LOAN AGREEMENT Dated as of March 15, 2005 By MAGUIRE PROPERTIES - MISSION CITY CENTER, LLC, as Borrower and BANK OF AMERICA, N.A., as Lender
Loan No.
58847
Servicing
No. 3201506
Dated as
of March 15, 2005
By
MAGUIRE
PROPERTIES - MISSION CITY CENTER, LLC,
as
Borrower
and
BANK
OF AMERICA, N.A.,
as
Lender
ARTICLE
1
DEFINITIONS; PRINCIPLES OF CONSTRUCTION |
1 | |
Section
1.1. Definitions |
1 | |
Section
1.2. Principles of Construction. |
18 | |
ARTICLE
2
GENERAL TERMS |
19 | |
Section
2.1. Loan Commitment; Disbursement to Borrower |
19 | |
Section
2.2. Interest Rate Protection Agreement. |
19 | |
Section
2.3. Loan Payments |
21 | |
Section
2.4. Late Payment Charge |
22 | |
Section
2.5. Prepayment |
22 | |
Section
2.6. Payments after Default |
23 | |
Section
2.7. Intentionally Deleted |
23 | |
Section
2.8. Usury Savings |
24 | |
Section
2.9. Unavailability of Rate. |
24 | |
Section
2.10. Extension of the Maturity Date. |
27 | |
Section
2.11. Additional Payment Provisions |
28 | |
ARTICLE
3
CONDITIONS PRECEDENT |
29 | |
Section
3.1. Representations and Warranties; Compliance with Conditions
|
29 | |
Section
3.2. Delivery of Loan Documents; Title Insurance; Reports; Leases
|
30 | |
Section
3.3. Related Documents |
31 | |
Section
3.4. Organizational Documents |
31 | |
Section
3.5. Opinions of Borrower’s Counsel |
31 | |
Section
3.6. Annual Budget |
31 | |
Section
3.7. Taxes and Other Charges |
31 | |
Section
3.8. Completion of Proceedings |
32 | |
Section
3.9. Payments |
32 | |
Section
3.10. Transaction Costs |
32 | |
Section
3.11. No Material Adverse Change |
32 | |
Section
3.12. Leases and Rent Roll |
32 | |
Section
3.13. Tenant Estoppels |
32 | |
Section
3.14. Intentionally omitted |
33 | |
Section
3.15. Subordination and Attornment |
33 | |
Section
3.16. Tax Lot |
33 | |
Section
3.17. Physical Conditions Report |
33 | |
Section
3.18. Management Agreements |
33 | |
Section
3.19. Appraisal |
33 | |
Section
3.20. Financial Statements |
33 | |
Section
3.21. Intentionally Omitted |
33 | |
Section
3.22. Further Documents |
34 | |
ARTICLE
4
REPRESENTATIONS AND WARRANTIES |
34 | |
Section
4.1. Organization |
34 | |
Section
4.2. Status of Borrower |
34 | |
Section
4.3. Validity of Documents |
35 |
i
Section
4.4. No Conflicts |
35 | |
Section
4.5. Litigation |
35 | |
Section
4.6. Agreements |
35 | |
Section
4.7. Solvency |
36 | |
Section
4.8. Full and Accurate Disclosure |
36 | |
Section
4.9. No Plan Assets |
36 | |
Section
4.10. Not a Foreign Person |
37 | |
Section
4.11. Enforceability |
37 | |
Section
4.12. Business Purposes |
37 | |
Section
4.13. Compliance |
37 | |
Section
4.14. Financial Information |
37 | |
Section
4.15. Condemnation |
38 | |
Section
4.16. Utilities and Public Access; Parking |
38 | |
Section
4.17. Separate Lots |
38 | |
Section
4.18. Assessments |
38 | |
Section
4.19. Insurance |
38 | |
Section
4.20. Use of Property |
38 | |
Section
4.21. Certificate of Occupancy; Licenses |
39 | |
Section
4.22. Flood Zone |
39 | |
Section
4.23. Physical Condition |
39 | |
Section
4.24. Boundaries |
39 | |
Section
4.25. Leases and Rent Roll |
39 | |
Section
4.26. Filing and Recording Taxes |
40 | |
Section
4.27. Management Agreements |
40 | |
Section
4.28. Illegal Activity |
40 | |
Section
4.29. Construction Expenses |
41 | |
Section
4.30. Personal Property |
41 | |
Section
4.31. Taxes |
41 | |
Section
4.32. Permitted Encumbrances |
41 | |
Section
4.33. Federal Reserve Regulations |
41 | |
Section
4.34. Investment Company Act |
41 | |
Section
4.35. Reciprocal Easement Agreements |
42 | |
Section
4.36. No Change in Facts or Circumstances; Disclosure |
42 | |
Section
4.37. Intellectual Property |
43 | |
Section
4.38. Survey |
43 | |
Section
4.39. Embargoed Person |
43 | |
Section
4.40. Patriot Act |
43 | |
Section
4.41. Survival |
44 | |
ARTICLE
5
BORROWER COVENANTS |
44 | |
Section
5.1. Existence; Compliance with Legal Requirements |
45 | |
Section
5.2. Maintenance and Use of Property |
45 | |
Section
5.3. Waste |
45 | |
Section
5.4. Taxes and Other Charges |
46 | |
Section
5.5. Litigation |
46 | |
Section
5.6. Access to Property |
46 |
ii
Section
5.7. Notice of Default |
47 | |
Section
5.8. Cooperate in Legal Proceedings |
47 | |
Section
5.9. Performance by Borrower |
47 | |
Section
5.10. Awards; Insurance Proceeds |
47 | |
Section
5.11. Financial Reporting |
47 | |
Section
5.12. Estoppel Statement |
52 | |
Section
5.13. Leasing Matters |
52 | |
Section
5.14. Property Management |
54 | |
Section
5.15. Liens |
55 | |
Section
5.16. Debt Cancellation |
55 | |
Section
5.17. Zoning |
55 | |
Section
5.18. ERISA |
55 | |
Section
5.19. No Joint Assessment |
56 | |
Section
5.20. Reciprocal Easement Agreements |
56 | |
Section
5.21. Alterations |
56 | |
ARTICLE
6
ENTITY COVENANTS |
57 | |
Section
6.1. Single Purpose Entity/Separateness |
57 | |
Section
6.2. Change of Name, Identity or Structure |
60 | |
Section
6.3. Business and Operations |
61 | |
Section
6.4. Independent Director |
61 | |
ARTICLE
7
NO SALE OR ENCUMBRANCE |
61 | |
Section
7.1. Transfer Definitions |
61 | |
Section
7.2. No Sale/Encumbrance |
62 | |
Section
7.3. Permitted Transfers |
62 | |
Section
7.4. Lender’s Rights |
64 | |
Section
7.5. Assumption |
64 | |
ARTICLE
8
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION |
66 | |
Section
8.1. Insurance |
66 | |
Section
8.2. Casualty |
70 | |
Section
8.3. Condemnation |
70 | |
Section
8.4. Restoration |
71 | |
ARTICLE
9
RESERVE FUNDS |
75 | |
Section
9.1. Mizuho Termination Reserve |
75 | |
Section
9.2. Replacements |
75 | |
Section
9.3. Tenant Improvements/Leasing Commissions |
76 | |
Section
9.4. Required Work |
77 | |
Section
9.5. Release of Reserve Funds |
79 | |
Section
9.6. Tax and Insurance Reserve Funds |
82 | |
Section
9.7. Intentionally omitted |
83 | |
Section
9.8. Operating Expenses; Extraordinary Expenses |
83 | |
Section
9.9. Reserve Funds Generally |
83 | |
ARTICLE
10
CASH MANAGEMENT |
85 | |
Section
10.1. Lockbox Account and Cash Management Account |
85 |
iii
Section
10.2. Deposits and Withdrawals |
86 | |
Section
10.3. Security Interest |
89 | |
ARTICLE
11
EVENTS OF DEFAULT; REMEDIES |
90 | |
Section
11.1. Event of Default |
90 | |
Section
11.2. Remedies |
92 | |
ARTICLE
12
ENVIRONMENTAL PROVISIONS 93 |
||
Section
12.1. Environmental Representations and Warranties |
93 | |
Section
12.2. Environmental Covenants |
93 | |
Section
12.3. Lender’s Rights |
94 | |
Section
12.4. Operations and Maintenance Programs |
95 | |
Section
12.5. Environmental Definitions |
95 | |
Section
12.6. Intentionally omitted |
95 | |
ARTICLE
13
SECONDARY MARKET |
96 | |
Section
13.1. Transfer of Loan |
96 | |
Section
13.2. Delegation of Servicing |
96 | |
Section
13.3. Dissemination of Information |
96 | |
Section
13.4. Cooperation |
96 | |
Section
13.5. Securitization Indemnification |
98 | |
ARTICLE
14
INDEMNIFICATIONS |
101 | |
Section
14.1. General Indemnification |
101 | |
Section
14.2. Mortgage and Intangible Tax Indemnification |
101 | |
Section
14.3. ERISA Indemnification |
101 | |
Section
14.4. Survival |
102 | |
ARTICLE
15
EXCULPATION |
102 | |
Section
15.1. Exculpation |
102 | |
ARTICLE
16
NOTICES |
104 | |
Section
16.1. Notices |
104 | |
ARTICLE
17
FURTHER ASSURANCES |
106 | |
Section
17.1. Replacement Documents |
106 | |
Section
17.2. Recording of Mortgage, Etc. |
106 | |
Section
17.3. Further Acts, Etc. |
106 | |
Section
17.4. Changes in Tax, Debt, Credit and Documentary Stamp Laws
|
107 | |
Section
17.5. Expenses |
107 | |
ARTICLE
18
WAIVERS |
108 | |
Section
18.1. Remedies Cumulative; Waivers |
108 | |
Section
18.2. Modification, Waiver in Writing |
108 | |
Section
18.3. Delay Not a Waiver |
109 | |
Section
18.4. Trial by Jury |
109 | |
Section
18.5. Waiver of Notice |
109 | |
Section
18.6. Remedies of Borrower |
110 | |
Section
18.7. Waiver of Marshalling of Assets |
110 |
iv
Section
18.8. Waiver of Statute of Limitations |
110 | |
Section
18.9. Waiver of Counterclaim |
110 | |
Section
18.10. Gradsky Waivers |
110 | |
ARTICLE
19
GOVERNING LAW |
111 | |
Section
19.1. Choice of Law |
111 | |
Section
19.2. Severability |
112 | |
Section
19.3. Preferences |
112 | |
ARTICLE
20
MISCELLANEOUS |
112 | |
Section
20.1. Survival |
112 | |
Section
20.2. Lender’s Discretion |
112 | |
Section
20.3. Headings |
112 | |
Section
20.4. Cost of Enforcement |
113 | |
Section
20.5. Schedules Incorporated |
113 | |
Section
20.6. Offsets, Counterclaims and Defenses |
113 | |
Section
20.7. No Joint Venture or Partnership; No Third Party Beneficiaries
|
113 | |
Section
20.8. Publicity |
114 | |
Section
20.9. Conflict; Construction of Documents; Reliance |
114 | |
Section
20.10. Entire Agreement |
115 | |
Section
20.11. Liability |
115 | |
Section
20.12. Contributions and Waivers |
115 |
v
THIS LOAN
AGREEMENT, dated as of March 15, 2005 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”),
between BANK
OF AMERICA, N.A., a
national banking association, having an address at 214 North Tryon Street,
Charlotte, North Carolina 28255 (together with its successors and/or assigns,
“Lender”) and
MAGUIRE
PROPERTIES - MISSION CITY CENTER, LLC, a
Delaware limited liability company, having an address at c/o Maguire Properties,
Inc., 333 South Grand Avenue, Suite 412, Los Angeles, California 90071 (together
with its respective successors and/or assigns, “Borrower”).
RECITALS:
Borrower
desires to obtain the Loan (defined below) from Lender.
Lender is
willing to make the Loan to Borrower, subject to and in accordance with the
terms of this Agreement and the other Loan Documents (defined
below).
In
consideration of the making of the Loan by Lender and the covenants, agreements,
representations and warranties set forth in this Agreement, the parties hereto
hereby covenant, agree, represent and warrant as follows:
ARTICLE
1
DEFINITIONS;
PRINCIPLES OF CONSTRUCTION
Section
1.1. Definitions
For all
purposes of this Agreement, except as otherwise expressly required or unless the
context clearly indicates a contrary intent:
“Acceptable
Accountant” shall
mean a “Big Four” accounting firm or other independent certified public
accountant acceptable to Lender.
“Act” shall
have the meaning set forth in Section 6.1(c) hereof.
“Additional
Replacement” shall
have the meaning set forth in Section 9.5(g) hereof.
“Affiliate” shall
mean, as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by or is under common control with such Person or is a
director or officer of such Person or of an Affiliate of such
Person.
“Affiliated
Loans” shall
mean a loan made by Lender to a parent, subsidiary or such other entity
affiliated with Borrower or Borrower Principal.
“Affiliated
Manager” shall
have the meaning set forth in Section 7.1 hereof.
“ALTA” shall
mean American Land Title Association, or any successor thereto.
- 1
-
“Alteration
Threshold” means
$1,000,000.00.
“Annual
Budget” shall
mean the operating budget, including all planned capital expenditures, for the
Property approved by Lender in accordance with Section 5.11(a)(iv) hereof for
the applicable calendar year or other period.
“Assignment
of Management Agreement” shall
mean that certain Assignment and Subordination of Management Agreement dated the
date hereof among Lender, Borrower and Manager, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to
time.
“Award” shall
mean any compensation paid by any Governmental Authority in connection with a
Condemnation in respect of all or any part of the Property.
“Base
Management Fee” shall
mean a monthly amount equal to three percent (3%) of gross
revenues.
“Borrower
Principal” shall
mean Maguire Properties, L.P., a Maryland limited partnership.
“Borrower
Principal Obligations” shall
have the meaning set forth in Section 18.10(c) hereof.
“Business
Day” shall
mean a day on which Lender is open for the conduct of substantially all of its
banking business at its office in the city in which the Note is payable
(excluding Saturdays and Sundays).
“Cash
Management Account” shall
have the meaning set forth in Section 10.1(a) hereof.
“Casualty” shall
have the meaning set forth in Section 8.2 hereof.
“Closing
Date” shall
mean the date of the funding of the Loan.
“Control” shall
have the meaning set forth in Section 7.1 hereof.
“Condemnation” shall
mean a temporary or permanent taking by any Governmental Authority as the
result, in lieu or in anticipation, of the exercise of the right of condemnation
or eminent domain, of all or any part of the Property, or any interest therein
or right accruing thereto, including any right of access thereto or any change
of grade affecting the Property or any part thereof.
“Condemnation
Proceeds” shall
have the meaning set forth in Section 8.4(b) hereof.
“Creditors
Rights Laws” shall
mean with respect to any Person any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to its debts or debtors.
- 2
-
“Debt” shall
mean the outstanding principal amount set forth in, and evidenced by, this
Agreement and the Note together with all interest accrued and unpaid thereon and
all other sums due to Lender in respect of the Loan under the Note, this
Agreement, the Mortgage or any other Loan Document.
“Debt
Service” shall
mean, with respect to any particular period of time, scheduled principal and/or
interest payments under the Note.
“Default” shall
mean the occurrence of any event hereunder or under any other Loan Document
which, but for the giving of notice or passage of time, or both, would be an
Event of Default.
“Default
Rate” shall
mean, with respect to the Loan, a rate per annum equal to the lesser of (a) the
maximum rate permitted by applicable law, or (b) four percent (4%) above the
Note Rate.
“Development
Covenants” has the
meaning given in Section 5.20.
“Disclosure
Document” shall
have the meaning set forth in Section 13.5 hereof.
“Eligible
Account” shall
mean a separate and identifiable account from all other funds held by the
holding institution that is either (a) an account or accounts maintained with a
federal or state chartered depository institution or trust company which
complies with the definition of Eligible Institution or (b) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the case
of a state chartered depository institution or trust company, is subject to
regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal and state authority. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other
instrument.
“Eligible
Institution” shall
mean Bank of America, N.A. or a depository institution or trust company insured
by the Federal Deposit Insurance Corporation, the short term unsecured debt
obligations or commercial paper of which are rated at least “A-1+” by S&P,
“P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are
held for thirty (30) days or less (or, in the case of accounts in which funds
are held for more than thirty (30) days, the long term unsecured debt
obligations of which are rated at least “AA-” by Fitch and S&P and “Aa2” by
Moody’s).
“Embargoed
Person” shall
have the meaning set forth in Section 4.39.
“Environmental
Indemnity” shall
mean that certain Environmental Indemnity Agreement, dated as of the date
hereof, executed by Borrower and Borrower Principal in connection with the Loan
for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
“Environmental
Law” shall
have the meaning set forth in Section 12.5 hereof.
- 3
-
“Environmental
Liens” shall
have the meaning set forth in Section 12.5 hereof.
“Environmental
Report” shall
have the meaning set forth in Section 12.5 hereof.
“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended from time
to time and any successor statutes thereto and applicable regulations issued
pursuant thereto in temporary or final form.
“Event
of Default” shall
have the meaning set forth in Section 11.1 hereof.
“Exchange
Act” shall
mean the Securities and Exchange Act of 1934, as amended.
“Exchange
Act Filing” shall
have the meaning set forth in Section 5.11(c) hereof.
