty;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ixiv) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Other Charges prior to delinquency in accordance with the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions terms of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that (A) sums sufficient to pay such deposits were applied amounts have been deposited into escrow with Lender and such amounts are deemed paid pursuant to Section 3.7 hereof; or (B) the Property has not generated over the immediately preceding twelve (12) months sufficient revenue to pay the same; or (C) Borrower or any tenant is contesting Taxes or Other Charges in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because terms of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)Section 5.2 hereof;
(xiiv) Borrower’s failure to (A) obtain and maintain (or cause the applicable tenant to obtain and maintain) the termination Policies in accordance with Section 7.1 hereof, or (B) pay Insurance Premiums prior to delinquency except to the extent that (i) sums sufficient to pay Insurance Premiums have been deposited into escrow with Lender and Insurance Premiums are deemed paid pursuant to Section 3.7 hereof; or (ii) the Property has not generated over the immediately preceding twelve (12) months sufficient revenue to pay Insurance Premiums;
(vi) Borrower’s failure to pay charges for labor or materials or other charges that can create Liens on the Property, in accordance with the terms of this Agreement, to the extent such Liens are not bonded over, discharged or contested in accordance with this Agreement or the other Loan Documents;
(vii) the removal or disposal of any portion of the Condominium Personal Property by Borrower, SPC Party, any Guarantor, any Affiliate of Borrower, SPC Party or any Guarantor, after an Event of Default without replacing such Personal Property with Personal Property of the removal same utility and of the same or greater value;
(viii) any intentional act of physical waste or arson by Borrower, SPC Party, any Guarantor, any Affiliate of any Unit from of the Condominiumforegoing or any of their respective agents or representatives with respect to the Property;
(ix) any fees or commissions being paid by Borrower to SPC Party, in each caseany Guarantor or any Affiliate of Borrower, SPC Party or any Guarantor in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or;
(xiii) (ix) the failure by Borrowerbreach of any representation, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined warranty, covenant or indemnification provision in the Original Bloomberg LeaseEnvironmental Indemnity or in the Loan Documents concerning Environmental Laws and Hazardous Substances and any indemnification of Lender with respect thereto in any Loan Document;
(xi) (other than Lender Borrower’s, SPC Party’s or any Affiliate of Lender) Guarantor’s intentional failure to comply with the terms and provisions of Section 36 of 11.1 or Borrower’s, SPC Party’s or any Guarantor’s failure to comply with the Original Bloomberg Lease indemnification provisions set forth in Section 11.2 hereof;
(an “Expansion Space Default”), xii) [intentionally omitted];
(iixiii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law Borrower or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount SPC Party violates or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or breaches any of the other Loan Documentsterms and conditions of Section 8.1 hereof (provided, (A) Lender however, it shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.Section 8.1(d)
Appears in 1 contract
Sources: Loan Agreement (Cole Credit Property Trust Iv, Inc.)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate officer, director, shareholder, partner, member, principal, employee of Borrower or any legal representatives, successors direct or assigns indirect owner of Borrower or its Affiliate or (provided that the foregoing shall not limit in any principalsmanner, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates the liability of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not su▇ ▇orsue for, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 9.3 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (ciii) affect the validity or enforceability of any of the Loan Documentsguaranty, the Guaranty indemnity or any other guaranty similar agreement or undertaking made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity Instrument and any other Loan Documents; or (f) impair the enforcement of the Environmental Indemnity; (gvi) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument (if required by applicable law and provided such deficiency judgment is not enforced personally against Borrower or any officer, director, shareholder, partner, member, principal, employee of Borrower or any direct or indirect owner of Borrower (excluding Guarantor under the Guaranty and Environmental Indemnity, as applicable)) or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; Property (or any portion thereof).
(hb) constitute a waiver of Nothing contained herein shall in any manner or way release, affect or impair the right of Lender to enforce the liability and obligation of recover from Borrower, by money judgment or otherwiseand Borrower shall be fully and personally liable and subject to legal action, to the extent of for any actual out-of-pocket loss, damage, cost, expense, liabilitydamage, claim or other obligation reasonably incurred by Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurred expenses and other collection and litigation expenses, but excluding any consequential, special punitive, special, indirect and exemplary damages or punitive damagesdiminutions in value) incurred or suffered by Lender arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the breach by gross negligence or willful misconduct of Borrower of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityGuarantor;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, arson or any intentional failure material physical waste of the Property, provided, however, that if Borrower does not have sufficient cash flow on a current basis to deposit rents into the Clearing Account to the extent in the control of Borrowerprevent waste, unless such rents are otherwise delivered to Lenderany waste shall not be deemed intentional and Borrower shall have no liability under this clause (iii);
(iv) the removal or disposal of any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste portion of the Property by Borrower during the continuance of an Event of Default, unless such removed or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material disposed portion of the Property is subsequently replaced with property of equal or damage to a material portion of the Property caused by willful misconduct greater utility or gross negligence of Borrower or any Borrower Affiliatevalue;
(v) the commission of any criminal act misappropriation, misapplication or conversion by Borrower or Guarantor, or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate foregoing, of (A) any Insurance Proceeds actually received paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property actually received by Borrower during the continuance of an Event of Default, (C) any Rents or other Property income or collateral proceeds, or (D) any Borrower AffiliateRents paid more than one month in advance (including security deposits) during the continuance of an Event of Default;
(viivi) after following the occurrence and during the continuance of an Event of Default, the intentional misappropriation failure to either apply rents or other Property income, collected after such Event of Default, to the ordinary, customary, and necessary expenses of operating the Property or, upon demand, to deliver such rents or other Property income to Lender (or otherwise to the Clearing Account or Cash Management Account, as required by Borrower this Agreement);
(vii) failure to maintain insurance or to pay taxes and assessments, or to pay charges for labor or materials or other charges or judgments that can create Liens on any Borrower Affiliate of any Rents in violation portion of the Loan DocumentsProperty (unless Lender is escrowing funds therefor and fails to make such payments or has taken possession of the Property following an Event of Default, has received all Rents from the Property applicable to the period for which such insurance, taxes or other items are due, and thereafter fails to make such payments), it being acknowledged that if Borrower does not have sufficient cash flow on a current basis to maintain insurance or to pay taxes and assessments or to pay charges for labor or materials or other charges or judgments (unless such charges were incurred following the occurrence and during the continuance of an Event of Default) that create Liens on any portion of the Property, Borrower shall have no liability under this clause (vii);
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were (A) applied or returned to Tenants in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof or (B) previously delivered to Lender to be applied to repay the Loan;
(ix) any voluntary Liens, other governing document than Permitted Encumbrances and Liens described in Sections 9.3(b)(vii) or 9.3(c)(B) hereof;
(x) any failure by Borrower did not have to comply with any of the legal rightrepresentations, because warranties or covenants set forth in Sections 4.1.37 or 5.1.19 hereof;
(xi) from the date upon which L▇▇▇▇▇ acquires title to the Grupo A▇▇▇▇▇▇ Property upon a foreclosure or action in lieu thereof, until Lender sells or otherwise transfers title to the Grupo A▇▇▇▇▇▇ Property to an unaffiliated third-party, any exercise by A▇▇▇▇▇▇ ▇▇▇▇▇▇ of its rights pursuant to Section 44 of the Grupo A▇▇▇▇▇▇ Lease (including, without limitation, as a bankruptcy, receivership or similar judicial proceeding, result of Lender’s inability to direct disbursement comply with Section 44 of such depositsthe Grupo A▇▇▇▇▇▇ Lease);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or[intentionally omitted];
(xiii) any failure by Borrower to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof to the extent such failure is not expressly covered by the full recourse event set forth in Section 9.3(c)(D) below;
(ixiv) Borrower fails to obtain L▇▇▇▇▇’s prior written consent to any Transfer that is not a Full Recourse Transfer, to the extent required pursuant to the terms of the Loan Documents;
(xv) the Violations; provided, however, that there shall be no liability pursuant to this clause (xv) with respect to a particular Violation at an Individual Property from and after the date that Borrower has cured such Violation and delivered to Lender an update to the applicable zoning report verifying such Violation has been cured;
(xvi) B▇▇▇▇▇▇▇’s failure by Borrowerto comply with the provisions of Sections 5.1.9 hereof;
(xvii) criminal acts of Borrower or Guarantor, any or executives of Borrower Affiliate and/or any other owner or Guarantor, resulting in the seizure, forfeiture or loss of the Upper Option Space and/or Property;
(xviii) B▇▇▇▇▇▇▇, acting in bad faith, fails to cooperate in transferring any licenses or permits requested by Lender in connection with any foreclosure of the Lower Option Space Property, deed in lieu or other transfer of the Property to Lender or L▇▇▇▇▇’s designee; or
(as defined in the Original Bloomberg Leasexix) (other than Lender if Guarantor, Borrower or any Affiliate of Lender) to comply any of the foregoing, in connection with any enforcement action or exercise or assertion of any right or remedy by or on behalf of Lender under or in connection with the terms of Section 36 of Note, the Original Bloomberg Lease (an “Expansion Space Default”)Security Instruments or any other Loan Document, (iia) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind or asserts in a pleading filed in connection with a judicial proceeding any defense against Lender or any right in connection with any security for the Loan and (b) the court in any such action or proceeding determines that Guarantor’s, Borrower’s or such Affiliate’s defense or request for judicial intervention (1) was made by Guarantor, Borrower or such Affiliate with the intent to hinder, delay or otherwise interfere with Lender’s exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default its remedies (whether pursuant to the Original Bloomberg Lease, at law or in equitygranted under the Loan Documents), includingor (2) was made in bad faith by Guarantor, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or Borrower or such Affiliate.
(iiic) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, Borrower shall be personally liable for the Debt if (A) Lender shall not be deemed Borrower fails to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions obtain L▇▇▇▇▇’s prior written consent (to the extent such consent is required pursuant to the terms of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof Transfer (other than those single purpose entity covenants that relate to solvency or adequacy of capital) a Transfer approved by Lender or a breach Transfer in connection with Lender’s enforcement of its rights and remedies)
(1) that results in a change in Control over Borrower or (2) of any of the certifications Property by deed, bill of sale, installment sales agreement or ground lease (excluding any lease to a Tenant in the ordinary course of business) (a “Full Recourse Transfer”); (B) except for any Permitted Encumbrances and Permitted Indebtedness, Borrower fails to obtain L▇▇▇▇▇’s prior written consent to any Indebtedness or voluntary mortgage, deed of trust, collateral assignment or similar voluntary Lien (including a P▇▇▇ ▇▇▇▇) encumbering the Property; provided, however, in no event shall a mechanic’s or materialman’s Lien encumbering the Property apply to this clause (B); (C) Borrower shall at any time hereafter make an assignment for the benefit of its creditors; (D) Borrower fails to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof, which failure is cited as a factor in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person entity in connection with a any proceeding under the Bankruptcy Code or under federalCode; (E) Borrower admits, state or foreign insolvency law in any legal proceeding (other than on motion Borrower admitting or pleading seeking making any truthful statement that it has been advised by counsel is required to be admitted or made under applicable laws, regulations or court orders), its insolvency or inability to pay its debts as they become due, provided that neither Borrower nor Guarantor shall have liability under this clause (E) in connection with the delivery of financial statements or any other filing required to be delivered pursuant to a substantive consolidation brought subpoena or actively supported any order entered in a bankruptcy proceeding or required under applicable law in connection with any such petition made by Lender)any Person which is not an Affiliate of Borrower; or (iiF) Borrower files, or any Borrower Affiliateconsents in writing to, officeror acquiesces in, director a petition for bankruptcy, insolvency, dissolution or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower liquidation under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of , or there is a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly Guarantor colludes with, or indirectly Controls Borrower colludes 121 otherwise assists any party in connection with and/or Borrower such filing, or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by from any Person; party (v) Borrower files an answer consenting toprovided, or joining inhowever, any involuntary petition filed against it by any other Person under that the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability failure to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with defend such an involuntary petition under where no meritorious defense exists shall not be deemed “assisting” for purposes hereof).
(d) Notwithstanding anything to the Bankruptcy Code contrary in this Agreement, the Note or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the other Loan Documents, if B▇▇▇▇▇▇▇ fails to deliver the Grupo A▇▇▇▇▇▇ Letter of Credit in accordance with Section 5.1.26 hereof, Borrower shall have full recourse liability in an amount equal to the Allocated Loan Amount for the Grupo A▇▇▇▇▇▇ Property, and B▇▇▇▇▇▇▇ agrees that no portion of any sums received from Borrower cannot pay its operating expenses (including Debt Service payments due or Guarantor, from time to time, in respect reduction of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion outstanding amount of the Property Debt (including, without limitation, any amounts received or any direct deemed to have been received pursuant to a foreclosure or indirect interest therein other exercise of remedies by Lender, or any Transfer by virtue of the applications of any direct casualty or indirect interest in Borrower, in either case, in violation condemnation proceeds pursuant to the terms and conditions of the Loan Documents) shall be deemed to have been applied in reduction of Borrower’s liability under this clause (d) until such time as the entire outstanding amount of the Debt shall have been reduced by payments by or on behalf of Borrower or Guarantor to less than the amount of Borrower’s recourse liability under this clause (d).
(e) Nothing herein shall be deemed to constitute a waiver by Lender of any right Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt.
(f) Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, Borrower shall not have any liability pursuant to this Section 9.3 if a court of competent jurisdiction issues a final non-appealable judgement that any acts or omissions creating liability hereunder were caused by the fraud, bad faith, willful misconduct or gross negligence of Lender or Servicer.
(g) Notwithstanding anything to the contrary contained in the Loan Documents, other than with respect to the Guarantor under the Guaranty and the Environmental Indemnity, neither Guarantor, nor any officer, director, shareholder, partner, member, principal, employee of, shall have any personal liability for, nor be joined as a party to, any action with respect to (i) the payment of any sum which is or may be payable under this Agreement or the Loan Documents, or (ii) the performance or discharge of any covenants, obligations or undertakings of Borrower. In addition to the foregoing, in no event will the assets of any officer, director, shareholder, partner, member, principal, employee of Borrower or Guarantor be available to satisfy any obligation of Guarantor thereunder.
(h) Notwithstanding the foregoing provisions of this Section 9.3 or anything to the contrary in this Agreement or the other Loan Documents, (i) Guarantor shall have no liability under Sections 9.3(b)(ix), (xiii), or (xiv) or Section 9.3(c) for Permitted Equipment Financing or Permitted Trade Payables that constituted Permitted Equipment Financing or Permitted Trade Payables when incurred but, due to insufficient cash flow at the Property, subsequently breaches the definition of Permitted Equipment Financing or Permitted Trade Payables by being outstanding for longer than any time period specified in such definitions, or by exceeding the one percent (1%) or two percent (2%) cap, as applicable, specified in such definitions, and (ii) Guarantor shall have no liability under any of the Loan Documents with respect to liabilities or obligations arising from events, acts, omissions, facts or circumstances first occurring from and after the date that Lender (or any Affiliate, designee, agent, nominee, successor to or assignee of Lender) takes title to the Property or the ownership interests in Borrower pursuant to a foreclosure, deed-in-lieu of foreclosure, assignment-in-lieu of foreclosure, other exercise of remedies under t
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender (a) Optionee agrees that it shall not enforce the liability and obligation of Borrower Optionor to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents Agreement by any action or proceeding wherein a against any Optionor Exculpated Party (as hereinafter defined), and shall not sue for, seek or demand any money judgment against any direct or indirect member, manager, shareholder, partner, beneficiary or other owner of beneficial ownership interests in Optionor, or any deficiency judgment director, officer, agent, attorney, employee or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates trustee of any of the foregoing (each, an “Optionor Exculpated Party” and, collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Optionor Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding ) under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 21(a) shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced of Optionor hereunder; or secured by any of the Loan Documents; (bii) impair the right of Lender Optionee to name Borrower Optionor as a party defendant in any action or suit for foreclosure and sale under the Mortgage; this Agreement.
(cb) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) constitute a waiver of the right of Lender to Optionor agrees that it shall not enforce the liability and obligation of BorrowerOptionee to perform and observe the obligations contained in this Agreement by any action or proceeding against any Optionee Exculpated Party (as hereinafter defined), by and shall not sue for, seek or demand any money judgment against any direct or otherwiseindirect member, to the extent manager, shareholder, partner, beneficiary or other owner of beneficial ownership interests in Optionee, or any director, officer, agent, attorney, employee or trustee of any lossof the foregoing (each, damagean “Optionee Exculpated Party” and, costcollectively, expense, liability, claim the “Optionee Exculpated Parties”) under or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out reason of or in connection with the following 119 (all such liability and obligation this Agreement. The provisions of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
this Section 21(b) shall not, however, (i) fraudulent actsconstitute a waiver, willful misconduct release or material intentional misrepresentation by Borrower impairment of any obligation of Optionee hereunder; or any Borrower Affiliate in connection with the Loan;
(ii) impair the breach by Borrower right of Optionor to name Optionee as a party defendant in any representation, warranty, covenant action or indemnification provision in the Environmental Indemnity;suit under this Agreement.
(iiic) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the The provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) Section 21 shall survive the failure by Borrower to deliver to Lender any security depositsClosing, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under expiration of the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) Option Period and the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Mta Project Documents
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not sus▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the enforcement right of the Environmental IndemnityLender to enforce Section 4.12(e) of this Agreement; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h) 8) 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 reasonably Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation or any failure to disclose a material fact by Borrower Borrower, any SPE Component Entity, Guarantor, Sponsor, Master Lessee or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach gross negligence or willful misconduct of Borrower, any SPE Component Entity, Guarantor, Sponsor, Master Lessee, or any Borrower Party or the commission of a criminal act by Borrower, any SPE Component Entity, Guarantor, Sponsor, Master Lessee or any Borrower Party which results in any seizure or forfeiture of the Property, or any representationportion thereof, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower’s interest therein;
(iii) material physical waste to the Property caused by the intentional misappropriation by Borrower acts or intentional omissions of Borrower, any Reserve Funds disbursed to BorrowerSPE Component Entity, Guarantor, Sponsor, Master Lessee, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of BorrowerBorrower Party (including, unless such rents are otherwise delivered to Lender;
(iv) without limitation, any intentional (other than, in each case, as part of arson or to facilitate any alteration that is permitted hereunder) material physical waste abandonment of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful Property) and/or the removal or destruction disposal of a material any portion of the Property or damage to a material portion during the continuation an Event of the Property caused Default by willful misconduct or gross negligence of Borrower Borrower, any SPE Component Entity, Guarantor, Sponsor, Master Lessee, or any Borrower Affiliate;
(v) Party, without the commission replacement of any criminal act by Borrower or any Borrower Affiliate which results in same, to the forfeiture extent the same is material to the operation of the Property;
(viiv) the intentional misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate Master Lessee of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, (C) any Rents or (D) any Tenant security deposits or Rents collected in advance;
(v) failure to pay any Taxes or Other Charges, charges for labor or materials or any Borrower Affiliateother charges that can create liens on any portion of the Property (other than (x) amounts deposited with Lender as Tax Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such Taxes or Other Charges owed or (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents) to the extent that the revenue from the Property is sufficient to pay such amounts as well as other costs of servicing the Debt and of operating the Property;
(vi) failure to maintain insurance as required by this Agreement (other than the failure to pay amounts deposited with Lender as Insurance Reserve Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of such Insurance Premiums) to the extent that the revenue from the Property is sufficient to pay the Insurance Premiums relating thereto as well as other costs of servicing the Debt and of operating the Property;
(vii) the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity, this Agreement or in the Security Instrument concerning Environmental Laws and Hazardous Substances;
(viii) any fees or commissions paid by Borrower or Master Lessee after the occurrence and during the continuance continuation of an any Event of DefaultDefault to Guarantor, the intentional misappropriation by Borrower or Sponsor, Master Lessee, and/or any Borrower Affiliate of any Rents Borrower, Guarantor, Sponsor and/or Master Lessee in violation of the terms of the Note, this Agreement, the Security Instrument or the other Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s breach of, or failure to pay Taxes or transfer taxescomply with, maintain required Policiesthe representations, pay insurance premiums for such Policies, or pay any Condominium Charges to warranties and covenants contained in Sections 15.1 and 15.3 of this Agreement and/or the extent cash flow from the Property is sufficient to make such payments and all other payments required provisions of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120Section 11.2 hereof;
(x) Borrower or Master Lessee fails to appoint a new property manager upon the voluntary incurrence by Borrower request of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security depositsLender, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documentseach as required by, unless previously applied (except to the extent that such deposits were applied and in accordance with the applicable lease or terms and provisions of, this Agreement, the Assignment of Management Agreement and the other governing document Loan Documents or Borrower did not have or Master Lessee appoints a new property manager or replaces the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, property manager other than in each case, in violation of accordance with the terms of this Agreement, which was voted for the Assignment of Management Agreement and the other Loan Documents;
(xi) any litigation or consented other legal proceeding related to or approved by Borrower (or the members of the Condominium Board appointed Debt filed by Borrower); and/or, any SPE Component Entity, Guarantor, Sponsor, Master Lessee or any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the other Loan Documents, provided that neither Borrower nor Guarantor shall be liable to the extent of any applicable loss, damage, cost, expense, liability, claim or other obligation arising solely from a defense of Borrower, Guarantor or any Affiliate of Borrower or Guarantor raised in good faith;
(xii) any representation, warranty or covenant contained in Section 5.1 or Section 5.3 hereof is violated or breached;
(xiii) (i) Borrower and/or Master Lessee fails to comply with the failure by Borrower, any Borrower Affiliate and/or any other owner Cash Management Agreement relating to the establishment of the Upper Option Space and/or the Lower Option Space a Deposit Account (as defined in the Original Bloomberg LeaseCash Management Agreement), a Cash Management Account, and/or the institution of cash management generally;
(xiv) Borrower’s failure to deposit any initial springing Reserve Fund deposit required pursuant to this Agreement;
(other than xv) if, in connection with any transfer of the Property to Lender (or Lender’s designee) in full or partial satisfaction of the Debt, Borrower or any Affiliate affiliate of Lender) Borrower fails to comply with take any lawful action reasonably necessary to effect the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise transfer of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law licenses or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation permits with respect to the Upper Option Space and/or Property from the Lower Option Space after then-current holder thereof to the occurrence transferee of an Expansion Space Defaultthe Property or its designee; and/or
(xvi) any amendment, modification or termination of the Master Lease without Lender’s consent. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) any representation, warranty or covenant contained in Article 5 hereof is violated or breached, and such violation or breach is cited as a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth factor in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under person (unless such failure results solely from the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lendereconomic performance of the Property); (ii) if Borrower fails to obtain Lender’s prior written consent to any voluntary Sale or Pledge encumbering the Property for which Lender’s consent is required hereunder; (iii) Borrower, Master Lessee or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or SPE Component Entity files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) an Affiliate, officer, director, or representative which Controls, directly or indirectly, Borrower, Master Lessee or any SPE Component Entity files, or joins in the filing of of, an involuntary petition against Borrower Borrower, Master Lessee or any SPE Component Entity under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by Borrower, Master Lessee or any SPE Component Entity from any Person; (v) Borrower Borrower, Master Lessee or any SPE Component Entity files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency lawcauses to be solicited petitioning creditors for any involuntary petition from any Person; (vi) Borrower any Affiliate, officer, director, or representative which Controls Borrower, Master Lessee or any SPE Component Entity consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, Master Lessee, any SPE Component Entity or any portion of the Property; (vii) Borrower, Master Lessee or any SPE Component Entity makes an assignment for the benefit of creditors or admits, in writing or admits in any legal proceeding, proceeding its insolvency or inability to pay its debts as they become due, which admission ; (viii) there is used as evidence substantive consolidation of Borrower’s insolvency , Master Lessee or any SPE Component Entity (or any Restricted Party) with any other Person in connection with an involuntary petition under the Bankruptcy Code or any other Federal federal or state bankruptcy proceeding involving the Guarantor or insolvency law any of its Affiliates and one of the factors cited as the bases therefor is a breach by Borrower or Master Lessee of any representation, warranty or covenant contained in Sections 5.1 and/or 5.3 hereof; (ix) intentionally omitted; (x) there occurs any voluntary cancellation, surrender, or termination of the Franchise Agreement by Borrower and/or Master Lessee without the prior written consent of Lender unless a Person other than Replacement Franchise Agreement is entered into concurrently with such termination in accordance with this Agreement, or (xi) Borrower and/or Master Lessee amends or modifies the Franchise Agreement without the prior written consent of Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any to the extent such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there consent is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of required under the Loan Documents).
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower Borrowers to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower Borrowers or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower Borrowers (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, or in the PropertyProperties, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower Borrowers only to the extent of Borrower’s Borrowers’ interest in the PropertyProperties, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrowers or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower Borrowers as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instruments; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrowers and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instruments; (f6) impair the enforcement right of the Environmental IndemnityLender to enforce Section 4.12(e) of this Agreement; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower Borrowers in order to fully realize the security granted by the Mortgage Security Instruments or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperties; or (h) 8) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrowers, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation or any failure to disclose a material fact by Borrower any Borrower, any SPE Component Entity, Guarantor, or any Borrower Affiliate Party in connection with the Loan;
(ii) the gross negligence or willful misconduct of any Borrower, any SPE Component Entity, Guarantor, or any Borrower Party or the commission of a criminal act by any Borrower, any SPE Component Entity, Guarantor, or any Borrower Party which results in any seizure or forfeiture of any Property or any portion thereof or any Borrower’s interest therein;
(iii) material physical waste to any Property caused by the intentional acts or intentional omissions of any Borrower, any SPE Component Entity, Guarantor, or any Borrower Party (including, without limitation, any arson or abandonment of any Property) and/or the removal or disposal of any portion of any Property after an Event of Default by any Borrower, any SPE Component Entity, Guarantor, or any Borrower Party;
(iv) the misapplication, misappropriation or conversion by any Borrower of (A) any insurance proceeds paid to any Borrower Party by reason of any loss, damage or destruction to any Property, (B) any Awards or other amounts received by any Borrower Party in connection with the Condemnation of all or a portion of any Property, (C) any Rents following an Event of Default or (D) any Tenant security deposits or Rents collected in advance;
(v) failure to pay any Taxes or Other Charges, charges for labor or materials or any other charges that can create liens on any portion of any Property to the extent that the revenue from the Properties is sufficient to pay such amounts (provided that Borrower shall have no liability for (x) amounts deposited with Lender as Tax Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such Taxes or Other Charges owed or (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents);
(vi) failure to maintain insurance as required by this Agreement to the extent that the revenue from the Properties is sufficient to pay the Insurance Premiums relating thereto (provided that Borrower shall have no liability for pay amounts deposited with Lender as Insurance Reserve Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of such Insurance Premiums);
(vii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of , this Agreement or in any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence Security Instrument concerning Environmental Laws and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan DocumentsHazardous Substances;
(viii) all any fees or commissions paid by any material portion of Borrower after the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower occurrence of any Indebtedness for borrowed money in violation Event of the provisions of this Agreement or Default to Guarantor, and/or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal Affiliate of any Unit from the Condominium, in each case, Borrower and/or Guarantor in violation of the terms of the Note, this Agreement, which was voted for or consented to or approved by Borrower (the Security Instruments or the members other Loan Documents;
(ix) any Borrower’s breach of, or failure to comply with, the representations, warranties and covenants contained in Section 15.1 of this Agreement and/or the Condominium Board appointed provisions of Sections 11.2 and 12.3 hereof;
(x) any Borrower’s breach or failure to comply with the covenants, conditions and/or restrictions contained in the documents described on Schedule VII hereto and relating to the Properties known as Johnstown Industrial Park in Johnstown, New York and Crossroads Industrial Park in Gloversville, New York;
(xi) any litigation or other legal proceeding related to the Debt filed by any Borrower), any SPE Component Entity, Guarantor, or any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the other Loan Documents, which the court in any such litigation or proceeding determines is frivolous, brought in bad faith or wholly without basis in fact or law; and/or
(xiiixii) any violation or breach of a representation, warranty or covenant contained in Section 5.1 hereof.
(ib) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower Borrowers in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach any violation of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth representation, warranty or covenant contained in Article 5 which results in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking the other Borrowers) as a substantive consolidation brought or actively supported by Lender)result of such breach; (ii) if any Sale or Pledge occurs that is not a Permitted Transfer (iii) any Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or SPE Component Entity files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (iiiiv) Borrower files an application for the appointment of a receiverAffiliate, trustee officer, director, or examiner for representative which Controls, directly or indirectly, any Borrower or any portion of the PropertySPE Component Entity files, except at the request of or with the consent of Lender, (iv) joins in the filing of of, an involuntary petition against any Borrower or any SPE Component Entity under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against any Borrower by or any SPE Component Entity from any Person; (v) any Borrower or any SPE Component Entity files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency lawcauses to be solicited petitioning creditors for any involuntary petition from any Person; (vi) any Affiliate, officer, director, or representative which Controls any Borrower or any SPE Component Entity consents to or acquiesces in or joins in an application by a party other than Lender for the appointment of a custodian, receiver, trustee, or examiner for any Borrower, any SPE Component Entity or any portion of any Property; (vii) any Borrower or any SPE Component Entity makes an assignment for the benefit of creditors or admits, in writing or admits in any legal proceeding, its insolvency or inability to generally pay its debts as they become due, which admission is used as evidence due unless in each of Borrower’s the foregoing cases to do otherwise would require a false statement in any such legal proceeding or violate Rule 9011 of the Federal Rules of Bankruptcy Procedure or other applicable rules requiring a sufficient legal and factual basis for filing papers in a proceeding under Federal or state insolvency law or in connection with an involuntary petition under the Bankruptcy Code any other legal proceeding; (viii) there is substantive consolidation of any Borrower or any SPE Component Entity (or any Restricted Party) with any other Federal Person (other than other Borrowers) in connection with any federal or state bankruptcy proceeding involving the Guarantor or any of its Affiliates; (ix) any Borrower or any SPE Component Entity (or any Affiliate of Borrower or any SPE Component Entity contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender proceeding involving the Guarantor or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsAffiliates.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, director, employee, advisor, beneficiary, shareholder, partner, manager, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor under the Guaranty and the Environmental Indemnity) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not sus▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower, Guarantor (but specifically excluding Guarantor under the Guaranty and the Environmental Indemnity) or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty or indemnity made in connection with the Loan (including the Guaranty and the Environmental Indemnity) or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of any assignment of leases contained in the Assignment of LeasesMortgage; or (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage (if required by applicable law and provided such deficiency judgment is not enforced against Borrower, the Exculpated Parties or Guarantor (but specifically excluding Guarantor under the Guaranty and the Environmental Indemnity) personally) or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; .
