Exhibit 10.4
LOAN AND SECURITY AGREEMENT
Dated as of August 3, 2005
Between
RECKSON COURT SQUARE, LLC,
as Borrower
and
GERMAN AMERICAN CAPITAL CORPORATION,
as Lender
TABLE OF CONTENTS
Page
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION..................................................................1
1.1 DEFINITIONS.....................................................................................1
1.2 PRINCIPLES OF CONSTRUCTION.....................................................................25
II. GENERAL TERMS...........................................................................................26
2.1 LOAN; DISBURSEMENT TO BORROWER.................................................................26
2.1.1 The Loan..............................................................................26
2.1.2 Disbursement to Borrower..............................................................26
2.1.3 The Note, Security Instrument and Loan Documents......................................26
2.1.4 Use of Proceeds.......................................................................26
2.2 INTEREST; LOAN PAYMENTS; LATE PAYMENT CHARGE...................................................26
2.2.1 Payment of Principal and Interest.....................................................26
2.2.2 Method and Place of Payment...........................................................27
2.2.3 Late Payment Charge...................................................................27
2.2.4 Usury Savings.........................................................................28
2.3 PREPAYMENTS....................................................................................28
2.3.1 Prepayments...........................................................................28
2.3.2 Prepayments After Event of Default....................................................28
2.3.3 Release of Property...................................................................28
2.4 REGULATORY CHANGE; TAXES.......................................................................29
2.4.1 Increased Costs.......................................................................29
2.4.2 Special Taxes.........................................................................30
2.4.3 Other Taxes...........................................................................30
2.4.4 Indemnity.............................................................................30
2.4.5 Change of Office......................................................................30
2.4.6 Survival..............................................................................30
2.4.7 Limitations; Prepayment...............................................................30
2.5 CONDITIONS PRECEDENT TO CLOSING................................................................31
2.5.1 Representations and Warranties; Compliance with Conditions............................31
2.5.2 Delivery of Loan Documents; Title Policy; Reports; Leases.............................31
2.5.3 Related Documents.....................................................................32
2.5.4 Delivery of Organizational Documents..................................................32
2.5.5 Opinions of Borrower's Counsel........................................................33
2.5.6 Reserved..............................................................................33
2.5.7 Completion of Proceedings.............................................................33
2.5.8 Payments..............................................................................33
2.5.9 Account Agreement.....................................................................33
2.5.10 Citibank Estoppel and SNDA............................................................33
2.5.11 Reciprocal Easement Agreement Estoppels...............................................34
2.5.12 Independent Member Certificate........................................................34
2.5.13 Transaction Costs.....................................................................34
Page
2.5.14 Material Adverse Effect..............................................................34
2.5.15 Leases and Rent Roll.................................................................34
2.5.16 Tax Lot..............................................................................34
2.5.17 Physical Conditions Report...........................................................34
2.5.18 Appraisal............................................................................34
2.5.19 Further Documents....................................................................35
III. CASH MANAGEMENT.........................................................................................35
3.1 CASH MANAGEMENT................................................................................35
3.1.1 Establishment of Accounts.............................................................35
3.1.2 Pledge of Account Collateral..........................................................36
3.1.3 Maintenance of Collateral Accounts....................................................37
3.1.4 Eligible Accounts.....................................................................38
3.1.5 Deposits into Sub-Accounts............................................................38
3.1.6 Monthly Funding of Sub-Accounts.......................................................38
3.1.7 Payments from Sub-Accounts............................................................40
3.1.8 Cash Management Bank..................................................................40
3.1.9 Borrower's Account Representations, Warranties and Covenants..........................40
3.1.10 Account Collateral and Remedies.......................................................41
3.1.11 Transfers and Other Liens.............................................................42
3.1.12 Reasonable Care.......................................................................42
3.1.13 Lender's Liability....................................................................43
3.1.14 Continuing Security Interest..........................................................43
IV. REPRESENTATIONS AND WARRANTIES..........................................................................44
4.1 BORROWER REPRESENTATIONS.......................................................................44
4.1.1 Organization..........................................................................44
4.1.2 Proceedings...........................................................................44
4.1.3 No Conflicts..........................................................................44
4.1.4 Litigation............................................................................45
4.1.5 Agreements............................................................................45
4.1.6 Title.................................................................................45
4.1.7 No Bankruptcy Filing..................................................................46
4.1.8 Full and Accurate Disclosure..........................................................46
4.1.9 All Property..........................................................................46
4.1.10 No Plan Assets........................................................................46
4.1.11 Compliance............................................................................47
4.1.12 Reserved..............................................................................47
4.1.13 Condemnation..........................................................................47
4.1.14 Federal Reserve Regulations...........................................................47
4.1.15 Utilities and Public Access...........................................................47
4.1.16 Not a Foreign Person..................................................................48
4.1.17 Separate Lots.........................................................................48
4.1.18 Assessments...........................................................................48
4.1.19 Enforceability........................................................................48
4.1.20 No Prior Assignment...................................................................48
4.1.21 Insurance.............................................................................48
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4.1.22 Use of Property......................................................................48
4.1.23 Certificate of Occupancy; Licenses...................................................49
4.1.24 Flood Zone...........................................................................49
4.1.25 Physical Condition...................................................................49
4.1.26 Boundaries...........................................................................49
4.1.27 Leases...............................................................................49
4.1.28 Filing and Recording Taxes...........................................................50
4.1.29 Single Purpose Entity/Separateness...................................................50
4.1.30 Management...........................................................................51
4.1.31 Illegal Activity.....................................................................51
4.1.32 Reserved.............................................................................51
4.1.33 Tax Filings..........................................................................51
4.1.34 Solvency/Fraudulent Conveyance.......................................................51
4.1.35 Investment Company Act...............................................................51
4.1.36 Labor................................................................................52
4.1.37 Brokers..............................................................................52
4.1.38 No Other Debt........................................................................52
4.1.39 Taxpayer Identification Number.......................................................52
4.1.40 Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws...............52
4.1.41 Leases and REAs......................................................................53
4.1.42 REAs.................................................................................53
4.2 SURVIVAL OF REPRESENTATIONS....................................................................53
V. BORROWER COVENANTS......................................................................................54
5.1 AFFIRMATIVE COVENANTS..........................................................................54
5.1.1 Performance by Borrower...............................................................54
5.1.2 Existence; Compliance with Legal Requirements; Insurance..............................54
5.1.3 Litigation............................................................................54
5.1.4 Single Purpose Entity.................................................................54
5.1.5 Consents..............................................................................55
5.1.6 Access to Property....................................................................56
5.1.7 Notice of Default.....................................................................56
5.1.8 Cooperate in Legal Proceedings........................................................56
5.1.9 Perform Loan Documents................................................................56
5.1.10 Insurance.............................................................................57
5.1.11 Further Assurances; Separate Notes....................................................57
5.1.12 Mortgage Taxes........................................................................58
5.1.13 Operation.............................................................................58
5.1.14 Business and Operations...............................................................59
5.1.15 Title to the Property.................................................................59
5.1.16 Costs of Enforcement..................................................................59
5.1.17 Estoppel Statement....................................................................59
5.1.18 Loan Proceeds.........................................................................60
5.1.19 No Joint Assessment...................................................................60
5.1.20 No Further Encumbrances...............................................................60
5.1.21 Reserved..............................................................................60
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5.1.22 Leases and REAs......................................................................61
5.2 NEGATIVE COVENANTS.............................................................................61
5.2.1 Incur Debt............................................................................61
5.2.2 Encumbrances..........................................................................61
5.2.3 Engage in Different Business..........................................................61
5.2.4 Make Advances.........................................................................61
5.2.5 Partition.............................................................................62
5.2.6 Commingle.............................................................................62
5.2.7 Guarantee Obligations.................................................................62
5.2.8 Transfer Assets.......................................................................62
5.2.9 Amend Organizational Documents........................................................62
5.2.10 Dissolve..............................................................................62
5.2.11 Bankruptcy............................................................................62
5.2.12 ERISA.................................................................................62
5.2.13 Distributions.........................................................................62
5.2.14 Manager...............................................................................63
5.2.15 Citibank Lease........................................................................63
5.2.16 Modify REAs...........................................................................63
5.2.17 Modify Account Agreement..............................................................63
5.2.18 Zoning Reclassification...............................................................64
5.2.19 Change of Principal Place of Business.................................................64
5.2.20 Debt Cancellation.....................................................................64
5.2.21 Misapplication of Funds...............................................................64
5.2.22 Single Purpose Entity.................................................................64
VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION..........................................................64
6.1 INSURANCE COVERAGE REQUIREMENTS................................................................64
6.1.1 Property Insurance....................................................................65
6.1.2 Liability Insurance...................................................................66
6.1.3 Workers' Compensation Insurance.......................................................66
6.1.4 Commercial Rents Insurance............................................................66
6.1.5 Builder's All-Risk Insurance..........................................................66
6.1.6 Boiler and Machinery Insurance........................................................66
6.1.7 Flood Insurance.......................................................................67
6.1.8 Other Insurance.......................................................................67
6.1.9 Ratings of Insurers...................................................................67
6.1.10 Form of Insurance Policies; Endorsements..............................................67
6.1.11 Certificates..........................................................................68
6.1.12 Separate Insurance....................................................................69
6.1.13 Blanket Policies......................................................................69
6.1.14 Terrorism Insurance...................................................................69
6.2 CONDEMNATION AND INSURANCE PROCEEDS............................................................69
6.2.1 Notification..........................................................................69
6.2.2 Proceeds..............................................................................70
6.2.3 Lender to Take Proceeds...............................................................71
6.2.4 Borrower to Restore...................................................................72
6.2.5 Disbursement of Proceeds..............................................................74
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VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS.......................................................75
7.1 BORROWER TO PAY IMPOSITIONS AND OTHER CHARGES..................................................75
7.2 NO LIENS.......................................................................................75
7.3 CONTEST........................................................................................76
VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS...........................................................77
8.1 RESTRICTIONS ON TRANSFERS......................................................................77
8.2 SALE OF BUILDING EQUIPMENT.....................................................................77
8.3 IMMATERIAL TRANSFERS AND EASEMENTS, ETC........................................................77
8.4 INDEBTEDNESS...................................................................................78
8.5 PERMITTED OWNER INTEREST TRANSFERS.............................................................78
8.6 DELIVERIES TO LENDER...........................................................................80
8.7 LOAN ASSUMPTION................................................................................80
8.8 LEASES.........................................................................................81
8.8.1 New Leases and Lease Modifications....................................................81
8.8.2 Leasing Conditions....................................................................82
8.8.3 Delivery of New Lease or Lease Modification...........................................83
8.8.4 Lease Amendments......................................................................83
8.8.5 Security Deposits.....................................................................84
8.8.6 No Default Under Leases...............................................................84
8.8.7 Subordination.........................................................................84
8.8.8 Attornment............................................................................85
8.8.9 Non-Disturbance Agreements............................................................85
8.8.10 Citibank Lease.......................................................................86
8.8.11 Subleases............................................................................86
IX. DEFEASANCE..............................................................................................86
9.1 DEFEASANCE.....................................................................................86
X. MAINTENANCE OF PROPERTY; ALTERATIONS....................................................................90
10.1 MAINTENANCE OF PROPERTY........................................................................90
10.2 CONDITIONS TO ALTERATION.......................................................................90
10.3 COSTS OF ALTERATION............................................................................91
XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION..................................93
11.1 BOOKS AND RECORDS..............................................................................93
11.2 FINANCIAL STATEMENTS...........................................................................93
11.2.1 Quarterly Reports....................................................................93
11.2.2 Annual Reports.......................................................................94
11.2.3 Leasing Reports......................................................................94
11.2.4 Capital Expenditures Summaries.......................................................94
11.2.5 Reserved.............................................................................94
11.2.6 Annual Budget........................................................................94
11.2.7 Other Information....................................................................95
11.2.8 Citibank Lease Information...........................................................95
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XII. ENVIRONMENTAL MATTERS...................................................................................95
12.1 REPRESENTATIONS................................................................................95
12.2 COVENANTS......................................................................................96
12.2.1 Compliance with Environmental Laws...................................................96
12.3 ENVIRONMENTAL REPORTS..........................................................................96
12.4 ENVIRONMENTAL INDEMNIFICATION..................................................................97
12.5 RECOURSE NATURE OF CERTAIN INDEMNIFICATIONS....................................................98
XIII. MEZZANINE LOAN..........................................................................................98
13.1 MEZZANINE LOAN.................................................................................98
XIV. SECURITIZATION AND PARTICIPATION........................................................................98
14.1 SALE OF NOTE AND SECURITIZATION................................................................98
14.2 SECURITIZATION FINANCIAL STATEMENTS...........................................................100
14.3 SECURITIZATION INDEMNIFICATION................................................................100
14.3.1 Disclosure Documents................................................................100
14.3.2 Indemnification Certificate.........................................................100
14.4 RETENTION OF SERVICER.........................................................................103
XV. ASSIGNMENTS AND PARTICIPATIONS.........................................................................103
15.1 ASSIGNMENT AND ACCEPTANCE.....................................................................103
15.2 EFFECT OF ASSIGNMENT AND ACCEPTANCE...........................................................103
15.3 CONTENT 104
15.4 REGISTER 104
15.5 SUBSTITUTE NOTES..............................................................................105
15.6 PARTICIPATIONS................................................................................105
15.7 DISCLOSURE OF INFORMATION.....................................................................105
15.8 SECURITY INTEREST IN FAVOR OF FEDERAL RESERVE BANK............................................106
XVI. RESERVE ACCOUNTS; COLLATERAL LETTERS OF CREDIT.........................................................106
16.1 TI AND LEASING RESERVE ACCOUNT................................................................106
16.2 COLLATERAL LETTERS OF CREDIT..................................................................108
16.3 LETTERS OF CREDIT.............................................................................109
XVII. DEFAULTS 109
17.1 EVENT OF DEFAULT..............................................................................109
17.2 REMEDIES 114
17.3 REMEDIES CUMULATIVE; WAIVERS..................................................................116
17.4 COSTS OF COLLECTION...........................................................................116
XVIII. SPECIAL PROVISIONS.....................................................................................116
18.1 EXCULPATION...................................................................................116
18.1.1 Exculpated Parties..................................................................116
18.1.2 Carveouts From Non-Recourse Limitations.............................................117
XIX. MISCELLANEOUS..........................................................................................118
19.1 SURVIVAL......................................................................................118
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19.2 LENDER'S DISCRETION...........................................................................119
19.3 GOVERNING LAW.................................................................................119
19.4 MODIFICATION, WAIVER IN WRITING...............................................................119
19.5 DELAY NOT A WAIVER............................................................................120
19.6 NOTICES.......................................................................................120
19.7 TRIAL BY JURY.................................................................................121
19.8 HEADINGS......................................................................................122
19.9 SEVERABILITY..................................................................................122
19.10 PREFERENCES...................................................................................122
19.11 WAIVER OF NOTICE..............................................................................122
19.12 EXPENSES; INDEMNITY...........................................................................123
19.13 EXHIBITS AND SCHEDULES INCORPORATED...........................................................125
19.14 OFFSETS, COUNTERCLAIMS AND DEFENSES...........................................................125
19.15 LIABILITY OF ASSIGNEES OF LENDER..............................................................125
19.16 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY BENEFICIARIES.................................126
19.17 PUBLICITY.....................................................................................126
19.18 WAIVER OF MARSHALLING OF ASSETS...............................................................126
19.19 WAIVER OF COUNTERCLAIM AND OTHER ACTIONS......................................................127
19.20 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.................................................127
19.21 PRIOR AGREEMENTS..............................................................................127
19.22 COUNTERPARTS..................................................................................128
19.23 NOTICE OF CERTAIN OCCURRENCES.................................................................128
19.24 CITIBANK LEASE................................................................................128
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EXHIBITS AND SCHEDULES
EXHIBIT A TITLE INSURANCE REQUIREMENTS, ENDORSEMENTS AND AFFIRMATIVE COVERAGES
EXHIBIT B SURVEY REQUIREMENTS
EXHIBIT C SINGLE PURPOSE ENTITY PROVISIONS
EXHIBIT D ENFORCEABILITY OPINION REQUIREMENTS
EXHIBIT E NON-CONSOLIDATION OPINION REQUIREMENTS
EXHIBIT F FORM OF TENANT ESTOPPEL LETTER
EXHIBIT G FORM OF CITIBANK ESTOPPEL LETTER
EXHIBIT H FORM OF CITIBANK SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT I FORM OF REA ESTOPPEL
EXHIBIT J APPROVED FORM OF MANAGEMENT AGREEMENT
EXHIBIT K BORROWER ORGANIZATIONAL STRUCTURE
EXHIBIT L FORM OF ASSIGNMENT OF MANAGEMENT AGREEMENT
EXHIBIT M FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT N FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT O INTENTIONALLY DELETED
EXHIBIT P FORM OF TENANT NOTIFICATION LETTER
EXHIBIT Q INTENTIONALLY DELETED
EXHIBIT R INTENTIONALLY DELETED
EXHIBIT S INTENTIONALLY DELETED
EXHIBIT T FORM OF INDEPENDENT MEMBER CERTIFICATE
SCHEDULE I REAS
SCHEDULE II LITIGATION
SCHEDULE III SECURITY DEPOSITS
SCHEDULE IV PRE-APPROVED PERMITTED OWNERS
SCHEDULE V SCHEDULED LEASES
SCHEDULE VI SCHEDULED PERMITTED ENCUMBRANCES
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LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT, dated as of August 3, 2005 (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, this "Agreement"), between RECKSON COURT SQUARE, LLC, a Delaware limited
liability company ("Borrower") having an office at c/o Reckson Associates Realty
Corp., 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, and GERMAN AMERICAN
CAPITAL CORPORATION, a Maryland corporation, having an address at 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (together with its successors and assigns,
"Lender").
RECITALS:
WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined)
from Lender;
WHEREAS, 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 (as
hereinafter defined).
NOW, THEREFORE, 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:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly required or unless the context clearly indicates a contrary
intent:
"Account Agreement" shall mean the Account and Control Agreement, dated
the date hereof, among Lender, Borrower and Cash Management Bank.
"Account Collateral" shall have the meaning set forth in Section 3.1.2.
"Additional Non-Consolidation Opinion" shall have the meaning set forth
in Section 4.1.29(b).
"Affiliate" shall mean, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with, or any general partner or managing member in, such
specified Person. An Affiliate of a Person includes, without limitation, (i) any
officer or director of such Person, (ii) any record or beneficial owner of more
than 25% of any class of ownership interests of such Person and (iii) any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with, or any general partner or managing member in, the
foregoing. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities or other beneficial interest, by contract or otherwise; and the terms
"controlling" and "controlled" have the meanings correlative to the foregoing.
"Agreement" shall mean this Agreement, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"ALTA" shall mean American Land Title Association, or any successor
thereto.
"Alteration" shall have the meaning set forth in Section 10.2.
"Amended and Restated Lease" shall have the meaning set forth in the
Existing Citibank Lease.
"Annual Budget" shall mean the operating budget for the Property
prepared by Borrower (or a Manager, on Borrower's behalf, pursuant to the
Management Agreement), for the applicable Fiscal Year or other period setting
forth, in reasonable detail, Borrower's good faith estimates of the anticipated
results of operations of the Property, including revenues from all sources, all
Operating Expenses, management fees and Capital Expenditures.
"Anticipated Repayment Date" shall have the meaning set forth in the
Note.
"Applicable Interest Rate" shall have the meaning set forth in the
Note.
"Approved Bank" shall have the meaning set forth in the Account
Agreement.
"Approved Operating Expenses" shall mean the monthly Operating Expenses
as set forth on the Annual Budget approved by Lender pursuant to Section 11.2.6;
provided, however, that if such Annual Budget has not been approved by Lender,
then the term "Approved Operating Expenses" shall mean the amount of Operating
Expenses set forth on the immediately preceding Annual Budget approved by the
Lender.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by Lender and an assignee, and accepted by Lender in accordance
with Article XV and in substantially the form of Exhibit M or such other form
customarily used by Lender in connection with the participation or syndication
of mortgage loans at the time of such assignment.
"Assignment of Leases" shall mean that certain first priority
Assignment of Leases, Rents and Security Deposits, dated as of the date hereof,
from Borrower, as assignor, to Lender, as assignee, assigning to Lender all of
Borrower's interest in and to the Leases, Rents and Security Deposits as
security for the Loan, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"Assignment of Management Agreement" shall mean a Manager's Consent and
Subordination of Management Agreement in the form attached hereto as Exhibit L,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
"Assumed Debt Service" shall mean the aggregate amount of interest due
and payable in accordance with the Notes during the applicable immediately
succeeding twelve (12) month period, assuming that interest on the aggregate
outstanding principal balance of the Notes is accruing at the Loan Constant.
2
"Assumed Debt Service Coverage Ratio" shall mean a ratio, as reasonably
determined by Lender for the applicable period, in which:
(a) the numerator is the Net Cash Flow from the Property for the twelve (12)
month period immediately following the applicable calculation date (except that
in determining Net Cash Flow for this calculation, Operating Income shall not
include the rents, income or revenue from Leases which have not, as of anytime
during such calculation period, satisfied all of the Preconditions); and
(b) the denominator is the sum of (i) any payments to be made by Borrower to any
Mezzanine Lender on each Payment Date for the immediately succeeding twelve (12)
Interest Periods plus (ii) the Assumed Debt Service.
"Bankruptcy Code" shall mean Title 11, U.S.C.A., as amended from time
to time and any successor statute thereto.
"Borrower" has the meaning set forth in the first paragraph of this
Agreement.
"Borrower's Account" shall mean account number 304174696 maintained at
Cash Management Bank or such other account as Borrower may designate as
Borrower's Account from time to time.
"Borrower's Business Purpose" shall have the meaning set forth in
Section 5.2.3.
"Borrower's Knowledge" or terms of similar import used in the Loan
Documents shall mean the actual knowledge of any of Xxxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxxx Xxxxxxxx and/or Xxxxx Xxxxxxx, without independent investigation.
"Building Equipment" shall have the meaning set forth in the Security
Instrument.
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York or in the state in which Servicer
is located are not open for business.
"Capital Expenditures" shall mean any amount incurred in respect of
capital items which in accordance with GAAP would not be included in Borrower's
annual financial statements for an applicable period as an operating expense of
the Property and is not reasonably expected by Borrower to be a regularly
recurring operating expense of the Property.
"Cash" shall mean the legal tender of the United States of America.
"Cash and Cash Equivalents" shall mean any one or a combination of the
following: (i) Cash, and (ii) U.S. Government Obligations.
"Cash Management Bank" shall mean JPMorgan Chase Bank, National
Association, or any successor Approved Bank acting as Cash Management Bank under
the Account Agreement or other financial institution approved by Lender or, if a
Securitization has occurred, approved by the Rating Agencies.
3
"Casualty Amount" shall mean Five Million Dollars ($5,000,000),
provided that solely for purposes of Section 6.2.1, the term "Casualty Amount"
shall mean One Million Dollars ($1,000,000).
"Citibank" shall mean Citibank, N.A., a national banking association.
"Citibank Easement" shall have the meaning set forth in Section 8.3.
"Citibank Lease" shall mean the Existing Citibank Lease or the Amended
and Restated Lease, whichever is in effect at the applicable time in question.
"Citibank Lien" shall mean any Lien which encumbers all or any portion
of the Property which (i) is the Citibank Tenant's obligation to remove in
accordance with the provisions of the Existing Citibank Lease and/or (ii) is
granted by the Citibank Tenant (or any Person claiming by, through or under the
Citibank Lease) or encumbers the Property as a result of any actions or
omissions of the Citibank Tenant (or any Person claiming by, through or under
the Citibank Lease).
"Citibank SNDA" shall mean the Subordination, Non-Disturbance and
Attornment Agreement, dated as of August 3, 2005, between Lender, Borrower, as
landlord, and Citibank, as tenant.
"Citibank Surrender Option" shall mean the option of the Citibank
Tenant to surrender portions of the premises demised under the Citibank Lease
pursuant to Article 4 of the Citibank Lease.
"Citibank Tenant" shall mean Citibank or any permitted successor or
assign of Citibank under the Citibank Lease which is the tenant under the
Citibank Lease at the applicable time.
"Closing Date" shall mean the date of this Agreement set forth in the
first paragraph hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended, as it
may be further amended from time to time, and any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"Collateral Accounts" shall have the meaning set forth in Section
3.1.1.
"Collateral Letter of Credit" shall mean each Letter of Credit issued
by an Approved Bank pursuant to Section 16.2 in the amount of Ten Million
Dollars ($10,000,000) in favor of Lender.
"Collateral Letter of Credit Release Conditions" shall have the meaning
set forth in Section 16.2(b).
"Collection Account" shall mean the account specified herein for
deposit of Rents and other receipts from the Property as provided herein.
4
"Control" shall have the meaning set forth in Section 8.5(b).
"Cut-Off Date" shall have the meaning set forth in Section 6.2.3.
"DBS" shall have the meaning set forth in Section 14.4.2(b).
"DBS Group" shall have the meaning set forth in Section 14.4.2(b).
"Debt" shall mean, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services; (b) obligations of such Person as lessee
under leases which should have been or should be, in accordance with GAAP,
recorded as capital leases; (c) current liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA; (d)
obligations issued for, or liabilities incurred on the account of, such Person
which obligations or liabilities are due and payable; (e) obligations or
liabilities of such Person arising under letters of credit, credit facilities or
other acceptance facilities; (f) obligations of such Person under any guarantees
or other agreement to become secondarily liable for any obligation of any other
Person, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person or otherwise to
assure a creditor against loss; (g) obligations of such Person secured by any
Lien on any property of such Person, whether or not the obligations have been
assumed by such Person; or (h) obligations of such Person under any interest
rate or currency exchange agreement.
"Debt Service" shall mean, with respect to any particular period of
time, scheduled 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 have the meaning set forth in the Note.
"Defeasance" shall have the meaning set forth in Section 9.1(a).
"Defeasance Collateral" shall mean Defeasance Eligible Investments
pledged to Lender as collateral pursuant to Section 9.1 (including, without
limitation, all amounts then on deposit in the Defeasance Collateral Account).
"Defeasance Collateral Account" shall have the meaning set forth in
Section 9.1(e).
"Defeasance Collateral Requirement" shall mean an amount sufficient to
provide payment of all (A) principal indebtedness outstanding as of the date of
Defeasance under the Note as it becomes due through the date that is three (3)
months prior to the Anticipated Repayment Date and (B) scheduled interest on the
Loan as it becomes due through the date that is three (3) months prior to the
Anticipated Repayment Date.
5
"Defeasance Eligible Investments" shall mean (i) obligations or
securities not subject to prepayment, call or early redemption which are direct
obligations of, or obligations fully guaranteed as to timely payment by, the
United States of America or any agency or instrumentality of the United States
of America, the obligations of which are backed by the full faith and credit of
the United States of America, which constitute "government securities" within
the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as
amended, and the ownership of which will not cause Lender to be required to be
registered as an "investment company" by virtue of Section 3(a)(1)(C) of the
Investment Company Act of 1940, as amended, and which qualify under
ss.1.860G-2(a)(8) of the Treasury regulations, (ii) debt obligations not subject
to prepayment, call or early redemption which are direct obligations of, or
obligations fully guaranteed as to timely payment by, Federal National Mortgage
Association and which qualify under ss.1.860G-2(a)(8) of the Treasury
regulations and (iii) such other securities as are acceptable to Lender in its
sole discretion or, if a Securitization has occurred, the Rating Agencies in
their sole discretion.
"Defeasance Note" shall have the meaning set forth in Section
9.1(a)(i).
"Defeasance Security Agreement" shall have the meaning set forth in
Section 9.1(a)(ii).
"Deficiency" shall have the meaning set forth in Section 6.2.4(b).
"Disclosure Documents" shall have the meaning set forth in Section
14.4.1.
"DSCR Test" shall mean that Borrower shall maintain an Assumed Debt
Service Coverage Ratio of at least 1.23:1 for the applicable immediately
succeeding twelve (12) month period.
"Eligible Account" has the meaning set forth in the Account Agreement.
"Environmental Certificate" shall have the meaning set forth in Section
12.2.1.
"Environmental Claim" shall mean any claim, action, cause of action,
investigation or written notice by any Person alleging potential liability
(including potential liability for investigatory costs, cleanup costs, natural
resource damages, property damages, personal injuries or penalties) arising out
of, based upon or resulting from (a) the presence, threatened presence, release
or threatened release into the environment of any Hazardous Materials from or at
the Property, or (b) the violation, or alleged violation, of any Environmental
Law relating to the Property.
"Environmental Event" shall have the meaning set forth in Section
12.2.1.
"Environmental Law" shall mean any federal, state or local statute,
regulation or ordinance or any judicial or administrative decree or decision,
whether now existing or hereinafter enacted, promulgated or issued, with respect
to the protection of human health, or the environment, or any Hazardous
Materials, drinking water, groundwater, wetlands, landfills, open dumps, storage
tanks, underground storage tanks, solid waste, waste water, storm water run-off,
waste emissions or xxxxx. Without limiting the generality of the foregoing, the
term shall encompass each of the following statutes, and regulations promulgated
thereunder, and amendments and successors to such statutes and regulations, as
may be enacted and promulgated from time to time: (i) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (codified in
scattered sections of 26 U.S.C.; 33 U.S.C.; 42 U.S.C. and 42 U.S.C. ss.9601 et
seq.); (ii) the Resource Conservation and Recovery Act of 1976 (42 U.S.C.
ss.6901 et seq.); (iii) the Hazardous Materials Transportation Act (49 U.S.C.
ss.1801 et seq.); (iv) the Toxic Substances Control Act (15 U.S.C. ss.2061 et
seq.); (v) the Clean Water Act (33 U.S.C. ss.1251 et seq.); (vi) the Clean Air
Act (42 U.S.C. ss.7401 et seq.); (vii) the Safe Drinking Water Act (21 U.S.C.
ss.349; 42 U.S.C. ss.201 and ss.300f et seq.); (viii) the National Environmental
Policy Act of 1969 (42 U.S.C. ss.4321); (ix) the Superfund Amendment and
Reauthorization Act of 1986 (codified in scattered sections of 10 U.S.C., 29
U.S.C., 33 U.S.C. and 42 U.S.C.); and (x) Title III of the Superfund Amendment
and Reauthorization Act (40 U.S.C. ss.1101 et seq.).
6
"Environmental Reports" shall have the meaning set forth in Section
12.1.
"ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, as amended from time to time, and the regulations
promulgated and the rulings issued thereunder.
"Event of Default" shall have the meaning set forth in Section 17.1(a).
"Excess Cash Flow" shall have the meaning set forth in Section
3.1.6(a)(ii).
"Exchange Act" shall have the meaning set forth in Section 14.4.1.
"Excluded Pledge" shall mean any pledge or encumbrance of direct or
indirect interests in any Excluded Transferee.
"Excluded Transfer" shall mean any Transfer (i) of direct or indirect
interests in any Excluded Transferee, (ii) of direct or indirect interests among
Funds (or Subsidiaries thereof) advised by the same advisors (or an advisor
which is an Affiliate of such advisor) or pension funds (or Subsidiaries
thereof) advised by the same pension fund advisors (or a pension fund advisor
which is an Affiliate of such pension fund advisor) and/or (iii) directly or
indirectly resulting from a merger, consolidation or sale of all or
substantially all of the assets of (or similar corporate transaction with
respect to) any Excluded Transferee or its direct or indirect owners.
"Excluded Transferee" shall mean (i) Guarantor, (ii) any Permitted
Owner, (iii) any Person whose ownership interests are publicly traded on a
nationally recognized stock exchange, (iv) any Fund and (v) any Person who, at
the time the applicable Excluded Pledge is made, is an Operating Company.
"Exculpated Parties" shall have the meaning set forth in Section
18.1.1.
"Excusable Delay" shall mean a delay solely due to acts of god,
governmental restrictions, stays, judgments, orders, decrees, enemy actions,
civil commotion, fire, casualty, strikes, work stoppages, shortages of labor or
materials or other causes beyond the reasonable control of Borrower, but
Borrower's lack of funds in and of itself shall not be deemed a cause beyond the
control of Borrower.
7
"Existing Citibank Lease" shall mean that certain Lease, dated as of
May 12, 2005, between Borrower, as landlord, and Citibank, as tenant, with
respect to the premises commonly known as One Court Square, 00-00 Xxxxxxx
Xxxxxx, Xxxx Xxxxxx Xxxx, Xxx Xxxx 00000.
"Fiscal Year" shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan or
the portion of any such 12-month period falling within the term of the Loan in
the event that such a 12-month period occurs partially before or after, or
partially during, the term of the Loan.
"Fitch" shall mean Fitch Ratings Inc.
"Fund" shall mean any private equity, investment or real estate
opportunity fund.
"GAAP" shall mean the generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession, to the extent such
principles are applicable to the facts and circumstances on the date of
determination.
"Governmental Authority" shall mean any court, board, agency,
commission, office or other authority of any nature whatsoever for any
governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or
otherwise) whether now or hereafter in existence.
"Guarantor" shall mean Reckson Operating Partnership, L.P., a Delaware
limited partnership, and any successor by merger, consolidation or
reorganization or by acquisition of all or substantially all of such Person's
assets.
"Hazardous Materials" shall mean each and every element, compound,
chemical mixture, contaminant, pollutant, material, waste or other substance
which is defined, determined or identified as hazardous or toxic under any
Environmental Law. Without limiting the generality of the foregoing, the term
shall mean and include:
(i) "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendment and Reauthorization Act of 1986, or Title III of the Superfund
Amendment and Reauthorization Act, each as amended, and regulations promulgated
thereunder;
(ii) "hazardous waste" and "regulated substances" as defined in the
Resource Conservation and Recovery Act of 1976, as amended, and regulations
promulgated thereunder;
(iii) "hazardous materials" as defined in the Hazardous Materials
Transportation Act, as amended, and regulations promulgated thereunder; and
(iv) "chemical substance or mixture" as defined in the Toxic Substances
Control Act, as amended, and regulations promulgated thereunder.
8
"Holding Account" shall have the meaning set forth in Section 3.1.1.
"Impositions" shall mean all taxes (including all ad valorem, sales
(including those imposed on lease rentals), use, single business, gross
receipts, value added, intangible transaction, privilege or license or similar
taxes), governmental assessments (including all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of this
Agreement), water, sewer or other rents and charges, excises, levies, fees
(including license, permit, inspection, authorization and similar fees), and all
other governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Property and/or any Rents (including all interest and penalties thereon), which
at any time prior to, during or in respect of the term hereof may be assessed or
imposed on or in respect of or be a Lien upon (a) Borrower (including all
income, franchise, single business or other taxes imposed on Borrower for the
privilege of doing business in the jurisdiction in which the Property is
located), (b) the Property, or any other collateral delivered or pledged to
Lender in connection with the Loan, or any part thereof, or any Rents received
therefrom or any estate, right, title or interest therein or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Property or the leasing or use of all or any part thereof.
Nothing contained in this Agreement shall be construed to require Borrower to
pay any tax, assessment, levy or charge imposed on (i) any Tenant, (ii) any
third party manager of the Property, including any Manager or (iii) Lender in
the nature of a capital levy, income, franchise, estate, inheritance,
succession, excise, gains, income or net revenue or similar tax or any transfer
tax imposed on Lender in connection with an assignment of the Loan pursuant to
Article XV.
"Improvements" shall have the meaning set forth in the Security
Instrument.
"Increased Costs" shall have the meaning set forth in Section 2.4.1.
"Indebtedness" shall mean, at any given time, the Principal Amount,
together with all accrued and unpaid interest thereon and all other obligations
and liabilities due or to become due to Lender pursuant hereto, under the Note
or in accordance with the other Loan Documents and all other amounts, sums and
expenses payable to Lender hereunder or pursuant to the Note or the other Loan
Documents.
"Indemnified Parties" shall have the meaning set forth in Section
19.12(b).
"Independent" shall mean, when used with respect to any Person, a
Person who (i) does not have any direct financial interest or any material
indirect financial interest in Borrower or in any Affiliate of Borrower (other
than in the case of a financial interest which is not an ownership interest, any
creditor, supplier or customer set forth in clause (iii) below), (ii) is not
connected with Borrower or any Affiliate of Borrower as an officer, employee,
promoter, underwriter, trustee, partner, member, manager, director or person
performing similar functions, (iii) is not a creditor, supplier or customer of
Borrower or any Affiliate of Borrower where such relationship constitutes a
material portion of the business of such creditor, supplier or customer and (iv)
is not a member of the immediate family of a Person defined in (i) or (ii)
above.
9
"Independent Accountant" shall mean Xxxx & Company, any of the so
called "Big Four" accounting firms or another firm of nationally recognized,
certified public accountants which is Independent and which is selected by
Borrower and reasonably acceptable to Lender.
"Independent Architect" shall mean an architect, engineer or
construction consultant selected by Borrower which is Independent, licensed to
practice in the State (in the case of any architect or engineer or any other
Person which is required to be so licensed) and has at least five (5) years of
architectural, engineering or construction experience, as applicable.
"Independent Director", "Independent Manager", or "Independent Member"
shall mean a Person who is not and will not be while serving as an Independent
Director, Independent Manager or Independent Member, as applicable, and has
never been (i) a member, manager, director, employee, attorney, or counsel of
Borrower or its Affiliates (provided that Borrower and Mezzanine Borrower may
not have the same Independent Directors, Independent Managers or Independent
Members), (ii) a customer, supplier or other Person who derives more than one
percent (1%) of its purchases or revenues from its activities with Borrower or
its Affiliates (other than an Independent Director, Independent Manager or
Independent Member, as applicable, provided by a corporate services company that
provides Independent Directors, Independent Managers or Independent Members in
the ordinary course of its business), (iii) a direct or indirect legal or
beneficial owner in Borrower or any of its Affiliates (other than as an
Independent Member), (iv) a member of the immediate family of any member,
manager, employee, attorney, customer, supplier or other Person referred to
above or (v) a person Controlling or under the common Control of anyone listed
in (i) through (iv) above. Except as otherwise provided in the parenthetical to
clause (i) above, a Person that otherwise satisfies the foregoing shall not be
disqualified from serving as an Independent Director or Independent Manager or
Independent Member if such individual is at the time of initial appointment, or
at any time while serving as such, is an Independent Director or Independent
Manager or Independent Member, as applicable, of a single purpose entity
affiliated with Borrower.
"Insurance Requirements" shall mean, collectively, (i) all material
terms of any insurance policy required pursuant to this Agreement and (ii) all
material regulations and then current standards applicable to or affecting the
Property or any part thereof or any use or condition thereof, which may, at any
time when the Existing Citibank Lease is (A) in full force and effect, be
required by the Board of Fire Underwriters, if any, having jurisdiction over the
Property, or such other body exercising similar functions or (B) no longer in
full force and effect, be recommended by the Board of Fire Underwriters, if any,
having jurisdiction over the Property, or such other body exercising similar
functions.
"Intangible" shall have the meaning set forth in the Security
Instrument.
"Intercreditor Agreement" shall mean a customary intercreditor,
recognition and standstill agreement between Lender and Mezzanine Lender in form
and substance acceptable to Lender in its reasonable discretion.
"Interest Period" shall have the meaning set forth in the Note.
"Land" shall have the meaning set forth in the Security Instrument.
10
"Late Payment Charge" shall have the meaning set forth in Section
2.2.3.
"Lease" shall mean any lease, sublease or sub-sublease, letting,
license, concession or other agreement (whether written or oral and whether now
or hereafter in effect) pursuant to which any Person is granted by Borrower a
possessory interest in, or right to use or occupy all or any portion of any
space in the Property, and every modification, amendment or other agreement
relating to such lease, sublease, sub-sublease, or other agreement entered into
in connection with such lease, sublease, sub-sublease, or other agreement and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto. The term
"Lease" shall not include the Scheduled Leases unless and until the Citibank
Lease shall no longer be in effect and such Scheduled Leases remain in existence
thereafter and/or subsequent to the date hereof, such Scheduled Leases shall be
deemed to be direct leases between Borrower and the tenants thereunder.
"Lease Modification" shall have the meaning set forth in Section 8.8.1.
"Leasehold Mortgagee" shall have the meaning set forth in the Citibank
Lease.
"Leasing Commissions" shall have the meaning set forth in Section
16.1(b).
"Legal Requirements" shall mean all present and future laws, statutes,
codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations
and requirements, and irrespective of the nature of the work to be done, of
every Governmental Authority including, without limitation, Environmental Laws
and all covenants, restrictions and conditions now or hereafter of record which
may be applicable to Borrower or to the Property and the Improvements and the
Building Equipment thereon, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of the Property and
the Improvements and the Building Equipment thereon including, without
limitation, building and zoning codes and ordinances and laws relating to
handicapped accessibility.