“Extraordinary
Expense” shall
mean an operating expense or capital expenditure with respect to the Property
that (i) is not set forth on the Annual Budget and (ii) is not subject to
payment by withdrawals from the Replacement Reserve. Borrower shall deliver
promptly to Lender a reasonably detailed explanation of such proposed
Extraordinary Expense for the approval of Lender (such approval not to be
unreasonably withheld or delayed).
“Fitch” shall
mean Fitch, Inc.
“GAAP” shall
mean generally accepted accounting principles in the United States of America as
of the date of the applicable financial report.
“Governmental
Authority” shall
mean any court, board, agency, department, commission, office or other authority
of any nature whatsoever for any governmental unit (federal, state, county,
municipal, city, town, special district or otherwise) in the United States
whether now or hereafter in existence.
“Hazardous
Materials” shall
have the meaning set forth in Section 12.5 hereof.
“Improvements” shall
have the meaning set forth in Section 1.1(c) of the Mortgage.
“Indemnified
Liabilities” shall
have the meaning set forth in Section 14.1 hereof.
“Indemnified
Parties” shall
mean (a) Lender, (b) any prior owner or holder of the Loan, (c) any servicer or
prior servicer of the Loan, (d) any Investor or any prior Investor in any
Securities, (e) any trustees, custodians or other fiduciaries who hold or who
have held a full or partial interest in the Loan for the benefit of any Investor
or other third party, (f) any receiver or other fiduciary appointed in a
foreclosure or other Creditors Rights Laws proceeding, (g) any officers,
directors, shareholders, partners, members, employees, agents, representatives,
affiliates or subsidiaries of any and all of the foregoing, and (h) the heirs,
legal representatives, successors and assigns of any and all of the foregoing
(including, without limitation, any successors by merger, consolidation or
acquisition of all or a substantial portion of the Indemnified Parties’ assets
and business).
“Independent
Director” shall
have the meaning set forth in Section 6.4(a) hereof.
- 4
-
“Insurance
Premiums” shall
have the meaning set forth in Section 8.1(b) hereof.
“Insurance
Proceeds” shall
have the meaning set forth in Section 8.4(b) hereof.
“Internal
Revenue Code” shall
mean the Internal Revenue Code of 1986, as amended, as it may be further amended
from time to time, and any successor statutes thereto, and applicable U.S.
Department of Treasury regulations issued pursuant thereto in temporary or final
form.
“Investor” shall
have the meaning set forth in Section 13.3 hereof.
“Issuer
Group” shall
have the meaning set forth in Section 13.5(b) hereof.
“Issuer
Person” shall
have the meaning set forth in Section 13.5(b) hereof.
“Lease” shall
have the meaning set forth in the Mortgage.
“Leasing
Commissions” shall
have the meaning set forth in Section 9.3(a) hereof.
“Leasing
Reserve Account” shall
have the meaning set forth in Section 9.3(b) hereof.
“Leasing
Reserve Funds” shall
have the meaning set forth in Section 9.3(b) hereof.
“Legal
Requirements” shall
mean all statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting the Property or
any part thereof, or the construction, use, alteration or operation thereof,
whether now or hereafter enacted and in force, and all permits, licenses,
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or
known to Borrower, at any time in force affecting the Property or any part
thereof, including, without limitation, any which may (a) require repairs,
modifications or alterations in or to the Property or any part thereof, or (b)
in any way limit the use and enjoyment thereof.
“Letter
of Credit” shall
mean a clean, irrevocable and unconditional letter of credit in form and
substance acceptable to Lender (a) that is issued by a commercial bank, the long
term unsecured obligations of which are rated no less than AA- (or the
equivalent) by the Rating Agencies, (b) that is payable upon presentation of
sight draft only in New York, New York or Los Angeles, California to the order
of Lender, (c) that has an initial expiration date of not less than one (1) year
from the date of issuance and is automatically renewable, at least thirty (30)
days prior to expiration, for successive one (1) year periods, (d) that is
transferable by Lender without the consent of the issuing bank and (e) for which
Borrower has no reimbursement or payment obligations.
“Lien” shall
mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment,
security interest, or any other encumbrance, charge or transfer of, on or
encumbering Borrower, the Property, any portion thereof or any interest therein,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the
- 5
-
same
economic effect as any of the foregoing, the filing of any financing statement,
and mechanic’s, materialmen’s and other similar liens and
encumbrances.
“LLC
Agreement” shall
have the meaning set forth in Section 6.1(c) hereof.
“Loan” shall
mean the loan made by Lender to Borrower pursuant to this
Agreement.
“Loan
Documents” shall
mean, collectively, this Agreement, the Note, the Mortgage, the Environmental
Indemnity, the Assignment of Management Agreement, and any and all other
documents, agreements and certificates executed and/or delivered in connection
with the Loan, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
“Lockbox
Account” shall
mean an Eligible Account established at the Lockbox Bank pursuant to Article 10
hereof for deposit of all Rents and other receipts from the
Property.
“Lockbox
Agreement” shall
mean that certain Clearing Bank Instruction Letter Agreement between Borrower
and Lockbox Bank.
“Lockbox
Bank” shall
mean Bank of the West.
“Lockout
Period” shall
mean the period commencing on the date hereof and ending on the date which is
six (6) months prior to the Maturity Date.
“Losses” shall
mean any and all 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 nature (including but not limited to
legal fees and other costs of defense).
“Major
Decisions” shall
mean (i) the sale of all or a substantial portion of the Property, (ii) the
approval of the Annual Budget, (iii) the execution of any Lease which does not
substantially comply with leasing guidelines then in effect with respect to the
Property; (iv) any material modification of the leasing guidelines then in
effect; (v) any material modification of any Loan Documents or any other related
financing requested by Borrower; (vi) any merger or consolidation of Borrower
with any other entity, or the liquidation or dissolution of Borrower other than
in accordance with the terms of the Borrower’s operating agreement; (vii) any
proposed settlement or compromise of any claim, litigation or other legal
proceeding by or against Borrower for more than $1,000,000 (net of insurance
coverage); (viii) any petition in bankruptcy or reorganization or instituting
any other type of bankruptcy, reorganization or insolvency proceeding with
respect to Borrower, the admission in writing by Borrower of its inability to
pay its debts generally as they become due or the making by Borrower of a
general assignment for the benefit of its creditors; (ix) except for the
Management Agreement, any material agreement between Borrower and any Affiliate
of Borrower and (x) such other items similar in scope to the foregoing which (A)
are consistent with veto rights typically held by institutional investors
holding majority but non-managing, non-controlling interests in an entity, but
(B) would not reasonably be deemed to constitute a change in Control with
respect to such entity.
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“Major
Lease” shall
mean as to the Property (i) any Lease which, individually or when aggregated
with all other leases at the Property with the same Tenant or its Affiliate,
either (A) accounts for ten percent (10%) or more of the Property’s
aggregate Net Operating Income, or (B) demises more than 25,000 square feet
of the Property’s gross leasable area, (ii) any Lease which contains any option,
offer, right of first refusal or other similar entitlement to acquire all or any
portion of the Property, or (iii) any instrument guaranteeing or providing
credit support for any Lease meeting the requirements of (i) or (ii)
above.
“Management
Agreement” shall
mean the management agreement entered into by and between Borrower and Manager
with respect to the Property, pursuant to which Manager is to provide management
and other services with respect to the Property, together with the sub-contract
entered into between Manager and Maguire Properties Services, Inc., as the
foregoing documents may be amended, restated, replaced, supplemented or
otherwise modified in accordance with the terms of this Agreement.
“Manager” shall
mean Maguire Properties L.P., a Maryland limited partnership or such other
entity selected as the manager of the Property in accordance with the terms of
this Agreement.
“Material
Adverse Change” shall
mean any event that is reasonably likely to cause a material and adverse impact
on Borrower’s or Borrower Principal’s financial condition, or the business of
the Property, or could be anticipated to prevent Borrower or Borrower Principal
from complying with its material obligations under the Loan Documents to which
it is a party.
“Maturity
Date” shall
mean April 1, 2012.
“Maximum
Legal Rate” shall
mean the maximum non-usurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by the Note and as provided for herein or the other Loan
Documents, under the laws of such state or states whose laws are held by any
court of competent jurisdiction to govern the interest rate provisions of the
Loan.
“Member” shall
have the meaning set forth in Section 6.1(c) hereof.
“Monthly
Payment Amount” shall
mean the monthly payment of interest due on each Scheduled Payment Date as set
forth in Section 2.2(b) hereof.
“Moody’s” shall
mean Moody’s Investor Services, Inc.
“Mortgage” shall
mean that certain first priority Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing dated the date hereof, executed and
delivered by Borrower as security for the Loan and encumbering the Property, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
“Net
Proceeds” shall
have the meaning set forth in Section 8.4(b) hereof.
“Net
Proceeds Deficiency” shall
have the meaning set forth in Section 8.4(b)(vi) hereof.
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“Note” shall
mean that certain promissory note of even date herewith in the original
principal amount of $52,000,000.00, made by Borrower in favor of Lender, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
“Note
Rate” shall
mean an interest rate equal to 5.0925% per annum.
“Offering
Document Date” shall
have the meaning set forth in Section 5.11(c)(i)(D) hereof.
“Operating
Expenses” shall
mean, with respect to any period of time, the total of all expenses actually
paid or payable in accordance with each Annual Budget approved by Lender,
including, without limitation, the Base Management Fee, together with all
Extraordinary Expenses approved by Lender, but excluding any leasing commissions
payable to an Affiliate of Borrower under the Management Agreement.
“Other
Charges” shall
mean all ground rents, maintenance charges, impositions other than Taxes, and
any other charges, including, without limitation, vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Property, now or
hereafter levied or assessed or imposed against the Property or any part
thereof.
“Participations” shall
have the meaning set forth in Section 13.1 hereof.
“Permitted
Encumbrances” shall
mean collectively, (a) the Lien and security interests created by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental
Authority and Other Charges, in each case not yet delinquent, (d) such other
title and survey exceptions as Lender has approved or may approve in writing in
Lender’s sole discretion, (e) Liens for the personal property identified on
Schedule I attached hereto; and (f) easements granted by Borrower so long as (i)
such easements do not, individually or in the aggregate, have a material adverse
effect on the use or operation of the Property and (ii) a breach or violation of
the terms of any such easements could not result in the divestiture or
subordination of the lien of this Mortgage.
“Permitted
Investments” shall
mean to the extent available from Lender or Lender’s servicer for deposits in
the Reserve Accounts and the Lockbox Account, any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by a servicer of the Loan, the trustee under any
securitization or any of their respective Affiliates, payable on demand or
having a maturity date not later than the Business Day immediately prior to the
date on which the funds used to acquire such investment are required to be used
under this Agreement and meeting one of the appropriate standards set forth
below:
(a) obligations
of, or obligations fully guaranteed as to payment of principal and interest by,
the United States or any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the United States of
America and are one or more of the following: obligations of the U.S. Treasury
(all direct or fully guaranteed obligations, the General Services Administration
(participation certificates), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates) and the U.S.
Department
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of
Housing and Urban Development (local authority bonds); provided, however, that
the investments described in this clause must (i) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (ii) be rated
“AAA” or the equivalent by each of the Rating Agencies, (iii) if rated by
S&P, must not have an “r” highlighter affixed to their rating, (iv) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (v) such investments must not be subject to
liquidation prior to their maturity;
(b) Federal
Housing Administration debentures;
(c) obligations
of the following United States government sponsored agencies: Federal Home Loan
Mortgage Corp. (debt obligations), the Farm Credit System (consolidated
systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt
obligations) and the Federal National Mortgage Association (debt obligations);
provided,
however, that
the investments described in this clause must (i) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (ii) if rated by
S&P, must not have an “r” highlighter affixed to their rating, (iii) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (iv) such investments must not be subject
to liquidation prior to their maturity;
(d) federal
funds, unsecured certificates of deposit, time deposits, bankers’ acceptances
and repurchase agreements with maturities of not more than 365 days of any bank,
the short term obligations of which at all times are rated in the highest short
term rating category by each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency in the highest short term rating
category and otherwise acceptable to each other Rating Agency, as confirmed in
writing that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described
in this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by S&P, must not have an
“r” highlighter affixed to their rating, (iii) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;
(e) fully
Federal Deposit Insurance Corporation-insured demand and time deposits in, or
certificates of deposit of, or bankers’ acceptances issued by, any bank or trust
company, savings and loan association or savings bank, the short term
obligations of which at all times are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by at least one Rating Agency in the highest short term rating category and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described
in this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by S&P, must not have an
“r” highlighter affixed to their rating, (iii) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move
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proportionately
with that index, and (iv) such investments must not be subject to liquidation
prior to their maturity;
(f) debt
obligations with maturities of not more than 365 days and at all times rated by
each Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result in
a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities) in its highest long-term unsecured
rating category; provided, however, that the investments described in this
clause must (i) have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (ii) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (iii) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;
(g) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof) with maturities of not more
than 365 days and that at all times is rated by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities) in its highest short-term unsecured debt rating; provided, however,
that the investments described in this clause must (i) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (ii) if
rated by S&P, must not have an “r” highlighter affixed to their rating,
(iii) if such investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread (if any) and
must move proportionately with that index, and (iv) such investments must not be
subject to liquidation prior to their maturity;
(h) units of
taxable money market funds, which funds are regulated investment companies, seek
to maintain a constant net asset value per share and invest solely in
obligations backed by the full faith and credit of the United States, which
funds have the highest rating available from each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities) for money market funds; and
(i) any other
security, obligation or investment which has been approved as a Permitted
Investment in writing by (i) Lender and (ii) each Rating Agency, as evidenced by
a written confirmation that the designation of such security, obligation or
investment as a Permitted Investment will not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities by such Rating Agency;
provided,
however, that no
obligation or security shall be a Permitted Investment if (A) such obligation or
security evidences a right to receive only interest payments, (B) the right to
receive principal and interest payments on such obligation or security are
derived from an
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underlying
investment that provides a yield to maturity in excess of one hundred twenty
percent (120%) of the yield to maturity at par of such underlying investment or
(C) such obligation or security has a remaining term to maturity in excess of
one (1) year; and provided, further that at any time that Borrower is not
permitted under the Loan Documents to select Permitted Investments, the term
“Permitted Investments” shall mean any one or more of the obligations or
securities included in subsections (a) through (c) above.
“Person” shall
mean any individual, corporation, partnership, joint venture, limited liability
company, estate, trust, unincorporated association, any federal, state, county
or municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the
foregoing.
“Personal
Property” shall
have the meaning set forth in Section 1.1(c) of the Mortgage.
“Physical
Conditions Report” shall
mean a report regarding the physical condition of the Property prepared by
Certified Environments, Inc. or a company otherwise satisfactory to Lender, in
form and substance satisfactory to Lender in its sole discretion.
“Policies” shall
have the meaning set forth in Section 8.1(b) hereof.
“Prohibited
Transfer” shall
have the meaning set forth in Section 7.2 hereof.
“Property” shall
mean the parcels of real property, the Improvements thereon and all Personal
Property owned by Borrower and encumbered by the Mortgage, together with all
rights pertaining to such property and Improvements, as more particularly
described in Section 1.1(c) of the Mortgage and referred to therein as the
“Property”.
“Provided
Information” shall
have the meaning set forth in Section 13.4(a) hereof.
“Qualified
Manager” shall
mean Manager or a reputable and experienced professional management organization
(a) which manages, together with its affiliates, at least five (5) first class
office buildings totaling at least 2,500,000 square feet of gross leasable area,
exclusive of the Property and (b) approved by Lender, which approval shall not
have been unreasonably withheld and for which Lender shall have received (i)
written confirmation from the Rating Agencies that the employment of such
manager will not result in a downgrade, withdrawal or qualification of the
initial, or if higher, then current ratings issued in connection with a
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization, and (ii) with respect to any
Affiliated Manager, a revised substantive non-consolidation opinion if one was
delivered in connection with the closing of the Loan.
“Qualified
Transferee” shall
mean one or more of the following:
(A) a pension
fund, pension trust or pension account that immediately prior to such transfer
has total real estate assets with a market value of at least $600,000,000
(exclusive of the Property);
(B) a pension
fund advisor who (i) immediately prior to such transfer Controls, directly or
indirectly, real estate assets with a market value of at least
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$600,000,000
(exclusive of the Property), and (ii) is acting on behalf of one or more pension
funds that, in the aggregate, satisfy the requirements referred to in
clause
(A) of this
definition;
(C) an
insurance company which is subject to supervision by the insurance commissioner,
or a similar official agency, of a state or territory of the United States
(including the District of Columbia) (i) with a net worth determined as of the
date that is no more than six (6) months prior to the date of the transfer, of
at least $250,000,000 (exclusive of the Property), and (ii) who, immediately
prior to such transfer, Controls, directly or indirectly, real estate assets
with a market value of at least $600,000,000 (exclusive of the
Property);
(D) an
association organized under the banking laws of the United States or any state
or territory of the United States (including the District of Columbia) (i) with
a combined capital and surplus of at least $200,000,000 (exclusive of the
Property); and (ii) who, immediately prior to such transfer, Controls, directly
or indirectly, real estate assets with a market value of at least $500,000,000
(exclusive of the Property); or
(E) any
entity (i) (x) with an “investment grade rating” from each of the Rating
Agencies, or (y) who owns and operates at least ten (10) first-class office
buildings totaling at least 5,000,000 square feet in major metropolitan markets
(exclusive of the Property), (ii) who has a net worth determined as of the date
this is no more than six (6) months prior to the date of the transfer, of at
least $250,000,000 (exclusive of the Property), and (iii) who, immediately prior
to such transfer, Controls, directly or indirectly, real estate assets with a
market value of at least $600,000,000 (exclusive of the Property).