(b) Nothing contained herein shall in any manner or (h) constitute a waiver of way release, affect or impair the right of Lender to enforce the liability recover, and obligation of BorrowerBorrower shall be fully and personally liable and subject to legal action, by money judgment or otherwise, to the extent of for any loss, damage, cost, expense, liabilitydamage, claim or other obligation reasonably incurred by Lender (including out-of-pocket without limitation reasonable attorneys’ fees and costs reasonably court costs) actually incurred but excluding any consequential, special or punitive damages) suffered by Lender arising out of or in connection with the following 119 (all such liability and obligation of provided that in no event shall Borrower be liable for any actions taken by, or all inaction of, a receiver, regardless of whether such action or inaction is undertaken by a receiver pursuant to any authority it may have to control the actions of Borrower, in each case to the extent the acts or omissions giving rise to such right of recovery occurred prior to (1) a Transfer resulting from, the exercise of Lender’s rights under the Loan Documents or (2) the consummation of any remedial or enforcement action by the Lender or of the following collateral for the Loan, including, without limitation, any foreclosure, deed-in-lieu or assignment in lieu of foreclosure and including the exercise of any rights of Lender under the Mortgage, that in each case results in any such entity or the Property not being referred under the Control of Guarantor (any of the foregoing pursuant to herein as clause (1) or (2), a “Borrower’s Recourse LiabilitiesTransfer Event”)):
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower Borrower, Principal or any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of any representationBorrower, warranty, covenant Principal or indemnification provision in the Environmental IndemnityGuarantor;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower Borrower, Principal or any Borrower Affiliate, or any intentional wrongful Guarantor (to the extent that there exists sufficient cash flow from the Property that is made available to Borrower);
(iv) the removal or destruction disposal of a material any portion of the Property by Borrower, Principal or damage Guarantor (other than as permitted by the Loan Documents or required by the Franchise Agreement or with respect to a material portion of the obsolete Personal Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(vincluding FF&E) the commission of any criminal act by Borrower or any Borrower Affiliate which results removed in the forfeiture ordinary course of owning and operating the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default unless such property is replaced with property of equal or greater utility or value;
(v) the misappropriation, misapplication or conversion by Borrower, Principal or Guarantor of (A) any Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, (B) any Awards received in connection with a Condemnation of all or a portion of the Property, (C) any Rents during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of (D) any Rents paid more than one month in violation advance or (E) any amounts disbursed to Borrower from the Reserve Funds;
(vi) failure to pay charges for labor or materials or other charges or judgments that can create Liens on any portion of the Property, (except for Permitted Encumbrances or to the extent Borrower is contesting the same in subject to and in compliance with the terms and conditions of Sections 5.1.1, 5.1.2 or 5.1.4 of the Loan DocumentsAgreement), provided that sufficient cash flow is available from the Property to pay such costs (and not on reserve with Lender or Manager) and such costs either (A) are contracted for during a period in which no Event of Default had occurred and was continuing or (B) if contracted for during the continuance of an Event of Default, were approved by Lender in writing;
(viiivii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected by Borrower, Principal or Guarantor with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that (A) any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document action in lieu thereof or (B) any such deposits were deposited into the Cash Management Account during a Cash Sweep Period;
(viii) if Borrower did not have the legal rightfails to maintain its status as a Special Purpose Entity or comply with any representation, because of a bankruptcy, receivership warranty or similar judicial proceeding, to direct disbursement of such depositscovenant set forth in Section 4.1.30 or Section 4.1.43 hereof (but expressly excluding any representation regarding future solvency or capital adequacy);
(ix) [intentionally omitted];
(x) if (1) without the prior written consent of Lender, the Franchise Agreement is modified in a manner that requires Lender’s prior written consent under Section 5.2.1(a) hereof or is terminated or cancelled by Borrower; or (2) without the prior written consent of Lender, Borrower accepts a surrender of the Franchise Agreement or accepts a modification of the Franchise Agreement which requires Lender’s prior written consent under Section 5.2.1(a) hereof;
(xi) any obligation of Lender to indemnify, defend or hold harmless Franchisor, or to pay any damages, costs, fees or expenses pursuant to any term or condition contained in the Comfort Letter; or
(xii) the termination if Borrower fails to permit on-site inspections of the Condominium Property or the removal of any Unit from the Condominiumfails to provide financial information, each as required by, and in each caseaccordance with, in violation of the terms and provisions of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the liability of Borrower under this Section 9.3(b) shall not include liability for consequential, special or punitive damages.
(c) Notwithstanding anything to the contrary in this Agreement, the Note or any of the other Loan Documents, (Ai) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt secured by the Mortgage or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (Bii) the Obligations Debt shall be fully recourse to Borrower in the event that of any of the following occur to the extent the acts or omissions giving rise to such full recourse occurred prior to a Transfer Event: (each, a “Springing Recourse Event”): (iA) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law event of: (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii1) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files Principal filing a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv2) the filing (by any person other than Lender) of an involuntary petition against Borrower or Principal under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower Borrower, Principal or a Borrower Affiliate that directly Guarantor colludes with, or indirectly Controls Borrower colludes 121 with and/or Borrower otherwise assists such Person, or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by or Principal from any Person; (v3) Borrower files or Principal filing an answer consenting to, to or otherwise acquiescing in or joining in, in each case in writing, any involuntary petition filed against it it, by any other Person (other than Lender) under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi4) Borrower makes or Principal consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or Principal or any portion of the Property (other than in connection with any deed-in-lieu, assignment-in-lieu or other consensual transfer or foreclosure of the Property to Lender); (5) Borrower or Principal making an assignment for the benefit of creditors creditors, or admitsadmitting, in writing or in any legal proceedingwriting, its insolvency or inability to pay its debts as they become due; or (6) Borrower, which admission is used as evidence of Borrower’s insolvency in writing, seeking substantive consolidation in connection with an involuntary petition under the a Bankruptcy Code Action of Borrower or any other Federal or state bankruptcy or insolvency law by a Person other than Lender affiliate of Borrower; (except for provided, that (AI) any admissions that if Borrower believes admits in good faith are truthful when made and (B) any such admission writing to Lender or any servicer of the Loan Servicer that (x) Borrower cannot pay its operating expenses Operating Expenses, (including y) Borrower cannot pay the Monthly Debt Service payments due in respect of Payment Amount or make any required deposits to the LoanReserve Funds or (z) or that Borrower cannot refinance the Loan Debt on the Maturity DateDate or (II) in response to any legal proceeding, Borrower makes a truthful admission regarding its insolvency or inability to pay its debts, and Borrower does not make any other admission in writing other than those described in clauses (I) and (II), inclusive, such admission shall not cause the Debt to be fully recourse to Borrower under this Section 9.3(c)); and (B)
(1) if Borrower fails to maintain its status as a Special Purpose Entity or comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof (viibut expressly excluding any representation or covenant regarding future solvency or capital adequacy) there and such failure results in a substantive consolidation of Borrower with any other Person; (2) to the extent Borrower is a voluntary Transfer of all required to obtain Lender’s prior written consent under Section 5.2.10 hereof, Borrower fails to obtain Lender’s prior written consent to any encumbrance or any material portion pledge of the Property or any direct part thereof or indirect interest therein (other than Permitted Encumbrances and those matters covered by Section 9.3(b)(vi) above); or (3) to the extent Borrower is required to obtain Lender’s prior written consent under Section 5.2.10 hereof, Borrower fails to obtain Lender’s prior written consent to any Transfer (it being acknowledged that, if all conditions set forth in this Agreement to a Permitted Transfer, Permitted Conditional Transfer or Permitted Change in Control, as applicable, have been satisfied, such Permitted Transfer, Permitted Conditional Transfer or Permitted Change in Control shall not result in recourse to Borrower or Guarantor pursuant to this clause (3)).
(d) Notwithstanding the foregoing, Borrower shall not have liability pursuant to this Section 9.3 if Borrower can prove that any acts or omissions creating liability hereunder were caused by the gross negligence or willful misconduct of any direct Lender or indirect interest Servicer.
(e) Notwithstanding anything to the contrary contained in Borrower, in either case, in violation of the Loan Documents, other than Guarantor under the Guaranty and the Environmental Indemnity, neither Guarantor nor any Exculpated Party shall have any personal liability for, nor be joined as a party to any action (except as required by applicable law) with respect to (i) the payment of any sum of money which is or may be payable hereunder or under any other Loan Document, including, but not limited to, the repayment of the Debt, or (ii) the performance or discharge of any covenants, obligations or undertakings of Borrower. In addition to the foregoing, anything in the Guaranty or the other Loan Documents notwithstanding, in no event will the assets of any Exculpated Party be available to satisfy any obligation of Guarantor thereunder.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the "Borrower Parties") or any other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Borrower Parties or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Person, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to this Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Lender to name any of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower Leases and Rents executed 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 Propertyconnection herewith; or (hvi) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower (but not against any members of Borrower (other than Guarantor to the extent provided in the Non-Recourse Guaranty) or their direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ ' fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Guarantor in connection with the Loan;
(iib) intentional physical waste of the Property (including, but not limited to, waste due to gross negligence) by Borrower or any affiliate thereof; provided, however, such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by Borrower or any affiliate thereof;
(c) the material breach by Borrower of any representation, warranty, covenant or indemnification provision in the that certain Environmental Indemnityand Hazardous Substance Indemnification Agreement of even date herewith given by Borrower to Lender or in this Agreement concerning Environmental Laws, Hazardous Substances and Asbestos;
(iiid) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, removal or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property disposal by Borrower or any Borrower Affiliate, or affiliate thereof of any intentional wrongful removal or destruction of a material portion of the Property or damage to a material after an Event of Default has occurred and while it is continuing, unless such portion of the Property caused is replaced by willful misconduct an item of equal or gross negligence of Borrower or any Borrower Affiliategreater value as determined by Lender in its reasonable discretion;
(ve) the commission of any criminal act misapplication or conversion by Borrower or any Borrower Affiliate which results in the forfeiture affiliate thereof of
(i) any insurance proceeds paid by reason of any loss, damage or destruction to the Property;,
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Aii) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property, (iii) any Rents following an Event of Default or (iv) any Rents paid more than one month in advance;
(f) failure to pay charges for labor or materials or taxes or other charges that can create liens superior to the lien of the Mortgage on any portion of the Property actually received unless such taxes or other charges are being contested in accordance herewith or such taxes or charges have been delivered to Lender in accordance with Section 3.3 or Borrower has complied with Section 5.2; and
(g) any security deposits collected by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected affiliate thereof with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because terms and conditions of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination any of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented Leases prior to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Defaultthe Event of Default that gave rise to such foreclosure or action in lieu thereof. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents,
(Ai) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (Bii) the Obligations Debt shall be become fully recourse to Borrower (but not its members (other than Guarantor solely to the extent provided in the Non-Recourse Guaranty) or other direct or indirect constituent members or partners or any other Person) in the event that any that: (A) the first full Monthly Payment Amount (as defined in the Note) under the Note is not paid when due; (B) other than in connection with a default under subsection (x) of the following occur (each, a “Springing Recourse Event”): (i) a breach definition of the covenants Special Purpose Bankruptcy Remote Entity set forth in Schedule V hereof 5 hereof, Borrower fails to maintain its status as a Special Purpose Bankruptcy Remote Entity in accordance with the provisions of this Agreement and such failure results in the substantive consolidation of Borrower with another Person; (C) except as otherwise permitted pursuant to the Loan Documents, Borrower fails to obtain Lender's prior written consent to any subordinate financing or other voluntary lien encumbering the Property; (D) except as otherwise permitted pursuant to the Loan Documents, Borrower fails to obtain Lender's prior written consent to any assignment, transfer, or conveyance of the Property or any interest therein as and to the extent required by this Agreement or the Mortgage; or (E)
(1) a receiver (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported receiver appointed by Lender); (ii) , liquidator or trustee of Borrower or Guarantor shall be appointed which is not dismissed within ninety (90) days, or (2) if any Borrower Affiliatepetition for bankruptcy, officerreorganization or arrangement pursuant to federal bankruptcy law, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal similar federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for shall be filed by Borrower or any portion of the PropertyGuarantor, except at the request of or with the consent of Lender, (iv3) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which if Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower Guarantor files an answer consenting to, or otherwise joining in, any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law filed against it by any other Person under the Bankruptcy Code Person, or is found pursuant to a final, unappealable order of a court of competent jurisdiction to have solicited or caused to be solicited creditors to file any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any other Federal similar federal or state bankruptcy law against Borrower or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admitsGuarantor, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii4) there is if Borrower or Guarantor are found, pursuant to a voluntary Transfer final unappealable order of all a court of competent jurisdiction, to have been in collusion with creditors that initiate a bankruptcy action or any material portion of the Property proceeding against Borrower or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsGuarantor.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth herein, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Section 10.7); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g6) 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; (7) impair the right of Lender to enforce Section 7.7 hereof or the other Cash Management Provisions; or (h) 8) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent actsfraud, willful misconduct or material intentional misrepresentation or failure to disclose a material fact, in each case, by Borrower or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower Party;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, litigation or any intentional failure to deposit rents into the Clearing Account other legal proceeding related to the extent Debt filed by any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the control of Borrower, unless such rents are otherwise delivered to Lenderother Loan Documents;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of to the Property caused by Borrower the intentional acts or intentional omissions of any Borrower Affiliate, or any intentional wrongful Party and/or the removal or destruction disposal of a material any portion of the Property or damage to a material portion after an Event of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower AffiliateDefault;
(v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Party of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, (C) any Rents following an Event of Default or (D) any Borrower AffiliateTenant security deposits or Rents collected in advance;
(vi) failure to pay Taxes, charges for labor or materials or other charges that can create Liens on any portion of the Property;
(vii) after failure to pay Insurance Premiums, to maintain the occurrence Policies in full force and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation effect and/or to provide Lender evidence of the Loan Documentssame, in each case, as expressly provided herein;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)action in lieu thereof;
(xiiix) failure to pay (A) any tax on the termination making and/or recording of the Condominium Mortgage, the Note or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for other Loan Documents or consented to (B) any transfer or approved by Borrower similar taxes (or whether due upon the members making of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender same or any Affiliate of upon Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the ’s exercise of any rights that the Tenant its remedies under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equityLoan Documents), including, without limitation, any rights intangible taxes or documentary stamp taxes, but excluding any income, franchise or other similar taxes;
(x) the seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party;
(xi) the failure to set off pay any payments deductible required under any Policy, make any Condemnation Payment and/or any True Up Payment, to permit on-site inspections of the Original Bloomberg Lease Property and/or to provide the Required Financial Items, in each case, as and when required herein; and/or
(iiixii) paying any amount or performing any obligation the breach of the representation by Borrower that on the Closing Date, all Improvements at the Property were in material compliance with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. all applicable Legal Requirements.
(b) Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt secured by the Mortgage or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach the first full monthly payment of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets principal and liabilities of Borrower with any other Person in connection with a proceeding interest under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)Note is not paid when due; (ii) Borrower or any Borrower Affiliatefails to comply with the Cash Management Provisions, officerfails to appoint a new property manager upon the request of Lender, director or representative which Controls Borrower consents fails to or files a voluntary petition implement Lender’s instructions with respect to Borrower under any property manager, counters Lender’s directions with respect to any property manager or fails to comply with any limitations on instructing the Bankruptcy Code or any property manager, each as required by and in accordance with, as applicable, the terms and provisions of, this Agreement and the other Federal or state bankruptcy or insolvency lawLoan Documents; (iii) Borrower files an application for any representation, warranty or covenant contained in the appointment of a receiver, trustee SPE Provisions and/or the Transfer Provisions hereof is violated or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, breached; (iv) the filing of an involuntary petition against Borrower under the a Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any PersonRecourse Event occurs; (v) if Borrower files an answer consenting toor any Borrower Party, or joining inany Affiliate of Borrower or Affiliate of any Borrower Party, any involuntary petition filed shall make a counterclaim against it by any other Person under the Bankruptcy Code Lender, Servicer or any other Federal or state bankruptcy or insolvency lawtheir Affiliates in violation of Section 11.15 of this Agreement; (vi) Borrower makes an assignment for the benefit of creditors Sections 10.1 or admits, in writing 10.2 hereof are violated or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date)breached; or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsDocument Event occurs.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or Operating Lessee to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower Borrower, Operating Lessee or against any Mezzanine Borrower, any Guarantor, any Affiliates of the foregoing or any Affiliate of Borrower their respective direct or any legal representatives, successors or assigns of Borrower or its Affiliate or any indirect principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trusteestrustees or agents (each, agents, or Affiliates of any exclusive of the foregoing (collectivelyBorrower and Operating Lessee, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the an “Other Exculpated PartiesParty”), except that (1) any Other Exculpated Party that is party to any Loan Document or any other separate written guaranty, indemnity or other agreement given by such Other Exculpated Party in connection with the Loan (including, without limitation, the Assignment of Management Agreement or any other Loan Document to which such Other Exculpated Party is a party) shall remain fully liable therefor and the foregoing provisions shall not operate to limit or impair the liabilities and obligations of such Other Exculpated Party thereunder, and (2) Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the PropertyProperties, the Rents Gross Revenue, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower or Operating Lessee only to the extent of Borrower’s and Operating Lessee’s interest in the PropertyProperties, in the Rents Gross Revenue and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not sus▇▇ ▇orfor, seek or demand any deficiency judgment against any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower or Operating Lessee as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty Documents or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower or Operating Lessee 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 PropertyProperties; (i) waive or impair the liability of any Other Exculpated Party under any Loan Document or any other separate written guaranty, indemnity or other agreement to which such Other Exculpated Party is a party (including, without limitation, the Assignment of Management Agreement or any other Loan Document to which such Other Exculpated Party is a party); or (hi) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower or Operating Lessee, by money judgment or otherwise, to the extent of any actual loss, damage, cost, out-of-pocket cost or expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket reasonable outside attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower or Operating Lessee for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actsfraud or intentional material misrepresentation committed by Borrower, willful misconduct or material intentional misrepresentation by Borrower Operating Lessee, any Guarantor or any Borrower Affiliate of Borrower, Operating Lessee or any Guarantor in connection with the Loan;
(ii) Borrower or Operating Lessee incurs any Indebtedness in violation of the breach by Borrower of any representation, warranty, covenant or indemnification provision Loan Documents not otherwise set forth in clause (i) in the Environmental Indemnitydefinition of “Springing Recourse Event” below (unless such debt was permitted when incurred but was not repaid due to the Property’s failure to generate sufficient cash flow or the failure of Lender to release funds from the Accounts);
(iii) the intentional misappropriation by Borrower or Operating Lessee fails to obtain Lender’s prior consent to (a) any Transfer of any Reserve Funds disbursed to Individual Property or (b) any Transfer of a direct or indirect interest in Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in each case not otherwise set forth in clause (ii) in the control definition of Borrower, unless such rents are otherwise delivered to Lender“Springing Recourse Event” below;
(iv) any intentional (other than, in each case, as part removal of or to facilitate any alteration that is permitted hereunder) material physical waste personal property from the Properties during an Event of the Property Default by Borrower or any Borrower Affiliate, Operating Lessee or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence on behalf of Borrower or Operating Lessee by any Borrower AffiliateGuarantor or any Affiliate of Borrower, Operating Lessee or any Guarantor, unless replaced with personal property of substantially the same or greater utility and of the same or greater value;
(v) the commission of any criminal act intentional material physical Waste at any Individual Property committed by Borrower or Operating Lessee or on behalf of Borrower or Operating Lessee by any Borrower Guarantor or any Affiliate which results in the forfeiture of the PropertyBorrower, Operating Lessee or any Guarantor;
(vi) the intentional material misappropriation by Borrower or Operating Lessee or on behalf of Borrower or Operating Lessee by any Borrower Guarantor or any Affiliate of Borrower, Operating Lessee or any Guarantor of (A) any Insurance Proceeds actually received paid by Borrower or reason of any Borrower Affiliate or Casualty to any Individual Property, (B) any Awards or other amounts received in connection with the Condemnation of all any Individual Property and (C) any Gross Revenues after (or that results in) a portion of the Property actually received by Borrower Trigger Period or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms Loan Documents; and
(vii) any breach of any provision of Section 4.4 or Schedule V of this AgreementAgreement (other than with respect to clause (d) of Schedule V (with respect to trade payables only), which was voted for or consented clause (f) of Schedule V, clause (j) of Schedule V, clause (o) of Schedule V (with respect to or approved by Borrower trade payables only), clause (or the members v) of the Condominium Board appointed by BorrowerSchedule V and clause (w) of Schedule V); and/or) other than a Springing Recourse Event described in clause (b)(viii) below.
(xiii) (i) the failure Borrower or Operating Lessee fails to obtain Lender’s prior consent to any financing for borrowed money secured by any Individual Property, or any voluntary conveyance of a mortgage, deed of trust, security deed, security agreement or similar grant by Borrower or Operating Lessee of a voluntary Lien upon any Individual Property, or Borrower or Operating Lessee fails to obtain Lender’s prior consent to any voluntary granting of a security interest in, voluntary pledge of or other voluntary Lien upon any direct or indirect equity interest in any Individual Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender Operating Lessee, or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”Mezzanine Borrower, in each case, as security for any obligations or liabilities that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding is not permitted under the Bankruptcy Code Loan Documents (excluding, for the avoidance of doubt, the security interests, pledges or Liens granted under federalthe Loan Documents or Mezzanine Loan Documents securing the Loan or any Mezzanine Loan), state in each case under this clause (i) that is not permitted under the Loan Documents or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)otherwise cured; (ii) Borrower fails to obtain Lender’s prior consent to (a) any voluntary transfer of fee title to any Individual Property that is not permitted under the Loan Documents or otherwise cured, or (b) any voluntary transfer of a direct or indirect interest in Borrower that results in a change of Control of Borrower, Operating Lessee or Mezzanine Borrower that is not permitted under the Loan Documents or otherwise cured (specifically excluding from this clause (ii), any transfer of the direct ownership interests in any Individual Borrower, or any Mezzanine Borrower Affiliateto any Mezzanine Lender or its designee as result of any foreclosure upon such ownership interests (or transfer-in-lieu of foreclosure of the ownership interests that are the collateral for the Mezzanine Loan); (iii) Borrower, officerOperating Lessee, director or representative which Controls Borrower consents to or and/or any Mezzanine Borrower, files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower, Operating Lessee, and/or any Mezzanine Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower, Operating Lessee, and/or any Mezzanine Borrower colludes 121 with or otherwise assists such Person, and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower, Operating Lessee, and/or any Mezzanine Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower, Operating Lessee, and/or any Mezzanine Borrower by any Person; (v) Borrower, Operating Lessee, and/or any Mezzanine Borrower files an answer consenting to, or joining in, fails to oppose any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawlaw (unless there is no good faith defense to such involuntary petition); (vi) Borrower, Operating Lessee, or any Mezzanine Borrower or any Affiliate, officer, director or representative which controls Borrower, Operating Lessee, or such Mezzanine Borrower, as the case may be, consents to, or joins in, an application for the appointment of a custodian, receiver, trustee or examiner for Borrower, Operating Lessee, and/or any portion of any Individual Property, or such Mezzanine Borrower, as the case may be; (vii) Borrower, Operating Lessee, and/or any Mezzanine Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become duedue (in each case except to the extent required by applicable law); or (viii) Borrower or Operating Lessee fails to comply with the provisions of Section 4.4 or Schedule V of this Agreement (other than those relating to solvency or adequacy of capital or adequacy of cash flow), which admission is used as evidence and such failure results in an order of substantive consolidation of one (1) or more of the Individual Borrowers or Operating Lessee with any other Person (other than another Individual Borrower’s insolvency ) in connection with an involuntary petition a bankruptcy or similar proceeding under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentslaw.
Appears in 1 contract
Exculpation. Subject to the qualifications below(a) Except as otherwise provided herein, ----------- Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations representations, warranties and obligations contained in the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under in the Note, this Agreement, the Mortgage and Security Instruments, the other Loan Documents, or and the interest in the PropertyProperties, the Rents or Rents, the Collateral and any other collateral given to Lender pursuant to the Note, this Agreement, the Security Instruments or the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the PropertyProperties, in the Rents Rent, the Collateral and in any other collateral given to Lender. In no event shall any Related Party have any personal liability for the payment of the indebtedness or any other sum due hereunder, and under the Note, the Security Instruments or the other Loan Documents, or for the performance or observance of any other obligation of Borrower other than pursuant to a written instrument executed by such Related Party specifically providing for such liability. Lender, by accepting the Note, this Agreement, the Mortgage Agreement and the other Loan DocumentsSecurity Instruments, agrees that it shall not sunot, except as otherwise provided herein ▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower and/or any Exculpated Related Party in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage other Loan Documents or the other Loan DocumentsSecurity Instruments. The provisions of this Section 10.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Note, this Agreement, the other Loan DocumentsDocuments or the Security Instruments; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the MortgageSecurity Instruments; (ciii) affect the validity or enforceability of any of the Loan Documentsindemnity (including, without limitation, the Guaranty Environmental Indemnity and the Maryland Guaranty), guaranty, master lease or any other guaranty similar instrument made in connection with the Note, this Agreement, the Security Instruments, or the other Loan or any of the rights and remedies of Lender thereunderDocuments; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (fvi) impair the enforcement of the Environmental Indemnity; (g) 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 (h) constitute a waiver of the right of Lender to enforce the liability provisions of Sections 4.1.8, 4.1.28, 5.1.9 and obligation 5.2.8 of Borrower, by money this Agreement; or (vii) impair the right of Lender to obtain a deficiency judgment or otherwiseother judgment on the Note against Borrower if necessary to preserve or enforce its rights and remedies against any Collateral, including any insurance proceeds or condemnation awards to which Lender would otherwise be entitled under this Agreement or the Security Instruments; provided however, Lender shall only enforce such judgment against such Collateral, including the insurance proceeds and/or condemnation awards, as applicable.
(b) Notwithstanding the provisions of this Section 9.4 to the extent of contrary, Borrower shall be personally liable to Lender for the direct, actual Losses it incurs due to: (i) fraud or intentional misrepresentation by any loss, damage, cost, expense, liability, claim Borrower or any other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special person or punitive damages) arising out of or entity in connection with the following 119 (all such liability execution and obligation of Borrower for any or all the delivery of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actsNote, willful misconduct this Agreement, the Security Instruments or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
other Loan Documents; (ii) the breach by Borrower any Borrower's intentional misapplication or misappropriation of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually Rents received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, no recourse shall be had against, and none of Administrative Agent or any Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against against, any Borrower Party or any direct or indirect principal, director, officer, employee, manager, beneficiary, parent, beneficial owner, shareholder, partner, member, trustee, agent, or Affiliate of any Borrower Party or any direct or indirect legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender Administrative Agent, on behalf of Lenders, may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or to enable Administrative Agent to realize upon Lenders’ interest in the Property, the Rents Rents, or any other collateral given to Lender Administrative Agent, on behalf of Lenders, pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to LenderLenders and Administrative Agent, on behalf of Lenders, and LenderAdministrative Agent and Lenders, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment with respect to the Loan against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or Security Instrument, the other Loan DocumentsDocuments or otherwise. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair - 143 - the right of Lender Administrative Agent, on behalf of Lenders, to name any Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of Loan Document or any guaranty in connection with the Loan Documents(including, without limitation, the indemnities set forth in Article 12 hereof, the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender Agent and Lenders thereunder; (d4) intentionally omitted, (5) impair the right of Lender Administrative Agent, on behalf of Lenders, to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e6) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f) impair the enforcement of the Environmental Indemnity; (g7) constitute a prohibition against Lender Administrative Agent, on behalf of Lenders, to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender Administrative Agent to exercise its Lenders’ remedies against the PropertyProperty or any portion thereof; or (h) 8) constitute a waiver of the right of Lender Administrative Agent and Lenders 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 reasonably actual Losses incurred by Lender Administrative Agent and/or Lenders (including actual out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by Borrower willful misconduct of any representation, warranty, covenant or indemnification provision Borrower Party in connection with the Environmental IndemnityLoan;
(iii) any litigation or other legal proceeding (including, the intentional misappropriation raising of defenses) related to the Debt filed or raised by any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of any Reserve Funds disbursed to Borrower, Administrative Agent or any intentional failure Lender to deposit rents into the Clearing Account exercise any rights and remedies available to the extent Administrative Agent or any Lender as provided herein and in the control other Loan Documents which is found by a court of Borrowercompetent jurisdiction to be without merit or brought or raised, unless such rents are otherwise delivered to Lenderas applicable, in bad faith;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste to the Property in violation of the Property terms of this Agreement caused by Borrower or any Borrower Affiliate, or any intentional wrongful Party and/or the removal or destruction disposal of a material any portion of the Property or damage to a material portion in violation of the Property caused by willful misconduct or gross negligence terms of Borrower or any Borrower Affiliatethis Agreement during the continuance of an Event of Default;
(v) the commission of any criminal act misappropriation or conversion by Borrower or any Borrower Affiliate which results Party, in the forfeiture contravention of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Loan Documents, of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property, (C) any Rents, or (D) any Security Deposits or Rents collected in advance;
(vi) to the extent there exists sufficient cash flow from the Property actually received to pay Taxes or charges for labor or materials or other charges that create liens on any portion of the Property, Borrower’s failure to pay (or Borrower’s failure to cause payment of) such Taxes or charges (except to the extent (A) sums sufficient to pay such Taxes or charges have been deposited with Administrative Agent in accordance with the terms of this Agreement or (B) such cash flow is not being made available to Borrower by Borrower Administrative Agent as a result of Administrative Agent’s exercise of its remedies under the Loan Documents) unless such Taxes or any Borrower Affiliateother charges are being contested as permitted hereunder;
(vii) after to the extent there exists sufficient cash flow from the Property to pay Insurance Premiums and/or to maintain the Policies in full force and effect, Borrower’s failure to pay (or Borrower’s failure to cause payment of) such Insurance Premiums and/or to maintain the Policies in full force and effect, in each case, as expressly provided herein (except to the (A) extent sums sufficient to pay such Insurance Premiums and/or to maintain the Policies have been deposited with Administrative Agent in accordance with the terms of this Agreement or (B) such cash flow is not being made available to Borrower by Administrative Agent as a result of Administrative Agent’s exercise of its remedies under the Loan Documents);
(viii) any Security Deposits which are not delivered to Administrative Agent on behalf of Lenders by a Borrower Party following a foreclosure of the Property or action in lieu thereof, except to the extent any such Security Deposits were applied in accordance with the terms and conditions of any of the applicable Leases prior to the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viiiix) all or any material portion if as a result of the Property being encumbered by a Lien voluntarily granted by actions or inactions of Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges its Affiliates (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) failing to comply with the terms of Section 36 such Property Document) any Property Document is (A) materially modified in a manner adverse to Administrative Agent or any Lender or Borrower, (B) terminated, (C) cancelled or (D) otherwise ceases to exist, except in each of the Original Bloomberg Lease foregoing cases, if such action or inaction of Borrower or its Affiliates is permitted pursuant to the terms of this Agreement and/or Administrative Agent has approved the same;
(an “Expansion Space Default”x) any representation, warranty or covenant contained in Article 5 hereof is violated or breached; provided, however, that solely with respect to a breach of Section 5.1(a)(vii) that arise from Borrower’s failure to pay trade and operational indebtedness, such breach shall not result in recourse under the Loan pursuant to this clause (x), if cash flow from the Property available to Borrower is not sufficient to pay such amounts;
(iixi) except as set forth in Section 13.1(b) below, (A) Borrower fails to obtain Lender’s prior consent to any Prohibited Transfer as required by this Agreement (other than a Permitted Transfer) or (B) any covenant contained in Section 6.6 hereof is violated or breached; and/or
(xii) Borrower gives notice of termination of the exercise Restricted Account Agreement other than in accordance with Section 8(d) of any rights that the Tenant under Restricted Account Agreement in effect as of the Original Bloomberg Lease may have Closing Date and the Restricted Account Agreement is terminated by Bank as a result of an Expansion Space Default such notice.
(whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iiib) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender Administrative Agent and Lenders shall not be deemed to have waived any right which Lender Administrative Agent and Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender Administrative Agent and Lenders in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that:
(i) a breach Bankruptcy Event occurs;
(ii) any voluntary Sale or Pledge of the covenants set forth in Schedule V hereof Property (other than those single purpose entity covenants (i) an easement (except for an easement affecting the Property that relate interferes or impairs in a material way Borrower’s ability to solvency use and operate the Property as currently used or adequacy that otherwise has a Material Adverse Effect), (ii) a covenant or restriction that (A) does not interfere with or impair in a material way Borrower’s ability to use and operate the Property as currently used and (B) does not have a Material Adverse Effect, and (iii) a Lease entered into at the Property (except for a lease of capitalall or a majority of the Property, a ground lease, or a master lease)) or a breach of any of the certifications set forth direct or indirect interest in the “Recycled Entity Certificate”, in each case, Borrower or Guarantor that results in a failure to comply with the Minimum Ownership/Control Test, in each case in violation of the terms of this Agreement (but excluding (x) any failure to comply with the requirements in any of clause (A), (D), (E), (G) or (H) appearing in the definition of “Permitted Transfer” in Section 6.3 of this Agreement and (y) any violation as a result of a failure of a Mezzanine Lender to comply with the Intercreditor Agreement);
(iii) if Borrower fails to obtain Administrative Agent’s prior consent (if and to the extent required under the Loan Documents) to (A) any subordinate financing or other voluntary liens encumbering the Property that are not considered Permitted Encumbrances hereunder or (B) any subordinate financing or other voluntary liens encumbering: (1) a direct interest in any subsidiary of Guarantor to the extent such subsidiary owns a direct or indirect interest in Borrower; or (2) a direct or indirect interest in Borrower if foreclosed upon would result in the Minimum Ownership/Control Test not being met; and/or
(iv) if any representation, warranty or covenant contained in Article 5 hereof is violated or breached and such violation or breach results in the substantive consolidation of the assets and liabilities of Borrower with the assets and liabilities of any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan Agreement (Brookfield DTLA Fund Office Trust Investor Inc.)
Exculpation. 120 0123905.0782082 4863-1270-3898v11
(a) Subject to the qualifications below, Lender ▇▇▇▇▇▇ shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate officer, director, shareholder, partner, member, principal, employee of Borrower or any legal representatives, successors direct or assigns indirect owner of Borrower or its Affiliate or (provided that the foregoing shall not limit in any principalsmanner, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates the liability of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not su▇ ▇orsue for, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 9.3 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (ciii) affect the validity or enforceability of any of the Loan Documentsguaranty, the Guaranty indemnity or any other guaranty similar agreement or undertaking made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity Instrument and any other Loan Documents; or (f) impair the enforcement of the Environmental Indemnity; (gvi) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument (if required by applicable law and provided such deficiency judgment is not enforced personally against Borrower or any officer, director, shareholder, partner, member, principal, employee of Borrower or any direct or indirect owner of Borrower (excluding Guarantor under the Guaranty and Environmental Indemnity, as applicable)) or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; Property (or any portion thereof).
(hb) constitute a waiver of Nothing contained herein shall in any manner or way release, affect or impair the right of Lender to enforce the liability and obligation of recover from Borrower, by money judgment or otherwiseand Borrower shall be fully and personally liable and subject to legal action, to the extent of for any actual out-of-pocket loss, damage, cost, expense, liabilitydamage, claim or other obligation reasonably incurred by Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurred expenses and other collection and litigation expenses, but excluding any consequential, special punitive, special, indirect and exemplary damages or punitive damagesdiminutions in value) incurred or suffered by Lender arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the breach by gross negligence or willful misconduct of Borrower of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityGuarantor;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, arson or any intentional failure material physical waste of the Property, provided, however, that if Borrower does not have sufficient cash flow on a current basis to deposit rents into the Clearing Account to the extent in the control of Borrowerprevent waste, unless such rents are otherwise delivered to Lenderany waste shall not be deemed intentional and Borrower shall have no liability under this clause (iii);
(iv) the removal or disposal of any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste portion of the Property by Borrower during the continuance of an Event of Default, unless such removed or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material disposed portion of the Property is subsequently replaced with property of equal or damage to a material portion of the Property caused by willful misconduct greater utility or gross negligence of Borrower or any Borrower Affiliate;value; 121 0123905.0782082 4863-1270-3898v11
(v) the commission of any criminal act misappropriation, misapplication or conversion by Borrower or Guarantor, or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate foregoing, of (A) any Insurance Proceeds actually received paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property actually received by Borrower during the continuance of an Event of Default, (C) any Rents or other Property income or collateral proceeds, or (D) any Borrower AffiliateRents paid more than one month in advance (including security deposits) during the continuance of an Event of Default;
(viivi) after following the occurrence and during the continuance of an Event of Default, the intentional misappropriation failure to either apply rents or other Property income, collected after such Event of Default, to the ordinary, customary, and necessary expenses of operating the Property or, upon demand, to deliver such rents or other Property income to Lender (or otherwise to the Clearing Account or Cash Management Account, as required by Borrower this Agreement);
(vii) failure to maintain insurance or to pay taxes and assessments, or to pay charges for labor or materials or other charges or judgments that can create Liens on any Borrower Affiliate of any Rents in violation portion of the Loan DocumentsProperty (unless Lender is escrowing funds therefor and fails to make such payments or has taken possession of the Property following an Event of Default, has received all Rents from the Property applicable to the period for which such insurance, taxes or other items are due, and thereafter fails to make such payments), it being acknowledged that if Borrower does not have sufficient cash flow on a current basis to maintain insurance or to pay taxes and assessments or to pay charges for labor or materials or other charges or judgments (unless such charges were incurred following the occurrence and during the continuance of an Event of Default) that create Liens on any portion of the Property, Borrower shall have no liability under this clause (vii);
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were (A) applied or returned to Tenants in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof or (B) previously delivered to Lender to be applied to repay the Loan;
(ix) any voluntary Liens, other governing document than Permitted Encumbrances and Liens described in Sections 9.3(b)(vii) or 9.3(c)(B) hereof;
(x) any failure by Borrower did not have to comply with any of the legal rightrepresentations, because of a bankruptcy, receivership warranties or similar judicial proceeding, to direct disbursement of such deposits)covenants set forth in Sections 4.1.37 or 5.1.19 hereof;
(xi) [intentionally omitted];
(xii) [intentionally omitted];
(xiii) any failure by Borrower to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof to the extent such failure is not expressly covered by the full recourse event set forth in Section 9.3(c)(D) below;
(xiv) Borrower fails to obtain ▇▇▇▇▇▇’s prior written consent to any Transfer that is not a Full Recourse Transfer, to the extent required pursuant to the terms of the Loan Documents;
(xv) [intentionally omitted];
(xvi) ▇▇▇▇▇▇▇▇’s failure to comply with the provisions of Sections 5.1.9 hereof; 122 0123905.0782082 4863-1270-3898v11
(xvii) criminal acts of Borrower or Guarantor, or executives of Borrower or Guarantor, resulting in the seizure, forfeiture or loss of the Property;
(xviii) ▇▇▇▇▇▇▇▇, acting in bad faith, fails to cooperate in transferring any licenses or permits requested by Lender in connection with any foreclosure of the Property, deed in lieu or other transfer of the Property to Lender or ▇▇▇▇▇▇’s designee;
(xix) if Guarantor, Borrower or any Affiliate of any of the foregoing, in connection with any enforcement action or exercise or assertion of any right or remedy by or on behalf of Lender under or in connection with the Note, the Security Instruments or any other Loan Document, (a) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind or asserts in a pleading filed in connection with a judicial proceeding any defense against Lender or any right in connection with any security for the Loan and (b) the court in any such action or proceeding determines that Guarantor’s, Borrower’s or such Affiliate’s defense or request for judicial intervention (1) was made by Guarantor, Borrower or such Affiliate with the intent to hinder, delay or otherwise interfere with Lender’s exercise of its remedies (whether at law or granted under the Loan Documents), or (2) was made in bad faith by Guarantor, Borrower or such Affiliate;
(xx) if there shall be any (A) termination of the Condominium Documents without Lender’s prior written consent, or (B) amendment or modification to the removal of any Unit from Condominium Documents without Lender’s prior written consent that materially and adversely affects Borrower’s ability to perform its obligations under the CondominiumLoan Documents or ▇▇▇▇▇▇’s security and rights hereunder; or
(xxi) Borrower’s failure to purchase (or cause the Association to purchase) the Additional Association Insurance. Notwithstanding the foregoing, in each case, in violation of the terms of there shall be no liability under this Agreement, which was voted for or consented clause (xxi) (and this clause (xxi) shall be deemed to or approved by Borrower have been intentionally omitted) following Borrower’s (or the members Association’s) purchase of the Condominium Board appointed by Borrower); and/orAdditional Association Insurance and the delivery of Evidence of Commercial Property Insurance (▇▇▇▇▇ 28) evidencing the same to Lender. 123 0123905.0782082 4863-1270-3898v11
(xiiic) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, Borrower shall be personally liable for the Debt if (A) Lender shall not be deemed Borrower fails to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions obtain ▇▇▇▇▇▇’s prior written consent (to the extent such consent is required pursuant to the terms of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof Transfer (other than those single purpose entity covenants that relate to solvency or adequacy of capital) a Transfer approved by Lender or a breach Transfer in connection with Lender’s enforcement of its rights and remedies)
(1) that results in a change in Control over Borrower or (2) of any of the certifications Property by deed, bill of sale, installment sales agreement or ground lease (excluding any lease to a Tenant in the ordinary course of business) (a “Full Recourse Transfer”); (B) except for any Permitted Encumbrances and Permitted Indebtedness, Borrower fails to obtain ▇▇▇▇▇▇’s prior written consent to any Indebtedness or voluntary mortgage, deed of trust, collateral assignment or similar voluntary Lien (including a ▇▇▇▇ ▇▇▇▇) encumbering the Property; provided, however, in no event shall a mechanic’s or materialman’s Lien encumbering the Property apply to this clause (B); (C) Borrower shall at any time hereafter make an assignment for the benefit of its creditors; (D) Borrower fails to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof, which failure is cited as a factor in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person entity in connection with a any proceeding under the Bankruptcy Code or under federalCode; (E) Borrower admits, state or foreign insolvency law in any legal proceeding (other than on motion Borrower admitting or pleading seeking making any truthful statement that it has been advised by counsel is required to be admitted or made under applicable laws, regulations or court orders), its insolvency or inability to pay its debts as they become due, provided that neither Borrower nor Guarantor shall have liability under this clause (E) in connection with the delivery of financial statements or any other filing required to be delivered pursuant to a substantive consolidation brought subpoena or actively supported any order entered in a bankruptcy proceeding or required under applicable law in connection with any such petition made by Lender)any Person which is not an Affiliate of Borrower; or (iiF) Borrower files, or any Borrower Affiliateconsents in writing to, officeror acquiesces in, director a petition for bankruptcy, insolvency, dissolution or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower liquidation under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of , or there is a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly Guarantor colludes with, or indirectly Controls Borrower colludes 121 otherwise assists any party in connection with and/or Borrower such filing, or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by from any Person; party (v) Borrower files provided, however, that the failure to defend such an answer consenting to, or joining in, any involuntary petition filed against it where no meritorious defense exists shall not be deemed “assisting” for purposes hereof).
(d) Nothing herein shall be deemed to constitute a waiver by Lender of any right Lender may have under Sections 506(a), 506(b), 1111(b) or any other Person under provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt.
(e) Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, Borrower shall not have any liability pursuant to this Section 9.3 if a court of competent jurisdiction issues a final non-appealable judgement that any acts or omissions creating liability hereunder were caused by the fraud, bad faith, willful misconduct or gross negligence of Lender or Servicer.
(f) Notwithstanding anything to the contrary contained in the Loan Documents, other than with respect to the Guarantor under the Guaranty and the Environmental Indemnity, neither Guarantor, nor any officer, director, shareholder, partner, member, principal, employee of, shall have any personal liability for, nor be joined as a party to, any action with respect to (i) the payment of any sum which is or may be payable under this Agreement or the Loan Documents, or (ii) the performance or discharge of any covenants, obligations or undertakings of Borrower. In addition to the foregoing, in no event will the assets of any officer, director, shareholder, partner, member, principal, employee of Borrower or Guarantor be available to satisfy any obligation of Guarantor thereunder. 124 0123905.0782082 4863-1270-3898v11
(g) Notwithstanding the foregoing provisions of this Section 9.3 or anything to the contrary in this Agreement or the other Loan Documents, (i) Guarantor shall have no liability under Sections 9.3(b)(ix), (xiii), or (xiv) or Section 9.3(c) for Permitted Equipment Financing or Permitted Trade Payables that constituted Permitted Equipment Financing or Permitted Trade Payables when incurred but, due to insufficient cash flow at the Property, subsequently breaches the definition of Permitted Equipment Financing or Permitted Trade Payables by being outstanding for longer than any time period specified in such definitions, or by exceeding the one percent (1%) or two percent (2%) cap, as applicable, specified in such definitions, and (ii) Guarantor shall have no liability under any of the Loan Documents with respect to liabilities or obligations arising from events, acts, omissions, facts or circumstances first occurring from and after the date that Lender (or any Affiliate, designee, agent, nominee, successor to or assignee of Lender) takes title to the Property or the ownership interests in Borrower pursuant to a foreclosure, deed-in-lieu of foreclosure, assignment-in-lieu of foreclosure, other exercise of remedies under the Loan Documents or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for means, and which do not arise as a result of the benefit acts of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code Guarantor or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions Affiliate thereof; provided, however, that Borrower believes in good faith are truthful when made and (B) Guarantor’s liability shall be automatically reinstated upon any such admission to Lender foreclosure or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) conveyance being set aside, rescinded or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsinvalidated.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment of Leases; (f6) impair the enforcement right of the Environmental IndemnityLender to enforce Section 4.12(f) of this Agreement; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h) 8) 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 reasonably Loss incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower Borrower, any of the Exculpated Parties, Sponsor or any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of any representationBorrower, warrantyits agents, covenant Affiliates, officers, or indemnification provision in the Environmental Indemnityemployees;
(iii) any litigation or other legal proceeding related to the intentional misappropriation Debt filed by Borrower of or any Reserve Funds disbursed Affiliate thereof that delays or impairs Lender’s ability to Borrowerpreserve, enforce or foreclose its lien on the Property in which action a claim, counterclaim, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to defense is asserted against Lender;
(iv) any intentional (other than, in each case, as part of or waste to facilitate any alteration that is permitted hereunder) material physical waste of the Property caused by Borrower the intentional acts or any Borrower Affiliateintentional omissions of Borrower, its agents, Affiliates, officers, employees or any intentional wrongful contractors and/or the removal or destruction disposal of a material any portion of the Property or damage to a material portion after an Event of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower AffiliateDefault;
(v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property, (C) any Rents following an Event of Default or (D) any Tenant security deposits or Rents collected in advance;
(vi) failure to pay Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property actually received and/or failure to pay Insurance Premiums in accordance with the terms and provisions hereof, but only to the extent the net cash flow of the Property (that is, Operating Income less Operating Expenses) was sufficient to permit payment of the same by Borrower or any Borrower AffiliateBorrower;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)action in lieu thereof;
(xiiviii) any tax on the making and/or recording of the Security Instrument, the Note or any of the other Loan Documents (whether due upon the making of the same or upon Lender’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other similar taxes;
(ix) the termination seizure or forfeiture of the Condominium Property, or the removal of any Unit portion thereof, or Borrower’s interest therein, resulting from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure criminal wrongdoing by Borrower, its agents, Affiliates, officers, or employees; or
(x) any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender violation or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise breach of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default representation, warranty or covenant contained in Article 5 hereof;
(whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iiib) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach the first full monthly payment of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets principal and liabilities of Borrower with any other Person in connection with a proceeding interest under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)Note is not paid when due; (ii) Borrower fails to permit on-site inspections of the Property, fails to provide the Required Financial Items or fails to appoint a new property manager upon the request of Lender, each as required by, and in accordance with the terms and provisions of, this Agreement and the Security Instrument; (iii) any representation, warranty or covenant contained in Article 6 hereof is violated or breached; (iv) Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (iiiv) an Affiliate, officer, director, or representative which Controls, directly or indirectly, Borrower files an application for the appointment of a receiverfiles, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) joins in the filing of of, an involuntary petition against Borrower under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by from any Person; (vvi) Borrower files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency law; (vi) Borrower makes an assignment causes to be solicited petitioning creditors for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or from any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date)Person; or (vii) there is any Affiliate, officer, director, or representative which Controls Borrower consents to or acquiesces in or joins in an application for the appointment of a voluntary Transfer of all custodian, receiver, trustee, or examiner for Borrower or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.Property; or
Appears in 1 contract
Exculpation. Subject It is expressly understood and agreed by and between the parties hereto, anything herein to the qualifications belowcontrary notwithstanding, Lender that each and all of the representations, warranties, covenants, undertakings, and agreements herein made on the part of any Landlord while in form purporting to be the representations, warranties, covenants, undertakings, and agreements of such Landlord are nevertheless each and every one of them made and intended, not as personal representations, warranties, covenants, undertakings, and agreements by such Landlord or for the purpose or with the intention of binding such Landlord personally, but are made and intended for the purpose only of subjecting such Landlord's interest in the Building to the terms of the Lease and for no other purpose whatsoever. The liability of Landlord to Tenant for any default by Landlord under the Lease or arising in connection herewith or with Landlord's operation, management, leasing, repair, renovation, alteration, or any other matter relating to the Building or the Premises, shall be limited to the interest of Landlord in the Building (and the rental proceeds thereof). Tenant agrees to look solely to Landlord's interest in the Building (and the rental proceeds thereof) for the recovery of any judgment against Landlord, and Landlord shall not enforce the be personally liable for any such judgment or deficiency after execution thereon. The limitations of liability and obligation of Borrower to perform and observe the Obligations contained in this provision shall apply equally and inure to the Notebenefit of Landlord's present and future partners, this Agreementbeneficiaries, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principalsofficers, directors, officers, employees, beneficiariestrustees, shareholders, agents and employees, and their respective partners, membersheirs, trustees, agentssuccessors and assigns. Under no circumstances shall any present or future general or limited partner of Landlord (if Landlord is a partnership), or Affiliates trustee or beneficiary (if Landlord or any partner of Landlord is a trust) have any liability for the performance of Landlord's obligations under the Lease. Notwithstanding the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s contrary, Landlord shall have personal liability under the Guarantyfor insured claims, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s beyond Landlord's interest in the Property, in the Rents Building (and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwiserental proceeds thereof), to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such Landlord's liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made insurance coverage available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsclaims.
Appears in 1 contract
Exculpation. Subject (a) Notwithstanding anything to the contrary herein or in any of the other Loan Documents but subject to the qualifications below, Lender Administrative Agent and Lenders shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower (but specifically excluding Guarantor subject to the terms of the Guaranty) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender Administrative Agent, on behalf of Lenders, may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender Administrative Agent to enforce and realize upon its Lenders’ interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender Administrative Agent, on behalf of Lenders, pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to LenderLenders and Administrative Agent, on behalf of Lenders, and LenderAdministrative Agent and Lenders, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender Administrative Agent, on behalf of Lenders, to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsseparate written indemnity or guaranty (including, without limitation, the Guaranty or any other guaranty Guaranty) made in connection with the Loan or any of the rights and remedies of Lender thereunderAdministrative Agent and Lenders thereunder (including, without limitation, Lenders’ and Administrative Agent’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally in such separate written indemnity or guaranty and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Lender Administrative Agent, on behalf of Lenders, to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases contained in the Security Instrument; (f6) impair the enforcement of the Environmental Indemnity[Intentionally omitted]; (g7) constitute a prohibition against Lender Administrative Agent, on behalf of Lenders, to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument (but not to impose personal liability upon Borrower contrary to this Section 13.1) or to commence any other appropriate action or proceeding in order for Lender Administrative Agent to exercise its Lenders’ remedies against the Property; or (h) 8) constitute a waiver of the right of Lender Administrative Agent and Lenders 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 reasonably Losses incurred by Lender Administrative Agent and/or Lenders (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) directly arising out of or in connection with caused by the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, fraud or willful misconduct or material intentional misrepresentation by Borrower Borrower, any of the Exculpated Parties or any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of Borrower, any representation, warranty, covenant of the Exculpated Parties or indemnification provision in the Environmental IndemnityGuarantor;
(iii) material physical waste to the Property (or any portion thereof) caused by the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, acts or any intentional failure to deposit rents into the Clearing Account to the extent in the control omissions of Borrower, unless such rents are otherwise delivered to Lenderany of the Exculpated Parties or Guarantor and/or the removal or disposal of any portion of the Property by Borrower, any of the Exculpated Parties or Guarantor after an Event of Default;
(iv) any intentional (other thanthe misapplication, in each case, as part of misappropriation or to facilitate any alteration that is permitted hereunder) material physical waste of the Property conversion by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any Casualty to the Property (or any Borrower Affiliate portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually Property, which such proceeds or Award are received by Borrower and not applied as required hereunder or any Borrower Affiliateunder the other Loan Documents;
(viiv) after the occurrence and misapplication, misappropriation or conversion by Borrower of any Rents during the continuance of an Event of Default, the intentional misappropriation which are received by Borrower and not applied by Borrower to the payment of either (i) normal and necessary Operating Expenses or any Borrower Affiliate of any Rents in violation of (ii) the Loan DocumentsDebt;
(viiivi) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to pay, or cause to be paid, prior to delinquency any Taxes or Other Charges (other than amounts paid to Administrative Agent for Taxes or Other Charges in connection with a Reserve Account hereunder and where Administrative Agent elects not to apply such funds toward the payment of Taxes and Other Charges owed) if non-payment of the same would create liens senior to the lien of the Security Instrument on all or any portion of the Property;
(vii) the failure of Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property to Administrative Agent, on behalf of Lenders, upon a foreclosure by Lender under of the Loan DocumentsProperty (or any portion thereof) or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document action in lieu thereof;
(viii) the material breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity, this Agreement or in the Security Instrument concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender and/or Administrative Agent with respect thereto in either document;
(ix) Borrower’s failure to comply with the indemnification obligations in Section 12.3 hereof;
(x) the breach of any material representation, warranty or covenant contained in Article 5 hereof;
(xi) the seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);Guarantor; and/or
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation breach by Borrower of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of Interest Rate Protection Agreement that results in the Condominium Board appointed by Borrower); and/ortermination thereof.
(xiiib) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender Administrative Agent and Lenders shall not be deemed to have waived any right which Lender Administrative Agent and Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender Administrative Agent and Lenders in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (iiiii) an Affiliate, officer, director, or representative which Controls, directly or indirectly, Borrower files an application for the appointment of a receiverfiles, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) joins in the filing of of, an involuntary petition against Borrower under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by from any Person; (viii) Borrower files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency lawcauses to be solicited petitioning creditors for any involuntary petition against it; (viiv) any Affiliate, officer, director, or representative which Controls Borrower consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Property (other than a receiver requested by Administrative Agent in connection with enforcement of its rights under the Loan Documents); (v) Borrower makes an assignment for the benefit of creditors creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code ; (vi) [Intentionally omitted]; (vii) Borrower (or any other Federal Restricted Party) contests or opposes any motion made by Administrative Agent or any Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency law by a Person other than Lender proceeding involving the Guarantor or its Affiliates; (except for viii) Borrower (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer Restricted Party) accepts from any Guarantor or Guarantor solicits or provides any debtor-in-possession financing to Borrower in the event Borrower (or any Restricted Party) is the subject of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) a bankruptcy or that Borrower cannot refinance the Loan on the Maturity Date)insolvency proceeding; or (viiix) there any covenant contained in Article 6 hereof is a voluntary Transfer of all violated or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsbreached.
Appears in 1 contract
Sources: Loan Agreement (Cole Credit Property Trust III, Inc.)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the enforcement right of the Environmental IndemnityLender to enforce Section 4.12(e) of this Agreement; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h) 8) 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 reasonably actual Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the LoanGuarantor;
(ii) the gross negligence or willful misconduct of Borrower or Guarantor or the commission of a criminal act by Borrower or Guarantor, which results in any seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein;
(iii) the breach by Borrower or Guarantor of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property caused by the intentional acts or intentional omissions of Borrower or any Borrower Affiliate, or any intentional wrongful Guarantor; and/or the removal or destruction disposal of a material any portion of the Property or damage to a material portion after an Event of the Property caused Default by willful misconduct or gross negligence of Borrower or any Borrower AffiliateGuarantor;
(v) the commission misapplication or conversion, in violation of any criminal act the terms hereof and the terms of the other Loan Documents, by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Guarantor of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property, in each case only to the extent Lender has not taken title to the Property actually received by Borrower either through a foreclosure or any Borrower Affiliatedeed-in-lieu thereof;
(viivi) after the occurrence and all Rents received or collected by or on behalf of Borrower during the continuance of an Event of Default, Default and not applied as required by terms hereof and the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation terms of the other Loan Documents;
Documents (viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, except to the extent cash flow from the Property is sufficient to make that such payments and, during a Trigger Period, funds are made available to Borrower for payment application of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxesfunds is prevented by bankruptcy, maintain required Policies, pay insurance premiums for such Policiesreceivership, or pay any Condominium Charges to similar judicial proceeding in which Borrower is legally prevented from directing the extent cash flow from the Property is sufficient to make disbursement of such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrancessums);
(xivii) the failure by Borrower to deliver to Lender any security depositsSecurity Deposits, advance deposits or any other deposits collected by Borrower (or Manager on their behalf) or any Rents collected in advance with respect to the Property upon which are not delivered to a receiver appointed by Lender or to Lender after a foreclosure by Lender under the Security Instrument;
(viii) Borrower’s breach of, or failure to comply with, the representations, warranties and/or covenants contained in Section 11.2 hereof;
(ix) Borrower fails to appoint a new property manager upon the request of Lender as required by, and in accordance with, the terms and provisions of, this Agreement, the Assignment of Management Agreement and the other Loan Documents or Borrower appoints a new property manager or replaces the property manager other than in accordance with the terms of this Agreement, the Assignment of Management Agreement and the other Loan Documents;
(x) any involuntary transfer or conveyance by Borrower of its interest in the Property, unless previously applied any voluntary transfer or conveyance of any direct and/or indirect, non-Controlling interest in Borrower or any involuntary transfer or conveyance of any Controlling or non-Controlling, direct and/or indirect interest in Borrower; in each case in violation of the covenants set forth in Article 6 hereof;
(except xi) arising out of, in connection with or resulting from (A) any Construction Impact Alterations and/or (B) any claims, suits, actions, proceedings or damages brought by any third party against Lender and/or any property damage to the Remaining Property arising out of, in connection with or resulting from the Construction (provided, however, such recourse obligation shall result in recourse liability hereunder only to the extent that Borrower’s or such deposits were applied in accordance with the applicable lease or other governing document or Borrower did Person’s liability insurance policy does not have the legal right, because cover such Loss(es) of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such depositsLender);
(xii) Borrower, Guarantor or any of their respective Affiliates or agents (or any other Person acting on their behalf or at the termination direction of any of the Condominium or foregoing) leasing any space at the removal Released Expansion Parcel to the Prohibited Tenant, pursuant to a Lease under which such Tenant takes occupancy of any Unit from portion of the Condominium, Released Expansion Parcel at any time after the completion of the Construction unless Lender has provided its prior written consent thereto; and
(xiii) the granting by Borrower of any voluntary non-monetary Lien against Borrower’s interest in each case, the Property in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined covenants contained in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space DefaultLoan Documents. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or SPE Component Entity files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (iiiii) Borrower files an application for the appointment any Borrower, Guarantor, or any Affiliate, officer, director, or representative of a receiver, trustee or examiner for Borrower or any portion of the PropertyGuarantor, except at the request of files, or with the consent of Lender, (iv) joins in the filing of of, an involuntary petition against Borrower under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy Borrower, any SPE Component Entity or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower Guarantor solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by or any SPE Component Entity from any Person; (viii) Borrower or any SPE Component Entity files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency lawcauses to be solicited petitioning creditors for any involuntary petition from any Person; (viiv) Borrower, Guarantor, or any Affiliate, officer, director, or representative of Borrower, any SPE Component Entity or Guarantor consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, any SPE Component Entity or any portion of the Property (other than an application initiated by Lender); (v) Borrower or any SPE Component Entity makes an assignment for the benefit of creditors or admits, in writing or admits in any legal proceeding, proceeding its insolvency or inability to pay its debts as they become due, which admission is used except to extent to prevent a claim of perjury or as evidence required by court order; (vi) Borrower, any SPE Component Entity or Guarantor contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender proceeding involving the Guarantor or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date)Affiliates; or (vii) there is a any voluntary Transfer transfer or conveyance by Borrower of all its interest in the Property, any voluntary transfer or any material portion of the Property or any direct or indirect interest therein or any Transfer conveyance of any direct or and/or indirect Controlling interest in Borrower or the granting by Borrower of a mortgage or other voluntary monetary Lien against Borrower’s interest in the Property, in either each case, in violation of the covenants contained herein or in the other Loan Documents; or (viii) the breach of any representation, warranty or covenant contained in Article 5 hereof that results in the substantive consolidation of the assets of Borrower with the assets of another Person.
Appears in 1 contract
Sources: Loan Agreement (Brookfield DTLA Fund Office Trust Investor Inc.)