"Lender" shall have the meaning set forth in the first paragraph of
this Agreement.
"Letter of Credit" shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit, in favor of Lender and
entitling Lender to draw thereon in New York, New York, based solely on a
statement executed by an officer or authorized signatory of Lender and issued by
an Approved Bank (provided that solely for purposes of this definition, an
Approved Bank may have a minimum long-term unsecured debt rating of at least "A"
(rather than "AA" as set forth in the definition of "Approved Bank" in the
Account Agreement). Such letter of credit shall either be (A) an evergreen
letter of credit, (B) a letter of credit which does not expire until at least
sixty (60) days after the Maturity Date (the "LC Expiration Date") or (C) a
letter of credit with a term of at least one (1) year which is renewed by
Borrower no later than forty-five (45) days prior to the expiration date thereof
(it being agreed that in the event that Borrower fails to renew such letter of
credit by the date which is ten (10) days prior to the expiration date thereof,
then such failure shall be deemed to be an immediate Event of Default hereunder
and Lender shall have the immediate right to draw down the same in full and hold
the proceeds thereof in accordance with the provisions of this Agreement (and
not apply the same except for the purposes for which Lender would have been
permitted to draw on such Letter of Credit pursuant to the terms of the Loan
Documents)). If at any time (a) the institution issuing any such Letter of
Credit shall cease to be an Approved Bank or (b) the Letter of Credit is due to
expire prior to the LC Expiration Date, Lender shall have the right immediately
to draw down the same in full and hold the proceeds thereof in accordance with
the provisions of this Agreement (and not apply the same except for the purposes
for which Lender would have been permitted to draw on such Letter of Credit
pursuant to the terms of the Loan Documents), unless Borrower shall deliver a
replacement Letter of Credit from an Approved Bank within (i) as to (a) above,
ten (10) days after Lender delivers written notice to Borrower that the
institution issuing the Letter of Credit has ceased to be an Approved Bank or
(ii) as to (b) above, at least ten (10) days prior to the expiration date of
said Letter of Credit. At any time or from time to time, Borrower may substitute
any existing Letter of Credit (or cash in lieu thereof) with a substitute Letter
of Credit which complies with this definition.
11
"Liability" shall have the meaning set forth in Section 14.4.2(b).
"License" shall have the meaning set forth in Section 4.1.23.
"Lien" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance or charge
on or affecting 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 same economic
effect as any of the foregoing, the filing of any financing statement, and the
filing of mechanic's, materialmen's and other similar liens and encumbrances.
"Liquidated Damages Amount" shall have the meaning set forth in the
Note.
"Loan" shall mean the loan in the amount of Three Hundred and Fifteen
Million Dollars ($315,000,000) made by Lender to Borrower pursuant to this
Agreement.
"Loan Constant" shall mean a rate equal to 8.75% per annum.
"Loan Documents" shall mean, collectively, this Agreement, the Note,
the Security Instrument, the Assignment of Leases, any Assignment of Management
Agreement, the Account Agreement, the Recourse Guaranty, the Citibank SNDA and
all other documents executed and delivered by Borrower in connection with the
Loan, including any certifications or representations delivered by or on behalf
of Borrower, any Affiliate of Borrower, any Manager, or any Affiliate of any
Manager.
"Lockout Period" shall have the meaning set forth in the Note.
"Management Agreement" shall mean any management agreement pursuant to
which the Manager is to provide management and other services with respect to
the Property, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time to the extent permitted hereunder.
"Management Fee" shall mean an amount equal to the property management
fee payable to the Manager pursuant to the terms of the Management Agreement for
base management services.
12
"Manager" shall mean any Qualified Manager with which Borrower enters
into a Management Agreement.
"Material Adverse Effect" shall mean any event or condition that has a
material adverse effect on (i) the use, operation, or value of the Property,
(ii) the business, profits, operations or financial condition of Borrower, or
(iii) the ability of Borrower to repay the principal and interest of the Loan as
it becomes due or to satisfy any of Borrower's material obligations under the
Loan Documents.
"Material Alteration" shall mean, subject to the last two (2) sentences
of Section 10.3, any Alteration which, when aggregated with all related
Alterations (other than decorative work such as painting, wall papering and
carpeting and the replacement of fixtures, furnishings and equipment to the
extent being of a routine and recurring nature and performed in the ordinary
course of business) constituting a single project, involves an estimated cost
exceeding five percent (5%) of the Principal Amount with respect to such
Alteration or related Alterations (including the Alteration in question) then
being undertaken at the Property.
"Maturity Date" shall have the meaning set forth in the Note.
"Maturity Date Payment" shall have the meaning set forth in the Note.
"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.
"Mezzanine Account" shall mean a "deposit account" (as such term is
defined in Section 9-102(a)(29) of the UCC), if and when established with the
Cash Management Bank for the benefit of any Mezzanine Lender for the collection
of Excess Cash Flow.
"Mezzanine Borrower" shall mean any entity which possesses direct or
indirect ownership interests in Borrower, where ownership interests are being
pledged (where the pledging of such ownership interests is occurring in
accordance with the terms of Article XIII, as opposed to a pledge that would
otherwise be permitted under the terms of Article VIII), which entity shall be a
Special Purpose Entity if required by the Rating Agencies.
"Mezzanine Lender" shall have the meaning set forth in Section 13.1.
"Mezzanine Loan" shall have the meaning set forth in Section 13.1.
"Mezzanine Loan Agreement" shall mean the loan agreement securing a
Mezzanine Loan.
"Mezzanine Loan Documents" shall mean, collectively, the Mezzanine
Note, the Mezzanine Loan Agreement and all other agreements, instruments or
documents executed by Mezzanine Borrower evidencing, securing or delivered in
connection with the Mezzanine Loan and the transactions contemplated thereby,
including, without limitation, officer's certificates.
13
"Mezzanine Note" shall mean the note or notes evidencing a Mezzanine
Loan.
"Monetary Default" shall mean a Default (i) that can be cured with the
payment of money or (ii) arising pursuant to Section 17.1(a)(vi) or (vii).
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Net Cash Flow" shall mean the amount obtained by subtracting from
annualized Operating Income from the Property for the month in which the
applicable calculation date occurs (based on a 365-day calendar year) the
following amounts: (i) the aggregate amount of all Operating Expenses for the
Property for the twelve (12) month period immediately succeeding the applicable
calculation date (other than Capital Expenditures and TI and Leasing Costs for
the Property during such twelve (12) month period); and (ii) an amount equal to
normalized Capital Expenditures and TI and Leasing Costs to be incurred by
Borrower for the twelve (12) month period immediately succeeding the applicable
calculation date.
"Net Operating Income" shall mean the amount obtained by subtracting
Operating Expenses from Operating Income.
"New Lease" shall have the meaning set forth in Section 8.8.1.
"Non-Consolidation Opinion" shall mean an opinion substantially in
compliance with the requirements set forth in Exhibit E or in such other form
reasonably approved by Lender or, if a Securitization has occurred, approved by
the Rating Agencies.
"Non-Disturbance Agreement" shall have the meaning set forth in Section
8.8.9.
"Note" shall mean that certain Note in the principal amount of Three
Hundred and Fifteen Million Dollars ($315,000,000), made by Borrower in favor of
Lender as of the date hereof, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"Notes" shall mean, collectively, the Note and the Mezzanine Note.
"Obligations" shall have meaning set forth in the recitals of the
Security Instrument.
"OFAC" List means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and accessible through the
internet website xxx.xxxxx.xxx/xxxx/x00xxx.xxx.
"Officer's Certificate" shall mean a certificate executed on behalf of
Borrower by an authorized signatory of Borrower that is familiar with the
financial condition of Borrower and/or the operation of the Property, as
applicable.
"Operating Asset" shall have the meaning set forth in the Security
Instrument.
"Operating Company" shall mean any Person whose assets, other than
direct or indirect interests in the Property, represent more than seventy
percent (70%) of the net equity value of such Person, as determined in good
faith by the board of directors or board of managers (or the equivalent
governing body of such Person), provided that in connection with such
determination, such board (or other governing body) shall provide reasonable
backup documentation relating to its determination to Lender and, if a
Securitization has occurred, the Rating Agencies.
14
"Operating Expense Reserve Account" shall have the meaning set forth in
Section 3.1.1(c).
"Operating Expenses" shall mean, for any period, without duplication,
all expenses actually paid or payable by Borrower during such period in
connection with the operation, management, maintenance, repair and use of the
Property, determined on an accrual basis, and, except to the extent otherwise
provided in this definition, in accordance with GAAP. Operating Expenses
specifically shall include (i) all expenses incurred in the immediately
preceding twelve (12) month period based on quarterly financial statements
delivered to Lender in accordance with Article XI, (ii) all payments required to
be made pursuant to any REAs, (iii) property management fees in an amount equal
to the greater of four percent (4%) of Operating Income and the management fees
actually paid under the Management Agreement, (iv) administrative, payroll,
security and general expenses for the Property, (v) the cost of utilities,
inventories and fixed asset supplies consumed in the operation of the Property,
(vi) a reasonable reserve for uncollectible accounts, (vii) costs and fees of
independent professionals (including, without limitation, legal, accounting,
consultants and other professional expenses), technical consultants, operational
experts (including quality assurance inspectors) or other third parties retained
to perform services required or permitted hereunder, (viii) cost of attendance
by employees at training and manpower development programs, (ix) association
dues, (x) computer processing charges, (xi) operational equipment and other
lease payments as reasonably approved by Lender, (xii) taxes and other
Impositions, other than income or franchise taxes or other Impositions in the
nature of income or franchise taxes, and insurance premiums and (xiii) all
underwritten reserves required by Lender hereunder (without duplication).
Notwithstanding the foregoing, Operating Expenses shall not include (1)
depreciation or amortization or other non-cash expenses (without taking into
account Lender's underwriting adjustments), (2) income taxes or other
Impositions in the nature of income taxes, (3) any expenses (including legal,
accounting and other professional fees, expenses and disbursements) incurred in
connection with the making of the Loan or the sale, exchange, transfer,
financing or refinancing of all or any portion of the Property or in connection
with the recovery of Proceeds which are applied to prepay the Note, (4) any
expenses which in accordance with GAAP should be capitalized, (5) Debt Service,
late charges and default interest under the Loan or Lender's administrative fees
imposed on Borrower under the Loan Documents, and (6) any item of expense which
would otherwise be considered within Operating Expenses pursuant to the
provisions above but is paid directly by any Tenant.
"Operating Income" shall mean, for any period, all income of Borrower
during such period from the use, ownership or operation of the Property as
follows:
(a) all amounts payable to Borrower by any Person as Rent and other
amounts under Leases, license agreements, occupancy agreements, concession
agreements or other agreements relating to the Property;
15
(b) business interruption insurance proceeds allocable to the
applicable reporting period; and
(c) all other amounts which in accordance with GAAP are included in
Borrower's annual financial statements as operating income attributable to the
Property.
Notwithstanding the foregoing, Operating Income shall not include (a)
any Proceeds (other than business interruption insurance proceeds and only to
the extent allocable to the applicable reporting period), (b) any proceeds
resulting from the direct or indirect Transfer of all or any portion of the
Property, (c) any Rent attributable to a Lease prior to the date in which the
Tenant thereunder has taken occupancy or in which the actual payment of rent is
required to commence thereunder, (d) any item of income otherwise included in
Operating Income but paid directly by any Tenant to a Person other than Borrower
as an offset or deduction against Rent payable by such Tenant, provided such
item of income is for payment of an item of expense (such as payments for
utilities paid directly to a utility company) and such expense is otherwise
excluded from the definition of Operating Expenses pursuant to clause "(6)" of
the definition thereof and (e) Security Deposits received from Tenants until
forfeited or applied. Operating Income shall be calculated on the accrual basis
of accounting and, except to the extent otherwise provided in this definition,
in accordance with GAAP.
"Opinion of Counsel" shall mean an opinion of counsel (in customary
form and taking into account customary assumptions and exclusions) of a law firm
selected by Borrower and reasonably acceptable to Lender.
"Other Charges" shall mean maintenance charges, impositions other than
Impositions, 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 by any Governmental Authority, other than those required to be
paid by a tenant pursuant to its respective Lease.
"Other Taxes" shall have the meaning set forth in Section 2.4.3.
"Payment Date" shall have the meaning set forth in the Note.
"Permitted Debt" shall mean, collectively, (a) the Note and the other
obligations, indebtedness and liabilities specifically provided for in any Loan
Document, (b) trade payables incurred in the ordinary course of Borrower's
business, not secured by Liens on the Property (other than liens being properly
contested in accordance with the provisions of this Agreement or the Security
Instrument), not to exceed three percent (3%) of the Principal Amount at any one
time outstanding, payable by or on behalf of Borrower for or in respect of the
operation of the Property in the ordinary course of operating Borrower's
business, provided that (but subject to the remaining terms of this definition)
each such amount shall be paid within sixty (60) days following the date on
which each such amount is incurred, (c) Borrower's obligations as landlord under
any Leases (including the provision of funds to a Tenant for the purpose of
funding such Tenant's improvements, moving expenses, furnishings or
installations or certain of its costs incurred in connection with such Tenant's
leasing of space at the Property, notwithstanding that such Tenant's Lease (or
related documentation) requires repayment of such funding), (d) Debt for
16
which a Rating Agency Confirmation is obtained, (e) Permitted Encumbrances which
constitute Debt, and (f) unsecured debt incurred by Borrower in the ordinary
course of its business of owning and operating the Property, provided that
unsecured debt described in this clause (f): (A) is not secured or evidenced by
a Note; and (B) does not exceed in the aggregate an amount equal to Five Hundred
Thousand Dollars ($500,000). Nothing contained herein shall be deemed to require
Borrower to pay any amount, so long as Borrower is in good faith, and, if
applicable, by proper legal proceedings, contesting the validity, amount or
application thereof, provided that in each case, at the time of the commencement
of any such action or proceeding, and during the pendency of such action or
proceeding (i) no Event of Default shall exist and be continuing hereunder, (ii)
adequate reserves with respect thereto are maintained on the books of Borrower
in accordance with GAAP (as determined by the Independent Accountant), and (iii)
such contest operates to suspend collection or enforcement, as the case may be,
of the contested amount (unless such contest would not, in Lender's reasonable
judgment, result at any time in the Property or any portion thereof being in
imminent danger of being forfeited or lost or result in Lender being likely to
be subject to civil or criminal damages as a result thereof) and such contest is
maintained and prosecuted continuously and with reasonable diligence.
Notwithstanding anything set forth herein, in no event shall Borrower be
permitted under this provision to enter into a note (other than the Note and the
other Loan Documents) or other instrument for borrowed money.
"Permitted Encumbrances" shall mean, collectively, (a) the Liens and
security interests created or permitted by the Loan Documents (including,
without limitation, pursuant to Section 8.3 hereof), (b) all Liens, encumbrances
and other matters disclosed in the Title Policy, (c) Liens, if any, for
Impositions imposed by any Governmental Authority not yet delinquent, (d) the
Citibank Lease, the Scheduled Leases and any other Lease permitted to be entered
into by Borrower in accordance with the terms hereof and any Person claiming by,
through or under any such leasehold estate, provided that if Lender's consent
shall be required under Section 8.8.11 for any sublease or sub-sublease, then
Lender shall have consented thereto, (e) the Liens of any Leasehold Mortgagees
on the leasehold estate created under the Citibank Lease, (f) any
Non-Disturbance Agreement or non-disturbance agreement entered into by Landlord
with respect to any sublease, provided that if Lender's consent shall be
required under Section 8.8.11 for such sublease, then Lender shall have
consented thereto, (g) Liens evidenced by financing statements filed in
connection with equipment leases or equipment financing which otherwise
constitutes Permitted Debt hereunder, (h) the Liens, encumbrances and other
matters set forth on Schedule VI attached hereto and (i) any other Lien
consented to by Lender in its sole discretion or for which a Rating Agency
Confirmation is obtained.
"Permitted Investments" shall have the meaning set forth in the Account
Agreement.
"Permitted Owner" shall mean any one of the following:
(A) Guarantor and its permitted successors;
(B) Sponsor and its permitted successors;
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(C) a Reckson sponsored Australian limited property trust, provided
that (i) upon any direct or indirect Transfer of interests in Borrower to such
trust, such trust will have gross assets, directly or indirectly, with a value
not less than $350 million (provided that not more than fifty percent (50%) of
such value shall be attributable to the Property) and a net equity not less than
$150 million and (ii) Guarantor and/or Sponsor shall at all times Control the
manager of such trust and, directly or indirectly, the decision-making (subject
to the right of other owners to participate in significant management decisions)
of such trust;
(D) any of (i) Citibank, (ii) any Person which is a successor to
Citibank by merger, consolidation or reorganization and (iii) a purchaser of all
or substantially all of the assets of Citibank;
(E) a bank, investment bank, insurance company, commercial credit
corporation, pension plan, pension fund, pension advisory firm, mutual fund,
government plan, real estate company, investment fund or an institution
substantially similar to any of the foregoing that, together with its
Affiliates, (x) has total assets (in name or under management) in excess of $1
billion (calculated exclusive of the Property) and capital/statutory surplus or
shareholder's equity in excess of $500 million (calculated exclusive of the
Property) and (y) is regularly engaged in the business of owning, operating
and/or managing interests (either directly or through funds under management) in
at least five (5) office properties containing in the aggregate at least one
million five hundred thousand (1,500,000) rentable square feet (calculated
exclusive of the Property);
(F) any Person who is listed on Schedule IV attached hereto; or
(G) any Person with respect to whom a Rating Agency Confirmation is
received.
"Person" shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"Personal Property" shall have the meaning set forth in the granting
clause of the Security Instrument.
"Physical Conditions Report" shall mean the structural engineering
report with respect to the Property (i) prepared by an Independent Architect,
(ii) addressed to Lender, (iii) prepared based on a scope of work determined by
Lender in Lender's reasonable discretion, and (iv) in form and content
acceptable to Lender in Lender's reasonable discretion, together with any
amendments or supplements thereto. Lender acknowledges that the report dated
June 20, 2005 from LandAmerica Commercial Services shall qualify as the Physical
Conditions Report.
"Plan" shall have the meaning set forth in Section 4.1.10.
"Preconditions" shall mean that with respect to any Lease, the Tenant
thereunder has (i) taken possession of its demised space and (ii) begun to pay
regular installments of Rent (which shall not include the payment by Tenant to
Borrower of the first month's installment of rent upon a Tenant's execution of a
Lease) and that all free rent periods have expired, as certified to Lender by
Borrower pursuant to an Officer's Certificate.
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"Prepayment Amounts" shall have the meaning set forth in Section
3.1.1(b).
"Prepayment Notice" shall have the meaning set forth in the Note.
"Prepayment Reserve Account" shall have the meaning set forth in
Section 3.1.1(b).
"Principal Amount" shall have the meaning set forth in the Note.
"Proceeds" shall have the meaning set forth in Section 6.2.2.
"Proceeds Reserve Account" shall have the meaning set forth in Section
3.1.1(d).
"Prohibited Person" means any Person identified on the OFAC List or any
other Person with whom a U.S. Person may not conduct business or transactions by
prohibition of Federal law or Executive Order of the President of the United
States or America.
"Property" shall have the meaning set forth in the Security Instrument.
"Provided Information" shall have the meaning set forth in Section
14.1.1.
"Public Reporting Entity" shall mean (i) a Person (other than an
individual) required by the Exchange Act to file periodic reports with the
Securities and Exchange Commission and (ii) for so long as Reckson Operating
Partnership, L.P. files periodic reports under the Exchange Act with the
Securities and Exchange Commission, Reckson Operating Partnership, L.P.
"PZR Report" shall mean that certain Zoning and Site Requirements
Summary from The Planning & Zoning Resource Corporation, PZR Site Number 41902,
dated July 29, 2005.
"Qualified Manager" shall mean (i) a reputable and experienced
management organization which together with its Affiliates manages a minimum of
2,000,000 square feet of Class A or Class B (and any combination thereof) office
space located in major United States cities, provided that (a) prior to a
Securitization, Borrower shall have obtained the prior written consent of Lender
for such Person, which consent shall not be unreasonably withheld or delayed and
(b) after a Securitization, in addition to Lender's consent, which consent shall
not be unreasonably withheld or delayed, Borrower shall have obtained a Rating
Agency Confirmation or (ii) any other manager as Lender shall approve in its
sole and absolute discretion. Notwithstanding the foregoing, Lender hereby
approves each of RANY Management Group, Inc. a Delaware corporation, and any
Person directly or indirectly Controlled by Sponsor as a Qualified Manager
hereunder.
"Qualified Successor Borrower" shall mean any Single Purpose Entity
that is Controlled by one or more Permitted Owners.
"Rating Agencies" shall mean (a) prior to a Securitization, each of
S&P, Xxxxx'x and Fitch and any other nationally-recognized statistical rating
agency which has been approved by Lender and (b) after a Securitization has
occurred, each such Rating Agency which has rated the Securities in the
Securitization.
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"Rating Agency Confirmation" shall mean, collectively, a written
affirmation from each of the Rating Agencies that the credit rating of the
Securities given by such Rating Agency immediately prior to the occurrence of
the event with respect to which such Rating Agency Confirmation is sought will
not be qualified, downgraded or withdrawn as a result of the occurrence of such
event, which affirmation may be granted or withheld in such Rating Agency's sole
and absolute discretion. In the event that, at any given time, no such
Securities shall have been issued and are then outstanding, then the term Rating
Agency Confirmation shall be deemed instead to require the written approval of
Lender based on its good faith determination of whether the Rating Agencies
would issue a Rating Agency Confirmation if any such Securities were
outstanding.
"REAs" shall mean, collectively, as the same may be amended, restated,
supplemented or otherwise modified from time to time, those certain agreements
more specifically described on Schedule I.
"Real Property" shall mean, collectively, the Land, the Improvements
and the Appurtenances (as defined in the Security Instrument).
"Recourse Guaranty" shall mean that certain Guaranty of Recourse
Obligations of Borrower, dated as of the date hereof, by Guarantor in favor of
Lender, as the same may be amended, supplemented, restated or otherwise modified
from time to time.
"Register" shall have the meaning set forth in Section 15.4.
"Regulatory Change" shall mean any change after the date of this
Agreement in federal, state or foreign laws or regulations or the adoption or
the making, after such date, of any interpretations, directives or requests
applying to Lender, or any Person Controlling Lender or to a class of banks or
companies Controlling banks of or under any federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.
"Rents" shall mean all rents, rent equivalents, moneys payable as
damages or in lieu of rent or rent equivalents, royalties (including, without
limitation, all oil and gas or other mineral royalties and bonuses), income,
receivables, receipts, revenues, deposits (including, without limitation,
security, utility and other deposits), accounts, cash, issues, profits, charges
for services rendered, and other consideration of whatever form or nature
received by or paid to or for the account of or benefit of Borrower from any and
all sources arising from or attributable to the Property and Proceeds, if any,
from business interruption or other loss of income insurance.
"Reserve Period " shall have the meaning set forth in the Account
Agreement.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Scheduled Leases" shall meant the leases listed on Schedule V attached
hereto.
"Securities" shall have the meaning set forth in Section 14.1.
20
"Securities Act" shall have the meaning set forth in Section 14.4.1.
"Securitization" shall have the meaning set forth in Section 14.1.
"Security Deposits" shall have the meaning set forth in Section 8.8.5.
"Security Instrument" shall mean that certain first priority Mortgage,
Security Agreement, Financing Statement, Fixture Filing and Assignment of
Leases, Rents and Security Deposits, dated the date hereof, executed and
delivered by Borrower to Lender and encumbering the Property, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
"Servicer" shall mean such Person designated in writing with an address
for such Person by Lender, in its sole discretion, to act as Lender's agent
hereunder with such powers as are specifically delegated to the Servicer by
Lender, whether pursuant to the terms of this Agreement, the Account Agreement
or otherwise, together with such other powers as are reasonably incidental
thereto.
"Single Purpose Entity" shall mean a Person, other than an individual,
which (i) is formed or organized solely for Borrower's Business Purpose or, in
the case of any Single Purpose Entity other than Borrower, for the purpose of
owning, holding or financing (or otherwise acting with respect to) a direct or
indirect interest in Borrower, as applicable, (ii) does not engage in any
business unrelated to Borrower's Business Purpose or, in the case of any Single
Purpose Entity other than Borrower, the ownership, holding or financing of a
direct or indirect interest in Borrower, as applicable (or otherwise acting with
respect thereto), (iii) has not and will not have any Debt other than the
Permitted Debt or the Mezzanine Loan, in the case of a Mezzanine Borrower (if
this definition is applicable), or any assets other than those related to
Borrower's Business Purpose or, in the case of any Single Purpose Entity other
than Borrower, the ownership, holding or financing of a direct or indirect
interest in Borrower, as applicable (or otherwise acting with respect thereto),
(iv) maintains its own separate books and records and its own accounts, in each
case which are separate and apart from the books and records and accounts of any
other Person (it being acknowledged that the maintenance of such Person's books,
records or accounts on such Person's behalf by a manager who holds itself out as
such Person's agent shall not contradict this clause (iv)), (v) holds itself out
as being a Person, separate and apart from any other Person, (vi) does not and
will not commingle its funds or assets with those of any other Person, (vii)
conducts its own business in its own name and will not identify its partners,
members or shareholders, as applicable, or any Affiliates of any of them, as a
division or part of it; (viii) maintains separate financial statements (provided
that such Person may also file consolidated tax and financial statements if
required by applicable local, state or federal tax law or other applicable law
or GAAP), (ix) pays its own liabilities out of its own funds (it being
acknowledged that the payment by the Citibank Tenant of operating expenses and
taxes with respect to the Property pursuant to the Existing Citibank Lease does
not contradict this clause (ix)), (x) observes all partnership, corporate or
limited liability company formalities, as applicable, (xi) pays the salaries of
its own employees, if any, and maintains (or requires its management company to
maintain) a sufficient number of employees, if any, in light of its contemplated
business operations, (xii) does not guarantee, assume, pay (other than in
connection with Borrower's Business Purpose) or otherwise obligate itself with
respect to the
21
debts or obligations (other than customary indemnities in connection with
Borrower's Business Purpose) of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person, (xiii) does not
acquire obligations or securities of its partners, members or shareholders,
(xiv) allocates fairly and reasonably shared expenses, including, without
limitation, any overhead for shared office space, if any, (xv) uses separate
stationary, invoices, and checks, (xvi) maintains an arms-length relationship
with its Affiliates, (xvii) does not and will not pledge its assets for the
benefit of any other Person or make any loans or advances to any other Person
(it being acknowledged that the provision of funds to a Tenant for the purpose
of funding such Tenant's improvements, moving expenses, furnishings or
installations or certain of its costs incurred in connection with such Tenant's
leasing of space at the Property does not contradict this clause (xvii),
notwithstanding that such Tenant's Lease (or related documentation) requires
repayment of such funding), (xviii) does and will continue to use commercially
reasonable efforts to correct any known misunderstanding regarding its separate
identity, (xix) maintains adequate capital in light of its contemplated business
operations, and (xx) to the fullest extent permitted by law, has not and will
not engage in, seek, or consent to the dissolution, winding up, liquidation,
consolidation or merger and except as otherwise permitted in this Agreement
(including pursuant to Article VIII), has not and will not engage in, seek or
consent to any asset sale or transfer of partnership, membership or shareholder
interests, or amendments of its partnership or operating agreement, certificate
of incorporation, articles of organization or other organizational document with
respect to those provisions required in order to qualify as a Single Purpose
Entity and/or where the consent of Lender and/or its Independent Directors,
Independent Managers or Independent Members is required. In addition, if such
Person is a partnership, (1) all general partners of such Person shall be Single
Purpose Entities; and (2) if such Person has more than one general partner, then
the organizational documents shall provide that such Person shall continue (and
not dissolve) for so long as a solvent general partner exists. In addition, if
such Person is a corporation, then, at all times: (a) such Person shall have at
least two (2) Independent Directors and (b) the board of directors of such
Person may not take any action requiring the unanimous affirmative vote of 100%
of the members of the board of directors unless all of the directors, including
the Independent Directors, shall have participated in such vote. In addition, if
such Person is a limited liability company, (a) such Person shall have at least
two (2) Independent Managers or Independent Members, (b) if such Person is
managed by a board of managers, the board of managers of such Person may not
take any action requiring the unanimous affirmative vote of 100% of the members
of the board of managers unless all of the managers, including the Independent
Managers, shall have participated in such vote, (c) if such Person is not
managed by a board of managers, the members of such Person may not take any
action requiring the affirmative vote of 100% of the members of such Person
unless all of the members, including the Independent Members, shall have
participated in such vote, (d) each managing member shall be a Single Purpose
Entity, unless such Person has two (2) Independent Managers who are springing
members or two (2) non-economic Independent Members and (e) its articles of
organization, certificate of formation and/or operating agreement, as
applicable, shall provide that until all of the outstanding Indebtedness has
been paid in full or otherwise fully satisfied, released or assigned in
accordance with Section 2.3.3 or 9.1, as applicable (or such entity has
transferred its interest in the Property to a new borrower in accordance with
Article VIII), such entity will not dissolve. In addition, the organizational
documents of such Person shall provide that, unless Lender otherwise consents,
until all of the outstanding Indebtedness has been paid in full or otherwise
fully satisfied, released or assigned in accordance with Section
22
2.3.3 or 9.1, as applicable (or such entity has transferred its interest in the
Property to a new borrower in accordance with Article VIII), such Person (1)
without the unanimous consent of all of the partners, directors or members, as
applicable, shall not with respect to itself or to any other Person in which it
has a direct or indirect legal or beneficial interest (a) seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or other similar official for the benefit of the creditors of such
Person or all or any portion of such Person's properties, or (b) take any action
that is reasonably anticipated to cause such Person to become insolvent,
petition or otherwise institute insolvency proceedings or otherwise seek any
relief under any laws relating to the relief from debts or the protection of
debtors generally, (2) will hold its assets in its own name, (3) will maintain
its financial statements (provided that such Person may also file consolidated
tax and financial statements if required by applicable local, state or federal
tax law or other applicable law or GAAP), books and records separate and apart
from any other Person, (4) will not identify its partners, members or
shareholders, or any affiliates of any of them as a division or part of it, and
(5) will maintain an arms-length relationship with its partners, members,
shareholders and other Affiliates such that it will not enter into or be a party
to any transaction with any of its partners, members, shareholders or other
Affiliates except in the ordinary course of business and on terms which are
intrinsically fair and are no less favorable to it than would be obtained in a
comparable arms-length transaction with a third party.
"Sole Member" shall mean One Court Square Holdings, LLC, a Delaware
limited liability company.
"Special Taxes" shall mean any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, or any liabilities with respect
thereto, including those arising after the date hereof as result of the adoption
of or any change in law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or application
thereof by a Governmental Authority but excluding, in the case of Lender, such
taxes (including income taxes, franchise taxes and branch profit taxes) as are
imposed on or measured by Lender's net income by the United States of America or
any Governmental Authority of the jurisdiction under the laws under which Lender
is organized or maintains a lending office.
"SPE Entity" shall mean Borrower and any other Person which is required
by this Agreement to be, as long as the Loan is outstanding, a Single Purpose
Entity.
"Standard Form of Lease" shall have the meaning set forth in Section
8.8.2(a).
"State" shall mean the State in which the Property or any part thereof
is located.
"Sub-Account(s)" shall have the meaning set forth in Section 3.1.1.
"Substitute Borrower" shall have the meaning set forth in Section
9.1(a)(iii).
"Survey" shall mean a survey of the Property prepared by a surveyor
licensed in the State and satisfactory to Lender and the company or companies
issuing the Title Policy, and containing a certification of such surveyor
reasonably satisfactory to Lender.
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"Taking" shall mean a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of the Property, or
any interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting the Property or any part thereof.
"Tenant" shall mean any Person leasing, subleasing or otherwise
occupying any portion of the Property, other than any Manager and its employees,
agents and assigns.
"Threshold Amount" shall mean an amount equal to five percent (5%) of
the Principal Amount.
"TI and Leasing Costs" shall have the meaning set forth in Section
16.1(b).
"TI and Leasing Reserve Account" shall have the meaning set forth in
Section 3.1.1(a).
"TI and Leasing Reserve Amount" shall have the meaning set forth in
Section 16.1(a).
"TI Work " shall have the meaning set forth in Section 16.1(b).
"Title Company" shall mean First American Title Insurance Company.
"Title Policy" shall mean an ALTA mortgagee title insurance policy in a
form acceptable to Lender (or, if the Property is in a State which does not
permit the issuance of such ALTA policy, such form as shall be permitted in such
State and acceptable to Lender) issued by the Title Company with respect to the
Property and insuring the lien of the Security Instrument.
"Total Loss" shall mean (i) a casualty, damage or destruction of the
Property which, in the reasonable judgment of Lender, (A) involves an actual or
constructive loss of more than twenty-five percent (25%) of the lesser of (x)
the fair market value of the Property or (y) the Principal Amount, or (B)
results in the cancellation of leases comprising more than twenty-five percent
(25%) of the rentable area of the Property, and in either case with respect to
which Borrower is not required under the Leases to apply Proceeds to the
restoration of the Property or (ii) a permanent Taking which, in the reasonable
judgment of Lender, (A) involves an actual or constructive loss of more than
fifteen percent (15%) of the lesser of (x) the fair market value of the Property
or (y) the Principal Amount, or (B) renders untenantable more than fifteen
percent (15%) of the rentable area of the Property, or (iii) a casualty, damage,
destruction or Taking that affects so much of the Property such that it would be
impracticable, in Lender's reasonable discretion, even after restoration, to
operate the Property as an economically viable whole.
"Transfer" shall mean to sell, assign, convey, mortgage, transfer,
pledge, hypothecate, encumber, grant a security interest in, exchange or
otherwise dispose of any beneficial interest or grant any option or warrant with
respect to, or where used as a noun, a sale, assignment, conveyance, transfer,
pledge or other disposition of any beneficial interest by any means whatsoever
whether voluntary, involuntary, by operation of law or otherwise.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect in the State.
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"Underwriter Group" shall have the meaning set forth in Section
14.4.2(b).
"U.S. Government Obligations" shall mean any direct obligations of, or
obligations guaranteed as to principal and interest by, the United States
Government or any agency or instrumentality thereof, provided that such
obligations are backed by the full faith and credit of the United States. Any
such obligation must be limited to instruments that have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change. If any
such obligation is rated by S&P, it shall not have an "r" highlighter affixed to
its rating. Interest must be fixed or tied to a single interest rate index plus
a single fixed spread (if any), and move proportionately with said index. U.S.
Government Obligations include, but are not limited to: U.S. Treasury direct or
fully guaranteed obligations, Farmers Home Administration certificates of
beneficial ownership, General Services Administration participation
certificates, U.S. Maritime Administration guaranteed Title XI financing, Small
Business Administration guaranteed participation certificates or guaranteed pool
certificates, U.S. Department of Housing and Urban Development local authority
bonds, and Washington Metropolitan Area Transit Authority guaranteed transit
bonds. In no event shall any such obligation have a maturity in excess of 365
days.
"U.S. Publicly-Traded Entity" shall mean a Person (other than an
individual) whose securities are listed on a national securities exchange, or
quoted on an automated quotation system, in the United States, or a wholly-owned
subsidiary of such a Person.
"Work" shall have the meaning provided in Section 6.2.4(a).
"Yield Maintenance Premium" shall have the meaning set forth in the
Note.
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 accounting terms not specifically defined herein shall be
construed in accordance with GAAP. When used herein, the term "financial
statements" shall include the notes and schedules thereto. Unless otherwise
specified herein or therein, all terms defined in this Agreement shall have the
definitions given them in this Agreement when used in any other Loan Document or
in any certificate or other document made or delivered pursuant thereto. All
uses of the word "including" shall mean including, without limitation unless the
context shall indicate otherwise. Unless otherwise specified, the words hereof,
herein and hereunder and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined.
II. GENERAL TERMS
2.1 Loan; Disbursement to Borrower.
2.1.1 The Loan. Subject to and upon the terms and conditions set forth
herein, Lender hereby agrees to make and Borrower hereby agrees to accept the
Loan on the Closing Date.
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2.1.2 Disbursement to Borrower. Borrower may request and receive only
one borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed. Borrower
acknowledges and agrees that the full proceeds of the Loan have been disbursed
by Lender to Borrower on the Closing Date.
2.1.3 The Note, Security Instrument and Loan Documents. The Loan shall
be evidenced by the Note and secured by the Security Instrument, the Assignment
of Leases, this Agreement and the other Loan Documents.
2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan to
(a) pay costs and expenses incurred in connection with the closing of the Loan
and (b) distribute the balance, if any, to Borrower for other company purposes
and/or to make distributions to its members.
2.2 Interest; Loan Payments; Late Payment Charge.
2.2.1 Payment of Principal and Interest.
(i) Except as set forth in Section 2.2.1(ii), interest shall
accrue on the Principal Amount as set forth in the Note.
(ii) Upon the occurrence and during the continuance of an
Event of Default and from and after the Maturity Date if the entire Principal
Amount is not repaid on the Maturity Date, interest on the outstanding principal
balance of the Loan and, to the extent permitted by law, overdue interest and
other amounts due in respect of the Loan shall accrue at the Default Rate
calculated from the date such payment was due without regard to any grace or
cure periods contained herein (it being agreed, however, that no such Default
Rate interest shall be payable if Borrower shall pay the amount due within five
(5) Business Days after such amount is due). Interest at the Default Rate shall
be computed from the occurrence of the Event of Default until the actual receipt
and collection of the Indebtedness (or that portion thereof that is then due).
This Section 2.2.1(ii) shall not be construed as an agreement or privilege to
extend the date of the payment of the Indebtedness, nor as a waiver of any other
right or remedy accruing to Lender by reason of the occurrence of any Event of
Default, and Lender retains its rights under the Note to accelerate and to
continue to demand payment of the Indebtedness upon the happening of any Event
of Default.
2.2.2 Method and Place of Payment.
(a) On each Payment Date, Borrower shall pay to Lender interest
accruing pursuant to the Note for the entire Interest Period immediately
preceding such Payment Date.
(b) All amounts advanced by Lender pursuant to the applicable
provisions of the Loan Documents, other than the Principal Amount, together with
any interest at the Default Rate or other charges as provided therein, shall be
due and payable hereunder as provided in the Loan Documents. In the event any
such advance is not so repaid by Borrower, Lender may, at its option, first
apply any payments received under the Note to repay such advances, together with
any interest thereon or other charges with respect to such advances as provided
herein or in any of the other Loan Documents, and the balance, if any, shall be
applied in payment of any installment of interest or principal then due and
payable.
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(c) The Maturity Date Payment shall be due and payable in full on the
Maturity Date.
(d) From and after the Anticipated Repayment Date, unless the
Indebtedness has been repaid in full, (i) all Excess Cash Flow shall be applied
on each Payment Date as a partial prepayment of the outstanding principal
Indebtedness, as set forth in Section 3.1.6(a)(ii) and (ii) Lender may draw down
on any of the Collateral Letters of Credit (unless Lender defaulted in timely
returning the same to Borrower in accordance with the terms hereof) and apply
the same on each Payment Date as a partial prepayment of the outstanding
principal Indebtedness, as set forth in Section 16.2.
2.2.3 Late Payment Charge. If any interest or any other sums due under
the Loan Documents (other than the outstanding Principal Amount) is not paid by
Borrower on or prior to the date which is five (5) Business Days after such
amount is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of (i) four percent (4%) of such unpaid sum or (ii) the Maximum Legal
Rate (the "Late Payment Charge") 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 this Agreement, the Security Instrument and the other Loan
Documents to the extent permitted by applicable law, subject to Section 13(a) of
the Security Instrument and Section 8(p) of the Assignment of Leases.
2.2.4 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 under the Note at a rate in excess of the Maximum Legal
Rate, then the Default Rate 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 under the Note. 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.
2.3 Prepayments.
2.3.1 Prepayments. No prepayments of the Indebtedness shall be
permitted except as set forth in Section 4 of the Note.
2.3.2 Prepayments After Event of Default. If, following an Event of
Default, Lender shall accelerate the Indebtedness and Borrower thereafter
tenders payment of all or any part of the Indebtedness, or if all or any portion
of the Indebtedness is recovered by Lender after such Event of Default, (a) such
payment may be made only on the next occurring Payment Date together with all
unpaid interest thereon as calculated through the end of the Interest Period
during which such Payment Date occurs (even if such period extends beyond such
Payment Date and calculated as if such payment had not been made on such Payment
Date), and all other fees and sums payable hereunder or under the Loan
Documents, including without limitation, interest that has accrued at the
Default Rate and any Late Payment Charges), (b) such payment shall be deemed a
voluntary prepayment by Borrower, and (c) Borrower shall pay, in addition to the
Indebtedness, the Yield Maintenance Premium, if applicable, and an amount equal
to, in the event the payment occurs during the Lockout Period, the Liquidated
Damages Amount.