For
purposes of this definition of Qualified Transferee, “Control” means the
ownership, directly or indirectly, in the aggregate of at least fifty percent
(50%) of the beneficial ownership interests of an entity and the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity, whether through the ability to exercise
voting power, by contract or otherwise. “Controlled by,” “controlling” and
“under common control with” shall have the respective correlative meaning
thereto.
“Rating
Agencies” shall
mean each of S&P, Moody’s and Fitch, or any other nationally-recognized
statistical rating agency which has been approved by Lender.
“REIT” means a
real estate investment trust within the meaning of Sections 856-860 of the
Internal Revenue Code.
“Release” shall
have the meaning set forth in Section 12.5 hereof.
“REMIC
Prohibition Period” means
the two-year period commencing with the “startup day” within the meaning of
Section 860G(a)(9) of the Internal Revenue Code of any REMIC Trust that holds
the Loan.
“Rent
Roll” shall
have the meaning set forth in Section 4.25 hereof.
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“Rents” shall
have the meaning set forth in Section 1.1(f) of the Mortgage.
“Rep
& Warranty Breach” shall
have the meaning set forth in Section 11.1(e) hereof.
“Replacements” shall
have the meaning set forth in Section 9.2(a) hereof.
“Required
Work” shall
have the meaning set forth in Section 9.4 hereof.
“Reserve
Accounts” shall
mean the Tax and Insurance Reserve Account, the Leasing Reserve Account or any
other escrow account established by the Loan Documents.
“Reserve
Funds” shall
mean the Tax and Insurance Reserve Funds, the Leasing Reserve Funds or any other
escrow funds established by the Loan Documents.
“Restoration” shall
mean, following the occurrence of a Casualty or a Condemnation which is of a
type necessitating the repair of the Property, the completion of the repair and
restoration of the Property as nearly as possible to the condition the Property
was in immediately prior to such Casualty or Condemnation, with such alterations
as may be reasonably approved by Lender.
“Restoration
Consultant” shall
have the meaning set forth in Section 8.4(b)(iii) hereof.
“Restoration
Retainage” shall
have the meaning set forth in Section 8.4(b)(iv) hereof.
“Restricted
Party” shall
have the meaning set forth in Section 7.1 hereof.
“Sale
or Pledge” shall
have the meaning set forth in Section 7.1 hereof.
“Scheduled
Payment Date” shall
have the meaning set forth in Section 2.2(b) hereof.
“Securities” shall
have the meaning set forth in Section 13.1 hereof.
“Securities
Act” shall
mean the Securities Act of 1933, as amended.
“Securities
Liabilities” shall
have the meaning set forth in Section 13.5 hereof.
“Securitization” shall
have the meaning set forth in Section 13.1 hereof.
“Special
Member” shall
have the meaning set forth in Section 6.1(c) hereof.
“Sponsor” shall
mean Maguire Properties, Inc.
“Standard
Statements” shall
have the meaning set forth in Section 5.11(c)(i)(A) hereof.
“S&P” shall
mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.
“State” shall
mean the state in which the Property or any part thereof is
located.
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“Tax
and Insurance Reserve Funds” shall
have the meaning set forth in Section 9.6 hereof.
“Tax
and Insurance Reserve Account” shall
have the meaning set forth in Section 9.6 hereof.
“Taxable
REIT Subsidiary” shall
mean a taxable REIT subsidiary within the meaning of Section 856(1) of the
Internal Revenue Code.
“Taxes” shall
mean all real estate and personal property taxes, assessments, water rates or
sewer rents, now or hereafter levied or assessed or imposed against the Property
or part thereof.
“Tenant” shall
mean any Person leasing, subleasing or otherwise occupying any portion of the
Property under a Lease or other occupancy agreement with Borrower, including,
without limitation, any Major Lease.
“Tenant
Improvements” shall
have the meaning set forth in Section 9.3(a) hereof.
“Termination
Fee Deposit” shall
have the meaning set forth in Section 9.3(b) hereof.
“TI/LC
Monthly Deposit” shall
mean the sum of $7,947.58.
“TI/LC
Tenants” shall
mean Chicago Title, Prudential, Century 21 and Cypress Point Insurance
Services.
“Title
Insurance Policy” shall
mean that certain ALTA mortgagee title insurance policy issued with respect to
the Property and insuring the lien of the Mortgage.
“Transferee” shall
have the meaning set forth in Section 7.5 hereof.
“Tribunal” shall
mean any state, commonwealth, federal, foreign, territorial or other court or
governmental department, commission, board, bureau, district, authority, agency,
central bank, or instrumentality, or any arbitration authority.
“UCC” or
“Uniform
Commercial Code” shall
mean the Uniform Commercial Code as in effect in the State where the applicable
Property is located.
“Underwriter
Group” shall
have the meaning set forth in Section 13.5(b) hereof.
Section
1.2. Principles
of Construction.
All
references to sections and schedules are to sections and schedules in or to this
Agreement unless otherwise specified. All uses of the word “including” shall
mean “including, without limitation” unless the context shall indicate
otherwise. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
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Agreement.
Unless otherwise specified, all meanings attributed to defined terms herein
shall be equally applicable to both the singular and plural forms of the terms
so defined.
ARTICLE
2
GENERAL
TERMS
Section
2.1. Loan
Commitment; Disbursement to Borrower
(a) Subject
to and upon the terms and conditions set forth herein, Lender hereby agrees to
make and Borrower hereby agrees to accept the Loan on the Closing
Date.
(b) Borrower
may request and receive only one borrowing in respect of the Loan and any amount
borrowed and repaid in respect of the Loan may not be reborrowed.
(c) The Loan
shall be evidenced by the Note and secured by the Mortgage and the other Loan
Documents.
(d) Borrower
shall use the proceeds of the Loan to (i) purchase the Property, (ii) pay
certain costs in connection with the financing of the Property, (iii) make
deposits into the Reserve Funds on the Closing Date in the amounts provided
herein, (iv) pay costs and expenses incurred in connection with the closing of
the Loan, as approved by Lender, (v) fund any working capital requirements of
the Property, and (vi) distribute the balance, if any, to its
members.
Section
2.2. Loan
Payments
(a) The Loan
shall bear interest at a fixed rate per annum equal to the Note Rate. Interest
shall be computed based on the daily rate produced assuming a three hundred
sixty (360) day year, multiplied by the actual number of days elapsed. Except as
otherwise set forth in this Agreement, interest shall be paid in
arrears.
(b) Borrower
hereby agrees to pay sums due under the Note as follows: An initial payment of
$125,049.11 is due on the Closing Date for interest from the Closing Date
through and including March 31, 2005. Thereafter, except as may be adjusted in
accordance with the last sentence of Section 2.2(c), consecutive monthly
installments of interest only computed at the Note Rate on the outstanding
principal balance of the Loan shall be payable pursuant to the terms of Section
2.2(d) (the “Monthly
Payment Amount”) on the
first (1st) day of each month beginning on May 1, 2005 (each a “Scheduled
Payment Date”) until
the entire indebtedness evidenced hereby is fully paid, except that any
remaining indebtedness, if not sooner paid, shall be due and payable on the
Maturity Date.
(c) Intentionally
omitted.
(d) Each
payment by Borrower hereunder or under the Note shall be payable at P.O. Box
65585, Charlotte, North Carolina 28265-0585, or by wire transfer to Bank of
America, N.A., ABA #111000025, Account #4782779943 for credit to CMSG, Loan
#58847, or at such other place as the Lender may designate from time to time in
writing, on the date such payment is due, to Lender by deposit to such account
as Lender may designate by written notice to
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Borrower.
Each payment by Borrower hereunder or under the Note shall be made in funds
settled through the New York Clearing House Interbank Payments System or other
funds immediately available to Lender by 2:00 p.m., New York City time, on the
date such payment is due, to Lender by deposit to such account as Lender may
designate by written notice to Borrower. Whenever any payment hereunder or under
the Note shall be stated to be due on a day which is not a Business Day, such
payment shall be made on the first Business Day preceding such scheduled due
date.
Notwithstanding the foregoing, amounts due under the Loan Documents shall be
deemed paid so long as there is sufficient money in the Cash Management Account
for payment of such amounts and Lender’s access to such money has not been
constrained or constricted in any manner.
(e) Prior to
the occurrence of an Event of Default, all monthly payments made as scheduled
under this Agreement and the Note shall be applied first to the payment of
interest computed
at the Note Rate. All voluntary and involuntary prepayments on the Note shall be
applied, to the extent thereof, to accrued but unpaid interest on the amount
prepaid, to the remaining principal amount, and any other sums due and unpaid to
Lender in connection with the Loan, in such manner and order as Lender may elect
in its sole and absolute discretion. Following the occurrence of an Event of
Default, any payment made on the Note shall be applied to accrued but unpaid
interest, late charges, accrued fees, the unpaid principal amount of the Note,
and any other sums due and unpaid to Lender in connection with the Loan, in such
manner and order as Lender may elect in its sole and absolute
discretion.
(f) All
payments made by Borrower hereunder or under the Note or the other Loan
Documents shall be made irrespective of, and without any deduction for, any
setoff, defense or counterclaims.
Section
2.3. Late
Payment Charge
If any
principal or interest payment is not paid by Borrower on or before the date
after the same is due, Borrower shall pay to Lender upon demand an amount equal
to the lesser of four percent (4%) of such unpaid sum or the maximum amount
permitted by applicable law in order to defray the expense incurred by Lender in
handling and processing such delinquent payment and to compensate Lender for the
loss of the use of such delinquent payment. Any such amount shall be secured by
the Mortgage and the other Loan Documents to the extent permitted by applicable
law.
Section
2.4. Prepayment;
Defeasance
Except as
otherwise expressly permitted by this Section 2.4 no voluntary prepayments,
whether in whole or in part, of the Loan or any other amount at any time due and
owing under the Note can be made by Borrower or any other Person without the
express written consent of Lender.
(a) Lockout
Period.
Borrower has no right to make, and Lender shall have no obligation to accept,
any voluntary prepayment, whether in whole or in part, of the Loan during the
Lockout Period. Notwithstanding the foregoing, if either (i) Lender, in its sole
and absolute discretion, accepts a full or partial voluntary prepayment during
the Lockout Period or (ii) there
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is an
involuntary prepayment during the Lockout Period, then, in either case, Borrower
shall, in addition to any portion of the Loan prepaid (together with all
interest accrued and unpaid thereon), pay to Lender a prepayment premium in an
amount calculated in accordance with Section 2.4(c) hereof.
(b) Defeasance.
(i) Notwithstanding
any provisions of this Section 2.4 to the contrary, including, without
limitation, subsection (a) of this Section 2.4, at any time other than prior to
the expiration of the earlier of (a) the REMIC Prohibition Period or (b)
forty-two (42) months after the Closing Date, Borrower may cause the release of
the Property from the lien of the Mortgage and the other Loan Documents upon the
satisfaction of the following conditions:
(A) no Event
of Default shall exist under any of the Loan Documents;
(B) not less
than forty-five (45) (but not more than ninety (90)) days prior written notice
shall be given to Lender specifying a date on which the Defeasance Collateral
(as hereinafter defined) is to be delivered (the “Release Date”), such date
being on a Scheduled Payment Date; provided, however, that Borrower shall have
the right (i) to cancel such notice by providing Lender with notice of
cancellation ten (10) days prior to the scheduled Release Date, or (ii) to
extend the scheduled Release Date until the next Scheduled Payment Date;
provided that in each case, Borrower shall pay all of Lender’s costs and
expenses incurred as a result of such cancellation or extension;
(C) all
accrued and unpaid interest and all other sums due under the Note, this
Agreement and under the other Loan Documents up to the Release Date, including,
without limitation, all fees, costs and expenses incurred by Lender and its
agents in connection with such release (including, without limitation,
reasonable legal fees and expenses for the review and preparation of the
Defeasance Security Agreement (as hereinafter defined) and of the other
materials described in Section 2.4(b)(i)(D) below and any related documentation,
and any servicing fees, Rating Agency fees or other costs related to such
release), shall be paid in full on or prior to the Release Date;
(D) Borrower
shall deliver to Lender on or prior to the Release Date:
(1) a pledge
and security agreement, in form and substance satisfactory to a prudent
institutional lender, creating a first priority security interest in favor of
Lender in the Defeasance Collateral, as defined herein (the “Defeasance Security
Agreement”), which shall provide, among other things, that any excess amounts
received by Lender from the Defeasance Collateral over the amounts payable by
Borrower on a given Scheduled Payment Date, which excess amounts are not
required to cover all or any portion of amounts payable on a future Scheduled
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Payment
Date, shall be refunded to Borrower promptly after each such Scheduled Payment
Date;
(2) (i)
direct non-callable obligations of, or guaranteed as to timely payment by, the
United States of America or other obligations which are “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, or
(ii) to the extent acceptable by the applicable Rating Agencies rating the
Securities, other non-callable government securities satisfying applicable REMIC
provisions (e.g., §§ 860A-860G of Subchapter M of the Code), that provide for
payments prior and as close as possible to (but in no event later than) all
successive Scheduled Payment Dates occurring after the Release Date, with each
such payment being equal to or greater than the amount of the corresponding
Monthly Payment Amount required to be paid under this Agreement and the Note
(including all amounts due on the Maturity Date) for the balance of the term
hereof (the “Defeasance Collateral”), each of which shall be duly endorsed by
the holder thereof as directed by Lender or accompanied by a written instrument
of transfer in form and substance satisfactory to a prudent institutional lender
(including, without limitation, such certificates, documents and instruments as
may be required by the depository institution holding such securities or the
issuer thereof, as the case may be, to effectuate book-entry transfers and
pledges through the book-entry facilities of such institution) in order to
perfect upon the delivery of the Defeasance Security Agreement the first
priority security interest therein in favor of Lender in conformity with all
applicable state and federal laws governing granting of such security
interests;
(3) a
certificate of Borrower certifying that all of the requirements set forth in
this Section 2.4(b)(i) have been satisfied;
(4) one or
more opinions of counsel for Borrower that are customary in commercial lending
transactions and subject only to customary qualifications, assumptions and
exceptions opining, among other things, that (i) Lender has a perfected security
interest in the Defeasance Collateral and that the Defeasance Security Agreement
is enforceable against Borrower in accordance with its terms, (ii) in the event
of a bankruptcy proceeding or similar occurrence with respect to Borrower, none
of the Defeasance Collateral nor any proceeds thereof will be property of
Borrower’s estate under Section 541 of the U.S. Bankruptcy Code or any similar
statute and the grant of security interest therein to Lender shall not
constitute an avoidable preference under Section 547 of the U.S. Bankruptcy Code
or applicable state law, (iii) the release of the lien of the Mortgage and the
pledge of Defeasance Collateral will not directly or indirectly result in or
cause any REMIC Trust that then holds the Note to fail to maintain its status as
a REMIC Trust and (iv) the defeasance will not cause any REMIC Trust to be an
“investment company” under the Investment Company Act of 1940;
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(5) a
certificate in form and scope acceptable to a prudent institutional lender from
an Acceptable Accountant certifying that the Defeasance Collateral will generate
amounts sufficient to make all payments of principal and interest as and when
due under the Note (including the scheduled outstanding principal balance of the
Loan due on the Maturity Date); and
(6) such
other certificates, documents and instruments as a prudent institutional lender
may reasonably require; and
(E) in the
event the Loan is held by a REMIC Trust, Lender has received written
confirmation from any Rating Agency rating any Securities that substitution of
the Defeasance Collateral will not result in a downgrade, withdrawal, or
qualification of the ratings then assigned to any of the
Securities.
(ii) Upon
compliance with the requirements of Section 2.4(b)(i), the Property shall be
released from the lien of the Mortgage and the other Loan Documents, and the
Defeasance Collateral shall constitute sole collateral which shall secure the
Note and all other obligations under the Loan Documents. Lender will, at
Borrower’s expense, execute and deliver any agreements reasonably requested by
Borrower to release the lien of the Mortgage and the other Loan Documents from
the Property.
(iii) Upon the
release of the Property in accordance with this Section 2.4(b), Borrower shall
assign all its obligations and rights under the Note, together with the pledged
Defeasance Collateral, to a successor entity designated and approved by Lender
in its sole and absolute discretion (“Successor
Borrower”).
Successor Borrower shall execute an assignment and assumption agreement in form
and substance satisfactory to a prudent institutional lender pursuant to which
it shall assume Borrower’s obligations under the Note and the Defeasance
Security Agreement. As conditions to such assignment and assumption, Borrower
shall (A) deliver to Lender one or more opinions of counsel that are customary
in commercial lending transactions and subject only to customary qualifications,
assumptions and exceptions opining, among other things, that such assignment and
assumption agreement is enforceable against Borrower and the Successor Borrower
in accordance with its terms and that the Note and the Defeasance Security
Agreement, as so assigned and assumed, are enforceable against the Successor
Borrower in accordance with their respective terms, and opining to such other
matters relating to Successor Borrower and its organizational structure as
Lender may reasonably require, and (B) pay all fees, costs and expenses incurred
by Lender or its agents in connection with such assignment and assumption
(including, without limitation, reasonable legal fees and expenses and for the
review of the proposed transferee and the preparation of the assignment and
assumption agreement and related certificates, documents and instruments and any
fees payable to any Rating Agencies and their counsel in connection with the
issuance of the confirmation referred to in subsection (b)(i)(E) above). Upon
such assignment and assumption, Borrower shall be relieved of its obligations
hereunder, under the Note, under the other Loan Documents and under the
Defeasance Security Agreement, except as expressly set forth in the assignment
and assumption agreement.