Exculpation. Subject Notwithstanding anything herein or in any other Loan Document to the qualifications belowcontrary, except as otherwise set forth in this Section 18.32 to the contrary, Lender shall not enforce the liability and obligation of Borrower and (a) if Borrower is a partnership, its constituent partners or any of their respective partners, (b) if Borrower is a trust, its beneficiaries or any of their respective Partners (as hereinafter defined), (c) if Borrower is a corporation, any of its shareholders, directors, principals, officers or employees, or (d) if Borrower is a limited liability company, any of its members and their respective legal, equitable and beneficial owner (the Persons described in the foregoing clauses (a) - (d), as the case may be, are hereinafter referred to as the “Partners”) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Partners, except that Lender may bring a foreclosure action, an action for specific performance performance, or any other appropriate action or proceeding (including, without limitation, an action to enable obtain a deficiency judgment) solely for the purpose of enabling Lender to enforce and realize upon its (i) Borrower’s interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or Property and (ii) any other collateral given to Lender pursuant to under the Loan DocumentsDocuments (the “Default Collateral”); provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower and the Partners only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan DocumentsDefault Collateral. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release impair the validity of the Debt evidenced by the Note or impairment in any way affect or impair the lien of any obligation evidenced this Security Instrument or secured by any of the other Loan DocumentsDocuments or the right of Lender to foreclose this Security Instrument following the occurrence of an Event of Default; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgagethis Security Instrument; (c) affect the validity or enforceability of any of the Loan DocumentsNote, the Guaranty or any other guaranty made in connection with the Loan this Security Instrument, or any of the rights and remedies other Loan Documents, or impair the right of Lender thereunderto seek a personal judgment against Guarantor; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the LoanAssignment;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Morgans Hotel Group Co.)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, L▇▇▇▇▇’s right to enforce said rights and remedies against B▇▇▇▇▇▇▇ and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the rights of Lender to (A) obtain the appointment of a receiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (5) impair the enforcement of the assignment of leases and rents contained in the Security Instrument and in any other Loan Documents; (6) impair the right of Lender to obtain the appointment enforce Section 4.12(e) of a receiverthis Agreement; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperty (or any portion thereof); or (h) 8) 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 reasonably Loss actually incurred by Lender L▇▇▇▇▇ (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or intentional material intentional misrepresentation by Borrower B▇▇▇▇▇▇▇, any SPE Component Entity, Sponsor, any Affiliated Manager, Guarantor or any Borrower Affiliate director, officer, beneficiary, shareholder, partner, member, employee or agent acting on behalf of any of the foregoing (each, a “Recourse Party”) in connection with the Loan;
(ii) the breach by Borrower willful misconduct of any representation, warranty, covenant or indemnification provision Recourse Party in connection with the Environmental IndemnityLoan;
(iii) the intentional misappropriation by Borrower breach of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent indemnification provision in the control Loan Documents concerning environmental laws, hazardous substances and asbestos and any indemnification of Borrower, unless such rents are otherwise delivered to LenderLender with respect thereto;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or to any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence the intentional acts of Borrower or any Borrower AffiliateRecourse Party, but only to the extent there is sufficient cash flow from the Properties to prevent such physical waste and such cash flow is made available by Lender for the purpose of preventing such physical waste;
(v) the commission removal of any criminal act by Borrower or any Borrower Affiliate which results property in contravention of the Loan Documents during the continuance of an Event of Default other than in the forfeiture ordinary course of the Propertybusiness;
(vi) the intentional misappropriation or conversion of any of the following by Borrower or any Borrower Affiliate a Recourse Party in contravention of the Loan Documents: (A) any Insurance Proceeds actually insurance proceeds received by Borrower or by reason of any Borrower Affiliate or Casualty, (B) any Awards or other amounts received by Borrower from a governmental authority in connection with the a Condemnation of all or a portion of the Property actually received Property, or (C) any revenues generated by Borrower or any Borrower Affiliatethe Properties;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security depositsSecurity Deposits, advance deposits or any other deposits collected with respect to the any Property which are not delivered to Lender upon a foreclosure by Lender under the Loan Documentsof such Property or action in lieu thereof, unless previously applied (except to the extent that any such deposits Security Deposits were applied in accordance with the terms and conditions of any of the applicable lease Lease;
(viii) any litigation or other governing document legal proceeding related to the Loan filed by a Recourse Party with the effect of delaying, opposing, impeding, obstructing, hindering, enjoining or otherwise interfering with the efforts of L▇▇▇▇▇ to exercise any rights and remedies available to Lender during the continuance of an Event of Default; provided, however, that there shall be no liability hereunder on account of, and the foregoing shall not restrict, B▇▇▇▇▇▇▇’s or Guarantor’s right to, dispute, in good faith, whether the relevant Event of Default shall have occurred or whether an action taken by Lender pursuant to the Loan Documents is permitted thereby, nor shall Borrower did be restricted from, or have liability hereunder for, bringing a good faith counterclaim which if not have raised in the legal rightforeclosure proceeding would be barred, because and which does not seek to enjoin the enforcement action by L▇▇▇▇▇;
(ix) Borrower fails to obtain L▇▇▇▇▇’s prior written consent to any additional indebtedness or voluntary lien encumbering any Property and not permitted by the Loan Documents;
(x) a material breach by Borrower of a bankruptcySection 5.5;
(xi) any voluntary termination, receivership or similar judicial proceedingany voluntary, material modification of any Ground Lease by Borrower without L▇▇▇▇▇’s prior written consent other than as expressly permitted under this Agreement; provided, that the liability with respect to direct disbursement this Section 13.1(a)(xi) shall not exceed the Allocated Loan Amount of such deposits)the applicable Ground Leased Property;
(xii) the (A) any voluntary termination of any PILOT Lease and/or PILOT Document or transfer or surrender of any PILOT Lease and/or PILOT Document (including any PILOT Bond) by Borrower without L▇▇▇▇▇’s prior written consent other than in connection with Borrower acquiring the Condominium fee estate from the applicable PILOT Lessor or as otherwise expressly permitted under this Agreement, (B) any termination of any PILOT Lease and/or PILOT Document as a result of a foreclosure of the applicable Security Instrument or deed in lieu thereof or (C) Borrower’s or the removal applicable Tenant’s failure to comply with or Borrower’s or the applicable Tenant’s breach of any Unit from PILOT Lease and/or PILOT Document that results in (x) a reduction of any tax abatement and/or mandatory repayment of any past or current tax abatement under such PILOT Lease and/or PILOT Document, as applicable, (y) termination of such PILOT Lease and/or PILOT Document, as applicable, and the Condominiumbenefits thereunder in favor of Borrower or Tenant or (z) a default by such Borrower under the applicable Lease for such PILOT Property (and, in any such case, Losses shall include lost rental income); provided, that, in each case, in violation the liability with respect to this Section 13.1(a)(xii) shall not exceed the Allocated Loan Amount of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower)applicable PILOT Property; and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of as set forth in Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”13.1(b)(v), (ii) the exercise a breach by Borrower of any rights that the Tenant under the Original Bloomberg Lease may have covenant of Article 5 of this Agreement documents (excluding any provision requiring each Borrower to remain solvent, maintain adequate capital or pay its debts as a result of an Expansion Space Default they come due).
(whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iiib) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code SPE Component Entity or any other Federal Affiliate thereof files, or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) joins in the filing of an involuntary of, a petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower law, or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited (or otherwise colludes with) petitioning creditors for any involuntary petition against Borrower by any Person; Borrower, (vii) Borrower or any SPE Component Entity or any Affiliate thereof files an answer consenting to, or joining in, any to an involuntary petition filed against it Borrower (other than any answer which is required to be made by applicable law), by any other Person person under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law; , (viiii) Borrower or any SPE Component Entity consents to or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower (other than with the prior written consent of Lender), (iv) Borrower makes an assignment for the benefit of creditors (other than to Lender in connection with the Loan or admitswith the prior written consent of Lender); (v) there is a breach of any provision of Article 5 (Single Purpose Entity Covenants) hereof or the separateness covenants contained in the Borrower’s or SPE Component Entity’s organizational documents (excluding, in writing each case, any provision requiring each Borrower to remain solvent, maintain adequate capital or in any legal proceeding, its insolvency or inability to pay its debts as they become come due, which admission ) and such breach is used as evidence cited by a court of Borrower’s insolvency competent jurisdiction in connection with an involuntary petition a final order in a proceeding under the Bankruptcy Code or as a material factor in ordering the substantive consolidation of Borrower with any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that a co-Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of under the Loan) ; provided that the motion or that pleading seeking substantive consolidation was not brought or supported by Lender and, as a result thereof, Borrower cannot refinance is subsequently substantively consolidated in a case under the Loan on Bankruptcy Code with any Person other than a co-Borrower under the Maturity Date); Loan, or (viivi) there is a voluntary Transfer Borrower fails to obtain L▇▇▇▇▇’s prior consent to (a) the transfer or conveyance of all or any material portion of any Property, or (b) the Property or any transfer of direct or indirect interest therein or any Transfer of any direct or indirect interest equity interests in Borrower, in either case, each case in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan Agreement (Industrial Logistics Properties Trust)
Exculpation. Subject to the qualifications below, (i) Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of the members of Borrower or any legal representativesdirect or indirect partner, successors shareholder, member, manager, owner, officer, director, trustee or assigns employee in or of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “"Exculpated Parties”)") or Borrower, except that Lender may may
bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, (ii) except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents and (iii) none of the Exculpated Parties shall have any personal liability in any respect for the Loan or the obligations of Borrower contained in the Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan (including, without limitation, the Guaranty) or any of the rights and remedies of Lender thereunder, or be taken to prevent recourse against any guarantor (including, without limitation, Metropolitan) under any guaranty made in connection with the Loan (including, without limitation, the Guaranty); (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (hg) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ ' fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate guarantor in connection with the Loan;
(ii) the gross negligence or willful misconduct of Borrower;
(iii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, Indemnity or any intentional failure to deposit rents into the Clearing Account to the extent in the control Mortgage concerning environmental laws, hazardous substances and asbestos and any indemnification of Borrower, unless such rents are otherwise delivered to LenderLender with respect thereto in either document;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction disposal of a material any portion of the Property after an Event of Default without replacing the same with an item or damage to a material portion items of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliatecomparable value;
(v) the commission of any criminal act misapplication or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, or (C) any Borrower AffiliateRents following an Event of Default;
(vi) failure to pay charges for labor or materials or other charges that can create liens on any portion of the Property;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach conditions of any of the certifications Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof;
(viii) Borrower's indemnification of Lender set forth in the “Recycled Entity Certificate”, in each case, that results in Section 9.2 hereof;
(ix) failure to maintain Borrower's status as a substantive consolidation single purpose entity; and
(x) failure to permit on-site inspections of the assets Property, failure to provide financial information or failure to appoint a new property manager upon the request of Lender after an Event of Default, each as required by, and liabilities of in accordance with, the terms and provisions of, this Agreement and the Mortgage, if such condition shall continue for five (5) Business Days after notice thereof.
(i) Borrower with fails to obtain Lender's prior written consent to any subordinate financing or other Person in connection with a proceeding under voluntary lien encumbering the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)Property; or
(ii) Borrower or fails to obtain Lender's prior written consent to any Borrower Affiliateassignment, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting totransfer, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion conveyance of the Property or any direct or indirect interest therein as required by the Mortgage or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsthis Agreement.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “"Exculpated Parties”"), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties, in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c) affect the validity or enforceability of any of the Loan Documentsindemnity, the Guaranty guaranty, or any other guaranty similar instrument made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f) impair the enforcement right of Lender to enforce the provisions of the Environmental IndemnityIndemnity or of Section 4.1.6(h) hereof; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower DMEAST #17478116 v7 92 in connection with the security granted by the Mortgage Loan or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Propertysuch security; or (h) 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 reasonably Losses incurred by Lender (including out-of-pocket attorneys’ ' fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
following: (i) fraudulent acts, fraud or willful misconduct or material intentional misrepresentation by Borrower Borrower, any of the Exculpated Parties or any Borrower Affiliate Party in connection with the Loan;
; (ii) the gross negligence or willful misconduct of Borrower, any of the Exculpated Parties or any Borrower Party in connection with the Loan; (iii) the breach by Borrower beyond any applicable notice and cure periods expressly contained in the Environmental Indemnity or in any other Loan Document, of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
Indemnity or in any other Loan Document concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in any such document; (iiiiv) waste to the Property (or any portion thereof) caused by intentional misappropriation by Borrower acts or intentional omissions of Borrower, any Reserve Funds disbursed to BorrowerExculpated Party, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower AffiliateParty, or any intentional wrongful the removal or destruction disposal of a material any portion of the Property or damage to a material portion after an Event of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
Default; (v) the commission of misapplication, misappropriation or conversion by Borrower, any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) Exculpated Parties or the intentional misappropriation Borrower Parties, to the extent actually received by Borrower, any of the Exculpated Parties or the Borrower or any Borrower Affiliate Parties, of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property, or (C) any Rents following an Event of Default or (D) any Tenant security deposits or Rents collected in advance; (vi) any Personal Property actually received of Borrower taken from the Property by or on behalf of Borrower, any of the Exculpated Parties or any Borrower Parties, and not replaced with Personal Property of the same utility and of the same of greater value; (vii) any act of arson by Borrower, any of the Exculpated Parties, or any Borrower Parties; (viii) any fees or comrmss1ons paid by Borrower or any on behalf of Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower Default to any Exculpated Party or any Borrower Affiliate of any Rents Party in violation of the terms of the Note, this Agreement, the Security Instrument or the other Loan Documents;
; (viiiix) all failure to pay Taxes, charges for labor or materials, or other charges that can create Liens on any material portion of the Property being encumbered by (unless such Taxes DMEAST #17478116 v7 93 and charges are the subject of a Lien voluntarily granted by bona fide dispute in which Borrower (i.e., not arising by operation is contesting the amount or validity thereof in accordance with the terms of lawthis Agreement) in violation of and/or the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on Insurance Premiums in accordance with the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such paymentsterms hereof; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof; (xi) any failure by Borrower to permit on-site inspections of the Property as required by, and subject to the terms of, this Agreement and/or the other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
Loan Documents; (xii) any failure of Borrower to appoint a new property manager upon the termination request of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of Lender as required by the terms of this Agreement, which was voted for or consented to or approved by Borrower (or Agreement and/or the members of the Condominium Board appointed by Borrower)other Loan Documents; and/or
(xiii) Borrower's breach of, or failure to comply with, the representations, warranties and covenants contained in Sections 4.1.5 and/or 4.1.9(c) hereof; (ixiv) Borrower's indemnification of Lender Indemnitees set forth m Sections 9.2, 11.13.3, and 11.13.4 hereof; (xv) any litigation or other legal proceeding related to the failure Debt filed by Borrower, any Borrower Affiliate and/or Party or any Exculpated Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the other owner Loan Documents; (xvi) the seizure or forfeiture of the Upper Option Space Property, or any portion thereof, or Borrower's interest therein, resulting from criminal wrongdoing by Borrower, any of the Exculpated Parties, or any Borrower Parties; (xvii) Borrower's failure to make the Condemnation Payment, if required, pursuant to Section 5.3.3 hereof; and/or (xviii) a casualty affecting the Lower Option Space Property, which results in Losses to Lender because of (as defined 1) the Property is non-conforming or legal non-conforming under the applicable zoning laws, ordinances and/or regulations in the Original Bloomberg Leasejurisdiction in which the Property is located ("Zoning Code"), and (2) (other than Lender or any Affiliate of Lender) the affected Improvements cannot be rebuilt to comply with their pre-casualty condition under the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have Zoning Code other than as a result of an Expansion Space Default (whether pursuant changes to the Original Bloomberg LeaseZoning Code as in effect as of the date hereof, at law or in equity), including, without limitation, any rights and (3) the Net Proceeds available to set off any payments required Lender under the Original Bloomberg Lease and/or (iii) paying any amount terms of the Security Instrument are insufficient to repay the Debt in full or performing any obligation with respect to Borrower does not otherwise repay the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space DefaultDebt in full. DMEAST #17478116 v7 94 Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(bllll(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach the first full monthly payment of principal and interest under this Agreement and the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)Note is not paid when due; (ii) Borrower fails to comply with the provisions of Section 4.2.1 hereof or Article 8 hereof; (iii) Borrower fails to comply with any provision of Section 3.1.24 hereof; (iv) Borrower fails to comply with the Cash Management Agreement relating to the institution of cash management generally; (v) Borrower or any Borrower SPC Party files a voluntary petition under the Bankruptcy code or any other Federal or state bankruptcy or insolvency law; (vi) an Affiliate, officer, director director, or representative which Controls Controls, directly or indirectly, Borrower consents to or files a voluntary any SPC Party, files, or joins in the filing of, an involuntary petition with respect to against Borrower or any SPC Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by or any SPC Party from any Person; (vvii) Borrower or any SPC Party files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (viviii) any Affiliate, officer, director, or representative which Controls Borrower or any SPC Party consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any SPC Party or any portion of the Property; (ix) Borrower or any SPC Party makes an assignment for the benefit of creditors creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission ; (x) there is used as evidence substantive consolidation of Borrower’s insolvency Borrower (or any Restricted Party) with any other Person in connection with an involuntary petition under any federal or state bankruptcy proceeding involving the Bankruptcy Code Guarantor or any other Federal of its Affiliates, (xi) Borrower (or any Restricted Party) contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender proceeding involving the Guarantor or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date)Affiliates; or (viixii) there is a voluntary Transfer of all Borrower (or any material portion Restricted Party) accepts from any Guarantor or Guarantor solicits or provides any debtor-in-possession financing to Borrower in the event Borrower (or any Restricted Party) is the subject of a bankruptcy or insolvency proceeding. The obligations and liabilities of Borrower under this Section 11.22 shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.Security Instrument. DMEAST #17478116 v7 95
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the “Borrower Parties”) or any other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Borrower Parties or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Person, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents all or any other collateral given to Lender pursuant to portion of the Loan DocumentsCollateral; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents and in any other collateral given to LenderCollateral, and Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not sus▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Lender to name any of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale in connection with exercising its remedies under the MortgageSecurity Documents and the Pledged Securities; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (hv) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower (but not against any members of Borrower (other than Guarantor to the extent provided in the Non-Recourse Guaranty) or their direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably (but excluding any punitive, consequential or speculative damages) incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower Borrower, Owner or any Borrower Affiliate Guarantor in connection with the Loan;
(iib) intentional physical waste of the Property (including, but not limited to, waste due to gross negligence) by Borrower, Owner or any affiliate thereof; provided, however, such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by Borrower, Owner or any affiliate thereof;
(c) the material breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityIndemnity or in this Agreement concerning Environmental Laws, Hazardous Substances or Asbestos;
(iiid) the intentional misappropriation removal or disposal by Borrower Borrower, Owner or any affiliate thereof of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material after an Event of Default has occurred and while it is continuing, unless such portion of the Property caused is replaced by willful misconduct an item of equal or gross negligence of Borrower or any Borrower Affiliategreater value as determined by Lender in its reasonable discretion;
(ve) the commission misapplication or conversion by Borrower, Owner or any affiliate thereof of (i) any insurance proceeds paid by reason of any criminal act by Borrower loss, damage or any Borrower Affiliate which results in the forfeiture of destruction to the Property;
, (vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Aii) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property actually received by Borrower Property, (iii) any Rents following an Event of Default or (iv) any Borrower AffiliateRents paid more than one (1) month in advance;
(viif) after failure to pay charges for labor or materials or taxes or other charges that can create liens superior to the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation lien of the Loan Documents;
(viii) all or Mortgage on any material portion of the Property unless such taxes or other charges are being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) contested in violation accordance with the Senior Loan Documents or in accordance with the terms herewith or such taxes or charges have been delivered to Senior Lender in accordance with the terms of the Senior Loan Documents, Documents or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such chargeshas complied with Section 5.2 hereof;
(ixg) any security deposits collected by Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement Owner or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected affiliate thereof with respect to the Property which are not delivered to Lender (subject to the rights of Senior Lender) upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)action in lieu thereof;
(xiih) the termination failure by Borrower to cause Owner to deposit with Senior Lender all Rents, as required under Article 3 of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Senior Loan Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/oror
(xiii) (i) the failure by Borrower, Borrower to cause Owner to use any Borrower Affiliate and/or funds released by Senior Lender from any other owner subaccount provided for in the Senior Loan Agreement for the intended use therefor in default of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 requirements of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space DefaultSenior Loan Agreement. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, Documents (Ai) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (Bii) the Obligations Debt shall be become fully recourse to Borrower (but not its members (other than Guarantor solely to the extent provided in the Non-Recourse Guaranty) or other direct or indirect constituent members or partners or any other Person) in the event that any that: (A) the first full Monthly Debt Service Payment Amount under the Note is not paid when due; (B) other than in connection with a default under subsection (x) of the following occur (each, a “Springing Recourse Event”): (i) a breach definition of the covenants Special Purpose Bankruptcy Remote Entity set forth in Schedule V hereof (other than those single purpose entity covenants that relate 5 hereto, Borrower fails to solvency or adequacy maintain its status as a Special Purpose Bankruptcy Remote Entity in accordance with the provisions of capital) or a breach of any of the certifications set forth this Agreement and such failure results in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)another Person; (iiC) except as otherwise permitted pursuant to the Loan Documents, Borrower fails to obtain Lender’s prior written consent to any subordinate financing or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a other voluntary petition with respect to Borrower under lien encumbering the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower Property or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.Collateral;
Appears in 1 contract
Sources: Senior Mezzanine Loan Agreement (Maguire Properties Inc)
Exculpation. Subject to the qualifications below, Lender (i) The Collateral Agent shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained have no duties or responsibilities except those expressly set forth in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, Collateral Agent shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the Gestetner Notes (or otherwise) be a trustee for any Gestetner Purchaser or have any fiduciary obligation to any Gestetner Purchaser or any of their Affiliates. Neither the Collateral Agent nor any of its directors, partners, members, managers, officers, employees or agents (collectively, the “Related Parties”) shall be liable to any Gestetner Purchaser for any action taken or omitted to be taken by it under this Agreement and the Gestetner Notes, or in any agreements delivered in connection therewith, or in connection herewith or therewith, except for its own willful misconduct or gross negligence, nor shall the Collateral Agent or any Related Parties be responsible for any recitals or representations or warranties herein or therein or in any other Loan Documentsagreement delivered in connection therewith, (A) Lender or for the effectiveness, enforceability, validity or due execution of any of this Agreement, the Gestetner Agency Agreement, the Gestetner Notes or in any other agreement delivered in connection therewith, nor for the creation, perfection or priority of any Security Interests purported to be created under any of the Gestetner Notes or the validity, genuineness, enforceability, existence, value or sufficiency of any Collateral, nor shall the Collateral Agent or any Related Parties be obligated to make any inquiry respecting the performance by the Company of its obligations hereunder or thereunder or in any other agreement delivered in connection therewith. Any such inquiry by the Collateral Agent shall not obligate it to make any further inquiry or to take any action. The Collateral Agent shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, consent, certificate, statement, or writing which they believe to be genuine and to have been presented by a proper Person. The Collateral Agent shall not be deemed responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.
(ii) The Collateral Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by email, telex, telecopy, telegram or cable) reasonably believed by it to be genuine and correct and to have waived any right which Lender may have under Section 506(abeen signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Gestetner and counsel to the Company), 506(b)independent accountants and other experts selected by the Collateral Agent with reasonable care. As to any matters not expressly provided for by this Agreement, 1111(b) the Collateral Agent shall in all cases be fully protected in acting, or any other provisions in refraining from acting, hereunder in accordance with instructions signed by Gestetner, in its capacity as agent of the Bankruptcy Code Gestetner Purchasers, and any action taken or failure to file a claim for the full amount of the Obligations or to require that all collateral act pursuant thereto, shall continue to secure be binding on all of the Obligations owing Secured Parties.
(iii) The Collateral Agent shall not be required to Lender take any action that is in accordance with its opinion contrary to law or to the Loan Documentsterms of this Agreement and the Gestetner Notes, or which would in its opinion subject it or any of its Related Parties to liability. The Collateral Agent shall, in all cases, be fully justified in failing or refusing to act hereunder and (B) under the Obligations Notes unless it shall be fully recourse indemnified to Borrower in the event that its satisfaction against any and all liability and expense which may be incurred by it by reason of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate taking or continuing to solvency or adequacy of capital) or a breach of take any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, such action.
(iv) The Collateral Agent may deem and treat the filing payee of an involuntary petition against Borrower under the Bankruptcy Code any promissory note or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency indebtedness relating to the Gestetner Secured Obligations as the owner thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof, signed by such payee and in connection form reasonably satisfactory to the Collateral Agent, shall have been filed with an involuntary petition under the Bankruptcy Code Collateral Agent. Any request, authority or consent of any other Federal Person who at the time of making such request or state bankruptcy giving such authority or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) consent is the holder of any such admission to Lender note or other evidence of indebtedness shall be conclusive and binding on any servicer subsequent holder, transferee or assignee of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect such note or other evidence of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer indebtedness and of any direct note or indirect interest notes or other evidences of indebtedness issued in Borrower, in either case, in violation of the Loan Documentsexchange therefor.
Appears in 1 contract
Sources: Intercreditor and Collateral Agency Agreement (Eroomsystem Technologies Inc)
Exculpation. Subject It is expressly understood and agreed by and between the parties hereto, anything herein to the qualifications belowcontrary notwithstanding, Lender shall that each and all of the representations, warranties, covenants, undertakings, and agreements herein made on the part of any Landlord while in form purporting to be the representations, warranties, covenants, undertakings, and agreements of such Landlord are nevertheless each and every one of them made and intended, not enforce as personal representations, warranties, covenants, undertakings, and agreements by such Landlord or for the liability purpose or with the intention of binding such Landlord personally, but are made and obligation intended for the purpose only of Borrower to perform and observe the Obligations contained subjecting such Landlord's interest in the NoteSubleased Premises to the terms of this Agreement and for no other purpose whatsoever, this Agreementand in case of default hereunder by any Landlord (or default through, under, or by any of its beneficiaries, or agents or representatives of said beneficiaries), the Mortgage Tenant shall look solely to the interests of such Landlord in the Subleased Premises; that Landlord nor any of its beneficiaries or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representativestheir partners, successors or assigns of Borrower or its Affiliate or any principalsshareholders, directors, officers, agents, employees, beneficiarieslegal representatives, shareholders, partners, members, trustees, agentssuccessors, or Affiliates assigns shall have any personal liability to pay any indebtedness accruing hereunder or to perform any covenant, either express or implied, herein contained and no liability or duty shall rest upon any Landlord which is a land trust to sequester the rents, issues, and profits arising from the trust estate, or the proceeds arising from any sale or other disposition thereof; that no personal liability or personal responsibility of any sort is assumed by, nor shall at any time be asserted or enforceable against, Landlord, LaSalle Bank National Association, individually or personally, but only as trustee under the provisions of a Trust Agreement dated January 1, 1991, and known as its Trust No. ▇▇-▇▇▇▇-▇▇ or against any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability beneficiaries under the Guaranty, any Alteration Deficiency Guaranty said Trust No. ▇▇-▇▇▇▇-▇▇ or any other guaranty provided in connection with beneficiaries under any land trust which may become the Loanowner of the Subleased Premises, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions on account of this Section 10.1 shall not, however, (a) constitute a waiver, release Agreement or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower on account of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrowercovenant, undertaking, or any intentional failure to deposit rents into the Clearing Account to the extent agreement of Landlord in the control of Borrowerthis Agreement contained, unless either express or implied, all such rents are otherwise delivered to Lender;
(iv) any intentional (other thanpersonal liability, in each caseif any, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property being expressly waived and released by Borrower or any Borrower AffiliateTenant and by all persons claiming by, through, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence under Tenant; and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) is executed and delivered by the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied undersigned Landlord not in accordance with the applicable lease or other governing document or Borrower did not have the legal its own right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, but solely in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have powers conferred upon it as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsTrustee.
Appears in 1 contract
Exculpation. Subject Notwithstanding anything in this Agreement or in any other Loan Document to the qualifications belowcontrary, except as otherwise set forth in this Section 8.01 to the contrary, Lender shall not enforce the liability and obligation of Borrower or any Person holding a direct or indirect interest in Borrower (a) if Borrower or any of its direct or indirect owners is a partnership, its or their direct or indirect constituent partners or any of their respective partners, (b) if Borrower or any of its direct or indirect owners is a trust, its or their beneficiaries or any of their respective Partners (as hereinafter defined), (c) if Borrower or any of its direct or indirect owners is a corporation, any of its or their direct or indirect shareholders, directors, principals, officers or employees, or (d) if Borrower or any of its direct or indirect owners is a limited liability company, any of its or their direct or indirect members (the Persons described in the foregoing clauses (a) — (d), as the case may be, are hereinafter referred to as the “Partners”) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Agreement or any of the other Loan Documents by any action or proceeding, including, without limitation, any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Partners, except that Lender may bring a foreclosure actionUCC sale, an action for specific performance performance, or any other appropriate action or proceeding (including, without limitation, an action to enable obtain a deficiency judgment) against Borrower solely for the purpose of enabling Lender to enforce and realize upon its (i) Borrower’s interest under in the NoteCollateral, this Agreement(ii) subject to the rights of Mortgage Lender, the Mortgage Rent to the extent received by Borrower during the existence of an Event of Default (all Rent covered by this clause (ii) being hereinafter referred to as the “Recourse Distributions”) and not applied towards Debt Service or the other Loan Documents, or in operation and maintenance of the Property, the Rents or Property and (iii) any other collateral given to Lender pursuant then subject to the Loan DocumentsDocuments (the collateral described in the foregoing clauses (i) — (iii) is hereinafter referred to as the “Default Collateral”); provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower and the Partners only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan DocumentsDefault Collateral. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release impair the validity of the Debt evidenced by the Note or impairment in any way affect or impair the lien of any obligation evidenced this Agreement or secured by any of the other Loan DocumentsDocuments or the right of Lender to enforce this Agreement during the existence of an Event of Default the cure of which has not been accepted by Lender; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgagethis Agreement; (c) affect the validity or enforceability of any of the Loan DocumentsNote, the Guaranty or any other guaranty made in connection with the Loan this Agreement, or any of the rights and remedies other Loan Documents, or impair the right of Lender thereunderto seek a personal judgment against the Guarantor to the extent and for the obligations guaranteed in the Guaranty; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement right of Lender to bring suit for a monetary judgment against Borrower with respect to fraud or material misrepresentation by Borrower, or any Affiliate of Borrower in connection with this Agreement, the Assignment Note or the other Loan Documents, and the foregoing provisions shall not modify, diminish or discharge the liability of LeasesBorrower or Guarantor to the extent of Guarantor’s liability under the Guaranty delivered by Guarantor with respect to same; (f) impair the enforcement right of Lender to bring suit for a monetary judgment to obtain the Environmental IndemnityRecourse Distributions received by Borrower or any of its Affiliates including, without limitation, the right to bring suit for a monetary judgement to proceed against any Guarantor, to the extent of Guarantor’s liability under any guaranty delivered by Guarantor, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower or Guarantor with respect to same; (g) constitute a prohibition against impair the right of Lender to seek bring suit for a deficiency monetary judgment against Borrower with respect to Borrower’s or Owner’s misappropriation of tenant security deposits or Rent collected more than one (1) month in order advance, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower or Guarantor to fully realize the security granted extent of Guarantor’s liability under any guaranty delivered by the Mortgage or Guarantor with respect to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Propertysame; or (h) constitute a waiver impair the right of Lender to obtain insurance proceeds due to Lender pursuant to this Agreement; (i) impair the right of Lender to enforce the provisions of Sections 2.02(g) and 4.01, inclusive of this Agreement, even after repayment in full by Borrower of the Debt or to bring suit for a monetary judgment against Borrower with respect to any obligation set forth in said Sections; (j) prevent or in any way hinder Lender from exercising, or constitute a defense, or counterclaim, or other basis for relief in respect of the exercise of, any other remedy against any or all of the collateral securing the Note as provided in the Loan Documents; (k) impair the right of Lender to bring suit for a monetary judgment against Borrower with respect to any misapplication or conversion of Loss Proceeds, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower or Guarantor to the extent of Guarantor’s liability under any guaranty delivered by Guarantor with respect to same; (l) impair the right of Lender to s▇▇ for, seek or demand a deficiency judgment against Borrower solely for the purpose of foreclosing the Premises or any part thereof, or realizing upon the Default Collateral; provided, however, that any such deficiency judgment referred to in this clause (l) shall be enforceable against Borrower and obligation of Borrower, by money judgment or otherwise, Guarantor only to the extent of any loss, damage, cost, expense, liability, claim of the Default Collateral; (m) impair the ability of Lender to bring suit for monetary judgment against Borrower with respect to arson or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special physical waste to or punitive damages) arising out of the Collateral or in connection with damage to the following 119 (all such liability and obligation collateral resulting from the gross negligence or willful misconduct of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actsor, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrowerthat there is sufficient cash flow, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such PoliciesImposition, or pay in lieu thereof, deposit a sum equal to any Condominium Charges Impositions into the Basic Carrying Costs Sub-Account ; (n) impair the right of Lender to bring a suit for a monetary judgment against Borrower in the extent cash flow from event of the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower exercise of any Indebtedness for borrowed money right or remedy under any federal, state or local forfeiture laws resulting in violation the loss of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms lien of this Agreement, which was voted for or consented to or approved by Borrower (or the members of priority thereof, against the Condominium Board appointed by Borrower)Collateral; and/or
(xiiio) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived a waiver of any right which Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations owing Debt; (p) impair the right of Lender to bring suit for monetary judgment against Borrower with respect to any losses resulting from any claims, actions or proceedings initiated by Borrower (or any Affiliate of Borrower) alleging that the relationship of Borrower and Lender is that of joint venturers, partners, tenants in accordance with common, joint tenants or any relationship other than that of debtor and creditor; (q) impair the Loan Documents, and (B) the Obligations shall be fully recourse right of Lender to bring suit for a monetary judgment against Borrower in the event that any of a Transfer in violation of the following occur provisions of this Agreement; (eachr) impair the right of Lender to bring suit for a monetary judgment in the event that Borrower moves its principal place of business or its books and records relating to the Collateral which are governed by the UCC, or changes its name, its jurisdiction of organization, type of organization or other legal structure or, if it has one, organizational identification number, without first giving Lender thirty (30) days prior written notice; or (s) impair the right of Lender to bring suit for a “Springing Recourse Event”): (i) a breach of monetary judgment in the covenants event that Borrower changes its name or otherwise does anything which would make the information set forth in Schedule V hereof any UCC Financing Statements relating to the Collateral materially misleading without giving Lender thirty (other than those single purpose entity covenants that relate 30) days prior written notice thereof. The provisions of this Section shall be inapplicable to solvency Borrower if (a) any proceeding, action, petition or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding filing under the Bankruptcy Code Code, or under federal, any similar state or foreign insolvency federal law now or hereafter in effect relating to bankruptcy, reorganization or insolvency, or the arrangement or adjustment of debts, shall be (other than on motion A) filed by Borrower, Owner or pleading seeking a substantive consolidation brought Guarantor or actively supported (B) filed against Borrower, Owner or Guarantor and consented to or acquiesced in by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code Owner or any other Federal Affiliate of Borrower, Owner or state bankruptcy Guarantor, or insolvency law; (iii) Borrower files an application for the appointment of a receiverif Borrower, trustee Owner or examiner for Borrower Guarantor or any portion Affiliate of the PropertyBorrower, except at the request of Owner or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code Guarantor shall institute any proceeding for Borrower’s or any other Federal Owner’s dissolution or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting toliquidation, or joining inBorrower, any involuntary petition filed against it by any other Person under the Bankruptcy Code Owner or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes Guarantor shall make an assignment for the benefit of creditors or admits, (b) Borrower or any Affiliate contests in writing bad faith or in any legal proceedingmaterial way interferes with in bad faith, its insolvency directly or inability to pay its debts as they become dueindirectly (collectively, which admission is used as evidence a “Contest”) any UCC sale or other material remedy exercised by Lender upon the occurrence of Borrower’s insolvency in connection with an involuntary petition Event of Default under the Bankruptcy Code or Loan Documents whether by making any other Federal or state bankruptcy or insolvency law by a Person motion, bringing any counterclaim (other than Lender a compulsory counterclaim), claiming any defense, seeking any injunction or other restraint, commencing any action, or otherwise in bad faith (except for (A) any admissions provided that Borrower believes in good faith are truthful when made and (B) if any such admission Person obtains a non-appealable order successfully asserting a Contest, Borrower shall have no liability under this clause (b)) or (c) Borrower (i) fails to cause Owner to deliver notice of default under any Ground Lease to Lender or any servicer other Person designated in writing by Lender or (ii) fails to prevent Owner from amending or modifying any Ground Lease without the prior written consent of Lender, in which event Lender shall have recourse against all of the Loan that assets of Borrower cannot pay its operating expenses (including Debt Service payments due including, without limitation, any right, title and interest of Borrower in respect of and to the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsCollateral.