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2.3.3 Release of Property. Lender shall, upon the written request and
at the expense of Borrower, upon payment in full of the Principal Amount and
interest on the Loan and all other amounts due and payable under the Loan
Documents in accordance with the terms and provisions of the Note and this
Agreement, release the Lien of (i) this Agreement upon the Account Collateral
and (ii) the Security Instrument on the Property or assign it (together with the
Note), in whole or in part, to a new lender. In such event, Borrower shall
submit to Lender, not less than five (5) Business Days prior to the date Lender
is being requested to execute such release or assignment, a release of lien or
assignment of lien, as applicable, for such property for execution by Lender.
Such release or assignment, as applicable, shall be in a form appropriate in
each jurisdiction in which the Property is located and satisfactory to Lender in
its reasonable discretion. In addition, Borrower shall provide all other
documentation Lender reasonably requires to be delivered by Borrower in
connection with such release or assignment, as applicable. Upon payment in full
of the Principal Amount and all interest on the Loan and all other outstanding
Indebtedness in accordance with the terms and provisions of the Note and this
Agreement, whether or not such documents are executed by Lender upon such
payment in full, the Lien of the Loan Documents shall automatically terminate
(except as to the Security Instrument, if so assigned) and the Loan Documents
(except for the Note and the Security Instrument, if so assigned) shall be of no
further force and effect and shall be terminated, Lender shall promptly return
to Borrower all Cash and Cash Equivalents, Letters of Credit and other
collateral being held by Lender and, upon the written request and at the expense
of Borrower, Lender shall execute all other documents reasonably required to put
third parties on notice thereof. If the Security Instrument is not so assigned,
the original Note shall be returned to Borrower marked "paid".
2.4 Regulatory Change; Taxes.
2.4.1 Increased Costs. If as a result of any Regulatory Change or
compliance of Lender therewith, the basis of taxation of payments to Lender or
any company Controlling Lender of the principal of or interest on the Loan is
changed (excluding Federal, state, foreign or local taxation of the overall net
income of Lender or the company Controlling Lender) or Lender or the company
Controlling Lender shall be subject to (i) any tax, duty, charge or withholding
of any kind with respect to this Agreement (excluding Federal, state, foreign or
local taxation of the overall net income of Lender or the company Controlling
Lender); or (ii) any reserve, special deposit or similar requirements relating
to any extensions of credit or other assets of, or any deposits with or other
liabilities, of Lender or any company Controlling Lender is imposed, modified or
deemed applicable and Lender determines that, by reason thereof, the cost to
Lender or any company Controlling Lender of making, maintaining or extending the
Loan to Borrower is increased, or any amount receivable by Lender or any company
Controlling Lender hereunder in respect of any portion of the Loan to Borrower
is reduced, in each case by an amount deemed by Lender in good faith to be
material (such increases in cost and reductions in amounts receivable being
herein called "Increased Costs"), then Lender shall use good faith efforts to
provide prompt notice thereof to Borrower and Borrower agrees that it will pay
to Lender upon Lender's written request such additional amount or amounts as
will compensate Lender or any company Controlling Lender for such Increased
Costs to the extent Lender reasonably determines that such Increased Costs are
allocable to the Loan. If Lender requests compensation under this Section 2.4.1,
Borrower may, by notice to Lender, require that Lender furnish to Borrower a
statement setting forth the basis for requesting such compensation and the
method for determining the amount thereof.
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2.4.2 Special Taxes. Except to the extent required by a Governmental
Authority, Borrower shall make all payments hereunder free and clear of and
without deduction for Special Taxes. If Borrower shall be required by law to
deduct any Special Taxes from or in respect of any sum payable hereunder or
under any other Loan Document to Lender, (i) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.4.2)
Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
2.4.3 Other Taxes. In addition, Borrower agrees to pay any present or
future stamp or documentary taxes or other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder, or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the other Loan Documents, or the Loan (hereinafter referred to as
"Other Taxes").
2.4.4 Indemnity. Borrower shall indemnify Lender for the full amount of
Special Taxes and Other Taxes (including any Special Taxes or Other Taxes
imposed by any Governmental Authority on amounts payable under this Section
2.4.4) paid by Lender and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto, whether or not such Special
Taxes or Other Taxes were correctly or legally asserted. This indemnification
shall be made within thirty (30) days after the date Lender makes written demand
therefor.
2.4.5 Change of Office. To the extent that changing the jurisdiction of
Lender's applicable office would have the effect of minimizing Special Taxes,
Other Taxes or Increased Costs, Lender shall use reasonable efforts to make such
a change, provided that same would not otherwise be disadvantageous to Lender.
2.4.6 Survival. Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations of Borrower
contained in this Section 2.4 shall survive the payment in full of principal and
interest hereunder, and the termination of this Agreement.
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2.4.7 Limitations; Prepayment. Notwithstanding anything to the contrary
contained herein, (i) the provisions of this Section 2.4 shall not apply to any
Increased Costs or Special Taxes accruing after the date of the first
Securitization of the Loan (or any part thereof) and (ii) in the event that
Borrower would be required to pay any material cost in respect of any Increased
Costs or Special Taxes pursuant to this Section 2.4, then Borrower may elect
(pursuant to a Prepayment Notice delivered to Lender at any time thereafter (but
prior to any Securitization described in clause (i) above) pursuant to Section 4
of the Note) to prepay the entire Principal Amount (with no obligation to pay
the Liquidated Damages Amount or the Yield Maintenance Premium) in lieu of
having to pay such material Increased Costs or Special Taxes (unless Lender
shall incur such Increased Costs or Special Taxes prior to the date on which the
Loan is so prepaid, in which event Borrower shall remain obligated to pay such
Increased Costs or Special Taxes pursuant to this Section 2.4). Such prepayment
shall be in accordance with the terms of Section 4 of the Note.
2.5 Conditions Precedent to Closing. The obligation of Lender to make
the Loan hereunder is subject to the fulfillment by, or on behalf of, Borrower
or waiver by Lender of the following conditions precedent no later than the
Closing Date; provided, however, that unless a condition precedent shall
expressly survive the Closing Date pursuant to a separate agreement, by funding
the Loan, Lender shall be deemed to have waived any such conditions not
theretofore fulfilled or satisfied:
2.5.1 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 no Default or Event of Default shall have occurred and be continuing; 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.
2.5.2 Delivery of Loan Documents; Title Policy; Reports; Leases.
(a) Loan Documents. Lender shall have received an original copy of this
Agreement, the Note and all of the other Loan Documents, in each case, duly
executed (and to the extent required, acknowledged) and delivered on behalf of
Borrower and any other parties thereto.
(b) Security Instrument, Assignment of Leases. Lender shall have
received evidence that original counterparts of the Security Instrument and
Assignment of Leases, in proper form for recordation, have been delivered to the
Title Company for recording, so as effectively to create, in the reasonable
judgment of Lender, upon such recording valid and enforceable first priority
Liens upon the Property, 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.
(c) UCC Financing Statements. Lender shall have received evidence that
the UCC financing statements relating to the Security Instrument and this
Agreement have been delivered to the Title Company for filing in the applicable
jurisdictions.
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(d) Title Insurance. Lender shall have received a Title Policy issued
by the Title Company and dated as of the Closing Date, with reinsurance and
direct access agreements acceptable to Lender. Such Title Policy shall (i)
provide coverage in the amount of the Loan, (ii) insure Lender that the Security
Instrument creates a valid, first priority Lien on the Property, 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 the endorsements and affirmative coverages set
forth on Exhibit A and such additional endorsements and affirmative coverages as
Lender may reasonably request, and (iv) name Lender as the insured. The Title
Policy shall be assignable. Lender also shall have received evidence that all
premiums in respect of such Title Policy have been paid.
(e) Survey. Lender shall have received a current Survey for the
Property, containing the survey certification substantially in the form attached
hereto as Exhibit B. Such Survey shall reflect the same legal description
contained in the Title Policy referred to in clause (d) 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 such Survey in form and substance reasonably acceptable to
Lender.
(f) Insurance. Lender shall have received valid certificates of
insurance for the policies of insurance required hereunder and/or under the
Existing Citibank Lease, if any, satisfactory to Lender in its sole discretion,
and evidence of the payment of all insurance premiums currently due and payable
for the existing policy period.
(g) Environmental Reports. Lender shall have received an Environmental
Report in respect of the Property satisfactory to Lender.
(h) Zoning. Lender shall have received letters or other evidence with
respect to the Property from the appropriate municipal authorities (or other
Persons) concerning applicable zoning and building laws acceptable to Lender.
(i) Certificate of Occupancy. Lender shall have received a copy of the
valid certificate of occupancy for the Property acceptable to Lender.
(j) 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 Permitted Encumbrances and
such other Liens as are permitted pursuant to the Loan Documents, and Lender
shall have received satisfactory evidence thereof.
2.5.3 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
Lender shall have received and approved certified copies thereof.
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2.5.4 Delivery of Organizational Documents. On or before the Closing
Date, Borrower shall deliver, or cause to be delivered, to Lender copies
certified by an Officer's Certificate, of all organizational documentation
related to Borrower, Guarantor, each SPE Entity and certain of its Affiliates as
have been requested by Lender and/or the formation, structure, existence, good
standing and/or qualification to do business of Borrower, Guarantor, each SPE
Entity and such Affiliates, as Lender may request in its sole discretion,
including, without limitation, good standing certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan and incumbency certificates as may be requested by Lender. Each
of the organizational documents of any SPE Entity shall contain provisions
having a substantive effect materially similar to that of the language set forth
in Exhibit C.
2.5.5 Opinions of Borrower's Counsel.
(a) Lender shall have received a Non-Consolidation Opinion.
(b) Lender shall have received the Opinion of Counsel substantially in
compliance with the requirements set forth in Exhibit D or in such other form
approved by Lender.
2.5.6 Reserved.
2.5.7 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.
2.5.8 Payments. All payments, deposits or escrows, if any, 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.
2.5.9 Account Agreement. Lender shall have received the original of the
Account Agreement executed by each of Cash Management Bank and Borrower.
2.5.10 Citibank Estoppel and SNDA. Lender shall have received from
Citibank (i) an executed tenant estoppel letter, substantially in form of
Exhibit G attached hereto and (ii) an executed Citibank SNDA.
2.5.11 Reciprocal Easement Agreement Estoppels. Lender shall have
received an executed reciprocal easement agreement estoppel letter from all
parties under the REAs substantially in the form of Exhibit I attached hereto.
2.5.12 Independent Member Certificate. Lender shall have received an
executed Independent Member certificate substantially in the form attached as
Exhibit T from each Independent Member.
2.5.13 Transaction Costs. Borrower shall have paid or reimbursed Lender
for all title insurance premiums, recording and filing fees, costs of
Environmental Reports, Physical Conditions Reports, appraisals and other
reports, the reasonable fees and costs of Lender's counsel and all other third
party out-of-pocket expenses incurred in connection with the origination of the
Loan.
2.5.14 Material Adverse Effect. No event or condition shall have
occurred since the date of Borrower's most recent financial statements
previously delivered to Lender which has or could reasonably be expected to have
a Material Adverse Effect. The Operating Income and Operating Expenses of the
Property, the Leases, and all other features of the transaction shall be as
represented to Lender without material adverse change. Neither Borrower nor any
of its constituent Persons nor Citibank nor any of its constituent Persons shall
be the subject of any bankruptcy, reorganization, or insolvency proceeding.
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2.5.15 Leases and Rent Roll. Lender shall have received true, correct
and complete copies of (i) the Existing Citibank Lease, including its exhibit,
the Amended and Restated Lease, and (ii) all Current Occupancy Agreements (as
defined in the Citibank Lease) which the Citibank Tenant has delivered to
Borrower.
2.5.16 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.
2.5.17 Physical Conditions Report. Lender shall have received a
Physical Conditions Report with respect to the Property, which report shall be
satisfactory in form and substance to Lender.
2.5.18 Appraisal. Lender shall have received an appraisal of the
Property, which shall be satisfactory in form and substance to Lender.
2.5.19 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.
III. CASH MANAGEMENT
3.1 Cash Management.
3.1.1 Establishment of Accounts. Borrower hereby confirms that,
simultaneously with the execution of this Agreement, pursuant to the Account
Agreement, it has established with Cash Management Bank, in the name of Borrower
for the benefit of Lender, as secured party, the collection account (the
"Collection Account"), which has been established as an interest-bearing
"deposit account" (as such term is defined in Section 9-102(a)(29) of the UCC),
and the holding account (the "Holding Account"), which has been established as a
"securities account" (as such term is defined in Section 8-501(a) of the UCC).
Both the Collection Account and the Holding Account and each sub-account of
either such account and the funds deposited therein and securities and other
assets credited thereto shall serve as additional security for the Loan.
Pursuant to the Account Agreement, Borrower shall irrevocably instruct and
authorize Cash Management Bank to disregard any and all orders for withdrawal
from the Collection Account or the Holding Account made by, or at the direction
of, Borrower other than to transfer all amounts on deposit in the Collection
Account in accordance with Section 4(c) of the Account Agreement. Pursuant to
the Account Agreement, (A) prior to the occurrence of a Reserve Period (and
thereafter so long as a Reserve Period shall no longer be continuing), Cash
Management Bank on a daily basis shall transfer all collected and available
funds as determined by Cash Management Bank's then current funds availability
schedule received in the Collection Account either to an account designated by
Borrower or to the Holding Account, as required by Section 3.1.6(a)
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below, and (B) from and after the occurrence and during the continuance of a
Reserve Period, Cash Management Bank on a daily basis shall transfer all
collected and available funds as determined by Cash Management Bank's then
current funds availability schedule received in the Collection Account to the
Holding Account. Borrower agrees that, prior to the payment in full of the
Indebtedness, the terms and conditions of the Account Agreement shall not be
amended or modified without the prior written consent of Lender (which consent
Lender may grant or withhold in its sole discretion), and if a Securitization
has occurred, the delivery by Borrower of a Rating Agency Confirmation. In
recognition of Lender's security interest in the funds deposited into the
Collection Account and the Holding Account, Borrower shall identify both the
Collection Account and the Holding Account with the name of Lender, as secured
party. The Collection Account shall be named as follows: "Reckson Court Square,
LLC f/b/o German American Capital Corporation, as secured party Collection
Account" (Account Number 323 967051). The Holding Account shall be named as
follows: "Reckson Court Square, LLC f/b/o German American Capital Corporation,
as secured party Holding Account" (Account Number 323 967043). Borrower confirms
that it has established with Cash Management Bank the following sub-accounts of
the Holding Account (each, a "Sub-Account" and, collectively, the "Sub-Accounts"
and together with the Holding Account and the Collection Account, the
"Collateral Accounts"), which (i) may be ledger or book entry sub-accounts and
need not be actual sub-accounts, (ii) shall each be linked to the Holding
Account, (iii) shall each be a "securities account" within the meaning of
Article 8 of the UCC and (iv) shall each be an Eligible Account to which certain
funds shall be allocated and from which disbursements shall be made pursuant to
the terms of this Agreement:
(a) a sub-account for the retention of Account Collateral in respect of
reserves for tenant improvements and leasing commissions with the account number
323 967043-1 (the "TI and Leasing Reserve Account");
(b) a sub-account for the retention of Account Collateral in respect of
any portion of the Principal Amount and unpaid interest thereon and any other
amounts required to be paid by Borrower to Lender in connection therewith
(collectively, "Prepayment Amounts") in connection with a voluntary prepayment
of the Loan pursuant to Section 4(a) of the Note with the account number 323
967043-3 (the "Prepayment Reserve Account");
(c) a sub-account for the retention of Account Collateral in respect of
Approved Operating Expenses with the account number 323 967043-2 (the "Operating
Expense Reserve Account"); and
(d) a sub-account for the retention of Account Collateral in respect of
certain Proceeds as more fully set forth in Section 6.2 with the account number
323 967043-4 (the "Proceeds Reserve Account").
3.1.2 Pledge of Account Collateral. To secure the full and punctual
payment and performance of the Obligations, Borrower hereby collaterally
assigns, grants a security interest in and pledges to Lender, to the extent not
prohibited by applicable law, a first priority continuing security interest in
and to the following property of Borrower, whether now owned or existing or
hereafter acquired or arising and regardless of where located (all of the same,
collectively, the "Account Collateral"):
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(a) the Collateral Accounts and all cash, checks, drafts, securities
entitlements, certificates, instruments, financial assets and other property,
including, without limitation, all deposits and/or wire transfers from time to
time deposited or held in, credited to or made to Collateral Accounts;
(b) any and all amounts invested in Permitted Investments;
(c) all interest, dividends, cash, instruments, securities entitlements
and other property from time to time received, receivable or otherwise payable
in respect of, or in exchange for, any or all of the foregoing or purchased with
funds from the Collateral Accounts; and
(d) to the extent not covered by clauses (a), (b) or (c) above, all
proceeds (as defined under the UCC) of any or all of the foregoing.
In addition to the rights and remedies herein set forth, Lender shall
have all of the rights and remedies with respect to the Account Collateral
available to a secured party at law or in equity, including, without limitation,
the rights of a secured party under the UCC, as if such rights and remedies were
fully set forth herein.
This Agreement shall constitute a security agreement for purposes of
the Uniform Commercial Code and other applicable law.
3.1.3 Maintenance of Collateral Accounts.
(a) Borrower agrees that the Collection Account is and shall be
maintained (i) as a "deposit account" (as such term is defined in Section
9-102(a)(29) of the UCC), (ii) in such a manner that Lender shall have control
(within the meaning of Section 9-104(a)(2) of the UCC) over the Collection
Account and (iii) such that, except as provided herein or in the Account
Agreement, neither Borrower nor Manager shall have any right of withdrawal from
the Collection Account and no Account Collateral shall be released to Borrower
or Manager from the Collection Account. Without limiting Borrower's obligations
under the immediately preceding sentence, Borrower shall only establish and
maintain the Collection Account with a financial institution that has executed
an agreement substantially in the form of the Account Agreement or in such other
form acceptable to Lender in its sole discretion, with changes requested by such
replacement Cash Management Bank that are reasonably acceptable to Lender
(including being in accordance with the applicable requirements of the
securitization market), and Lender agrees to reasonably cooperate in connection
therewith (at no cost to Lender).
(b) Borrower agrees that each of the Holding Account and the
Sub-Accounts is and shall be maintained (i) as a "securities account" (as such
term is defined in Section 8-501(a) of the UCC), (ii) in such a manner that
Lender shall have control (within the meaning of Section 8-106(d)(2) of the UCC)
over the Holding Account and any Sub-Account, (iii) such that neither Borrower
nor Manager shall have any right of withdrawal from the Holding Account or the
Sub-Accounts and, except as provided herein, no Account Collateral shall be
released to Borrower from the Holding Account or the Sub-Accounts, (iv) in such
a manner that the Cash Management Bank shall agree to treat all property
credited to the Holding Account or the Sub-Accounts as "financial assets" (as
such term is defined in Section 8-102(a)(9) of the UCC) and (v) such that all
securities or other property underlying any financial assets credited to the
Accounts shall be registered in the name of Cash Management Bank, indorsed to
Cash Management Bank or in blank or credited to another securities account
maintained in the name of Cash Management Bank and in no case will any financial
asset credited to any of the Collateral Accounts be registered in the name of
Borrower, payable to the order of Borrower or specially indorsed to Borrower
except to the extent the foregoing have been specially indorsed to Cash
Management Bank or in blank. Without limiting Borrower's obligations under the
immediately preceding sentence, Borrower shall only establish and maintain the
Holding Account with a financial institution that has executed an agreement
substantially in the form of the Account Agreement or in such other form
acceptable to Lender in its sole discretion, with changes requested by such
replacement Cash Management Bank that are reasonably acceptable to Lender
(including being in accordance with the applicable requirements of the
securitization market), and Lender agrees to reasonably cooperate in connection
therewith (at no cost to Lender).
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3.1.4 Eligible Accounts. The Collateral Accounts shall be Eligible
Accounts. The Collateral Accounts shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other banking or governmental authority, as may now or
hereafter be in effect. Income and interest accruing on the Collateral Accounts
or any investments held in such accounts shall be periodically added to the
principal amount of such account and shall be held, disbursed and applied in
accordance with the provisions of this Agreement, the Note and the Account
Agreement. Borrower shall be the beneficial owner of the Collateral Accounts for
federal income tax purposes and shall report all income on the Collateral
Accounts.
3.1.5 Deposits into Sub-Accounts. On the date hereof, Borrower has
deposited the following amounts into the Sub-Accounts:
(i) $0 into the Prepayment Reserve Account
(ii) $0 into the Operating Expense Reserve Account;
(iii) $0 into the TI and Leasing Reserve Account; and
(iv) $0 into the Proceeds Reserve Account.
3.1.6 Monthly Funding of Sub-Accounts.
(a) Provided that no Reserve Period shall have occurred and be
continuing, (A) Borrower may direct Cash Management Bank to transfer from the
Collection Account on each Business Day, commencing on the Closing Date, all
funds on deposit in the Collection Account (other than funds relating to any
Surrender Fees) and transfer the same (free of the Lien of the Loan Documents)
to an account designated by Borrower and (B) Borrower shall direct Cash
Management Bank to transfer from the Collection Account on any Business Day from
and after the Closing Date that funds are on deposit in the Collection Account
which relate to any Surrender Fees and transfer the same to the Holding Account
for application in accordance with this Section 3.16. From and after the
occurrence and during the continuance of a Reserve Period (and/or in the event
that there are any funds on deposit in the Holding Account relating to any
Surrender Fees or Prepayment Amounts), Borrower hereby irrevocably authorizes
Lender to transfer (and, pursuant to the Account Agreement shall irrevocably
authorize Cash Management Bank to execute any corresponding instructions of
Lender), and Lender shall transfer on each Business Day (subject to the terms of
Section 3.1.10), or as soon thereafter as sufficient funds are in the Holding
Account to make the applicable transfers, funds in the following amounts and in
the following order of priority:
36
(i) funds in an amount equal to the amount of any Prepayment Amounts
paid by Borrower to Lender with respect to the next occurring Payment Date and
deposit the same into the Prepayment Reserve Account;
(ii) during any Reserve Period, funds in an amount equal to the
Approved Operating Expenses for the month in which the Payment Date immediately
following the date of the transfer from the Holding Account occurs, and transfer
the same to the Operating Expense Reserve Account; provided, however, that to
the extent that the Officer's Certificate delivered to Lender on a quarterly
basis by Borrower pursuant to Article XI provides evidence reasonably
satisfactory to Lender that actual Operating Expenses for such calendar quarter
were either less than or greater than Approved Operating Expenses, then Lender
may direct Cash Management Bank to increase or decrease the amount of the
Approved Operating Expense transfer to be made for the month following the month
in which such Officer's Certificate was delivered, such adjustment to be in an
amount reasonably determined by Lender to appropriately reflect such difference
between actual Operating Expenses and Approved Operating Expenses;
(iii) funds in an amount equal to any Surrender Fees (as defined in the
Citibank Lease), if any, and transfer the same to the TI and Leasing Reserve
Account; and
(iv) during any Reserve Period, funds in an amount equal to the balance
(if any) remaining or deposited in the Holding Account after the foregoing
deposits (such remainder being hereinafter referred to as "Excess Cash Flow")
and provided no Event of Default shall have occurred and is then continuing,
transfer any Excess Cash Flow to Lender to be applied as a partial prepayment of
the outstanding principal Indebtedness in accordance with the Note.
(b) If Lender shall reasonably determine that there will be
insufficient amounts in the Holding Account to make any of the transfers
pursuant to this Section 3.1.5 inclusive on the date required hereunder, Lender
shall provide notice to Borrower of such insufficiency and, within five (5)
Business Days after receipt of said notice and prior to the expiration of any
grace period applicable to such payment, Borrower shall deposit into the Holding
Account an amount equal to the shortfall of available funds in the Holding
Account taking into account any funds which accumulate in the Holding Account
during such five (5) day Business Day period. Notwithstanding anything to the
contrary contained in this Agreement or in the other Loan Documents, Borrower
shall not be deemed to be in default hereunder or thereunder in the event funds
sufficient for a required transfer are held in an appropriate Sub-Account and
Lender or Cash Management Bank fails to timely make any transfer from such
Sub-Account as contemplated by this Agreement unless due to the negligence or
willful misconduct of Borrower.
(c) Notwithstanding anything to the contrary contained herein or in the
Security Instrument, to the extent that Borrower shall fail to timely pay any
mortgage recording tax, Lender shall have the right, at any time, without notice
to Borrower, to withdraw from the Holding Account, an amount equal to such
unpaid taxes, costs, expenses and/or other amounts and pay such amounts to the
Person(s) entitled thereto.
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3.1.7 Payments from Sub-Accounts. Borrower irrevocably authorizes
Lender to make and, provided no Event of Default shall have occurred and be
continuing, Lender hereby agrees to make, the following payments from the
Sub-Accounts to the extent of the monies on deposit therefor:
(i) funds from the Prepayment Reserve Account to Lender sufficient to
pay the Prepayment Amounts on the next occurring Payment Date, and Lender, on
such Payment Date, shall apply such funds to the payment of the Prepayment
Amounts payable on such Payment Date;
(ii) during a Reserve Period, no more frequently than once a month,
funds from the Operating Expense Reserve Account in an amount equal to the
Approved Operating Expenses for the month in which the transfer is made, and
transfer the same to Borrower's Account; and
(iii) no more frequently than once in any calendar month, funds from
the TI and Leasing Reserve Account to the Borrower's Account to pay for TI and
Leasing Costs in accordance with Section 16.1.
3.1.8 Cash Management Bank.
(a) Lender shall have the right at Borrower's sole cost and expense to
replace the Cash Management Bank with a financial institution reasonably
satisfactory to Borrower in the event that (i) the Cash Management Bank fails,
in any material respect, to comply with the Account Agreement, (ii) the Cash
Management Bank named herein is no longer the Cash Management Bank or (iii) the
Cash Management Bank is no longer an Approved Bank. Upon the occurrence and
during the continuance of an Event of Default, Lender shall have the right at
Borrower's sole cost and expense to replace Cash Management Bank at any time,
without notice to Borrower. Borrower shall cooperate with Lender in connection
with the appointment of any replacement Cash Management Bank and the execution
by the Cash Management Bank and Borrower of an Account Agreement and delivery of
same to Lender (with a copy to the Mezzanine Lender).
(b) So long as no Event of Default shall have occurred and be
continuing, Borrower shall have the right at its sole cost and expense to
replace the Cash Management Bank with a financial institution that is an
Approved Bank, provided that such financial institution and Borrower shall
execute and deliver to Lender (with a copy to Mezzanine Lender) an Account
Agreement substantially similar to the Account Agreement executed as of the
Closing Date, with changes requested by such replacement Cash Management Bank
that are reasonably acceptable to Lender (including being in accordance with the
applicable requirements of the securitization market), and Lender agrees to
reasonably cooperate in connection therewith (at no cost to Lender).
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3.1.9 Borrower's Account Representations, Warranties and Covenants.
(a) Borrower represents, warrants and covenants that (i) as of the date
hereof, Borrower has directed all Tenants under the Leases to mail all checks
and wire all funds with respect to any payments due under such Leases directly
to the Collection Account pursuant to a letter substantially in the form of
Exhibit P, and (ii) Borrower shall deliver a letter substantially in the form
attached hereto as Exhibit P to Tenants under all Leases entered into after the
date hereof (or shall incorporate the same into such Tenant's Lease).
(b) Borrower further represents, warrants and covenants that (i)
Borrower shall cause each Manager to deposit all Rents payable to Borrower
pursuant to any Management Agreement directly into the Collection Account, (ii)
Borrower shall pay or cause to be paid all Rents (and not including any Security
Deposits) not covered by the preceding subsection (a) within two (2) Business
Days after receipt thereof by Borrower or its Affiliates directly into the
Collection Account and, until so deposited, any such amounts held by Borrower or
Manager shall be deemed to be Account Collateral and shall be held in trust by
it for the benefit, and as the property, of Lender and shall not be commingled
with any other funds or property of Borrower or Manager, (iii) there are no
accounts other than the Collateral Accounts maintained by Borrower or any other
Person with respect to the collection of Rents (and not including any Security
Deposits), other than any accounts maintained by the Citibank Tenant and (iv) so
long as the Loan shall be outstanding, neither Borrower nor any other Person
(other than the Citibank Tenant) shall open any other accounts with respect to
the collection of Rents, except for the Collateral Accounts.
(c) Notwithstanding anything to the contrary contained herein, Borrower
may change the name of any of the Collateral Accounts in order to reflect the
fact that the Borrower initially named herein is no longer the Borrower or has
changed its name (so long as such name change is not prohibited under any of the
Loan Documents), provided that (i) Borrower delivers written notice thereof to
Lender at least ten (10) Business Days prior to the effective date of such name
change, (ii) Borrower obtains Lender's consent thereto (which consent shall not
be unreasonably withheld), (iii) no Reserve Period shall have occurred and be
continuing and (iv) Lender's Lien in the Account Collateral shall not be
adversely affected thereby.
3.1.10 Account Collateral and Remedies.
(a) Upon the occurrence and during the continuance of an Event of
Default, without additional notice from Lender to Borrower, (i) Lender may, in
addition to and not in limitation of Lender's other rights, make any and all
withdrawals from, and transfers between and among, the Collateral Accounts as
Lender shall determine in its sole and absolute discretion to pay any
Obligations, Operating Expenses and/or Capital Expenditures for the Property,
(ii) all Excess Cash Flow shall be retained in the Holding Account or applicable
Sub-Accounts, (iii) all payments to the Mezzanine Lender pursuant to Section
3.1.6 shall immediately cease and (iv) Lender may liquidate and transfer any
amounts then invested in Permitted Investments to the Collateral Accounts to
which they relate or reinvest such amounts in other Permitted Investments as
Lender may reasonably determine is necessary to perfect or protect any security
interest granted or purported to be granted hereby or to enable Lender to
exercise and enforce Lender's rights and remedies hereunder with respect to any
Account Collateral or to preserve the value of the Account Collateral.
39
(b) Upon the occurrence and during the continuance of an Event of
Default, Borrower hereby irrevocably constitutes and appoints Lender as
Borrower's true and lawful attorney-in-fact, with full power of substitution, to
execute, acknowledge and deliver any instruments and to exercise and enforce
every right, power, remedy, option and privilege of Borrower with respect to the
Account Collateral, and do in the name, place and stead of Borrower, all such
acts, things and deeds for and on behalf of and in the name of Borrower, which
Borrower could or might do or which Lender may deem necessary or desirable to
more fully vest in Lender the rights and remedies provided for herein and to
accomplish the purposes of this Agreement. The foregoing powers of attorney are
irrevocable and coupled with an interest. Upon the occurrence and during the
continuance of an Event of Default, Lender may perform or cause performance of
any such agreement, and any reasonable expenses of Lender incurred in connection
therewith shall be paid by Borrower as provided in Section 5.1.16.
(c) Borrower hereby expressly waives, to the fullest extent permitted
by law, presentment, demand, protest or any notice of any kind in connection
with this Agreement or the Account Collateral except with respect to matters for
which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower acknowledges and agrees that
ten (10) days' prior written notice of the time and place of any public sale of
the Account Collateral or any other intended disposition thereof shall be
reasonable and sufficient notice to Borrower within the meaning of the UCC.
3.1.11 Transfers and Other Liens. Borrower agrees that it will not (i)
sell or otherwise dispose of any of the Account Collateral or (ii) create or
permit to exist any Lien upon or with respect to all or any of the Account
Collateral, except for the Lien granted to Lender under this Agreement and/or
any Lien of the Cash Management Bank in accordance with the Account Agreement.
3.1.12 Reasonable Care. Beyond the exercise of reasonable care in the
custody thereof, Lender shall have no duty as to any Account Collateral in its
possession or control as agent therefor or bailee thereof or any income thereon
or the preservation of rights against any person or otherwise with respect
thereto. Lender shall be deemed to have exercised reasonable care in the custody
and preservation of the Account Collateral in its possession if the Account
Collateral is accorded treatment substantially equal to that which Lender
accords its own property, it being understood that Lender shall not be liable or
responsible for any loss or damage to any of the Account Collateral, or for any
diminution in value thereof, by reason of the act or omission of Lender, its
Affiliates, agents, employees or bailees, except to the extent that such loss or
damage results from Lender's gross negligence or willful misconduct. In no event
shall Lender be liable either directly or indirectly for losses or delays
resulting from any event which may be the basis of an Excusable Delay, computer
malfunctions, interruption of communication facilities, labor difficulties or
other causes beyond Lender's reasonable control or for indirect, special or
consequential damages except to the extent of Lender's gross negligence or
willful misconduct. Notwithstanding the foregoing, Borrower acknowledges and
agrees that (i) Lender does not have custody of the Account Collateral, (ii)
Cash Management Bank has custody of the Account Collateral, (iii) the initial
Cash Management Bank was chosen by Borrower and (iv) Lender has no obligation or
duty to supervise Cash Management Bank or to see to the safe custody of the
Account Collateral.
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3.1.13 Lender's Liability.
(a) Lender shall be responsible for the performance only of such duties
with respect to the Account Collateral as are specifically set forth in this
Section 3.1 or elsewhere in the Loan Documents, and no other duty shall be
implied from any provision hereof. Lender shall not be under any obligation or
duty to perform any act with respect to the Account Collateral which would cause
it to incur any expense or liability or to institute or defend any suit in
respect hereof, or to advance any of its own monies. Borrower shall indemnify
and hold Lender, its employees and officers harmless from and against any loss,
cost or damage (including, without limitation, reasonable attorneys' fees and
disbursements) incurred by Lender in connection with the transactions
contemplated hereby with respect to the Account Collateral except as such may be
caused by the gross negligence or willful misconduct of Lender, its employees,
officers or agents.
(b) Lender shall be protected in acting upon any notice, resolution,
request, consent, order, certificate, report, opinion, bond or other paper,
document or signature believed by it in good faith to be genuine, and, in so
acting, it may be assumed that any person purporting to give any of the
foregoing in connection with the provisions hereof has been duly authorized to
do so. Lender may consult with counsel, and the opinion of such counsel shall be
full and complete authorization and protection in respect of any action taken or
suffered by it hereunder and in good faith in accordance therewith.
3.1.14 Continuing Security Interest. This Agreement shall create a
continuing security interest in the Account Collateral and shall remain in full
force and effect until payment in full of the then outstanding Indebtedness (or
assignment or release, as applicable, in accordance with Section 2.3.3 or 9.1).
Upon payment in full of the then outstanding Indebtedness (or assignment or
release, as applicable, in accordance with Section 2.3.3 or 9.1), this security
interest shall automatically terminate without further notice from any party and
Borrower shall be entitled to the return, upon its request, of such of the
Account Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof and Lender shall execute such instruments and documents as may
be reasonably requested by Borrower to evidence such termination and the release
of the Account Collateral and to provide evidence to third parties thereof.
IV. REPRESENTATIONS AND WARRANTIES
4.1 Borrower Representations. Borrower represents and warrants as of
the Closing Date that:
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4.1.1 Organization. Each of Borrower and Sole Member is a limited
liability company and has been duly formed and is validly existing and in good
standing pursuant to the laws of the State of Delaware with requisite power and
authority to own its properties and to transact the businesses in which it is
now engaged. Guarantor is a limited partnership and has been duly formed and is
validly existing and in good standing pursuant to the laws of the State of
Delaware with requisite power and authority to own its properties and to
transact the businesses in which it is now engaged. Each of Borrower and Sole
Member has 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. Each of Borrower and Sole Member
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, and the sole business of Borrower is as
set forth in Section 5.2.3. The organizational structure of Borrower is
accurately depicted by the schematic diagram attached hereto as Exhibit K.
Borrower shall not itself, and shall not permit any other SPE Entity to, change
its name, identity, corporate structure or jurisdiction of organization unless
it shall have given Lender at least thirty (30) days' prior written notice of
any such change and shall have taken all steps reasonably requested by Lender to
grant, perfect, protect and/or preserve the security interest granted hereunder
to Lender.
4.1.2 Proceedings. Each of Borrower and Guarantor has full power to and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement (in the case of Borrower only) and the other Loan
Documents to which it is a party. This Agreement and the other Loan Documents
being executed by Borrower and/or Guarantor on the date hereof have been duly
executed and delivered by, or on behalf of, Borrower and Guarantor, as
applicable, and constitute legal, valid and binding obligations of Borrower and
Guarantor, as applicable, enforceable against Borrower and Guarantor, as
applicable, in accordance with their respective terms, subject only to
applicable bankruptcy, insolvency and similar laws affecting rights of creditors
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
4.1.3 No Conflicts. The execution, delivery and performance of this
Agreement and the other Loan Documents by Borrower and Guarantor, as applicable,
will not conflict with or result in a material breach of any of the terms or
provisions of, or constitute a material 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 Guarantor
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
partnership agreement or other agreement or instrument to which Borrower or
Guarantor is a party or by which any of Borrower's or Guarantor's property or
assets is subject (unless consents from all applicable parties thereto have been
obtained), nor will such action result in any violation of the provisions of any
statute or any order, rule or regulation of any Governmental Authority, 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 Guarantor of this Agreement or any other Loan
Documents has been obtained and is in full force and effect.
4.1.4 Litigation. Except as set forth on Schedule II attached hereto,
there are no arbitration proceedings, governmental investigations, actions,
suits or proceedings at law or in equity by or before any Governmental Authority
now pending or, to Borrower's Knowledge, threatened against or affecting
Borrower, Sole Member or, to Borrower's Knowledge, the Property. The actions,
suits or proceedings identified on Schedule II, if determined against Borrower,
Sole Member or the Property, would not materially and adversely affect the
condition (financial or otherwise) or business of Borrower, Sole Member or the
condition or operation of the Property.
42
4.1.5 Agreements. Borrower is not a party to any agreement or
instrument or subject to any restriction which is reasonably likely to
materially and adversely affect Borrower or Borrower's financial condition.
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, to Borrower's Knowledge, the Property is bound. Borrower has no
material financial obligation (contingent or otherwise) under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which Borrower is a party or by which Borrower or, to Borrower's Knowledge, the
Property is otherwise bound, other than (a) Permitted Encumbrances, (b)
obligations incurred in the ordinary course of the acquisition, ownership,
leasing, management or operation of the Property and (c) obligations under the
Loan Documents.
4.1.6 Title. Borrower has good, marketable and insurable fee simple
title to the Land and the Improvements, free and clear of all Liens whatsoever
except the Permitted Encumbrances, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. Borrower has
good and marketable title to the remainder of the Property, free and clear of
all Liens whatsoever except the Permitted Encumbrances. The Security Instrument,
when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, when filed in the appropriate offices therefor, will create (a) a
valid, perfected first mortgage lien on the Land and the Improvements, subject
only to Permitted Encumbrances and (b) perfected security interests in and to,
and perfected collateral assignments of, to the extent the same may be perfected
by the filing of a UCC financing statement, all of Borrower's right, title and
interest in and to all personalty (including the Leases) which constitutes part
of the Property, all in accordance with the terms thereof, in each case subject
only to any applicable Permitted Encumbrances. To Borrower's 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. None of the Permitted Encumbrances will
materially and adversely affect (i) the ability of Borrower to pay any of its
obligations to any Person as and when due, (ii) the fair market value of the
Property or (iii) the use or operation of the Property as of the Closing Date
and thereafter. Borrower shall preserve its right, title and interest in and to
the Property for so long as the Note remains outstanding and will warrant and
defend same and the validity and priority of the Lien hereof from and against
any and all claims whatsoever other than the Permitted Encumbrances.
4.1.7 No Bankruptcy Filing. None of Borrower, Sole Member, any SPE
Entity or Guarantor is contemplating either the filing of a petition by it under
any state or federal bankruptcy or insolvency laws or the liquidation of all or
a major portion of such entity's assets or property, and Borrower has no
knowledge of any Person contemplating the filing of any such petition against it
or against Sole Member, any SPE Entity or Guarantor.
4.1.8 Full and Accurate Disclosure. No statement of fact made by
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading. There
is no fact presently known to Borrower which has not been disclosed which could
reasonably be expected to have a Material Adverse Effect.
43
4.1.9 All Property. The Property constitutes all of the real property,
personal property, equipment and fixtures currently owned or leased by Borrower.