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(iv) In no
event shall Lender have any obligation to notify Borrower that a REMIC
Prohibition Period is in effect with respect to the Loan, except that Lender
shall notify Borrower if any REMIC Prohibition Period is in effect with respect
to the Loan after receiving any notice described in Section 2.4(b)(i)(B);
provided, however, that the failure of Lender to so notify Borrower shall not
impose any liability on Lender or grant Borrower any right to defease the Loan
during any such REMIC Prohibition Period.
(c) Involuntary
Prepayment During the Lockout Period. During
the Lockout Period, in the event of any involuntary prepayment of the Loan or
any other amount under the Note, whether in whole or in part, in connection with
or following Lender’s acceleration of the Note or otherwise, and whether the
Mortgage is satisfied or released by foreclosure (whether by power of sale or
judicial proceeding), deed in lieu of foreclosure or by any other means,
including, without limitation, repayment of the Loan by Borrower or any other
Person pursuant to any statutory or common law right of redemption, Borrower
shall, in addition to any portion of the principal balance of the Loan prepaid
(together with all interest accrued and unpaid thereon and in the event the
prepayment is made on a date other than a Scheduled Payment Date, a sum equal to
the amount of interest which would have accrued under the Note on the amount of
such prepayment if such prepayment had occurred on the next Scheduled Payment
Date), pay to Lender a prepayment premium in an amount equal to the greater of
(i) 1% of the portion of the Loan being prepaid, and (ii) the present value as
of the Prepayment Calculation Date of a series of monthly payments over the
remaining term of the Loan each equal to the amount of interest which would be
due on the portion of the Loan being prepaid assuming a per annum interest rate
equal to the excess of the Note Rate over the Reinvestment Yield, and discounted
at the Reinvestment Yield. As used herein, “Reinvestment
Yield” means
the yield calculated by the linear interpolation of the yields, as reported in
the Federal Reserve Statistical Release H.15-Selected Interest Rates under the
heading “U.S. government securities” and the sub-heading “Treasury constant
maturities” for the week ending prior to the Prepayment Calculation Date, of the
U.S. Treasury constant maturities with maturity dates (one longer and one equal
to or shorter) most nearly approximating the Maturity Date, and converted to a
monthly compounded nominal yield. In the event Release H.15 is no longer
published, Lender shall select a comparable publication to determine the
Reinvestment Yield. The “Prepayment
Calculation Date” shall
mean, as applicable, the date on which (i) Lender applies any prepayment to the
reduction of the outstanding principal amount of this Note, (ii) Lender
accelerates the Loan, in the case of a prepayment resulting from acceleration,
or (iii) Lender applies funds held under any Reserve Account, in the case of a
prepayment resulting from such an application (other than in connection with
acceleration of the Loan).
(d) Insurance
and Condemnation Proceeds; Excess Interest.
Notwithstanding any other provision herein to the contrary, and provided no
Event of Default exists, Borrower shall not be required to pay any prepayment
premium in connection with any prepayment occurring solely as a result
of (i) the application of Insurance Proceeds or Condemnation Proceeds pursuant
to the terms of the Loan Documents, or (ii) the application of any interest in
excess of the maximum rate permitted by applicable law to the reduction of the
Loan.
(e) After
the Lockout Period.
Commencing on the day after the expiration of the Lockout Period, and upon
giving Lender at least thirty (30) days (but not more than ninety (90) days)
prior written notice, Borrower may voluntarily prepay (without premium) the Note
in
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whole
(but not in part) on a Scheduled Payment Date. Lender shall accept a prepayment
pursuant to this Section 2.4(e) on a day other than a Scheduled Payment Date
provided that, in addition to payment of the full outstanding principal balance
of the Note, Borrower pays to Lender a sum equal to the amount of interest which
would have accrued on the Note if such prepayment occurred on the next Scheduled
Payment Date.
(f) Limitation
on Partial Prepayments. In no
event shall Lender have any obligation to accept a partial
prepayment.
Section
2.5. Payments
after Default
Upon the
occurrence and during the continuance of an Event of Default, interest on the
outstanding principal balance of the Loan and, to the extent permitted by law,
overdue interest and other amounts due in respect of the Loan, (a) shall accrue
at the Default Rate, and (b) Lender shall be entitled to receive and Borrower
shall pay to Lender all cash flow from the Property in accordance with the terms
of the Article 10 hereof, such amount to be applied by Lender to the payment of
the Debt in such order as Lender shall determine in its sole discretion,
including, without limitation, alternating applications thereof between interest
and principal. Interest at the Default Rate shall be computed from the
occurrence of the Event of Default until the earlier of (i) the actual receipt
and collection of the Debt (or that portion thereof that is then due) and (ii)
the cure of such Event of Default. To the extent permitted by applicable law,
interest at the Default Rate shall be added to the Debt, shall itself accrue
interest at the same rate as the Loan and shall be secured by the Mortgage. This
paragraph shall not be construed as an agreement or privilege to extend the date
of the payment of the Debt, nor as a waiver of any other right or remedy
accruing to Lender by reason of the occurrence of any Event of Default; the
acceptance of any payment from Borrower shall not be deemed to cure or
constitute a waiver of any Event of Default (other than the applicable payment
default giving rise to such Event of Default); and Lender retains its rights
under this Agreement to accelerate and to continue to demand payment of the Debt
upon the happening of and during the continuance any Event of Default, despite
any payment by Borrower to Lender.
Section
2.6. Usury
Savings
This
Agreement and the Note are subject to the express condition that at no time
shall Borrower be obligated or required to pay interest on the principal balance
of the Loan at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the Maximum Legal Rate. If, by the
terms of this Agreement or the other Loan Documents, Borrower is at any time
required or obligated to pay interest on the principal balance due hereunder at
a rate in excess of the Maximum Legal Rate, the Note Rate or the Default Rate,
as the case may be, shall be deemed to be immediately reduced to the Maximum
Legal Rate and all previous payments in excess of the Maximum Legal Rate shall
be deemed to have been payments in reduction of principal and not on account of
the interest due hereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the sums due under the Loan, shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so that
the rate or amount of interest on account of the Loan does not exceed the
Maximum Legal Rate of interest from time to time in effect and applicable to the
Loan for so long as the Loan is outstanding.
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ARTICLE
3
CONDITIONS
PRECEDENT
The
obligation of Lender to make the Loan hereunder is subject to the fulfillment by
Borrower or waiver by Lender of the following conditions precedent no later than
the Closing Date.
Section
3.1. Representations
and Warranties; Compliance with Conditions
The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date,
and Lender shall have determined that no Default or an Event of Default shall
have occurred and be continuing nor will any Default or Event of Default occur
immediately following on the Closing Date; and Borrower shall be in compliance
in all material respects with all terms and conditions set forth in this
Agreement and in each other Loan Document on its part to be observed or
performed.
Section
3.2. Delivery
of Loan Documents; Title Insurance; Reports; Leases
(a) Mortgage,
Loan Agreement and Note. Lender
shall have received from Borrower a fully executed and acknowledged counterpart
of the Mortgage and evidence that counterparts of the Mortgage has been
delivered to the title company for recording, in the reasonable judgment of
Lender, so as to effectively create upon such recording valid and enforceable
Liens upon the Property, of the requisite priority, in favor of Lender (or such
other trustee as may be required or desired under local law), subject only to
the Permitted Encumbrances and such other Liens as are permitted pursuant to the
Loan Documents. Lender shall have also received from Borrower fully executed
counterparts of the Environmental Indemnity, this Agreement, the Note and
Assignments of Management Agreement and all other Loan Documents required as of
the Closing Date.
(b) Title
Insurance. Lender
shall have received a Title Insurance Policy issued by a title company
acceptable to Lender and dated as of the Closing Date, with reinsurance and
direct access agreements acceptable to Lender. Such Title Insurance Policy shall
(i) provide coverage in the amount of the Loan, (ii) insure Lender that the
Mortgage creates a valid lien on the Property of the requisite priority, free
and clear of all exceptions from coverage other than Permitted Encumbrances and
standard exceptions and exclusions from coverage (as modified by the terms of
any endorsements), (iii) contain such endorsements and affirmative coverages as
Lender may reasonably request, and (iv) name Lender as the insured. The Title
Insurance Policy shall be assignable. Lender also shall have received evidence
that all premiums in respect of such Title Insurance Policy have been
paid.
(c) Survey. Lender
shall have received a current title survey for the Property, certified to the
title company and Lender and their successors and assigns, in form and content
satisfactory to Lender and prepared by a professional and properly licensed land
surveyor satisfactory to Lender in accordance with the 1999 Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys. The survey shall meet the
classification of an “Urban Survey” and the following additional items from the
list of “Optional Survey Responsibilities
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and
Specifications” (Table A) should be added to each survey: 2, 3, 4, 6, 8, 9, 10,
11 and 13. Such survey shall reflect the same legal description contained in the
Title Insurance Policy referred to in subsection (b) above and shall include,
among other things, a metes and bounds description of the real property
comprising part of the Property reasonably satisfactory to Lender. The
surveyor’s seal shall be affixed to the survey and the surveyor shall provide a
certification for each survey in form and substance acceptable to
Lender.
(d) Insurance. Lender
shall have received copies of the Policies required hereunder, satisfactory to
Lender in its sole discretion, and evidence of the payment of all Insurance
Premiums payable for the existing policy period.
(e) Environmental
Reports. Lender
shall have received an Environmental Report in respect of the Property
satisfactory to Lender.
(f) Zoning/Building
Code. Lender
shall have received evidence of compliance with zoning and building ordinances
and codes with respect to the Property, including, without limitation, required
certificates of occupancy, reasonably acceptable to Lender.
(g) Encumbrances.
Borrower shall have taken or caused to be taken such actions in such a manner so
that Lender has a valid and perfected first Lien as of the Closing Date on the
Property, subject only to applicable Permitted Encumbrances and such other Liens
as are permitted pursuant to the Loan Documents, and Lender shall have received
satisfactory evidence thereof.
(h) Lien
Searches.
Borrower shall have delivered to Lender certified search results pertaining to
Borrower, Borrower Principal and such other Persons as reasonably required by
Lender for state and federal tax liens, bankruptcy, judgment, litigation and
state and local UCC filings.
Section
3.3. Related
Documents
Each
additional document not specifically referenced herein, but relating to the
transactions contemplated herein, shall have been duly authorized, executed and
delivered by all parties thereto and at Lender’s written request, Lender shall
have received and approved certified copies thereof.
Section
3.4. Organizational
Documents
On or
before the Closing Date, Borrower shall deliver or cause to be delivered to
Lender (a) copies certified by Borrower of all organizational documentation
related to Borrower and Borrower Principal which must be acceptable to Lender in
its sole discretion, and (b) such other evidence of the formation, structure,
existence, good standing and/or qualification to do business of the Borrower and
Borrower Principal, as Lender may request in its sole discretion, including,
without limitation, good standing or existence certificates, qualifications to
do business in the appropriate jurisdictions, resolutions authorizing the
entering into of the Loan and incumbency certificates as may be requested by
Lender.
Section
3.5. Opinions
of Borrower’s Counsel
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Lender
shall have received opinions of Borrower’s counsel (a) with respect to
non-consolidation issues and (b) with respect to due execution, authority and
enforceability of the Loan Documents and such other matters as Lender may
require, all such opinions in form, scope and substance satisfactory to Lender
and Lender’s counsel in their sole discretion.
Section
3.6. Annual
Budget
Borrower
shall have delivered, and Lender shall have approved, the Annual Budget for the
current fiscal year, a copy of which is attached as Exhibit A
hereto.
Section
3.7. Taxes
and Other Charges
Borrower
shall have paid all Taxes and Other Charges (including any in arrears) relating
to the Property, which amounts may be funded with proceeds of the
Loan.
Section
3.8. Completion
of Proceedings
All
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated by this Agreement and other Loan Documents and all
documents incidental thereto shall be satisfactory in form and substance to
Lender, and Lender shall have received all such counterpart originals or
certified copies of such documents as Lender may reasonably
request.
Section
3.9. Payments
All
payments, deposits or escrows required to be made or established by Borrower
under this Agreement, the Note and the other Loan Documents on or before the
Closing Date shall have been paid.
Section
3.10. Transaction
Costs
Except as
otherwise expressly provided herein, Borrower shall have paid or reimbursed
Lender for all out of pocket expenses in connection with the underwriting,
negotiation and closing of the Loan, including title insurance premiums and
other title company charges; recording, registration, filing and similar fees,
taxes and charges; transfer, mortgage, deed, stamp or documentary taxes or
similar fees or charges; costs of third-party reports, including without
limitation, environmental studies, credit reports, seismic reports, engineer’s
reports, appraisals and surveys; underwriting and origination expenses; and all
actual, reasonable legal fees and expenses charged by counsel to
Lender.
Section
3.11. No
Material Adverse Change
There
shall have been no Material Adverse Change in the financial condition or
business condition of the Property, Borrower, Borrower Principal, Manager or any
other person or party contributing to the operating income and operations of the
Property since the date of the most recent financial statements and/or other
information delivered to Lender. The income and expenses of the Property, the
occupancy and leases thereof, and all other features of the transaction shall be
as represented to Lender without material adverse change. Neither Borrower
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nor
Borrower Principal or Affiliated Manager shall be the subject of any bankruptcy,
reorganization, or insolvency proceeding.
Section
3.12. Leases
and Rent Roll
Lender
shall have received copies of all Leases affecting the Property, which shall be
satisfactory in form and substance to Lender. Lender shall have received a
current certified rent roll of the Property, reasonably satisfactory in form and
substance to Lender.
Section
3.13. Tenant
Estoppels
Borrower
shall have delivered to Lender an executed tenant estoppel letter, which shall
be in form and substance satisfactory to Lender, from Tenants leasing, in the
aggregate, not less than seventy-five percent (75%) of the currently leased
square footage of the Property (which may include an estoppel letter delivered
by the Person or entity selling the Property to Borrower or its Affiliate for up
to five percent (5%) of the currently leased square footage of the
Property).
Section
3.14. Intentionally
omitted
Section
3.15. Subordination
and Attornment
Borrower
shall have delivered to Lender executed instruments acceptable to Lender
subordinating to the Mortgage all of the Leases with those tenants indicated on
the estoppel/snda chart circulated with the closing checklist.
Section
3.16. Tax
Lot
Lender
shall have received evidence that the Property constitutes one (1) or more
separate tax lots, which evidence shall be reasonably satisfactory in form and
substance to Lender.
Section
3.17. Physical
Conditions Report
Lender
shall have received a Physical Conditions Report with respect to the Property,
which report shall be reasonably satisfactory in form and substance to
Lender.
Section
3.18. Management
Agreements
Lender
shall have received a certified copy of the Management Agreement which shall be
satisfactory in form and substance to Lender.
Section
3.19. Appraisal
Lender
shall have received an appraisal of the Property, which shall be satisfactory in
form and substance to Lender.
Section
3.20. Financial
Statements
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Lender
shall have received financial statements and related information in form and
substance satisfactory to Lender and in compliance with any Legal Requirements
promulgated by the Securities and Exchange Commission, including, without
limitation, a balance sheet, income and expense statement and statement of cash
flows with respect to Borrower and an operating statement with respect to the
Property for the year-to-date 2005, plus the previous five (5) years, audited
(except with respect to the year-to-date 2005) by an Acceptable Accountant and
together with (x) an unqualified opinion of such Acceptable Accountant that such
statements have been prepared in accordance with GAAP applied on a consistent
basis and (y) a letter from such Acceptable Accountant consenting to the
utilization and/or incorporation by reference of such financial statements and
opinion in a Securitization involving the Loan.
Section
3.21. Intentionally
Omitted
Section
3.22. Further
Documents
Lender or
its counsel shall have received such other and further approvals, opinions,
documents and information as Lender or its counsel may have reasonably requested
including the Loan Documents in form and substance satisfactory to Lender and
its counsel.
Lender
acknowledges that, in closing the Loan, the conditions in this Article 3 have
been satisfied or waived (except to the extent covered by any post-closing
undertaking).
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES
Borrower
and, where specifically indicated, Borrower Principal represents and warrants to
Lender as of the Closing Date that:
Section
4.1. Organization
Borrower
and Borrower Principal (when not an individual) (a) has been duly organized and
is validly existing and in good standing with requisite power and authority to
own its properties and to transact the businesses in which it is now engaged,
(b) is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its
properties, businesses and operations (except as to Borrower Principal, where
such failure to qualify is not reasonably expected to cause a material adverse
effect on Borrower Principal), (c) possesses all rights, licenses, permits and
authorizations, governmental or otherwise, necessary to entitle it to own its
properties and to transact the businesses in which it is now engaged (except as
to Borrower Principal, where such failure to qualify is not reasonably expected
to cause a material adverse effect on Borrower Principal), and the sole business
of Borrower is the ownership, management, development and operation of the
Property, and (d) in the case of Borrower, has full power, authority and legal
right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and
convey the Property pursuant to the terms of the Loan Documents, and in the case
of Borrower and Borrower Principal, has full power, authority and legal right to
keep and observe all of the terms of the Loan Documents to which it is a party.
Borrower and Borrower Principal represent and warrant that the chart attached
hereto as Exhibit B sets forth an accurate listing of the direct and indirect
owners of the equity interests in
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Borrower
and Borrower Principal (when not an individual) to the extent any such entity is
not publicly traded.
Section
4.2. Status
of Borrower
Borrower’s
exact legal name is correctly set forth on the first page of this Agreement.