Appears in 1 contract
Sources: Loan and Security Agreement (Ashford Hospitality Trust Inc)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate officer, director, shareholder, partner, member, principal, employee of Borrower or any legal representatives, successors direct or assigns indirect owner of Borrower or its Affiliate or (provided that the foregoing shall not limit in any principalsmanner, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates the liability of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 9.3 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (ciii) affect the validity or enforceability of any of the Loan Documentsguaranty, the Guaranty indemnity or any other guaranty similar agreement or undertaking made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity Instrument and any other Loan Documents; or (f) impair the enforcement of the Environmental Indemnity; (gvi) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; Property (or any portion thereof).
(hb) constitute a waiver of Nothing contained herein shall in any manner or way release, affect or impair the right of Lender to enforce the liability and obligation of recover from Borrower, by money judgment or otherwiseand Borrower shall be fully and personally liable and subject to legal action, to the extent of for any actual out-of-pocket loss, damage, cost, expense, liabilitydamage, claim or other obligation reasonably incurred by Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurred expenses and other collection and litigation expenses but in all events excluding any consequential, special or punitive punitive, special, indirect and exemplary damages) incurred or suffered by Lender arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or Guarantor, or any Borrower Affiliate in connection with of the Loanforegoing;
(ii) the breach by gross negligence or willful misconduct of Borrower or Guarantor, or any Affiliate of any representation, warranty, covenant or indemnification provision in the Environmental Indemnityforegoing;
(iii) intentional material physical waste of the Property, provided, however, that if Borrower does not have sufficient cash flow on a current basis to prevent waste, any waste shall not be deemed intentional misappropriation by and Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lendershall have no liability under this clause (iii);
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction disposal of a material any portion of the Property or damage to a material portion in violation of the Property caused by willful misconduct or gross negligence terms of Borrower or any Borrower Affiliatethe Loan Documents;
(v) the commission of any criminal act misappropriation or conversion by Borrower or Guarantor, or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate foregoing, of (A) any Insurance Proceeds actually received paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property, (C) any Rents or other Property actually received by Borrower income or collateral proceeds, or (D) any Borrower AffiliateRents paid more than one month in advance (including security deposits);
(viivi) after following the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower failure to either apply rents or other Property income, collected after such Event of Default, to the ordinary, customary, and necessary expenses of operating the Property or, upon demand, to deliver such rents or other Property income to Lender;
(vii) failure to maintain insurance or to pay taxes and assessments, or to pay charges for labor or materials or other charges or judgments that can create Liens on any Borrower Affiliate of any Rents in violation portion of the Loan DocumentsProperty (unless Lender is escrowing funds therefor and fails to make such payments or has taken possession of the Property following an Event of Default, has received all Rents from the Property applicable to the period for which such insurance, taxes or other items are due, and thereafter fails to make such payments), it being acknowledged that if Borrower does not have sufficient cash flow on a current basis to maintain insurance or to pay taxes and assessments or to pay charges for labor or materials or other charges or judgments that create Liens on any portion of the Property, Borrower shall have no liability under this clause (vii);
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected by or on behalf of Borrower with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied (A) in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document action in lieu thereof or (B) previously delivered to Lender to be applied to repay the Loan;
(ix) any failure by Borrower did not have to obtain Lender’s prior written consent (to the legal rightextent such consent is required pursuant to the terms of the Loan Documents) to any modification, because amendment or terminations of a bankruptcyany Lease;
(x) any failure by Borrower to comply with any of the representations, receivership warranties or similar judicial proceeding, covenants set forth in Sections 4.1.37 or 5.1.19 hereof;
(xi) any failure by Borrower to direct disbursement permit on-site inspections of such deposits)the Property in accordance with the terms and provisions of the Loan Documents;
(xii) the termination failure of Borrower to appoint a new Manager at Lender’s request, to the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of extent Borrower is expressly required to do so pursuant to this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or;
(xiii) (i) the any failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”)any representation, (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law warranty or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants covenant set forth in Schedule V Section 4.1.30 hereof (other than those single purpose entity covenants that relate to solvency does not result, in whole or adequacy of capital) or a breach of any of the certifications set forth in part, in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with those of any other Person in connection with a proceeding under or entity pursuant to the Bankruptcy Code Code;
(xiv) Borrower fails to obtain Lender’s prior written consent to any Transfer to the extent required pursuant to the terms of the Loan Documents that is not a Full Recourse Transfer;
(xv) Borrower fails to obtain Lender’s prior written consent, to the extent required pursuant to the terms of the Loan Documents, to any Indebtedness or under federalvoluntary Lien encumbering the Property that is not a Full Recourse Lien; or
(xvi) the failure of the AT&T Sprinkler Installation Work to be completed in accordance herewith on or before the applicable AT&T Sprinkler Installation Work Completion Deadlines.
(c) Notwithstanding anything to the contrary in this Agreement, state the Note or foreign insolvency law any of the other Loan Documents, Borrower shall be personally liable for the Debt if (other than on motion A) Borrower fails to obtain Lender’s prior written consent (to the extent such consent is required pursuant to the terms of the Loan Documents) to any Transfer (a “Full Recourse Transfer”)
(1) that results in a change in Control over Borrower or pleading seeking (2) of any of the Property by deed, ▇▇▇▇ of sale, installment sales agreement, ground lease (excluding any lease to a substantive consolidation brought Tenant in the ordinary course of business) or actively supported by any similar agreement; (B) Borrower fails to obtain Lender’s prior written consent (to the extent such consent is required pursuant to the terms of the Loan Documents) to any voluntary mortgage, deed of trust, collateral assignment or similar voluntary lien or interest encumbering all or a substantial portion of the Property (a “Full Recourse Lien”); (iiC) Borrower or shall at any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes time hereafter make an assignment for the benefit of creditors its creditors; (D) Borrower fails to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof, which failure results in a substantive consolidation of Borrower with another Person or entity pursuant to the Bankruptcy Code; (E) Borrower admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency provided that neither Borrower nor Guarantor shall have liability under this clause (E) in connection with the delivery of financial statements or any other filing required to be delivered pursuant to a subpoena or any order entered in a bankruptcy proceeding or required under applicable law in connection with any such petition made by any Person which is not an Affiliate of Borrower; (F) intentionally omitted; (G) Borrower files, or consents in writing to, a petition for bankruptcy, insolvency, dissolution or liquidation under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or there is a filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law in which Borrower or Guarantor colludes with, or otherwise assists any party in connection with such filing, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower from any party (provided, however, that the failure to defend such an involuntary petition where no meritorious defense exists shall not be deemed “assisting” for purposes hereof).
(d) Nothing herein shall be deemed to constitute a waiver by a Person other than Lender (except for (Aof any right Lender may have under Sections 506(a), 506(b), 1111(b) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer other provision of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect Bankruptcy Code to file a claim for the full amount of the Loan) Debt or to require that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion collateral shall continue to secure all of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsDebt.
Appears in 1 contract
Exculpation. Subject Except as may be required by applicable securities laws or other law, neither the Managing Member or any Additional Managing Member, any of their respective Affiliates, or any member, officer, director, employee or shareholder of the Managing Member, any Additional Managing Member, or any of their respective Affiliates (individually, a "Party" and collectively, the "Parties"), shall be liable, responsible or accountable in damages or otherwise to the qualifications belowFund or any of the Members for honest mistakes of judgment, Lender shall or for losses due to such mistakes or due to the negligence, dishonesty or bad faith of any employee, broker or other agent of the Fund, or for any action taken or failure to act in any way related to the Fund or its business or affairs (including but not enforce limited to (i) failure to obtain the liability and obligation lowest negotiated brokerage commission rates or other transaction costs, or to combine or arrange orders so as to obtain the lowest commission rates or other transaction costs with respect to any transaction on behalf of Borrower the Fund, or failure to perform and observe recapture, directly or indirectly, any brokerage commissions or other transaction costs for the Obligations contained in benefit of the NoteFund, this Agreementor (ii) claims, costs, expenses, damages or losses due to, including but not limited to, the Mortgage Bankruptcy, insolvency or suspension of normal business activities of any Investee Pool, bank, brokerage firm, custodian or transfer agent holding assets of the other Loan Documents by Fund, or due to the negligence, dishonesty, bad faith or malfeasance of any action investment adviser with whom the Fund invests, either directly or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or indirectly, any Affiliate of Borrower any entity in which the Fund invests, or any legal representativesemployee, successors broker or assigns other agent of Borrower or its Affiliate or any principalsthe Fund), directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agentsif such Party acted in good faith and in a manner it believed to be in, or Affiliates of any not opposed to, the interests of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan DocumentsFund; provided, however, that, except as specifically provided herein, any judgment in any that such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, Party shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party be relieved of liability in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, to the extent respect of any loss, damageexpense or damage caused by such Party's actual fraud, cost, expense, liability, claim gross negligence or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special wanton or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower misconduct. The termination of any representationpending or threatened action, warrantysuit or proceeding by judgment, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrowerorder, settlement, conviction, or any intentional failure to deposit rents into the Clearing Account to the extent in the control upon a plea of Borrowernolo contendere or its equivalent, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other thanshall not, in each caseand of itself, as part of create a presumption or to facilitate any alteration otherwise constitute evidence that is permitted hereunder) material physical waste of a Party did not satisfy the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results standards for exculpation set forth in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received this Section 7.5. The Managing Member may consult with Legal Counsel and Accountants in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except Fund's affairs and shall be fully protected and justified in acting or failing to the extent that such deposits were applied act in accordance with the applicable lease written or other governing document oral advice or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement opinion of such deposits);
(xii) the termination of the Condominium Legal Counsel or the removal of any Unit from the CondominiumAccountants, in each caseprovided that they have been selected with reasonable care, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) and provided further that the failure by Borrower, to obtain any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender such advice or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender opinion shall not be deemed evidence as to have waived any right which Lender may have under whether the Managing Member's actions fall within or outside the scope of this Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents7.5.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Aspen Diversified Fund LLC)
Exculpation. 26.%2.%3.%4. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower Borrower, Principal or Operating Company to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower Borrower, Principal or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Operating Company, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, Principal or Operating Company only to the extent of Borrower’s, Principal’s or Operating Company’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower, Principal or Operating Company in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower Borrower, Principal or Operating Company (if applicable) as a party defendant in any action or suit for foreclosure and sale under any of the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of any assignment of leases contained in the Assignment of LeasesMortgage; or (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower Borrower, Principal or Operating Company (if applicable) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation Notwithstanding any other terms of Borrower to perform and observe the Obligations contained in the Note, this Agreement, whether express or implied, or obligation at law or in equity, neither the Mortgage or General Partner, any Tax Representative, nor the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representativesManagement Company nor their respective members, successors or assigns of Borrower or its Affiliate or any principalsformer members, directors, officersassignees, employees, beneficiariesagents or Affiliates, shareholders, partners, nor Advisory Board members in their capacities as Advisory Board members, trusteesnor Limited Partners that designated a representative to serve on the Advisory Board in their capacities as designating Limited Partners (individually, agents, or Affiliates of any of the foregoing (an “Exculpated Party” and collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)) shall be liable to a Limited Partner or the Partnership for honest mistakes of judgment, except that Lender may bring a foreclosure action, an action or for specific performance or any other appropriate action or proceeding inaction, taken reasonably and in good faith for a purpose that was reasonably believed to enable Lender be in the best interests of the Partnership, or for losses due to enforce such mistakes, action or inaction, or to the negligence, dishonesty, or bad faith of any employee, broker, or other agent of the Partnership, provided that such employee, broker, or agent was selected, engaged or retained and realize upon its interest under supervised with reasonable care. Notwithstanding any of the Note, this Agreementforegoing to the contrary, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 10.12 shall not, however, not be construed so as to relieve (aor attempt to relieve) constitute a waiver, release or impairment any Exculpated Party of any obligation evidenced liability by reason of criminal conduct, recklessness, fraud, intentional wrongdoing or secured by any gross negligence (except that such exclusion for gross negligence shall not apply to liability arising out of or relating to the Loan Documents; (b) impair the right service of Lender to name Borrower an Exculpated Party as a party defendant director, manager, officer, member or the equivalent of a person any securities of which the Partnership owns or has owned) or to the extent (but only to the extent) that such liability may not be waived, modified or limited under applicable law, but shall be construed so as to effectuate the provisions of this Section 10.12 and of Section 10.13 to the fullest extent permitted by law. The General Partner may consult with counsel and accountants in respect of Partnership affairs and be fully protected and justified in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration inaction that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied taken in accordance with the applicable lease advice or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement opinion of such deposits);
(xii) the termination of the Condominium counsel or the removal of any Unit from the Condominiumaccountants, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate provided that such counsel and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply accountants shall have been selected with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsreasonable care.
Appears in 1 contract
Sources: Limited Partnership Agreement
Exculpation. Subject (a) Notwithstanding anything to the contrary herein or in any of the other Loan Documents but subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or any Individual Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage any Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Individual Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, manager, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor subject to the terms of the Guaranty) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage each Security Instrument and the other Loan Documents, or in the any Individual Property, the Rents Rents, or any other collateral Collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower and any Individual Borrower only to the extent of Borrower’s and any Individual Borrower’s interest in the Property, in the Rents and in any other collateral Collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage each Security Instrument and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any Individual Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage any Security Instrument or the other Loan Documents. The provisions of this Section 10.1 11.3 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower or any Individual Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgageany Security Instrument; (c) affect the validity or enforceability of any of the Loan DocumentsDocuments or any guaranty or indemnity (including, without limitation, the Guaranty and the Environmental Indemnity) or any other guaranty similar instrument made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan Agreement (Cole Real Estate Income Strategy (Daily Nav), Inc.)
Exculpation. Subject to Except as expressly provided in this Section 9.2, the qualifications below, Lender Administrative Agent shall not enforce the liability and obligation of Borrower Borrowers to perform and observe the Obligations obligations contained in the NoteNotes, this Agreement, the Mortgage Mortgages or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Borrowers, except that Lender the Administrative Agent may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender the Administrative Agent to enforce and realize upon its interest (on behalf of the Secured Parties) under the NoteNotes, this Agreement, the Mortgage Mortgages and the other Loan Documents, or in the PropertyProperties, the Rents Rents, or any other collateral given to Lender the Administrative Agent or the Collateral Agent (not in its individual capacity but solely in its capacity as Collateral Agent on behalf of the Administrative Agent for the benefit of the Secured Parties) pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower Borrowers only to the extent of each Borrower’s interest in the its Property, in the Rents and in any other collateral given to Lenderthe Administrative Agent or the Collateral Agent (not in its individual capacity but solely in its capacity as Collateral Agent on behalf of the Administrative Agent for the benefit of the Secured Parties), and each Lender, by accepting the NoteNotes, this Agreement, the Mortgage and the other Loan Documents, agrees that the Administrative Agent shall not su▇ ▇orsue for, seek or demand any deficiency judgment or any other money judgment against any direct or indirect member, manager, shareholder, partner, beneficiary or other owner of beneficial ownership interests in Borrowers, or any director, officer, employee, trustee or agent or any of the foregoing (each, an “Exculpated Party Party” and, collectively, the “Exculpated Parties”), in any such action or proceeding under or by reason of or under or in connection with the NoteNotes, this Agreement, the Mortgage Mortgages or the other Loan Documents. The provisions of this Section 10.1 9.2 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender the Administrative Agent to name any Borrower as a party defendant in any action or suit for foreclosure and sale under the such Borrower’s related Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender the Administrative Agent or the Lenders thereunder; (d) impair the right of Lender the Administrative Agent to obtain the appointment of a receiver; (e) impair the enforcement of any of the Assignment Assignments of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender the Administrative Agent (on behalf of the Secured Parties) to seek a deficiency judgment against any Borrower in order to fully realize the security granted by the it under its applicable Mortgage or to commence any other appropriate action or proceeding in order for Lender the Administrative Agent or Collateral Agent (not in its individual capacity but solely in its capacity as Collateral Agent on behalf of the Administrative Agent for the benefit of the Secured Parties) to exercise its their remedies against all of the PropertyProperties; or (hg) constitute a waiver of the right of Lender Lenders to enforce the liability and obligation of BorrowerBorrowers, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender ▇▇▇▇▇▇▇ (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower the Limited Guarantor, any Loan Party or any Borrower subsidiary or Affiliate of the Limited Guarantor or any Loan Party in connection with the Loan, the Collateral or any Loan Document;
(ii) the willful misconduct, bad faith or gross negligence of the Limited Guarantor, any Loan Party or any subsidiary or Affiliate of the Limited Guarantor or any Loan Party in connection with the Loan, the Collateral or any Loan Document;
(iii) the breach by Borrower any Loan Party of any representation, warranty, covenant or indemnification provision in any Loan Document concerning Environmental Laws, Hazardous Substances or asbestos and any indemnification of the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of Administrative Agent, any Reserve Funds disbursed to Borrower, Lender or Collateral Agent with respect thereto in any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to LenderLoan Document;
(iv) the misapplication, misappropriation or conversion by any intentional (Loan Party or any Affiliate of any Loan Party of any collections or proceeds with respect to any Collateral, including the proceeds of any related insurance payable to any Borrower or funds received by any Borrower for payment of taxes or any other thanamounts, in each case, as part of or case to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower extent required to be deposited into the Collection Account or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of other account established and maintained pursuant to the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower AffiliateLoan Documents;
(v) the commission any intentional material waste of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Financed Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards sale, conveyance or other amounts received disposition of any Financed Property or conveyance or release of any Financed Property in connection with the Condemnation breach of all or a portion of the Property actually received by Borrower or any Borrower AffiliateLoan Document;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate Loan Party fails to obtain Administrative Agent’s prior written consent to any incurrence of any Rents in violation of debt not permitted under the Loan Documents;
(viii) all the imposition of any consensual Lien or other encumbrance on any Financed Property or other Collateral other than that which is expressly permitted under the terms of the Loan Documents; or
(ix) any litigation or other legal proceeding related to the Collateral or the other obligations of the Loan Parties or the Limited Guarantor pursuant to the Loan Documents filed by a Loan Party, the Company or any material portion subsidiary or Affiliate of any Loan Party or the Company that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of the Property being encumbered Administrative Agent to exercise any rights and remedies available to the Administrative Agent as provided in the Loan Documents, in each case if filed in bad faith (and expressly excluding any good faith assertion of rights, defense or counterclaims).
(a) the Loan Parties cease to be controlled by the Limited Guarantor, in each case to the extent constituting a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) Documents that create Liens on the Property, regardless constitutes an Event of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document Default (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender a violation of any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease required notice or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borroweradministrative requirements); and/or
(xiiib) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as Loan Party files a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding voluntary petition under the Bankruptcy Code or under federal, any other Federal or state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)bankruptcy law; (iic) Borrower any Loan Party or any Borrower AffiliateAffiliate of any Loan Party, officerfiles, director or representative which Controls Borrower consents to or files a voluntary joins in the filing of, an involuntary petition with respect to Borrower against any Loan Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited (or if any Loan Party otherwise colludes with) petitioning creditors for any involuntary petition against Borrower any Loan Party from any person other than a petition filed by the Administrative Agent or any PersonLender; (vd) Borrower any Loan Party files an answer consenting to, to or joining in, in any involuntary petition filed against it any Loan Party by any other Person person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Loan Party from any Person other than a petition filed or joined by the Administrative Agent or any Lender; (vie) Borrower makes any Loan Party or any Affiliate of any Loan Party consents to or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Loan Party or any portion of the Collateral other than if required by the Administrative Agent or a Lender; or (f) any Loan Party making an assignment for the benefit of creditors creditors, or admitsadmitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence ; (ii) if the first full monthly payment of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made principal and (B) any such admission to Lender or any servicer of interest on the Loan that Borrower canis not pay paid when due (subject to any applicable cure period); (iii) if any Loan Party fails to permit on-site inspections of its operating expenses Property, fails to provide financial information, fails to maintain its status as a “special purpose entity” or fails to appoint a new property manager upon the request of Lenders as and if permitted under this Agreement, each as required by, and in accordance with, the terms and provisions (including Debt Service payments due any applicable notice and cure provisions) of this Agreement or the Mortgages; (iv) if any Loan Party fails to obtain Lenders’ prior written consent to any Indebtedness or voluntary Lien encumbering its Property as and if required by, and in respect accordance with the terms and provisions (including any applicable notice and cure provisions) of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date)this Agreement; or (viiv) there is a voluntary Transfer of all if any Loan Party fails to obtain ▇▇▇▇▇▇▇’ prior written consent to any transfer as and if required by this Agreement or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsMortgages.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the “Borrower Parties”) or any other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Borrower Parties or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Person, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to this Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Lender to name any of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower Leases and Rents executed 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 Propertyconnection herewith; or (hvi) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrower (but not against any members of Borrower (other than Guarantor to the extent provided in the Non-Recourse Guaranty) or their direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably (but excluding any punitive, consequential or speculative damages) incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Guarantor in connection with the Loan;
(iib) intentional physical waste of the Property (including, but not limited to, waste due to gross negligence) by Borrower or any affiliate thereof; provided, however, such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by Borrower or any affiliate thereof;
(c) the material breach by Borrower of any representation, warranty, covenant or indemnification provision in the that certain Environmental Indemnityand Hazardous Substance Indemnification Agreement of even date herewith given by Borrower to Lender or in this Agreement concerning Environmental Laws, Hazardous Substances and Asbestos;
(iiid) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, removal or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property disposal by Borrower or any Borrower Affiliate, or affiliate thereof of any intentional wrongful removal or destruction of a material portion of the Property or damage to a material after an Event of Default has occurred and while it is continuing, unless such portion of the Property caused is replaced by willful misconduct an item of equal or gross negligence of Borrower or any Borrower Affiliategreater value as determined by Lender in its reasonable discretion;
(ve) the commission of any criminal act misapplication or conversion by Borrower or any Borrower Affiliate which results in the forfeiture affiliate thereof of (i) any insurance proceeds paid by reason of any loss, damage or destruction to the Property;
, (vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Aii) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property, (iii) any Rents following an Event of Default or (iv) any Rents paid more than one month in advance;
(f) failure to pay charges for labor or materials or taxes or other charges that can create liens superior to the lien of the Mortgage on any portion of the Property actually received unless such taxes or other charges are being contested in accordance herewith or such taxes or charges have been delivered to Lender in accordance with Section 3.3 or Borrower has complied with Section 5.2; and
(g) any security deposits collected by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected affiliate thereof with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach conditions of any of the certifications set forth in Leases prior to the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation occurrence of the assets and liabilities Event of Borrower with Default that gave rise to such foreclosure or action in lieu thereof.
(1) if any other Person in connection with a proceeding under the Bankruptcy Code petition for bankruptcy, reorganization or under federalarrangement pursuant to federal bankruptcy law, or any similar federal or state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported law, shall be filed by Lender); (ii) Borrower or any Borrower AffiliateGuarantor, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii2) Borrower files an application for the appointment of a receiver, trustee or examiner for if Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower Guarantor files an answer consenting to, or otherwise joining in, any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law filed against it by any other Person under the Bankruptcy Code Person, or is found pursuant to a final, unappealable order of a court of competent jurisdiction to have solicited or caused to be solicited creditors to file any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any other Federal similar federal or state bankruptcy law against Borrower or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admitsGuarantor, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii3) there is if Borrower or Guarantor are found, pursuant to a voluntary Transfer final unappealable order of all a court of competent jurisdiction, to have been in collusion with creditors that initiate a bankruptcy action or any material portion of the Property proceeding against Borrower or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsGuarantor.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by Notwithstanding any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary ----------- elsewhere in this Agreement or any of the other Loan Documents, (A) Lender the Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any trust or fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) read into this Agreement or any other provisions Loan Document or otherwise exist against the Agent. Neither the Agent nor any of its directors, officers, employees or agents (collectively, the "Related Parties") shall be liable to any --------------- Bank for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence, nor shall the Agent or any of the Bankruptcy Code to file a claim Related Parties be responsible for any recitals or representations or warranties herein or therein, or for the full amount effectiveness, enforceability, validity, or due execution of this Agreement or any other Loan Document, nor shall the Agent or any of the Obligations Related Parties be obligated to make any inquiry respecting the performance by the Principal Companies of their obligations hereunder or thereunder, or to require that all collateral shall continue to secure all inspect the Properties, books or records of the Obligations owing Principal Companies. The Agent shall be entitled to Lender rely upon advice of counsel concerning legal matters and upon any notice, consent, certificate, statement, or writing which it believes to be genuine and to have been presented by a proper Person. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Loan DocumentsRequired Banks (or, to the extent this Agreement requires a higher percentage, such higher percentage), and (B) such request and any action taken or failure to act pursuant thereto shall be binding upon all the Obligations Banks and all future holders of the Obligations. The Agent shall be fully recourse justified in failing or refusing to Borrower in the event that take any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding action under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code this Agreement or any other Federal Loan Document unless it shall first receive such advice or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion concurrence of the PropertyRequired Banks (or, except at to the request of or with the consent of Lenderextent this Agreement requires a higher percentage, (ivsuch higher percentage) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against as it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsdeems appropriate.