4.1.10 No Plan Assets.
(a) Borrower does not maintain an employee benefit plan as defined by
Section 3(3) of ERISA, which is subject to Title IV of ERISA, and Borrower (i)
has no knowledge of any material liability which has been incurred or is
expected to be incurred by Borrower which is or remains unsatisfied for any
taxes or penalties with respect to any "employee benefit plan," within the
meaning of Section 3(3) of ERISA, or any "plan", within the meaning of Section
4975(e)(1) of the Internal Revenue Code or any other benefit plan (other than a
multiemployer plan) maintained, contributed to, or required to be contributed to
by Borrower or by any entity that is under common control with Borrower within
the meaning of ERISA Section 4001(a)(14) (a "Plan") or any plan that would be a
Plan but for the fact that it is a multiemployer plan within the meaning of
ERISA Section 3(37); and (ii) has made and shall continue to make when due all
required contributions to all such Plans, if any. Each such Plan has been and
will be administered in compliance in all material respects with its terms and
the applicable provisions of ERISA, the Internal Revenue Code, and any other
applicable federal or state law; and Borrower has not taken any action or failed
to take any action that could reasonably be expected to result in the
disqualification or loss of tax-exempt status of any such Plan intended to be
qualified and/or tax exempt (unless the same can be cured without material
liability); and
(b) Borrower is not an employee benefit plan, as defined in Section
3(3) of ERISA, subject to Title I of ERISA, none of the assets of Borrower
constitutes or will constitute plan assets of one or more such plans within the
meaning of 29 C.F.R. Section 2510.3-101 and Borrower is not a governmental plan
within the meaning of Section 3(32) of ERISA and transactions by or with
Borrower are not subject to state statutes regulating investment of, and
fiduciary obligations with respect to, governmental plans similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code currently in
effect, which prohibit or otherwise restrict the transactions contemplated by
this Agreement.
4.1.11 Compliance. To Borrower's Knowledge, (i) except as set forth in
the PZR Report, the Property and the use thereof comply in all material respects
with all applicable Legal Requirements, including, without limitation, building
and zoning ordinances and codes, (ii) Borrower is not in default or in violation
of any order, writ, injunction, decree or demand of any Governmental Authority,
(iii) the Citibank Tenant is not in default or in violation of any order, writ,
injunction, decree or demand of any Governmental Authority applicable to the
Property and (iv) there has not been committed by Borrower or Citibank any act
or omission affording the federal government or any other Governmental Authority
the right of forfeiture as against the Property or any part thereof or any
monies paid in performance of Borrower's obligations under any of the Loan
Documents.
4.1.12 Reserved.
4.1.13 Condemnation. To Borrower's Knowledge, no Condemnation has been
commenced or is contemplated with respect to all or any portion of the Property
or for the relocation of roadways providing access to the Property.
44
4.1.14 Federal Reserve Regulations. None of the proceeds of the Loan
will be used for the purpose of purchasing or carrying any "margin stock" as
defined in Regulation U, Regulation X or Regulation T or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry "margin stock" or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of Regulation U or Regulation
X. As of the Closing Date, Borrower does not own any "margin stock".
4.1.15 Utilities and Public Access. The Property has rights of access
to public ways and, to Borrower's Knowledge, is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service the Property for its
intended uses. To Borrower's Knowledge, all utilities necessary to the existing
use of the Property are located either in the public right-of-way abutting the
Property (which are connected so as to serve the Property without passing over
other property) or in recorded easements serving the Property and such easements
are set forth in and insured by the Title Policy. All roads necessary for the
use of the Property for its current purposes have been completed and, if
necessary, dedicated to public use.
4.1.16 Not a Foreign Person. Borrower is not a foreign person within
the meaning of ss. 1445(f)(3) of the Code.
4.1.17 Separate Lots. The Property is comprised of one (1) or more
contiguous parcels which constitute a separate tax lot or lots and does not
constitute or include a portion of any other tax lot not a part of the Property.
4.1.18 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.
4.1.19 Enforceability. The Loan Documents are not subject to any
existing 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 (subject 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)), and Borrower has
not asserted any right of rescission, set-off, counterclaim or defense with
respect thereto.
4.1.20 No Prior Assignment. There are no prior sales, transfers or
assignments of the Leases or any portion of the Rents due and payable or to
become due and payable which are presently outstanding following the funding of
the Loan, other than those being terminated or assigned to Lender concurrently
herewith.
4.1.21 Insurance. The Citibank Tenant has elected to self-insure with
respect to its obligations under the Existing Citibank Lease.
4.1.22 Use of Property. To Borrower's Knowledge, the Property is used
exclusively for permitted uses under the Existing Citibank Lease.
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4.1.23 Certificate of Occupancy; Licenses. To Borrower's Knowledge, all
material certifications, permits, licenses and approvals, including without
limitation, certificates of completion and occupancy required of Borrower for
the legal use, occupancy and operation of the Property as an office building
(collectively, the "Licenses"), have been obtained and are in full force and
effect. Borrower shall keep and maintain all Licenses necessary for the
operation of the Property as an office building to the standard at which it is
currently operated where the failure to do so would have a Material Adverse
Effect. To Borrower's Knowledge, the use being made of the Property is in
conformity in all material respects with the certificate of occupancy issued for
the Property.
4.1.24 Flood Zone. None of the Improvements on the Property are located
in an area as identified by the Federal Emergency Management Agency as an area
having special flood hazards.
4.1.25 Physical Condition. To Borrower's Knowledge and except as
expressly disclosed in the Physical Conditions Report or Environmental Report or
any violations search or any other materials provided to Lender and its counsel
prior to Closing, 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 and except as disclosed in the
Physical Conditions Report or Environmental Report or any violations search or
any other materials provided to Lender and its counsel prior to Closing, there
exists no structural or other material defects or damages in or to the Property,
whether latent or otherwise, and neither Borrower nor (to Borrower's Knowledge)
Citibank has received any written notice from any insurance company or bonding
company of any defects or inadequacies in the Property, or any part thereof,
which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.
4.1.26 Boundaries. To Borrower's Knowledge, except as shown on the
Survey, all of the Improvements lie wholly within the boundaries and building
restriction lines of the Real Property, and no improvements on adjoining
properties encroach upon the Real Property, and no easements or other
encumbrances upon the Real Property encroach upon any of the Improvements, so as
to have a material adverse effect on the value or marketability of the Real
Property except those which are insured against by the Title Policy.
4.1.27 Leases. The Property is not subject to any Leases other than the
Citibank Lease. No Person has any possessory interest in the Property or right
to occupy the same except under and pursuant to the provisions of the Leases and
Persons claiming by, through and under Tenants under such Leases. The current
Leases are in full force and effect and to Borrower's Knowledge, there are no
material defaults thereunder by either party (other than as expressly disclosed
to Lender or in the Tenant estoppel certificates delivered to Lender in
connection with the closing of the Loan) and there are no conditions that, with
the passage of time or the giving of notice, or both, would constitute material
defaults thereunder. No Rent has been paid more than one (1) month in advance of
its due date, except as disclosed in the Tenant estoppel certificates delivered
to Lender in connection with the closing of the Loan. There has been no prior
sale, transfer or assignment, hypothecation or pledge by Borrower of any Lease
or of the Rents received therein, which will be outstanding following the
funding of the Loan, other than those being assigned to Lender concurrently
herewith.
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4.1.28 Filing and Recording Taxes. To Borrower's Knowledge, all
transfer taxes, deed stamps, intangible taxes or other amounts in the nature of
transfer taxes, if any, required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the transfer of the Property
to Borrower have been paid and the granting and recording of the Security
Instrument and the UCC financing statements required to be filed in connection
with the Loan. To Borrower's Knowledge, 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
Security Instrument, have been paid (or delivered to the Title Company for
payment), and, upon such payment and recordation, under current Legal
Requirements, the Security Instrument is enforceable against Borrower in
accordance with its terms by Lender (or any subsequent holder thereof) subject
only to applicable bankruptcy, insolvency and similar laws affecting rights of
creditors generally, and subject as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law.
4.1.29 Single Purpose Entity/Separateness.
(a) Until the Indebtedness has been paid in full, Borrower hereby
represents, warrants and covenants that Borrower and each SPE Entity is, shall
be, and shall continue to be, a Single Purpose Entity.
(b) All of the assumptions made in the Non-Consolidation Opinion,
including, but not limited to, any exhibits attached thereto, are true and
correct in all respects and any assumptions made in any subsequent
non-consolidation opinion delivered in connection with the Loan Documents (an
"Additional Non-Consolidation Opinion"), including, but not limited to, any
exhibits attached thereto, shall be true and correct in all respects. Borrower
and each SPE Entity will comply with all of the assumptions made with respect to
its actions after the date hereof in the Non-Consolidation Opinion. Borrower and
each SPE Entity will have complied and will comply with all of the assumptions
made with respect to it in any Additional Non-Consolidation Opinion. Each entity
other than Borrower with respect to which an assumption shall be made in any
Additional Non-Consolidation Opinion will have complied and will comply with all
of the assumptions made with respect to it in any Additional Non-Consolidation
Opinion in all material respects.
4.1.30 Management. Pursuant to the Existing Citibank Lease (including,
without limitation, Article 13 thereof), the Citibank Tenant is responsible for
the operation, repair, replacement, maintenance and management of the Property.
4.1.31 Illegal Activity. No portion of the Property has been or will be
purchased with proceeds of any illegal activity.
4.1.32 Reserved.
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4.1.33 Tax Filings. Borrower has filed (or has obtained effective
extensions for filing) all federal, state and local tax returns required to be
filed and has paid or made adequate provision for the payment of all federal,
state and local taxes, charges and assessments payable by Borrower.
4.1.34 Solvency/Fraudulent Conveyance. Borrower (a) has not entered
into the transaction contemplated by this Agreement or any Loan Document with
the actual intent to hinder, delay, or defraud any creditor and (b) has received
reasonably equivalent value in exchange for its obligations under the Loan
Documents. After giving effect to the Loan, the fair saleable value of
Borrower's assets exceeds and will, immediately following the making of the
Loan, exceed Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower's assets is and will, immediately following the
making of the Loan, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its Debts as such Debts
become absolute and matured. Borrower's assets do not and, immediately following
the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur Debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Debt and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower).
4.1.35 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 mean of the Public Utility Holding
Company Act of 1935, as amended or (c) subject to any other federal or state law
or regulation which purports to restrict or regulate its ability to borrow
money. 4.1.36 Labor. To Borrower's Knowledge, (i) no organized work stoppage or
labor strike is pending or threatened by employees and other laborers at the
Property, (ii) neither Borrower nor Citibank is involved in or threatened with
any labor dispute, grievance or litigation relating to labor matters involving
any employees and other laborers at the Property, including, without limitation,
violation of any federal, state or local labor, safety or employment laws
(domestic or foreign) and/or charges of unfair labor practices or discrimination
complaints, (iii) Borrower has not engaged in any unfair labor practices (within
the meaning of the National Labor Relations Act or the Railway Labor Act) and
(iv) the Citibank Tenant has not engaged in any unfair labor practices (within
the meaning of the National Labor Relations Act or the Railway Labor Act) at the
Property.
4.1.37 Brokers. Neither Borrower nor Lender has dealt with any broker
or finder with respect to the transactions contemplated by the Loan Documents
and neither party has done any acts, had any negotiations or conversations, or
made any agreements or promises which will in any way create or give rise to any
obligation or liability for the payment by either party of any brokerage fee,
charge, commission or other compensation to any Person with respect to the
transactions contemplated by the Loan Documents. Borrower and Lender shall each
indemnify and hold harmless the other from and against any loss, liability, cost
or expense, including any judgments, attorneys' fees, or costs of appeal,
incurred by the other party and arising out of or relating to any breach or
default by the indemnifying party of its representations, warranties and/or
agreements set forth in this Section 4.1.37. The provisions of this Section
4.1.37 shall survive the expiration and termination of this Agreement and the
payment of the Indebtedness.
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4.1.38 No Other Debt. Borrower has not borrowed or received debt
financing that has not been heretofore repaid in full, other than the Permitted
Debt.
4.1.39 Taxpayer Identification Number. Borrower's Federal taxpayer
identification number is 00-0000000.
4.1.40 Compliance with Anti-Terrorism, Embargo and Anti-Money
Laundering Laws. (i) None of Borrower, Sole Member or Guarantor currently is
identified on the OFAC List or otherwise qualifies as a Prohibited Person, (ii)
Borrower has implemented procedures to ensure that no Person who now or
hereafter owns any equity interest in Borrower or Guarantor (unless Guarantor
itself is a U.S. Publicly-Traded Entity or a Public Reporting Entity) is a
Prohibited Person or Controlled by a Prohibited Person (provided that this
clause (ii) shall not apply to any Person to the extent that such Person's
interest in Borrower or Guarantor is through a U.S. Publicly-Traded Entity or a
Public Reporting Entity), and (iii) neither Borrower, Sole Member nor Guarantor
is in violation of any Legal Requirements relating to anti-money laundering or
anti-terrorism, including, without limitation, Legal Requirements related to
transacting business with Prohibited Persons or the requirements of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the related
regulations issued thereunder, including temporary regulations, all as amended
from time to time. To Borrower's Knowledge, no tenant or subtenant at the
Property currently is identified on the OFAC List or otherwise qualifies as a
Prohibited Person, and no tenant or subtenant at the Property is owned or
Controlled by a Prohibited Person.
4.1.41 Leases and REAs. Borrower represents that it has heretofore
delivered to Lender true and complete copies of the Existing Citibank Lease (and
its exhibit, the Amended and Restated Lease) and all REAs, and any and all
amendments or modifications thereof, and that Borrower has provided copies of
all Current Occupancy Agreements (as defined in the Citibank Lease) provided to
Borrower by Citibank under Article 7 of the Citibank Lease. To Borrower's
Knowledge, Borrower and its predecessors have complied with and performed all of
its or their material construction, improvement and alteration obligations, if
any, with respect to the Property required to be performed as of the date hereof
and any other obligations under the other REAs or the Citibank Lease that are
required to be performed as of the date hereof have either been complied with or
the failure to comply with the same does not and could not reasonably be
expected to have a Material Adverse Effect.
4.1.42 REAs. The REAs are in full force and effect and neither Borrower
nor, to Borrower's Knowledge, any other party to the REAs, is in default
thereunder, and to the best of Borrower's Knowledge, there are no conditions
which, with the passage of time or the giving of notice, or both, would
constitute a default thereunder. The REAs have not been modified, amended or
supplemented except as set forth on Schedule I.
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4.2 Survival of Representations. Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall be deemed
given and made as of the date of the funding of the Loan and survive for so long
as any amount remains owing to Lender under this Agreement or any of the other
Loan Documents by Borrower or Guarantor unless a longer survival period is
expressly stated in a Loan Document with respect to a specific representation or
warranty, in which case, for such longer period. 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.
V. BORROWER COVENANTS
5.1 Affirmative Covenants. From the Closing Date and until payment and
performance in full of all obligations of Borrower under the Loan Documents,
Borrower hereby covenants and agrees with Lender that:
5.1.1 Performance by Borrower. Borrower shall in a timely manner
observe, perform and fulfill each and every covenant, term and provision of each
Loan Document executed and delivered by, or applicable to, Borrower, and shall
not enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, Borrower, as applicable, without the prior written consent
of Lender.
5.1.2 Existence; Compliance with Legal Requirements; Insurance. Subject
to Borrower's and Citibank's right to contest pursuant to Section 7.3 and
subject to Section 8.03 of the Citibank Lease, Borrower shall at all times
comply and cause the Property to be in compliance with all Legal Requirements
applicable to Borrower, any SPE Entity and/or the Property and the uses by
Borrower permitted upon the Property. Borrower shall do or cause to be done all
things reasonably necessary to preserve, renew and keep in full force and effect
its existence, rights, licenses, permits and franchises necessary to comply with
all Legal Requirements applicable to it and the Property. Borrower shall not,
and shall not knowingly permit, any other Person in occupancy of or involved
with the operation or use of the Property to commit, any act or omission
affording the federal government or any state or local government the right of
forfeiture as against the Property or any part thereof or any monies paid in
performance of Borrower's obligations under any of the Loan Documents. Borrower
hereby covenants and agrees not to commit, knowingly permit or suffer to exist
any act or omission affording such right of forfeiture. Borrower shall at all
times maintain, preserve and protect all franchises and trade names not owned by
Tenants and reasonably preserve all the remainder of its property used in the
conduct of its business and shall keep the Property in good working order and
repair, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto,
all as more fully set forth in the Security Instrument. Borrower shall keep the
Property insured at all times to such extent and against such risks, and
maintain liability and such other insurance, as is more fully set forth in this
Agreement (it being agreed that the Citibank Tenant's maintenance of
self-insurance with respect to the Property in accordance with Section 9.08 of
the Citibank Lease shall not be deemed to be a breach of this Section).
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5.1.3 Litigation. Borrower shall give prompt written notice to Lender
of any litigation or governmental proceedings pending or threatened in writing
against Borrower which, if determined adversely to Borrower, would have a
Material Adverse Effect.
5.1.4 Single Purpose Entity.
(a) Each of Borrower and each SPE Entity has been since the date of its
formation and shall remain a Single Purpose Entity, except that Borrower and
Lender hereby acknowledge that from the date of Borrower's formation, April 29,
2005, until August 3, 2005, (1) Borrower's limited liability company operating
agreement did not include the Separateness Criteria (as defined in the
Non-Consolidation Agreement), (2) Borrower did not have a managing member that
was a Single Purpose Entity or any Independent Members, (3) Borrower had no bank
accounts, (4) since Borrower acquired the Property on May 12, 2005, the Citibank
Tenant has remitted its monthly rent payments to Guarantor rather than to
Borrower, (5) Borrower previously guaranteed the obligations of Guarantor, (6)
Borrower did not maintain separate stationery, invoices or checks and (7)
Borrower's limited liability company operating agreement did not limit
Borrower's purposes.
(b) Each of Borrower and each SPE Entity shall continue to maintain its
own deposit account or accounts, separate from those of any Affiliate, with
commercial banking institutions. None of the funds of Borrower or any SPE Entity
will be diverted to any other Person or for other than business uses of Borrower
or any SPE Entity, as applicable, but the foregoing shall not affect Borrower's
right to make distributions.
(c) To the extent that Borrower or any SPE Entity shares the same
officers or other employees as any of Borrower, any SPE Entity or their
Affiliates, the salaries of and the expenses related to providing benefits to
such officers and other employees shall be fairly allocated among such entities,
and each such entity shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees.
(d) To the extent that Borrower or any SPE Entity jointly contracts
with any of Borrower, any SPE Entity or either of their Affiliates, as
applicable, to do business with vendors or service providers or to share
overhead expenses, the costs incurred in so doing shall be allocated fairly
among such entities, and each such entity shall bear its fair share of such
costs. To the extent that either Borrower or any SPE Entity contracts or does
business with vendors or service providers where the goods and services provided
are partially for the benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose benefit the
goods and services are provided, and each such entity shall bear its fair share
of such costs. All material transactions between (or among) Borrower or each SPE
Entity and any of their respective Affiliates shall be conducted on
substantially the same terms (or on more favorable terms for Borrower or any SPE
Entity, as applicable) as would be conducted with third parties.
(e) In addition, Borrower and each SPE Entity shall each: (i) maintain
its assets in such a manner that it is not more costly or difficult to
segregate, identify or ascertain such assets; (ii) in the event that Borrower or
such SPE Entity shall have a board of directors or more than one shareholder,
partner or member (other than any Independent Member), hold regular meetings of
its board of directors, shareholders, partners or members, as the case may be;
and (iii) transact all business with its Affiliates on an arm's-length basis and
pursuant to enforceable agreements.
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5.1.5 Consents. If Borrower or any SPE Entity is a corporation, the
board of directors of such Person may not take any action requiring the
unanimous affirmative vote of 100% of the members of the board of directors
unless all of the directors, including the Independent Directors, shall have
participated in such vote. If Borrower or any SPE Entity is a limited liability
company, (a) if such Person is managed by a board of managers, the board of
managers of such Person may not take any action requiring the unanimous
affirmative vote of 100% of the members of the board of managers unless all of
the managers, including the Independent Managers, shall have participated in
such vote, or (b) if such Person is not managed by a board of managers, the
members of such Person may not take any action requiring the affirmative vote of
100% of the members of such Person unless all of the members, including the
Independent Members, shall have participated in such vote. An affirmative vote
of 100% of the directors, board of managers or members, as applicable, of
Borrower and any SPE Entity shall be required to (i) file a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings or to
authorize Borrower or any SPE Entity to do so or (ii) file an involuntary
bankruptcy petition against any Affiliate, Manager, or any Affiliate of Manager.
Furthermore, Borrower's and each SPE Entity's formation documents shall
expressly state that, except as may be permitted under the Loan Documents
(including Article VIII of this Agreement), unless Lender consents otherwise,
for so long as the Loan is outstanding or otherwise satisfied, released or
assigned in accordance with Section 2.3.3 or 9.1, as applicable (or such entity
has transferred its interest in the Property to a new Borrower in accordance
with Article VIII), neither Borrower nor any SPE Entity shall be permitted to
(A) dissolve, liquidate, consolidate, merge or sell all or substantially all of
Borrower's or any SPE Entity's assets other than in connection with the
repayment of the Loan or (B) engage in any other business activity and such
entity's organizational documents shall not be modified so as to change, modify
or delete the restrictions set forth in clauses (A) and (B) above.
5.1.6 Access to Property. Subject to the rights and limitations set
forth in the Citibank Lease and to the rights of Tenants under other Leases,
Borrower shall permit agents, representatives and employees of Lender and the
Rating Agencies to inspect the Property or any part thereof during normal
business hours on Business Days upon reasonable advance notice.
5.1.7 Notice of Default. Borrower shall promptly advise Lender (a) of
any event or condition that has or is likely to have a Material Adverse Effect
and (b) of the occurrence of any Default or Event of Default of which Borrower
has knowledge.
5.1.8 Cooperate in Legal Proceedings. Borrower shall cooperate fully
with Lender with respect to any proceedings before any court, board or other
Governmental Authority which would reasonably be expected to affect in any
material adverse way the rights of Lender hereunder or under any of the other
Loan Documents and, in connection therewith, permit Lender, at its election, to
participate in any such proceedings which may have a Material Adverse Effect.
5.1.9 Perform Loan Documents. Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions of, and shall pay
when due all costs, fees and expenses to the extent required, under the Loan
Documents executed and delivered by, or applicable to, Borrower.
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5.1.10 Insurance.
(a) Subject to the terms of Article VI, Borrower shall cooperate with
Lender in obtaining for Lender the benefits of any Proceeds lawfully or
equitably payable in connection with the Property, and Lender shall be
reimbursed for any expenses incurred in connection therewith (including
reasonable attorneys' fees and disbursements) out of such Proceeds.
(b) Borrower shall comply with all Insurance Requirements and shall not
bring or keep or permit to be brought or kept any article upon any of the
Property or cause or permit any condition to exist thereon which would be
prohibited by any Insurance Requirement (subject to the Citibank Tenant's rights
under the Citibank Lease), or would invalidate insurance coverage required
hereunder to be maintained by Borrower on or with respect to any part of the
Property pursuant to Section 6.1; provided, however, in no event shall the mere
use of the Property by the Citibank Tenant for customary and ordinary office
purposes or for any retail or other use of the Property as of the date of the
Existing Citibank Lease, as opposed to the manner of such use, constitute a
breach of this Section 5.1.10(b).
5.1.11 Further Assurances; Separate Notes.
(a) Borrower shall execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Lender all documents, and take all actions,
reasonably required by Lender from time to time to confirm the rights created or
now or hereafter intended to be created under this Agreement and the other Loan
Documents and any security interest created or purported to be created
thereunder, to protect and further the validity, priority and enforceability of
this Agreement and the other Loan Documents, to subject to the Loan Documents
any property of Borrower intended by the terms of any one or more of the Loan
Documents to be encumbered by the Loan Documents, or otherwise carry out the
purposes of the Loan Documents and the transactions contemplated thereunder
(including, without limitation, the execution and delivery by Borrower, from
time to time, of such further instruments (including, without limitation,
delivery of any financing statements under the UCC) as may be reasonably
requested by Lender to confirm the Lien of the Security Instrument on any
Building Equipment, Operating Asset or any Intangible). Borrower agrees that it
shall, upon request, reasonably cooperate with Lender in connection with any
request by Lender to sever the Note into two (2) or more separate substitute
notes in an aggregate principal amount equal to the Principal Amount and to
reapportion the Loan among such separate substitute notes, including, without
limitation, by executing and delivering to Lender new substitute notes to
replace the Note, amendments to or replacements of existing Loan Documents to
reflect such severance and/or Opinions of Counsel with respect to such severed
notes, substitute notes, amendments and/or replacements, provided that Borrower
shall bear no costs or expenses in connection therewith (other than
administrative costs and expenses of Borrower). Any such substitute notes may
have varying principal amounts and economic terms, provided, however, that (i)
the maturity date and anticipated repayment date of any such substitute note
shall be the same as the scheduled Maturity Date and scheduled Anticipated
Repayment Date of the Note immediately prior to the issuance of such substitute
notes, (ii) the substitute notes shall provide for amortization of the Principal
Amount on a
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weighted average basis over a period not less than the amortization period
provided under the Note, if any, immediately prior to the issuance of such
substitute notes, (iii) the weighted average Applicable Interest Rate for the
term of the substitute notes shall not exceed the Applicable Interest Rate under
the Note immediately prior to the issuance of such substitute notes, (iv) the
economics of the Loan (or severed portions thereof), taken as a whole, shall not
change in a manner which is adverse to Borrower and (v) the entering into of
such substitute notes shall not materially adversely affect Borrower's (or any
of its Affiliates') tax, REIT or ERISA treatment. Upon the occurrence and during
the continuance of an Event of Default, Lender may apply payment of all sums due
under such substitute notes in such order and priority as Lender shall elect in
its sole and absolute discretion.
(b) In addition, Borrower shall, at Borrower's sole cost and expense:
(i) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
to evidence, preserve and/or protect the collateral at any time securing or
intended to secure the obligations of Borrower under the Loan Documents, as
Lender may reasonably require; and
(ii) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the carrying out of the terms and conditions of
this Agreement and the other Loan Documents, as Lender shall reasonably require
from time to time.
5.1.12 Mortgage Taxes. Borrower shall pay all present and future stamp
or documentary and other taxes, charges, filing, registration and recording fees
(including mortgage recording tax) and similar levies payable with respect to
the Note or the Liens created or secured by the Loan Documents. Nothing
contained in this Agreement shall be construed to require Borrower to pay any
tax, assessment, levy or charge imposed on (i) any Tenant occupying any portion
of the Property, (ii) any third party manager of the Property, including any
Manager or (iii) Lender in the nature of a capital levy, income, franchise,
estate, inheritance, succession, excise, gains, income or net revenue or similar
tax or any transfer tax imposed on Lender in connection with an assignment of
the Loan pursuant to Article XV. Lender shall give Borrower prompt notice of any
demand on Lender by any Governmental Authority for payment thereof.
5.1.13 Operation. If the Existing Citibank Lease is no longer in
effect, then Borrower shall, and shall cause Manager to, (i) promptly perform
and/or observe in all material respects all of the covenants and agreements
required to be performed and observed by it under any Management Agreement and
do all things necessary to preserve and to keep unimpaired its material rights
thereunder, (ii) promptly notify Lender of any "event of default" under any
Management Agreement of which it is aware, and (iii) enforce in a commercially
reasonable manner the performance and observance of all of the covenants and
agreements required to be performed and/or observed by the Manager under any
Management Agreement in all material respects.
5.1.14 Business and Operations. Borrower shall continue to engage in
the businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Property. Borrower shall qualify to do business and shall remain in good
standing under the laws of the State in which the Property is located and as and
to the extent required for the ownership, maintenance, management and operation
of the Property.
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5.1.15 Title to the Property. Borrower shall warrant and defend (a) its
title to the Property and every part thereof, subject only to Liens permitted
hereunder (including Permitted Encumbrances) and (b) the validity and priority
of the Liens of the Security Instrument, the Assignment of Leases and this
Agreement on the Property, subject only to Liens permitted hereunder (including
Permitted Encumbrances), in each case against the claims of all Persons
whomsoever. Borrower shall reimburse Lender for any losses, costs, damages or
expenses (including reasonable attorneys' fees and court costs) incurred by
Lender if an interest in the Property, other than as permitted hereunder, is
claimed by another Person.
5.1.16 Costs of Enforcement. In the event (a) that this Agreement or
the Security Instrument is foreclosed upon in whole or in part or that this
Agreement or the Security Instrument is put into the hands of an attorney for
collection, suit, action or foreclosure, (b) of the foreclosure of any security
agreement prior to or subsequent to this Agreement in which proceeding Lender is
made a party, or a mortgage prior to or subsequent to the Security Instrument in
which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower or any of its
constituent Persons or an assignment by Borrower or any of its constituent
Persons for the benefit of its creditors, Borrower, its successors or assigns,
shall be chargeable with and agrees to pay all costs of collection and defense,
including reasonable attorneys' fees and costs, incurred by Lender or Borrower
in connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, together with all required service or use
taxes.
5.1.17 Estoppel Statement.
(a) Borrower shall, from time to time, upon thirty (30) days' prior
written request from Lender, execute, acknowledge and deliver to Lender an
Officer's Certificate stating that this Agreement and the other Loan Documents
are unmodified and in full force and effect (or, if there have been
modifications, that this Agreement and the other Loan Documents are in full
force and effect as modified and setting forth such modifications), stating the
last day to which interest has been paid and the outstanding principal amount of
the Note and containing such other information with respect to Borrower, the
Property and the Loan as Lender shall reasonably request. Such Officer's
Certificate shall also state, to the signing party's knowledge, either that no
Default exists hereunder or, if any Default shall exist hereunder, specify such
Default and the steps being taken to cure such Default.
(b) Borrower shall use commercially reasonable efforts (but in no event
shall Borrower be required to incur any liability or out-of-pocket expense,
waive any rights or modify any agreement in order to obtain the same, nor shall
Borrower be required to send any notice of default or bring any action to cause
the same to occur) to deliver to Lender, within fifteen (15) Business Days of
Lender's request (which shall not be made more frequently than three (3) times
in any Fiscal Year) (i) during the term of the Citibank Lease, an estoppel
certificate from the Citibank Tenant as required under Article 30 of the
Citibank Lease and (ii) tenant estoppel certificates from each other Tenant
leasing space at the Property from time to time in substantially the form of
Exhibit F attached hereto.
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(c) Provided no Event of Default has occurred and is continuing, Lender
shall, from time to time, upon thirty (30) days' prior written request from
Borrower, execute, acknowledge and deliver to Borrower a certificate of an
authorized officer of Lender stating that this Agreement and the other Loan
Documents are unmodified and in full force and effect (or, if there have been
modifications, that this Agreement and the other Loan Documents are in full
force and effect as modified and setting forth such modifications), stating the
amount of accrued and unpaid interest and the outstanding principal amount of
the Note and containing such other information with respect to the Loan
Documents as Borrower shall reasonably request.
5.1.18 Loan Proceeds. Borrower shall use the proceeds of the Loan
received by it on the Closing Date only for the purposes set forth in Section
2.1.4.
5.1.19 No Joint Assessment. Borrower shall not suffer, permit or
initiate the joint assessment of the Property (a) with any other real property
constituting a tax lot separate from the Property and (b) which constitutes real
property with any portion of the Property which may be deemed to constitute
personal property, or any other procedure whereby the lien of any taxes which
may be levied against such personal property shall be assessed or levied or
charged to such real property portion of the Property.
5.1.20 No Further Encumbrances. Borrower shall do, or cause to be done,
all things necessary to keep and protect the Property and all portions thereof
unencumbered from any Liens, easements or agreements granting rights in or
restricting the use or development of the Property, except for (a) Permitted
Encumbrances and (b) Liens permitted pursuant to the Loan Documents.
5.1.21 Reserved.
5.1.22 Leases and REAs. Borrower shall promptly after receipt thereof
deliver to Lender a copy of any notice received with respect to the REAs and the
Leases claiming that Borrower is in default in the performance or observance of
any of the material terms, covenants or conditions of any of the REAs or the
Leases.
5.2 Negative Covenants.
From the Closing Date until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Lien of this Agreement or the Security Instrument in accordance with the terms
of this Agreement and the other Loan Documents, Borrower covenants and agrees
with Lender that it will not do, directly or indirectly, any of the following:
5.2.1 Incur Debt. Incur, create or assume any Debt other than Permitted
Debt or Transfer (directly or indirectly) or lease all or any part of the
Property or any interest therein, except as permitted in the Loan Documents;
5.2.2 Encumbrances. Other than in connection with the Mezzanine Loan,
incur, create or assume or permit the incurrence, creation or assumption of any
Debt secured by an interest in Borrower, Mezzanine Borrower or any SPE Entity
and shall not directly or indirectly Transfer or permit the direct or indirect
Transfer of any interest in Borrower, Mezzanine Borrower or any SPE Entity
except as permitted pursuant to Article VIII;
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5.2.3 Engage in Different Business. Engage, directly or indirectly, in
any business other than that of entering into this Agreement and the other Loan
Documents to which Borrower is a party and the use, ownership, management,
leasing, renovation, financing, development, operation and maintenance of the
Property and activities related thereto (collectively, the "Borrower's Business
Purposes");
5.2.4 Make Advances. Make advances or make loans to any Person, or hold
any investments, except as expressly permitted pursuant to the terms of this
Agreement or any other Loan Document (it being acknowledged that the provision
of funds to a Tenant for the purpose of funding such Tenant's improvements,
moving expenses, furnishings or installations or certain of its costs incurred
in connection with such Tenant's leasing of space at the Property does not
contradict this Section 5.2.4, notwithstanding that such Tenant's Lease (or
related documentation) requires repayment of such funding);
5.2.5 Partition. Partition the Property;
5.2.6 Commingle. Commingle its assets with the assets of any of its
Affiliates;
5.2.7 Guarantee Obligations. Guarantee any obligations of any Person;
5.2.8 Transfer Assets. Transfer any asset other than in the ordinary
course of business or directly or indirectly Transfer any interest in the
Property except as may be permitted hereby or in the other Loan Documents;
5.2.9 Amend Organizational Documents. Amend or modify any of its
organizational documents without Lender's consent, other than in connection with
any direct or indirect Transfer permitted pursuant to Article VIII or to reflect
any change in capital accounts, contributions, distributions, allocations or
other provisions that do not and could not reasonably be expected to have a
Material Adverse Effect and provided that Borrower and each SPE Entity each
remain a Single Purpose Entity;
5.2.10 Dissolve. Dissolve, wind-up, terminate, liquidate, merge with or
consolidate into another Person, except as expressly permitted pursuant to this
Agreement;
5.2.11 Bankruptcy. (i) File a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings, (ii) dissolve, liquidate,
consolidate, merge or (except as permitted under Article VIII) sell all or
substantially all of Borrower's assets other than in connection with the
repayment of the Loan, (iii) engage in any other business activity or (iv) file
or solicit the filing of an involuntary bankruptcy petition against Borrower,
Manager or any Affiliate of Borrower or Manager, without obtaining the prior
consent of all of the members of Borrower, including, without limitation, the
Independent Members;
5.2.12 ERISA. Engage in any activity that would subject it to
regulation under ERISA or qualify it as an "employee benefit plan" (within the
meaning of Section 3(3) of ERISA) to which ERISA applies and Borrower's assets
do not and will not constitute plan assets within the meaning of 29 C.F.R.
Section 2510.3-101;
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5.2.13 Distributions. From and after the occurrence and during the
continuance of an Event of Default, make any distributions to or for the benefit
of any of its partners or members or its or their Affiliates;
5.2.14 Manager. This Section 5.2.14 shall only apply after the Existing
Citibank Lease is no longer in effect.
(a) Borrower shall not, without the prior written consent of Lender,
which consent shall not be unreasonably withheld or delayed (provided, if a
Securitization shall have occurred, Borrower obtains a Rating Agency
Confirmation with respect to such action): (i) materially modify, change,
supplement, alter or amend any Management Agreement or waive or release any of
its right and remedies under any Management Agreement that would have a Material
Adverse Effect or (ii) replace any Manager with a Person other than a Qualified
Manager;
(b) Borrower shall notify Lender in writing (and shall deliver a copy
of the proposed management agreement) of any entity proposed to be designated as
a Qualified Manager of the Property not less than twenty (20) days before such
Qualified Manager, begins to manage the Property;
(c) If (a) an Event of Default has occurred and is continuing or (b)
any Manager shall become insolvent, Borrower shall, at the request of Lender,
terminate the applicable Management Agreement and replace such Manager with a
Qualified Manager in accordance with this Section 5.2.14 and shall deliver an
acceptable Non-Consolidation Opinion covering such replacement Manager if such
Person (i) is not covered by the Non-Consolidation Opinion or an Additional
Non-Consolidation Opinion, and (ii) is an Affiliate of Borrower; and
(d) Upon the retention of a Qualified Manager, Lender, and if a
Securitization shall have occurred, the Rating Agencies, shall have the right to
approve any new management agreement with such Qualified Manager (which approval
by Lender shall not be unreasonably withheld or delayed). In the event that the
Qualified Manager is RANY Management Group, Inc., a Delaware corporation, or any
Person directly or indirectly Controlled by Sponsor, then Lender hereby approves
the form of management agreement attached hereto as Exhibit J.
5.2.15 Citibank Lease. Without the prior consent of Lender, send the
Citibank Tenant written notice of its election to end the term of the Citibank
Lease pursuant to the Citibank Lease.
5.2.16 Modify REAs. Without the prior consent of Lender, which shall
not be unreasonably withheld, delayed or conditioned, Borrower shall not execute
modifications to the REAs;
5.2.17 Modify Account Agreement. Without the prior consent of Lender,
which shall not be unreasonably withheld, delayed or conditioned (and if a
Securitization shall have occurred, a Rating Agency Confirmation obtained by
Borrower), Borrower shall not execute any modification to the Account Agreement;
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5.2.18 Zoning Reclassification. Subject to the rights of the Citibank
Tenant under the Citibank Lease, without the prior written consent of Lender,
(a) initiate or consent to any zoning reclassification of any portion of the
Property, (b) seek any variance under any existing zoning ordinance that could
result in the use of the Property becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation, or (c) allow
any portion of the Property to be used in any manner that could result in the
use of the Property becoming a non-conforming use under any zoning ordinance or
any other applicable land use law, rule or regulation;
5.2.19 Change of Principal Place of Business. To the extent the same
would affect the effect, perfection and priority of the security interest of
Lender hereunder in the Account Collateral at any time, change its principal
place of business and chief executive office set forth on the first page of this
Agreement without first giving Lender thirty (30) days' prior written notice
(but in any event, within the period required pursuant to the UCC) and there
shall have been taken such action, reasonably satisfactory to Lender, as may be
necessary to maintain fully the effect, perfection and priority of the security
interest of Lender hereunder in the Account Collateral at all times;
5.2.20 Debt Cancellation. Cancel or otherwise forgive or release any
material claim or debt owed to it by any Person, except for adequate
consideration or in the ordinary course of its business and except for
termination of a Lease as permitted by Section 8.8;
5.2.21 Misapplication of Funds. Distribute any revenue from the
Property or any Proceeds in violation of the provisions of this Agreement, fail
to remit amounts to the Collection Account or Holding Account, as applicable, as
required by Section 3.1, misappropriate any security deposit or portion thereof
or apply the proceeds of the Loan in violation of Section 2.1.4; or
5.2.22 Single Purpose Entity. Fail to be a Single Purpose Entity or
take or suffer any action or inaction the result of which would be to cause it
or any SPE Entity to cease to be a Single Purpose Entity.
VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
6.1 Insurance Coverage Requirements. Borrower shall, at its sole cost
and expense, keep or cause to be kept in full force and effect insurance
coverage of the types and minimum limits as follows (and to the extent the
Citibank Lease requires insurance coverage exceeding the minimum requirements
set forth herein, in accordance with such specific Citibank Lease requirement)
during the term of this Agreement; provided that for so long as the Existing
Citibank Lease is in effect, (i) the insurance coverages required in the
Existing Citibank Lease as of the date hereof shall be deemed to satisfy the
requirements of Section 6.1.11, (ii) the insuring of the Property by the
Citibank Tenant pursuant to the Existing Citibank Lease (or, if the Citibank
Tenant is in default of its obligations to insure the Property under the
Existing Citibank Lease, by Borrower in lieu thereof; provided, however, that in
such instance Borrower shall nevertheless still be required to provide any
certificates of insurance and other deliverables required to be delivered to
Lender pursuant to this Section 6.1) shall be deemed to satisfy any obligation
of Borrower to insure the Property pursuant to Section 6.1.11, (iii) for so long
as (x)
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the Citibank Tenant (or, if the Citibank Tenant is in default of its obligations
to insure the Property under the Existing Citibank Lease, Borrower in lieu
thereof; provided, however, that in such instance Borrower shall nevertheless
still be required to provide any certificates of insurance and other
deliverables required to be delivered to Lender pursuant to this Section 6.1) is
insuring the Property in accordance with the requirements of the Existing
Citibank Lease, (y) the Citibank Tenant has elected to self insure (Borrower and
Lender acknowledging that such election is currently in effect) and the Rating
Threshold (as defined in the Existing Citibank Lease) is satisfied or (z) the
Citibank Tenant has elected to self insure and the Rating Threshold is not
satisfied, but a period of not more than thirty (30) days has passed since the
Rating Threshold ceases to be satisfied (it being agreed that the passing of
such thirty (30) day period shall not be deemed to extend the thirty (30) day
period set forth in Section 17.1(a)(iii)(A) hereof), then Borrower shall not be
required to comply with any of its obligations under Section 6.1.1 through
6.1.14 below (except for those obligations set forth in the second sentence of
Section 6.1.10 and in Section 6.1.12) and (iv) Lender shall not exercise any of
its rights under the second to last sentence of Section 6.1.11 unless an Event
of Default shall have occurred and be continuing or the Citibank Tenant shall
have exercised the Insurance Election (as defined in the Existing Citibank
Lease):
6.1.1 Property Insurance. Insurance against loss customarily included
under so called "All Risk" policies including flood (subject to reasonable
sublimits), earthquake (subject to reasonable sublimits), vandalism, and
malicious mischief and such other insurable hazards as, under good insurance
practices, from time to time are insured against for other property and
buildings similar to the Improvements and Building Equipment in nature, use,
location, height, and type of construction. Such insurance policy shall also
insure the additional expense of demolition and if any of the Improvements or
the use of the Property shall at any time constitute legal non-conforming
structures or uses, provide coverage for contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction Endorsements
and containing an "Ordinance or Law Coverage" or "Enforcement" endorsement. The
amount of such "All Risk" insurance shall be not less than one hundred percent
(100%) of the replacement cost value of the Improvements and the Building
Equipment. Each such insurance policy shall contain an agreed amount
(coinsurance waiver) and replacement cost value endorsement and shall cover,
without limitation, all tenant improvements and betterments which Borrower is
required to insure in accordance with any Lease. Lender shall be named "Loss
Payee" on a "Standard Mortgagee Endorsement" and be provided not less than (i)
ten (10) days' advance notice of change in coverage, cancellation or non-renewal
as a result of the failure to pay the premium thereunder or (ii) thirty (30)
days' advance notice of change in coverage, cancellation or non-renewal in all
other instances.
6.1.2 Liability Insurance. "Commercial General Liability" insurance;
"Owned" (if any), "Hired" and "Non-Owned Auto Liability"; and "Umbrella
Liability" coverage for "Personal Injury", "Bodily Injury", "Death and Property
Damage", providing in combination no less than $30,000,000 ($50,000,000 during
construction) per occurrence and in the annual aggregate, per location (except
during construction). In the event that aggregate limits do not apply on a "per
location" basis, then the umbrella limit shall be increased from $30,000,000 to
$40,000,000. The policies described in this paragraph shall cover, without
limitation: elevators, escalators, independent contractors, "Contractual
Liability" (covering, to the maximum extent permitted by law, Borrower's
obligation to indemnify Lender as required under this Agreement and "Products
and Completed Operations Liability" coverage). All liability insurance shall
name Lender as "Additional Insured" either on a specific endorsement or under a
blanket endorsement satisfactory to Lender.
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6.1.3 Workers' Compensation Insurance. Workers compensation and
disability insurance as required by law.
6.1.4 Commercial Rents Insurance. "Commercial rents" insurance in an
amount equal to eighteen (18) months actual rental loss plus a twelve (12) month
extended period of indemnity endorsement and with a limit of liability
sufficient to avoid any co-insurance penalty and to provide Proceeds which will
cover the actual loss of profits and rents sustained during the period of at
least eighteen (18) months following the date of casualty. Such policies of
insurance shall be subject only to exclusions that are acceptable to Lender and,
if the Loan is the subject of a Securitization, the Rating Agencies; provided,
however, that such exclusions are reasonably consistent with those required for
loans similar to the Loan provided herein. Such insurance shall be deemed to
include "loss of rental value" insurance where applicable. The term "rental
value" means the sum of (A) the total then ascertainable Rents payable under the
Leases and (B) the total ascertainable amount of all other amounts to be
received by Borrower from third parties which are the legal obligation of
Tenants, reduced to the extent such amounts would not be received because of
operating expenses not incurred during a period of non-occupancy of that portion
of such Property then not being occupied.
6.1.5 Builder's All-Risk Insurance. During any period of repair or
restoration, builder's "All-Risk" insurance in an amount equal to not less than
the full insurable value of the Property against such risks (including so called
"All Risk" perils coverage and collapse of the Improvements to agreed limits as
Lender may request, in form and substance acceptable to Lender).
6.1.6 Boiler and Machinery Insurance. Comprehensive boiler and
machinery insurance (without exclusion for explosion) covering all mechanical
and electrical equipment against physical damage, rent loss and improvements
loss and covering, without limitation, all tenant improvements and betterments
that Borrower is required to insure pursuant to any Lease on a replacement cost
basis. The minimum amount of limits to be provided shall be $10,000,000 per
accident.
6.1.7 Flood Insurance. If any portion of the Improvements is located
within an area designated as "flood prone" or a "special flood hazard area" (as
defined under the regulations adopted under the National Flood Insurance Act of
1968 and the Flood Disaster Protection Act of 1973), flood insurance shall be
provided, in an amount not less than the maximum limit of coverage available
under the Federal Flood Insurance plan with respect to the Property. Lender
reserves the right to require flood insurance in excess of that available under
the Federal Flood Insurance plan.
6.1.8 Other Insurance. To the extent generally carried by owners of
Comparable Buildings (as defined in the Citibank Lease), at Lender's reasonable
request, such other insurance (not including terrorism insurance which is
covered by Section 6.1.14) with respect to the Property against loss or damage
of the kinds from time to time customarily insured against and in such amounts
as are generally required by institutional lenders on loans of similar amounts
and secured by properties comparable to, and in the general vicinity of, the
Property.
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6.1.9 Ratings of Insurers. Borrower shall maintain the insurance
coverage described in Section 6.1.1 through Section 6.1.8 above, in all cases,
with one or more insurers having a claims-paying-ability and financial strength
ratings by S&P of not less than "BBB" and its equivalent by the other Rating
Agencies (provided that the primary provider of insurance and at least 75% of
all insurers shall have a financial strength rating by S&P of not less than
"A-") or otherwise acceptable to Lender in its sole discretion. All insurers
providing insurance required by this Agreement shall be authorized to issue
insurance in the State.
6.1.10 Form of Insurance Policies; Endorsements. All insurance policies
shall be in such form and with such endorsements as are reasonably satisfactory
to Lender (and Lender shall have the right to approve all loss payees
thereunder). A certificate of insurance with respect to all of the
above-mentioned insurance policies has been delivered to Lender and, during the
period from and after the date hereof and up to the date of the expiration or
earlier termination of the Existing Citibank Lease, Borrower shall make
available all certificates of insurance or copies of such policies as are
provided to it pursuant to the Existing Citibank Lease, if any. From and after
the expiration or earlier termination of the Existing Citibank Lease, Borrower
shall make all originals or certified copies of all such policies available for
Lender's review in New York City when the same are normally and customarily
available following the date of such expiration or termination. All policies
(other than a policy which solely relates to worker's compensation) shall name
Lender as an additional insured, shall provide that all Proceeds (except with
respect to Proceeds of general liability and workers' compensation insurance) be
payable to Lender as and to the extent set forth in Section 6.2, and shall
contain: (i) a standard "non-contributory mortgagee" endorsement or its
equivalent relating, inter alia, to recovery by Lender notwithstanding the
negligent or willful acts or omissions of Borrower; (ii) a waiver of subrogation
endorsement in favor of Lender; (iii) an endorsement providing that no policy
shall be impaired or invalidated by virtue of any act, failure to act,
negligence of, or violation of declarations, warranties or conditions contained
in such policy by Borrower, Lender or any other named insured, additional
insured or loss payee, except for the willful misconduct of Lender knowingly in
violation of the conditions of such policy; (iv) a deductible per loss of an
amount not more than that which is customarily maintained by prudent owners of
properties with a standard of operation and maintenance comparable to and in the
general vicinity of the Property, but in no event in excess of an amount
reasonably acceptable to Lender; provided, however, that any such deductible
which does not exceed $50,000 shall automatically be deemed to be acceptable to
Lender; and (v) a provision that such policies shall not be canceled, terminated
or expire without at least thirty (30) days' prior written notice to Lender, in
each instance (provided that in the event any such cancellation, termination or
expiration is due to the failure to pay the premium under such policies, then
Lender shall only be entitled to ten (10) days' prior written notice thereof).
Each insurance policy shall contain a provision whereby the insurer (1) waives
any right to claim any premiums and commissions against Lender, provided that
the policy need not waive the requirement that the premium be paid in order for
a claim to be paid to the insured and (2) provides that (except in the case of
any blanket insurance policy maintained by Borrower pursuant to Section 6.1.13)
Lender at its option, shall be permitted to make payments to effect the
continuation of such policy upon notice of cancellation due to non-payment of
premiums. In the event any insurance policy (except for general public and other
liability and workers
62
compensation insurance) shall contain breach of warranty provisions, such policy
shall provide that with respect to the interest of Lender, such insurance policy
shall not be invalidated by and shall insure Lender regardless of (A) any act,
failure to act or negligence of or violation of warranties, declarations or
conditions contained in such policy by any named insured, (B) the occupancy or
use of the Property for purposes more hazardous than permitted by the terms
thereof or (C) any foreclosure or other action or proceeding taken by Lender
pursuant to any provision of this Agreement.
6.1.11 Certificates. If the Existing Citibank Lease shall no longer be
in full force and effect and/or the Citibank Tenant has exercised the Insurance
Election (as defined in the Existing Citibank Lease), then Borrower shall
deliver to Lender annually, concurrently with the renewal of the insurance
policies required hereunder, an Officer's Certificate stating, to the best of
the signer's knowledge, that the insurance policies required to be delivered to
Lender pursuant to this Section 6.1 are maintained with insurers who comply with
the terms of Section 6.1.9, setting forth a schedule describing all premiums
required to be paid by Borrower to maintain the policies of insurance required
under this Section 6.1, and stating that Borrower has paid such premiums.
Certificates of insurance with respect to all replacement policies shall be
delivered to Lender not less than ten (10 Business Days prior to the expiration
date of any of the insurance policies required to be maintained hereunder which
certificates shall bear notations evidencing payment of applicable premiums.
Borrower shall deliver to Lender originals or certified copies or (unless
otherwise required by the Rating Agencies) abstracts of such replacement
insurance policies on or before ten (10) days after Borrower's receipt thereof.
If Borrower fails to maintain and timely deliver to Lender the certificates of
insurance and certified copies or originals (or abstracts, unless otherwise
required by the Rating Agencies) required by this Agreement, upon five (5)
Business Days' prior notice to Borrower, Lender may procure such insurance, and
all costs thereof (and interest thereon at the Default Rate) shall be added to
the Indebtedness. Lender shall not, by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any insurance, incur any
liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of insurance contracts, solvency of insurance companies, or
payment or defense of lawsuits, and Borrower hereby expressly assumes full
responsibility therefor and all liability, if any, with respect to such matters.
6.1.12 Separate Insurance. Borrower shall not take out separate
insurance contributing in the event of loss with that required to be maintained
pursuant to this Section 6.1 unless such insurance complies with this Section
6.1.
6.1.13 Blanket Policies. The insurance coverage required under this
Section 6.1 may be effected under a blanket policy or policies covering the
Property and other properties and assets not constituting a part of the
Property; provided that any such blanket policy shall specify, except in the
case of public liability insurance, the portion of the total coverage of such
policy that is allocated to the Property, and any sublimits in such blanket
policy applicable to the Property, which amounts shall not be less than the
amounts required pursuant to this Section 6.1 and which shall in any case comply
in all other respects with the requirements of this Section 6.1. Upon Lender's
request, Borrower shall deliver to Lender an Officer's Certificate setting forth
(i) the number of properties covered by such policy, (ii) the location by city
(if available, otherwise, county) and state of the properties, (iii) the average
square footage of the properties (or the aggregate square footage), (iv) a brief
description of the typical construction type included in the blanket policy and
(v) such other information as Lender may reasonably request.
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6.1.14 Terrorism Insurance. Borrower shall obtain terrorism insurance
in such amounts and types of coverage that are commercially available, provided
that such amounts and types of coverage are available at commercially reasonable
rates (it being agreed that an annual premium not to exceed an amount equal to
$1,600,000 shall be deemed to be a commercially reasonable rate) and are
consistent with those that are then generally required of, or carried by, owners
of Comparable Buildings (as defined in the Citibank Lease) that are Real Estate
Investment Trusts and taking into account the tenancy of such buildings
(including the Improvements).
6.2 Condemnation and Insurance Proceeds.
6.2.1 Notification. Borrower shall promptly notify Lender in writing
upon obtaining knowledge of (i) the institution of any proceedings relating to
any Taking (whether material or immaterial) of, or (ii) the occurrence of any
casualty, damage or injury to, the Property or any portion thereof, the
restoration of which is estimated by Borrower in good faith to cost more than
the Casualty Amount. In addition (unless the Existing Citibank Lease is in full
force effect), each such notice shall set forth, if then readily determinable,
such good faith estimate of the cost of repairing or restoring such casualty,
damage, injury or Taking in reasonable detail if the same is then available and,
if not, as soon thereafter as it can reasonably be provided.
6.2.2 Proceeds. In the event of any Taking of or any casualty or other
damage or injury to the Property, Borrower's right, title and interest in and to
all compensation, awards, proceeds, damages, claims, insurance recoveries,
causes and rights of action (whether accrued prior to or after the date hereof)
and payments (collectively, "Proceeds") with respect to the Property or any part
thereof other than payments received in connection with any liability or loss of
rental value or business interruption insurance, in connection with any such
Taking of, or casualty or other damage or injury to, the Property or any part
thereof are hereby assigned by Borrower to Lender and, except as otherwise
provided herein or in the Existing Citibank Lease, shall be paid to Lender.
Borrower shall, in good faith and in a commercially reasonable manner, file and
prosecute the adjustment, compromise or settlement of any claim for Proceeds
(other than Proceeds which are payable to the Citibank Tenant pursuant to the
Existing Citibank Lease) and, subject to Borrower's right to receive the direct
payment of any Proceeds as herein provided and the Citibank Tenant's right to
such Proceeds under the Existing Citibank Lease, will cause the same to be paid
directly to Lender to be held and applied in accordance with the provisions of
this Agreement. Except upon the occurrence and during the continuance of an
Event of Default, Borrower may settle any insurance claim with respect to
Proceeds which does not exceed the Casualty Amount; provided that the foregoing
shall (i) not limit Borrower's obligation to cooperate with any adjustment or
settlement of insurance claims as required by Section 19.05 of the Existing
Citibank Lease or (ii) be subject to the Citibank Tenant's right to seven (7)
days' advance notice of any party Borrower desires to name as an additional
insured pursuant to Section 9.03 of the Existing Citibank Lease. If the Existing
Citibank Lease shall no longer be in full force and effect and/or the Citibank
Tenant has exercised the Insurance Election (as defined in the Existing Citibank
Lease), whether or not an Event of Default shall have occurred and be
continuing, Lender shall have the right to approve, such approval not to be
unreasonably withheld or delayed, any settlement which might result in any
Proceeds in excess of the Casualty
64
Amount and Borrower shall deliver or cause to be delivered to Lender all
instruments reasonably requested by Lender to permit such approval (it being
agreed that Lender shall not have the right to settle or adjust any claim except
after the occurrence and during the continuance of an Event of Default).
Borrower shall pay all reasonable out-of-pocket costs, fees and expenses
reasonably incurred by Lender (including all reasonable attorneys' fees and
expenses, the reasonable fees of insurance experts and adjusters and reasonable
costs incurred in any litigation or arbitration), and interest thereon at the
Default Rate to the extent not paid within fifteen (15) Business Days after
delivery of a request for reimbursement by Lender (together with evidence
reasonably required to establish same), in connection with the settlement of any
claim for Proceeds and seeking and obtaining of any payment on account thereof
in accordance with the foregoing provisions. If any Proceeds are received by
Borrower and may be retained by Borrower pursuant to this Section 6.2 (and are
not required to be paid to the Citibank Tenant under the terms of the Existing
Citibank Lease), such Proceeds shall, until the completion of the related Work,
be held in trust and shall be segregated from other funds of Borrower to be used
to pay for the cost of the Work in accordance with the terms hereof, and in the
event such Proceeds exceed the Casualty Amount, such Proceeds shall be forthwith
paid directly to and held by Lender in the Proceeds Reserve Account in trust for
Borrower, to be applied or disbursed in accordance with this Section 6.2,
subject to the terms of Existing Citibank Lease. If (A) an Event of Default
shall have occurred and be continuing or (B) unless Borrower is acting in good
faith and keeps Lender regularly advised as to the status of such claim,
Borrower fails to file and/or prosecute any insurance claim for a period of
twenty (20) Business Days following Borrower's receipt of written notice from
Lender, Borrower hereby irrevocably empowers Lender, in the name of Borrower as
its true and lawful attorney-in-fact, to file and prosecute such claim
(including settlement thereof), but not a claim with respect to which proceeds
are required to be paid to the Citibank Tenant pursuant to the Existing Citibank
Lease, with counsel satisfactory to Lender and to collect and to make receipt
for any such payment, all at Borrower's expense (including payment of interest
at the Default Rate for any amounts advanced by Lender pursuant to this Section
6.2). Notwithstanding anything to the contrary set forth in this Agreement (but
subject to the terms of the Existing Citibank Lease), however, and excluding
situations requiring prepayment of the Note, to the extent any Proceeds (either
singly or when aggregated with all other then unapplied Proceeds with respect to
the Property) do not exceed the Casualty Amount, such Proceeds are to be paid
directly to Borrower to be applied to restoration of the Property in accordance
with the terms hereof (except that Proceeds paid in respect of the insurance
described in Section 6.1.4 or for a temporary taking shall be deposited directly
to the Collection Account as revenue of the Property).
6.2.3 Lender to Take Proceeds.
(a) Subject to the terms of the Existing Citibank Lease, if (i) the
Proceeds (other than any amounts to which the Citibank Tenant is entitled under
the Existing Citibank Lease) shall equal or exceed the Principal Amount, (ii) a
Monetary Default or an Event of Default shall have occurred and be continuing
(it being agreed, however, that if a Monetary Default has occurred and is
continuing (but not an Event Default), Lender may not apply the Proceeds to the
Indebtedness, but rather shall be entitled to hold the Proceeds in trust until
such Monetary Default has been cured or an Event of Default has occurred), (iii)
a Total Loss with respect to the Property shall have occurred, (iv) the Work is
not capable of being completed before the earlier to occur of the date which is
six (6) months prior to the earlier of the Maturity Date and the date
65
on which the business interruption insurance carried by Borrower with respect to
the Property shall expire (the "Cut-Off Date"), unless on or prior to the
Cut-Off Date Borrower (x) shall deliver to Lender and there shall remain in
effect a binding written offer, subject only to customary conditions, of an
Approved Bank or such other financial institution or investment bank reasonably
satisfactory to Lender duly authorized to originate loans secured by real
property located in the State for a loan from such Approved Bank or such other
financial institution or investment bank to Borrower in a principal amount of
not less than the then Principal Amount and which shall, in Lender's reasonable
judgment, enable Borrower to refinance the Loan prior to the Maturity Date and
(y) if a Securitization shall have occurred, shall obtain a Rating Agency
Confirmation, (v) the Property is not capable of being restored substantially to
its condition prior to such Taking or casualty and such incapacity shall have a
Material Adverse Effect, (vi) Leases demising in the aggregate less than 50% of
the total rentable space in the Property which has been demised under executed
and delivered Leases in effect as of the date of the occurrence of such fire or
other casualty remain in full force and effect during and after the completion
of the restoration and (vii) Lender determines that upon the completion of the
restoration, the gross cash flow and the net cash flow of the Property will not
be restored to a level sufficient to cover all carrying costs and operating
expenses of the Property, including, without limitation, debt service on the
Note at a coverage ratio (after deducting all required reserves as required by
Lender from net operating income) of at least 1.5 to 1.0, which coverage ratio
shall be determined by Lender in its sole and absolute discretion; then in any
such case, all Proceeds shall be paid over to Lender (if not paid directly to
Lender) and any Proceeds remaining after reimbursement of Lender's or its
agent's reasonable out-of-pocket costs and expenses actually incurred in
connection with recovery of any such Proceeds (including, without limitation,
reasonable out-of-pocket administrative costs and inspection fees) may be
applied by Lender in its sole discretion to prepay the Note in accordance with
the provisions thereof, and the balance, if any, if so provided in the Mezzanine
Loan Agreement, shall be paid to Mezzanine Lender to be applied pursuant to the
terms of the Mezzanine Loan Agreement (or if no Mezzanine Loan is outstanding,
or it does not provide for such application, to Borrower).
(b) In the event that Lender elects to apply the Proceeds to prepay the
Note pursuant to Section 6.2.3(a) above and such Proceeds are less than the
Principal Amount outstanding as of the date of prepayment, then Borrower may, in
Borrower's discretion on prior written notice to Lender, prepay the remaining
balance of the Principal Amount, without premium or penalty, in accordance with
the provisions of the Note on the Payment Date on which Lender shall apply such
Proceeds to prepayment of the Principal Amount or any Payment Date thereafter.
6.2.4 Borrower to Restore.
(a) Subject to the terms of the Existing Citibank Lease, promptly after
the occurrence of any damage or destruction to all or any portion of the
Property or a Taking of a portion of the Property, Borrower shall commence and
diligently prosecute, or cause to be commenced and diligently prosecuted, to
completion, subject to Excusable Delays (or, if such restoration is being
performed by the Citibank Tenant under the Existing Citibank Lease, subject to
Force Majeure Causes (as defined in the Existing Citibank Lease)), the repair,
restoration and rebuilding of the Property (in the case of a partial Taking, to
the extent it is capable of being restored) so damaged, destroyed or remaining
after such Taking in full compliance with all material Legal Requirements and
free and clear of any and all Liens except Permitted Encumbrances (such
66
repair, restoration and rebuilding are sometimes hereinafter collectively
referred to as the "Work"). The plans and specifications shall require that the
Work be done in a first-class workmanlike manner at least equivalent to the
quality and character prior to the damage or destruction, subject to changes
thereto necessitated by Legal Requirements (provided, however, that in the case
of a partial Taking, the Property restoration shall be done to the extent
reasonably practicable after taking into account the consequences of such
partial Taking), so that upon completion thereof, the Property shall be at least
equal in value and general utility to the Property prior to the damage or
destruction; it being understood, however, that Borrower shall not be obligated
to restore the Property to the precise condition of the Property prior to any
partial Taking of, or casualty or other damage or injury to, the Property, if
the Work actually performed, if any, or failed to be performed, shall have no
Material Adverse Effect on the value of the Property from the value that the
Property would have had if the same had been restored to its condition
immediately prior to such Taking or casualty. Subject to Borrower's rights
pursuant to Section 2.3.3 to cause the Property to be released from the Lien of
the Security Instrument, and subject to the terms of the Existing Citibank
Lease, Borrower shall be obligated to restore the Property suffering a casualty
or which has been subject to a partial Taking in accordance with the provisions
of this Section 6.2 at Borrower's sole cost and expense whether or not the
Proceeds shall be sufficient, provided that, if applicable, the Proceeds shall
be made available to Borrower by Lender in accordance with this Agreement.
Notwithstanding the foregoing, in the event that the Citibank Tenant is
obligated to restore the Property pursuant to the Existing Citibank Lease, then
(i) the restoration of the Property by the Citibank Tenant as required by the
Existing Citibank Lease shall be deemed to satisfy the requirements of this
Section 6.2.4(a) (it being agreed that the foregoing shall not be deemed to
limit the rights of the Citibank Tenant to make alterations to the Property in
accordance with the terms of the Existing Citibank Lease) and (ii) Borrower
shall not have any obligation to restore the Property to any greater condition
which is required by this Section 6.2.4(a).
(b) If Proceeds are not required to be (A) applied toward payment of
the Indebtedness pursuant to the terms hereof, (B) delivered to the Citibank
Tenant pursuant to the terms of the Existing Citibank Lease or (C) delivered to
Borrower if required pursuant to Section 6.2.2, then Lender shall make the
Proceeds which it is holding pursuant to the terms hereof (after payment of any
reasonable out-of-pocket expenses actually incurred by Lender in connection with
the collection thereof plus interest thereon at the Default Rate (from the date
advanced through the date of reimbursement) to the extent the same are not paid
within ten (10) Business Days after request for reimbursement by Lender,
together with evidence reasonably required to establish the same) available to
Borrower for payment of or reimbursement of Borrower's or the applicable
Tenant's expenses incurred with respect to the Work, upon the terms and subject
to the conditions set forth in paragraphs (i), (ii) and (iii) below and in
Section 6.2.5:
(i) at the time of disbursement, there shall be no continuing Monetary
Default or Event of Default;
(ii) if, at any time, the estimated cost of the Work (as estimated by
the Independent Architect referred to in clause (iii) below) shall exceed the
Proceeds (a "Deficiency") and for so long as a Deficiency shall exist, Lender
shall not be required to make any Proceeds disbursement to Borrower unless
Borrower (within a reasonable period of time after receipt of such estimate), at
its election, either deposits with or delivers to Lender (A) Cash
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and Cash Equivalents or a Letter or Letters of Credit in an amount equal to the
estimated cost of the Work less the Proceeds available (which Cash and Cash
Equivalents shall be applied in the same manner as Proceeds so that the same
will be available for restoration), or (B) such other evidence of Borrower's
ability to meet such excess costs and which is satisfactory to Lender and the
Rating Agencies;
(iii) Subject to the terms of the Existing Citibank Lease, each of
Lender and the Independent Architect shall have reasonably approved (or, in the
case of the Existing Citibank Lease, shall have been provided for informational
purposes to the extent the same are provided to Borrower) the plans and
specifications for the Work and any change orders in connection with such plans
and specifications (but excluding minor field changes); it being agreed that if
Lender does not approve such plans and specifications within five (5) Business
Days after Lender's receipt thereof, then Lender shall be deemed to have
approved same; and
(iv) Lender shall, within a reasonable period of time prior to request
for initial disbursement (except in the case of an emergency), be furnished with
an estimate of the cost of the Work accompanied by an Independent Architect's
certification as to such costs and appropriate plans and specifications for the
Work. Borrower shall restore all Improvements such that when they are fully
restored and/or repaired, such Improvements and their contemplated use fully
comply with all applicable Legal Requirements including zoning, environmental
and building laws, codes, ordinances and regulations.
6.2.5 Disbursement of Proceeds.
(a) Subject to the terms of the Existing Citibank Lease, disbursements
of the Proceeds in Cash or Cash Equivalents to Borrower hereunder shall be made
from time to time (but not more frequently than once in any month) by Lender but
only for so long as no Monetary Default or Event of Default shall have occurred
and be continuing, as the Work progresses upon receipt by Lender of (i) an
Officer's Certificate dated not more than ten (10) Business Days prior to the
application for such payment, requesting such payment or reimbursement and
describing the Work performed that is the subject of such request, the parties
that performed such Work and the actual cost thereof, and also certifying that
such Work and materials are or, upon disbursement of the payment requested to
the parties entitled thereto, will be free and clear of Liens other than
Permitted Encumbrances, (ii) evidence reasonably satisfactory to Lender that (A)
all materials installed and work and labor performed in connection with such
Work for which payment is required have been paid for in full or will be so paid
upon the making of such disbursement and (B) there exists no notices of
pendency, stop orders, mechanic's liens or notices of intention to file same
(unless the same is required by State law as a condition to the payment of a
contractor) or any liens or encumbrances of any nature whatsoever on the
Property arising out of the Work which have not been either fully bonded to the
satisfaction of Lender or discharged of record or in the alternative, fully
insured to the satisfaction of Lender by the Title Company that issued the Title
Policy and (iii) an Independent Architect's certificate certifying performance
of the Work together with an estimate of the cost to complete the Work. Except
with respect to payments made by the Citibank Tenant in connection with any
restoration of the Property pursuant to the Existing Citibank Lease, no payment
made prior to the final completion of the Work, as certified by the Independent
Architect, except for payment made to contractors whose Work shall have been
fully completed and from which final lien waivers have been
68
received, shall exceed ninety-five percent (95%) of the value of the Work
performed and materials furnished and incorporated into the Improvements from
time to time, and at all times the undisbursed balance of said Proceeds together
with all amounts deposited, bonded, guaranteed or otherwise provided for
pursuant to Section 6.2.4(b) above, shall be at least sufficient to pay for the
estimated cost of completion of the Work; final payment of all Proceeds
remaining with Lender shall be made upon receipt by Lender of a certification by
an Independent Architect, as to the completion of the Work substantially in
accordance with the submitted plans and specifications and final lien releases,
as certified pursuant to an Officer's Certificate, and delivery of a certificate
of occupancy with respect to the Work, or, if not applicable, an Officer's
Certificate to the effect that a certificate of occupancy is not required.
(b) Subject to the terms of the Existing Citibank Lease, if, after the
Work is completed in accordance with the provisions hereof and Lender receives
evidence that all costs of completion have been paid, there are excess Proceeds,
Lender shall apply such excess Proceeds with respect to the Taking of or
casualty to the Property to the payment or prepayment of all or any portion of
the Indebtedness secured hereby without penalty or premium.
VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS
7.1 Borrower to Pay Impositions and Other Charges. Borrower shall (A)
deliver to Lender annually, no later than fifteen (15) Business Days after the
first day of each New York City tax year, and shall update as new information is
received, a schedule describing all real estate taxes (including any special
assessments), payable or estimated to be payable during such fiscal year
attributable to or affecting the Property or Borrower and (B) endeavor to notify
Lender of any material increases to any Impositions described in clause (A)
above promptly after Borrower has knowledge of same. Subject to Borrower's and
the Citibank Tenant's right to contest set forth in Section 7.3, as set forth in
the next two sentences, Borrower shall (or shall cause the Citibank Tenant to)
pay all Impositions and Other Charges which are now or hereafter levied or
assessed or imposed against the Property or any part thereof or Borrower, prior
to the date such Impositions or Other Charges shall become delinquent or late
charges may be imposed thereon, directly to the applicable taxing authority with
respect thereto. Nothing contained in this Agreement shall be construed to
require Borrower to pay any tax, assessment, levy or charge imposed on (i) any
Tenant occupying any portion of the Property, (ii) any third party manager of
the Property, including any Manager or (iii) Lender in the nature of a capital
levy, income, franchise, estate, inheritance, succession, excise, gains, income
or net revenue or similar tax or any transfer tax imposed on Lender in
connection with an assignment of the Loan pursuant to Article XV.
7.2 No Liens. Subject to Borrower's or the Citibank Tenant's right to
contest set forth in Section 7.3, Borrower shall at all times keep, or cause to
be kept, the Property free from all Liens (other than Permitted Encumbrances)
and shall pay when due and payable (or bond over or discharge) all claims and
demands of mechanics, materialmen, laborers and others which, if unpaid, might
result in or permit the creation of a Lien on the Property or any portion
thereof and shall in any event cause the prompt, full and unconditional
discharge of all Liens imposed on or against the Property or any portion thereof
within forty-five (45) days after receiving written notice of the filing
(whether from Lender, the lienor or any other Person) thereof (and during said
forty-five (45) day period, the existence of said Lien shall not be deemed to be
a Default
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hereunder, subject to the other requirements of this Section 7.2). Borrower
shall do or cause to be done, at the sole cost of Borrower, everything
reasonably necessary to fully preserve the first priority of the Lien of the
Security Instrument against the Property, subject to the Permitted Encumbrances.
Upon the occurrence and during the continuance of an Event of Default with
respect to its Obligations as set forth in this Article VII, Lender may (but
shall not be obligated to) make such payment or discharge such Lien, and
Borrower shall reimburse Lender on demand for all such advances pursuant to
Section 19.12 (together with interest thereon at the Default Rate).
7.3 Contest. Nothing contained herein shall be deemed to require
Borrower to pay, or cause to be paid, any Imposition or to satisfy any Lien, or
to comply with any Legal Requirement or Insurance Requirement, so long as
Borrower is in good faith, and by proper legal proceedings, where appropriate,
diligently contesting the validity, amount or application thereof, provided that
in each case of a contest by Borrower (as opposed to the Citibank Tenant under
the Citibank Lease), at the time of the commencement of any such action or
proceeding, and during the pendency of such action or proceeding (i) no Event of
Default shall exist and be continuing hereunder, (ii) Borrower shall keep Lender
informed of the status of such contest at reasonable intervals, (iii) if the
provisions of subclause (z) of clause (iv) below is not applicable and Borrower
is not providing security as provided in clause (vi) below, adequate reserves
with respect thereto are maintained on Borrower's books in accordance with GAAP,
(iv) either (x) such contest operates to suspend collection or enforcement as
the case may be, of the contested Imposition, Lien or Legal Requirement and such
contest is maintained and prosecuted continuously and with diligence, (y) the
Imposition or Lien is paid under protest, bonded, or discharged or (z) the
Property or any portion thereof shall not be, in Lender's reasonable judgment,
in imminent danger of being forfeited or lost and Lender shall not be likely to
be subject to civil damages (unless Lender is sufficiently indemnified) or
criminal damages as a result thereof, (v) in the case of any Insurance
Requirement, the failure of Borrower to comply therewith shall not impair the
validity of any insurance required to be maintained by Borrower under Section
6.1 or the right to full payment of any claims thereunder and (vi) in the case
of Impositions and Liens which are not paid under protest, bonded or discharged
and which are in excess of $1,500,000 individually, or in the aggregate, during
such contest, Borrower, shall deposit with or deliver to Lender either Cash and
Cash Equivalents or a Letter or Letters of Credit in an amount equal to 125% of
(A) the amount of Borrower's obligations being contested plus (B) any additional
interest, charge, or penalty arising from such contest. Notwithstanding the
foregoing, the creation of any such reserves or the furnishing of any bond or
other security, Borrower promptly shall comply with any contested Legal
Requirement or Insurance Requirement or shall pay any contested Imposition or
Lien, and compliance therewith or payment thereof shall not be deferred, if, at
any time the Property or any portion thereof shall be, in Lender's reasonable
judgment, in imminent danger of being forfeited or lost or Lender is likely to
be subject to civil damages (unless Lender is sufficiently indemnified) or
criminal damages as a result thereof. If such action or proceeding is terminated
or discontinued adversely to Borrower, Borrower shall deliver to Lender
reasonable evidence of Borrower's compliance with such contested Imposition,
Lien, Legal Requirements or Insurance Requirements, as the case may be.
Notwithstanding anything to the contrary contained herein, in the event that
(and for so long as) the Citibank Tenant is contesting any Imposition, Lien,
Legal Requirements or Insurance Requirements in accordance with and as permitted
by the terms of the Citibank Lease (which Imposition, Lien, Legal Requirements
or Insurance Requirements the Citibank Tenant is
70
obligated to pay, remove or comply with in accordance with the terms of the
Citibank Lease), then the Citibank Tenant's failure to so pay, remove or comply
with such Imposition, Lien, Legal Requirements or Insurance Requirements shall
be permitted hereunder and the failure to pay, remove or comply with such
Imposition, Lien, Legal Requirement or Insurance Requirement shall not
constitute a Default hereunder.
VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS
8.1 Restrictions on Transfers. Unless such action is permitted by the
provisions of this Article VIII, Borrower shall not, except with the prior
written consent of Lender, (i) Transfer all or any part of the Property, (ii)
incur any Debt, other than Permitted Debt or Permitted Encumbrances, or (iii)
except in connection with the Mezzanine Loan, permit any other Person holding
any direct or indirect interest in Borrower to Transfer its direct or indirect
interest in Borrower.
8.2 Sale of Building Equipment. Borrower may Transfer or dispose of
Building Equipment which is being replaced or which is no longer necessary in
connection with the operation of the Property free from the Lien of the Security
Instrument provided that such Transfer or disposal will not have a Material
Adverse Effect on the value of the Property taken as a whole, will not
materially impair the utility of the Property, and will not result in a
reduction or abatement of, or right of offset against, the Rents payable under
any Lease, in either case as a result thereof, and provided further that any new
Building Equipment acquired by Borrower (and not so disposed of) shall be
subject to the Lien of the Security Instrument. Lender shall, from time to time,
upon receipt of an Officer's Certificate requesting the same and confirming
satisfaction of the conditions set forth above, execute a written instrument in
form reasonably satisfactory to Lender to confirm that such Building Equipment
which is to be, or has been, sold or disposed of is free from the Lien of the
Security Instrument.
8.3 Immaterial Transfers and Easements, etc. Borrower may, without the
consent of Lender, (i) make immaterial Transfers of portions of the Property to
Governmental Authorities for dedication or public use (subject to the provisions
of Section 6.2) or, portions of the Property to third parties for the purpose of
erecting and operating additional structures whose use is integrated with the
use of the Property, and (ii) grant easements, restrictions, covenants,
reservations and rights of way and similar encumbrances in the ordinary course
of business for access, water and sewer lines, telephone and telegraph lines,
electric lines or other utilities or for other similar purposes, provided that
no such Transfer set forth in the foregoing clauses (i) and (ii) shall
materially impair the utility and operation of the Property or have a Material
Adverse Effect (it being agreed that in the event that Lender's approval shall
be required with respect to any such Transfer which would not have a Material
Adverse Effect, then such approval shall not be unreasonably withheld).
Notwithstanding the foregoing, Borrower shall be permitted to grant any easement
(a "Citibank Easement") which Borrower is required to grant pursuant to the
terms of Article 33 of the Citibank Lease. In connection with any Transfer
permitted pursuant to this Section 8.3, Lender shall execute and deliver any
instrument reasonably necessary or appropriate, in the case of the Transfers
referred to in clause (i) above, to release the portion of the Property affected
by such Taking or such Transfer from the Lien of the Security Instrument and to
modify the definition of "Property" accordingly or, in the case of clause (ii)
above or a Citibank Easement, to subordinate the Lien of the Security Instrument
to such easements,
71
restrictions, covenants, reservations and rights of way or other similar grants
upon receipt by Lender of:
(a) twenty (20) days' prior written notice thereof;
(b) a copy of the instrument or instruments of Transfer;
(c) an Officer's Certificate stating (x) with respect to any Transfer,
the consideration, if any, being paid for the Transfer and (y) that such
Transfer does not materially impair the utility and operation of the Property,
materially reduce the value of the Property or have a Material Adverse Effect or
is a Citibank Easement; and
(d) reimbursement of all of Lender's reasonable costs and expenses
incurred in connection with such Transfer.
8.4 Indebtedness. Borrower shall not incur, create or assume any Debt
without the consent of Lender (other than trade payables as permitted pursuant
to clause (b) of the definition of "Permitted Debt" herein); provided, however,
that if no Event of Default shall have occurred and be continuing, Borrower may,
without the consent of Lender, incur, create or assume Permitted Debt.
8.5 Permitted Owner Interest Transfers.
(a) A Transfer (but not a pledge or encumbrance, other than a pledge or
encumbrance of not more than forty-nine percent (49%) of the direct or indirect
ownership interests in Borrower (either individually or in the aggregate at any
one time outstanding), provided that for such purposes, such forty-nine percent
(49%) calculation shall not include any Excluded Pledge) of a direct or indirect
beneficial interest in Borrower shall be permitted without Lender's consent if
(i) in the case of any Transfer of (A) direct interests in Borrower or (B)
either individually or in the aggregate with all other related or series of
related Transfers (or unrelated Transfers which are intended to circumvent the
provisions of this Article VIII) of more than forty-nine percent (49%) of the
indirect interests in Borrower, then prior to any such Transfer (unless such
Transfer is an Excluded Transfer), Lender receives ten (10) Business Days' prior
written notice thereof, (ii) one or more Permitted Owners Control Borrower,
(iii) in the case of any Transfer of direct or indirect interests in Borrower
other than an Excluded Transfer, immediately prior to such Transfer, no Event of
Default shall have occurred and be continuing, (iv) in the event that the
Existing Citibank Lease is no longer in effect, a Qualified Manager shall
continue to manage the Property after such Transfer, and (v) in the case of any
Transfer of direct or indirect interests in Borrower which does not constitute
(A) an Excluded Transfer or (B) a Transfer (either individually or in the
aggregate with all other related or series of related Transfers (or unrelated
Transfers which are intended to circumvent the provisions of this Article VIII))
of more than forty-nine percent (49%) of the direct or indirect interests in
Borrower, then prior to such Transfer, all documentation and opinion letters
required by Lender and, if the Loan is the subject of a Securitization, the
Rating Agencies, shall have been delivered to Lender and, as applicable, to the
Rating Agencies (including, but not limited to, a Non-Consolidation Opinion in a
form satisfactory to Lender or, if the Loan is the subject of a Securitization,
to the Rating Agencies in their sole discretion), provided that in the case of
any such documentation and opinion letters
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other than a Non-Consolidation Opinion, (1) Lender shall advise Borrower of the
documentation and opinion letters so required within ten (10) days after notice
of the proposed Transfer is delivered to Lender and (2) such documentation and
opinion letters shall not be intended to give Lender or the Rating Agencies an
approval right over such Transfer, as opposed to dealing with structural issues,
such as substantive consolidation risks. Borrower shall pay all of Lender's
reasonable attorneys' fees and costs actually incurred by Lender in connection
with any Transfer which is permitted under this Section 8.5(a), which costs and
expenses shall be paid within thirty (30) days after receipt of an invoice
therefor from Lender (together with such additional information as may be
reasonably required to establish same). With respect to the delivery of a
Non-Consolidation Opinion as provided above, such Non-Consolidation Opinion
shall only be required when then current Rating Agency guidelines require the
same and any existing Non-Consolidation Opinions do not already adequately cover
such circumstances.