Borrower is an organization of the type specified on the first page of this
Agreement. Borrower is incorporated in or organized under the laws of the state
of Delaware. Borrower’s principal place of business and chief executive office,
and the place where Borrower keeps its books and records, including recorded
data of any kind or nature, regardless of the medium of recording, including
software, writings, plans, specifications and schematics, has been for the
preceding four months (or, if less, the entire period of the existence of
Borrower) the address of Borrower set forth on the first page of this Agreement.
The organizational identification number assigned by the state of incorporation
or organization is 3922524.
Section
4.3. Validity
of Documents
Borrower
and Borrower Principal have taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents to which they are parties. This Agreement and such other Loan
Documents have been duly executed and delivered by or on behalf of Borrower and
Borrower Principal and constitute the legal, valid and binding obligations of
Borrower and Borrower Principal enforceable against Borrower and Borrower
Principal in accordance with their respective terms, subject only to applicable
bankruptcy, insolvency and similar laws affecting rights of creditors generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at
law).
Section
4.4. No
Conflicts
The
execution, delivery and performance of this Agreement and the other Loan
Documents by Borrower and Borrower Principal will not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance (other
than pursuant to the Loan Documents) upon any of the property or assets of
Borrower or Borrower Principal pursuant to the terms of any agreement or
instrument to which Borrower or Borrower Principal is a party or by which any of
Borrower’s or Borrower Principal’s property or assets is subject, nor will such
action result in any violation of the provisions of any statute or any order,
rule or regulation of any Governmental Authority having jurisdiction over
Borrower or Borrower Principal or any of Borrower’s or Borrower Principal’s
properties or assets (except as to Borrower Principal, where such failure to
qualify is not reasonably expected to cause a material adverse effect on
Borrower Principal), and any consent, approval, authorization, order,
registration or qualification of or with any Governmental Authority required for
the execution, delivery and performance by Borrower or Borrower Principal of
this Agreement or any of the other Loan Documents has been obtained and is in
full force and effect.
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Section
4.5. Litigation
Except as
disclosed on Schedule 4.5 attached hereto, there are no actions, suits or
proceedings at law or in equity by or before any Governmental Authority or other
agency now pending for which Borrower or an Affiliate of Borrower has been
served or, to Borrower’s or Borrower Principal’s knowledge, threatened in
writing against or affecting Borrower, Borrower Principal, Manager or the
Property, which actions, suits or proceedings, if determined against Borrower,
Borrower Principal, Manager or the Property, would materially adversely affect
the condition (financial or otherwise) or business of Borrower or Borrower
Principal or the condition or ownership of the Property.
Section
4.6. Agreements
Borrower
is not a party to any agreement or instrument or subject to any restriction
which would materially and adversely affect Borrower or the Property, or
Borrower’s business, properties or assets, operations or condition, financial or
otherwise. Borrower is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party or by
which Borrower or the Property is bound. Borrower has no material financial
obligation under any agreement or instrument to which Borrower is a party or by
which Borrower or the Property is otherwise bound, other than (a) obligations
incurred in the ordinary course of the operation of the Property and (b)
obligations under the Loan Documents.
Section
4.7. Solvency
Except as
disclosed on Schedule 4.7 attached hereto, Borrower and Borrower Principal have
(a) not entered into the transaction or executed the Note, this Agreement or any
other Loan Documents with the actual intent to hinder, delay or defraud any
creditor and (b) received reasonably equivalent value in exchange for their
obligations under such Loan Documents. Giving effect to the Loan, the fair
saleable value of the assets of Borrower and Borrower Principal exceeds and
will, immediately following the making of the Loan, exceed the total liabilities
of Borrower and Borrower Principal, including, without limitation, subordinated,
unliquidated, disputed and contingent liabilities. No petition in bankruptcy has
been filed against Borrower, Borrower Principal or Affiliated Manager (if any)
in the last ten (10) years, and neither Borrower nor Borrower Principal or
Affiliated Manager in the last ten (10) years has made an assignment for the
benefit of creditors or taken advantage of any Creditors Rights Laws. Neither
Borrower nor Borrower Principal or Affiliated Manager is contemplating either
the filing of a petition by it under any Creditors Rights Laws or the
liquidation of all or a major portion of Borrower’s assets or property, and
Borrower has no knowledge of any Person contemplating the filing of any such
petition against Borrower or Borrower Principal or Affiliated
Manager.
Section
4.8. Full
and Accurate Disclosure
No
statement of fact made by or on behalf of Borrower or Borrower Principal in this
Agreement or in any of the other Loan Documents or in any other document or
certificate delivered by Borrower, Borrower Principal or any Affiliate thereof
or, to Borrower’s knowledge, in any third-party reports delivered on behalf of
Borrower or Borrower Principal in connection
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with the
Loan contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no material fact presently known to Borrower or Borrower
Principal which has not been disclosed to Lender which adversely affects, nor as
far as Borrower or Borrower Principal can reasonably foresee, is reasonably
expected to adversely affect, the Property or the business, operations or
condition (financial or otherwise) of Borrower or Borrower
Principal.
Section
4.9. No
Plan Assets
Borrower
is not an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject
to Title I of ERISA, and none of the assets of Borrower constitutes or, so long
as the Loan is outstanding, will constitute “plan assets” of one or more such
plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a)
Borrower is not a “governmental plan” within the meaning of Section 3(32) of
ERISA and (b) transactions by or with Borrower are not in violation of state
statutes regulating investment of, and fiduciary obligations with respect to,
governmental plans similar to the provisions of Section 406 of ERISA or Section
4975 of the Internal Revenue Code currently in effect, which prohibit or
otherwise restrict the transactions contemplated by this Agreement.
Section
4.10. Not
a Foreign Person
Neither
Borrower nor Borrower Principal is a “foreign person” within the meaning of
§1445(f)(3) of the Internal Revenue Code.
Section
4.11. Enforceability
The Loan
Documents are not subject to any right of rescission, set-off, counterclaim or
defense by Borrower, including the defense of usury, nor would the operation of
any of the terms of the Loan Documents, or the exercise of any right thereunder,
render the Loan Documents unenforceable as a whole, and neither Borrower nor
Borrower Principal has asserted any right of rescission, set-off, counterclaim
or defense with respect thereto. No Default or Event of Default exists under or
with respect to any Loan Document.
Section
4.12. Business
Purposes
The Loan
is solely for the business purpose of Borrower (including distributions to
Borrower’s constituent entity and all subsequent upstream distributions), and is
not for personal, family, household, or agricultural purposes.
Section
4.13. Compliance
Borrower
and the Property, and the use and operation thereof, comply in all material
respects with all Legal Requirements, including, without limitation, building
and zoning ordinances and codes and the Americans with Disabilities Act. To
Borrower’s knowledge, Borrower is not in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority and Borrower
has received no written notice of any such default or violation. There has not
been committed by Borrower or, to Borrower’s knowledge, any other Person in
occupancy of or involved with the operation or use of the Property any act or
omission
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affording
any Governmental Authority the right of forfeiture as against the Property or
any part thereof or any monies paid in performance of Borrower’s obligations
under any of the Loan Documents.
Section
4.14. Financial
Information
All
financial data, including, without limitation, the balance sheets, statements of
cash flow, statements of income and operating expense and rent rolls, that have
been delivered to Lender in respect of Borrower, Borrower Principal and/or the
Property, to Borrower Principal’s actual knowledge (with respect to any
financials relating to the Property only) (a) are true, complete and correct in
all material respects, (b) accurately represent in all material respects the
financial condition of Borrower, Borrower Principal or the Property, as
applicable, as of the date of such reports, and (c) to the extent prepared or
audited by an independent certified public accounting firm, have been prepared
in accordance with GAAP throughout the periods covered, except as disclosed
therein. Borrower does not have any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments that are known to Borrower and
reasonably likely to have a material adverse effect on the Property or the
current and/or intended operation thereof, except as referred to or reflected in
said financial statements. To Borrower’s knowledge, since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operations or business of Borrower or Borrower Principal
from that set forth in said financial statements.
Section
4.15. Condemnation
No
Condemnation or other proceeding has been commenced or, to Borrower’s best
knowledge, is threatened or contemplated with respect to all or any portion of
the Property or for the relocation of roadways providing access to the
Property.
Section
4.16. Utilities
and Public Access; Parking
The
Property has adequate rights of access to public ways and is served by water,
sewer, sanitary sewer and storm drain facilities adequate to service the
Property for full utilization of the Property for its intended uses. All public
utilities necessary to the full use and enjoyment of the Property as currently
used and enjoyed are located either in the public right-of-way abutting the
Property (which are connected so as to serve the Property without passing over
other property) or in recorded easements serving the Property and such easements
are set forth in and insured by the Title Insurance Policy. All roads necessary
for the use of the Property for its current purposes have been completed and
dedicated to public use and accepted by all Governmental Authorities. The
Property has, or is served by, parking to the extent required to comply with all
Legal Requirements.
Section
4.17. Separate
Lots
The
Property is assessed for real estate tax purposes as one or more wholly
independent tax lot or lots, separate from any adjoining land or improvements
not constituting a part of such lot or lots, and no other land or improvements
is assessed and taxed together with the Property or any portion
thereof.
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Section
4.18. Assessments
To
Borrower’s knowledge, there are no pending or proposed special or other
assessments for public improvements or otherwise affecting the Property, nor are
there any contemplated improvements to the Property that may result in such
special or other assessments.
Section
4.19. Insurance
Borrower
has obtained and has delivered to Lender certified copies of all Policies
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. No claims have been made under any of the Policies, and to
Borrower’s knowledge, no Person, including Borrower, has done, by act or
omission, anything which would impair the coverage of any of the
Policies.
Section
4.20. Use
of Property
The
Property is used exclusively for office and ancillary retail purposes and other
appurtenant and related uses.
Section
4.21. Certificate
of Occupancy; Licenses
All
certifications, permits, licenses and approvals, including, without limitation,
certificates of completion or occupancy and any applicable liquor license
required for the legal use, occupancy and operation of the Property for the
purpose intended herein, have been obtained and are valid and in full force and
effect. Borrower shall keep and maintain all licenses necessary for the
operation of the Property for the purpose intended herein. The use being made of
the Property is in conformity with the certificate of occupancy and any permits
or licenses issued for the Property.
Section
4.22. Flood
Zone
None of
the Improvements on the Property are located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards, or,
if any portion of the Improvements is located within such area, Borrower has
obtained the insurance prescribed in Section 8.1(a)(i).
Section
4.23. Physical
Condition
To
Borrower’s knowledge and except as expressly disclosed in the Physical
Conditions Report to Lender, the Property, including, without limitation, all
buildings, improvements, parking facilities, sidewalks, storm drainage systems,
roofs, plumbing systems, HVAC systems, fire protection systems, electrical
systems, equipment, elevators, exterior sidings and doors, landscaping,
irrigation systems and all structural components, are in good condition, order
and repair in all material respects. To Borrower’s knowledge, there exists no
structural or other material defects or damages in the Property, as a result of
a Casualty or otherwise, and whether latent or otherwise. Borrower has not
received notice from any insurance company or bonding company of any defects or
inadequacies in the Property, or any part thereof, which would adversely affect
the insurability of the same or cause the imposition of extraordinary premiums
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or
charges thereon or of any termination or threatened termination of any policy of
insurance or bond.
Section
4.24. Boundaries
(a) None of
the Improvements which were included in determining the appraised value of the
Property lie outside the boundaries and building restriction lines of the
Property to any material extent, and (b) no improvements on adjoining properties
encroach upon the Property and no easements or other encumbrances upon the
Property encroach upon any of the Improvements so as to materially affect the
value or marketability of the Property.
Section
4.25. Leases
and Rent Roll
To
Borrower’s actual knowledge, Borrower has delivered to Lender a true, correct
and complete rent roll for the Property (a “Rent
Roll”) which
includes all Leases affecting the Property (including schedules for all executed
Leases for Tenants not yet in occupancy or under which the rent commencement
date has not occurred). To Borrower’s actual knowledge, except as set forth in
the Rent Roll (as same has been updated by written notice thereof to Lender) and
estoppel certificates delivered to Lender on or prior to the Closing Date: (a)
each Lease is in full force and effect; (b) the premises demised under the
Leases have been completed and the Tenants under the Leases have accepted
possession of and are in occupancy of all of their respective demised premises;
(c) the Tenants under the Leases have commenced the payment of rent under the
Leases and there are no offsets, claims or defenses to the enforcement thereof,
and Borrower has no monetary obligations to any Tenant under any Lease; (d) all
Rents due and payable under the Leases have been paid and no portion thereof has
been paid for any period more than thirty (30) days in advance; (e) the rent
payable under each Lease is the amount of fixed rent set forth in the Rent Roll
and there is no claim or basis for a claim by the Tenant thereunder for an
offset or adjustment to the rent; (f) no Tenant has made any written claim of a
material default against the landlord under any Lease which remains outstanding
nor has Borrower or Manager received, by in-person, or e-mail (with respect to
Major Leases only) communication to an authorized representative of Borrower or
Manager, any notice of a material default under any Lease; (g) there is no
present material default by the Tenant under any Lease; (h) all security
deposits under the Leases have been collected by Borrower; (i) Borrower is the
sole owner of the entire landlord’s interest in each Lease; (j) each Lease is
the valid, binding and enforceable obligation of Borrower and the applicable
Tenant thereunder and there are no agreements with the Tenants under the Leases
other than as expressly set forth in the Leases; (k) no Person has any
possessory interest in, or right to occupy, the Property or any portion thereof
except under the terms of a Lease; (l) none of the Leases contains any option or
offer to purchase or right of first refusal to purchase the Property or any part
thereof; (m) neither the Leases nor the Rents have been assigned, pledged or
hypothecated except to Lender, and no other Person has any interest therein
except the Tenants thereunder; and (n) no conditions exist which now give any
Tenant or party the right to “go dark” pursuant to the provision of its Lease,
if applicable.
Section
4.26. Filing
and Recording Taxes
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All
mortgage, mortgage recording, stamp, intangible or other similar tax required to
be paid by any Person under applicable Legal Requirements currently in effect in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including, without
limitation, the Mortgage, have been paid or will be paid, and, under current
Legal Requirements, the Mortgage is enforceable in accordance with its terms by
Lender (or any subsequent holder thereof or its nominee).
Section
4.27. Management
Agreements
The
Management Agreement is in full force and effect in accordance with its terms
and there is no default thereunder by any party thereto and, to Borrower’s
knowledge, no event has occurred that, with the passage of time and/or the
giving of notice would constitute a default thereunder. No management fees under
the Management Agreement are accrued and unpaid.
Section
4.28. Illegal
Activity
No
portion of the Property has been or will be purchased with proceeds of any
illegal activity, and no part of the proceeds of the Loan will be used in
connection with any illegal activity.
Section
4.29. Construction
Expenses
To
Borrower’s actual knowledge, all costs and expenses of any and all labor,
materials, supplies and equipment used in the construction maintenance or repair
of the Improvements have been paid in full. To Borrower’s actual knowledge,
there are no claims for payment for work, labor or materials affecting the
Property which are or may become a lien prior to, or of equal priority with, the
Liens created by the Loan Documents.
Section
4.30. Personal
Property
Borrower
has paid in full for, and is the owner of, all Personal Property (other than
tenants’ property) used in connection with the operation of the Property, free
and clear of any and all security interests, liens or encumbrances, except for
Permitted Encumbrances and the Lien and security interest created by the Loan
Documents or as otherwise permitted hereunder.
Section
4.31. Taxes
Borrower
and Borrower Principal have filed prior to delinquency all material federal,
state, county, municipal, and city income, personal property and other tax
returns required to have been filed by them and have paid all taxes and related
liabilities which have become due pursuant to such returns or pursuant to any
assessments received by them, except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change.
Neither Borrower nor Borrower Principal knows of any basis for any additional
material assessment in respect of any such taxes and related liabilities for
prior years.
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Section
4.32. Permitted
Encumbrances
None of
the Permitted Encumbrances, individually or in the aggregate, materially
interferes with the benefits of the security intended to be provided by the Loan
Documents, materially and adversely affects the value of the Property, impairs
the use or the operation of the Property or impairs Borrower’s ability to pay
its obligations in a timely manner.
Section
4.33. Federal
Reserve Regulations
Borrower
will use the proceeds of the Loan for the purposes set forth in Section 2.1(d)
hereof and not for any illegal activity. No part of the proceeds of the Loan
will be used for the purpose of purchasing or acquiring any “margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or prohibited by the terms and
conditions of this Agreement or the other Loan Documents.
Section
4.34. Investment
Company Act
Borrower
is not (a) an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended;
(b) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (c)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
Section
4.35. Intentionally
Deleted
Section
4.36. No
Change in Facts or Circumstances; Disclosure
All
information submitted by Borrower or its agents to Lender and in all financial
statements, rent rolls, reports, certificates and other documents submitted in
connection with the Loan or in satisfaction of the terms thereof and all
statements of fact made by Borrower in this Agreement or in any other Loan
Document, as may be updated by Borrower prior to the closing of the Loan, are,
to Borrower’s knowledge (and actual knowledge with respect to the Property)
accurate and correct in all material respects and sufficiently complete as to
not to be misleading in any material respect. To Borrower’s knowledge, there has
been no material adverse change in any condition, fact, circumstance or event
that would make any such information inaccurate, incomplete or otherwise
misleading in any material respect or that otherwise materially and adversely
affects or might materially and adversely affect the Property or the business
operations or the financial condition of Borrower. Borrower has disclosed to
Lender all material facts known to Borrower and has not failed to disclose any
material fact known to Borrower that could cause any representation or warranty
made herein or in any other documents delivered to Lender by Borrower or any of
its Affiliates or agents to be materially misleading.