Appears in 1 contract
Sources: Credit Agreement (View Tech Inc)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documentsindemnity, the Guaranty guaranty or any other guaranty similar instrument made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement right of the Environmental IndemnityLender to enforce Section 4.1.6(g) of this Agreement; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower Borrower, any of the Exculpated Parties, Sponsor or any Borrower Affiliate Guarantor in connection with the Loan;
(ii) the gross negligence or willful misconduct of Borrower;
(iii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, Indemnity or any intentional failure to deposit rents into the Clearing Account to the extent in the control Mortgage concerning environmental laws, hazardous substances and asbestos and any indemnification of Borrower, unless such rents are otherwise delivered to LenderLender with respect thereto in either document;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction disposal of a material any portion of the Property or damage to a material portion after an Event of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower AffiliateDefault;
(v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, (C) any Rents following an Event of Default or (D) any Borrower AffiliateTenant security deposits or Rents collected in advance;
(vi) failure to pay charges for labor or materials or other charges that can create Liens on any portion of the Property;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document action in lieu thereof;
(viii) any representation, warranty or Borrower did not have covenant contained in Section 2.5.2 or 6.5 hereof is violated or breached;
(ix) Borrower’s indemnification of Lender set forth in Section 9.2 of the legal rightSecurity Instrument;
(x) the exercise of any remedies, because or the bringing of a bankruptcyany action, receivership by the District of Columbia under Section 22.2(b) of the Development Agreement;
(xi) any misstatement or similar judicial proceeding, to direct disbursement of such deposits)inaccuracy in that certain Real Property Recordation and Transfer Tax Form FP 7/C filed in connection with Mortgage;
(xii) Borrower’s failure to deliver evidence satisfactory to Lender evidencing the termination valid transfer of development rights from the adjoining property to the Property such that the Property shall be in conformance with the building density requirements and zoning regulations of the Condominium or the removal District of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); Columbia: and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner ’s indemnification of the Upper Option Space and/or the Lower Option Space (as defined Lender set forth in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default9.2 hereof. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b1111 (b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.Code
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained Except as otherwise specifically provided in the NotePlan, this Agreementno Exculpated Party shall have or incur liability for and each Exculpated Party is hereby released and exculpated from any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out of, the Mortgage Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, filing, or termination of the RSA and related prepetition transactions, the DIP Facility, the Disclosure Statement, the Plan, the Plan Supplement, the Disinterested Directors’ Settlement, or any Restructuring Transaction, contract, instrument, release, or other agreement or document (including any legal opinion requested by any Entity regarding any transaction, contract, instrument, document or other agreement contemplated by the Plan or the other Loan Documents reliance by any action Released Party on the Plan or proceeding wherein a money judgment the Confirmation Order in lieu of such legal opinion) created or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided entered into in connection with the LoanRSA, the DIP Facility, the Disclosure Statement, the Plan, the Plan Supplement, the Disinterested Directors’ Settlement, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date, except for claims related to any act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence, but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan. The Exculpated Parties and other parties set forth above have, and upon confirmation of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of votes and distribution of consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan. Future Source, LLC ▇. ▇. ▇▇▇▇▇▇ Company, Inc. ▇. ▇. ▇▇▇▇▇▇ Corporation, Inc. ▇. ▇. ▇▇▇▇▇▇ de Guatemala, Sociedad Anonimad ▇. ▇. ▇▇▇▇▇▇ de Honduras, S.A. J. ▇. ▇▇▇▇▇▇ Direct Marketing Services, LLC ▇. ▇. ▇▇▇▇▇▇ Export Merchandising Corporation ▇. ▇. ▇▇▇▇▇▇ Business Information Consulting (Shanghai) Co., Ltd. ▇. ▇. ▇▇▇▇▇▇ International, Inc. ▇. ▇. ▇▇▇▇▇▇ Korea ▇. ▇. ▇▇▇▇▇▇ Properties, LLC ▇. ▇. ▇▇▇▇▇▇ Purchasing Corporation ▇. ▇. ▇▇▇▇▇▇ Purchasing Hong Kong Limited ▇. ▇. ▇▇▇▇▇▇ Purchasing India Private Limited ▇. ▇. ▇▇▇▇▇▇ Services India Private Limited JCP Construction Services, Inc. JCP Media, Inc. JCP New Jersey, LLC JCP Procurement, Inc. JCP Real Estate Holdings, LLC JCP Realty, LLC JCP Telecom Systems, Inc. JCPenney Insurance Agency, Inc. JCPenney Puerto Rico, Inc. JCPenney Services, LLC jcpSSC, Inc. The undersigned (“Exculpated PartiesTransferee”) hereby acknowledges that it has read and understands the Restructuring Support Agreement, dated as of (the “Agreement”)1 by and among ▇. ▇. ▇▇▇▇▇▇ Company, Inc. (“JCP”) and its affiliates and subsidiaries bound thereto and the Consenting First Lien Lenders, including the transferor to the Transferee of any Company Claims/Interests (each such transferor, a “Transferor”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding and agrees to enable Lender to enforce be bound by the terms and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only conditions thereof to the extent the Transferor was thereby bound, and shall be deemed a “Consenting First Lien Lenders” and a [“Consenting Term Lender”] [“Consenting First Lien Noteholder”] under the terms of Borrower’s interest the Agreement. The Transferee specifically agrees to be bound by the terms and conditions of the Agreement and makes all representations and warranties contained therein as of the date of the Transfer, including the agreement to be bound by the vote of the Transferor if such vote was cast before the effectiveness of the Transfer discussed herein. Date Executed: Name: Title: Address: E-mail address(es): [ABL Loans] First Lien Notes [Second Lien Notes] [Unsecured Notes] Term Loans [Equity Interests] 1 Capitalized terms used but not otherwise defined herein shall having the meaning ascribed to such terms in the Property, in Agreement. The undersigned (“Joinder Party”) hereby acknowledges that it has read and understands the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Restructuring Support Agreement, dated as of (the Mortgage “Agreement”),1 by and among ▇. ▇. ▇▇▇▇▇▇ Company, Inc. (“JCP”) and its affiliates and subsidiaries bound thereto and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender Consenting First Lien Lenders and agrees to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted be bound by the Mortgage or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h) constitute a waiver of the right of Lender to enforce the liability terms and obligation of Borrower, by money judgment or otherwise, conditions thereof to the extent of any lossthe other Parties are thereby bound, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as shall be deemed a [“Borrower’s Recourse LiabilitiesConsenting Term Lender”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a ] [“Consenting First Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender Noteholder”] under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this the Agreement, which was voted for or consented . The Joinder Party specifically agrees to or approved be bound by Borrower (or the members terms and conditions of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner Agreement and makes all representations and warranties contained therein as of the Upper Option Space and/or the Lower Option Space (as defined date of this joinder and any further date specified in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space DefaultAgreement. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.Date Executed: Name: Title: Address: E-mail address(es):
Appears in 1 contract
Sources: Restructuring Support Agreement (J C Penney Co Inc)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained Except as otherwise specifically provided in the NotePlan, this Agreementno Exculpated Party shall have or incur, and each Exculpated Party is released and exculpated from any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out of, the Mortgage Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, or filing of the other Loan Documents by any action or proceeding wherein a money judgment RSA and related prepetition transactions, the Disclosure Statement, the Plan, or any deficiency judgment Restructuring Transaction, contract, instrument, release or other judgment establishing personal liability shall be sought against Borrower agreement or any Affiliate of Borrower document created or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided entered into in connection with the LoanDisclosure Statement or the Plan, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, except for claims related to any act or omission that is determined in a final order to have constituted actual fraud or gross negligence, but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan. The Exculpated Parties have, and upon completion of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of votes and distribution of consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan. EXHIBIT B Transfer Agreement PROVISION FOR TRANSFER AGREEMENT The undersigned (“Exculpated PartiesTransferee”) (a) hereby acknowledges that it has read and understands the Restructuring Support Agreement, dated as of (the “Agreement”),1 by and among the Company Parties and each of the Consenting Stakeholders party thereto, (b) desires to acquire the Claims described below (the “Transferred Claims”) from one of the Consenting Stakeholders (the “Transferor”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect hereby irrevocably agrees to be bound by the validity or enforceability of any terms and conditions of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, Agreement to the same extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected Transferor was thereby bound with respect to the Property upon Transferred Claims, and shall be deemed a foreclosure by Lender “Consenting Stakeholder” and a [“Consenting Creditor”] / [“Consenting Sponsor”] under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this the Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) . The Transferee hereby specifically and irrevocably agrees (i) to be bound by the failure by Borrower, any Borrower Affiliate and/or any other owner terms and conditions of the Upper Option Space and/or Agreement, to the Lower Option Space (as defined in same extent applicable to the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”)Transferred Claims, (ii) to be bound by the exercise vote of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant Transferor if cast prior to the Original Bloomberg Leaseeffectiveness of the transfer of the Transferred Claims, at law or except as otherwise provided in equity)the Agreement, including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or and (iii) paying any amount or performing any obligation that each of the Parties shall be an express third-party beneficiary of this Provision for Transfer Agreement and shall have the same recourse against the Transferee under the Agreement as such Party would have had against the Transferor with respect to the Upper Option Space and/or the Lower Option Space after the occurrence Transferred Claims. Date Executed: , Print name of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.Transferee Name: Title: Address: Attention: Telephone: Facsimile:
Appears in 1 contract
Sources: Restructuring Support Agreement
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Lease, and except with respect to the Security Deposit or any as may be explicitly agreed in writing after the date hereof, it is expressly understood and agreed that Tenant is a limited liability company and (a) Tenant shall be personally liable for the payment and performance of the other Loan Documentsduties, responsibilities, liabilities and obligations of Tenant under this Lease to the extent (Abut only to the extent) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for assets of Tenant (specifically excluding the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach assets of any of the certifications set forth past, present or future members of Tenant or any past, present or future shareholder of any corporate member of Tenant, except for any such member’s or shareholder’s interest in any then undistributed assets of Tenant and sales proceeds thereof), (b) none of the “Recycled Entity Certificate”past, present or future members of Tenant or past, present or future shareholders of any of the corporate members of Tenant shall be personally liable for the payment or performance of any such duties, responsibilities, liabilities or obligations, (c) no past, present or future member of Tenant or past, present or future shareholders of any corporate member of Tenant shall be named as a party in each caseany suit or other judicial proceeding of any kind or nature whatsoever brought against Tenant with respect to this Lease, that results except to the extent necessary to secure jurisdiction of Tenant, and any such suit or other judicial proceeding shall be limited to the enforcement of the rights of Landlord with respect to the then undistributed assets (and sales proceeds thereof) of Tenant, and (d) no attachment, execution or other write of process shall be sought, issued or levied upon any assets, property or funds of any of the past, present or future members of Tenant or past, present or future shareholder of any corporate member of Tenant, except for any such member’s or shareholder’s interest in a substantive consolidation any then undistributed assets (and sales proceeds thereof) of Tenant. For the purposes of this Section, no portion of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported employee benefit plans maintained by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment Tenant for the benefit of creditors any present, future or admits, in writing former members or in any legal proceeding, its insolvency or inability employees of Tenant shall be deemed to pay its debts as they become due, which admission is used as evidence be assets of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsTenant.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Agreement and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents Rents, and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Agreement and the other Loan Documents, agrees that it shall not sus▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Agreement or the other Loan Documents. The provisions of this Section 10.1 1.4 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty guaranty or any other guaranty indemnity made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official; (e) impair the enforcement of the Assignment of LeasesLeases and Rents; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order for Lender to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its rights and remedies against the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; impair the right of Lender to assert the Debt as a set-off, affirmative defense or limitation on any liability of Lender for any claim for damages made by Borrower, Guarantor or any Borrower Related Party arising from or in connection with the Loan, in any arbitration, mediation, proceeding or other action; or (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with with, and Borrower shall be personally liable for, the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as the “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct i. fraud or intentional or material intentional misrepresentation by Borrower Borrower, Guarantor or any Borrower Affiliate Related Party in connection with the Loan;
(ii) . the willful misconduct by or on behalf of Borrower, Guarantor or any Borrower Related Party in connection with the Loan;
iii. the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental IndemnityIndemnity or in the Security Instrument concerning Environmental Law and Hazardous Substances;
(iii) iv. the intentional misappropriation by Borrower removal or disposal of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage during the continuation of an Event of Default, other than in the ordinary course of owning and operating the Property with respect to a material the portion of the Property caused by willful misconduct that is either being replaced or gross negligence that is no longer necessary in connection with the operation of Borrower the Property; provided that such removal or disposal will not (A) have a Material Adverse Effect, (B) impair the utility or operation of the Property in any Borrower Affiliate;
material respect, or (vC) result in a reduction or abatement of, or right of offset against, the commission of rents under any criminal act by Borrower or any Borrower Affiliate which results Lease in the forfeiture respect of the Property;
(viA) the intentional misappropriation misappropriation, misapplication or conversion by Borrower Borrower, Guarantor or any Borrower Affiliate Related Party of (A) any Insurance Proceeds actually received paid by Borrower reason of any Casualty or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property actually received Property, (B) the misappropriation or conversion by Borrower Borrower, Guarantor or any Borrower Affiliate;
Related Party of any Rents, or (viiC) after the occurrence and misapplication by Borrower, Guarantor or any Borrower Related Party of any Rents during the continuance continuation of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender vi. any security deposits, advance deposits or any other deposits or prepaid rents (including reimbursements) collected with respect to the Property Property, which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except except, if applicable, to the extent that any such security deposits were applied in accordance with the terms and conditions of the applicable lease Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof;
vii. Borrower’s failure to pay any Taxes affecting the Property, subject in all cases to Borrower’s right to contest Taxes as set forth in, and in accordance with, the terms and conditions of the Loan Documents; provided that there shall be no liability hereunder if (A)(1) there are sufficient funds on deposit in the Tax and Insurance Escrow Account that are fully available to Lender in accordance with the terms and conditions of the Loan Documents and (2) Lender fails to apply the requisite portion thereof to the payment of such Taxes in accordance with the terms and conditions of the Loan Documents, or (B) there is insufficient cash flow from the operation of the Property to pay such Taxes;
viii. Borrower’s failure to obtain and maintain in full force and effect fully paid for Policies as required by this Agreement; provided that there shall be no liability hereunder if (A) such failure arises solely due to non-payment of the applicable Insurance Premiums and (B)(1) there are sufficient funds on deposit in the Tax and Insurance Escrow Account that are fully available to Lender in accordance with the terms and conditions of the Loan Documents and Lender fails to apply the requisite portion thereof to the payment of such Insurance Premiums in accordance with the terms and conditions of the Loan Documents or (2) the applicable Policies are not blanket Policies and there is insufficient cash flow from the operation of the Property to pay the applicable Insurance Premiums;
ix. Borrower’s failure to pay charges for labor or materials or other governing document or Borrower did not charges that can create Liens on any portion of the Property, except, in the case of any such charges incurred in accordance with the provisions of the Loan Documents, (A) subject in all cases to Borrower’s right to contest Liens as set forth in, and in accordance with, the terms and conditions of the Loan Documents and (B) except to the extent that (1) sums sufficient to pay such amounts have been deposited in a Reserve Fund with Lender pursuant to the legal rightterms hereof, because which Reserve Fund was established for the payment thereof, such escrowed sums are fully available to Lender in accordance with the terms and conditions of a bankruptcythe Loan Documents, receivership or similar judicial proceeding, and Lender fails to direct disbursement apply the requisite portion thereof in accordance with the terms and conditions of the Loan Documents to the payment of such depositsamounts or (2) there is insufficient cash flow from the operation of the Property to pay such amounts);
(xii) x. any material physical waste at the termination Property caused by the intentional or willful acts or omissions of Borrower, Guarantor or any Borrower Related Party, except, in the case of any such waste arising solely from omissions of Borrower, Guarantor or any Borrower Related Party, to the extent there is insufficient cash flow from the operation of the Condominium Property to prevent such waste at the Property;
xi. the payment of fees or the removal other amounts by Borrower to any of any Unit from the Condominium, in each case, its Affiliates in violation of the Loan Documents;
xii. commission of any criminal act by Borrower, Guarantor or any Borrower Related Party which results in the forfeiture of the Property or any portion thereof;
xiii. the breach of any representation, warranty or covenant set forth in Section 4.1.10 and Section 5.2.9 hereof;
xiv. subject to clause (ii)(A) in Section 1.4(b) hereof, if Borrower fails to maintain its status as a single purpose entity as required by, and in accordance with, the terms and provisions of this Agreement;
xv. Borrower fails to permit on-site inspections of the Property, which was voted for fails to provide financial information or consented fails to appoint a new property manager upon the request of Lender, in each case as required by, and in accordance with, the terms and provisions of, this Agreement and the other Loan Documents;
xvi. Borrower, Guarantor or approved any Borrower Related Party that Controls, directly or indirectly, Borrower contests, impedes, delays or opposes the exercise by Borrower (Lender of any enforcement actions, remedies or other rights it has under or in connection with this Agreement or the members other Loan Documents or objects to any notice of strict foreclosure or similar notice; provided that neither Borrower nor Guarantor shall be liable to the extent of any applicable loss, damage, cost, expense, liability, claim or other obligation arising solely from a defense of Borrower, Guarantor or such Borrower Related Party raised in good faith;
xvii. any other division or actual partition of the Condominium Board appointed by Borrower)Property or the Property without Lender’s prior written consent; and/oror
xviii. the breach of any representation, warranty or covenant set forth in Section 4.1.31 hereof.
(xiiib) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (Ai) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), ) or 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Other Obligations owing to Lender in accordance with the Loan Documents, and (Bii) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur occurs (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.):
Appears in 1 contract
Sources: Commercial Loan Agreement (Red Oak Capital Fund V, LLC)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower{12282340:5} 114 ▇▇▇▇▇▇▇▇’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documents, the Guaranty guaranty or any other guaranty indemnity made in connection with the Loan (including, without limitation, indemnities set forth in Article 11 hereof, Section 9.2 hereof, in the Guaranty and in the Environmental Indemnity) or any of the rights and remedies of Lender thereunder; (d4) impair the right of Lender to obtain the appointment of a receiverreceiver or to enforce its rights and remedies provided in Articles 7 and 8 hereof; (e5) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity Instrument; (f) impair the enforcement of the Environmental Indemnity; (g6) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument (provided, that, such deficiency judgment will only be enforceable against Borrower to the extent of its interest in the Property) or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h7) 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 reasonably Loss actually incurred by Lender ▇▇▇▇▇▇ (including out-of-pocket attorneys’ fees and costs expenses reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
following: (i) fraudulent acts, fraud or willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate Party in connection with the Loan;
; (ii) the breach by Borrower gross negligence or willful misconduct of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
Borrower Party; (iii) any litigation or other legal proceeding related to the intentional misappropriation Debt filed by any Borrower Party or any other action of any Reserve Funds disbursed Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to Borrower, or exercise any intentional failure rights and remedies available to deposit rents into the Clearing Account to the extent Lender as provided herein and in the control other Loan Documents unless a court of Borrowercompetent jurisdiction finds that such action is not frivolous, unless such rents are otherwise delivered to Lender;
not brought in bad faith, not wholly without merit, and not wholly without basis in fact or law; (iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of to the Property caused by Borrower the intentional acts or intentional omissions of any Borrower Affiliate, or any intentional wrongful Party and/or the removal or destruction disposal of a material any portion of the Property or damage to a material portion after an Event of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
Default; (v) the commission of any criminal act misapplication, misappropriation or conversion by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Party of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or destruction to the Property (or any Borrower Affiliate or portion thereof), (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, (C) any Rents, (D) any Tenant security deposits or Rents collected in {12282340:5} 115 advance or (E) any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of other monetary collateral for the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, any amounts deposited in the Accounts and/or any portion thereof disbursed to (or at the direction of) Borrower); (vi) failure to pay Taxes, charges for labor and materials) or materials or other charges that can create Liens liens on any portion of the PropertyProperty (except, regardless in the case of whether arising by operation of lawTaxes, to the extent cash flow that (x) the revenue from the Property is insufficient to pay such amounts or (y) amounts sufficient to make pay such payments Taxes have been deposited with Lender hereunder or with Senior Lender under the Senior Loan Agreement and, during a Trigger Periodin either case, funds are made available to Borrower allocated for the payment of such charges;
Taxes, and Lender or Senior Lender, as applicable, does not apply the same in payment thereof in violation of the Senior Loan Agreement); (ixvii) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges Insurance Premiums (except to the extent cash flow that (x) the revenue from the Property is insufficient to pay such amounts or (y) amounts sufficient to make pay such payments and all other payments required of Borrower Insurance Premiums have been deposited with Lender hereunder or with Senior Lender under the Senior Loan Agreement and, during a Trigger Periodin either case, funds are made available to Borrower to make allocated for the payment of such payments; 120
(x) Insurance Premiums, and Lender or Senior Lender, as applicable, does not apply the voluntary incurrence by Borrower of any Indebtedness for borrowed money same in payment thereof in violation of the provisions Senior Loan Agreement, to maintain the Policies in full force and effect and/or to provide Lender evidence of this Agreement or any other Loan Document the same, in each case, as expressly provided herein; (other than Permitted Encumbrances);
(xiviii) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by which are not delivered to Lender under or Senior Lender in accordance with the Senior Loan Documents, unless previously applied (as applicable, except to the extent that any such security deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because terms and conditions of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination any of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented Leases prior to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything the Event of Default or a Senior Loan Event of Default that gave rise to the contrary in this Agreement requirement that such deposits be delivered; (ix) any tax on the making and/or recording of the Security Instrument, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) Documents or the Senior Loan Documents or any other provisions transfer or similar taxes (whether due upon the making of the Bankruptcy Code to file a claim for the full amount same or upon Lender’s exercise of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with its remedies under the Loan Documents), and but excluding any income, franchise or other similar taxes; (Bx) the Obligations shall be fully recourse to Borrower in the event that any forfeiture or seizure of the following occur Property (each, or any portion thereof and/or interest therein) resulting from a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency violation or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency applicable law; (iiixi) Borrower files an application for any violation or breach of any representation, warranty or covenant contained in Sections 3.24 or 4.23 hereof or Exhibit C attached hereto; (xii) any violation or breach of any representation, warranty or covenant contained in Article 6 hereof other than the appointment occurrence of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.Prohibited Transfer;
Appears in 1 contract
Sources: Junior Loan Agreement (Silver Star Properties Reit, Inc)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of any Borrower or its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the "Borrower Parties") or any other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty Borrower Parties or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Person, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to this Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents. The provisions of this Section 10.1 paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Lender to name any of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower Leases and Rents executed 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 Propertyconnection herewith; or (hvi) constitute a waiver of the right of Lender to enforce the liability and obligation of BorrowerBorrowers (but not against any members of Borrowers (other than Guarantor) or their direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by any Borrower or any Borrower Affiliate Guarantor in connection with the Loan;
(iib) intentional physical waste of the Property (including, but not limited to, waste due to gross negligence) by any Borrower or any affiliate thereof; provided, however, such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by any Borrower or any affiliate thereof;
(c) the material breach by Borrower of any representation, warranty, covenant or indemnification provision in the that certain Environmental Indemnityand Hazardous Substance Indemnification Agreement of even date herewith given by Borrowers to Lender or in this Agreement concerning Environmental Laws, Hazardous Substances and Asbestos;
(iiid) the intentional misappropriation removal or disposal by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or affiliate thereof of any intentional wrongful removal or destruction of a material portion of the Property or damage to a material after an Event of Default, unless such portion of the Property caused is replaced by willful misconduct an item of equal or gross negligence of greater value as determined by Lender in its reasonable discretion;
(e) the misapplication or conversion by any Borrower or any Borrower Affiliate;
affiliate thereof of (vi) the commission any insurance proceeds paid by reason of any criminal act by Borrower loss, damage or any Borrower Affiliate which results in the forfeiture of destruction to the Property;
, (vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Aii) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property actually received by Borrower or Property, (iii) any Borrower Affiliate;
(vii) after the occurrence and during the continuance of Rents following an Event of Default, the intentional misappropriation by Borrower Default or any Borrower Affiliate of (iv) any Rents paid more than one month in violation advance; 84
(f) failure to pay charges for labor or materials or taxes or other charges that can create liens superior to the lien of the Loan Documents;
(viii) all or Mortgage on any material portion of the Property unless such taxes or other charges are being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) contested in violation of the Loan Documents, accordance herewith or Borrower’s failure such charges have been delivered to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments Lender in accordance with Section 3.3; and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ixg) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence security deposits collected by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement Borrowers or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected affiliate thereof with respect to the Property which are not delivered to Lender upon a foreclosure by Lender under of the Loan DocumentsProperty or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach conditions of any of the certifications set forth in Leases prior to the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation occurrence of the assets and liabilities Event of Borrower with any other Person Default that gave rise to such foreclosure or action in connection with lieu thereof.
(1) a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law receiver (other than on motion or pleading seeking a substantive consolidation brought or actively supported receiver appointed by Lender); (ii) , liquidator or trustee of any Borrower or Guarantor shall be appointed which is not dismissed within ninety (90) days, or (2) if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by any Borrower Affiliateor Guarantor, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii3) Borrower files an application for the appointment of a receiver, trustee or examiner for if Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower Guarantor files an answer consenting to, or otherwise joining in, any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law filed against it by any other Person under the Bankruptcy Code Person, or is found pursuant to a final, unappealable order of a court of competent jurisdiction to have solicited or caused to be solicited creditors to file any involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any other Federal similar federal or state bankruptcy law against any Borrower or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admitsGuarantor, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii4) there is if any Borrower or Guarantor are found, pursuant to a voluntary Transfer final unappealable order of all a court of competent jurisdiction, to have been in collusion with creditors that initiate a bankruptcy action or any material portion of the Property proceeding against a Borrower or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsGuarantor.
Appears in 1 contract
Exculpation. Subject to the qualifications below(a) The Agent shall have no duties or responsibilities, Lender implied by application of law or otherwise, except those expressly set out in this Agreement. The Agent shall not enforce the liability and obligation of Borrower be required to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage make any decision or the other Loan Documents by take any action which may expose it to personal liability or proceeding wherein a money judgment which, in its sole discretion, may be contrary to this Agreement or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or Applicable Law. As between the Agent and each of the Lenders, neither the Agent nor any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principalsofficers, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, employees or Affiliates of agents shall be liable for any of the foregoing (collectively, but specifically excluding Guarantor action taken or omitted to the extent of Guarantor’s liability be taken under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under Documents or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease caused by their fraudulent conduct or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Defaultwilful misconduct. Notwithstanding anything to the contrary Nothing in this Agreement or any of the other Loan Documents, (A) Lender expressed or implied, is intended to, or shall be construed in any way so as to, impose upon the Agent any obligation except as expressly set out in this Agreement or the Loan Documents. Without limiting the generality of the foregoing, the Agent shall not be deemed to have waived responsible for any right calculation, recitals, statements, representations or warranties made by the Borrower or any Guarantor in the Loan Documents or which Lender may have under Section 506(a)be contained in any Loan Document subsequently entered into by the Agent or in any verbal or written information provided by the Borrower, 506(b), 1111(b) any Guarantor or any other provisions Subsidiary thereof for the benefit of the Bankruptcy Code to file a claim Lenders or for the full amount authorization, execution, effectiveness, genuineness, validity or enforceability of the Obligations Loan Documents or any other instruments and agreements referred to require therein and shall not be required to make any inquiry or investigation concerning the performance, compliance or observance of any of the terms, provisions or conditions of the Loan Documents or any other instruments or agreements referred to therein or arising therefrom.
(b) Each of the Lenders severally represents and warrants to the Agent that all collateral it has made and shall continue to secure all make such independent investigation of the Obligations owing financial condition and affairs of the Borrower and the Guarantors as such Lender deems for itself to be appropriate in connection with any of the Loan Documents and the making and continuance of Advances under the Credit Facilities, that such Lender has and shall continue to make its own appraisal of the creditworthiness of the Borrower and the Guarantors and that such Lender in connection with such investigation and appraisal has not relied upon any information provided to such Lender by the Agent, including any legal advice provided to the Agent by its counsel. The Agent may at any time request instructions or directions from the Lenders with respect to any actions or approvals which, by the terms of this Agreement, the Agent is permitted or required to take or to grant, and the Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Lender for refraining from taking any action or withholding any approval under the Loan Documents until it has received such written instructions or directions from the Lenders. No Lender shall have any right of action or recourse whatsoever against the Agent as a result of the Agent acting or refraining from acting under any of the Loan Documents in accordance with instructions or directions received from the Lenders. The Lenders have reviewed the consequences of entering into and performing obligations and receiving amounts under this Agreement, including the Canadian income tax consequences in respect thereof, and are not relying on any information provided by the Agent, including any legal or tax advice provided to the Agent by its counsel.
(c) The Agent may consult with its own legal counsel, Borrower's Counsel, independent public accountants and other experts and advisors selected by it and shall not be liable for any action taken or omitted to be taken in good faith in accordance with the Loan Documentsadvice of such counsel, accountants, experts or advisors.
(d) The Agent does not make any warranty or representation to any Lender and is not responsible to any Lender for the accuracy or completeness of any information or data made available to the Lender in connection with the syndication of the Credit Facilities, or for any statements, warranties or representations (Bwhether written or oral) the Obligations shall be fully recourse to Borrower made in the event that or in connection with any of the following occur (each, a “Springing Recourse Event”): (i) a breach of Loan Documents. The Agent shall have no duty to ascertain or to enquire as to the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency performance or adequacy of capital) or a breach observation of any of the certifications set forth in the “Recycled Entity Certificate”terms, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code covenants or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation conditions of the Loan Documents, where applicable. The Agent shall not be responsible to any Lender for the due execution, legality, validity, enforcement, genuineness, sufficiency or value of any of the Loan Documents and shall not have any duty to procure funds for any payment required hereunder, including, without limitation, by charging any account of the Borrower maintained with the Agent for any amount due to the Lenders hereunder.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor with respect to its obligations set forth in the Guaranty and the Environmental Indemnity) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageSecurity Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the enforcement right of the Environmental IndemnityLender to enforce Section 4.12(e) of this Agreement; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h) 8) 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 reasonably Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation or any failure to disclose a material fact by Borrower Borrower, any SPE Component Entity, Guarantor, or any Borrower Affiliate Party in connection with the Loan, to the extent such fact is known by Borrower, any SPE Component Entity, Guarantor or any Borrower Party;
(ii) the breach gross negligence or willful misconduct of Borrower, any SPE Component Entity, Guarantor, or any Borrower Party or the commission of a criminal act by Borrower, any SPE Component Entity, Guarantor or any Borrower Party which results in any seizure or forfeiture of the Property, or any representationportion thereof, warranty, covenant or indemnification provision in the Environmental IndemnityBorrower’s interest therein;
(iii) material physical waste to the Property caused by the intentional misappropriation by Borrower acts or intentional omissions of Borrower, any Reserve Funds disbursed to BorrowerSPE Component Entity, Guarantor, or any intentional failure to deposit rents into 104 Borrower Party (including, without limitation, any arson or abandonment of the Clearing Account to Property) and/or the extent in removal or disposal of any portion of the control Property after an Event of Default by Borrower, unless such rents are otherwise delivered any SPE Component Entity, Guarantor or any Borrower Party, provided it shall not be considered waste if Borrower fails to Lendermaintain the Property due solely to insufficient revenue from the Property;
(iv) any intentional (other thanthe misapplication, in each case, as part of misappropriation or to facilitate any alteration that is permitted hereunder) material physical waste of the Property conversion by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or any Borrower Affiliate or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, (C) any Rents upon and during a continuing Event of Default or (D) any Borrower AffiliateTenant security deposits or Rents collected in advance;
(viiv) after the occurrence and during the continuance of an Event of Defaultfailure to pay any Taxes or Other Charges, the intentional misappropriation by Borrower charges for labor or materials or any Borrower Affiliate of other charges that can create liens on any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow that the revenue from the Property is sufficient to make pay such payments and, during a Trigger Period, amounts (other than (x) amounts deposited with Lender as Tax Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds are made available to Borrower for toward payment of such chargesTaxes or Other Charges owed, (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents or (z) Taxes or Other Charges that first arise and accrue from and after the date that Lender acquires title to the Property, whether by foreclosure, deed-in-lieu of foreclosure or other comparable conversion of the Security Instrument following an Event of Default);
(vi) failure to maintain insurance as required by this Agreement to the extent that the revenue from the Property is sufficient to pay the Insurance Premiums relating thereto (other than the failure to pay amounts deposited with Lender as Insurance Reserve Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of such Insurance Premiums), provided Borrower shall not be liable for premiums that first arise and accrue from and after the date that Lender acquires title to the Property, whether by foreclosure, deed-in-lieu of foreclosure or other comparable conversion of the Security Instrument following an Event of Default;
(vii) the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity, this Agreement or in the Security Instrument concerning Environmental Laws and Hazardous Substances;
(viii) any fees or commissions paid by Borrower after the occurrence of any Event of Default to Guarantor and/or any Affiliate of Borrower and/or Guarantor in violation of the terms of the Note, this Agreement, the Security Instrument or the other Loan Documents;
(ix) Borrower’s breach of, or failure to pay Taxes or transfer taxescomply with, maintain required Policiesthe representations, pay insurance premiums for such Policieswarranties and covenants contained in Article 15 of this Agreement and/or the provisions of Sections 11.2, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments 12.2 and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments12.3 hereof; 120105
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money representation, warranty or covenant contained in violation of the provisions of this Agreement Article 5 hereof is violated or any other Loan Document (other than Permitted Encumbrances);breached; and/or
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits litigation or any other deposits collected with respect legal proceeding related to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure Debt filed by Borrower, any SPE Component Entity, Guarantor or any Borrower Affiliate and/or Party in bad faith or frivolously that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any other owner of the Upper Option Space and/or the Lower Option Space (rights and remedies available to Lender as defined provided herein and in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space DefaultLoan Documents. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a any representation, warranty or covenant contained in Article 5 hereof is violated or breached, provided, however, that any such breach or violation with respect to Article 5 shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from any source whatsoever, Borrower fails to cure such breach and then only to the covenants set forth in Schedule V hereof (other than those single purpose entity covenants extent that relate to solvency or adequacy of capital) or a such breach of any of the certifications set forth results in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with as a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender)result of such breach; (ii) if any Sale or Pledge occurs that is not a Permitted Transfer; (iii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or SPE Component Entity files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (iiiiv) Borrower files unless sought by Lender, an application for the appointment of a receiverAffiliate, trustee officer, director, or examiner for representative which Controls, directly or indirectly, Borrower or any portion of the PropertySPE Component Entity files, except at the request of or with the consent of Lender, (iv) joins in the filing of of, an involuntary petition against Borrower or any SPE Component Entity under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by or any SPE Component Entity from any Person; (v) unless sought by Lender, Borrower or any SPE Component Entity files an answer consenting to, to or otherwise acquiescing in or joining in, in any involuntary petition filed against it it, by any other Person under the Bankruptcy Code or any other Federal Creditors Rights Laws, or state bankruptcy solicits or insolvency lawcauses to be solicited petitioning creditors for any involuntary petition from any Person; (vi) unless sought by Lender, any Affiliate, officer, director, or representative which Controls Borrower or any SPE Component Entity consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, any SPE Component Entity or any portion of the Property; (vii) unless sought by Lender, Borrower or any SPE Component Entity makes an assignment for the benefit of creditors or admits, in writing or admits in any legal proceeding, proceeding its insolvency or inability to pay its debts as they become due, which admission ; (viii) there is used as evidence substantive consolidation of Borrower’s insolvency Borrower or any SPE Component Entity (or any Restricted Party) with any other Person in connection with an involuntary petition under any federal or state bankruptcy proceeding involving the Bankruptcy Code Guarantor or any other Federal of its Affiliates; (ix) Borrower or any SPE Component Entity (or any Restricted Party) contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency law by proceeding involving the Guarantor or its Affiliates; (x) if following thirty (30) days written notice, Borrower fails to comply with the Cash Management Agreement relating to the establishment of a Person other than Lender Deposit Account or Cash Management Account until such accounts shall have been established; (except for xi) if Borrower shall have failed to satisfy the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Condemnation Requirements in 106 accordance with Section 2.7 hereof, in an amount equal to the then outstanding Allocated Loan Amount of the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Property (A) any admissions that Borrower believes in good faith are truthful when made after deducting the Net Proceeds payable and (B) any such admission paid to Lender relating to such Condemnation) until such time as the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Condemnation Requirements are satisfied or any servicer (xii) if Borrower shall have failed to satisfy the Lowe’s Casualty Requirements in accordance with Section 2.7 hereof, in an amount equal to the then outstanding Allocated Loan Amount of the Loan that Borrower cannot pay its operating expenses Lowe’s Property (including Debt Service payments due in respect of after deducting the LoanNet Proceeds payable and paid to Lender relating to such Casualty) or that Borrower cannot refinance until such time as the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsLowe’s Casualty Requirements are satisfied.
Appears in 1 contract
Sources: Loan Agreement
Exculpation. Subject to the qualifications below, (a) Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against (i) Borrower (except as set forth in this Section 10.1 and the Environmental Indemnity), (ii) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (iii) any Affiliate of Borrower, (iv) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (v) any legal representativesdirect or indirect limited partner, successors or assigns of Borrower or its member, principal, officer, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates director of any of the foregoing Persons described in clauses (i) through (v) above (collectively, but specifically excluding Guarantor subject to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided exceptions in connection with the Loanclauses (i) and (ii) above, the “Exculpated Borrower Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce the Loan Documents and realize upon its interest under on any collateral for the NoteLoan, this Agreementincluding without limitation, the Mortgage and the other Loan Documents, or interest in the Property, the Rents or and any other collateral given to Lender pursuant to created by or under the Loan DocumentsDocuments (including the Account Collateral); provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender for the Debt (including the Account Collateral). Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not sunot, except as otherwise provided in this Section 10.1, ▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party Borrower Parties in any such action or proceeding proceeding, under or by reason of or under or in connection with any of the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (aA) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bB) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage; (cC) affect the validity or enforceability of any guaranty or indemnity (including, without limitation, those contained in Article XI of this Agreement and the Loan Documents, the Guaranty or any other guaranty Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderDocuments; (dD) impair the right of Lender to obtain the appointment of a receiverreceiver for the Property; (eE) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; (f) impair the enforcement of the Environmental Indemnity; (gF) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to the extent required 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 (hG) 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 actual Losses incurred or other obligation reasonably incurred suffered by Lender (including out-of-pocket reasonable attorneys’ fees and costs expenses reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, fraud or intentional or willful misconduct or material intentional misrepresentation by any of the Borrower or any Borrower Affiliate Parties in connection with the Loan (including during the term of the Loan);
(ii) the gross negligence or willful misconduct of any of the Borrower Parties related to the Loan and/or the Property (including during the term of the Loan);
(iii) the breach by Borrower or Guarantor of any representation, warranty, covenant or indemnification provision set forth in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) actual material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or the gross negligence or intentional acts or omissions of any of the Borrower Parties when there is sufficient cash flow from the operation of the Property to avoid such waste from occurring, provided that any such insufficiency is not related to the misappropriation or any Borrower Affiliatemisapplication of such cash flow by Borrower;
(v) the commission misappropriation, conversion or willful misapplication by or on behalf of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture violation of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Loan Documents of (A) any Insurance Proceeds actually Rents received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, (B) tenant security deposits (including the intentional misappropriation proceeds from any letters of credit held in lieu of such security deposits) (including the failure to deliver to Lender tenant security deposits upon foreclosure of the Mortgage or deed in lieu thereof, to the extent not applied in accordance with the applicable Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or deed in lieu thereof), (C) Rents collected more than one (1) month in advance, (D) Insurance Proceeds paid by reason of any Casualty or Condemnation Proceeds received in connection with a Taking; or (E) any Account Collateral and/or any portion thereof disbursed to (or on behalf of or at the direction of) Borrower in violation of this Agreement;
(vi) Borrower’s failure during the continuance of any Event of Default to (A) deliver to Lender upon written demand all Rents (to the extent actually received by Borrower or Manager and not actually paid into the Sub-Account) and all books and records relating to the Property or (B) comply with all written notices and instructions of Lender in connection with the termination of the Manager delivered pursuant to the terms of the Manager Subordination or this Agreement;
(vii) the Borrower’s failure to pay Insurance Premiums and/or Impositions, provided that there shall be no liability hereunder to the extent that (A) sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms of this Agreement and Borrower has not made a claim against such escrowed amounts or otherwise taken action to restrict Lender from applying such sums for the purpose of paying such items or (B) there is insufficient cash flow from the operation of the Property to pay such items, provided that any such insufficiency is not related to the misappropriation or misapplication of such cash flow by Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materialsor materials or other charges (other than Impositions) that create Liens on any portion of the Property, regardless unless such charges are the subject of whether arising a bona fide dispute in which Borrower is contesting the amount or validity thereof in accordance with the terms of Section 6.1(c) of this Agreement and Borrower has either (A) provided to Lender sufficient security to pay for such labor or materials as required by operation Section 6.1(c) and Lender’s access to such security is not restricted by applicable Legal Requirements, the actions of law, to Borrower or otherwise (except where such restriction is solely the extent cash flow from result of Lender’s willful misconduct) or (B) bonded any such Lien filed against the Property in accordance with all applicable Legal Requirements, and such bond is sufficient effective to make remove such payments and, during a Trigger Period, funds are made available to Borrower for payment of such chargesLien as an encumbrance on the Property under applicable Legal Requirements;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay an intentional breach by Borrower of any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120covenant set forth in Section 2.6 hereof;
(x) the voluntary incurrence breach by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrancesits indemnification obligations under Section 11.25(e);
(xi) if Borrower fails to comply with the SPE Covenants or maintain its status as a Single-Purpose Entity;
(xii) Borrower’s assertion or raising of any defense to a proceeding instituted by Lender (whether judicial or otherwise) for the foreclosure of the Mortgage during the continuance of an Event of Default caused by Borrower’s failure to timely pay any Monthly Debt Service Payments or the Debt due on the Maturity Date, which defense is determined by a court of competent jurisdiction to be brought in bad faith;
(xiii) if Borrower fails to deliver obtain Lender’s prior written consent to the extent required by any of the Loan Documents to any unsecured Indebtedness other than Permitted Encumbrances;
(xiv) Borrower incurs any Indebtedness other than the Debt, Permitted Trade Payables and Permitted Equipment Leases without the prior written consent of Lender unless expressly permitted in this Agreement or consented to by Lender in writing; and
(xv) the occurrence of a Prohibited Transfer (to the extent not addressed by clause (iii), (iv) or (v) of Section 10.1(b) below) in violation of the terms and conditions of Section 3.1 hereof and not a Permitted Transfer; provided if such Transfer that is not a Permitted Transfer arises solely from a failure to provide any required notice or information pursuant to Section 3.2 hereof, no recourse liability shall arise hereunder if Borrower promptly provides such notice and/or information after Borrower obtains knowledge (or notice from Lender, if earlier) of such failure and any such information confirms that (A) the applicable transferee is able to make the representations contained herein relating to ERISA matters (or such other representations as may be applicable to the subject Person but which continue to provide assurances to Lender that the Loan does not violate ERISA), the Prescribed Laws, OFAC and Patriot Act and (B) each of the other requirements of Section 3.2 hereof are satisfied.
(b) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower in the event (i) if Borrower fails to comply with the SPE Covenants and such failure is cited as a material factor in a court’s decision that results in a substantive consolidation (other than a substantive consolidation petitioned for or joined in by Lender) of the Borrower with any security depositsother Person in a proceeding under any Creditors’ Rights Laws or Borrower fails to maintain its status as a Single-Purpose Entity, advance deposits (ii) if Borrower fails to obtain Lender’s prior written consent as required by any of the Loan Documents to any voluntary Lien (which, for the avoidance of doubt, shall not include trade payables, ad valorem tax liens, and inchoate mechanics’ liens) encumbering the Property, (iii) Borrower conveys its ground leasehold interest in and to all or any other deposits collected with respect to part of any Property in violation of the Property upon Loan Documents without the prior written consent of Lender, (iv) of any Prohibited Transfer that results in a foreclosure change in Control of Borrower and that is not otherwise a Permitted Transfer, approved in advance by Lender or otherwise permitted under the Loan Documents, unless previously applied (except to v) Borrower grants any mortgage or deed of trust encumbering the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, Property in violation of the terms Loan Documents without the prior written consent of this AgreementLender, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (ivi) the failure Property or any part thereof shall become an asset in a bankruptcy or insolvency proceeding initiated by Borrower, (vii) Borrower, Guarantor or any Affiliate, officer, director, or representative which Controls, directly or indirectly, Borrower Affiliate and/or or Guarantor files, or joins in the filing of, an involuntary petition against Borrower under any Creditors Rights Laws, or solicits or causes to be solicited petitioning creditors for the filing of any involuntary petition against Borrower from any Person under any Creditors Rights Laws; (viii) Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) Person (other than Lender or any Affiliate of Lender) under any Creditors Rights Laws, or solicits or causes to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of be solicited petitioning creditors for any rights involuntary petition from any Person; provided that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender Borrower shall not be deemed to have waived acquiesced to such petition solely as a result of such Borrower’s truthful response to any allegation; or (ix) any Affiliate, officer, director, or representative which Controls Borrower consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Property (unless the same is requested and/or required by Lender). Nothing herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan DocumentsDocuments The provisions of, and obligations of Borrower under, this Article X survive the expiration and termination of this Agreement and the repayment of the Debt until the date which is the date on which the Debt has been indefeasibly paid and satisfied in full; provided, however, that (a) Borrower’s liability hereunder shall survive such termination with respect to any and all obligations related to Losses incurred or suffered by Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising from acts, events or circumstances which occurred prior to such date, and (Bb) the Obligations shall be fully recourse to Borrower in the event that if any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach payment by of any of the certifications Debt received by Lender is held to constitute a preference under the bankruptcy laws, or if for any other reason Lender is required to refund such payment or pay the amount thereof to any other party, this Article X shall be reinstated and thereafter survive until the amount of such returned or refunded payment has been indefeasibly paid to Lender and satisfied in full; and provided, further that the foregoing shall not affect Borrower’s or Guarantor’s liability under the Environmental Indemnity on the terms set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentstherein.
Appears in 1 contract
Exculpation. Subject Neither of the Collateral Agents nor any of their employees, agents or attorneys shall be liable for any action taken or omitted to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained be taken hereunder in the Note, connection with this Agreement, the Mortgage Security Agreements, the Notes or the Warrants unless caused by his, her, its or their willful misconduct. Each Collateral Agent shall be entitled to rely upon advice of counsel with respect to legal matters, the advice of independent public accountants with respect to accounting matters and the advice of other Loan Documents by experts with respect to matters which the Collateral Agent reasonably believes to be within such person’s professional or expert competence, and upon schedules, certificates, statements, reports, notices or other writings which the Collateral Agent reasonably believes to be genuine or to have been properly presented. Neither of the Collateral Agents nor any action of the Collateral Agents’ employees or proceeding wherein a money judgment agents shall (a) be responsible for any recitals, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability, of this Agreement, the Security Agreements, or any deficiency judgment other instrument or other judgment establishing personal liability shall document delivered in connection with the Loans; (b) be sought against Borrower responsible for the validity, genuineness, effectiveness, existence or value of any Affiliate of Borrower Collateral; (c) be under any duty to inquire into or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of pass upon any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documentsmatters, or in to make any inquiry concerning the Property, the Rents performance by Datakey of its obligations; or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment (d) in any such event, be liable for any action taken or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest omitted by him or them in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek his or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documentstheir role as Collateral Agents. The provisions of this Section 10.1 agency hereby created shall not, however, (a) constitute a waiver, release in no way impair or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or alter any of the rights and remedies of Lender thereunder; (d) impair powers of, or impose any duties or obligations upon, the right of Lender to obtain Collateral Agents in their individual capacity as Lenders. Each Collateral Agent shall have the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 same rights and powers hereunder as any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documentshis individual capacity as Lender, and (B) may exercise or refrain from exercising the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, same as though he were not a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan DocumentsCollateral Agent.
Appears in 1 contract
Exculpation. Subject to (a) Except as otherwise provided herein or in the qualifications belowother Loan Documents, Lender shall not enforce the liability and obligation of Borrower or Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against (a) Borrower (except as set forth in this Section 15.1), (b) any Affiliate of Borrower (other than Borrower Principal to the extent provided in this Section 15.1 as evidenced by the Guaranty), (c) any Person (other than Borrower Principal to the extent provided in this Section 15.1 as evidenced by the Guaranty) owning, directly or indirectly, any legal or beneficial interest in Borrower, Borrower Principal or any Affiliate of Borrower or any legal representatives, successors or assigns of (d) other than Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor Principal to the extent of Guarantor’s liability under provided in this Section 15.1 as evidenced by the Guaranty, any Alteration Deficiency Guaranty direct or indirect limited partner, member, principal, officer, Controlling Person, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate or director of any other guaranty provided Persons described in connection with the Loanparagraphs (a) through (c) above (collectively, the “Exculpated Parties”), except that Lender Lender, may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Lender pursuant to created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and . Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not sunot, except as otherwise provided in this Section 15.1, ▇▇▇ ▇orfor, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage; (ciii) affect the validity or enforceability of any indemnity (including, without limitation, those contained in the Environmental Indemnity, Section 13.5 and Article 14 of the Loan Documentsthis Agreement), guaranty, (including, without limitation, the Guaranty Guaranty) master lease or any other guaranty similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Lender thereunderDocuments; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leases; (f) impair leases provisions contained in the enforcement of the Environmental Indemnity; (g) 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 PropertyMortgage; or (hvi) constitute a waiver of impair the right of Lender to enforce the liability and obligation of Borrower, by money obtain a deficiency judgment or otherwiseother judgment on the Note against Borrower or Borrower Principal if necessary to obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such judgment to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation reasonably incurred by Borrower and Borrower Principal shall be personally liable to Lender (including out-of-pocket attorneys’ fees on a joint and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower several basis for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):Losses due to:
(i) fraudulent actsintentional physical waste committed by Borrower or Borrower Principal (or any Affiliate of either of them) with respect to the Property (excluding a failure to repair or replace where there is insufficient Net Operating Income to pay for such repair or replacement, willful misconduct after the payment of approved Operating Expenses and the Monthly Payment Amount, and Borrower is not restricted by Lender in the use of such cash flow from making such payments);
(ii) fraud or material intentional misrepresentation by Borrower or Borrower Principal (or any Borrower Affiliate of either of them) in connection with or in any way relating to the Loan;
(iiiii) if Borrower or Borrower Principal (or any Affiliate of either of them) contests, disputes, challenges, obstructs, hinders, delays, impedes, frustrates or otherwise interferes with the breach exercise by Borrower Lender of any representationor all of its respective rights or remedies under the Loan Documents following an Event of Default which the court in such action determines is without merit or unwarranted or asserts or raises any defense in connection therewith or objection thereto (with the intent to challenge, warrantyobstruct, covenant hinder, delay, impede, frustrate or indemnification provision in otherwise interfere with the Environmental Indemnity;
(iii) the intentional misappropriation exercise by Borrower Lender of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into all of its respective rights or remedies under the Clearing Account to Loan Documents) which the extent court in the control of Borrower, unless such rents are otherwise delivered to Lenderaction determines is without merit or unwarranted;
(iv) any intentional (other thanthe misappropriation or conversion by or on behalf of Borrower, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste violation of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion terms of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Loan Documents, of (A) any Insurance Proceeds actually received by Borrower or reason of any Borrower Affiliate or Casualty to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower Property, or (C) any Borrower Affiliate;
(vii) after revenues or other funds following the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;.
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ixv) Borrower’s failure to pay Taxes when due all Taxes, charges for labor or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, materials or pay Other Charges that can create liens on any Condominium Charges portion of the Property in accordance with the terms and provisions of the Loan Documents (but only to the extent the Property is generating sufficient Net Operating Income to pay such items, after the payment of approved Operating Expenses and the Monthly Payment Amount, and Borrower is not restricted by Lender in the use of such cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make making such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xivi) the Borrower’s failure by Borrower to deliver pay when due Insurance Premiums and/or to provide Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination evidence of the Condominium or the removal of any Unit from the Condominiumsame, in each case, as expressly provided in the Loan Documents (but only to the extent the Property is generating sufficient Net Operating Income to pay such items, after the payment of approved Operating Expenses and the Monthly Payment Amount, and Borrower is not restricted by Lender in the use of such cash flow from making such payments);
(vii) a breach of any of the covenants set forth in Article 6 hereof (other than immaterial violations thereof and other than those contained in Section 6.1(a)(xv), (xviii), (xx) or (xxii) hereof); and
(viii) if Borrower or Borrower Principal (or any Affiliate of either of them) allows, permits or causes any Prohibited Transfer (other than those Prohibited Transfers for which a cure period is provided for in the Loan Documents and such Prohibited Transfer is in fact cured within the applicable cure period), but only if such Prohibited Transfer relates to (1) a Sale or Pledge of any direct or indirect interests in Borrower or the Property in violation of the terms of the Loan Documents (it being understood and agreed that (x) any failure to meet any notice requirement necessary for a Transfer to constitute a Permitted Transfer, and (y) an assignment in lieu or similar transaction with Mezzanine Lender, shall not, in either case, in and of itself give rise to recourse to Borrower pursuant to the terms of this AgreementSection 15.1(b)) or (2) any subordinate financing or other voluntary Lien encumbering the Property, which was voted excluding, for or consented to or approved by Borrower the sake of clarity (or the members but without limitation), any transfers of the Condominium Board appointed by Borrower); and/orPersonal Property, any tax liens, mechanic’s liens, materialmen’s liens and/or judgment liens.
(xiiic) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower and Borrower Principal on a joint and several basis in the event (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space files a voluntary bankruptcy or insolvency proceeding or (as defined in the Original Bloomberg Leaseii) Borrower or Borrower Principal (other than Lender or any Affiliate of Lendereither of them) consents to, acts in concert with, colludes or conspires with any person or party to comply with cause the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result commencement of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law involuntary bankruptcy or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation insolvency proceeding with respect to the Upper Option Space and/or the Lower Option Space after the occurrence Borrower or if such proceeding shall have been commenced against Borrower by an Affiliate of an Expansion Space Default. Notwithstanding anything to the contrary Borrower or Borrower Principal, whether entirely or in this Agreement or any of the other Loan Documents, part;
(Ad) Lender Nothing herein shall not be deemed to have waived be a waiver of any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Obligations indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the Obligations indebtedness owing to Lender in accordance with this Agreement, the Loan DocumentsNote, and (B) the Obligations shall be fully recourse to Borrower in Mortgage or the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Exculpation. Subject to (a) Except as otherwise provided herein or in the qualifications belowother Loan Documents, Lender shall not enforce the liability liabilities and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage obligations arising hereunder or under the other Loan Documents, or otherwise arising in connection with the Loan or Loan Documents by any action or proceeding the enforcement thereof, wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against (1) Borrower or any Affiliate of Borrower or any legal representatives(except as set forth in this Section 10.1 and the Environmental Indemnity), successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding 2) Guarantor to the extent of Guarantor’s liability under (except as set forth in the Guaranty, any Alteration Deficiency Guaranty or the Environmental Indemnity and any other guaranty provided in connection with the Loan), (3) any Affiliate of Borrower (other than ALX to the extent of ALX’s obligations and liabilities under the ALX Letter of Credit Agreement), (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower, Guarantor or any Affiliate of Borrower or Guarantor (other than ALX to the extent of ALX’s obligations and liabilities under the ALX Letter of Credit Agreement) or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate or director of any Persons described in clauses (1) through (5) above (other than ALX to the extent of ALX’s obligations and liabilities under the ALX Letter of Credit Agreement) (collectively, subject to the exceptions in clauses (1) through (5) above, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Lender pursuant to this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, that except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral for the Loan given to Lender, and . Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not su▇ ▇ornot, except as otherwise provided in this Section 10.1, sue for, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage; (ciii) affect the validity or enforceability of any of indemnity (including the Loan DocumentsEnvironmental Indemnity), the Guaranty guaranty, master lease or any other guaranty similar instrument (if any) made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Lender thereunderDocuments; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (f) impair the enforcement of the Environmental Indemnity; (gvi) 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 , including without limitation, any Insurance Proceeds and/or Awards.
(hb) constitute a waiver Notwithstanding the provisions of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, Section 10.1(a) to the extent of any losscontrary, damage, cost, expense, liability, claim or other obligation reasonably incurred by Borrower shall be personally liable to Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) for Losses arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent actsintentional physical waste or arson to the Property committed by Borrower or Guarantor or any Affiliate of Borrower or Guarantor;
(ii) fraud, willful misconduct or material intentional misrepresentation by Borrower or Guarantor or any Affiliate of Borrower Affiliate or Guarantor in connection with the making of the Loan by ▇▇▇▇▇▇ or during the term of the Loan;
(iiiii) the breach any litigation or other legal proceeding initiated by Borrower or any Affiliate of Borrower in bad faith that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any representation, warranty, covenant or indemnification provision rights and remedies available to Lender as provided herein and in the Environmental Indemnityother Loan Documents during the continuance of an Event of Default;
(iiiA) the misappropriation or intentional misappropriation misapplication of funds by or on behalf of ▇▇▇▇▇▇▇▇, in violation of the terms of the Loan Documents, including (1) any Insurance Proceeds received by Borrower by reason of any loss, damage or destruction to the Property (it being agreed that Borrower shall not be deemed to have misapplied such proceeds unless the same are received by Borrower and not paid to Lender in a circumstance in which Lender is expressly entitled to receive the same pursuant to the terms of the Loan Documents to be applied toward payment of the Loan), (2) any Awards received by Borrower in connection with the condemnation of all or a portion of the Property (it being agreed that Borrower shall not be deemed to have misapplied such proceeds unless the same are received by Borrower and not paid to Lender in a circumstance in which Lender is expressly entitled to receive the same pursuant to the terms of the Loan Documents to be applied toward payment of the Loan), (3) any Rents or other revenues received by Borrower following the occurrence and during the continuation of an Event of Default (including Lease Sweep Lease Termination Payments and Lease Termination Payments) or (4) any Reserve Funds disbursed to Borrower, Borrower or any (B) the intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under of the Loan DocumentsProperty except to the extent the same were applied or returned to the tenant or other party in accordance with the applicable Lease or other agreement relating to such deposit;
(vi) Borrower’s failure to pay Taxes or transfer taxes, unless previously applied Condominium Charges, Other Charges, charges for labor or materials or other charges that can create liens on the Property beyond any applicable notice and cure periods specified herein (in each case, except to the extent that (A) sums sufficient to pay such deposits were applied amounts have been deposited in accordance escrow with Lender pursuant to the applicable lease terms hereof or other governing document or Borrower did not have (B) there is insufficient cash flow from the legal right, because operation of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such depositsthe Property);
(vii) any failure to pay or maintain the Policies or pay the amount of any deductible required thereunder following a Casualty or other insurance claim, except to the extent that (A) such Policies are not commercially available, (B) sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof or (C) there is insufficient cash flow from the operation of the Property;
(viii) Borrower’s failure to return or to reimburse Lender for Personal Property destroyed or damaged due to the willful misconduct or gross negligence of Borrower, Guarantor or any Affiliate of Borrower or Guarantor or wrongfully taken from the Property during the continuance of an Event of Default by or on behalf of Borrower, Guarantor or any Affiliate of Borrower or Guarantor and not replaced with Personal Property of at least the same utility (it being agreed that the removal and replacement of Personal Property in the ordinary course of maintenance and operation of the Property shall not be deemed to be wrongful removal);
(ix) the breach of any representation, warranty, covenant or indemnification obligation set forth in the Environmental Indemnity;
(x) any voluntary Indebtedness, voluntary Lien or voluntary Transfer, in each case, in violation of the Loan Documents that does not trigger full recourse under clause (d) below (for the avoidance of doubt, the entry into, or amendment of, a Lease of space in the Improvements to a Tenant shall not be a violation of this clause (x));
(xi) any failure of Borrower to comply with, and at all times have complied with, the requirements of a Special Purpose Bankruptcy Remote Entity that does not trigger full recourse under clause (d) below;
(xii) any opposition by Borrower or Sponsor to any motion filed by Lender for relief from the automatic stay in any bankruptcy proceeding of Borrower;
(xiii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower▇▇▇▇▇▇▇▇); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.;
Appears in 1 contract
Sources: Loan Agreement (Alexanders Inc)
Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or Borrower, any Affiliate of Borrower or its Affiliates and/or any legal representatives, successors or assigns of Borrower or its Affiliate or any their respective principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates any legal representatives, successors or assigns of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, or in the Propertyany Individual Property (or any portion thereof), the Rents Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, shall not su▇ ▇orsue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgageany Security Instrument; (c3) affect the validity or enforceability of any of the Loan Documentsindemnity, guaranty or similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty or any other guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Lender thereunderthereunder (including, without limitation, L▇▇▇▇▇’s right to enforce said rights and remedies against B▇▇▇▇▇▇▇ and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the rights of Lender to (A) obtain the appointment of a receiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (5) impair the enforcement of the assignment of leases and rents contained in the Security Instruments and in any other Loan Documents; (6) impair the right of Lender to obtain the appointment enforce Section 4.12(e) of a receiverthis Agreement; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g7) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the PropertyProperty (or any portion thereof); or (h) 8) 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 reasonably Loss incurred by Lender (including out-of-pocket reasonable attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by Borrower gross negligence or willful misconduct of any representationBorrower Party (including, warrantywithout limitation, covenant any litigation or indemnification provision other legal proceeding related to the Debt filed by any Borrower Party or any other action of any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the Environmental Indemnityother Loan Documents);
(iii) physical waste to any Individual Property (or any portion thereof) caused by the intentional misappropriation by Borrower acts or intentional omissions of any Reserve Funds disbursed to Borrower, Borrower Party and/or the removal or disposal by a Borrower Party or its Affiliates of any intentional failure to deposit rents into portion of any Individual Property during the Clearing Account to the extent in the control continuance of Borrower, unless such rents are otherwise delivered to Lenderan Event of Default;
(iv) any intentional (other thanthe misapplication, in each case, as part of misappropriation or to facilitate any alteration that is permitted hereunder) material physical waste of the Property conversion by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate Party of (A) any Insurance Proceeds actually received insurance proceeds paid by Borrower reason of any loss, damage or destruction to any Individual Property (or any Borrower Affiliate or portion thereof), (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of any Individual Property, (C) any Rents, (D) any Security Deposits or Rents collected in advance or (E) any other monetary collateral for the Property actually received by Borrower Loan (including, without limitation, any Reserve Funds and/or any portion thereof disbursed to (or any Borrower Affiliateat the direction of) Borrower);
(viiv) failure to pay Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property in accordance with the terms and provisions hereof; provided, however, Borrower shall have no liability under this subsection (v) if (A) such Taxes, charges for labor or materials or other charges that can create liens are being contested in accordance with the terms and conditions hereof or (B) sufficient cash flow is not available from the Properties to pay such amounts; provided, that, in no instance shall Borrower be released from any liability pursuant to this clause (v) to the extent (1) such insufficiency of cash flow arises from the intentional misappropriation or conversion of Rent by any Borrower Party or (2) Borrower incurred such charges after the occurrence and during the continuance of an Event of Default;
(vi) failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the same, in each case, as expressly provided herein; provided, however, Borrower shall have no liability under this subsection (vi) if sufficient cash flow is not available from the Properties to pay such amounts; provided, that, in no instance shall Borrower be released from any liability pursuant to this clause (vi) to the extent such insufficiency of cash flow arises from the intentional misappropriation or conversion of Rent by Borrower or any Borrower Affiliate of any Rents in violation of the Loan DocumentsParty;
(viiivii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., Security Deposits which are not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver delivered to Lender any security deposits, advance deposits or any other deposits collected with respect to within the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (timeframe required hereunder except to the extent that any such deposits Security Deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the applicable lease Event of Default. For purposes of clarification, for a Security Deposit to be deemed “delivered to Lender” in connection with the foregoing, the same must be in the form of cash or in a letter of credit solely in L▇▇▇▇▇’s name;
(viii) any violation or breach by any Borrower Party of any applicable law mandating the forfeiture or seizure of any Individual Property (or any portion thereof and/or interest therein);
(ix) the failure to make any REMIC Payment as and when required herein;
(x) any indemnity obligations of Lender to Bank under the Restricted Account Agreement;
(xi) Borrower fails to comply with the Cash Management Provision or fails to comply with any limitations on instructing the property manager, each as required by and in accordance with, as applicable, the terms and provisions of, this Agreement and the other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)Loan Documents;
(xii) the termination of the Condominium without limiting Section 13.1(b)(ii) below, any violation or the removal breach of any Unit from representation, warranty or covenants contained in Article 5;
(xiii) without limiting Section 13.1(b)(iii) below, any violation or breach of any representation, warranty or covenants contained in Article 6;
(xiv) any failure of Lender to be paid the Condominium, in each case, in violation Release Price for the Individual Property known as One Ally Center upon a total Condemnation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower)such Individual Property; and/or
(xiiixv) (i1) the failure any (A) material amendment or modification or (B) termination or cancellation of any Leased Fee Lease by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender each case without Lender’s consent, which consent is to be given or any Affiliate of Lender) to comply withheld in accordance with the terms of Section 36 of the Original Bloomberg Lease 4.14 hereof or (an “Expansion Space Default”), (ii2) the exercise any termination or cancellation of any rights that the Tenant under the Original Bloomberg Leased Fee Lease may have as due to a result of an Expansion Space Default default by Borrower thereunder.
(whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iiib) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents, and (B) the Obligations Debt shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): that: (i) a breach the first full monthly payment of principal and interest under the covenants set forth Note is not paid when due; (ii) any representation, warranty or covenant contained in Schedule V hereof (other than those single purpose entity covenants that relate to solvency Article 5 is violation or adequacy of capital) or a breach of any of the certifications set forth breached which results in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower or any SPE Component with any other Person Person; (iii) Borrower and/or any SPE Component Entity fails to obtain Lender’s prior written consent to any voluntary transfer of any material portion of any Individual Property or any voluntary act that causes a change (directly or indirectly) in connection with the ownership of any Borrower and/or any SPE Component Entity to the extent such ownership change required Lender’s consent under this Agreement; (iv) a Bankruptcy Event occurs; or (v) the Ground Lease is terminated, cancelled or otherwise ceases to exist or is rejected in a proceeding under the Bankruptcy Code or under federaland/or any Creditors Rights Laws (provided, state or foreign insolvency law however, that liability for breach of this clause (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); v) shall be limited to the Release Price of such Individual Property subject to the Ground Lease together with L▇▇▇▇▇’s fees, costs and expenses in connection therewith (iiincluding L▇▇▇▇▇’s reasonable attorneys’ fees and expenses) and (II) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition shall have no liability with respect to Borrower a rejection of the Ground Lease by a ground lessor in a proceeding of the ground lessor under the Bankruptcy Code or and/or any other Federal or state bankruptcy or insolvency law; Creditors Rights Laws to the extent that (iiix) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower retains its rights under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made such Ground Lease and (By) any Lender’s first priority lien in the leasehold estate created by such admission Ground Lease (subject only to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the LoanPermitted Encumbrances) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentsunimpaired.
Appears in 1 contract
Sources: Loan Agreement (Istar Inc.)
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents against Borrower or any of its officers, directors, employees, partners, members or shareholders ("Borrower's Constituents"), by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)sought, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest security interests under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the PropertyProperties, the Rents or any other collateral given by or on behalf of Borrower to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided hereinin this Section 10.1, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the PropertyProperties, in the Rents and in any other collateral given by or on behalf of Borrower to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, Lender agrees that it shall not su▇▇▇ ▇orfor, seek or demand any deficiency judgment against (i) Borrower, (ii) the property of any Exculpated Party of Borrower's Constituents, or (iii) the property of any of the officers, directors, employees, partners, members or shareholders of any of Borrower's Constituents, in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other any Loan DocumentsDocument. The provisions of this Section 10.1 section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan DocumentsDocument; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgageMortgages; (ciii) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of LeasesLeases as against Borrower's interest in the Properties or the Rents; (f) impair the enforcement of the Environmental Indemnity; (gvi) 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 fully realize the security granted by the Mortgages or to exercise its remedies against the PropertyProperties; or (hvii) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ ' fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):following:
(ia) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate guarantor in connection with the Loan;
(iib) the willful misconduct of Borrower;
(c) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the any Loan Document concerning Environmental IndemnityLaws or Hazardous Substances, including Sections 4.1.32 and 5.10, and clauses (viii) through (xi) of Section 5.18;
(iiid) the intentional removal or disposal of any portion of any Property after an Event of Default, which removal or disposal is prohibited under the Loan Documents;
(e) the misappropriation or conversion by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(ivx) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property Proceeds paid by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission reason of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
Insured Casualty, (vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (Ay) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts Award received in connection with the Condemnation of all a Condemnation, or a portion of the Property actually received by Borrower or (z) any Borrower Affiliate;
(vii) after the occurrence and Rents during the continuance of an Event of Default, which are not deposited into the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan DocumentsDeposit Account;
(viiif) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) or materials or other charges that can create Liens on any portion of any Property unless such charges are the Property, regardless subject of whether arising by operation of law, to a bona fide dispute in which Borrower is contesting the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such chargesamount or validity thereof;
(ixg) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the any Property which are not delivered to Lender upon a foreclosure by Lender under the Loan Documentsof or action in lieu thereof, unless previously applied (except to the extent that any such security deposits were applied in accordance with the applicable lease terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits)action in lieu thereof;
(xiih) the termination Borrower's indemnifications of Lender set forth in Sections 9.1.3 and 9.1.4; and
(i) Borrower's indemnification of Lender set forth in Section 24 of each of the Condominium Mortgages. provided, however, that notwithstanding anything to the contrary contained in this clause (vii), Lender agrees that it shall not ▇▇▇ for, seek or the removal of demand any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) judgment against (i) the failure by property of any of Borrower's Constituents, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise property of any rights that of the Tenant officers, directors, employees, partners, members or shareholders of any of Borrower's Constituents, in any such action or proceeding under the Original Bloomberg Lease may have as a result or by reason of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or under or in equity), including, without limitation, connection with any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space DefaultLoan Document. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations owing to Lender Debt in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Exculpation. Subject (a) Lender acknowledges that in making the Loan, Lender has not relied on the credit or the assets of Borrower and that Lender is relying on and looking solely to the qualifications belowcredit and the assets of the Junior B Mezzanine Guarantor, the Collateral under the Pledge Agreements that do not constitute assets of the Borrower or its general partner, and any other collateral, guaranties, or indemnities (from Persons other than Borrower or its general partner) (collectively, the “Collateral Obligations”, and the obligors under such Collateral Obligations, the “Collateral Providers”), for the repayment of the Loan. Therefore, notwithstanding anything to the contrary contained in the Note, this Loan Agreement or any of the other Loan Documents, neither Borrower nor any present nor future direct general partner in Borrower (as used in this Section 11.22, “general partner”) shall have any personal liability, directly or indirectly, under or in connection with the Note, this Loan Agreement or any of the Loan Documents, or any amendment or amendments to any of the foregoing made at any time or times hereafter. Lender shall not have any claim against Borrower and shall have no recourse against any assets of Borrower or such general partner, including the Property, under any circumstances, for Borrower’s breach of any obligation under the Note, this Loan Agreement or any other Loan Document, and Lender shall not enforce the liability and obligation of Borrower or its general partner, except as provided below, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate such general partner or their respective assets. Lender, on behalf of itself and its successors and assigns, hereby waives any and all such personal liability and rights against the assets of Borrower and the general partner, including the Property; provided, however, that nothing contained herein shall affect or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of limit Lender’s rights (i) to enforce any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability obligations under the GuarantyNote, any Alteration Deficiency Guaranty this Loan Agreement or any of the other guaranty provided in connection with Loan Document against the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance Junior B Mezzanine Guarantor or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest interests under the Note, this Agreement, the Mortgage Pledge Agreements and the other Loan Documents, or in the Property, the Rents or any other collateral Collateral Obligations given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment (ii) to name Borrower in any such action or proceeding shall be enforceable solely to enforce Lender’s rights and remedies against Borrower only to Junior B Mezzanine Guarantor or the extent of Borrower’s interest in Collateral Providers, including foreclosure and other remedies under the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Collateral Obligations; (iii) to seek specific performance of any terms and conditions under the Loan Documents; or (iv) to seek declaratory relief under the Loan Documents; provided, further that in each of clauses (i), (ii), (iii) and (iv) above, in no event shall not su▇ ▇orBorrower or its general partner have any personal liability with respect to such actions or proceedings or judgments issued therein, seek in no event shall any assets of Borrower or demand its general partner be available to pay any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or other obligation under or in connection with the Notesuch action or proceeding, this Agreementand in no event shall Lender enforce or execute any judgment against any assets of Borrower or its general partner or seek any monetary relief against Borrower or its general partner. For further avoidance of doubt, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, not (a) constitute a waiver, release or impairment of any obligation of Junior B Mezzanine Guarantor or the Collateral Providers evidenced or secured by any of the Loan Documents; (b) impair to the right of extent Lender to commences an action or suit seeking foreclosure under the Pledge Agreements, it shall only name Borrower as a party defendant in any such action or suit for to the extent required to pursue such foreclosure and sale under the MortgagePledge Agreements; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder, including the right of Lender to seek recourse thereunder against the guarantor, to the extent permitted in such guaranty; or (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair receiver with respect to Junior B Mezzanine Guarantor or the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions Collateral Providers. The execution of this Agreement or by the Junior B Mezzanine Guarantor shall not in any other Loan Document (other than Permitted Encumbrances);way increase of alter the obligations of the Junior B Mezzanine Guarantor from those obligations set forth in its Guaranty.
(xib) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b1111 (b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral Collateral shall continue to secure all of the Obligations Debt owing to Lender in accordance with the Loan Documents.
(c) Notwithstanding anything to the contrary contained in this Agreement (other than Section 11.22(4) below) or the Note, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants except as set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency Section 11.22(4) below, neither any present or adequacy of capital) future Constituent Partner in Borrower nor any present or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliatefuture shareholder, officer, director director, employee, trustee, beneficiary, advisor, partner, member, principal, participant or representative which Controls Borrower consents to agent of or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for in Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceedingperson or entity that is or becomes a Constituent Partner in Borrower (collectively, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of the “Borrower’s insolvency in connection with an involuntary petition Partners”) shall have any personal liability, directly or indirectly, under this Agreement, the Bankruptcy Code Note or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents, or any Modifications to any of the foregoing made at any time or times hereafter and, except as set forth in this Section 11.22(c) and Section 11.22(d) below, Lender, on behalf of itself and its successors and assigns, hereby waives any such personal liability. The term “Constituent Partner”, as used herein, shall mean, any direct partner in Borrower and any person or entity that, directly or indirectly, through one or more other partnerships, limited liability companies or corporation or other entities is a partner in Borrower. For purposes of this Section 11.22(c), subject to Section 11.22(d) below, neither the negative capital account of any Constituent Partner in Borrower or in any other Constituent Partner in Borrower, nor any obligation of any Constituent Partner in Borrower to restore a negative capital account or to contribute or loan capital to Borrower or to any other Constituent Partner in Borrower shall at any time be deemed to be the property or an asset of Borrower (or any other Constituent Partner) and neither Lender nor any of its successors or assigns shall have any right to collect, enforce or proceed against with respect to any such negative capital account or obligation to restore, contribute or loan.
Appears in 1 contract
Sources: Junior B Mezzanine Loan Agreement (Thomas Properties Group Inc)
Exculpation. Subject (a) Notwithstanding anything to the qualifications belowcontrary contained in this Note, the Security Instrument or any Other Security Document (but subject to the provisions of subsections (b), (c) and (d) of this Article 11), Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instrument by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing any personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent or affiliate of Borrower or any person owning, directly or indirectly, any legal representativesor beneficial interest in Borrower, or any successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “"Exculpated Parties”"), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the this Note, this Agreementthe Security Instrument, the Mortgage Other Security Documents, and the other Loan Documents, or interest in the Property, the Rents or (as defined in the Security Instrument) and any other collateral given to Lender pursuant to the Loan Documents; secure this Note, provided, however, thatsubject to the provisions of subsections (b), except as specifically provided herein(c) and (d) of this Article 11, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents and in any other collateral c▇▇▇▇▇▇▇▇l given to Lender, and Lender to secure this Note Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instrument, agrees that it shall not su▇ ▇ornot, except as otherwise provided in this Article 11, sue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties, in any such action or proceeding proceeding, under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Security Instrument or the other Loan Other Security Documents. The provisions of this Section 10.1 Article 11 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Note, the Loan DocumentsSecurity Instrument or the Other Security Documents delivered to Lender; (bii) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage; Security Instrument, (ciii) affect the validity or enforceability of any of the Loan Documentsindemnity, the Guaranty guaranty, master lease or any other guaranty similar instrument made in connection with this Note, the Loan Security Instrument, or any of the rights and remedies of Lender thereunder; Other Security Documents, (div) impair the right of Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; Leases and Rents executed in connection herewith, (fvi) impair the enforcement right of Lender to enforce the provisions of Section 12.2 of the Environmental IndemnitySecurity Instrument or of Section 3 12(e) of the Security Instrument; or (gvii) constitute a prohibition against impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize the security granted by the Mortgage Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or .
(hb) constitute a waiver Notwithstanding the provisions of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, this Article 11 to the extent of any losscontrary, damage, cost, expense, liability, claim or other obligation reasonably incurred by Borrower shall be personally liable to Lender for the Losses (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesas defined in the Security Instrument) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
Lender incurs due to: (i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower or any Borrower Affiliate of the Exculpated Parties in connection with the Loan;
; (ii) the breach by Borrower gross negligence or willful misconduct of any representationBorrower, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower removal or disposal of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Exculpation. (I) Subject to the qualifications below, Lender neither Agent nor Lenders shall not enforce the liability and obligation of Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender Agent may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender Agent and Lenders to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the PropertyCollateral, the Rents or any other collateral given to Lender Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents Collateral and in any other collateral given to LenderAgent, and LenderLenders and Agent, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, shall not sus▇▇ ▇orfor, seek or demand any deficiency judgment against Borrower or any of the Exculpated Party Parties, in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender Agent or Lenders to name Borrower as a party defendant in any action or suit for foreclosure and sale under the MortgagePledge Agreement; (c) affect the validity or enforceability of any of the Loan Documentsindemnity, the Guaranty guaranty, or any other guaranty similar instrument made in connection with the Loan or any of the rights and remedies of Lender Agent or Lenders thereunder; (d) impair the right of Lender Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases[intentionally omitted]; (f) impair the enforcement right of Agent or Lenders to enforce the provisions of the Guaranty or the Environmental Indemnity; (g) constitute a prohibition against Lender Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the security granted by the Mortgage Loan or to commence any other appropriate action or proceeding in order for Lender Agent or Lenders to exercise its remedies against the Propertysuch security; or (h) 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 reasonably actual Losses incurred by Lender Agent and Lenders (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damagesincurred) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse LiabilitiesLoss Liability”):
(i) fraudulent acts, willful misconduct fraud or material intentional misrepresentation by Borrower Mortgage Borrower, Borrower, Guarantor or any Borrower Affiliate Party in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Black Creek Diversified Property Fund Inc.)
Exculpation. Subject Notwithstanding anything herein or in any other Loan Document to the qualifications belowcontrary, except as otherwise set forth in this Section 8.01 to the contrary, Lender shall not enforce the liability and obligation of Borrower and (a) if Borrower is a partnership, its constituent partners or any of their respective partners, (b) if Borrower is a trust, its beneficiaries or any of their respective Partners (as hereinafter defined), (c) if Borrower is a corporation, any of its shareholders, directors, principals, officers or employees, or (d) if Borrower is a limited liability company, any of its members and their respective legal, equitable and beneficial owner (the Persons described in the foregoing clauses (a) — (d), as the case may be, are hereinafter referred to as the “Partners”) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Agreement or any of the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”)Partners, except that Lender may bring a foreclosure actionUCC sale, an action for specific performance performance, or any other appropriate action or proceeding (including, without limitation, an action to enable obtain a deficiency judgment) solely for the purpose of enabling Lender to enforce and realize upon its (i) Borrower’s interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or Collateral and (ii) any other collateral given to Lender pursuant to under the Loan DocumentsDocuments (the “Default Collateral”); provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower and the Partners only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan DocumentsDefault Collateral. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release impair the validity of the Debt evidenced by the Note or impairment in any way affect or impair the lien of any obligation evidenced this Agreement or secured by any of the other Loan DocumentsDocuments or the right of Lender to enforce this Agreement following the occurrence of an Event of Default; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgagethis Agreement; (c) affect the validity or enforceability of any of the Loan DocumentsNote, the Guaranty or any other guaranty made in connection with the Loan this Agreement, or any of the rights and remedies other Loan Documents, or impair the right of Lender thereunderto seek a personal judgment against the Guarantor; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement right of Lender to bring suit for a monetary judgment with respect to damages incurred by Lender resulting from fraud or intentional misrepresentation by Borrower, or any other Person in connection with this Agreement, the Assignment Note or the other Loan Documents, and the foregoing provisions shall not modify, diminish or discharge the liability of LeasesBorrower or the Partners with respect to same; (f) impair the enforcement right of Lender to bring suit for a monetary judgment with respect to Borrower’s misappropriation of tenant security deposits or Rent, and the Environmental Indemnityforegoing provisions shall not modify, diminish or discharge the liability of Borrower or the Partners with respect to same; (g) constitute a prohibition against impair the right of Lender to seek a deficiency judgment against Borrower in order obtain insurance proceeds due to fully realize the security granted by the Mortgage or Lender pursuant to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Propertythis Agreement; or (h) constitute a waiver of impair the right of Lender to enforce the provisions of Section 2.02(g) of this Agreement, even after repayment in full by Borrower of the Debt; (i) prevent or in any way hinder Lender from exercising, or constitute a defense, or counterclaim, or other basis for relief in respect of the exercise of, any other remedy against any or all of the collateral securing the Note as provided in the Loan Documents; (j) impair the right of Lender to bring suit for a monetary judgment with respect to damages incurred by Lender resulting from any misapplication or conversion of Loss Proceeds (as defined in the Mortgage), and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower or the Partners with respect to same; (k) impair the right of Lender to ▇▇▇ for, seek or demand a deficiency judgment against Borrower solely for the purpose of foreclosing the Premises or any part thereof, or realizing upon the Default Collateral; provided, however, that any such deficiency judgment referred to in this clause (k) shall be enforceable against Borrower and obligation of Borrower, by money judgment or otherwise, the Partners only to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonably of the Default Collateral; (l) impair the ability of Lender to bring suit for monetary judgment with respect to damages incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special resulting from arson or punitive damages) arising out of waste to or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred Premises and/or the Collateral or damage to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation the Premises committed by Borrower or any Borrower Affiliate its Affiliates; (m) impair the right of Lender to bring a suit for a monetary judgment in connection with the Loan;
(ii) event of the breach by Borrower exercise of any representationright or remedy under any federal, warranty, covenant state or indemnification provision local forfeiture laws resulting in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste loss of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms lien of this Agreement, which was voted for or consented to or approved by Borrower (or the members of priority thereof, against the Condominium Board appointed by Borrower)Collateral; and/or
(xiiin) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived a waiver of any right which Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Obligations Debt or to require that all collateral shall continue to secure all of the Obligations owing Debt; (o) impair the right of Lender to bring suit for monetary judgment with respect to damages incurred by Lender resulting from any losses resulting from any claims, actions or proceedings initiated by Borrower (or any Affiliate of Borrower) alleging that the relationship of Borrower and Lender is that of joint venturers, partners, tenants in common, joint tenants or any relationship other than that of debtor and creditor; (p) impair the right of Lender to bring suit for a monetary judgment for damages incurred by Lender in accordance with the Loan Documentsevent of a Transfer in violation of the provisions of Section 2.11 hereof, including, without limitation, the failure to obtain Lender’s consent to a Transfer as, when and to the extent required thereunder; (Bq) impair the Obligations shall be fully recourse right of Lender to Borrower bring suit for a monetary judgment in the event that any Borrower moves its principal place of business or its books and records relating to the following occur Collateral which are governed by the UCC, or changes its name, its jurisdiction of organization, type of organization or other legal structure or, if it has one, organizational identification number, without first giving Lender thirty (each, 30) days prior written notice or (r) impair the right of Lender to bring suit for a “Springing Recourse Event”): (i) a breach monetary judgment in the event that Borrower changes its name of otherwise does anything which would make the covenants information set forth in Schedule V hereof any UCC Financing Statements relating to the Collateral materially misleading without giving Lender thirty (other than those single purpose entity covenants that relate 30) days prior written notice thereof. The provisions of this Section shall be inapplicable to solvency Borrower if (a) any proceeding, action, petition or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding filing under the Bankruptcy Code Code, or under federal, any similar state or foreign insolvency federal law (other than on motion now or pleading seeking a substantive consolidation brought hereafter in effect relating to bankruptcy, reorganization or actively supported by Lender); (ii) Borrower insolvency, or any Borrower Affiliatethe arrangement or adjustment of debts, officershall be filed by, director or representative which Controls Borrower consents consented to or files a voluntary petition acquiesced in by or with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting toBorrower, or joining inif Borrower shall institute any proceeding for its dissolution or liquidation, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes shall make an assignment for the benefit of creditors or admits(b) Lender obtains a judgment that Borrower or any Affiliate of Borrower has, other than in writing good faith, contested or in any legal proceedingmaterial way interfered with, its insolvency directly or inability indirectly (collectively, a “Contest”) any UCC sale or other material remedy exercised by Lender upon the occurrence of any Event of Default whether by making any motion, bringing any counterclaim, claiming any defense, seeking any injunction or other restraint, commencing any action, or otherwise or (c) Borrower (i) fails to pay its debts as they become due, which admission is used as evidence cause Owner to deliver notice of Borrower’s insolvency in connection with an involuntary petition default under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission Ground Lease to Lender or any servicer other Person designated in writing by Lender or (ii) fails to prevent Owner from amending or modifying the Ground Lease without the prior written consent of Lender, in which event Lender shall have recourse against all of the Loan that assets of Borrower canincluding, without limitation, any right, title and interest of Borrower in and to the Premises, and any partnership interests in Borrower (but excluding the other assets of such Partners to the extent Lender would not pay its operating expenses (including Debt Service payments due have had recourse thereto other than in respect accordance with the provisions of the Loan) or that Borrower cannot refinance the Loan on the Maturity Datethis Section); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Sources: Loan and Security Agreement (Morgans Hotel Group Co.)
Exculpation. Subject to the qualifications below, Lender (a) Optionee agrees that it shall not enforce the liability and obligation of Borrower Optionor to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents Agreement by any action or proceeding wherein a against any Optionor Exculpated Party (as hereinafter defined), and shall not s▇▇ for, seek or demand any money judgment against any direct or indirect member, manager, shareholder, partner, beneficiary or other owner of beneficial ownership interests in Optionor, or any deficiency judgment director, officer, agent, attorney, employee or other judgment establishing personal liability shall be sought against Borrower or any Affiliate of Borrower or any legal representatives, successors or assigns of Borrower or its Affiliate or any principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates trustee of any of the foregoing (each, an “Optionor Exculpated Party” and, collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Optionor Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party in any such action or proceeding ) under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 21(a) shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced of Optionor hereunder; or secured by any of the Loan Documents; (bii) impair the right of Lender Optionee to name Borrower Optionor as a party defendant in any action or suit for foreclosure and sale under the Mortgage; this Agreement.
(cb) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) constitute a waiver of the right of Lender to Optionor agrees that it shall not enforce the liability and obligation of BorrowerOptionee to perform and observe the obligations contained in this Agreement by any action or proceeding against any Optionee Exculpated Party (as hereinafter defined), by and shall not s▇▇ for, seek or demand any money judgment against any direct or otherwiseindirect member, to the extent manager, shareholder, partner, beneficiary or other owner of beneficial ownership interests in Optionee, or any director, officer, agent, attorney, employee or trustee of any lossof the foregoing (each, damagean “Optionee Exculpated Party” and, costcollectively, expense, liability, claim the “Optionee Exculpated Parties”) under or other obligation reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out reason of or in connection with the following 119 (all such liability and obligation this Agreement. The provisions of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
this Section 21(b) shall not, however, (i) fraudulent actsconstitute a waiver, willful misconduct release or material intentional misrepresentation by Borrower impairment of any obligation of Optionee hereunder; or any Borrower Affiliate in connection with the Loan;
(ii) impair the breach by Borrower right of Optionor to name Optionee as a party defendant in any representation, warranty, covenant action or indemnification provision in the Environmental Indemnity;suit under this Agreement.
(iiic) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the The provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) Section 21 shall survive the failure by Borrower to deliver to Lender any security depositsClosing, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under expiration of the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) Option Period and the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documents.
Appears in 1 contract
Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained The Plan will contain an exculpation provision substantially in the Noteform of the following: Exculpation. No Exculpated Party shall have or incur, this and each Exculpated Party is hereby released and exculpated from any Claim, obligation, Cause of Action or liability for any Claim in connection with or arising out of the formulation, preparation, dissemination, or negotiation of the Restructuring Support Agreement or the Genco Working Capital Facility, or any contract, instrument, release, or other agreement or document created or entered into in connection with the Restructuring Support Agreement, the Mortgage Exchange Offers, the Consent Solicitations, the Plan, the Chapter 11 Case, the filing of the Chapter 11 Case, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the other Loan Documents by any action or proceeding wherein a money judgment distribution of property under the Plan or any deficiency judgment other related agreement, or upon any other act or omission, transaction, agreement, event, or other judgment establishing personal liability occurrence taking place on or before the Effective Date related or relating to the foregoing, except for willful misconduct or gross negligence, but in all respects such entities shall be sought against Borrower or any Affiliate entitled to reasonably rely upon the advice of Borrower or any legal representativescounsel with respect to their duties and responsibilities with respect to the foregoing; provided, successors or assigns however, that the foregoing exculpation shall not apply to the Unreleased Dynegy Claims. The Debtor, the Reorganized Debtor, Dynegy and the Consenting Noteholders (and each of Borrower or its Affiliate or any principalstheir respective affiliates, agents, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees, agents, or Affiliates of any of the foregoing (collectively, but specifically excluding Guarantor to the extent of Guarantor’s liability under the Guaranty, any Alteration Deficiency Guaranty or any other guaranty provided in connection with the Loan, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lenderadvisors, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not su▇ ▇or, seek or demand any deficiency judgment against any Exculpated Party attorneys) have participated in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any of the Loan Documents, the Guaranty or any other guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) 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 (h) 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 reasonably incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred but excluding any consequential, special or punitive damages) arising out of or in connection with the following 119 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) fraudulent acts, willful misconduct or material intentional misrepresentation by Borrower or any Borrower Affiliate in connection with the Loan;
(ii) the breach by Borrower of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity;
(iii) the intentional misappropriation by Borrower of any Reserve Funds disbursed to Borrower, or any intentional failure to deposit rents into the Clearing Account to the extent in the control of Borrower, unless such rents are otherwise delivered to Lender;
(iv) any intentional (other than, in each case, as part of or to facilitate any alteration that is permitted hereunder) material physical waste of the Property by Borrower or any Borrower Affiliate, or any intentional wrongful removal or destruction of a material portion of the Property or damage to a material portion of the Property caused by willful misconduct or gross negligence of Borrower or any Borrower Affiliate;
(v) the commission of any criminal act by Borrower or any Borrower Affiliate which results in the forfeiture of the Property;
(vi) the intentional misappropriation by Borrower or any Borrower Affiliate of (A) any Insurance Proceeds actually received by Borrower or any Borrower Affiliate or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Borrower Affiliate;
(vii) after the occurrence and during the continuance of an Event of Default, the intentional misappropriation by Borrower or any Borrower Affiliate of any Rents in violation of the Loan Documents;
(viii) all or any material portion of the Property being encumbered by a Lien voluntarily granted by Borrower (i.e., not arising by operation of law) in violation of the Loan Documents, or Borrower’s failure to pay any charges (including, without limitation, charges for labor and materials) that create Liens on the Property, regardless of whether arising by operation of law, to the extent cash flow from the Property is sufficient to make such payments and, during a Trigger Period, funds are made available to Borrower for payment of such charges;
(ix) Borrower’s failure to pay Taxes or transfer taxes, maintain required Policies, pay insurance premiums for such Policies, or pay any Condominium Charges to the extent cash flow from the Property is sufficient to make such payments and all other payments required of Borrower and, during a Trigger Period, funds are made available to Borrower to make such payments; 120
(x) the voluntary incurrence by Borrower of any Indebtedness for borrowed money in violation of the provisions of this Agreement or any other Loan Document (other than Permitted Encumbrances);
(xi) the failure by Borrower to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon a foreclosure by Lender under the Loan Documents, unless previously applied (except to the extent that such deposits were applied in accordance compliance with the applicable lease or other governing document or Borrower did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct disbursement of such deposits);
(xii) the termination of the Condominium or the removal of any Unit from the Condominium, in each case, in violation of the terms of this Agreement, which was voted for or consented to or approved by Borrower (or the members of the Condominium Board appointed by Borrower); and/or
(xiii) (i) the failure by Borrower, any Borrower Affiliate and/or any other owner of the Upper Option Space and/or the Lower Option Space (as defined in the Original Bloomberg Lease) (other than Lender or any Affiliate of Lender) to comply with the terms of Section 36 of the Original Bloomberg Lease (an “Expansion Space Default”), (ii) the exercise of any rights that the Tenant under the Original Bloomberg Lease may have as a result of an Expansion Space Default (whether pursuant to the Original Bloomberg Lease, at law or in equity), including, without limitation, any rights to set off any payments required under the Original Bloomberg Lease and/or (iii) paying any amount or performing any obligation with respect to the Upper Option Space and/or the Lower Option Space after the occurrence of an Expansion Space Default. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code with regard to file a claim the solicitation and distribution of the Securities pursuant to the Plan, and, therefore, are not, and on account of such distributions shall not be, liable at any time for the full amount violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Obligations Plan or such distributions made pursuant to require that all collateral shall continue to secure all the Plan, including the issuance of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur (each, a “Springing Recourse Event”): (i) a breach of the covenants set forth in Schedule V hereof (other than those single purpose entity covenants that relate to solvency or adequacy of capital) or a breach of any of the certifications set forth in the “Recycled Entity Certificate”, in each case, that results in a substantive consolidation of the assets and liabilities of Borrower with any other Person in connection with a proceeding under the Bankruptcy Code or under federal, state or foreign insolvency law (other than on motion or pleading seeking a substantive consolidation brought or actively supported by Lender); (ii) Borrower or any Borrower Affiliate, officer, director or representative which Controls Borrower consents to or files a voluntary petition with respect to Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iii) Borrower files an application for the appointment of a receiver, trustee or examiner for Borrower or any portion of the Property, except at the request of or with the consent of Lender, (iv) the filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower colludes 121 with and/or Borrower or a Borrower Affiliate that directly or indirectly Controls Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower by any Person; (v) Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (vi) Borrower makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, which admission is used as evidence of Borrower’s insolvency in connection with an involuntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a Person other than Lender (except for (A) any admissions that Borrower believes in good faith are truthful when made and (B) any such admission to Lender or any servicer of the Loan that Borrower cannot pay its operating expenses (including Debt Service payments due in respect of the Loan) or that Borrower cannot refinance the Loan on the Maturity Date); or (vii) there is a voluntary Transfer of all or any material portion of the Property or any direct or indirect interest therein or any Transfer of any direct or indirect interest in Borrower, in either case, in violation of the Loan Documentssecurities thereunder.
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Sources: Restructuring Support Agreement (Illinois Power Generating Co)