(b) For purposes of this Agreement, the term "Control" means (i)
control, directly or indirectly, of the decision-making of a Person (subject to
the rights of other owners to participate in significant management decisions)
and (ii) the ownership, direct or indirect, of no less than 51% of the equity
interests in such Person; and the terms "Controlled", "Controlling" and "Common
Control" shall have correlative meanings; it being agreed that Borrower shall be
deemed to have satisfied the requirements of Section 8.5(a)(ii) (or any
provisions of the Loan Documents where Control by a Permitted Owner is relevant)
if one or more Permitted Owners control the decision-making of Borrower under
clause (i) above and one or more Permitted Owners (who may or may not be the
same Permitted Owners who are controlling the decision-making) in the aggregate
own at least 51% of the direct or indirect equity interests in Borrower under
clause (ii) above.
(c) Upon any Transfer of a direct or indirect interest in Borrower
which is permitted under this Section 8.5 (and which results in a change in the
Permitted Owner who then Controls Borrower (even if not all of the Permitted
Owners who so Control Borrower have their ownership interest or Control affected
thereby), Guarantor shall be released from its obligations under the Recourse
Guaranty, provided that a successor principal that is either a Permitted Owner
or another creditworthy entity reasonably satisfactory to Lender and, if the
Loan is the subject of a Securitization, the Rating Agencies, assumes all of the
obligations of Guarantor thereunder with respect to events occurring on or after
such Transfer (it being agreed, however, that such Guarantor shall remain liable
under the Recourse Guaranty to the extent of any events occurring prior to such
Transfer) pursuant to a written assumption agreement and other documentation
reasonably satisfactory to Lender and, if the Loan is the subject of a
Securitization, the Rating Agencies. Upon the execution and delivery of such
written assumption and other documentation, such successor principal shall be
deemed to be the "Guarantor" for all purposes of this Agreement and the other
Loan Documents, but the foregoing shall not limit the right of the initially
named Guarantor hereunder to constitute a Permitted Owner. Provided no Event of
Default has occurred and is continuing, Lender shall execute, at Borrower's sole
cost and expense, all documents reasonably requested to evidence such release of
the prior Guarantor as provided above.
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(d) Notwithstanding anything to the contrary contained herein, if a
Person that qualified as a Permitted Owner at the time of the Transfer to it (or
to a Person in which at the time it owned a direct or indirect interest) of
direct or indirect beneficial interests in Borrower permitted under Section
8.5(a) above (or at the time of a Transfer of the Property to a Qualified
Successor Borrower in which it owns a direct or indirect interest at the time of
such Transfer) subsequently fails to qualify as such, then (i) such failure
shall not be deemed to trigger a Default and (ii) the direct or indirect
beneficial interests in Borrower owned by such Person immediately prior to the
date on which such Person shall cease to be a Permitted Owner (but not any such
direct or indirect beneficial interests subsequently acquired by such Person
unless such Person shall once again become a Permitted Owner) shall continue to
be deemed to be direct or indirect beneficial interests in Borrower owned by a
Permitted Owner for purposes of determining whether one or more Permitted Owners
"Controls" Borrower under Section 8.5(a)(ii) above.
(e) Notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents, nothing contained herein or in any of the other
Loan Documents is intended to restrict or limit any Excluded Transfer or
Excluded Pledge, and no consent of Lender or the Rating Agencies or fee, notice
or deliveries shall be required hereunder or under the other Loan Documents in
connection therewith and the consummation or granting thereof shall not
constitute a Default or an Event of Default.
8.6 Deliveries to Lender. Not less than ten (10) Business Days prior to
the closing of any Transfer which is described in Section 8.4 (but only in the
case of Debt other than Permitted Debt for which Lender's consent is requested),
8.5 (other than with respect to any Transfer with respect to which Lender is not
entitled to notice pursuant to Section 8.5(a)(i))or 8.7, Borrower shall deliver
to Lender an Officer's Certificate describing the proposed Transfer and stating
that such Transfer is permitted by this Article VIII. Upon the request of
Lender, Borrower shall deliver such other information as Lender may reasonably
request to evidence such compliance with this Article VIII. In addition,
Borrower shall provide Lender with copies of executed deeds or other similar
closing documents within thirty (30) days after such closing.
8.7 Loan Assumption. Notwithstanding anything to the contrary contained
herein, in the event that any Qualified Successor Borrower purchases the
Property from Borrower, such Transfer shall be permitted hereunder and such
Qualified Successor Borrower may assume Borrower's obligations under the Loan
without Lender's consent, subject to the provisions of this Section 8.7. Any
such Transfer or assumption of the Loan shall be conditioned upon, among other
things, (i) the delivery of such evidence as Lender may reasonably request to
establish that the purchaser of the Property is a Qualified Successor Borrower
(including, if applicable, financial information), (ii) the delivery of evidence
that the purchaser is a Single Purpose Entity, (iii) the execution and delivery
of all documentation reasonably requested by Lender, (iv) the delivery of
Opinions of Counsel reasonably requested by Lender, including, without
limitation, a Non-Consolidation Opinion with respect to the purchaser and other
entities identified by Lender or requested by the Rating Agencies and opinions
with respect to the valid formation, due authority and good standing of the
purchaser and the continued enforceability of the Loan Documents and any other
matters requested by Lender, (v) the delivery of an endorsement to the Title
Policy in form and substance acceptable to Lender, insuring the lien of the
Security Instrument, as assumed, subject only to the Permitted Encumbrances or,
if such endorsement is not available in the State, a letter from the Title
Company certifying that the Transfer to the Qualified Successor Borrower does
not affect the validity of the Title Policy or the priority of the Lien of the
Security Instrument on the Property, (vi) in the event that the Existing
Citibank Lease is no longer in effect, a Qualified Manager shall continue to
manage the Property after such
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Transfer and (vii) the payment of an assumption fee equal to one-tenth (1/10th)
of one percent (0.10%) of the Principal Amount. In connection with any
assumption of the Loan which is permitted under this Section 8.7, Guarantor
shall be released from its obligations under the Recourse Guaranty, provided
that a successor principal that is either a Permitted Owner or another
creditworthy entity reasonably satisfactory to Lender and, if the Loan is the
subject of a Securitization, the Rating Agencies, assumes all of the obligations
of Guarantor thereunder with respect to events occurring on or after such
assumption (it being agreed, however, that such Guarantor shall remain liable
under the Recourse Guaranty to the extent of any events occurring prior to such
assumption) pursuant to a written assumption agreement and other documentation
reasonably satisfactory to Lender and, if the Loan is the subject of a
Securitization, the Rating Agencies. Upon the execution and delivery of such
written assumption and other documentation, such successor principal shall be
deemed to be the "Guarantor" for all purposes of this Agreement and the other
Loan Documents, but the foregoing shall not limit the right of the initially
named Guarantor hereunder to constitute a Permitted Owner. Provided no Event of
Default has occurred and is continuing, Lender shall execute, at Borrower's sole
cost and expense, all documents reasonably requested to evidence such release of
the prior Guarantor as provided above. In addition, Borrower shall pay, within
thirty (30) days after the delivery by Lender to Borrower of an invoice
therefor, all of Lender's third party processing costs (including, without
limitation, reasonable attorneys' fees and costs) actually incurred by Lender in
connection with such assumption, which invoice shall be accompanied with such
additional information which may be reasonably required to establish same.
8.8 Leases.
8.8.1 New Leases and Lease Modifications. Except as otherwise provided
in this Section 8.8, Borrower shall not (x) enter into any Lease (a "New Lease")
or (y) consent to the assignment of any Lease (unless required to do so by the
terms of such Lease) that releases the original Tenant from its obligations
under the Lease, or (z) materially modify any Lease (including, without
limitation, accept a surrender of any portion of the Property subject to a Lease
(unless otherwise permitted or required by law or pursuant to Article 4 of the
Citibank Lease), allow a reduction in the term of any Lease or any reduction in
the fixed or base rent payable under any Lease or any reduction in any
additional rent payable under any Lease (other than an immaterial reduction in
such additional rent), change any renewal provisions of any Lease, materially
increase the obligations of the landlord or materially decrease the obligations
of any Tenant) or terminate any Lease (any such action referred to in clauses
(y) and (z) being referred to herein as a "Lease Modification") without the
prior written consent of Lender which consent shall not be unreasonably withheld
or delayed. Any New Lease or Lease Modification that requires Lender's consent
shall not be effective unless and until Lender has consented thereto in
accordance with this Section 8.8. Lender's consent to any proposed New Lease or
Lease Modification shall be deemed to have been granted in the event such New
Lease or Modified Lease is not disapproved by Lender within ten (10) Business
Days after receipt of such New Lease or Lease Modification by Lender and a
request for consent by Borrower; provided that the letter requesting such
consent contains in bold, large letters the following language: NOTICE: YOU WILL
BE DEEMED TO HAVE CONSENTED TO THE DOCUMENT ENCLOSED HEREIN IF NOT DISAPPROVED
WITHIN TEN (10) BUSINESS DAYS OF RECEIPT.
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8.8.2 Leasing Conditions. Subject to the remaining terms of this
Section 8.8, provided no Event of Default shall have occurred and be continuing,
Borrower may enter into a New Lease or Lease Modification, without Lender's
prior written consent, that satisfies each of the following conditions:
(a) in the case of any (i) New Lease, such New Lease shall be written
on a standard form of Lease reasonably agreed to by Lender and Borrower after
the Closing (the "Standard Form of Lease") (as such standard form may be
reasonably modified with the consent of Lender, not to be unreasonably
withheld), with such changes as may be, taken as a whole, commercially
reasonable given the then current market conditions and (ii) Lease Modification,
such Lease Modification shall be on terms which, taken as a whole, are
commercially reasonable given the then current market conditions and the terms
of the existing Lease;
(b) with respect to a New Lease or Lease Modification, (i) such New
Lease or Lease Modification demises not more than three (3) full floors of
office space in the Building and (ii) if such New Lease or Lease Modification
demises not more than three (3) full floors of office space in the Building, the
net rentable square feet of the premises demised thereunder does not exceed
ninety-five thousand two hundred and forty-seven (95,247) net rentable square
feet;
(c) the term of such New Lease or Lease Modification, as applicable,
does not exceed 180 months, plus up to two (2) 60-month option terms (or
equivalent combination of renewals);
(d) the rental rate under such New Lease is at least equal to the then
prevailing market rate for the entire term of such Lease (except for the option
periods) and no Lease Modification shall reduce the base or fixed rent under
such Lease (to any extent) during the remainder of the term thereof (except for
the option periods) except in connection with the settlement of operating
expense disputes and similar claims;
(e) "fixed" or "base" rent under such New Lease is at a substantially
consistent or rising level throughout the term of the lease, other than for (x)
"free rent" periods within market parameters or (y) tenant improvement and
tenant inducements that exceed current market conditions but are amortized over
a shorter time period than the entire initial term of such New Lease;
(f) such New Lease or Lease Modification, as applicable, provides that
the premises demised thereby cannot be used for any of the following uses; any
pornographic or obscene purposes, any commercial sex establishment, any
pornographic, obscene, nude or semi-nude performances, modeling, obscene
materials, activities or sexual conduct or any other use that has or could
reasonably be expected to have a Material Adverse Effect; provided, however,
that for so long as Borrower is "controlled" (as defined in the definition of
"Affiliate" herein) by Sponsor, the foregoing restriction shall only apply to
the primary use of such premises (as opposed to any ancillary uses);
(g) the Tenant under such New Lease or Lease Modification, as
applicable, is not an Affiliate of Borrower;
(h) the New Lease or Lease Modification, as applicable, does not
contain any provision whereby the Rent payable thereunder would be based, in
whole or in part, upon the net income or profits derived by any Person from the
Property, but the same shall not apply to retail rent or any participation in
the profits from subleasing, assigning or similar actions;
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(i) the New Lease or Lease Modification, as applicable, does not
prevent Proceeds from being held and disbursed by Lender in accordance with the
terms hereof;
(j) the New Lease or Lease Modification, as applicable, shall not
entitle any Tenant to receive and retain condemnation Proceeds (or proceeds of
insurance obtained by Borrower) except those that may be specifically awarded to
it in condemnation proceedings because of the Taking of its trade fixtures and
its leasehold improvements which have not become part of the Property or its
other personal property, moving expenses and such business loss as Tenant may
specifically and separately establish, but nothing in this Section is intended
to limit the right of any Tenant to share in any Proceeds Borrower is entitled
to receive under the terms of the Loan Documents; and
(k) the New Lease or Lease Modification, as applicable, satisfies the
requirements of Section 8.8.7 and Section 8.8.8.
In the event a New Lease or a Lease Modification does not satisfy any
of the applicable criteria set forth above in clauses (a) through (k) above,
Borrower shall not enter into such New Lease or Lease Modification without
Lender's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed.
8.8.3 Delivery of New Lease or Lease Modification. Upon the execution
of any New Lease or Lease Modification, as applicable, Borrower shall deliver to
Lender an executed copy thereof and, in the case of a New Lease, an additional
copy marked to show all changes from the Standard Form of Lease.
8.8.4 Lease Amendments. Borrower agrees that it shall not have the
right or power, as against Lender without Lender's consent, to cancel, abridge,
amend or otherwise modify any Lease unless such modification is consented to be
Lender or entered into without Lender's consent in compliance with this Section
8.8 (including non-material modifications described in Section 8.8.1 and Lease
Modifications described in Section 8.8.2); provided, however, that this Section
is not intended to prohibit Borrower from terminating Leases (a) pursuant to a
default by the Tenant thereunder, (b) pursuant to a right to terminate the Lease
relating to a failure of a condition thereof to be satisfied by Tenant prior to
rent commencement thereunder, which right is expressly set forth in such Lease
or (c) in the ordinary course of business of the Property if (i) (x) such Lease
demises not more than one (1) full floor of office space in the Building and (y)
if such Lease does not demise more than one (1) full floor of office space in
the Building, the net rentable square feet of the premises demised thereunder
does not exceed thirty-one thousand seven hundred and forty-nine (31,749) net
rentable square feet or (ii) in the event that Borrower has signed a Lease with
a replacement Tenant (which is Lease is permitted under this Section 8.8), (x)
such Lease demises not more than two (2) full floors of office space in the
Building and (y) if such Lease does not demise more than two (2) full floors of
office space in the Building, the net rentable square feet of the premises
demised thereunder does not exceed sixty-three thousand four hundred and
ninety-eight (63,498) net rentable square feet.
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8.8.5 Security Deposits. All cash security or other deposits of Tenants
of the Property ("Security Deposits") shall, in accordance with all applicable
Legal Requirements, be treated as trust funds and shall not be commingled with
any other funds of Borrower (other than security deposits under other Leases),
and such Security Deposits shall be deposited, upon receipt of the same by
Borrower in a separate account maintained by Borrower expressly for such
purpose. Within ten (10) Business Days after written request by Lender, Borrower
shall furnish to Lender reasonably satisfactory evidence of compliance with this
Section 8.8.5, together with a statement of all Security Deposits deposited with
Borrower by the Tenants and the location and account number of the account in
which such cash Security Deposits are held. Attached hereto as Schedule III, is
a true correct and complete list of all Security Deposits and the amounts
thereof, currently in Borrower's possession.
8.8.6 No Default Under Leases. Borrower shall (i) promptly perform and
observe all of the material terms, covenants and conditions required to be
performed and observed by Borrower under the Leases and the REAs, if the failure
to perform or observe the same would have a Material Adverse Effect; (ii)
exercise, within ten (10) Business Days after a written request by Lender, any
right to request from the Tenant under any Lease, or the party to any REAs a
certificate with respect to the status thereof (which shall not be made more
than three (3) times in any calendar year) and (iii) not collect any of the
Rents, more than one (1) month in advance (except that Borrower may collect
Security Deposits and up to one (1) month's Rent (whether the first month, the
last month or otherwise) as are permitted by Legal Requirements and are
commercially reasonable in the prevailing market and collect other charges in
accordance with the terms of each Lease).
8.8.7 Subordination. All Lease Modifications and New Leases entered
into by Borrower after the date hereof shall by their express terms (or in any
Non-Disturbance Agreement entered into by Lender and the applicable Tenant with
respect to such Lease) be subject and subordinate to this Agreement and the
Security Instrument (through a subordination provision contained in such Lease
or otherwise) and shall provide that the Tenant shall attorn to Lender or any
other Person succeeding to the interests of Lender upon its obtaining ownership
or possession of the Property through the exercise of its remedies hereunder or
any transfer in lieu thereof on the terms set forth in this Section 8.8 (or such
other terms as are set forth in any Non-Disturbance Agreement entered into by
Lender and the applicable Tenant thereunder). Notwithstanding the foregoing, any
Lease Modification, in lieu of providing the foregoing, may contain a
confirmation by the Tenant that any Non-Disturbance Agreement previously entered
into by Lender and such Tenant with respect to the Lease being so modified shall
remain in full force and effect.
8.8.8 Attornment. Each Lease Modification and New Lease entered into
from and after the date hereof (unless a Non-Disturbance Agreement is entered
into by Lender and such Tenant with respect to such Lease) shall provide that in
the event of Lender's (or any other Person's who succeeds to the interest of
Lender as a result of such enforcement) obtaining ownership or possession of the
Property through the exercise of Lender's remedies hereunder or any transfer in
lieu thereof, the Tenant under such Lease shall, at the option of Lender or of
such Person, attorn to Lender or to such Person and shall recognize Lender or
such successor in the interest as lessor under such Lease without change in the
provisions thereof; provided, however, Lender or such successor in interest
shall not be liable for or bound by (i) any payment of an
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installment of rent or additional rent made more than thirty (30) days before
the due date of such installment (unless otherwise consented to by Lender in its
sole discretion or as otherwise permitted hereby), (ii) any act or omission of
or default by Borrower under any such Lease (but the Lender, or such successor,
shall be subject to the continuing obligations of the landlord to the extent
such act, omission or default continues after such succession to the extent of
Lender's, or such successor's, interest in the Property), (iii) any credits,
claims, setoffs or defenses which any Tenant may have against Borrower, (iv) any
obligation under such Lease to maintain a fitness facility at the Property, (v)
any obligation on Borrower's part, pursuant to such Lease, to perform any tenant
improvement work or (vi) any obligation on Borrower's part, pursuant to such
Lease, to pay any sum of money to any Tenant. Each such New Lease shall also
provide that, upon the reasonable request by Lender or such successor in
interest, the Tenant shall execute and deliver an instrument or instruments
confirming such attornment. Notwithstanding the foregoing, any Lease
Modification, in lieu of providing the foregoing, may contain a confirmation by
the Tenant that any Non-Disturbance Agreement previously entered into by Lender
and such Tenant with respect to the Lease being so modified shall remain in full
force and effect.
8.8.9 Non-Disturbance Agreements. Lender shall enter into and, if
required by applicable law to provide constructive notice or requested by a
Tenant, record in the county where the subject Property is located, a
subordination, attornment and non-disturbance agreement, substantially in form
and substance substantially similar to (i) the form attached hereto as Exhibit
N, in the case of any Tenant other than the Citibank Tenant (which shall contain
any such changes as Tenant and Lender shall agree upon, Lender agreeing to act
reasonably with respect to any such changes requested by a Tenant under a New
Lease) and (ii) the form attached hereto as Exhibit H in the case of the
Citibank Tenant (each such agreement, a "Non-Disturbance Agreement"), with any
Tenant (other than an Affiliate of Borrower) entering into a New Lease which
Lender has consented to or which is permitted to be entered into by Borrower
without Lender's consent in accordance with this Section 8.8, within ten (10)
Business Days after written request therefor by Borrower, provided that such
request is accompanied by an Officer's Certificate stating that such Lease
complies in all material respects with this Section 8.8. All reasonable third
party costs and expenses incurred by Lender in connection with the negotiation,
preparation, execution and delivery of any Non-Disturbance Agreement, including,
without limitation, reasonable attorneys' fees and disbursements, shall be paid
by Borrower (in advance of Lender executing such Non-Disturbance Agreement, if
requested by Lender).
8.8.10 Citibank Lease. Notwithstanding anything to the contrary
contained herein, Lender hereby consents to the amending and restating of the
Existing Citibank Lease pursuant to the Amended and Restated Lease to the extent
such amending and restating is expressly required pursuant to the terms of the
Existing Citibank Lease. Borrower shall be entitled to enter into an amendment
to the Existing Citibank Lease to permit Borrower or one of its Affiliates to
manage the Property on behalf of the Citibank Tenant pursuant to a Management
Agreement.
8.8.11 Subleases. If Borrower has the right under any Lease entered
into in accordance with this Agreement to consent to any sublease or
sub-sublease and (x) such sublease or sub-sublease demises at least three (3)
full floors of office space in the Building or (y) the net rentable square feet
of the premises demised under such sublease or sub-sublease is at least
ninety-five thousand two hundred and forty-seven (95,247) net rentable square
feet, then, unless Borrower is obligated to grant its consent to such sublease
or sub-sublease pursuant to the terms of the underlying Lease, Borrower shall
not grant any such consent without the consent of Lender, such consent by Lender
not to be unreasonably withheld or delayed if Borrower is not permitted pursuant
to the terms of such Lease to unreasonably withhold its consent to such sublease
or sub-sublease.
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IX. DEFEASANCE
9.1 Defeasance.
(a) At any time subsequent to the Lockout Period and prior to the
Anticipated Repayment Date, provided that all of the conditions set forth in
Section 9.1(b) are complied with, Lender hereby agrees that Borrower shall have
the right to obtain a release of the Lien of the Security Instrument and the
other Loan Documents (other than the Defeasance Note and the Lien of the
Defeasance Security Agreement on the property secured thereby) on the Property
upon at least thirty (30) days' prior written notice upon satisfaction of the
following (such release, after satisfaction of the other provisions of this
Section 9.1(a), a "Defeasance"):
(i) the execution and delivery of a defeasance note (the "Defeasance
Note"), in substitution for the Note and in form and substance reasonably
acceptable to Lender, dated as of the date of the Defeasance (which must be on a
Business Day), payable to Lender on the same remaining payment terms as the
Note;
(ii) the execution and delivery of a security agreement (the
"Defeasance Security Agreement"), in form and substance reasonably acceptable to
Lender, dated as of the date of the Defeasance (which must be on a Business
Day), in favor of Lender, pursuant to which Lender is granted a perfected first
priority security interest in the Defeasance Collateral to secure the Defeasance
Note;
(iii) the execution and delivery of appropriate and reasonable
agreements and/or instruments, each in form and substance reasonably acceptable
to Lender, pursuant to which the obligations and liabilities of Borrower under
the Defeasance Note and the Defeasance Security Agreement are assumed by a new
entity (the "Substitute Borrower") which satisfies all of the Single Purpose
Entity requirements;
(iv) the execution and delivery by Borrower of the release documents
referenced in Section 9.1(d) to the extent Borrower is a party thereto;
(v) satisfaction of the conditions set forth in Section 9.1(b); and
(vi) no Event of Default shall have occurred and be continuing.
(b) With respect to a Defeasance pursuant to Section 9.1(a), Borrower
shall deposit the Defeasance Collateral in accordance with Section 9.1(b)(ii)
below into the Defeasance Collateral Account. Defeasance shall be permitted at
such time as all of the following events shall have occurred:
(i) the Defeasance Collateral Account shall have been established
pursuant to Section 9.1(e) hereof;
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(ii) Borrower shall have delivered or caused to have been delivered to
Lender the Defeasance Collateral for deposit into the Defeasance Collateral
Account such that it will satisfy the Defeasance Collateral Requirement at the
time of delivery and all such Defeasance Collateral, if in registered form,
shall be registered in the name of Lender or its nominee (and, if registered in
nominee name endorsed to Lender or in blank) and, if issued in book-entry form,
the name of Lender or its nominee shall appear as the owner of such securities
on the books of the Federal Reserve Bank or other party maintaining such
book-entry system;
(iii) Borrower shall have granted or caused to have been granted to
Lender a valid perfected first priority security interest in the Defeasance
Collateral and all proceeds thereof;
(iv) Borrower shall have delivered or caused to be delivered to Lender
an Officer's Certificate, dated as of the date of such delivery, that (x) sets
forth the aggregate face amount or unpaid principal amount, interest rate and
maturity of all such Defeasance Collateral, a copy of the transaction journal,
if any, or such other notification, if any, published by or on behalf of the
Federal Reserve Bank or other party maintaining a book-entry system advising
that Lender or its nominee is the owner of such securities issued in book-entry
form and (y) states that:
(1) Borrower (or the Substitute Borrower)
owns the Defeasance Collateral being delivered to Lender free and clear of any
and all Liens, security interests or other encumbrances (other than the
Defeasance Security Agreement), and has not assigned any interest or
participation therein (or, if any such interest or participation has been
assigned, it has been released), and Borrower has full power and authority to
pledge such Defeasance Collateral to Lender;
(2) such Defeasance Collateral consists
solely of Defeasance Eligible Investments;
(3) such Defeasance Collateral satisfies the
Defeasance Collateral Requirement, determined as of the date of delivery; and
(4) the information set forth in clause
(iv)(x) above as set forth in a schedule attached to such Officer's Certificate
is correct and complete in all material respects as of the date of delivery
(such schedule, which shall be attached to and form a part of such Officer's
Certificate, shall demonstrate satisfaction of the requirement set forth in
clause (iv)(2) above, in a form reasonably acceptable to Lender);
(v) Borrower shall have delivered or caused to be delivered to Lender a
Rating Agency Confirmation and such other documents and certificates as Lender
may reasonably request, including Opinions of Counsel, in connection with
demonstrating that Borrower has satisfied the provisions of this Section 9.1(b),
including, but not limited to, an Opinion of Counsel stating, among other
things, that (x) Lender has a perfected first priority security interest in the
Defeasance Collateral and that the Defeasance Security Agreement is enforceable
in accordance with its terms and (y) if applicable, that any trust formed as a
REMIC pursuant to a Securitization will not fail to maintain its status as a
REMIC as a result of such Defeasance; and
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(vi) Borrower shall have delivered to Lender a certificate of an
Independent Accountant certifying that the Defeasance Collateral will generate
monthly amounts which satisfy the Defeasance Collateral Requirement.
(c) For purposes of determining whether sufficient amounts of
Defeasance Collateral are on deposit in the Defeasance Collateral Account, there
shall be included only payments of principal and predetermined and certain
income thereon (as reasonably determined by Lender and agreed to by Borrower
without regard to any reinvestment of such amounts) that will occur on a stated
date for a stated payment on or before the dates when such amounts may be
required to be applied to pay the interest when due on the Defeasance Note
(and/or any substitute notes, as applicable) as of the Payment Date that is
three (3) months prior to the Anticipated Repayment Date, together with the
outstanding principal balance of the Defeasance Note (and/or any substitute
notes, as applicable) as of the Payment Date that is three (3) months prior to
the Anticipated Repayment Date.
(d) Upon the delivery of Defeasance Collateral in accordance with
Section 9.1(b) and the satisfaction of all other conditions provided for in this
Section 9.1, Lender shall enter into appropriate release and termination
documents as if a payment in full of the Indebtedness hereunder (except as to
the Defeasance Note and Defeasance Security Agreement) had occurred, together
with such documentation as may be reasonably requested by Borrower to notify
third parties thereof and substitute note documentation (including a release of
Borrower from the Defeasance Note and the Defeasance Security Instrument as and
to the extent that Borrower is replaced by a Substitute Borrower in accordance
with the terms of this Article IX), and Lender will return to Borrower any
Letters of Credit or other collateral or security held by Lender in connection
with the Loan (other than the Defeasance Collateral). Notwithstanding the
foregoing, if Borrower desires to effectuate a Defeasance in a manner which will
permit the assignment of the Note and the Security Instrument to a new Lender in
order to save on mortgage recording tax, then Lender shall reasonably cooperate
therewith (at no cost to Lender), in which event Lender shall assign the Note
and the Security Instrument (without representation, recourse or warranty or any
nature, express or implied) to a new lender designated by Borrower. Lender's
obligation to assign the Note and the Security Instrument shall be conditioned
upon the following:
(i) compliance by Borrower with all of the other provisions of this
Section 9.1;
(ii) the execution and delivery by Borrower to such new lender of the
Defeasance Note and Defeasance Security Agreement, which Defeasance Note,
together with the Defeasance Security Agreement and the rights of such new
lender in and to the Defeasance Collateral, shall be assigned by such new lender
to Lender simultaneously with the assignment of the Note and the Security
Instrument by Lender;
(iii) payment by Borrower of the reasonable out-of-pocket costs of
Lender incurred in connection therewith;
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(iv) such assignment is not then prohibited by any Legal Requirement;
and
(v) such assignment and the actions described above in Lender's good
faith determination do not constitute a prohibited transaction for any trust
formed as a REMIC pursuant to a Securitization and will not disqualify such
REMIC as a "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code as a result of such assignment and the Defeasance.
(e) On or before the date on which Borrower delivers Defeasance
Collateral to Lender pursuant to Section 9.1(b), Borrower shall open at any
Approved Bank (or other bank subject to the next sentence hereof) at the time
and acting as custodian for Lender, a defeasance collateral account (the
"Defeasance Collateral Account") which shall at all times be an Eligible
Account, in which Borrower shall grant to Lender or reconfirm the grant to
Lender of a security interest. The Defeasance Collateral Account shall contain
(i) all Defeasance Collateral delivered by Borrower pursuant to Section 9.1(b),
(ii) all payments received on Defeasance Collateral held in the Defeasance
Collateral Account and (iii) all income or other gains from investment of moneys
or other property deposited in the Defeasance Collateral Account. All such
amounts, including all income from the investment or reinvestment thereof, shall
be held by Lender, subject to withdrawal by Lender for the purposes set forth in
this Section 9.1. Borrower (or the Substitute Borrower) shall be the owner of
the Defeasance Collateral Account and shall report all income accrued on
Defeasance Collateral for federal, state and local income tax purposes in its
income tax return.
(f) Lender shall withdraw, draw on or collect and apply the amounts
that are on deposit in the Defeasance Collateral Account to pay when due the
principal and all installments of interest and principal on the Defeasance Note.
Funds and other property in the Defeasance Collateral Account shall not be
commingled with any other monies or property of Borrower (or the Substitute
Borrower) or any Affiliate of Borrower (or the Substitute Borrower). Lender
shall not in any way be held liable by reason of any insufficiency in the
Defeasance Collateral Account.
(g) If required, Borrower and Lender shall enter into any appropriate
amendments to the Loan Documents necessitated by a Defeasance, such amendments
to be in form and substance reasonably acceptable to both Borrower and Lender.
X. MAINTENANCE OF PROPERTY; ALTERATIONS
10.1 Maintenance of Property. Borrower shall keep and maintain, or
cause to be kept and maintained, the Property and every part thereof in good
condition and repair, subject to ordinary wear and tear, and, subject to
Excusable Delays and the provisions of this Agreement with respect to damage or
destruction caused by casualty events or Takings, shall not permit or commit any
waste, impairment, or deterioration of any portion of the Property in any
material respect. In the event that the Existing Citibank Lease is no longer in
effect, Borrower further covenants to do all other acts which from the character
or use of the Property may be reasonably necessary to protect the security
hereof, the specific enumerations herein not excluding the general. Borrower
shall not remove or demolish (or permit to be removed or demolished) any
Improvement on the Property except as the same may be necessary in connection
with an Alteration or a restoration in connection with a Taking or casualty, or
as otherwise permitted herein, in each case in accordance with the terms and
conditions hereof.
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10.2 Conditions to Alteration. Provided that no Event of Default shall
have occurred and be continuing hereunder (except where such Alterations are
performed by Tenants, required in order to comply with Legal Requirements or in
an emergency in order to insure life safety), Borrower shall have the right,
without Lender's consent, to undertake any alteration, improvement, demolition
or removal of the Property or any portion thereof (any such alteration,
improvement, demolition or removal, an "Alteration") so long as (i) Borrower
provides Lender with prior written notice of any Material Alteration, and (ii)
such Alteration is undertaken in accordance with the applicable provisions of
this Agreement and the other Loan Documents, is not prohibited by any relevant
REAs and the Leases and shall not, upon completion (giving credit to rent and
other charges attributable to Leases executed upon such completion), have a
Material Adverse Effect. Any Material Alteration (other than Material
Alterations performed by Tenants) shall be conducted under the supervision of an
architect, engineer or construction consultant which is an Independent
Architect; provided, however, as long as Reckson Operating Partnership, L.P.
Controls Borrower, such architect, engineer or construction consultant shall not
be required to be an Independent Architect if such architect, engineer or
construction consultant (A) performs work for Reckson Operating Partnership,
L.P. and its Affiliates on a regular basis, (B) is licensed to practice in the
State (in the case of any architect, engineer or other Person required to be so
licensed) and (C) has at least five (5) years of architectural experience. In
connection with any Material Alteration (if performed by Borrower), Borrower
shall deliver to Lender, for informational purposes only and not for approval by
Lender, detailed plans and specifications and cost estimates therefor, prepared
by an Independent Architect(s) (or such other architect, engineer or
construction consultant referred to in the preceding sentence). Such plans and
specifications may be revised at any time and from time to time by an
Independent Architect(s) (or such other architect, engineer or construction
consultant), provided that material revisions of such plans and specifications
are filed with Lender, for informational purposes only. Additionally, if any
Tenant in connection with a Material Alteration delivers any plans and
specifications therefor to Borrower, Borrower shall deliver a copy of the same
to Lender, for informational purposes only. All work done in connection with any
Alteration shall be performed (once commenced) with reasonable diligence,
subject to Excusable Delays, in a good and workmanlike manner, all materials
used in connection with any Alteration shall not be less than the standard of
quality of the materials currently used at the Property and all materials used
shall be in accordance with all applicable material Legal Requirements and
Insurance Requirements. Nothing in this Section 10.2 shall limit the rights of
the Citibank Tenant under the Citibank Lease with respect to Alterations.
10.3 Costs of Alteration. Notwithstanding anything to the contrary
contained in this Article X, no Material Alteration shall be performed by or on
behalf of Borrower unless Borrower shall have delivered to Lender Cash and Cash
Equivalents and/or a Letter of Credit as security in an amount not less than the
estimated cost of the Material Alteration or the Alterations minus the Threshold
Amount (as set forth in the Independent Architect's written estimate referred to
above). In addition to payment or reimbursement from time to time of Borrower's
expenses incurred in connection with any Material Alteration or any such
Alteration, the amount of such security shall be reduced on any given date to
the excess of (x) the Independent Architect's then written estimate of the cost
to complete the Material Alteration or
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the Alterations (including any retainages), free and clear of Liens, other than
Permitted Encumbrances over (y) the Threshold Amount. Costs payable by Borrower
in connection with any Material Alteration shall be subject to a retainage which
shall not be less than five percent (5%) in the aggregate. In the event that any
Material Alteration or Alteration shall be made in conjunction with any
restoration with respect to which Borrower shall be entitled to withdraw
Proceeds pursuant to Section 6.2, the amount of the Cash and Cash Equivalents
and/or Letter of Credit to be furnished pursuant hereto need not exceed the
aggregate cost of such restoration and such Material Alteration or Alteration
(as estimated by the Independent Architect), less the sum of the amount of any
Proceeds which Borrower may be entitled to withdraw pursuant to Section 6.2 and
which are held by Lender in accordance with Section 6.2 and less the Threshold
Amount. Payment or reimbursement of Borrower's expenses incurred with respect to
any Material Alteration or any such Alteration shall be made by Lender upon
submission of a request therefor from time to time, together with an invoice
evidencing the amount paid or then due.
At any time after (i) substantial completion of any Material
Alteration or any such Alteration in respect of which Cash and Cash Equivalents
and/or a Letter of Credit is deposited pursuant hereto or (ii) the date on which
Borrower delivers to Lender an Officer's Certificate (together with reasonable
supporting documentation with respect thereto) stating that (A) the remaining
costs of any Material Alteration no longer exceed, in the aggregate, the
Threshold Amount and (B) to the knowledge of the certifying Person, all amounts
which Borrower is then liable to pay in respect of such Material Alteration
through the date of the certification have been paid in full or adequately
provided for or are being contested in accordance with Section 7.3 and that lien
waivers with respect to all portions of such Alterations which have been
completed by such date and paid for have been obtained from the general
contractor and major subcontractors performing such Material Alterations (or
such waivers are not customary and reasonably obtainable by prudent managers in
the area where the Property is located), then the whole balance of any Cash and
Cash Equivalents so deposited by Borrower with Lender and then remaining on
deposit (together with earnings thereon), as well as all retainages, may be
withdrawn by Borrower and shall be paid by Lender to Borrower, and any other
Cash and Cash Equivalents and/or a Letter of Credit so deposited or delivered
shall, to the extent it has not been called upon, reduced or theretofore
released, be released to Borrower, within ten (10) days after receipt by Lender
of (x) in the case of clause (ii) above, the Officer's Certificate described
therein or (y) in the case of clause (i) above, an application for such
withdrawal and/or release together with an Officer's Certificate, and signed
also (as to the following clause (a)) by the Independent Architect, setting
forth in substance as follows:
(a) that the Material Alteration or Alteration in respect of which such
Cash and Cash Equivalents and/or a Letter of Credit was deposited has been
substantially completed in all material respects substantially in accordance
with any plans and specifications therefor previously filed with Lender under
Section 10.2 and that, if applicable, a certificate of occupancy has been issued
with respect to such Material Alteration or Alteration by the relevant
Governmental Authority(ies) or, if not applicable, that a certificate of
occupancy is not required; and
(b) that to the knowledge of the certifying Person all amounts which
Borrower is or may become liable to pay in respect of such Material Alteration
or Alteration through the date of the certification have been paid in full or
adequately provided for or are being contested in accordance with Section 7.3
and that lien waivers have been obtained from the general contractor and major
subcontractors performing such Material Alterations or Alterations (or such
waivers are not customary and reasonably obtainable by prudent managers in the
area where the Property is located).
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For the purposes of this Section 10.3 only, Alterations and Material Alterations
shall not include tenant improvement alterations, improvements, demolitions or
removals undertaken pursuant to (or as permitted by) a Lease in which the costs
thereof are to be paid by or on behalf of a Tenant or any Person claiming by,
through or under a Tenant.
Nothing in this Section 10.3 shall limit the rights of the Citibank
Tenant under the Citibank Lease with respect to Alterations (regardless of
whether the same would constitute Material Alterations hereunder).
XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION
11.1 Books and Records. Borrower shall keep and maintain on a fiscal
year basis proper books and records separate from any other Person, in which
accurate and complete entries shall be made of all dealings or transactions of
or in relation to the Note, the Property and the business and affairs of
Borrower relating to the Property which shall reflect all items of income and
expense in connection with the operation on an individual basis of the Property
and in connection with any services, equipment or furnishings provided in
connection with the operation of the Property, in accordance with GAAP or in
accordance with a cash method of accounting as required to prepare the reports
required hereunder (or such other reporting method as Lender shall approve).
Lender and its authorized representatives shall have the right at reasonable
times and upon reasonable notice to examine the books and records of Borrower
relating to the operation of the Property and to make such copies or extracts
thereof as Lender may reasonably require.