Section
4.37. Intellectual
Property
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All
trademarks, trade names and service marks necessary to the business of Borrower
as presently conducted or as Borrower contemplates conducting its business are
in good standing and, to the extent of Borrower’s actual knowledge, uncontested.
Borrower has not infringed, is not infringing, and has not received notice of
infringement with respect to asserted trademarks, trade names and service marks
of others. To Borrower’s actual knowledge, there is no infringement by others of
trademarks, trade names and service marks of Borrower.
Section
4.38. Survey
The
Survey for the Property delivered to Lender in connection with this Agreement
has been prepared in accordance with the provisions of Section 3.2(c) hereof,
and to the actual knowledge of Borrower does not fail to reflect any material
matter affecting the Property or the title thereto.
Section
4.39. Embargoed
Person
To
Borrower’s actual knowledge, as of the date hereof and at all times throughout
the term of the Loan, including after giving effect to any transfers of
interests permitted pursuant to the Loan Documents, (a) none of the funds or
other assets of Borrower and Borrower Principal constitute property of, or are
beneficially owned, directly or indirectly, by any person, entity or government
subject to trade restrictions under U.S. law, including but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders
or regulations promulgated thereunder with the result that the investment in
Borrower or Borrower Principal, as applicable (whether directly or indirectly),
is prohibited by law or the Loan made by Lender is in violation of law
(“Embargoed
Person”); (b)
no Embargoed Person has any interest of any nature whatsoever in Borrower or
Borrower Principal, as applicable, with the result that the investment in
Borrower or Borrower Principal, as applicable (whether directly or indirectly),
is prohibited by law or the Loan is in violation of law; and (c) none of the
funds of Borrower or Borrower Principal, as applicable, have been derived from
any unlawful activity with the result that the investment in Borrower or
Borrower Principal, as applicable (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law.
Section
4.40. Patriot
Act
All
capitalized words and phrases and all defined terms used in the USA Patriot Act
of 2001, 107 Public Law 56 (October 26, 2001) and in other statutes and all
orders, rules and regulations of the United States government and its various
executive departments, agencies and offices related to the subject matter of the
Patriot Act, including Executive Order 13224 effective September 24, 2001
(collectively referred to in this Section only as the “Patriot
Act”) and
are incorporated into this Section. Each of Borrower and Borrower Principal
hereby represents and warrants that Borrower and Borrower Principal and each and
every Person affiliated with Borrower or Borrower Principal or that to
Borrower’s actual knowledge has an economic interest in Borrower, or, to
Borrower’s actual knowledge, that has or will have an interest in the
transaction contemplated by this Agreement or in the Property or will
participate, in any manner whatsoever, in the Loan, is: (i) not a “blocked”
person listed in the Annex to Executive Order Nos. 12947, 13099 and 13224 and
all modifications thereto or thereof (as used in this Section
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only, the
“Annex”); (ii)
in full compliance with the requirements of the Patriot Act and all other
requirements contained in the rules and regulations of the Office of Foreign
Assets Control, Department of the Treasury (as used in this Section only,
“OFAC”); (iii)
operated under policies, procedures and practices, if any, that are in
compliance with the Patriot Act and available to Lender for Lender’s review and
inspection during normal business hours and upon reasonable prior notice; (iv)
not in receipt of any notice from the Secretary of State or the Attorney General
of the United States or any other department, agency or office of the United
States claiming a violation or possible violation of the Patriot Act; (v) not
listed as a Specially Designated Terrorist or as a “blocked” person on any lists
maintained by the OFAC pursuant to the Patriot Act or any other list of
terrorists or terrorist
organizations maintained pursuant to any of the rules and regulations of the
OFAC issued pursuant to the Patriot Act or on any other list of terrorists or
terrorist organizations maintained pursuant to the Patriot Act; (vi) not a
person who has been determined by competent authority to be subject to any of
the prohibitions contained in the Patriot Act; and (vii) not owned or controlled
by or now knowingly acting and or will in the future knowingly act for or on
behalf of any person named in the Annex or any other list promulgated under the
Patriot Act or any other person who has been determined to be subject to the
prohibitions contained in the Patriot Act. Borrower covenants and agrees that in
the event Borrower receives any notice that Borrower Principal or Borrower (or
to Borrower’s knowledge any of its beneficial owners or affiliates or
participants) become listed on the Annex or any other list promulgated under the
Patriot Act or is indicted, arraigned, or custodially detained on charges
involving money laundering or predicate crimes to money laundering, Borrower
shall immediately notify Lender. It shall be an Event of Default hereunder if
Borrower, Borrower Principal or any other party to any Loan Document becomes
listed on any list promulgated under the Patriot Act or is indicted, arraigned
or custodially detained on charges involving money laundering or predicate
crimes to money laundering.
Section
4.41. Survival
Borrower
agrees that, unless expressly provided otherwise, all of the representations and
warranties of Borrower set forth in this Agreement and elsewhere in this
Agreement and in the other Loan Documents shall survive for so long as any
portion of the Debt remains owing to Lender. All representations, warranties,
covenants and agreements made in this Agreement or in the other Loan Documents
by Borrower shall be deemed to have been relied upon by Lender notwithstanding
any investigation heretofore or hereafter made by Lender or on its
behalf.
ARTICLE
5
BORROWER
COVENANTS
From the
date hereof and until repayment of the Debt in full and performance in full of
all obligations of Borrower under the Loan Documents or the earlier release of
the Lien of the Mortgage (and all related obligations) in accordance with the
terms of this Agreement and the other Loan Documents, Borrower hereby covenants
and agrees with Lender that:
Section
5.1. Existence;
Compliance with Legal Requirements
(a) Borrower
shall do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its existence, rights, licenses, permits and franchises
and comply in
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all
material respects with all Legal Requirements applicable to it and the Property.
Borrower hereby covenants and agrees not to commit, permit or suffer to exist
any act or omission affording any Governmental Authority the right of forfeiture
as against the Property or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents. Borrower shall at all
times maintain, preserve and protect all franchises and trade names necessary in
connection with the operation of the Property.
(b) After
prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and
with due diligence, the Legal Requirements affecting the Property, provided that
(i) no Default or Event of Default has occurred and is continuing; (ii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower or the Property is subject
and shall not constitute a default thereunder; (iii) neither the Property, any
part thereof or interest therein, any of the tenants or occupants thereof, nor
Borrower shall be affected in any material adverse way as a result of such
proceeding; (iv) non-compliance with the Legal Requirements shall not impose
civil or criminal liability on Borrower or Lender; (v) Borrower shall have
furnished the security as may be required in the proceeding or by Lender to
ensure compliance by Borrower with the Legal Requirements; and (vi) Borrower
shall have furnished to Lender all other items reasonably requested by
Lender.
Section
5.2. Maintenance
and Use of Property
Borrower
shall cause the Property to be maintained in a good and safe condition and
repair (subject to ordinary wear and tear). The Improvements and the Personal
Property shall not be removed, demolished, or other than in accordance with the
provisions of Section 5.21, materially altered (except for normal replacement or
disposal of the Personal Property in the ordinary course of Borrower’s business)
without the prior written consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed. If under applicable zoning
provisions the use of all or any portion of the Property is or shall become a
nonconforming use, Borrower will not cause or permit the nonconforming use to be
discontinued or the nonconforming Improvement to be abandoned without giving
concurrent notice thereof to Lender.
Section
5.3. Waste
Borrower
shall not commit or suffer any physical or actual waste of the Property or make
any change in the use of the Property which will in any way materially increase
the risk of fire or other hazard arising out of the operation of the Property,
or take any action that is reasonably expected to invalidate or give cause for
cancellation of any Policy, or do or permit to be done thereon anything that is
reasonably expected to in any way impair the value of the Property or the
security for the Loan. Borrower will not, without the prior written consent of
Lender (not to be unreasonably withheld or delayed), permit any drilling or
exploration for or extraction, removal, or production of any minerals from the
surface or the subsurface of the Property, regardless of the depth thereof or
the method of mining or extraction thereof.
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Section
5.4. Taxes
and Other Charges
(a) Borrower
shall pay all Taxes and Other Charges now or hereafter levied or assessed or
imposed against the Property or any part thereof prior to delinquency; provided,
however, Borrower’s obligation to directly pay Taxes shall be suspended for so
long as Borrower complies with the terms and provisions of Section 9.6 hereof.
Borrower shall furnish to Lender receipts for the payment of the Taxes and the
Other Charges prior to the date the same shall become delinquent (provided,
however, that Borrower is not required to furnish such receipts for payment of
Taxes in the event that such Taxes have been paid by Lender pursuant to Section
9.6 hereof). Subject to Section 5.4(b), Borrower shall not suffer and shall
promptly cause to be paid and discharged any Lien or charge whatsoever which may
be or become a Lien or charge against the Property (other than Permitted
Encumbrances and other Liens permitted under the Loan Documents), and shall
promptly pay for all utility services provided to the Property.
(b) After
prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and
with due diligence, the amount or validity or application in whole or in part of
any Taxes or Other Charges, provided that (i) no Event of Default has occurred
and remains uncured; (ii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
Borrower is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable Legal
Requirements; (iii) neither the Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, canceled or
lost; (iv) Borrower shall promptly upon final determination thereof pay the
amount of any such Taxes or Other Charges, together with all costs, interest and
penalties which may be payable in connection therewith; (v) such proceeding
shall suspend the collection of such contested Taxes or Other Charges from the
Property; and (vi) Borrower shall furnish such security as may be required in
the proceeding, or deliver to Lender such reserve deposits as may be requested
by Lender, to insure the payment of any such Taxes or Other Charges, together
with all interest and penalties thereon (unless Borrower has paid all of the
Taxes or Other Charges under protest). Lender may pay over any such cash deposit
or part thereof held by Lender to the claimant entitled thereto at any time
when, in the judgment of Lender, the entitlement of such claimant is established
or the Property (or part thereof or interest therein) shall be in danger of
being sold, forfeited, terminated, canceled or lost or there shall be any danger
of the Lien of the Mortgage being primed by any related Lien.
Section
5.5. Litigation
Borrower
shall give prompt written notice to Lender of any litigation or governmental
proceedings pending or threatened in writing against Borrower which is
reasonably expected to materially adversely affect Borrower’s condition
(financial or otherwise) or business or the Property.
Section
5.6. Access
to Property
Borrower
shall permit agents, representatives and employees of Lender to inspect the
Property or any part thereof during regular business hours upon reasonable
advance notice,
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provided
Lender shall use reasonable efforts to minimize interference with the business
of any tenants.
Section
5.7. Notice
of Default
Borrower
shall promptly advise Lender of any Material Adverse Change in the condition
(financial or otherwise) of Borrower, Borrower Principal or the Property or of
the occurrence of event or circumstance which would constitute a Default or
Event of Default of which Borrower has knowledge.
Section
5.8. Cooperate
in Legal Proceedings
Borrower
shall at Borrower’s expense cooperate fully with Lender with respect to any
proceedings before any court, board or other Governmental Authority which may in
any way affect the rights of Lender hereunder or any rights obtained by Lender
under any of the other Loan Documents and, in connection therewith, permit
Lender, at its election, to participate in any such proceedings.
Section
5.9. Performance
by Borrower
Borrower
shall in a timely manner observe, perform and fulfill each and every covenant,
term and provision to be observed and performed by Borrower under this Agreement
and the other Loan Documents and any other material agreement or instrument
affecting or pertaining to the Property and any amendments, modifications or
changes thereto.
Section
5.10. Awards;
Insurance Proceeds
Borrower
shall cooperate with Lender in obtaining for Lender the benefits of any Awards
or Insurance Proceeds lawfully or equitably payable in connection with the
Property, and Lender shall be reimbursed for any expenses incurred in connection
therewith (including reasonable, actual attorneys’ fees and disbursements, and
the payment by Borrower of the expense of an appraisal on behalf of Lender in
case of a Casualty or Condemnation affecting the Property or any part thereof)
out of such Awards or Insurance Proceeds.
Section
5.11. Financial
Reporting
(a) Borrower
will maintain full and accurate books of accounts and other records reflecting
the results of the operations of the and will furnish to Lender on or before
forty-five (45) days after the end of each calendar quarter the following items,
each certified by Borrower as being true and correct in all material respects:
(i) a written statement (rent roll) dated as of the last day of each such
calendar quarter identifying each of the Leases (excluding subleases) by the
term, space occupied, rental required to be paid, security deposit paid, any
rental concessions, and a report identifying any defaults or payment
delinquencies thereunder; (ii) monthly and year to date operating
statements prepared for each calendar month during each such calendar quarter,
including an itemization of actual (not pro forma) capital expenditures and
other information necessary and sufficient under generally accepted accounting
practices to fairly represent the financial position and results of operation of
the Property during such calendar month, all in form satisfactory to Lender;
(iii) a balance sheet for each such calendar quarter; and (iv) a
comparison
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of the
budgeted income and expenses and the actual income and expenses for year to date
together with a detailed explanation of any variances of five percent (5%) or
more between budgeted and actual amounts for such year to date period. Until a
Securitization has occurred, Borrower shall furnish monthly each of the items
listed in the immediately preceding sentence within thirty (30) days after the
end of such month. Within one hundred twenty (120) days following the end of
each calendar year (provided, however, if requested by Lender, Borrower shall
use commercially reasonable efforts to provide Lender with any unaudited annual
statements prior to such date), Borrower shall furnish statements of its
financial affairs and condition including a balance sheet and a statement of
profit and loss for the Borrower in such detail as Lender may reasonably
request, and setting forth the financial condition and the income and expenses
for the Property for the immediately preceding calendar year, which statements
shall be prepared by Borrower. Borrower’s annual financial statements shall
include (x) a list of the tenants, if any, occupying more than twenty (20%)
percent of the total floor area of the Improvements, and (y) a breakdown
showing the year in which each Lease then in effect expires and the percentage
of total floor area of the Improvements and the percentage of base rent with
respect to which Leases shall expire in each such year, each such percentage to
be expressed on both a per year and a cumulative basis. Borrower’s annual
financial statements shall be accompanied by a certificate executed by a
financial officer of Borrower or the Sponsor, as applicable, stating that each
such annual financial statement presents fairly the financial condition of the
Property being reported upon and shall be audited by a “Big Four” accounting
firm or other independent certified public accountant reasonably acceptable to
Lender, which audited financial statements may be in the form of schedules to
the audited consolidated financial statements of the Sponsor. Each such annual
financial statement shall be prepared in accordance with generally accepted
accounting principles consistently applied or the method used in connection with
the financial statements delivered to Lender in connection with the closing of
the Loan. At any time and from time to time Borrower shall deliver to Lender or
its agents such other financial data as Lender or its agents shall reasonably
request with respect to the ownership, maintenance, use and operation of the
Property. Borrower shall furnish to Lender an Annual Budget not later than
thirty (30) days prior to the commencement of each fiscal year of Borrower in
form reasonably satisfactory to Lender. In the event that Lender objects to a
proposed Annual Budget submitted by Borrower, Lender shall advise Borrower of
such objections within fifteen (15) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower
shall promptly revise such Annual Budget and resubmit the same to Lender. Lender
shall advise Borrower in writing of any objections to such revised Annual Budget
within ten (10) days after receipt thereof (and deliver to Borrower a reasonably
detailed description of such objections) and Borrower shall promptly revise the
same in accordance with the process described in this subsection until Lender
approves the Annual Budget. Lender shall have a period of thirty (30) days from
receipt of such Annual Budget, together with any other related documentation
reasonably requested by Lender, in which to approve or reject such Annual
Budget, provided that such Annual Budget is accompanied by a written request
from Borrower marked in bold lettering with the following language: “LENDER’S
RESPONSE IS REQUIRED WITHIN THIRTY (30) DAYS OF RECEIPT OF THIS NOTICE PURSUANT
TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and the
envelope containing the request must be marked “PRIORITY - LENDER’S RESPONSE
REQUIRED IN THIRTY (30) DAYS”. In the event that Lender fails to approve or
reject such Annual Budget in such period of time, Lender’s
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consent
to such Annual Budget shall be deemed given. Until such time that Lender
approves a proposed Annual Budget, which approval shall not be unreasonably
withheld, conditioned or delayed, the most recent Annual Budget shall apply;
provided that, such approved Annual Budget shall be adjusted to reflect actual
increases in Taxes, Insurance Premiums, utilities expenses and expenses under
the Management Agreement.
(b) Upon
request from Lender, Borrower shall promptly furnish to Lender:
(i) a
property management report for the Property, containing a list of prospective
tenants and any other information requested by Lender, in reasonable detail and
certified by Borrower under penalty of perjury to be true and complete, but no
more frequently than quarterly;
(ii) an
accounting of all security deposits held in connection with any Lease of any
part of the Property, including the name and identification number of the
accounts in which such security deposits are held, the name and address of the
financial institutions in which such security deposits are held and the name of
the Person to contact at such financial institution, along with any authority or
release necessary for Lender to obtain information regarding such accounts
directly from such financial institutions; and
(iii) a report
of all letters of credit provided by any Tenant in connection with any Lease of
any part of the Property, including the account numbers of such letters of
credit, the names and addresses of the financial institutions that issued such
letters of credit and the names of the Persons to contact at such financial
institutions, along with any authority or release necessary for Lender to obtain
information regarding such letters of credit directly from such financial
institutions.
(c) Borrower
shall comply with the following:
(i) If
requested by Lender, Borrower shall provide Lender, promptly upon request, with
the following financial statements if, at the time a Disclosure Document is
being prepared for a Securitization, it is expected that the principal amount of
the Loan when combined with the principal amount of any Affiliated Loans at the
time of Securitization may, or if the principal amount of the Loan when combined
with the principal amount of any Affiliated Loans at any time during which the
Loan and any Affiliated Loans are included in a Securitization does, equal or
exceed 20% of the aggregate principal amount of all mortgage loans included or
expected to be included, as applicable, in the Securitization:
(A) A balance
sheet with respect to the Property for the two most recent fiscal years, meeting
the requirements of Section 210.3-01 of Regulation S-X of the Securities Act and
statements of income and statements of cash flows with respect to the Property
for the three most recent fiscal years, meeting the requirements of Section
210.3-02 of Regulation S-X, and, to the extent that such balance sheet is more
than 135 days old as of the date of the document in which such financial
statements are included, interim financial statements of the Property meeting
the requirements of Section 210.3-01 and 210.3-02 of
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Regulation
S-X (all of such financial statements, collectively, the “Standard
Statements”).
(B) Not later
than 30 days after the end of each fiscal quarter following the date hereof, a
balance sheet of the Property as of the end of such fiscal quarter, meeting the
requirements of Section 210.3-01 of Regulation S-X, and statements of income and
statements of cash flows of the Property for the period commencing following the
last day of the most recent fiscal year and ending on the date of such balance
sheet and for the corresponding period of the most recent fiscal year, meeting
the requirements of Section 210.3-02 of Regulation S-X (provided, that if for
such corresponding period of the most recent fiscal year Acquired Property
Statements were permitted to be provided hereunder pursuant to subsection (i)
above, Borrower shall instead provide Acquired Property Statements for such
corresponding period).
(C) Not later
than 75 days after the end of each fiscal year following the date hereof, a
balance sheet of the Property as of the end of such fiscal year, meeting the
requirements of Section 210.3-01 of Regulation S-X, and statements of income and
statements of cash flows of the Property for such fiscal year, meeting the
requirements of Section 210.3-02 of Regulation S-X.
(D) Within
ten Business Days after notice from Lender in connection with the Securitization
of this Loan, such additional financial statements, such that, as of the date
(each an “Offering
Document Date”) of
each Disclosure Document, Borrower shall have provided Lender with all financial
statements as described in subsection (f)(i) above; provided that the fiscal
year and interim periods for which such financial statements shall be provided
shall be determined as of such Offering Document Date.
(ii) If
requested by Lender, Borrower shall provide Lender, promptly upon request, with
summaries of the financial statements referred to in Section 5.11(c) hereof if,
at the time a Disclosure Document is being prepared for a Securitization, it is
expected that the principal amount of the Loan and any Affiliated Loans at the
time of Securitization may, or if the principal amount of the Loan and any
Affiliated Loans at any time during which the Loan and any Affiliated Loans are
included in a Securitization does, equal or exceed 10% (but is less than 20%) of
the aggregate principal amount of all mortgage loans included or expected to be
included, as applicable, in a Securitization. Such summaries shall meet the
requirements for “summarized financial information,” as defined in Section
210.1-02(bb) of Regulation S-X, or such other requirements as may be determined
to be necessary or appropriate by Lender.
(iii) All
financial statements provided by Borrower hereunder pursuant to Section
5.11(c)(i) and (ii) hereof shall be prepared in accordance with GAAP, and shall
meet the requirements of Regulation S-X and other applicable legal requirements.
All financial statements referred to in Section 5.11(c)(i)(A)and (C) above shall
be audited by Acceptable Accountants in accordance with Regulation S-X and all
other applicable legal requirements, shall be accompanied by the manually
executed report of the independent
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accountants
thereon, which report shall meet the requirements of Regulation S-X and all
other applicable legal requirements, and shall be further accompanied by a
manually executed written consent of the Acceptable Accountants, in form and
substance acceptable to Lender, to the inclusion of such financial statements in
any Disclosure Document and any Exchange Act Filing and to the use of the name
of such Acceptable Accountants and the reference to such Acceptable Accountants
as “experts” in any Disclosure Document and Exchange Act Filing (as defined
below), all of which shall be provided at the same time as the related financial
statements are required to be provided. All financial statements (audited or
unaudited) provided by Borrower under this Section 5.11 shall be certified by
the chief financial officer or administrative member of Borrower, which
certification shall state that such financial statements meet the requirements
set forth in the first sentence of this Section 5.11(c)(iii).
(iv) If
requested by Lender, Borrower shall provide Lender, promptly upon request, with
any other or additional financial statements, or financial, statistical or
operating information, as Lender shall determine to be required pursuant to
Regulation S-X or any amendment, modification or replacement thereto or other
legal requirements in connection with any Disclosure Document or any filing
under or pursuant to the Exchange Act in connection with or relating to a
Securitization (hereinafter an “Exchange
Act Filing”) or as
shall otherwise be reasonably requested by Lender.
(v) In the
event Lender determines, in connection with a Securitization, that the financial
statements required in order to comply with Regulation S-X or other legal
requirements are other than as provided herein, then notwithstanding the
provisions of Section 5.11(c) hereof, Lender may request, and Borrower shall
promptly provide, such combination of Acquired Property Statement and/or
Standard Statements or such other financial statements as Lender determines to
be necessary or appropriate for such compliance.
(vi) Any
reports, statements or other information required to be delivered under this
Agreement shall be delivered in paper form and in the event that Lender requires
financial statements in connection with subsection (c) above because the Loan
when combined with the principal amount of any Affiliated Loans equal or exceed
20% of the aggregate principal amount of all mortgage loans included in a
Securitization (defined below), Borrower shall deliver such reports, statements
and other information (A) on a diskette, and (B) if requested by Lender and
within the capabilities of Borrower’s data systems without change or
modification thereto, in electronic form and prepared using Microsoft Word for
Windows or WordPerfect for Windows files (which files may be prepared using a
spreadsheet program and saved as word processing files).
(d) Borrower
and Borrower Principal shall furnish Lender with such other additional financial
or management information (including state and federal tax returns) as may, from
time to time, be reasonably required by Lender in form and substance
satisfactory to Lender (including, without limitation, any financial reports
required to be delivered by any Tenant or any guarantor of any Lease pursuant to
the terms of such Lease), and shall furnish to Lender and its agents convenient
facilities for the examination and audit of any such books and
records.
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(e) All items
requiring the certification of Borrower shall, except where Borrower is an
individual, require a certificate executed by the general partner, managing
member or chief executive officer of Borrower, as applicable (and the same rules
shall apply to any sole shareholder, general partner or managing member which is
not an individual).
Section
5.12. Estoppel
Statement
(a) After
request by Lender, Borrower shall within ten (10) Business Days furnish Lender
with a statement, duly acknowledged and certified, setting forth (i) the amount
of the original principal amount of the Note, (ii) the rate of interest on the
Note, (iii) the unpaid principal amount of the Note, (iv) the date installments
of interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, and (vi) that the Note, this Agreement, the
Mortgage and the other Loan Documents are valid, legal and binding obligations
and have not been modified or if modified, giving particulars of such
modification.
(b) After
request by Borrower, Lender shall promptly deliver to Borrower a beneficiary’s
statement on Lender’s (or its servicer’s) then current form of such document,
which shall include the balance of the Loan, the then applicable interest rate
and the balances in the Reserve Accounts. In a separate writing, Lender shall
provide to Borrower, to the extent true, a statement that Lender has not
delivered any notices of default to Borrower.
(c) Borrower
shall use its commercially reasonable best efforts to deliver to Lender,
promptly upon request, duly executed estoppel certificates from any one or more
Tenants as required by Lender attesting to such facts regarding the related
Lease as Lender may reasonably require, including, but not limited to
attestations that each Lease covered thereby is in full force and effect with no
defaults thereunder on the part of any party, that none of the Rents have been
paid more than one month in advance, except as security, and that the Tenant
claims no defense or offset against the full and timely performance of its
obligations under the Lease. Other than in connection with a Securitization,
Borrower shall not be required to use its best efforts to deliver such estoppel
certificates more than once per year so long as no Event of Default
exists.
Section
5.13. Leasing
Matters
(a) Borrower
may enter into a proposed Lease (including the renewal or extension of an
existing Lease (a “Renewal
Lease”))
without the prior written consent of Lender, provided such proposed Lease or
Renewal Lease (i) provides for rental rates and terms comparable to existing
local market rates and terms (taking into account the type and quality of the
tenant) as of the date such Lease is executed by Borrower (unless, in the case
of a Renewal Lease, the rent payable during such renewal, or a formula or other
method to compute such rent, is provided for in the original Lease), (ii) is an
arm’s-length transaction with a bona fide, independent third party tenant or
with a Taxable REIT Subsidiary of Sponsor, (iii) does not have a materially
adverse effect on the value of the Property taken as a whole, (iv) is subject
and subordinate to the Mortgage and the Tenant thereunder agrees to attorn to
Lender, either by the terms of such Renewal Lease or pursuant to a
subordination, non-disturbance and attornment agreement on Lender’s then current
form (v) does not contain any option, offer, right of first refusal, or other
similar right to acquire all or any portion of the Property, (vi) has a base
term of less than fifteen (15) years including options to renew, (vii) has no
rent credits, free rents or concessions granted
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thereunder,
other than as consistent with then market standards for prudent institutional
owners of Class A office buildings in the sub-market where the Property is
located, and (viii) is written on the standard form of lease approved by Lender
and attached hereto as Exhibit C, subject to tenant specific negotiated changes
which do not, individually or in the aggregate, cause a Material Adverse Change
with respect to the Property or the financial condition of Borrower. All
proposed Leases which do not satisfy the requirements set forth in this
subsection shall be at Borrower’s expense and subject to the prior approval of
Lender and its counsel, such consent not to be unreasonably withheld or delayed.
Borrower shall promptly deliver to Lender copies of all Leases which are entered
into pursuant to this subsection together with Borrower’s certification that it
has satisfied all of the conditions of this Section.
(b) Borrower
(i) shall observe and perform in all material respects all the obligations
imposed upon the landlord under the Leases (or refrain from such observance or
performance to the extent the same is in accordance with prudent institutional
ownership practices for properties similar to and in the same sub-market as
Property) and shall not do or permit to be done anything to impair the value of
any of the Leases as security for the Debt; (ii) shall promptly send copies to
Lender of all notices of default which Borrower shall send or receive
thereunder; (iii) shall enforce all of the material terms, covenants and
conditions contained in the Leases upon the part of the tenant thereunder to be
observed or performed unless Borrower, in accordance with prudent institutional
ownership practices for properties similar and in the same sub-market as the
Property, elects not to enforce any such term, covenant or condition; (iv) shall
not collect any of the Rents more than one (1) month in advance (except security
deposits shall not be deemed Rents collected in advance); (v) shall not execute
any other assignment of the landlord’s interest in any of the Leases or the
Rents; and (vi) shall not consent to any assignment of or subletting under any
Leases not in accordance with their terms, without the prior written consent of
Lender, such consent not to be unreasonably withheld, conditioned or
delayed.
(c) Borrower
may, without the prior written consent of Lender, amend, modify or waive the
provisions of any Lease or terminate, reduce Rents under, accept a surrender of
space under, or shorten the term of, any Lease (including any guaranty, letter
of credit or other credit support with respect thereto) provided that such
action (taking into account, in the case of a termination, reduction in rent,
surrender of space or shortening of term, the planned alternative use of the
affected space) does not have a materially adverse effect on the value of the
Property taken as a whole, and provided that such Lease, as amended, modified or
waived, is otherwise in compliance with the requirements of this Agreement and
any subordination agreement binding upon Lender with respect to such Lease or
provided that such action is reasonably required to maintain Sponsor’s status as
a REIT. A termination of a Lease with a tenant who is in default beyond
applicable notice and grace periods shall not be considered an action which has
a materially adverse effect on the value of the Property taken as a whole. Any
amendment, modification, waiver, termination, rent reduction, space surrender or
term shortening which does not satisfy the requirements set forth in this
subsection shall be subject to the prior approval of Lender and its counsel, at
Borrower’s expense. Borrower shall promptly deliver to Lender copies of
amendments, modifications and waivers which are entered into pursuant to this
subsection together with Borrower’s certification that it has satisfied all of
the conditions of this subsection.
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(d) Notwithstanding
anything contained herein to the contrary, Borrower shall not, without the prior
written consent of Lender, enter into, renew, extend, amend in any material
respect, modify in any material respect, waive any material provisions of,
terminate, reduce Rents under, accept a surrender of space under, or shorten the
term of any Major Lease (except, as to termination, reduction or acceptance of
surrender, in accordance with the express terms of the Lease).
(e) Notwithstanding
anything to the contrary contained herein, to the extent Lender’s prior approval
is required for any leasing matters set forth in this Section 5.13, Lender shall
have ten (10) Business Days from receipt of written request and all required
information and documentation relating thereto in which to approve or disapprove
such matter, provided that such request to Lender is marked in capitalized bold
lettering with the following language: “LENDER’S RESPONSE IS REQUIRED WITHIN TEN
(10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN
AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and the envelope containing the
request must be marked “PRIORITY- LENDER’S RESPONSE REQUIRED IN TEN (10)
BUSINESS DAYS”. In the event that Lender fails to respond to the leasing matter
in question within such time, Lender’s approval shall be deemed given for all
purposes. Borrower shall provide Lender with such information and documentation
as may be reasonably required by Lender, including, without limitation, lease
comparables and other market information as required by Lender.
Section
5.14. Property
Management
(a) Borrower
shall (i) promptly perform and observe in all material respects all of the
covenants required to be performed and observed by it under the Management
Agreement and do all things necessary to preserve and to keep unimpaired its
material rights thereunder; (ii) promptly notify Lender of any default under the
Management Agreement of which Borrower is aware; (iii) promptly deliver to
Lender a copy of any notice of default or other material notice received by
Borrower under the Management Agreement; (iv) promptly give notice to Lender of
any notice or information that Borrower receives which indicates that Manager is
terminating the Management Agreement or that Manager is otherwise discontinuing
its management of the Property; and (v) promptly enforce the performance and
observance in all material respects of all of the covenants required to be
performed and observed by Manager under the Management Agreement.
(b) If at any
time, (i) Manager shall become insolvent or a debtor in a bankruptcy proceeding;
(ii) an Event of Default has occurred and is continuing; or (iii) a default by
Manager has occurred and is continuing beyond applicable cure periods under the
Management Agreement, Borrower shall, at the request of Lender, terminate the
Management Agreement upon sixty (60) days prior notice to Manager and replace
Manager with a Qualified Manager reasonably approved by Lender on terms and
conditions satisfactory to Lender, it being understood and agreed that the
management fee for such replacement manager shall not exceed then prevailing
market rates.
(c) Intentionally
Deleted.
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(d) Borrower
shall not, without the prior written consent of Lender (which consent shall not
be unreasonably withheld, conditioned or delayed): (i) surrender, terminate or
cancel the Management Agreement or otherwise replace Manager or enter into any
other management agreement with respect to the Property; (ii) reduce or consent
to the reduction of the term of the Management Agreement; (iii) increase or
consent to the increase of the amount of any charges under the Management
Agreement; or (iv) otherwise modify, change, supplement, alter or amend, or
waive or release any of its rights and remedies under, the Management Agreement
in any material respect. In the event that Borrower replaces Manager at any time
during the term of Loan pursuant to this subsection, such Manager shall be a
Qualified Manager.
(e) No
resignation of Manager shall be effective unless (i) Manager provides ninety
(90) days prior written notice of its intent to resign and (ii) a Qualified
Manager has assumed responsibility for the management of the Property pursuant
to a written management agreement in form and substance acceptable to
Lender.
(f) The
Property shall at all times be managed by a Qualified Manager.
Section
5.15. Liens
Borrower
shall not, without the prior written consent of Lender, create, incur, assume or
suffer to exist any Lien on any portion of the Property or permit any such
action to be taken, except Permitted Encumbrances and liens being contested in
accordance with Sections 5.1(b) and 5.4(b) of this Agreement.
Section
5.16. Debt
Cancellation
Borrower
shall not cancel or otherwise forgive or release any claim or debt (other than
termination of Leases in accordance herewith) owed to Borrower by any Person,
except for adequate consideration and in the ordinary course of Borrower’s
business.
Section
5.17. Zoning
Borrower
shall not initiate or consent to any zoning reclassification of any portion of
the Property or seek any variance under any existing zoning ordinance or use or
permit the use of any portion of the Property in any manner that is reasonably
expected to result in such use becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation, without the
prior written consent of Lender.
Section
5.18. ERISA
(a) Borrower
shall not engage in any transaction which would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Lender of any of its rights
under the Note, this Agreement or the other Loan Documents) to be a non-exempt
(under a statutory or administrative class exemption) prohibited transaction
under ERISA.
(b) Borrower
further covenants and agrees to deliver to Lender such certifications or other
evidence from time to time throughout the term of the Loan, as requested by
Lender in its reasonable discretion, that (i) Borrower is not an “employee
benefit plan” as defined in Section
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3(3) of
ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the
meaning of Section 3(32) of ERISA; (ii) Borrower is not in violation of state
statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (iii) one or more of the following circumstances is
true:
(A) Equity
interests in Borrower are publicly offered securities, within the meaning of 29
C.F.R. §2510.3-101(b)(2);
(B) Less than
twenty-five percent (25%) of each outstanding class of equity interests in
Borrower are held by “benefit plan investors” within the meaning of 29 C.F.R.
§2510.3-101(f)(2); or
(C) Borrower
qualifies as an “operating company” or a “real estate operating company” within
the meaning of 29 C.F.R. §2510.3-101(c) or (e) or an Investment Company
registered under the Investment Company Act of 1940; or
(D) None of
the assets of Borrower otherwise constitutes “plan assets” within the meaning of
29 CFR §2518.3-101.
Section
5.19. No
Joint Assessment
Borrower
shall not suffer, permit or initiate the joint assessment of the Property with
(a) any other real property constituting a tax lot separate from the Property,
or (b) any portion of the Property which may be deemed to constitute personal
property, or any other procedure whereby the Lien of any taxes which may be
levied against such personal property shall be assessed or levied or charged to
the Property.
Section
5.20. Reciprocal
Easement Agreements
Borrower
shall not enter into, terminate or modify any material reciprocal easement
agreement without Lender’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Borrower shall enforce, comply
with, and cause each of the parties to any reciprocal easement agreement to
comply with all of the material economic terms and conditions contained in any
such material reciprocal easement agreement. Notwithstanding the foregoing,
Lender acknowledges and agrees that Borrower may enter into covenants,
conditions, restrictions and easements, including, without limitation,
reciprocal easement agreements (collectively, the “Development
Covenants”) in
connection with the subdivision and/or development of a Release Parcel, which
Borrower shall have the right to enter into and record (or cause to be recorded)
against the Remaining Property, and Lender agrees to subordinate thereto so long
as such Development Covenants do not materially and adversely affect (i) the
value or operations of the Remaining Property or (ii) Borrower’s ability to
repay the Loan.
Section
5.21. Alterations
Lender’s
prior approval (not to be unreasonably withheld or delayed) shall be required in
connection with any alterations to any Improvements, exclusive of alterations to
tenant spaces required under any Lease, (a) that is reasonably expected to have
a material adverse effect on the
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Property,
(b) that affect the structure of the applicable building or (c) that, together
with any other alterations undertaken at the same time (including any related
alterations, improvements or replacements), are reasonably anticipated to have a
cost in excess of the Alteration Threshold. If the total unpaid amounts incurred
and to be incurred with respect to such alterations to the Improvements shall at
any time exceed the Alteration Threshold, Borrower, at Lender’s reasonable
request, shall promptly deliver to Lender as security for the payment of such
amounts and as additional security for Borrower’s obligations under the Loan
Documents any of the following: (i) cash, (ii) direct non-callable obligations
of the United States of America or other obligations which are “government
securities” within the meaning of Section 2(a)(16) of the Investment Company Act
of 1940, to the extent acceptable to the applicable Rating Agencies, (iii) other
securities acceptable to Lender and the Rating Agencies, or (iv) a completion
bond, provided that such completion bond is acceptable to the Lender and the
Rating Agencies. Such security shall be in an amount equal to the excess of the
total unpaid amounts incurred and to be incurred with respect to such
alterations to the Improvements over the Alteration Threshold.
Notwithstanding the foregoing, Lender acknowledges that certain alterations to
Improvements relating to parking, ingress/egress, and landscaping located on the
Remaining Parcel may be required in connection with the development of the
Release Parcels. Such alterations shall be deemed approved provided that
Borrower provides a form of security as described above in this Section
5.21.
ARTICLE
6
ENTITY
COVENANTS
Section
6.1. Single
Purpose Entity/Separateness
Until the
Debt has been paid in full, Borrower represents, warrants and covenants as
follows:
(a) Borrower
has not and will not:
(i) engage in
any business or activity other than the acquisition, ownership, operation,
development, financing and maintenance of the Property, and activities
incidental thereto;
(ii) acquire
or own any assets other than (A) the Property, and (B) such incidental Personal
Property as may be necessary for the operation of the Property;
(iii) merge
into or consolidate with any Person, or dissolve, terminate, liquidate in whole
or in part, transfer or otherwise dispose of all or substantially all of its
assets or change its legal structure;
(iv) fail to
observe all organizational formalities in order to maintain its separate
existence;
(v) own any
subsidiary, or make any investment in, any Person;
(vi) commingle
its assets with the assets of any other Person;
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(vii) incur any
debt, secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than (A) the Debt, (B) trade and operational indebtedness
incurred in the ordinary course of business with trade creditors, provided such
indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on commercially
reasonable terms and conditions, and (4) due not more than sixty (60) days past
the date incurred and paid on or prior to such date, and/or (C) financing leases
and purchase money indebtedness incurred in the ordinary course of business
relating to Personal Property on commercially reasonable terms and conditions
and/or
(D) in the case of development of any Release Parcel, such obligations (direct
or contingent) to third parties and governmental entities as are committed to by
Borrower in connection with the receipt of governmental approvals for the
development, subdivision or other improvement or such Release Parcel;
provided however, the aggregate amount of the indebtedness described in (B) and
(C) and (D)
shall not
exceed at any time three percent (3%) of the original principal amount of the
Loan;
(viii) fail to
maintain its records, books of account, bank accounts, financial statements,
accounting records and other entity documents separate and apart from those of
any other Person; except that Borrower’s financial position, assets,
liabilities, net worth and operating results may be included in the consolidated
financial statements of an Affiliate, provided that such consolidated financial
statements contain a footnote indicating that Borrower is a separate legal
entity;
(ix) enter
into any contract or agreement with any general partner, member, shareholder,
principal, guarantor of the obligations of Borrower, or any Affiliate of the
foregoing, except upon terms and conditions that are commercially reasonable and
substantially similar to those that would be available on an arm’s-length basis
with unaffiliated third parties;
(x) maintain
its assets in such a manner that it will be costly or difficult to segregate,
ascertain or identify its individual assets from those of any other
Person;
(xi) (A)
assume or guaranty the debts of any other Person, hold itself out to be
responsible for the debts of any other Person, or otherwise pledge its assets
for the benefit of any other Person or hold out its credit as being available to
satisfy the obligations of any other Person or (B) other than with respect to
(I) the obligations of Borrower guaranteed by Borrower Principal pursuant to the
terms of the Loan Documents, or (II) reimbursement obligations, if any, of
Borrower Principal or its Affiliates (other than Borrower) to the Issuing Bank
with respect to the Reserve Letters of Credit, permit any of its partners,
members, shareholders or other Affiliates to guarantee, become obligated for or
hold its credit out to be responsible for any of the debts or obligations of
Borrower;
(xii) make any
loans or advances to any Person;
(xiii) fail to
file its own tax returns (if Borrower is required to file such tax returns by
applicable law) or file a consolidated federal income tax return with any Person
(unless required or permitted, as the case may be, by applicable Legal
Requirements);
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(xiv) identify
itself as a division or part of any Affiliate (other than for tax purposes) or
fail either to hold itself out to the public as a legal entity separate and
distinct from any other Person or to conduct its business solely in its own name
or fail to correct any known misunderstanding regarding its separate
identity;
(xv) fail to
maintain adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its contemplated business
operations;
(xvi) without
the unanimous written consent of all of its members and the written consent of
100% of the directors of
Borrower, including, without limitation, each Independent Director, (a) file or
consent to the filing of any petition, either voluntary or involuntary, to take
advantage of any Creditors Rights Laws, (b) seek or consent to the appointment
of a receiver, liquidator or any similar official, or (c) make an assignment for
the benefit of creditors;
(xvii) fail to
allocate, fairly and reasonably, shared expenses (including, without limitation,
shared office space and services performed by an employee of an Affiliate) among
the Persons sharing such expenses and to use separate stationery, invoices and
checks with the result that Borrower bears its fair share of such
expenses;
(xviii) fail to
remain solvent or pay its own liabilities (including, without limitation,
salaries of its own employees) only from its own funds;
(xix) acquire
obligations or securities of its partners, members, shareholders or other
affiliates, as applicable;
(xx) violate
or cause to be violated the assumptions made with respect to Borrower and its
principals in any opinion letter pertaining to substantive consolidation
delivered to Lender in connection with the Loan;
(xxi) fail to
maintain a sufficient number of employees in light of its contemplated business
operations;
(xxii) permit
any Affiliate independent access to its bank accounts other than with respect to
the Manager (and any sub manager) in its capacity as manager of the Property
pursuant to the Management Agreement;
(xxiii) fail to
maintain the resolutions, agreements and other instruments regarding the
transactions contemplated by the Loan as official records; or
(xxiv) fail to
make all oral and written communication, including, without limitation, letters,
invoices, purchase orders, contracts, statements, and applications solely in the
name of Borrower.
(b) Borrower
shall have Maguire Properties Holdings II, LLC as its sole member. Borrower
shall maintain its status as a single member Delaware limited liability
company.
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(c) The
limited liability company agreement of Borrower (the “LLC
Agreement”) shall
provide that (i) upon the occurrence of any event that causes the sole member of
Borrower (“Member”) to
cease to be the member of Borrower (other than (A) upon an assignment by Member
of all of its limited liability company interest in Borrower and the admission
of the transferee in accordance with the Loan Documents and the LLC Agreement,
or (B) the resignation of Member and the admission of an additional member of
Borrower in accordance with the terms of the Loan Documents and the LLC
Agreement), any person acting as Independent Director of Borrower shall, without
any action of any other Person and simultaneously with the Member ceasing to be
the member of Borrower, automatically be admitted to Borrower (“Special
Member”) and
shall continue Borrower without dissolution and (ii) Special Member may not
resign from Borrower or transfer its rights as Special Member unless (A) a
successor Special Member has been admitted to Borrower as Special Member in
accordance with requirements of Delaware law and (B) such successor Special
Member has also accepted its appointment as an Independent Director. The LLC
Agreement shall further provide that (i) Special Member shall automatically
cease to be a member of Borrower upon the admission to Borrower of a substitute
Member, (ii) Special Member shall be a member of Borrower that has no
interest in the profits, losses and capital of Borrower and has no right to
receive any distributions of Borrower assets, (iii) pursuant to Section
18-301 of the Delaware Limited Liability Company Act (the “Act”),
Special Member shall not be required to make any capital contributions to
Borrower and shall not receive a limited liability company interest in Borrower,
(iv) Special Member, in its capacity as Special Member, may not bind Borrower
and (v) except as required by any mandatory provision of the Act, Special
Member, in its capacity as Special Member, shall have no right to vote on,
approve or otherwise consent to any action by, or matter relating to, Borrower,
including, without limitation, the merger, consolidation or conversion of
Borrower; provided, however, such prohibition shall not limit the obligations of
Special Member, its capacity as Independent Director, to vote on such matters
required by the Loan Documents or the LLC Agreement. In order to implement the
admission to Borrower of Special Member, Special Member shall execute a
counterpart to the LLC Agreement. Prior to its admission to Borrower as Special
Member, Special Member shall not be a member of Borrower.
Upon the
occurrence of any event that causes the Member to cease to be a member of
Borrower, to the fullest extent permitted by law, the personal representative of
Member shall, within ninety (90) days after the occurrence of the event that
terminated the continued membership of Member in Borrower, agree in writing (i)
to continue Borrower and (ii) to the admission of the personal representative or
its nominee or designee, as the case may be, as a substitute member of Borrower,
effective as of the occurrence of the event that terminated the continued
membership of Member of Borrower in Borrower. Any action initiated by or brought
against Member or Special Member under any Creditors Rights Laws shall not cause
Member or Special Member to cease to be a member of Borrower and upon the
occurrence of such an event, the business of Borrower shall continue without
dissolution. The LLC Agreement shall provide that each of Member and Special
Member waives any right it might have to agree in writing to dissolve Borrower
upon the occurrence of any action initiated by or brought against Member or
Special Member under any Creditors Rights Laws, or the occurrence of an event
that causes Member or Special Member to cease to be a member of
Borrower.
Lender
acknowledges that the terms of Borrower’s LLC Agreement as of the Closing Date
are deemed to have satisfied the requirements of this Section
6.1(c).
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Section
6.2. Change
of Name, Identity or Structure
Borrower
shall not change or permit to be changed (a) Borrower’s name, (b) Borrower’s
identity (including its trade name or names), (c) Borrower’s principal place of
business set forth on the first page of this Agreement, (d) the corporate,
partnership or other organizational structure of Borrower, (e) Borrower’s state
of organization, or (f) Borrower’s organizational identification number, without
in each case notifying Lender of such change in writing at least thirty (30)
days prior to the effective date of such change and, in the case of a change in
Borrower’s structure, without first obtaining the prior written consent of
Lender. In addition, Borrower shall not change or permit to be changed any
organizational documents of Borrower or if such change would adversely impact
the covenants set forth in Section 6.1 and Section 6.4 hereof. Borrower
authorizes Lender to file any financing statement or financing statement
amendment required by Lender to establish or maintain the validity, perfection
and priority of the security interest granted under the Loan Documents. At the
request of Lender, Borrower shall execute a certificate in form satisfactory to
Lender listing the trade names under which Borrower intends to operate the
Property, and representing and warranting that Borrower does business under no
other trade name with respect to the Property. If Borrower does not now have an
organizational identification number and later obtains one, or if the
organizational identification number assigned to Borrower subsequently changes,
Borrower shall promptly notify Lender of such organizational identification
number or change.
Section
6.3. Business
and Operations
Borrower
will qualify to do business and will remain in good standing under the laws of
the State as and to the extent the same are required for the ownership,
maintenance, management and operation of the Property.
Section
6.4. Independent
Director
(a) The
organizational documents of Borrower shall provide that at all times there shall
be, and Borrower shall cause there to be, at least two duly appointed members of
the board of directors (each an “Independent
Director”) of
Borrower reasonably satisfactory to Lender each of whom are not at the time of
such individual’s initial appointment, and shall not have been at any time
during the preceding five (5) years, and shall not be at any time while serving
as a director of Borrower, either (i) a shareholder (or other equity owner) of,
or an officer, director (other than an Independent Director of Borrower or an
Affiliate or other similar capacity), partner, manager, member (other than as a
Special Member of Borrower or an Affiliate in the case of single member Delaware
limited liability companies), employee, attorney or counsel of, Borrower or any
of its shareholders, partners, members, subsidiaries or Affiliates; (ii) a
customer or creditor of, or supplier to, Borrower or any of its respective
shareholders, partners, members, subsidiaries or affiliates who derives any of
its purchases or revenue from its activities with Borrower or any Affiliate of
any of them (provided that an Independent Director can be an employee of an
entity providing corporate services and independent directors in the ordinary
course of business); (iii) a Person who Controls or is under common Control with
any such shareholder, officer, director, partner, manager, member, employee,
supplier, creditor or customer; or (iv) a member of the immediate family of any
such shareholder, officer, director (other than an Independent Director of
Borrower or an Affiliate or other similar capacity),
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partner,
manager, member (other than as a Special Member of Borrower or an Affiliate in
the case of single member Delaware limited liability companies), employee,
supplier, creditor or customer.
(b) The
organizational documents of Borrower shall provide that the board of directors
of Borrower shall not take any action which, under the terms of any certificate
of organization, operating agreement or any voting trust agreement with respect
to any membership interests, requires a unanimous vote of the board of directors
of Borrower unless at the time of such action there shall be at least two
members of the board of directors who are Independent Directors. Borrower shall
not will not, without the unanimous written consent of its board of directors
including each Independent Director, on behalf Borrower, (i) file or consent to
the filing of any petition, either voluntary or involuntary, to take advantage
of any applicable Creditors Rights Laws; (ii) seek or consent to the appointment
of a receiver, liquidator or any similar official; or (iii) make an assignment
for the benefit of creditors.
ARTICLE
7
NO
SALE OR ENCUMBRANCE
Section
7.1. Transfer
Definitions
For
purposes of this Article 7 an “Affiliated
Manager” shall
mean any managing agent of the Property, other than Borrower Principal, in which
Borrower, Borrower Principal or any affiliate of such entities has, directly or
indirectly, any Controlling legal, beneficial or economic interest (excluding
any sub manager, Taxable REIT Subsidiary of Sponsor that is owned, directly or
indirectly, by Borrower Principal which does not have, directly or indirectly,
an ownership interest in Borrower); “Control” shall
mean the power to direct the management and policies of a Restricted Party,
directly or indirectly, whether through the ownership of voting securities or
other beneficial interests, by contract or otherwise; “Restricted
Party” shall
mean Borrower, Borrower Principal, any Affiliated Manager, or any shareholder,
partner, member or non-member manager, or any direct or indirect legal or
beneficial owner of Borrower, Borrower Principal, any Affiliated Manager or any
non-member manager, provided, however, that no direct or indirect owners of
Borrower Principal, other than Sponsor, shall be included within the definition
of Restricted Party; and a “Sale
or Pledge” shall
mean a voluntary or involuntary sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, grant of any options with respect to, or any
other transfer or disposition of (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for
consideration or of record) a legal or beneficial interest, except for Permitted
Encumbrances.
Section
7.2. No
Sale/Encumbrance
(a) Except as
provided in Section 7.3 below, Borrower shall not cause or permit a Sale or
Pledge of the Property or any part thereof or any legal or beneficial interest
therein nor permit a Sale or Pledge of an interest in any Restricted Party (in
each case, a “Prohibited
Transfer”),
without the prior written consent of Lender, other than (i) pursuant to Leases
of space in the Improvements to Tenants in accordance with the provisions of
Section 5.13, (ii)
capital leases and other debt permitted under Section 6.1(vii) hereof, (iii) the
licensing of rights to a Taxable REIT Subsidiary of sponsor that is owned,
directly or indirectly, in whole or in part,
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