11.2 Financial Statements.
11.2.1 Quarterly Reports. Not later than forty-five (45) days following
the end of each fiscal quarter, Borrower shall deliver to Lender unaudited
financial statements, internally prepared on a cash basis including a balance
sheet and profit and loss statement as of the end of such quarter and for the
corresponding quarter of the previous year, if applicable, and a statement of
revenues and expenses for the year to date, a statement of Net Operating Income
for such quarter, and a comparison of the year to date results with (i) after
the second (2nd) Fiscal Year occurring after the Closing Date, the results for
the same period of the previous year, if applicable, and (ii) if the Existing
Citibank Lease shall no longer be in full force and effect, the Annual Budget
for such period and the Fiscal Year; provided, however, that solely with respect
to the fourth (4th) fiscal quarter of each Fiscal Year, (1) Borrower shall only
be obligated to deliver to Lender on or prior to the expiration of such
forty-five (45) day period an Officer's Certificate stating whether or not, to
the best of Borrower's Knowledge, any events or circumstances exist which, with
or without the giving of notice, the passage of time or both, may constitute a
monetary or material non-monetary default on the part of Borrower or the
Citibank Tenant under the Citibank Lease and (2) Borrower shall deliver the
items set forth above in this
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sentence with respect to each such fourth (4th) fiscal quarter simultaneously
with the delivery by Borrower of the annual report for such Fiscal Year pursuant
to Section 11.2.2 below (i.e., rather than on or prior to the expiration of such
forty-five (45) day period). Such statements for each quarter shall be
accompanied by an Officer's Certificate certifying to the best of the signer's
knowledge, (A) that such statements fairly represent the financial condition and
results of operations of Borrower, (B) that as of the date of such Officer's
Certificate, no Event of Default exists or, if so, specifying the nature and
status of each such Event of Default and the action then being taken by Borrower
or proposed to be taken to remedy such Event of Default and (C) that as of the
date of each Officer's Certificate, no litigation or proceeding affecting
Borrower or the Property or any part thereof in which the amount involved is
$1,000,000 (either individually or in the aggregate) or more and not covered by
insurance or in which injunctive or similar relief is sought and likely to be
obtained or, if so, specifying such litigation and the status thereof and any
actions being taking in relation thereto.
11.2.2 Annual Reports. Not later than ninety (90) days after the end of
each Fiscal Year of Borrower's operations, Borrower shall deliver to Lender
audited financial statements certified by an Independent Accountant in
accordance with GAAP, covering the Property, including a balance sheet as of the
end of such year, a statement of Net Operating Income for the year and for the
fourth quarter thereof and a statement of revenues and expenses for such year,
and, commencing with the annual statement for the second (2nd) Fiscal Year after
the Closing Date, stating in comparative form the figures for the previous
Fiscal Year, and provided the Existing Citibank Lease is no longer in full force
and effect, the Annual Budget for such Fiscal Year and the occupancy statistics
for the Property. Such annual financial statements shall also be accompanied by
an Officer's Certificate in the form required pursuant to Section 11.2.1.
11.2.3 Leasing Reports. Not later than forty-five (45) days after the
end of each fiscal quarter of Borrower's operations, if the Existing Citibank
Lease is no longer in effect during such fiscal quarter, Borrower shall deliver
to Lender a true and complete rent roll for the Property, dated as of the last
month of such fiscal quarter, showing the percentage of gross leasable area of
the Property, if any, leased as of the last day of such fiscal quarter, the
current annual rent for the Property, the expiration date of each lease, whether
to Borrower's Knowledge any portion of the Property has been sublet, and if it
has, the name of the subtenant, and such rent roll shall be accompanied by an
Officer's Certificate certifying that, to the knowledge of the signatory, such
rent roll is true, correct and complete in all material respects as of its date
and stating whether Borrower, within the past three (3) months, has issued a
notice of default with respect to any Lease which has not been cured and the
nature of such default.
11.2.4 Capital Expenditures Summaries. Borrower shall, within ninety
(90) days after the end of each calendar year during the term of the Note, if
the Existing Citibank Lease is no longer in effect, deliver to Lender an annual
summary of any and all Capital Expenditures made by Borrower at the Property
during the prior twelve (12) month period.
11.2.5 Reserved.
11.2.6 Annual Budget. If the Existing Citibank Lease is no longer in
effect, Borrower shall deliver to Lender the Annual Budget for Lender's review,
but not approval, not later than thirty (30) days prior to the end of such
Fiscal Year, or, if Lender's approval of such Annual
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Budget is required under this Section, at least sixty (60) days prior to the end
of each Fiscal Year. Notwithstanding the foregoing, Lender shall have the right
to approve the Annual Budget, in its sole and absolute discretion, upon the
occurrence and during the continuation of a Reserve Period. Borrower shall not
consent to a change or modification of the Annual Budget without first providing
a copy to Lender for its review (unless such change or modification is made as
the result of an emergency repair), but not approval (unless Lender's approval
is required pursuant to this Section 11.2.6).
11.2.7 Other Information. Borrower shall, promptly after written
request by Lender or, if a Securitization shall have occurred, the Rating
Agencies, furnish or cause to be furnished to Lender, in such manner and in such
detail as may be reasonably requested by Lender, such reasonable additional
information as is in Borrower's possession or is readily obtainable and as may
be reasonably requested with respect to the Property.
11.2.8 Citibank Lease Information. Borrower, immediately upon receipt
thereof from the Citibank Tenant, shall deliver to Lender true, correct and
complete copies of the materials, reports and information described in Section
7.04, 7.07(a), 9.03 and 9.09 of the Citibank Lease which are delivered by the
Citibank Tenant to Borrower.
XII. ENVIRONMENTAL MATTERS
12.1 Representations. Borrower hereby represents and warrants that
except as set forth in the environmental reports and studies delivered to Lender
(the "Environmental Reports") and except for common maintenance and cleaning
products regularly found at properties with a standard of operation and
maintenance comparable to the Property which have been used in compliance with
Environmental Law, (i) Borrower has not engaged in or knowingly permitted any
operations or activities upon, or any use or occupancy of the Property, or any
portion thereof, for the purpose of or in any way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials on, under, in or about the
Property, or transported any Hazardous Materials to, from or across the
Property, except in all cases in material compliance with Environmental Laws and
only in the course of legitimate business operations at the Property; but the
foregoing shall not be deemed violated by the Citibank Tenant (and parties
claiming under it) being permitted to use and occupy the Property as permitted
under the Citibank Lease; (ii) to Borrower's Knowledge, no tenant, occupant or
user of the Property, or any other Person, has engaged in or permitted any
operations or activities upon, or any use or occupancy of the Property, or any
portion thereof, for the purpose of or in any material way involving the
handling, manufacture, treatment, storage, use, generation, release, discharge,
refining, dumping or disposal of any Hazardous Materials on, in or about the
Property, or transported any Hazardous Materials to, from or across the
Property, except in all cases in material compliance with Environmental Laws and
only in the course of legitimate operations at the Property (including any
legitimate business conducted thereat); (iii) no Hazardous Materials are
presently constructed, deposited, stored, or otherwise located on, under, in or
about the Property except in material compliance with Environmental Laws; (iv)
to Borrower's Knowledge, no Hazardous Materials have migrated from the Property
upon or beneath other properties which would reasonably be expected to result in
material liability for Borrower; and (v) to Borrower's Knowledge, no Hazardous
Materials have migrated or threaten
88
to migrate from other properties upon, about or beneath the Property which would
reasonably be expected to result in material liability for Borrower.
12.2 Covenants.
12.2.1 Compliance with Environmental Laws. Subject to Borrower's or the
Citibank Tenant's right to contest under Section 7.3, Borrower covenants and
agrees with Lender that it shall comply with all Environmental Laws. If at any
time during the continuance of the Lien of the Security Instrument, a
Governmental Authority having jurisdiction over the Property requires remedial
action relating to the presence of Hazardous Materials in, around, or under the
Property (an "Environmental Event"), Borrower shall, upon obtaining knowledge
thereof, deliver prompt notice of the occurrence of such Environmental Event to
Lender. Within thirty (30) days after Borrower has knowledge of the occurrence
of an Environmental Event, Borrower shall deliver to Lender an Officer's
Certificate (an "Environmental Certificate") explaining the Environmental Event
in reasonable detail (subject to such information being reasonably available to
Borrower) and setting forth the proposed remedial action, if any. Borrower shall
promptly provide Lender with copies of all notices which allege or identify any
actual or potential material violation or noncompliance received by or prepared
by or for Borrower in connection with any Environmental Law. For purposes of
this paragraph, the term "notice" shall mean any summons, citation, directive,
order, claim, pleading, letter, application, filing, report, findings,
declarations or other materials pertinent to compliance of the Property and
Borrower with such Environmental Laws. If the Security Instrument is foreclosed,
Borrower shall deliver the Property in compliance with all applicable
Environmental Laws.
12.3 Environmental Reports. Upon the occurrence and during the
continuance of (i) if the Existing Citibank Lease is no longer in effect, an
Environmental Event with respect to the Property or (ii) an Event of Default,
Lender shall have the right to have its consultants perform a comprehensive
environmental audit of the Property. Such audit shall be conducted by an
environmental consultant chosen by Lender and may include a visual survey, a
record review, an area reconnaissance assessing the presence of hazardous or
toxic waste or substances, PCBs or storage tanks at the Property, an asbestos
survey of the Property, which may include random sampling of the Improvements
and air quality testing, and such further site assessments as Lender may
reasonably require due to the results obtained from the foregoing. Borrower
grants Lender, its agents, consultants and contractors the right to enter the
Property as reasonable or appropriate for the circumstances for the purposes of
performing such studies, but such access shall be subject to the rights of
Tenants under their Leases. The reasonable cost of such studies shall be due and
payable by Borrower to Lender within thirty (30) days after an invoice therefor,
accompanied by evidence as may be reasonably required to establish such cost, is
delivered to Borrower, and shall be secured by the Lien of the Security
Instrument, subject to Section 13(a) of the Security Instrument. Lender shall
not unreasonably interfere with, and Lender shall direct the environmental
consultant to use its commercially reasonable efforts not to hinder, Borrower's
or any Tenant's, other occupant's or Manager's operations upon the Property when
conducting such audit, sampling or inspections. By undertaking any of the
measures identified in and pursuant to this Section 12.3, Lender shall not be
deemed to be exercising any control over the operations of Borrower or the
handling of any environmental matter or hazardous wastes or substances of
Borrower for purposes of incurring or being subject to liability therefor.
Lender shall be responsible for any damage to the Property or the property of
any Tenants resulting solely from the gross negligence and willful misconduct of
Lender relating to any such inspections.
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12.4 Environmental Indemnification. Borrower shall protect, indemnify,
save, defend, and hold harmless the Indemnified Parties from and against any and
all liability, loss, damage, actions, causes of action, costs or expenses
whatsoever (including reasonable attorneys' fees and expenses) and any and all
claims, suits and judgments which any Indemnified Party may suffer, as a result
of or with respect to: (a) any Environmental Claim relating to or arising from
the Property; (b) the violation of any Environmental Law in connection with the
Property; (c) any release, spill, or the presence of any Hazardous Materials
affecting the Property; and (d) the presence at, in, on or under, or the
release, escape, seepage, leakage, discharge or migration at or from, the
Property of any Hazardous Materials, whether or not such condition was known or
unknown to Borrower; provided that, in each case, Borrower shall be relieved of
its obligation under this subsection if any of the matters referred to in
clauses (a) through (d) above did not occur (but need not have been discovered)
prior to (1) the foreclosure of the Security Instrument, (2) the delivery by
Borrower to Lender or its designee of a deed-in-lieu of foreclosure with respect
to the Property, or (3) Lender's or its designee's taking possession and control
of the Property after the occurrence of an Event of Default hereunder. If any
such action, claim or other proceeding shall be brought against an Indemnified
Party, then Lender shall promptly notify Borrower and Borrower shall have,
subject to the further terms hereof, the right to defend and indemnify the
Indemnified Parties against such action, claim or other proceeding. Written
notice from Borrower to Lender electing to assume the defense of such action,
claim or other proceeding shall be given reasonably promptly following Lender's
notice to Borrower of such action, claim or proceeding). Borrower shall be
entitled to assume the defense thereof, at Borrower's expense, with counsel
which is selected by the Citibank Tenant or any insurance company which is
covering such action, claim or proceeding or otherwise is reasonably acceptable
to Lender; provided, however, Lender may, at its own expense, retain separate
counsel to participate in such defense, but such participation shall not (i) be
deemed to give Lender a right to control such defense, which right Borrower
expressly retains or (ii) affect any indemnity or defense obligation of the
Citibank Tenant or any insurance company covering such action, claim or
proceeding. Notwithstanding the foregoing, each Indemnified Party shall have the
right to employ separate counsel at Borrower's expense if, in the reasonable
opinion of legal counsel, a conflict or potential conflict exists between the
Indemnified Party and Borrower that would make such separate representation
advisable. Borrower shall have no obligation to indemnify an Indemnified Party
for damage or loss resulting from an Indemnified Party's gross negligence or
willful misconduct.
12.5 Recourse Nature of Certain Indemnifications. Notwithstanding
anything to the contrary provided in this Agreement or in any other Loan
Document, the indemnification provided in Section 12.4 shall be fully recourse
to Borrower and shall be independent of, and shall survive, the discharge of the
Indebtedness, the release of the Lien created by the Security Instrument, and/or
the conveyance of title to the Property to Lender or any purchaser or designee
in connection with a foreclosure of the Security Instrument or conveyance in
lieu of foreclosure.
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XIII. MEZZANINE LOAN
13.1 Mezzanine Loan. Notwithstanding anything to the contrary contained
herein, Mezzanine Borrower shall have the right, from time to time, to obtain
mezzanine financing (a "Mezzanine Loan") from a lender (the "Mezzanine Lender")
reasonably acceptable to Lender, which Mezzanine Loan shall be secured by a
pledge of direct or indirect interests in Borrower. The right of Mezzanine
Borrower to obtain a Mezzanine Loan shall be conditioned upon (i) the delivery
of a Rating Agency Confirmation, (ii) the execution and delivery of an
Intercreditor Agreement (which Lender shall also execute at the time), (iii) the
execution and delivery of all documentation reasonably requested by Lender or,
if the Loan is the subject of a Securitization, the Rating Agencies (including,
without limitation, any amendments to the Loan Documents and reaffirmation of
the Recourse Guaranty, if the same are required by the Rating Agencies as a
condition to the Rating Agency Confirmation), (iv) the delivery of Opinions of
Counsel required by the Rating Agencies, including, without limitation, a
Non-Consolidation Opinion with respect to Mezzanine Borrower and other entities
required by the Rating Agencies, and (v) no Event of Default shall have occurred
and be continuing. Borrower shall pay all of Lender's third party fees, costs
and expenses, including, without limitation, reasonable attorneys' fees and
costs, actually incurred by Lender in connection with such assumption, such
payment to be made within thirty (30) days after invoices therefor (accompanied
by such information as may be reasonably requested by Borrower to confirm same)
have been delivered to Borrower.
XIV. SECURITIZATION AND PARTICIPATION
14.1 Sale of Note and Securitization. At the request of Lender and, to
the extent not already required to be provided by Borrower under this Agreement,
Borrower shall use reasonable efforts to satisfy the market standards which may
be reasonably required in the marketplace or by the Rating Agencies in
connection with the sale of the Note or participation therein as part of the
first successful securitization (such sale and/or securitization, the
"Securitization") of rated single or multi-class securities (the "Securities")
secured by or evidencing ownership interests in the Note and this Agreement,
including using reasonable efforts to do (or cause to be done) the following
(but Borrower shall not in any event be required to incur, suffer or accept
(except to a de minimis extent) (i) any lesser rights or greater obligations
than as currently set forth in the Loan Documents, (ii) except as set forth in
this Article XIV, any expense or any liability and (iii) an adverse effect on
Borrower or its direct or indirect owners (including any such Person's tax, REIT
or ERISA treatment), other than to a de minimis extent, and in no event shall
Borrower be required to amend the Citibank Lease):
(a) Provided Information. (i) Provide, at the sole expense of the
holder of the Note, such financial and other information (but not projections)
with respect to the Property, Borrower, Guarantor and any Manager retained by
Borrower pursuant to Section 5.2.14 to the extent such information is reasonably
available to Borrower or Manager, (ii) provide, at the sole expense of the
holder of the Note, business plans (but not projections) and budgets relating to
the Property for the current year, to the extent prepared by Borrower or Manager
retained by Borrower pursuant to Section 5.2.14 and (iii) cooperate with the
holder of the Note (and its representatives) in obtaining, at the sole expense
of the holder of the Note, such site inspection, appraisals, market studies (but
only if the Existing Citibank Lease is no longer in effect), environmental
reviews and reports, engineering reports and other due diligence investigations
of the Property, as may be reasonably requested by the holder of the Note or
reasonably requested by the Rating Agencies but subject to the rights of access
allowed Borrower or its designee under the Citibank Lease (all information
provided by Borrower pursuant to this Section 14.1 together with all other
information heretofore provided by Borrower to Lender in connection with the
Loan, as such may be updated, at Lender's request, in connection with a
Securitization, or hereafter provided by Borrower to Lender in connection with
the Loan or a Securitization, being herein collectively called the "Provided
Information");
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(b) Opinions of Counsel. Use reasonable efforts to cause to be rendered
such customary updates or customary modifications to the Opinions of Counsel
delivered at the closing of the Loan as may be reasonably requested by the
holder of the Note or the Rating Agencies in connection with the Securitization.
Borrower's failure to use reasonable efforts to deliver or cause to be delivered
the opinion updates or modifications required hereby within twenty (20) Business
Days after written request therefor (which request specifies that an Event of
Default may result from a failure to do so) shall constitute an "Event of
Default" hereunder. To the extent any of the foregoing Opinions of Counsel were
required to be delivered in connection with the closing of the Loan, any update
or modification thereof shall be without cost to Borrower. In no event shall
Borrower be required to deliver an Opinion of Counsel with respect to "true
sale", "no fraudulent conveyance" or "10b-5" matters;
(c) Modifications to Loan Documents. Without cost to Borrower, execute
such amendments to the Security Instrument and Loan Documents as may be
reasonably requested by Lender or the Rating Agencies in order to achieve the
required rating or to effect the Securitization (including, without limitation,
modifying the Payment Date, as defined in the Note, to a date other than as
originally set forth in the Note); provided, however, that nothing contained in
this Section 14.1.3 shall result in any economic or other adverse change (except
to a de minimis extent) in the transaction contemplated by the Security
Instrument or the Loan Documents (unless Borrower is made whole by the holder of
Note) or result in any operational changes or otherwise have an adverse effect
on Borrower or its direct or indirect owners (including any such Person's tax,
REIT or ERISA treatment), other than to a de minimis extent, or result in any
inconsistency between the Loan Documents and the Citibank Lease which is not
resolved in favor of the Citibank Lease; and
(d) Cooperation with Rating Agencies. Borrower shall, at Lender's
expense, (i) at Lender's request, meet with representatives of the Rating
Agencies at reasonable times to discuss the business and operations of the
Property and (ii) cooperate with the reasonable requests of the Rating Agencies
in connection with the Property, subject to the terms of the Citibank Lease.
Until the Obligations are paid in full, Borrower shall, if requested by Lender,
provide the Rating Agencies with all financial reports required hereunder and
such other customary information as they shall reasonably request, including
copies of any default notices or other material notices delivered to and
received from Lender hereunder, to enable them to continuously monitor the
creditworthiness of Borrower and to permit an annual surveillance of the implied
credit rating of the Securities.
14.2 Securitization Financial Statements. Borrower acknowledges that
all financial information delivered by Borrower to Lender pursuant to Article XI
may, at Lender's option, be delivered to the Rating Agencies.
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14.3 Securitization Indemnification.
14.3.1 Disclosure Documents. Borrower understands that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including a prospectus, private placement memorandum,
collateral term sheet or a public registration statement (each, a "Disclosure
Document") and may also be included in filings with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "Securities
Act") or the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), or provided or made available to investors or prospective investors in
the Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, upon request, Borrower shall
reasonably cooperate with the holder of the Note, at such holder's sole expense,
in updating the Provided Information for inclusion or summary in the Disclosure
Document by providing all current information pertaining to Borrower and the
Property reasonably requested by Lender and which is customarily provided by
borrowers in connection with similar securitizations.
14.3.2 Indemnification Certificate. In connection with each applicable
Disclosure Document, Borrower agrees to provide, at Lender's reasonable request,
an indemnification certificate (at no material cost to Borrower):
(a) certifying that Borrower has carefully examined those portions of
such memorandum or prospectus, as applicable, reasonably designated in writing
by Lender for Borrower's review pertaining to Borrower, the Property, Guarantor
and/or the Provided Information (which Provided Information relates solely to
the Citibank Lease) and insofar as such sections or portions thereof
specifically pertain to Borrower, the Property, Guarantor or such Provided
Information (such portions so provided by Lender, the "Relevant Portions"), the
Relevant Portions do not (except to the extent specified by Borrower if Borrower
does not agree with the statements therein), as of the date of such certificate,
to Borrower's Knowledge, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading.
(b) indemnifying Lender and the Affiliates of Deutsche Bank Securities,
Inc. (collectively, "DBS") that have prepared the Disclosure Document relating
to the Securitization, each of its directors, each of its officers who have
signed the Disclosure Document and each person or entity who controls DBS within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (collectively, the "DBS Group"), and DBS, together with the DBS Group, each
of their respective directors and each person who controls DBS or the DBS Group,
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act (collectively, the "Underwriter Group") for any actual,
out-of-pocket losses, third party claims, damages (excluding lost profits,
diminution in value and other consequential damages) or liabilities arising out
of third party claims (the "Liabilities") to which any member of the Underwriter
Group may become subject to the extent such Liabilities arise out of or are
based upon any untrue statement of any material fact relating to Borrower,
Guarantor, the Property and/or the Provided Information (which Provided
Information relates solely to the Citibank Lease) contained in the Relevant
Portions and in the Provided Information or arise out of or are
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based upon the omission by Borrower to state therein a material fact required to
be stated in the Relevant Portions in order to make the statements in the
Relevant Portions in light of the circumstances under which they were made, not
misleading (except that (i) Borrower's obligation to indemnify in respect of any
information contained in a Disclosure Document that is derived in part from
information provided by Borrower or any Affiliate of Borrower and in part from
information provided by others unrelated to or not employed by Borrower shall be
limited to any untrue statement or omission of material fact therein known to
Borrower that results directly from an error in any information provided (or
which should have been provided) by Borrower and (ii) Borrower shall have no
responsibility for (A) the failure of any member of the Underwriting Group to
accurately transcribe written information supplied by Borrower or to include
such portions of the Provided Information, (B) any statements contained in any
Disclosure Document to which Borrower or its authorized representatives have
objected or which have been updated pursuant to the above provisions, (C)
descriptions of risks of the offering (including legal or tax risks), (D)
numbers which have been submitted by Borrower and adjusted by the Underwriter
Group from those submitted by Borrower, to the extent of such adjustment and (E)
third party reports, such as environmental and physical condition reports and
information regarding Citibank and its Affiliates (other than the Citibank
Lease)). The indemnity contained in the indemnification certificate will be in
addition to any liability which Borrower may otherwise have.
(c) The indemnification certificate shall provide that Borrower's
liability under clauses (a) and (b) of the indemnification certificate shall be
limited to Liabilities arising out of or based upon any such untrue statement or
omission made in a Disclosure Document in reliance upon and in conformity with
information furnished to Lender by Borrower or its Affiliates or authorized
representatives in connection with the preparation of those portions of the
relevant Disclosure Document pertaining to Borrower, the Property, the Citibank
Lease and/or Guarantor, including financial statements of Borrower.
(d) The indemnification certificate shall also provide that promptly
after receipt by an indemnified party of notice of any claim or the commencement
of any action covered by the indemnification certificate, such indemnified party
will notify the indemnifying party in writing of such claim or the commencement
of such action, but the omission to so notify the indemnifying party will not
relieve the indemnifying party from any liability which the indemnifying party
may have to any indemnified party thereunder except to the extent that failure
to notify causes prejudice to the indemnifying party. In the event that any
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party who sent such notice within a reasonable period of time after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
After such notice from the indemnifying party to such indemnified party of its
assumption of such defense, the indemnifying party shall not be liable for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof; provided, however, if an indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there are any legal defenses available to it that are different
from or in conflict with those available to the indemnifying party, or
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties at the expense of the
indemnifying party. Provided no Event of Default has occurred and is continuing,
Lender shall not be entitled to settle any claim which is being indemnified by
Borrower under this Section 14.3 without the consent of Borrower, which consent
shall not be unreasonably withheld, conditioned or delayed.
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(e) The indemnification certificate shall also provide that in order to
provide for just and equitable contribution in circumstances in which the
indemnity provided for therein is for any reason held to be unenforceable by an
indemnified party in respect of any actual, out-of-pocket losses, claims,
damages or liabilities relating to third party claims (or action in respect
thereof) referred to therein which would otherwise be indemnifiable thereunder,
the indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such actual, out of pocket losses, third party
claims, damages or liabilities (or action in respect thereof) (but excluding
damages for lost profits, diminution in value of the Property and consequential
damages); provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution for Liabilities arising therefrom from any
person who was not guilty of such fraudulent misrepresentation. In determining
the amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) the DBS Group's and Borrower's
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; (iii) the limited responsibilities and obligations of
Borrower as specified herein; and (iv) any other equitable considerations
appropriate in the circumstances.
14.4 Retention of Servicer. Lender reserves the right, at Lender's sole
cost and expense, to retain the Servicer. Lender has advised Borrower that the
Servicer initially retained by Lender shall be Midland Loan Services, Inc.
Borrower shall pay any reasonable third-party fees and expenses, including,
without limitation, special servicing fees, work-out fees, fees of the Servicer
in connection with any proposed modification or assumption of the Loan and
reasonable attorneys fees and disbursements, as applicable, in connection with a
prepayment, Defeasance, assumption or modification of the Loan, special
servicing or work-out of the Loan or enforcement of the Loan Documents. Except
as set forth in the preceding sentence, Lender shall pay the fees of the
Servicer.
XV. ASSIGNMENTS AND PARTICIPATIONS
15.1 Assignment and Acceptance. Lender may assign to one or more
Persons all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or a portion of the
Note); provided that the parties to each such assignment shall execute and
deliver to Lender, for its acceptance and recording in the Register (as
hereinafter defined), an Assignment and Acceptance. In addition, Lender may
participate to one or more Persons all or any portion of its rights and
obligations under this Agreement and the other Loan Documents (including without
limitation, all or a portion of the Note) utilizing such documentation to
evidence such participation and the parties' respective rights thereunder as
Lender, in its sole discretion, shall elect.
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15.2 Effect of Assignment and Acceptance. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in such Assignment and Acceptance, (i) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of Lender, as the case may be, hereunder and such assignee shall be
deemed to have assumed such rights and obligations, and (ii) Lender shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement and the other Loan Documents
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of Lender's rights and obligations under this Agreement and the other
Loan Documents, Lender shall cease to be a party hereto) accruing from and after
the effective date of the Assignment and Acceptance, except with respect to (A)
any payments made by Borrower to Lender pursuant to the terms of the Loan
Documents after the effective date of the Assignment and Acceptance and (B) any
letter of credit, cash deposit or other deposits or security (other than the
Lien of the Security Instrument and the other Loan Documents) delivered to or
for the benefit of or deposited with German American Capital Corporation, as
Lender, for which German American Capital Corporation shall remain responsible
for the proper disposition thereof until such items are delivered to a party who
is qualified as an Approved Bank and agrees to hold the same in accordance with
the terms and provisions of the agreement pursuant to which such items were
deposited. If Lender no longer owns any interest in the Loan, Lender shall
deliver possession of the Note and the other Loan Documents to the assignee and
shall reasonably cooperate to insure that title to all Loan Documents is held in
the name of such assignee.
15.3 Content. By executing and delivering an Assignment and Acceptance,
Lender and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or any other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (ii) Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under any Loan
Documents or any other instrument or document furnished pursuant thereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents; (v) such assignee
appoints and authorizes Lender to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated to
Lender by the terms hereof together with such powers and discretion as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform, in accordance with their terms, all of the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by Lender.
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15.4 Register. Lender shall maintain a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of Lender and each assignee pursuant to this Article XV
and the principal amount of the Loan owing to each such assignee from time to
time (the "Register"). The entries in the Register shall, with respect to such
assignees, be conclusive and binding for all purposes, absent manifest error.
The Register shall be available for inspection by Borrower or any assignee
pursuant to this Article XV at any reasonable time and from time to time upon
reasonable prior written notice.
15.5 Substitute Notes. Upon its receipt of an Assignment and Acceptance
executed by an assignee, together with any Note or Notes subject to such
assignment, Lender shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit M hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register,
and (iii) give prompt written notice thereof to Borrower. Within ten (10)
Business Days after its receipt of such notice, if Lender so requests, Borrower,
at Lender's own expense, shall execute and deliver to Lender in exchange and
substitution for the surrendered Note or Notes a new Note to the order of such
assignee in an amount equal to the portion of the Loan assigned to it and a new
Note to the order of Lender in an amount equal to the portion of the Loan
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate then outstanding principal amount of
such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the Note (modified, however, to the extent necessary so as not to impose
duplicative or increased obligations on Borrower and to delete obligations
previously satisfied by Borrower). The parties shall make such changes to the
Loan Documents as are reasonably required to reflect the substitute Notes as any
party may reasonably request. Notwithstanding the provisions of Section 2.4 or
this Article XV, Borrower shall not be responsible or liable for any additional
taxes, reserves, adjustments or other costs and expenses that are related to, or
arise as a result of, any transfer of the Loan or any interest or participation
therein that arise solely and exclusively from (or would not have been incurred
but for) the transfer of the Loan or any interest or participation therein or
from the execution of the new Note contemplated by this Section 15.5, including,
without limitation, any mortgage tax. Lender and/or the assignees, as the case
may be, shall at all times designate one agent through which Borrower shall
request all approvals and consents required or contemplated by this Agreement
and make all deliveries to and on whose statements Borrower may rely as if
executed by all parties who own an interest in the Note.
15.6 Participations. Each assignee pursuant to this Article XV may sell
participations to one or more Persons (other than Borrower or any of its
Affiliates) in or to all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Note held by it); provided, however, that (i) such assignee's
obligations under this Agreement and the other Loan Documents shall remain
unchanged, (ii) such assignee shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such assignee
shall remain the holder of any such Note for all purposes of this Agreement and
the other Loan Documents, and (iv) Borrower, Lender and the assignees pursuant
to this Article XV shall continue to deal solely and directly with such assignee
in connection with such assignee's rights and obligations under this Agreement
and the other Loan Documents. In the event that more than one (1) party
comprises Lender, Lender shall designate one party to act on the behalf of all
parties comprising Lender in providing approvals and all other necessary
consents under the Loan Documents and on whose statements Borrower may rely.
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15.7 Disclosure of Information. Any assignee pursuant to this Article
XV may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Article XV, disclose to the
assignee or participant or proposed assignee or participant, any information
relating to Borrower furnished to such assignee by or on behalf of Borrower;
provided, however, that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing for the
benefit of Borrower to preserve the confidentiality of any confidential
information received by it.
15.8 Security Interest in Favor of Federal Reserve Bank.
Notwithstanding any other provision set forth in this Agreement or any other
Loan Document, any assignee pursuant to this Article XV may at any time create a
security interest in all or any portion of its rights under this Agreement or
the other Loan Documents (including, without limitation, the amounts owing to it
and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
XVI. RESERVE ACCOUNTS; COLLATERAL LETTERS OF CREDIT
16.1 TI and Leasing Reserve Account.
(a) Borrower shall deposit, or cause to be deposited into the TI and
Leasing Reserve Account, immediately after Borrower's receipt thereof, an amount
equal to any Surrender Fee(s) (as defined in the Citibank Lease) received by
Borrower pursuant to the Citibank Lease (any amount on deposit in the TI and
Leasing Reserve Account, the "TI and Leasing Reserve Amount") and the same shall
be held by Cash Management Bank on Lender's behalf as additional security for
the Loan and disbursed in accordance with this Section 16.1 and Section 3.1.
(b) Provided that no Monetary Default or Event of Default shall have
occurred and be continuing, Lender shall make disbursements from the TI and
Leasing Reserve Account to Borrower from time to time, but not more than once
during each calendar month, to pay for costs (collectively, "TI and Leasing
Costs") incurred by Borrower for (A) tenant improvements or allowances ("TI
Work") required under any New Lease or Lease Modification demising any Surrender
Space (as defined in the Citibank Lease), provided that with respect to any such
New Lease or Lease Modification, as applicable, each such New Lease or Lease
Modification complies with the terms and provisions of this Agreement and (B)
leasing commissions (including any so-called "override" leasing commissions
which may be due and then payable to any leasing or rental agent engaged by
Borrower for the Property in the event that an agent other than such agent shall
also be entitled to a leasing commission) incurred by Borrower in connection
with any such New Lease or Lease Modification ("Leasing Commissions"), provided
that, other than with respect to any commissions which are paid pursuant to any
Management Agreement for which Lender's approval has been obtained, such leasing
commissions and "override" leasing commissions are reasonable and customary for
properties similar to the Property and the portion of the Property leased for
which such leasing commission and "override" leasing commission is due, in each
case in the manner provided herein.
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(c) As between Lender and Borrower, Borrower shall be obligated to fund
directly to such Tenants or third parties, as the case may be, all TI and
Leasing Costs in excess of sums available for disbursement from the TI and
Leasing Reserve Account.
(d) The obligation of Lender to make a disbursement from the TI and
Leasing Reserve Account for TI and Leasing Costs shall be subject to the
satisfaction of the following further conditions precedent before or
concurrently with the date of such disbursement:
(i) Borrower (or Manager) shall have delivered to Lender (if not
previously delivered), without duplication (x) a certified copy of the fully
executed New Lease or Lease Modification, as applicable, to which the applicable
TI and Leasing Costs relate and (y) a certified copy of any related leasing,
brokerage, fee or commission agreement entered into with respect thereto;
(ii) Borrower shall have delivered to Lender, at least five (5)
Business Days prior to the date of the proposed disbursement, an Officer's
Certificate certifying (x) the amounts then due and payable for TI and Leasing
Costs or which have been paid for TI and Leasing Commissions by or on behalf of
Borrower and as to which no previous disbursement under this Section 16.1(d) has
been made (together with an invoice for, or other reasonable evidence of, such
amounts), (y) that all previously disbursed amounts have been paid in accordance
with any prior certification and (z) that all conditions precedent to Borrower's
obligation, as landlord, to fund Borrower's share of the cost of the portion in
question of such tenant work have been satisfied by such Tenant or waived in
good faith by Borrower; and
(iii) no Monetary Default or Event of Default shall have occurred and
is then continuing.
(e) Provided that (i) no Event of Default shall have occurred and is
then continuing, (ii) the Anticipated Repayment Date shall not have occurred,
(iii) the Citibank Tenant shall have exercised its right to surrender any
Surrender Space (as defined in the Citibank Lease) during the Tranche 1
Surrender Notice Period (as defined in the Citibank Lease) and (iv) Borrower
shall have entered into Leases (which Leases have been consented to by Lender or
comply with the terms of Section 8.8) with respect to which Tenants thereunder
have commenced occupying at least ninety percent (90%) of such surrendered
space, then any excess funds remaining in the TI and Leasing Reserve Account
which relate solely to Surrender Fees (as defined in the Citibank Lease) payable
in respect of the exercise of such rights shall be promptly released to Borrower
(it being agreed that in no event shall the terms of this Section 16.1(e)
require Lender to release to Borrower any funds in the TI and Leasing Reserve
Account which relate to Surrender Fees payable in respect of the exercise by the
Citibank Tenant of its right to surrender any Surrender Space (as defined in the
Citibank Lease) during the Tranche 2 Surrender Notice Period (as defined in the
Citibank Lease)).
(f) Provided that (i) no Event of Default shall have occurred and is
then continuing, (ii) the Anticipated Repayment Date shall not have occurred,
(iii) Borrower shall have provided Lender with evidence reasonably satisfactory
to Lender of the substantial completion of all TI Work and the payment of all
Leasing Commissions that are payable with respect to any New Leases and Lease
Modifications entered into by Borrower with respect to any Tranche 2
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Surrender Space (as defined in the Citibank Lease), solely to the extent
necessary for Borrower to satisfy the DSCR Test pursuant to clause (v) below,
(iv) either of the following events shall have occurred: (x) the expiration of
the Tranche 2 Surrender Notice Period (as defined in the Citibank Lease); (y)
the Citibank Tenant shall have exercised its option to surrender 100% of the
Surrender Space (as defined in the Citibank Lease) which the Citibank Tenant is
entitled to surrender during the Tranche 2 Surrender Notice Period (as defined
in the Citibank Lease), whether pursuant to the Existing Citibank Lease or the
Amended and Restated Lease; or (z) the waiver by the Citibank Tenant of the
right to surrender any further space pursuant to such Sections; and (v) after
giving effect to any exercise by the Citibank Tenant of its options to surrender
any space in accordance with Article 4 of the Citibank Lease (and the subsequent
lease-up of such space by Borrower), the DSCR Test shall be satisfied (provided,
however, the condition set forth in this clause (v) shall not be required to be
satisfied if, after the expiration of the Tranche 2 Surrender Notice Period, the
Existing Citibank Lease shall remain in full force and effect), then any excess
funds remaining in the TI and Leasing Reserve Account which relate solely to
Surrender Fees (as defined in the Citibank Lease) payable in respect of the
exercise of such rights shall be promptly released to Borrower (it being agreed
that in no event shall the terms of this Section 16.1(f) require Lender to
release to Borrower any funds in the TI and Leasing Reserve Account which relate
to Surrender Fees payable in respect of the exercise by the Citibank Tenant of
its right to surrender any Surrender Space (as defined in the Citibank Lease)
during the Tranche 1 Surrender Notice Period (as defined in the Citibank Lease))
16.2 Collateral Letters of Credit.
(a) On or prior to each of September 1, 2013, March 1, 2014 and
September 1, 2014, Borrower shall provide a Collateral Letter of Credit to
Lender (i.e., so that on September 1, 2014, the aggregate amount of all
Collateral Letters of Credit provided to Lender under this Section 16.2(a) shall
equal Thirty Million Dollars ($30,000,000)), which Collateral Letters of Credit
shall serve as additional collateral for the Loan and shall be drawn upon as
provided in this Section 16.2 or in the definition of "Letter of Credit", as
applicable.
(b) Upon (i) the occurrence of an Event of Default or (ii) the failure
of Borrower to repay the entire Indebtedness on or prior to the Anticipated
Repayment Date, Lender shall be entitled to draw down on all or a portion of the
Collateral Letters of Credit and apply the proceeds therefrom against any
portion of the Indebtedness or any shortfall in principal or interest payments
required to be made under the Note and, in the case of any failure of Borrower
to repay the entire Indebtedness on or prior to the Anticipated Repayment Date,
Lender may draw down on any of Collateral Letters of Credit and apply the same
on each Payment Date as a partial prepayment of the outstanding principal
Indebtedness. Notwithstanding anything to the contrary contained herein, if
after the earlier to occur of (x) the expiration of the Tranche 2 Surrender
Notice Period (as defined in the Citibank Lease), (y) the date on which the
Citibank Tenant exercises its option to surrender space which results in 100% of
the Surrender Space (as defined in the Citibank Lease) which the Citibank Tenant
is entitled to surrender during the Tranche 2 Surrender Notice Period (as
defined in the Citibank Lease) being surrendered, whether pursuant to the
Existing Citibank Lease or the Amended and Restated Lease, and (z) the Citibank
Tenant waiving any further right to surrender space under such Sections, all of
the Collateral Letter of Credit Release Conditions have been satisfied, then
Lender shall (A) return the Collateral Letters of Credit to Borrower along with
a letter to the issuing bank thereof canceling
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the Collateral Letters of Credit and (B) cause the Cash Management Bank to
transfer all funds then remaining in the Collateral Accounts (other than funds
remaining in the TI and Leasing Reserve Account, which funds shall be disbursed
in accordance with Section 16.1) to the Borrower's Account or as Borrower may
otherwise direct. For purposes of this Section 16.2(b), the term "Collateral
Letter of Credit Release Conditions" means, collectively, the following
conditions:
(I) no Event of Default shall have occurred and be continuing;
(II) the Anticipated Repayment Date shall not have occurred; and
(III) after giving effect to any exercise by the Citibank Tenant of its
options to surrender any space in accordance with Article 4 of the Citibank
Lease (and the subsequent lease-up of such space by Borrower), the DSCR Test
shall be satisfied; provided, however, the condition set forth in this clause
(III) shall not be required to be satisfied if, after the expiration of the
Tranche 2 Surrender Notice Period, the Existing Citibank Lease shall remain in
full force and effect.
16.3 Letters of Credit. Notwithstanding anything to the contrary
contained herein, if at any time any additional security is required to be
posted under any of the Loan Documents and the posting of a Letter of Credit in
respect of such obligation would cause the amount of all outstanding Letters of
Credit issued on the basis of any third party's credit to exceed, in the
aggregate, ten percent (10%) of the Principal Amount, then Borrower shall be
required to post Cash or Cash Equivalents in an amount equal to such excess in
lieu of such Letter of Credit (unless Borrower shall deliver to Lender an
Additional Non-Consolidation Opinion which is reasonably acceptable to Lender).
XVII. DEFAULTS
17.1 Event of Default.
(a) Each of the following events shall constitute an event of default
hereunder (an "Event of Default"):
(i) if (A) the Indebtedness is not paid in full on the Maturity Date,
(B) any regularly scheduled monthly payment of interest due under the Note is
not paid in full on or before the date which is five (5) days after the
applicable Payment Date (or, if such day is not a Business Day, then on the
immediately preceding Business Day), (C) any prepayment of principal due under
this Agreement or the Note (other than a prepayment under Section 4(a)(A) of the
Note) is not paid within five (5) days after the same is due (or, if such day is
not a Business Day, then on the immediately preceding Business Day), (D) the
Liquidated Damages Amount or the Yield Maintenance Premium is not paid when due,
(E) any deposit to the Collection Account is not made within five (5) days after
notice is delivered to Borrower that such deposit was not made on the required
deposit date therefor; or (F) except as to any amount included in (A), (B), (C),
(D) and/or (E) of this clause (i), any other amount payable to Lender pursuant
to this Agreement, the Note or any other Loan Document is not paid in full when
due and payable in accordance with the provisions of the applicable Loan
Document, with such failure continuing for ten (10) Business Days after Lender
delivers written notice thereof to Borrower;
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(ii) subject to Borrower's or the Citibank Tenant's right to contest as
set forth in Section 7.3, (A) if and for so long as the Existing Citibank Lease
is in full force and effect, (1) if any of the Impositions or Other Charges
constituting real estate taxes and assessments are not paid within five (5)
Business Days after the expiration of the sixty (60) day period occurring
immediately after such Impositions or Other Charges become due (plus the number
of additional days during which any Leasehold Mortgagee shall be entitled to
cure such default pursuant to Section 43.02(a) of the Existing Citibank Lease)
or (2) if any of the Impositions or Other Charges not constituting real estate
taxes or assessments are not paid within five (5) Business Days after the
expiration of the sixty (60) day period occurring immediately after Borrower
obtains knowledge that such Impositions or Other Charges have not been paid when
the same became due (plus the number of additional days during which any
Leasehold Mortgagee shall be entitled to cure such default pursuant to Section
43.02(a) of the Existing Citibank Lease); provided, however, if the aggregate
amount of such Impositions or Other Charges under this clause (2) does not
exceed an amount equal to Five Million Dollars ($5,000,000), then the sixty (60)
day period set forth in this clause (2) shall be measured from the date on which
Lender provides Borrower notice of the failure to pay such Impositions or Other
Charges, or (B) from and after the date on which the Existing Citibank Lease has
been amended and restated pursuant to the Amended and Restated Lease, if any of
the Impositions or Other Charges are not paid within ten (10) Business Days
after the same are due;
(iii) (A) if and for so long as (I) the Existing Citibank Lease shall
be in full force and effect, (II) the Citibank Tenant has not exercised the
Insurance Election (as defined in the Existing Citibank Lease) and (III)
Citibank (or its Corporate Successor (as defined in the Existing Citibank
Lease)) has a long-term credit rating of at least "A-" (or its equivalent) by
S&P, or any successor in interest, and Xxxxx'x, or any successor in interest, if
the Citibank Tenant shall fail to obtain the insurance required to be maintained
pursuant to Article 9 of the Existing Citibank Lease within thirty (30) days
after notice thereof from Lender to Borrower of such failure or (B) if the
Existing Citibank Lease shall no longer be in full force and effect and/or the
Citibank Tenant has exercised the Insurance Election (as defined in the Existing
Citibank Lease), if the insurance policies required by Section 6.1 are not kept
in full force and effect, or if an Officer's Certificate attaching true and
correct copies of any of such insurance policies are not delivered to Lender
within thirty (30) days after the later to occur of (x) the effective date of
such insurance policies or (y) the date on which such insurance policies are
readily obtainable from the insurance provider, unless valid certificates
evidencing such insurance policies are provided by the insurance provider to
Lender, in which event the notice and cure periods set forth in clause (xx)
below shall apply;
(iv) if, except as permitted pursuant to Article VIII or elsewhere in
the Loan Documents, (a) any direct or indirect Transfer of any legal, beneficial
or equitable interest in all or any portion of the Property (other than
unintentional violations by Borrower of the provisions of this Loan Agreement
with respect to Transfers of personal property, in which event Borrower shall be
entitled to cure such Default within five (5) days after Lender provides notice
thereof to Borrower), (b) any Transfer of any direct or indirect interest in
Borrower, (c) subject to Section 7.3, any easement, Lien, covenant or
restriction is granted by Borrower or any other Person over
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all or any portion of the Property (other than any Citibank Lien so long as
either (1) the Existing Citibank Lease shall then be in full force and effect,
(2) the Citibank Tenant shall then have a long-term credit rating of at least
"A-" (or its equivalent) by S&P, or any successor in interest, and Xxxxx'x, or
any successor in interest, or (3) in the case of any Liens, the aggregate amount
secured by any such Lien(s) at any one time outstanding shall not exceed an
amount equal to Five Million Dollars ($5,000,000)), or (d) the filing of a
declaration of condominium with respect to the Property;
(v) if any, representation or warranty made by Borrower herein or by
Borrower, Guarantor or any Affiliate of Borrower in any other Loan Document, or
in any report, certificate, financial statement or other instrument, agreement
or document furnished to Lender shall have been false or misleading in any
material respect as of the date the representation or warranty was made;
(vi) if Borrower, Sole Member, any SPE Entity or Guarantor shall make
an assignment for the benefit of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed for
Borrower, Sole Member, any SPE Entity or Guarantor or if Borrower, Sole Member,
any SPE Entity or Guarantor shall be adjudicated a bankrupt or insolvent, or if
any petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Borrower, Sole Member, any SPE
Entity or Guarantor, or if any proceeding for the dissolution or liquidation of
Borrower, Sole Member, any SPE Entity or Guarantor shall be instituted;
provided, however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Borrower, Sole Member, any SPE Entity or
Guarantor upon the same not being discharged, stayed or dismissed within ninety
(90) days;
(viii) if Borrower or Sole Member, as applicable, attempts to assign
its rights under this Agreement or any of the other Loan Documents or any
interest herein or therein in contravention of the Loan Documents;
(ix) with respect to any term, covenant or provision set forth herein
(other than the other subsections of this Section 17.l) which specifically
contains a notice requirement or grace period (where such term, covenant or
provision expressly states that the failure to cure within such notice or grace
period shall be an "Event of Default"), if Borrower, any SPE Entity or Guarantor
shall be in default under such term, covenant or condition after the giving of
such notice and the expiration of such grace period;
(x) if (1) any of the assumptions contained in the Non-Consolidation
Opinion, in any Additional Non-Consolidation Opinion or in any other
non-consolidation opinion delivered to Lender in connection with the Loan, or in
any other non-consolidation delivered subsequent to the closing of the Loan, is
or shall become untrue in any material respect, where such occurrence would, in
Lender reasonable judgment, reasonably be expected to result in a significant
risk of a consolidation of any SPE Entity with a non-SPE Entity; or (2) any of
the assumptions contained in the Non-Consolidation Opinion, in any Additional
Non-Consolidation Opinion or in any other non-consolidation opinion delivered to
Lender in connection with the Loan, or in any other non-consolidation delivered
subsequent to the closing of the Loan, is or shall become untrue in any material
respect, where such occurrence would not, in Lender reasonable judgment,
reasonably be expected to result in a significant risk of a consolidation of any
SPE Entity with a non-SPE Entity and Borrower shall fail to cure same within ten
(10) days after Borrower obtains knowledge thereof;
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(xi) if Borrower shall fail to provide Lender with each of the
Collateral Letters of Credit on or prior to the dates set forth in Section 16.2;
(xii) if (1) Borrower shall fail to comply with any covenants set forth
in Section 5.1.4, Section 5.2.9 and 5.2.22 where such failure would, in Lender
reasonable judgment, reasonably be expected to result in a significant risk of a
consolidation of any SPE Entity with a non-SPE Entity or (2) Borrower shall fail
to comply with any covenants set forth in Section 5.1.4, Section 5.2.9 and
5.2.22 where such failure would not, in Lender reasonable judgment, reasonably
be expected to result in a significant risk of a consolidation of any SPE Entity
with a non-SPE Entity and Borrower shall fail to cure same within ten (10) days
after Borrower obtains knowledge thereof;
(xiii) except as provided clause (xii) above, if Borrower shall fail to
comply with any covenants set forth in Article XI with such failure continuing
for ten (10) Business Days after Lender delivers written notice thereof to
Borrower;
(xiv) if Borrower shall fail to comply with any covenants set forth in
Section 4 or Section 3(d) or Section 8 of the Security Instrument with such
failure continuing for ten (10) Business Days after Lender delivers written
notice thereof to Borrower;
(xv) if this Agreement or any other Loan Document or any Lien granted
hereunder or thereunder, in whole or in part, shall terminate or shall cease to
be effective or shall cease to be a legally valid, binding and enforceable
obligation of Borrower or any Guarantor, or any Lien securing the Indebtedness
shall, in whole or in part, cease to be a perfected first priority Lien, subject
to the Permitted Encumbrances (except in any of the foregoing cases in
accordance with the terms hereof or under any other Loan Document or by reason
of any affirmative act or omission of Lender), and the same would, in Lender's
reasonable judgment, reasonably be expected to result in a Material Adverse
Effect;
(xvi) if the Management Agreement is terminated and a Qualified Manager
is not appointed as a replacement manager pursuant to the provisions of Section
5.2.14 within sixty (60) days after such termination;
(xvii) if (1) for so long as the Existing Citibank Lease is in full
force and effect, Borrower shall default beyond the expiration of any applicable
cure period under any existing easement, covenant or restriction which affects
the Property, the default of which shall have a Material Adverse Effect, and
such default shall not be cured by the date which is three (3) Business Days
after the expiration of any applicable notice and cure period in favor of the
Citibank Tenant under the Existing Citibank Lease or (2) if the Existing
Citibank Lease is no longer in full force and effect, Borrower shall default
beyond the expiration of any applicable cure period under any existing easement,
covenant or restriction which affects the Property, the default of which shall
have a Material Adverse Effect;
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(xviii) if (A) there shall occur any default by Borrower under the
Citibank Lease in the observance or performance of any material term, covenant
or condition of the Citibank Lease and said default is not cured prior to the
date which is ten (10) Business Days after Lender provides written notice
thereof to Borrower and such default shall have a Material Adverse Effect, (B)
any one or more of the events referred to in the Citibank Lease shall occur
which would give the Citibank Tenant the right to terminate the Citibank Lease
(other than in the case of the occurrence of any material casualty or
condemnation) and said default is not cured prior to the date which is ten (10)
Business Days after Lender provides written notice thereof to Borrower, (C) the
Citibank Lease shall be surrendered, terminated or canceled other that pursuant
to the termination or surrender right of the Citibank Tenant provided in the
Citibank Lease, or (D) any of the terms, covenants or conditions of the Citibank
Lease shall in any manner be modified, changed, supplemented, altered or amended
in contradiction of the provisions of Section 8.8 without the prior written
consent of Lender, which consent may be withheld in Lender's sole discretion,
where said default is not cured prior to the date which is ten (10) Business
Days after Lender provides written notice thereof to Borrower;
(xix) except for Permitted Encumbrances or as otherwise permitted
pursuant to Article VIII or elsewhere in the Loan Documents, and subject to
Section 7.3, so long as either (1) the Existing Citibank Lease shall then be in
full force and effect, (2) the Citibank Tenant shall then have a long-term
credit rating of at least "A-" (or its equivalent) by S&P, or any successor in
interest, and Xxxxx'x, or any successor in interest, or (3) in the case of any
Liens, the aggregate amount secured by any such Lien(s) at any one time
outstanding shall not exceed an amount equal to Five Million Dollars
($5,000,000), there shall exist any Citibank Lien encumbering all or any portion
of the Property which Borrower shall fail to remove or discharge by the date
which is three (3) Business Days after the expiration of any applicable notice
and cure period in favor of the Citibank Tenant under the Citibank Lease;
(xx) if (A) the Existing Citibank Lease shall be in full force and
effect and if Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement or of any Loan Document not
specified in subsections (i) to (xix) above, for the period which is five (5)
Business Days after the expiration of the sixty (60) day period after notice
from Lender is delivered to Borrower (plus the number of additional days during
which any Leasehold Mortgagee shall be entitled to cure such default pursuant to
Section 43.02(a) of the Existing Citibank Lease); provided, however, that if
such Default is susceptible of cure but cannot reasonably be cured within such
period and, provided further, that Borrower shall have commenced to cure such
Default within such period and thereafter diligently proceeds to cure the same,
such period shall be extended for such time as is reasonably necessary for
Borrower in the exercise of due diligence to cure such Default or (B) the
Existing Citibank Lease shall have been amended and restated pursuant to the
Amended and Restated Lease and Borrower shall continue to be in Default under
any of the other terms, covenants or conditions of this Agreement or of any Loan
Document not specified in subsections (i) to (xix) above, for thirty (30) days
after notice from Lender; provided, however, that if such Default is susceptible
of cure but cannot reasonably be cured within such thirty (30) day period, and
provided further, that Borrower shall have commenced to cure such Default within
such thirty (30) day period and thereafter diligently proceeds to cure the same,
such thirty (30) day period shall be extended for such time as is reasonably
necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed one hundred eighty (180) days.
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(b) In order to be effective hereunder, all notices of Default shall
reference that the same is a notice of Default being delivered in accordance
with Section 17.1(a) of the Loan Agreement.
(c) Unless waived in writing by Lender, upon the occurrence and during
the continuance of an Event of Default (other than an Event of Default described
in clauses (a)(vi), (vii) or (viii) above) Lender may, without notice or demand,
in addition to any other rights or remedies available to it pursuant to this
Agreement and the other Loan Documents or at law or in equity, take such action
that Lender deems advisable to protect and enforce its rights against Borrower
and in the Property, including, without limitation, (i) declaring immediately
due and payable the entire Principal Amount together with interest thereon and
all other sums due by Borrower under the Loan Documents, (ii) collecting
interest on the Principal Amount at the Default Rate whether or not Lender
elects to accelerate the Note and (iii) enforcing or availing itself of any or
all rights or remedies set forth in the Loan Documents against Borrower and the
Property, including, without limitation, all rights or remedies available at law
or in equity; and upon any Event of Default described in subsections (a)(vi) or
(a)(vii) above, the Indebtedness and all other obligations of Borrower hereunder
and under the other Loan Documents shall immediately and automatically become
due and payable, without notice or demand, and Borrower hereby expressly waives
any such notice or demand, anything contained herein or in any other Loan
Document to the contrary notwithstanding. The foregoing provisions shall not be
construed as a waiver by Lender of its right to pursue any other remedies
available to it under this Agreement, the Security Instrument or any other Loan
Document. Any payment hereunder may be enforced and recovered in whole or in
part at such time by one or more of the remedies provided to Lender in the Loan
Documents.
17.2 Remedies.
(a) Unless waived in writing by Lender, upon the occurrence and during
the continuance of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to Lender against Borrower under
this Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at any
time and from time to time, whether or not all or any of the Indebtedness shall
be declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to the Property. Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth herein
or in the other Loan Documents. Without limiting the generality of the
foregoing, Borrower agrees that, to the maximum extent permitted by law, if an
Event of Default is continuing (i) Lender shall not be subject to any one action
or election of remedies law or rule and (ii) all liens and other rights,
remedies or privileges provided to Lender shall remain in full force and effect
until Lender has exhausted all of its remedies against the Property and the
Security Instrument has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Indebtedness or the Indebtedness has been paid in full.
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(b) Upon the occurrence and during the continuance of an Event of
Default, with respect to the Account Collateral, Lender may:
(i) without notice to Borrower, except as required by law, and at any
time or from time to time, charge, set-off and otherwise apply all or any part
of the Account Collateral against the Obligations, Operating Expenses and/or
Capital Expenditures for the Property or any part thereof;
(ii) in Lender's sole discretion, at any time and from time to time,
exercise any and all rights and remedies available to it under this Agreement,
and/or as a secured party under the UCC;
(iii) demand, collect, take possession of or receipt for, settle,
compromise, adjust, xxx for, foreclose or realize upon the Account Collateral
(or any portion thereof) as Lender may determine in its sole discretion; and
(iv) take all other actions provided in, or contemplated by, this
Agreement.
(c) With respect to Borrower, the Account Collateral and the Property,
nothing contained herein or in any other Loan Document shall be construed as
requiring Lender to resort to the Property for the satisfaction of any of the
Indebtedness, and Lender may seek satisfaction out of the Property or any part
thereof, in its absolute discretion in respect of the Indebtedness. In addition,
Lender shall have the right from time to time to partially foreclose this
Agreement and the Security Instrument in any manner and for any amounts secured
by this Agreement or the Security Instrument then due and payable as determined
by Lender in its sole discretion including, without limitation, the following
circumstances: (i) in the event Borrower defaults beyond any applicable grace
period in the payment of one or more scheduled payments of principal or
interest, Lender may foreclose this Agreement and the Security Instrument to
recover such delinquent payments, or (ii) in the event Lender elects to
accelerate less than the entire outstanding principal balance of the Loan,
Lender may foreclose this Agreement and the Security Instrument to recover so
much of the principal balance of the Loan as Lender may accelerate and such
other sums secured by this Agreement or the Security Instrument as Lender may
elect. Notwithstanding one or more partial foreclosures, the Property shall
remain subject to this Agreement and the Security Instrument to secure payment
of sums secured by this Agreement and the Security Instrument and not previously
recovered.
17.3 Remedies Cumulative; Waivers. The rights, powers and remedies of
Lender under this Agreement and the Security Instrument shall be cumulative and
not exclusive of any other right, power or remedy which Lender may have against
Borrower pursuant to this Agreement or the other Loan Documents, or existing at
law or in equity or otherwise. Lender's rights, powers and remedies may be
pursued singly, concurrently or otherwise, at such time and in such order as
Lender may determine in Lender's sole discretion. No delay or omission to
exercise any remedy, right or power accruing upon an Event of Default shall
impair any such remedy, right or power or shall be construed as a waiver
thereof, but any such remedy, right or power may be exercised from time to time
and as often as may be deemed expedient. A waiver of one Default or Event of
Default with respect to Borrower or Guarantor shall not be construed to be a
waiver of any subsequent Default or Event of Default by Borrower or Guarantor or
to impair any remedy, right or power consequent thereon.
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17.4 Costs of Collection. In the event that after an Event of Default:
(i) the Note or any of the Loan Documents is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal
proceeding; (ii) an attorney is retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under the Note or any of the Loan Documents; or (iii) an
attorney is retained to protect or enforce the lien or any of the terms of this
Agreement, the Security Instrument or any of the Loan Documents; then Borrower
shall pay to Lender all reasonable attorney's fees, costs and expenses actually
incurred in connection therewith, including costs of appeal, together with
interest on any judgment obtained by Lender at the Default Rate.
XVIII. SPECIAL PROVISIONS
18.1 Exculpation.
18.1.1 Exculpated Parties. Except as set forth in this Section 18.1 (as
to Borrower) or the Recourse Guaranty (as to Guarantor), no personal liability
shall be asserted, sought or obtained by Lender or enforced against (i)
Borrower, (ii) any Affiliate of Borrower, (iii) any Person owning, directly or
indirectly, any legal or beneficial interest in Borrower or any Affiliate of
Borrower or (iv) any direct or indirect partner, member, principal, officer,
Controlling Person, beneficiary, trustee, advisor, shareholder, employee, agent,
Affiliate or director of any Persons described in clauses (i) through (iii)
above (collectively, the "Exculpated Parties") and none of the Exculpated
Parties shall have any personal liability (whether by suit, deficiency judgment
or otherwise) in respect of the Obligations, this Agreement, the Security
Instrument, the Note, the Property or any other Loan Document, or the making,
issuance or transfer thereof, all such liability, if any, being expressly waived
by Lender. The foregoing limitation shall not in any way limit or affect
Lender's right to any of the following and Lender shall not be deemed to have
waived any of the following:
(a) Foreclosure of the lien of this Agreement and the Security
Instrument in accordance with the terms and provisions set forth herein and in
the Security Instrument;
(b) Action against any other security at any time given to secure the
payment of the Note and the other Obligations;
(c) Exercise of any other remedy set forth in this Agreement or in any
other Loan Document which is not inconsistent with the terms of this Section
18.1;
(d) Any right which Lender may have under Sections 506(a), 506(b),
1111(b) or any other provisions of the Bankruptcy Code to file a claim for the
full amount of the Indebtedness secured by this Agreement and the Security
Instrument or to require that all collateral shall continue to secure all of the
Indebtedness owing to Lender in accordance with the Loan Documents; or
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(e) The liability of any given Exculpated Party with respect to any
separate written guaranty or agreement given by any such Exculpated Party in
connection with the Loan (including, without limitation, the Recourse Guaranty);
it being agreed that as of the Closing Date there are no such separate
guaranties or agreements other than the Recourse Guaranty.
18.1.2 Carveouts From Non-Recourse Limitations. Notwithstanding the
foregoing or anything in this Agreement or any of the Loan Documents to the
contrary, there shall at no time be any limitation on Borrower's or, to the
extent provided in the Recourse Guaranty, Guarantor's liability for the payment,
to Lender of:
(a) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of the fraudulent acts of Borrower or any Affiliate of
Borrower;
(b) Proceeds which Borrower or any Affiliate of Borrower has received
and to which Lender is entitled pursuant to the terms of this Agreement or any
of the Loan Documents to the extent the same have not been applied toward
payment of the Indebtedness, or used for the repair or replacement of the
Property in accordance with the provisions of this Agreement;
(c) all loss, damage, cost or expense incurred by Lender and arising
from any intentional misrepresentation of Borrower or any Affiliate of Borrower;
(d) any misappropriation of Surrender Fees or Security Deposits by any
Manager, Borrower or any Affiliate of Borrower;
(e) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of all or any part of the Property, the Account Collateral
being encumbered by any voluntary Lien in violation of the Loan Documents;
(f) after the occurrence and during the continuance of an Event of
Default, any Rents collected by Borrower or any Affiliate of Borrower (other
than Rent sent to the Collection Account or paid directly to Lender or in
accordance with its direction) and not applied to payment of the Obligations or
used to pay normal and verifiable Operating Expenses of the Property or
otherwise applied in a manner permitted under the Loan Documents;
(g) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of any physical damage to the Property from intentional waste
committed by Borrower or any Affiliate of Borrower;
(h) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of any Transfer of the Property or direct or indirect interests
in Borrower in violation of any of the provisions of Article VIII;
(i) any and all liabilities, obligations, losses, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees, causes of
action, suits, claims, demands and adjustments of any nature or description
whatsoever) which may at any time be imposed upon, incurred by or awarded
against Lender, in the event (and arising out of such circumstances) that (x) an
involuntary case is commenced against Borrower under the Bankruptcy Code with
the collusion of Borrower or any of its Affiliates or (y) an order for relief is
entered with respect to Borrower under the Bankruptcy Code through the actions
of Borrower or any of its Affiliates at a time when Borrower is able to pay its
debts as they become due unless Borrower and Guarantor shall have received an
opinion of independent counsel that the members of Borrower have a fiduciary
duty to seek such an order for relief; or
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(j) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of the failure of Borrower to comply with any of the provisions
of Section 5.1.4 or 5.1.5 which result in a consolidation of any SPE Entity with
a non-SPE Entity, other than any provision which requires Borrower to maintain
adequate capitalization or prohibits Borrower from causing another Person to
become insolvent unless such Person becomes insolvent by reason of the failure
of Borrower to comply with any of the other provisions of Section 5.1.4 or
5.1.5.
(k) reasonable attorney's fees and expenses incurred by Lender in
connection with any successful suit filed on account of any of the foregoing
clauses (a) through (j).
XIX. MISCELLANEOUS
19.1 Survival. This Agreement and all covenants, indemnifications,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by Lender of the Loan and the
execution and delivery to Lender of the Note, and shall continue in full force
and effect so long as all or any of the Indebtedness is outstanding and unpaid,
or assigned, released or satisfied pursuant to Section 2.3.3 or 9.1, as
applicable, unless a longer period is expressly set forth herein or in the other
Loan Documents. Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on behalf
of Borrower, shall inure to the benefit of the successors and assigns of Lender.
If Borrower consists of more than one person, the obligations and liabilities of
each such person hereunder and under the other Loan Documents shall be joint and
several.
19.2 Lender's Discretion. Whenever pursuant to this Agreement, Lender
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Lender, the decision of Lender to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall be (except as is otherwise specifically herein provided) in
the sole discretion of Lender and final and conclusive.
19.3 Governing Law.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN
WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
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ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF
OR RELATING TO THIS AGREEMENT MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
QUEENS COUNTY, NEW YORK OR IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX XXXX, XXXXX OF
NEW YORK PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
EACH OF LENDER AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER
HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND EACH OF LENDER AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
19.4 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
or of the Note, or of any other Loan Document, or consent to any departure
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to or
demand on Borrower shall entitle Borrower to any other or future notice or
demand in the same, similar or other circumstances.
19.5 Delay Not a Waiver. Neither any failure nor any delay on the part
of Lender in insisting upon strict performance of any term, condition, covenant
or agreement, or exercising any right, power, remedy or privilege hereunder, or
under the Note or under any other Loan Document, or any other instrument given
as security therefor, shall operate as or constitute a waiver thereof, nor shall
a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement, the Note or any other Loan Document, Lender shall
not be deemed to have waived any right either to require prompt payment when due
of all other amounts due under this Agreement, the Note or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.
19.6 Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by (a)
certified or registered United States mail, postage prepaid, return receipt
requested, (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery or (c) for notices,
other than a notice of Default, telecopier (with answer back acknowledged),
addressed as follows (or at such other address and Person as shall be designated
from time to time by any party hereto, as the case may be, in a written notice
to the other parties hereto in the manner provided for in this Section 19.6):
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If to Lender: German American Capital Corporation
00 Xxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx and General Counsel
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
With a copy to: Midland Loan Services, Inc.
00000 Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Portfolio Management
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
With a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
If to Borrower: c/o Reckson Associates Realty Corp.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
With a copy to: Reckson Associates Realty Corp.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
With a copy to: Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
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All notices, elections, requests and demands under this Agreement shall be
effective and deemed received upon the earliest of (i) the actual receipt of the
same by personal delivery or otherwise, (ii) one (1) Business Day after being
deposited with a nationally recognized overnight courier service as required
above, (iii) three (3) Business Days after being deposited in the United States
mail as required above or (iv) if facsimile delivery is permitted, as provided
above, on the day sent if sent by facsimile with confirmation on or before 5:00
p.m. New York time on any Business Day or on the next Business Day if so
delivered after 5:00 p.m. New York time or on any day other than a Business Day.
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given as herein required shall be deemed
to be receipt of the notice, election, request, or demand sent.
19.7 TRIAL BY JURY. BORROWER AND LENDER AND ALL PERSONS CLAIMING BY,
THROUGH OR UNDER THEM, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, THE SECURITY INSTRUMENT, THE
NOTE OR ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR
FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT (AS
NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE; AND BORROWER AND LENDER HEREBY AGREE AND CONSENTS THAT AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY.
BORROWER AND LENDER ACKNOWLEDGE THAT THEY HAVE CONSULTED WITH LEGAL COUNSEL
REGARDING THE MEANING OF THIS WAIVER AND BORROWER ACKNOWLEDGES THAT THIS WAIVER
IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE LOAN. THIS WAIVER SHALL SURVIVE
THE REPAYMENT OF THE LOAN.
19.8 Headings. The Article and/or Section headings and the Table of
Contents in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.
19.9 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
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19.10 Preferences. To the extent Borrower makes a payment or payments
to Lender, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied shall be revived and continue in full force and effect, as if
such payment or proceeds had not been received by Lender.
19.11 Waiver of Notice. Borrower shall not be entitled to any notices
of any nature whatsoever from Lender except with respect to matters for which
this Agreement or the other Loan Documents specifically and expressly provide
for the giving of notice by Lender to Borrower and except with respect to
matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which
this Agreement or the other Loan Documents do not specifically and expressly
provide for the giving of notice by Lender to Borrower.
19.12 Expenses; Indemnity
(a) Borrower covenants and agrees to pay or, if Borrower fails to pay,
to reimburse, Lender within ten (10) Business Days after receipt of written
notice from Lender (together with evidence reasonably required to establish
same) for all reasonable costs and expenses (including reasonable attorneys'
fees and disbursements) incurred by Lender in connection with: (i) the
preparation, negotiation, execution and delivery of this Agreement and the other
Loan Documents and the origination of the Loan and all the costs of furnishing
all opinions by counsel for Borrower (including without limitation any opinions
requested by Lender pursuant to this Agreement); (ii) Lender's ongoing
performance of and compliance with all agreements and conditions contained in
this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date; (iii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters as required herein or under the other Loan Documents; (iv)
the filing and recording fees and expenses, mortgage recording taxes (subject to
Borrower's right to contest same in accordance herewith), title insurance and
other similar expenses incurred in creating and perfecting the Lien in favor of
Lender pursuant to this Agreement and the other Loan Documents; (v) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation (subject to Borrower's
rights under Section 19.12(b)), in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, the Property, or any other
security given for the Loan; (vi) enforcing any obligations of or collecting any
payments due from Borrower under this Agreement, the other Loan Documents or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a work-out or of any insolvency
or bankruptcy proceedings; and (vii) after the occurrence and during the
continuance of an Event of Default, where the Existing Citibank Lease is no
longer in full force and effect and/or the Citibank Tenant has elected the
Insurance Election (as defined in the Existing Citibank Lease) thereunder,
procuring any insurance policies required pursuant to Section 6.1.11, where
Lender is entitled thereunder to procure same; provided, however, that Borrower
shall not be liable for the payment of any such costs and expenses to the extent
the same arise (A) by reason of the gross negligence, illegal acts, fraud or
willful misconduct of Lender or (B) in connection with a Securitization, other
than Borrower's internal
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administrative costs and external legal costs (but the foregoing shall not
require Borrower to pay any legal costs which Lender is expressly obligated to
pay pursuant to Article XIV or the standard monthly servicing fees of the
Servicer). Notwithstanding anything to the contrary contained above, except as
set forth in Section 14.4, Borrower shall not be liable under this Section
19.12(a) for any fees of the Servicer. Any cost and expenses due and payable to
Lender may be paid from any amounts in the Collection Account or the Holding
Account.
(b) Subject to the non-recourse provisions of Section 18.1, Borrower
shall protect, indemnify and save harmless Lender, and all officers, directors,
stockholders, members, partners, employees, agents, successors and assigns
thereof (collectively, the "Indemnified Parties") from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (including all reasonable attorneys' fees and expenses actually
incurred) imposed upon or incurred by or asserted against the Indemnified
Parties or the Property or any part of its interest therein, by reason of the
occurrence or existence of any of the following (to the extent Proceeds payable
on account of the following shall be inadequate; it being understood that in no
event will the Indemnified Parties be required to actually pay or incur any
costs or expenses as a condition to the effectiveness of the foregoing
indemnity) prior to (i) the acceptance by Lender or its designee of a
deed-in-lieu of foreclosure with respect to the Property, or (ii) an Indemnified
Party or its designee taking possession or control of the Property or (iii) the
foreclosure of the Security Instrument, except to the extent caused by the
actual willful misconduct or gross negligence of the Indemnified Parties (other
than such willful misconduct or gross negligence imputed to the Indemnified
Parties because of their interest in the Property): (1) ownership of Borrower's
interest in the Property, or any interest therein, or receipt of any Rents or
other sum therefrom, (2) any accident, injury to or death of any persons or loss
of or damage to property occurring on or about the Property or any Appurtenances
thereto, (3) any design, construction, operation, repair, maintenance, use,
non-use or condition of the Property or Appurtenances thereto, including claims
or penalties arising from violation of any Legal Requirement or Insurance
Requirement, as well as any claim based on any patent or latent defect, whether
or not discoverable by Lender, any claim the insurance as to which is
inadequate, and any Environmental Claim, (4) any Default under this Agreement or
any of the other Loan Documents or any failure on the part of Borrower to
perform or comply with any of the terms of any Lease or REA within the
applicable notice or grace periods, (5) any performance of any labor or services
or the furnishing of any materials or other property in respect of the Property
or any part thereof, (6) any negligence or tortious act or omission on the part
of Borrower or any of its agents, contractors, servants, employees, sublessees,
licensees or invitees, (7) any contest referred to in Section 7.3 hereof, (8)
any obligation or undertaking relating to the performance or discharge of any of
the terms, covenants and conditions of the landlord contained in the Leases, or
(9) the presence at, in or under the Property or the Improvements of any
Hazardous Materials in violation of any Environmental Law. Any amounts the
Indemnified Parties are legally entitled to receive under this Section which are
not paid within fifteen (15) Business Days after written demand therefor by the
Indemnified Parties or Lender, setting forth in reasonable detail the amount of
such demand and the basis therefor, shall bear interest from the date of demand
(or such later date as such Indemnified Party shall have paid or incurred the
amount in question) at the Default Rate, and shall, together with such interest,
be part of the Indebtedness and secured by the Security Instrument. In case any
action, suit or proceeding is brought against the Indemnified Parties by reason
of any such occurrence, Borrower shall at Borrower's expense resist and defend
such action, suit or proceeding or will cause the same to be resisted and
115
defended by counsel for the Citibank Tenant, by counsel for the insurer of the
liability or by counsel designated by Borrower (unless, in the latter case,
reasonably disapproved by Lender promptly after Lender has been notified of such
counsel designated by Borrower); provided, however, that nothing herein shall
compromise the right of Lender (or any Indemnified Party) to appoint its own
counsel at Borrower's expense for its defense with respect to any action which
in its reasonable opinion presents a conflict or potential conflict between
Lender and Borrower that would make such separate representation advisable;
provided further that if Lender shall have appointed separate counsel pursuant
to the foregoing, Borrower shall not be responsible for the expense of
additional separate counsel of any Indemnified Party unless in the reasonable
opinion of Lender a conflict or potential conflict exists between such
Indemnified Party and Lender. So long as an insurer or the Citibank Tenant is
defending such claim, action, suit or proceeding, or Borrower is resisting and
defending such claim, action, suit or proceeding as provided above in a
commercially reasonable manner, Lender and the Indemnified Parties shall not be
entitled to settle or adjust such claim, action, suit or proceeding without
Borrower's consent which shall not be unreasonably withheld or delayed, and
claim the benefit of this Section with respect to such claim, action, suit or
proceeding and Lender agrees that it will not settle or adjust any such claim,
action, suit or proceeding without the consent of Borrower; provided, however,
that if (1) an insurer or the Citibank Tenant is not defending such claim,
action, suit or proceeding, (2) Borrower is not diligently defending such claim,
action, suit or proceeding in a prudent and commercially reasonable manner as
provided above, and (3) Lender has provided Borrower with thirty (30) days'
prior written notice, or shorter period if mandated by the requirements of
applicable law, and opportunity to correct such determination, then Lender may
settle or adjust such claim, action, suit or proceeding and claim the benefit of
this Section 19.12 with respect to settlement or adjustment of such claim,
action, suit or proceeding with the consent of Borrower, such consent not to be
unreasonably withheld. Any Indemnified Party will give Borrower prompt notice
after such Indemnified Party obtains actual knowledge of any potential claim and
of any action, suit or proceeding which is brought, in each case, for which such
Indemnified Party is entitled to indemnification hereunder. The Indemnified
Parties shall not settle or adjust any action, suit, proceeding or claim as to
which it is indemnified hereunder without notice to Borrower and only when it is
entitled to do so.
(c) Provided no Event of Default has occurred and is continuing, each
Indemnified Party will reasonably cooperate with any defense of any such action,
suit, proceeding or claim as to which it is indemnified hereunder (at no cost to
such Indemnified Party), including pursuant to Section 18.02 of the Citibank
Lease. Subject to the provisions of Section 19.12(b) and provided no Event of
Default has occurred and is continuing, Borrower may settle any such action,
suit, proceeding or claim without the consent of the applicable Indemnified
Party so long as such Indemnified Party is fully and finally released from any
liability in connection therewith.
19.13 Exhibits and Schedules Incorporated. The Exhibits and Schedules
annexed hereto are hereby incorporated herein as a part of this Agreement with
the same effect as if set forth in the body hereof.
19.14 Offsets, Counterclaims and Defenses. Any assignee of Lender's
interest in and to this Agreement, the Note and the other Loan Documents shall
take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower.
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19.15 Liability of Assignees of Lender. No assignee of Lender shall
have any personal liability, directly or indirectly, under or in connection with
this Agreement or any other Loan Document or any amendment or amendments hereto
made at any time or times, heretofore or hereafter, any different than the
liability of Lender hereunder. In addition, no assignee shall have at any time
or times hereafter any personal liability, directly or indirectly, under or in
connection with or secured by any agreement, lease, instrument, encumbrance,
claim or right affecting or relating to the Property or to which the Property is
now or hereafter subject any different than the liability of Lender hereunder.
The limitation of liability provided in this Section 19.15 is (i) in addition
to, and not in limitation of, any limitation of liability applicable to the
assignee provided by law or by any other contract, agreement or instrument, and
(ii) shall not apply to any assignee's gross negligence or willful misconduct.
19.16 No Joint Venture or Partnership; No Third Party Beneficiaries.
(a) Borrower and Lender intend that the relationships created hereunder
and under the other Loan Documents be solely that of borrower and lender.
Nothing herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.
19.17 Publicity. All news releases, publicity or advertising (except
that which is required by law (including any applicable securities laws or rules
of any securities self-regulating organizations) by Borrower or its Affiliates
through any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents, to Lender, or any of
its Affiliates shall be subject to the prior written approval of Lender, not to
be unreasonably withheld or delayed. Lender acknowledges that Borrower may issue
a press release with respect to the Loan upon the closing thereof. Such press
release shall be subject to the consent of Lender, which consent shall not be
unreasonably withheld or delayed.
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19.18 Waiver of Marshalling of Assets. To the fullest extent permitted
by law, Borrower, for itself and its successors and assigns, waives all rights
to a marshalling of the assets of Borrower, Borrower's members and others with
interests in Borrower and of the Property, and agrees not to assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the right
of Lender under the Loan Documents to a sale of the Property for the collection
of the Indebtedness without any prior or different resort for collection or of
the right of Lender to the payment of the Indebtedness out of the net proceeds
of the Property in preference to every other claimant whatsoever.
19.19 Waiver of Counterclaim and other Actions. Borrower hereby
expressly and unconditionally waives, in connection with any suit, action or
proceeding brought by Lender on this Agreement, the Note, the Security
Instrument or any Loan Document, any and every right it may have to (i)
interpose any counterclaim therein (other than a counterclaim which can only be
asserted in the suit, action or proceeding brought by Lender on this Agreement,
the Note, the Security Instrument or any Loan Document and cannot be maintained
in a separate action) and (ii) have any such suit, action or proceeding
consolidated with any other or separate suit, action or proceeding.
19.20 Conflict; Construction of Documents; Reliance. In the event of
any conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or Affiliate of Lender of any
equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender's exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.
19.21 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents and unless specifically set forth in
a writing contemporaneous herewith the terms, conditions and provisions of any
and all such prior agreements do not survive execution of this Agreement.
19.22 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which shall
constitute one document.
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19.23 Notice of Certain Occurrences. In addition to all other notices
required to be given by Borrower hereunder, Borrower shall give notice to Lender
promptly upon the occurrence of: (a) any Default; (b) any litigation or
proceeding affecting Borrower or the Property or any part thereof in which the
amount involved is $1,000,000 (either individually or in the aggregate) or more
and not covered by insurance or in which injunctive or similar relief is sought
and likely to be obtained; (c) a material adverse change in the business,
operations, property or financial condition of Borrower or the Property; and (d)
any material default by the Citibank Tenant under the Citibank Lease.
19.24 Citibank Lease. Borrower shall act in a commercially reasonable
manner to enforce its rights against the Citibank Tenant under the Citibank
Lease in the event of a material default by the Citibank Tenant thereunder.
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119
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
BORROWER:
RECKSON COURT SQUARE, LLC, a Delaware limited
liability company
By: One Court Square Holdings, LLC, a Delaware
limited liability company, its sole member
By: Reckson Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Reckson Associates Realty Corp., a
Maryland corporation, its general partner
By: _________________________________________
Name:
Title:
[Lender's signature appears on following page]
LENDER:
GERMAN AMERICAN CAPITAL
CORPORATION, a Maryland corporation
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title: