EXHIBIT 10.10
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LOAN AGREEMENT
Dated as of October 1, 1998
Between
77 West Xxxxxx Limited Partnership
as Borrower
and
XXXXXX BROTHERS HOLDINGS INC.,
DOING BUSINESS AS LEHMAN CAPITAL,
A DIVISION OF XXXXXX BROTHERS HOLDINGS INC.
as Lender
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TABLE OF CONTENTS
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I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION............................... 1
Section 1.1 Definitions............................................ 1
Section 1.2 Principles of Construction............................. 10
II. GENERAL TERMS......................................................... 10
Section 2.1 Loan Commitment; Disbursement to Borrower.............. 10
2.1.1 The Loan............................................... 10
2.1.2 Disbursement to Borrower............................... 11
2.1.3 The Note, Mortgage and Loan Documents.................. 11
2.1.4 Use of Proceeds........................................ 11
Section 2.2 Interest; Loan Payments; Late Payment Charge........... 11
2.2.1 Interest Generally..................................... 11
2.2.2 Interest Calculation................................... 11
2.2.3 Determination of Interest Rate......................... 11
2.2.4 Payments of Interest................................... 13
2.2.5 Payment on Maturity Date............................... 13
2.2.6 Payments after Default................................. 13
2.2.7 Late Payment Charge.................................... 13
2.2.8 Usury Savings.......................................... 14
Section 2.3 Prepayments............................................ 14
2.3.1 Voluntary Prepayments.................................. 14
2.3.2 Mandatory Prepayments.................................. 14
Section 2.4 Intentionally Omitted.................................. 14
Section 2.5 Release of Property.................................... 14
Section 2.6 Manner of Making Payments; Cash Management............. 15
2.6.1 Deposits into Lockbox Account.......................... 15
2.6.2 Making of Payments..................................... 15
2.6.3 Payments Received in the Lockbox Account............... 15
2.6.4 No Deductions, etc..................................... 15
III.CONDITIONS PRECEDENT.................................................. 16
Section 3.1 Conditions Precedent to Closing........................ 16
3.1.1 Representations and Warranties; Compliance with
Conditions............................................. 16
3.1.2 Loan Agreement and Note................................ 16
3.1.3 Delivery of Loan Documents; Title Insurance; Reports;
Leases................................................. 16
3.1.4 Related Documents...................................... 17
3.1.5 Delivery of Organizational Documents................... 17
3.1.6 Opinions of Borrower's Counsel......................... 17
3.1.7 Budgets................................................ 18
3.1.8 Basic Carrying Costs................................... 18
3.1.9 Intentionally Omitted.................................. 18
3.1.10 Payments............................................... 18
3.1.11 Intentionally Omitted.................................. 18
3.1.12 Tenant Estoppels....................................... 18
3.1.13 Transaction Costs...................................... 18
3.1.14 Material Adverse Change................................ 18
3.1.15 Leases and Rent Roll................................... 19
3.1.16 Subordination and Attornment........................... 19
3.1.17 Tax Lot................................................ 19
3.1.18 Physical Conditions Reports............................ 19
3.1.19 Management Agreement................................... 19
3.1.20 Appraisal.............................................. 19
3.1.21 Financial Statements................................... 19
3.1.22 Further Documents...................................... 19
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IV. REPRESENTATIONS AND WARRANTIES........................................ 19
Section 4.1 Borrower Representations............................... 19
4.1.1 Organization........................................... 20
4.1.2 Proceedings............................................ 20
4.1.3 No Conflicts........................................... 20
4.1.4 Litigation............................................. 20
4.1.5 Agreements............................................. 20
4.1.6 Title.................................................. 21
4.1.7 No Bankruptcy Filing................................... 21
4.1.8 Full and Accurate Disclosure........................... 21
4.1.9 No Plan Assets......................................... 22
4.1.10 Compliance............................................. 22
4.1.11 Financial Information.................................. 22
4.1.12 Condemnation........................................... 22
4.1.13 Federal Reserve Regulations............................ 22
4.1.14 Utilities and Public Access............................ 23
4.1.15 Not a Foreign Person................................... 23
4.1.16 Separate Lots.......................................... 23
4.1.17 Assessments............................................ 23
4.1.18 Enforceability......................................... 23
4.1.19 No Prior Assignment.................................... 23
4.1.20 Insurance.............................................. 23
4.1.21 Use of Property........................................ 24
4.1.22 Licenses............................................... 24
4.1.23 Flood Zone............................................. 24
4.1.24 Physical Condition..................................... 24
4.1.25 Boundaries............................................. 24
4.1.26 Leases................................................. 24
4.1.27 Intentionally Omitted.................................. 25
4.1.28 Loan to Value.......................................... 25
4.1.29 Filing and Recording Taxes............................. 25
4.1.30 Single Purpose Entity/Separateness..................... 25
4.1.31 Management Agreement................................... 28
4.1.32 Ground Lease........................................... 28
4.1.33 Illegal Activity....................................... 30
4.1.34 No Change in Facts or Circumstances; Disclosure........ 30
Section 4.2 Survival of Representations............................ 30
V. BORROWER COVENANTS.................................................... 30
Section 5.1 Affirmative Covenants.................................. 30
Section 5.2 Negative Covenants..................................... 37
VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS................... 40
Section 6.1 Insurance.............................................. 40
Section 6.2 Casualty............................................... 43
Section 6.3 Condemnation........................................... 43
Section 6.4 Restoration............................................ 44
VII.RESERVE FUNDS......................................................... 48
Section 7.1 Intentionally Omitted.................................. 48
Section 7.2 Tax Escrow Fund........................................ 48
Section 7.3 Intentionally Deleted.................................. 49
Section 7.4 Termination Account.................................... 49
Section 7.5 Reserve Funds, Generally............................... 49
VIII. DEFAULTS............................................................ 49
Section 8.1 Event of Default....................................... 49
Section 8.2 Remedies............................................... 51
Section 8.3 Remedies Cumulative; Waivers........................... 52
IX. SPECIAL PROVISIONS.................................................... 53
Section 9.1 Sale of Notes and Securitization....................... 53
Section 9.2 Securitization Indemnification......................... 56
Section 9.3 Intentionally Omitted.................................. 56
Section 9.4 Exculpation............................................ 56
Section 9.5 Termination of Manager................................. 58
Section 9.6 Servicer............................................... 58
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X. MISCELLANEOUS......................................................... 58
Section 10.1 Survival............................................... 58
Section 10.2 Lender's Discretion.................................... 59
Section 10.3 Governing Law.......................................... 59
Section 10.4 Modification, Waiver in Writing........................ 60
Section 10.5 Delay Not a Waiver..................................... 60
Section 10.6 Notices................................................ 60
Section 10.7 Trial by Jury.......................................... 61
Section 10.8 Headings............................................... 62
Section 10.9 Severability........................................... 62
Section 10.10 Preferences............................................ 62
Section 10.11 Waiver of Notice....................................... 62
Section 10.12 Remedies of Borrower................................... 63
Section 10.13 Expenses; Indemnity.................................... 63
Section 10.14 Schedules Incorporated................................. 64
Section 10.15 Offsets, Counterclaims and Defenses.................... 64
Section 10.16 No Joint Venture or Partnership; No Third Party
Beneficiaries.......................................... 64
Section 10.17 Publicity.............................................. 65
Section 10.18 Waiver of Marshalling of Assets;....................... 65
Section 10.19 Waiver of Counterclaim................................. 65
Section 10.20 Conflict; Construction of Documents; Reliance.......... 65
Section 10.21 Brokers and Financial Advisors......................... 66
Section 10.22 Prior Agreements....................................... 66
SCHEDULES
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Schedule I - Rent Roll
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of October 1, 1998 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
"Agreement"), between XXXXXX BROTHERS HOLDINGS INC., doing business as Lehman
Capital, a division of Xxxxxx Brothers Holdings Inc., having an address at Three
World Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lender") and 77 WEST XXXXXX
LIMITED PARTNERSHIP, an Illinois limited partnership, having an address at 00
Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 ("Borrower").
W I T N E S S E T H :
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WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and
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
Section 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly required
or unless the context clearly indicates a contrary intent:
"ACQUIRED PROPERTY" shall have the meaning set forth in Section 9.1(e)(i)
hereof.
"ACQUIRED PROPERTY STATEMENTS" shall have the meaning set forth in Section
9.1(e)(i) hereof.
"AFFILIATE" shall mean, as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by or is under common control
with such Person or is a director or executive officer of such Person or of an
Affiliate of such Person.
"AGENT" shall mean LaSalle National Bank, N.A. or any successor thereto
acting as Agent under the Cash Management Agreement.
"ALTA" shall mean American Land Title Association, or any successor
thereto.
"ANNUAL BUDGET" shall mean the operating budget, including all planned
capital expenditures, for the Property prepared by Borrower for the applicable
Fiscal Year or other period.
"APPLICABLE INTEREST RATE" shall mean six and three-eighths percent
(6.375%) for the initial Interest Period, and thereafter shall mean a
fluctuating rate per annum equal to LIBOR plus one hundred (100) basis points,
as such rate may change on each Determination Date for the next succeeding
Interest Period (or the Substitute Rate, if applicable).
"ASSIGNMENT OF LEASES" shall mean that certain first priority Assignment of
Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to
Lender, as assignee, assigning to Lender all of Borrower's interest in and to
the Leases and Rents of the Property as security for the Loan, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.
"ASSIGNMENT OF MANAGEMENT AGREEMENT" shall mean that certain Assignment of
Management Agreement and Subordination of Management Fees dated the date hereof
among Lender, Borrower and Manager, as the same may amended, restated, replaced,
supplemented or otherwise modified from time to time.
"AWARD" shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation in respect of all or any part of the Property.
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"BASIC CARRYING COSTS" shall mean, the sum of the following costs
associated with the Property for the relevant Fiscal Year or payment period: (i)
Taxes and (ii) Insurance Premiums.
"BORROWER" shall mean 77 West Xxxxxx Limited Partnership, an Illinois
limited partnership, together with its successors and assigns.
"BREAKAGE COSTS" shall have the meaning set forth in 2.2.3(d) hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York, New York are not open for
business.
"CAPITAL EXPENDITURES" shall mean, for any period, the amount expended for
items capitalized under GAAP.
"CASH MANAGEMENT AGREEMENT" shall mean that certain Cash Management
Agreement by and among Borrower, Manager, Agent and Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time, relating to funds deposited in the Lockbox Account.
"CASUALTY" shall have the meaning specified in Section 6.2 hereof.
"CASUALTY CONSULTANT" shall have the meaning set forth in Section
6.4(b)(iii) hereof.
"CASUALTY RETAINAGE" shall have the meaning set forth in Section 6.4(b)(iv)
hereof.
"CLOSING DATE" shall mean the date of the funding of the Loan.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, as it may
be further amended from time to time, and any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"CONDEMNATION" shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
"DEBT" shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums due to Lender in respect of the Loan under the
Note, this Agreement, the Mortgage or any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular period of time,
scheduled principal and/or interest payments under the Note.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate per annum equal
to the lesser of (a) the maximum rate permitted by applicable law, or (b) three
percent (3%) above the Applicable Interest Rate.
"DETERMINATION DATE" shall mean, with respect to any Interest Period, the
date that is (2) London Business Days prior to the beginning of such Interest
Period.
"ENVIRONMENTAL INDEMNITY" shall mean that certain Environmental and
Hazardous Substance Indemnification Agreement executed by Borrower in connection
with the Loan for the benefit of Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 8.1(a)
hereof.
"EVEREN LEASE" shall mean that certain Lease between Borrower and Everen
Securities, Inc., formerly Xxxxxx Securities Group, Inc. for approximately
241,225 square feet of office space at the Property.
"EXCHANGE ACT FILING" shall have the meaning set forth in Section
9.1(e)(vi) hereof.
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"EXCULPATED PARTIES" shall have the meaning set forth in Section 9.4.
"EXTRAORDINARY EXPENSE" shall have the meaning set forth in Section
5.1.11(e) hereof.
"FISCAL YEAR" shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as of the date of the applicable financial statement.
"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.
"GROSS INCOME FROM OPERATIONS" shall mean all income, computed in
accordance with GAAP, derived from the ownership and operation of the Property
from whatever source, including, but not limited to, Rents, utility charges,
escalations, forfeited security deposits, interest on credit accounts, service
fees or charges, license fees, parking fees, rent concessions or credits, and
other required pass-throughs but excluding sales, use and occupancy or other
taxes on receipts required to be accounted for by Borrower to any Governmental
Authority, refunds or other reimbursements required to be made to tenants and
uncollectible accounts, sales of furniture, fixtures and equipment, Insurance
Proceeds (other than business interruption or other loss of income insurance),
Awards, unforfeited security deposits, utility and other similar deposits and
any disbursements to Borrower from the Reserve Funds. Gross income shall not be
diminished as a result of the Mortgage or the creation of any intervening estate
or interest in the Property or any part thereof.
"GROUND LEASE" shall mean that certain Lease executed by American National
Bank and Trust Company, as Trustee Under Trust Agreement Dated November 26, 1985
and known as Trust Number 66121, as Lessor, and Borrower, as Lessee, dated March
7, 1991, which Lease was recorded on March 18, 1991 as Document 91119739.
"IMPROVEMENTS" shall have the meaning set forth in the granting clause of
the Mortgage.
"INDEBTEDNESS" of a Person, at a particular date, means the sum (without
duplication) at such date of (a) indebtedness or liability for borrowed money;
(b) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (c) obligations for the deferred purchase price of property or
services (including trade obligations); (d) obligations under letters of credit;
(e) obligations under acceptance facilities; (f) all guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds, to invest in any Person or entity, or otherwise to assure a
creditor against loss; and (g) obligations secured by any Liens, whether or not
the obligations have been assumed.
"INDEPENDENT DIRECTOR" shall have the meaning set forth in Section
4.1.30(p).
"INSOLVENCY OPINION" shall mean that certain opinion letter dated the date
hereof delivered by Winston & Xxxxxx in connection with the Loan.
"INSURANCE PREMIUMS" shall have the meaning set forth in Section 6.1(b)
hereof.
"INSURANCE PROCEEDS" shall have the meaning set forth in Section 6.4(b)
hereof.
"INTEREST PERIOD" shall mean (a) the period commencing on the date hereof
and ending on October 31, 1998 for the first period hereunder, and (b) for each
period thereafter, the period commencing on the first (1st) day of each calendar
month during the term of the Loan and ending on the last day of such calendar
month.
"LEASE" shall mean any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in the
Property, and every modification, amendment or other agreement relating to such
lease, sublease, subsublease, or other agreement entered into in connection with
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such lease, sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.
"LEGAL REQUIREMENTS" shall mean all federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting the
Property or any part thereof, or the construction, use, alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force, and
all permits, licenses and authorizations and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting the Property or any part thereof, including, without limitation, any
which may (a) require repairs, modifications or alterations in or to the
Property or any part thereof, or (b) in any way limit the use and enjoyment
thereof.
"LENDER" shall mean Xxxxxx Brothers Holdings Inc., doing business as Lehman
Capital, a division of Xxxxxx Brothers Holdings Inc., together with its
successors and assigns.
"LENDER'S NOTICE" shall have the meaning set forth in Section 2.2.3(b)
hereof.
"LIABILITIES" shall have the meaning set forth in Section 9.2(a) hereof.
"LIBOR" shall mean, with respect to each Interest Period, the rate
(expressed as a percentage per annum and rounded upward, if necessary, to the
next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month period,
that appears on Telerate Page 3750 (or the successor thereto) as of 11:00 a.m.,
London time, on the related Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London time, on such Determination Date,
LIBOR shall be the arithmetic mean of the offered rates (expressed as a
percentage per annum) for deposits in U.S. dollars for a one-month period that
appear on the Reuters Screen Libor Page as of 11:00 a.m., London time, on such
Determination Date, if at least two such offered rates so appear. If fewer than
two such offered rates appear on the Reuters Screen Libor Page as of 11:00 a.m.,
London time, on such Determination Date, Lender shall request the principal
London Office of any four major reference banks in the London interbank market
selected by Lender to provide such bank's offered quotation (expressed as a
percentage per annum) to prime banks in the London interbank market for deposits
in U.S. dollars for a one-month period as of 11:00 a.m., London time, on such
Determination Date for the amounts of not less than U.S. $1,000,000. If at least
two such offered quotations are so provided, LIBOR shall be the arithmetic mean
of such quotations. If fewer than two such quotations are so provided, Lender
shall request any three major banks in New York City selected by Lender to
provide such bank's rate (expressed as a percentage per annum) for loans in U.S.
dollars to leading European banks for a one-month period as of approximately
11:00 a.m., New York City time on the applicable Determination Date for amounts
of not less than U.S. $1,000,000. If at least two such rates are so provided,
LIBOR shall be the arithmetic mean of such rates. LIBOR shall be determined by
Lender or its agent.
"LICENSES" shall have the meaning set forth in Section 4.1.22 hereof.
"LIEN" shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance, charge or transfer of,
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
mechanic's, materialmen's and other similar liens and encumbrances.
"LOAN" shall mean the loan made by Lender to Borrower pursuant to this
Agreement.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Leases, the Environmental Indemnity, the
Subordination of Management Agreement, the Cash Management Agreement and all
other documents executed and/or delivered in connection with the Loan.
"LOCKBOX ACCOUNT" shall mean the account, if any, specified in the Cash
Management Agreement for deposit of Rents and other receipts from the Property.
"LONDON BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
any other day on which commercial banks in London, England are not open for
business.
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"MANAGEMENT AGREEMENT" shall mean the management agreement entered into by
and between Borrower and the Manager, pursuant to which the Manager is to
provide management and other services with respect to the Property.
"MANAGER" shall mean Prime Group Realty, L.P., or any permitted successor
managers of the Property.
"MATURITY DATE" shall mean October 1, 1999, or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.
"MAXIMUM LEGAL RATE" shall mean the maximum nonusurious interest rate, if
any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.
"MORTGAGE" shall mean that certain first priority Mortgage and Security
Agreement, dated the date hereof, executed and delivered by Borrower as security
for the Loan and encumbering the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"NET CASH FLOW" for any period shall mean the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.
"NET CASH FLOW AFTER DEBT SERVICE" for any period shall mean the amount
obtained by subtracting Debt Service for such period from Net Cash Flow for such
period.
"NET OPERATING INCOME" means the amount obtained by subtracting Operating
Expenses from Gross Income from Operations.
"NET PROCEEDS" shall have the meaning set forth in Section 6.4(b) hereof.
"NOTE" shall mean that certain note of even date herewith in the principal
amount of One Hundred Seventy Million and No/100 Dollars ($170,000,000), made by
Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"OFFERING DOCUMENT" shall have the meaning set forth in Section 9.1(e)(iv)
hereof.
"OFFERING DOCUMENT DATE" shall have the meaning set forth in Section
9.1(e)(iv) hereof.
"OFFICERS' CERTIFICATE" shall mean a certificate delivered to Lender by
Borrower which is signed by an authorized executive officer of the general
partner of Borrower.
"OPERATING EXPENSES" shall mean the total of all expenditures, computed in
accordance with GAAP, of whatever kind relating to the operation, maintenance
and management of the Property that are incurred on a regular monthly or other
periodic basis, including without limitation, utilities, ordinary repairs and
maintenance, insurance, license fees, property taxes and assessments,
advertising expenses, management fees, payroll and related taxes, computer
processing charges, operational equipment lease payments or other lease
payments, and other similar costs, but excluding depreciation, Debt Service,
Capital Expenditures and contributions to the Reserve Funds.
"OTHER CHARGES" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.
"PAYMENT DATE" shall mean the first (1st) day of each calendar month during
the term of the Loan or, if such day is not a Business Day, the immediately
succeeding Business Day.
"PERMITTED ENCUMBRANCES" shall mean collectively, (a) the Liens and
security interests created by the Loan Documents, (b) all Liens, encumbrances
and other matters disclosed in the Title Insurance Policy, (c) Liens, if any,
for Taxes imposed by any Governmental Authority not yet due or delinquent, and
(d) such other title and survey exceptions as Lender has approved or may approve
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in writing in Lender's sole discretion, which Permitted Encumbrances in the
aggregate do not materially adversely affect the value or use of the Property or
Borrower's ability to repay the Loan.
"PERSONAL PROPERTY" shall have the meaning set forth in the granting clause
of the Mortgage.
"PHYSICAL CONDITIONS REPORT" shall mean a report prepared by a company
satisfactory to Lender regarding the physical condition of the Property,
satisfactory in form and substance to Lender in its reasonable discretion.
"POLICIES" shall have the meaning specified in Section 6.1(b) hereof.
"PRIME ENTITIES" shall have the meaning set forth in Section 4.1.30(p)(iii)
hereof.
"PROPERTY" shall mean the parcel of real property, the Improvements thereon
and all personal property owned by Borrower and encumbered by the Mortgage,
together with all rights pertaining to such property and Improvements, as more
particularly described in the Granting Clauses of the Mortgage and referred to
therein as the "Property".
"PROVIDED INFORMATION" shall have the meaning set forth in Section 9.1(a)
hereof.
"RATING AGENCIES" shall mean each of Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc., Xxxxx'x Investors Service, Inc., Duff & Xxxxxx
Credit Rating Co. and Fitch IBCA, Inc., or any other nationally-recognized
statistical rating agency which has been approved by Lender.
"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 or its
agents or employees from any and all sources arising from or attributable to the
Property, and proceeds, if any, from business interruption or other loss of
income insurance.
"RESERVE FUNDS" shall mean the Tax Escrow Fund and any other escrow fund
established by the Loan Documents.
"RESTORATION" shall have the meaning set forth in Section 6.2 hereof.
"SECURITIES" shall have the meaning set forth in Section 9.1 hereof.
"SECURITIZATION" shall have the meaning set forth in Section 9.1 hereof.
"SERVICER" shall have the meaning set forth in Section 9.6 hereof.
"SERVICING AGREEMENT" shall have the meaning set forth in Section 9.6
hereof.
"SEVERED LOAN DOCUMENTS" shall have the meaning set forth in Section 8.2(c)
hereof.
"SPC PARTY" shall have the meaning set forth in Section 4.1.30(o) hereof.
"STATE" shall mean the State or Commonwealth in which the Property or any
part thereof is located.
"SUBSTITUTE RATE" shall have the meaning set forth in Section 2.2.3(b)
hereof.
"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 Insurance Policy, and containing a certification of such
surveyor satisfactory to Lender.
"TAX ESCROW FUND" shall have the meaning set forth in Section 7.2 hereof.
"TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property or part thereof.
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"TERMINATION ACCOUNT" shall have the meaning set forth in Section 7.4
hereof.
"TITLE INSURANCE POLICY" shall mean an ALTA mortgagee title insurance
policy in the form (acceptable to Lender) (or, if the Property is in a State
which does not permit the issuance of such ALTA policy, such form as shall be
permitted in such State and acceptable to Lender) issued with respect to the
Property and insuring the lien of the Mortgage.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in the State.
"U.S. OBLIGATIONS" shall mean direct non-callable obligations of the United
States of America.
Section 1.2 PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and schedules in
or to this Agreement unless otherwise specified. All uses of the word
"including" shall mean "including, without limitation" unless the context shall
indicate otherwise. Unless otherwise specified, the words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
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
Section 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER.
2.1.1 THE LOAN. Subject to and upon the terms and conditions set forth
herein, Lender hereby agrees to make and Borrower hereby agrees to accept the
Loan on the Closing Date.
2.1.2 DISBURSEMENT TO BORROWER. Borrower may request and receive only one
borrowing hereunder in respect of the Loan and any amount borrowed and repaid
hereunder in respect of the Loan may not be reborrowed.
2.1.3 THE NOTE, MORTGAGE AND LOAN DOCUMENTS. The Loan shall be evidenced by
the Note and secured by the Mortgage, the Assignment of Leases and the other
Loan Documents.
2.1.4 USE OF PROCEEDS. Borrower shall use the proceeds of the Loan to (a)
repay and discharge any existing loans relating to the Property, (b) pay all
past-due Basic Carrying Costs, if any, in respect of the Property, (c) make
deposits into the Reserve Funds on the Closing Date in the amounts provided
herein, (d) pay costs and expenses incurred in connection with the Closing of
the Loan, as approved by Lender, (e) fund any working capital requirements of
the Property, and (f) distribute the balance, if any, to Borrower, which may be
distributed to its partners.
Section 2.2 INTEREST; LOAN PAYMENTS; LATE PAYMENT CHARGE.
2.2.1 INTEREST GENERALLY. Interest on the outstanding principal balance of
the Loan shall accrue from the Closing Date to but excluding the Maturity Date
at the Applicable Interest Rate.
2.2.2 INTEREST CALCULATION. Interest on the outstanding principal balance
of the Loan shall be calculated by multiplying (a) the actual number of days
elapsed in the period for which the calculation is being made by (b) the
Applicable Interest Rate divided by three hundred sixty (360) by (c) the
outstanding principal balance.
2.2.3 DETERMINATION OF INTEREST RATE.
(a) Subject to the terms and conditions of this Section 2.2.3 Borrower
shall pay interest on the outstanding principal amount of the Loan at LIBOR plus
one hundred (100) basis points for each Interest Period following the initial
Interest Period. Each determination by Lender of the Applicable Interest Rate
shall be conclusive and binding for all purposes, absent manifest error.
(b) If any requirement of law or any change therein or in the
interpretation or application thereof which is imposed or occurs after the date
hereof shall make it unlawful for Lender to make or maintain the LIBOR rate as
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contemplated hereunder and such unlawfulness cannot be avoided by Lender through
reasonable efforts, Lender shall, by notice to Borrower ("Lender's Notice"),
offer to establish an interest rate at Lender's then customary spread, taking
into account the size of the Loan, the Net Operating Income from the Property
and the creditworthiness of Borrower, above a published index used for variable
rate loans as reasonably determined by Lender (the "Substitute Rate"). By
written notice to Lender within thirty (30) days of receipt of Lender's Notice,
Borrower may accept such offer in which case the Applicable Interest Rate shall
be a rate equal to the Substitute Rate in effect from time to time until such
illegality or condition shall cease to exist, in Lender's good faith
determination. If Borrower does not timely accept such offer, interest shall
accrue at the Substitute Rate and Borrower shall, within ninety (90) days of
Lender's Notice, pay to Lender on a Payment Date the entire outstanding
principal of the Loan, the accrued and unpaid interest and all other amounts
then due and payable under the Loan.
(c) In the event that Lender shall have determined (which determination
shall be conclusive and binding upon Borrower absent manifest error) that (a) by
reason of circumstances affecting the interbank eurodollar market, adequate and
reasonable means do not exist for ascertaining the LIBOR rate, and (b) the LIBOR
rate determined pursuant to the terms and provisions of this Agreement for the
Interest Period does not accurately reflect the cost to Lender of making or
maintaining the amount of the Loan, then Lender shall by a Lender's Notice offer
a Substitute Rate. By written notice to Lender within thirty (30) days of
receipt of Lender's Notice, Borrower may accept such offer in which case the
Libor Rate shall be a rate equal to the Substitute Rate in effect from time to
time until such circumstances shall cease to exist, in Lender's good faith
determination. If Borrower does not timely accept such offer, interest shall
accrue at the Substitute Rate and Borrower shall, within ninety (90) days of
Lender's Notice, pay to Lender on a Payment Date the entire outstanding
principal of the Loan, the accrued and unpaid interest and all other amounts
then due and payable under the Loan.
(d) Borrower agrees to indemnify Lender and to hold Lender harmless from
any loss or expense which Lender sustains or incurs as a consequence of (i) any
default by Borrower in payment of the principal of or interest at the LIBOR
rate, including, without limitation, any such loss or expense arising from
interest or fees payable by Lender to lenders of funds obtained by it in order
to maintain the Loan at the LIBOR rate, (ii) any prepayment (whether voluntary
or mandatory) of the Loan on a day that (A) is not the Payment Date immediately
following the last day of an Interest Period with respect thereto or (B) is the
Payment Date immediately following the last day of an Interest Period with
respect thereto if Borrower did not give the prior written notice of such
prepayment required pursuant to the terms of this Agreement, including, without
limitation, such loss or expense arising from interest or fees payable by Lender
to lenders of funds obtained by it in order to maintain the LIBOR rate hereunder
and (iii) the conversion (for any reason whatsoever, whether voluntary or
involuntary) of the Applicable Interest Rate to the Substitute Rate, including,
without limitation, such loss or expenses arising from interest or fees payable
by Lender to lenders of funds obtained by it in order to maintain the Loan at
the LIBOR rate (the amounts referred to in clauses (i), (ii) and (iii) are
herein referred to collectively as "Breakage Costs"). This provision shall
survive payment of the Note in full and the satisfaction of all other
obligations of Borrower under this Agreement and the other Loan Documents.
2.2.4 PAYMENTS OF INTEREST. Borrower shall pay to Lender (a) on the first
Payment Date following the Closing Date, an amount equal to interest only on the
outstanding principal balance of the Loan from the Closing Date up to but not
including such Payment Date and (b) on each Payment Date thereafter up to but
not including the Maturity Date, an amount equal to interest only on the
outstanding principal balance of the Loan from the prior Payment Date up to but
not including such Payment Date, in each case calculated in accordance with the
provisions of this Section 2.2.
2.2.5 PAYMENT ON MATURITY DATE. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance, all accrued and unpaid interest
and all other amounts due hereunder and under the Note, the Mortgage and the
other Loan Documents.
2.2.6 PAYMENTS AFTER EVENT OF DEFAULT. Upon the occurrence and during the
continuance of an Event of Default, (a) 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
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cure periods contained herein and (b) Lender shall be entitled to receive and
Borrower shall pay to Lender on each Payment Date an amount equal to the Net
Cash Flow After Debt Service for the prior month, such amount to be applied by
Lender to the payment of the Debt in such order as Lender shall determine in its
sole discretion, including, without limitation, alternating applications thereof
between interest and principal. Interest at the Default Rate and Net Cash Flow
After Debt Service shall both be computed from the occurrence of the Event of
Default until the actual receipt and collection of the Debt (or that portion
thereof that is then due). To the extent permitted by applicable law, interest
at the Default Rate shall be added to the Debt, shall itself accrue interest at
the same rate as the Loan and shall be secured by the Mortgage. This paragraph
shall not be construed as an agreement or privilege to extend the date of the
payment of the Debt, nor as a waiver of any other right or remedy accruing to
Lender by reason of the occurrence of any Event of Default; the acceptance of
any payment of Net Cash Flow After Debt Service shall not be deemed to cure or
constitute a waiver of any Event of Default; and Lender retains its rights under
this Note to accelerate and to continue to demand payment of the Debt upon the
happening of any Event of Default, despite any payment of Net Cash Flow After
Debt Service.
2.2.7 LATE PAYMENT CHARGE. If any principal, interest or any other sums due
under the Loan Documents is not paid by Borrower on the date on which it is due,
Borrower shall pay to Lender upon demand an amount equal to the lesser of five
percent (5%) of such unpaid sum or the maximum amount permitted by applicable
law in order to defray the expense incurred by Lender in handling and processing
such delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgage and the
other Loan Documents to the extent permitted by applicable law.
2.2.8 USURY SAVINGS. This Agreement and the Note are subject to the express
condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of the Maximum Legal Rate,
the Applicable Interest Rate or the Default Rate, as the case may be, shall be
deemed to be immediately reduced to the Maximum Legal Rate and all previous
payments in excess of the Maximum Legal Rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.
Section 2.3 PREPAYMENTS.
2.3.1 VOLUNTARY PREPAYMENTS. Borrower may, at its option and upon ten (10)
Business Days prior written notice from Borrower to Lender, prepay in whole or
in part the Debt without payment of any prepayment premium or consideration.
Such payment, if not paid on a Payment Date, shall include interest that would
have accrued on such prepayment through the next Payment Date and any applicable
Breakage Costs.
2.3.2 MANDATORY PREPAYMENTS. On each date on which Borrower actually
receives any Net Proceeds, if Lender is not obligated to make such Net Proceeds
available to Borrower for the restoration of the Property, Borrower shall prepay
the outstanding principal balance of the Note in an amount equal to one hundred
percent (100%) of such Net Proceeds on the next Payment Date. Any partial
prepayment under this Section shall be applied to the last payments of principal
due under the Loan.
Section 2.4 INTENTIONALLY OMITTEd.
Section 2.5 RELEASE OF PROPERTY. Except as set forth in this Section 2.5,
no repayment or prepayment or defeasance of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the release of
any Lien of the Mortgage on the Property. Lender shall, upon the written request
and at the expense of Borrower, upon payment in full of all principal and
interest on the Loan and all other amounts due and payable under the Loan
Documents in accordance with the terms and provisions of the Note and this Loan
Agreement, release the Lien of the Mortgage on the Property. Borrower shall
deliver to Lender a statutory release form appropriate in the jurisdiction in
which the Property is located.
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Section 2.6 MANNER OF MAKING PAYMENTS; CASH MANAGEMENT.
2.6.1 DEPOSITS INTO LOCKBOX ACCOUNT. Borrower shall cause all Rents from
the Property to be deposited into the Lockbox Account in accordance with the
Cash Management Agreement. Without limitation of the foregoing, Borrower shall,
and shall cause Manager to, (a) deliver irrevocable written instructions to all
Tenants under Leases to deliver all Rents payable thereunder directly to the
Lockbox Account, and (b) deposit all amounts received by Borrower or Manager
constituting Rents or other revenue of any kind from the Property into the
Lockbox Account within one (1) Business Day of receipt thereof. Disbursements
from the Lockbox Account will be made in accordance with the terms and
conditions of this Agreement and the Cash Management Agreement. Lender shall
have sole dominion and control over the Lockbox Account and, after deposits for
all reserves as set forth in the Cash Management Agreement, Borrower shall have
the right to make withdrawals therefrom as provided in the Cash Management
Agreement.
2.6.2 MAKING OF PAYMENTS. Each payment by Borrower hereunder or under the
Note shall be made in funds settled through the New York Clearing House
Interbank Payments System or other funds immediately available to Lender by 2:00
p.m., New York City time, on the date such payment is due, to Lender by deposit
to such account as Lender may designate by written notice to Borrower. Whenever
any payment hereunder or under the Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the first Business Day
succeeding such scheduled due date.
2.6.3 PAYMENTS RECEIVED IN THE LOCKBOX ACCOUNT. Notwithstanding anything to
the contrary contained in this Agreement or the other Loan Documents, and
provided no Event of Default has occurred and is continuing, Borrower's
obligations with respect to the monthly payment of principal and interest and
amounts due for the Reserve Funds shall be deemed satisfied to the extent
sufficient amounts are deposited in the Lockbox Account to satisfy such
obligations on the dates each such payment is required, regardless of whether
any of such amounts are so applied by Lender.
2.6.4 NO DEDUCTIONS, ETC. All payments made by Borrower hereunder or under
the Note or the other Loan Documents shall be made irrespective of, and without
any deduction for, any setoff, defense or counterclaims.
III. CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO CLOSING.
The obligation of Lender to make the Loan hereunder is subject to the
fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date:
3.1.1 REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS. The
representations and warranties of 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 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.
3.1.2 LOAN AGREEMENT AND NOTE. Lender shall have received a copy of this
Agreement and the Note, in each case, duly executed and delivered on behalf of
Borrower.
3.1.3 DELIVERY OF LOAN DOCUMENTS; TITLE INSURANCE; REPORTS; LEASES.
(a) Mortgage, Assignment of Leases. Lender shall have received from
Borrower fully executed and acknowledged counterparts of the Mortgage and the
Assignment of Leases and evidence that counterparts of the Mortgage and
Assignment of Leases have been delivered to the title company for recording, in
the reasonable judgment of Lender, so as to effectively create upon such
recording valid and enforceable Liens upon the Property, of the requisite
priority, in favor of Lender (or such other trustee as may be required or
desired under local law), subject only to the Permitted Encumbrances and such
other Liens as are permitted pursuant to the Loan Documents. Lender shall have
also received from Borrower fully executed counterparts of the Environmental
Indemnity, Cash Management Agreement and Assignment of Management Agreement.
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(b) Title Insurance. Lender shall have received a Title Insurance Policy
issued by a title company acceptable to Lender and dated as of the Closing Date,
with letter confirmation of reinsurance reasonably acceptable to Lender. Such
Title Insurance Policy shall (i) provide coverage in amounts satisfactory to
Lender, (ii) insure Lender that the Mortgage creates a valid lien on the
Property of the requisite priority, free and clear of all exceptions from
coverage other than Permitted Encumbrances and standard exceptions and
exclusions from coverage (as modified by the terms of any endorsements), (iii)
contain such endorsements and affirmative coverages as Lender may reasonably
request, and (iv) name Lender as the insured. The Title Insurance Policy shall
be assignable. Lender also shall have received evidence that all premiums in
respect of such Title Insurance Policy have been paid.
(c) Survey. Lender shall have received a current title survey for the
Property, certified to the title company and Lender and their successors and
assigns, in form and content satisfactory to Lender and prepared by a
professional and properly licensed land surveyor satisfactory to Lender in
accordance with the 1992 Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys. The survey shall meet the classification of an "Urban Survey" and
the following additional items from the list of "Optional Survey
Responsibilities and Specifications" (Table A) should be added to each survey:
2, 3, 4, 6, 8, 9, 10, 11 and 13. Such survey shall reflect the same legal
description contained in the Title Insurance Policy referred to in clause (ii)
above and shall include, among other things, a metes and bounds description of
the real property comprising part of the Property reasonably satisfactory to
Lender. The surveyor's seal shall be affixed to the survey and the surveyor
shall provide a certification for each survey in form and substance acceptable
to Lender.
(d) Insurance. Lender shall have received valid certificates of insurance
for the policies of insurance required hereunder, satisfactory to Lender in its
reasonable discretion, and evidence of the payment of all premiums payable in
accordance with the premium payment schedule.
(e) Environmental Reports. Lender shall have received an environmental
report in respect of the Property satisfactory to Lender.
(f) Zoning. Lender shall have received, at Lender's option, an ALTA 3.1
zoning endorsement for the Title Insurance Policy.
(g) Intentionally Omitted.
3.1.4 RELATED DOCUMENTS. Each additional document not specifically
referenced herein, but relating to the transactions contemplated herein, shall
have been duly authorized, executed and delivered by all parties thereto and
Lender shall have received and approved certified copies thereof.
3.1.5 DELIVERY OF ORGANIZATIONAL DOCUMENTS. On or before the Closing Date,
Borrower shall deliver or cause to be delivered to Lender copies certified by
Borrower of all organizational documentation related to Borrower and/or the
formation, structure, existence, good standing and/or qualification to do
business, as Lender may request in its sole discretion, including, without
limitation, good standing certificates, qualifications to do business in the
appropriate jurisdictions, resolutions authorizing the entering into of the Loan
and incumbency certificates as may be requested by Lender.
3.1.6 OPINIONS OF BORROWER'S COUNSEL. Lender shall have received opinions
of Borrower's counsel (a) with respect to non-consolidation, true sale or true
contribution, and fraudulent transfer issues, and (b) with respect to due
execution, authority, enforceability of the Loan Documents and such other
matters as Lender may require, all such opinions containing customary
assumptions and qualifications and otherwise in form, scope and substance
satisfactory to Lender and Lender's counsel in their reasonable discretion.
3.1.7 BUDGETS. Borrower shall have delivered, and Lender shall have
approved, the Annual Budget for the current Fiscal Year.
3.1.8 BASIC CARRYING COSTS. Borrower shall have paid all Basic Carrying
Costs relating to the Property which are in arrears, including without
limitation, (a) accrued but unpaid insurance premiums relating to the Property,
(b) currently due Taxes (including any in arrears) relating to the Property, and
(c) currently due Other Charges relating to the Property, which amounts shall be
funded with proceeds of the Loan.
3.1.9 INTENTIONALLY OMITTED.
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3.1.10 PAYMENTS. All payments, deposits or escrows required to be made or
established by Borrower under this Agreement, the Note and the other Loan
Documents on or before the Closing Date shall have been paid or paid from Loan
proceeds.
3.1.11 INTENTIONALLY OMITTED.
3.1.12 TENANT ESTOPPELS. Lender shall have received an executed tenant
estoppel letter, which shall be in form and substance satisfactory to Lender,
from, (a) each tenant paying base rent in an amount equal to or exceeding five
percent (5%) of the Gross Income from Operations from the Property and (b)
disregarding the area leased by those described in clause (a) lessees of not
less than seventy-five percent (75%) of the remaining gross leasable area of the
Property.
3.1.13 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 fees and
costs of Lender's counsel and all other third party out-of-pocket expenses
incurred in connection with the origination of the Loan.
3.1.14 MATERIAL ADVERSE CHANGE. There shall have been no material adverse
change in the financial condition or business condition of Borrower or the
Property since the date of the most recent financial statements delivered to
Lender. The income and expenses of the Property, the occupancy leases thereof,
and all other features of the transaction shall be as represented to Lender
without material adverse change. Neither Borrower nor any of its general
partners shall be the subject of any bankruptcy, reorganization, or insolvency
proceeding.
3.1.15 LEASES AND RENT ROLL. Lender shall have received copies of all
tenant leases, certified copies of any tenant leases as requested by Lender and
certified copies of all ground leases affecting the Property. Lender shall have
received a current certified rent roll of the Property, reasonably satisfactory
in form and substance to Lender.
3.1.16 SUBORDINATION AND ATTORNMENT. Lender shall have received appropriate
instruments acceptable to Lender subordinating the following three (3) Leases
affecting the Property: Xxxxx, Day, Xxxxxx and Xxxxx; Everen Securities, Inc.;
and X.X. Xxxxxxxxx & Sons Company.
3.1.17 TAX LOT. Lender shall have received evidence that the Property
constitutes one (1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.
3.1.18 PHYSICAL CONDITIONS REPORTS. Lender shall have received a Physical
Conditions Report with respect to the Property, which report shall be reasonably
satisfactory in form and substance to Lender.
3.1.19 MANAGEMENT AGREEMENT. Lender shall have received a certified copy of
the Management Agreement with respect to the Property which shall be
satisfactory in form and substance to Lender.
3.1.20 APPRAISAL. Lender shall have received an appraisal of the Property,
which shall be satisfactory in form and substance to Lender.
3.1.21 FINANCIAL STATEMENTS. Lender shall have received a balance sheet
with respect to the Property for the two most recent Fiscal Years and statements
of operations with respect to the Property for the three most recent Fiscal
Years.
3.1.22 FURTHER DOCUMENTS. Lender or its counsel shall have received such
other and further approvals, opinions, documents and information as Lender or
its counsel may have reasonably requested including the Loan Documents in form
and substance satisfactory to Lender and its counsel.
IV. REPRESENTATIONS AND WARRANTIES
Section 4.1 BORROWER REPRESENTATIONS.
Borrower represents and warrants as of the date hereof and as of the
Closing Date that:
4.1.1 ORGANIZATION. Borrower has been duly organized and is validly
existing and in good standing with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged. Borrower
is duly qualified to do business and is in good standing in each jurisdiction
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where it is required to be so qualified in connection with its properties,
businesses and operations. To the best of Borrower's knowledge, Borrower
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 the
ownership, management and operation of the Property.
4.1.2 PROCEEDINGS. Borrower has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents. This Agreement and such other Loan Documents have been duly executed
and delivered by or on behalf of Borrower and constitute legal, valid and
binding obligations of Borrower enforceable against Borrower 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 at closing will not conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, partnership agreement or other agreement or instrument to
which Borrower is a party or by which any of Borrower's property or assets is
subject, nor will such action result in any violation of the provisions of any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over Borrower or any of Borrower's properties or
assets, and any consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or other
governmental agency or body required for the execution, delivery and performance
by Borrower of this Agreement or any other Loan Documents has been obtained and
is in full force and effect.
4.1.4 LITIGATION. To the best of Borrower's knowledge, there are no
actions, suits or proceedings at law or in equity by or before any Governmental
Authority or other agency now pending or threatened against or affecting
Borrower or the Property, which actions, suits or proceedings, if determined
against Borrower or the Property, might materially adversely affect the
condition (financial or otherwise) or business of Borrower or the condition or
ownership of the Property.
4.1.5 AGREEMENTS. Borrower is not a party to any agreement or instrument or
subject to any restriction which might materially and adversely affect Borrower
or the Property, or Borrower's business, properties or assets, operations or
condition, financial or otherwise. Borrower has not received written notice that
it is in default in any material respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party or by which Borrower or the
Property is bound. Borrower has no material financial obligation 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 the Property is
otherwise bound, other than (a) obligations incurred in the ordinary course of
the operation of the Property and (b) obligations under the Loan Documents.
4.1.6 TITLE. As evidenced by the Title Policy delivered to Lender at
Closing, Borrower will have good, marketable and insurable title to the real
property and leasehold estate comprising part of the Property and good title to
the balance of the Property, free and clear of all Liens whatsoever except the
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. As evidenced by the Title
Policy delivered to Lender at Closing, the Mortgage, when properly recorded in
the appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (a) a
valid, perfected lien on the Property, subject only to Permitted Encumbrances
and the Liens created by the Loan Documents and (b) perfected security interests
in and to, and perfected collateral assignments of, all personalty (including
the Leases), all in accordance with the terms thereof, in each case subject only
to any applicable Permitted Encumbrances, such other Liens as are permitted
pursuant to the Loan Documents and the Liens created by the Loan Documents. As
evidenced by the Title Policy delivered to Lender at Closing, and except for the
Permitted Encumbrances (including mechanics' lien claims which have been
disclosed to Lender and with respect to which the Title Company has issued an
endorsement omitting or insuring over same), there will be 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.
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4.1.7 NO BANKRUPTCY FILING. Neither Borrower nor any of its constituent
general or limited partners are contemplating either the filing of a petition by
it under any state or federal bankruptcy or insolvency laws or the liquidation
of all or a major portion of Borrower's assets or property, and Borrower has no
knowledge of any Person contemplating the filing of any such petition against it
or such general or limited partners.
4.1.8 FULL AND ACCURATE DISCLOSURE. To the best of Borrower's knowledge, 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 material fact presently known to Borrower which has not
been disclosed to Lender which adversely affects, nor as far as Borrower can
reasonably foresee, might adversely affect, the Property or the business,
operations or condition (financial or otherwise) of Borrower.
4.1.9 NO PLAN ASSETS. Borrower is not an "employee benefit plan," as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the
assets of Borrower constitutes or will constitute "plan assets" of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a)
Borrower is not a "governmental plan" within the meaning of Section 3(32) of
ERISA and (b) transactions by or with Borrower are not subject to state statutes
regulating investment of, and fiduciary obligations with respect to,
governmental plans similar to the provisions of Section 406 of ERISA or Section
4975 of the Code currently in effect, which prohibit or otherwise restrict the
transactions contemplated by this Loan Agreement.
4.1.10 COMPLIANCE. To the best of Borrower's knowledge, Borrower and the
Property and the use thereof comply in all material respects with all applicable
Legal Requirements, including, without limitation, building and zoning
ordinances and codes. Borrower has not received any notice of default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority. To the best of Borrower's knowledge, there has not been committed by
Borrower 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, nor has Borrower received written notice of any such
act or omission by any other Person in occupancy of or involved with the
operation or use of the Property.
4.1.11 FINANCIAL INFORMATION. All financial data, including, without
limitation, the statements of operations, that have been delivered to Lender in
respect of the Property (i) are true, complete and correct in all material
respects, (ii) accurately represent the financial condition of the Property as
of the date of such reports in all material respects, and (iii) with respect to
the audited financial statements, to the extent prepared or audited by an
independent certified public accounting firm, to the best of Borrower's
knowledge have been prepared in accordance with GAAP throughout the periods
covered, except as disclosed therein. Borrower does not have any contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments that are known
to Borrower and reasonably likely to have a materially adverse effect on the
Property or the operation thereof as an office building, except as referred to
or reflected in said financial statements. To the best of Borrower's knowledge,
since the date of such financial statements, there has been no materially
adverse change in the financial condition, operations or business of Borrower
from that set forth in said financial statements.
4.1.12 CONDEMNATION. Borrower has received no written notice that any
condemnation or other proceeding has been commenced or, to Borrower's best
knowledge, is contemplated with respect to all or any portion of the Property or
for the relocation of roadways providing access to the Property.
4.1.13 FEDERAL RESERVE REGULATIONS. No part of the proceeds of the Loan
will be used for the purpose of purchasing or acquiring any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.
4.1.14 UTILITIES AND PUBLIC ACCESS. To the best of Borrower's knowledge:
(a) the Property has rights of access to public ways and is served by water,
sewer, sanitary sewer and storm drain facilities adequate to service the
Property for its intended uses, (b) all public utilities necessary or convenient
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to the full use and enjoyment of the Property are located either in the public
right-of-way abutting such (which are connected so as to serve the Property
without passing over other property) or in recorded easements serving the
Property and such easements are set forth in and insured by the Title Insurance
Policy, and (c) all roads necessary for the use of the Property for its current
purposes have been completed and dedicated to public use and accepted by all
Governmental Authorities.
4.1.15 NOT A FOREIGN PERSON. Borrower is not a "foreign person" within the
meaning ofss.1445(f)(3) of the Code.
4.1.16 SEPARATE LOTS. The Property is comprised of one (1) or more parcels
which constitute a separate tax lot or lots and does not constitute a portion of
any other tax lot not a part of the Property.
4.1.17 ASSESSMENTS. Borrower has received no notice of any pending or
proposed special or other assessments for public improvements or otherwise
affecting the Property, nor has Borrower received notice of any contemplated
improvements to the Property that may result in such special or other
assessments.
4.1.18 ENFORCEABILITY. To the best of Borrower's knowledge, the Loan
Documents are not subject to any right of rescission, set-off, counterclaim or
defense by Borrower, including the defense of usury, nor would the operation of
any of the terms of the Loan Documents, or the exercise of any right thereunder,
render the Loan Documents unenforceable, and Borrower has not asserted any right
of rescission, set-off, counterclaim or defense with respect thereto.
4.1.19 NO PRIOR ASSIGNMENT. As of the Closing Date there will be no prior
assignments of the Leases or any portion of the Rents due and payable or to
become due and payable which are presently outstanding.
4.1.20 INSURANCE. Borrower has obtained and has delivered to Lender
certified copies of all insurance policies currently in effect and covering the
Property reflecting the insurance coverages, amounts and other requirements set
forth in this Agreement. No claims have been made under any such policy, and, to
the best of Borrower's knowledge, no Person, including Borrower, has done, by
act or omission, anything which would impair the coverage of any such policy.
4.1.21 USE OF PROPERTY. The Property is used exclusively for office
purposes and other appurtenant and related uses (including a fitness center).
4.1.22 LICENSES. To the best of Borrower's knowledge, all certifications,
permits, licenses and approvals, including without limitation, certificates of
completion and occupancy permits required for the legal use, occupancy and
operation of the Property as an office building complex (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.
4.1.23 FLOOD ZONE. To the best of Borrower's knowledge, 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.
4.1.24 PHYSICAL CONDITION. To the best of Borrower's knowledge: (a) 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;
(b) there exists no structural or other material defects or damages in the
Property, whether latent or otherwise, and (c) Borrower has not received notice
from any insurance company or bonding company of any defects or inadequacies in
the Property, or any part thereof, which would adversely affect the insurability
of the same or cause the imposition of extraordinary premiums or charges thereon
or of any termination or threatened termination of any policy of insurance or
bond.
4.1.25 BOUNDARIES. As evidenced by the Survey (a) all of the improvements
which were included in determining the appraised value of the Property lie
wholly within the boundaries and building restriction lines of the Property, and
no improvements on adjoining properties encroach upon the Property, and (b) no
easements or other encumbrances upon the Property encroach upon any of the
improvements, so as to affect the value or marketability of the Property except
those which are insured against by title insurance.
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4.1.26 LEASES. The Property is not subject to any Leases other than the
Leases described in Schedule I attached hereto and made a part hereof. No Person
has any possessory interest in the Property or right to occupy the same except
under and pursuant to the provisions of the Leases. The current Leases are in
full force and effect and, to the best of Borrower's knowledge, there are no
defaults thereunder by either party except as disclosed to Lender. No Rent
(including security deposits) has been paid more than one (1) month in advance
of its due date. All work to be performed by Borrower under each Lease has been
performed as required and has been accepted by the applicable tenant, and any
payments, free rent, partial rent, rebate of rent or other payments, credits,
allowances or abatements required to be given by Borrower to any tenant has
already been received by such tenant, except as set forth on Schedule I. There
has been no prior sale, transfer or assignment, hypothecation or pledge of any
Lease or of the Rents received therein. Except as set forth on Schedule I,
Borrower has not consented to any assignment by any tenant of its Lease or any
sublease of all or any portion of the premises demised thereby, no such tenant
holds its leased premises under assignment or sublease, nor does anyone except
such tenant and its employees occupy such leased premises. No tenant under any
Lease has a right or option pursuant to such Lease or otherwise to purchase all
or any part of the leased premises or the building of which the leased premises
are a part. No tenant under any Lease has any right or option for additional
space in the Improvements except as set forth in the Lease. To the best of
Borrower's knowledge, no hazardous wastes or toxic substances, as defined by
applicable federal, state or local statutes, rules and regulations, have been
disposed, stored or treated by any tenant under any Lease on or about the leased
premises in violation of applicable environmental laws nor does Borrower have
any knowledge of any tenant's intention to use its leased premises for any
activity which, directly or indirectly, involves the use, generation, treatment,
storage, disposal or transportation of any petroleum product or any toxic or
hazardous chemical, material, substance or waste in violation of applicable
Environmental Laws.
4.1.27 INTENTIONALLY OMITTED.
4.1.28 LOAN TO VALUE. The maximum principal amount of the Loan does not
exceed one hundred twenty-five percent (125%) of the fair market value of the
Property.
4.1.29 FILING AND RECORDING TAXES. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements currently in effect in
connection with the transfer of the Property to Borrower have been paid. All
mortgage, mortgage recording, stamp, intangible or other similar tax required to
be paid by any Person under applicable Legal Requirements currently in effect in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including, without
limitation, the Mortgage, have been paid, and, under current Legal Requirements,
the Mortgage is enforceable in accordance with its terms by Lender (or any
subsequent holder thereof).
4.1.30 SINGLE PURPOSE ENTITY/SEPARATENESS. Borrower represents, warrants
and covenants as follows:
(a) The purpose for which Borrower is organized is and shall be limited
solely to (i) owning, holding, selling, leasing, transferring, exchanging,
operating and managing the Property and transacting any and all lawful business
for which Borrower may be organized under its constitutive law that is incident,
necessary and appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any asset or property other than
(i) the Property, and (ii) incidental personal property necessary for and used
or to be used in connection with the ownership or operation of the Property.
(c) Borrower will not engage in any business other than the ownership,
management and operation of the Property.
(d) Borrower will not enter into any contract or agreement with any
Affiliate of Borrower, any constituent party of Borrower, any owner of Borrower,
any guarantors of the obligations of Borrower or any Affiliate of any
constituent party, owner or guarantor (collectively, the "Related Parties"),
except upon terms and conditions that are intrinsically fair, commercially
reasonable and substantially similar to those that would be available on an
arms-length basis with third parties not so affiliated with Borrower or such
Related Parties.
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(e) Borrower has not incurred and will not incur any Indebtedness other
than (i) the Loan, (ii) Indebtedness incurred in the financing of equipment and
other personal property used on the Property, trade and operational debt
incurred in the ordinary course of business with trade creditors in amounts as
are normal and reasonable under the circumstances, provided such debt is not
evidenced by a note and is not in excess of sixty (60) days past due and does
not exceed in the aggregate the amount of Three Million and No/100 Dollars
($3,000,000). No Indebtedness other than the Debt may be secured (senior,
subordinate or pari passu) by the Property (provided that the fee owner of the
portion of the Property demised by the Ground Lease may encumber its interests
therein).
(f) Borrower has not made and will not make any loans or advances to any
Person and shall not acquire obligations or securities of any Related Party.
(g) Borrower is and will remain solvent and Borrower will pay its debts and
liabilities (including, as applicable, shared personnel and overhead expenses)
from its assets as the same shall become due.
(h) Borrower has done or caused to be done and will do all things necessary
to observe organizational formalities and preserve its existence, and Borrower
will not, nor will Borrower permit any SPC to, amend, modify or otherwise change
the partnership certificate, partnership agreement, articles of incorporation
and bylaws, operating agreement, trust or other organizational documents of
Borrower or such SPC without the prior written consent of Lender.
(i) Borrower will maintain separate financial statements, showing its
assets and liabilities separate and apart from those of any other person or
entity and will not have its assets listed on the financial statements of any
other Person except the consolidated financial statements of the REIT, which
statements shall contain footnotes or other information to the effect that the
assets are owned by the Single Purpose Entity and are not available to pay
creditors of the REIT. Borrower shall maintain its books, records, resolutions
and agreements as official records.
(j) Borrower will be, and at all times will hold itself out to the public
as, a legal entity separate and distinct from any other Person (including any
Affiliate or other Related Party), shall correct any known misunderstanding
regarding its status as a separate entity, and shall conduct business in its own
name and from its own office, shall not identify itself or any of its Affiliates
as a division or part of the other and shall maintain and utilize a separate
telephone number and separate stationery, invoices and checks; provided that
business correspondence and other communications of Borrower may also be made by
its managing partner from its office when the managing partner is acting on
behalf of Borrower.
(k) Borrower will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations.
(l) Neither Borrower nor any SPC will seek the dissolution, winding up,
liquidation, consolidation or merger in whole or in part, or the sale of
material assets of Borrower.
(m) Borrower will not commingle its assets with those of any other Person
and will hold all of its assets in its own name;
(n) Borrower will not guarantee or become obligated for the debts of any
other Person and does not and will not hold itself out as being responsible for
the debts or obligations of any other Person.
(o) If Borrower is a limited partnership or a limited liability company, at
least one general partner or member, or if Borrower is a general partnership at
least two general partners (an "SPC Party") shall be a corporation whose sole
asset is its interest in Borrower and such SPC Party will at all times comply,
and will cause Borrower to comply, with each of the representations, warranties,
and covenants contained in this Section 4.1.30 as if such representation,
warranty or covenant was made directly by such SPC Party. Upon the withdrawal or
the disassociation of the SPC Party from Borrower, Borrower shall immediately
appoint a new member whose articles of incorporation are substantially similar
to those of the SPC Party and deliver a new Insolvency Opinion to the Rating
Agency or Rating Agencies, as applicable, with respect to the new SPC Party and
its equity owners.
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(p) Borrower shall at all times cause there to be at least one duly
appointed member of the board of directors (an "Independent Director") of
Borrower (if a corporation) or of each SPC Party reasonably satisfactory to
Lender who is not at the time of initial appointment or while serving as
Independent Director and has not been, at any time during the preceding five (5)
years, a stockholder, director (other than an Independent Director), officer,
employee, partner, attorney or counsel of (i) the Prime Group, Inc., an Illinois
corporation, or any of its Affiliates; (ii) the Operating Partnership or any of
its Affiliates (except as an independent director on the board of directors of
Finance and certain other corporations, each a single purpose entity); (iii)
Finance, the Partnership or any of their Affiliates (except as an independent
director on the board of directors of Finance and certain other corporations,
each a single purpose entity (collectively, the "Prime Entities"); (iv) a
customer, supplier or other Person who derives more than 10% of its purchases or
revenues from its activities with any of the Prime Entities, Borrower or such
SPC Party or any Affiliate of either of them; (v) a Person controlling,
controlled by, or under common control with any such stockholder, partner,
customer, supplier or other Person; or (vi) a member of the immediate family of
any Person described in clauses (i), (ii) or (iii). (As used herein, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of management, policies or activities of a Person,
whether through ownership of voting securities, by contract or otherwise.)
(q) Borrower shall not cause or permit the board of directors of an SPC
Party to take any action which, under the terms of any certificate of
incorporation, by-laws or any voting trust agreement with respect to any common
stock, requires the vote of any SPC Party unless at the time of such action
there shall be at least one member who is an Independent Director.
(r) Borrower shall allocate fairly and reasonably any overhead expenses
that are shared with an Affiliate, including paying for office space and
services performed by any employee of an Affiliate or Related Party.
(s) Borrower shall not pledge its assets for the benefit of any other
Person other than with respect to the Loan except as permitted in Section
4.1.30(e).
(t) Borrower shall maintain a sufficient number of employees in light of
its contemplated business operations and pay the salaries of its own employees
from its own funds.
(u) Borrower shall conduct its business so that the assumptions made with
respect to Borrower in the Insolvency Opinion shall be true and correct in all
respects.
4.1.31 MANAGEMENT AGREEMENT. The Management Agreement is in full force and
effect and, to the best of Borrower's knowledge there is no default thereunder
by any party thereto and no event has occurred that, with the passage of time
and/or the giving of notice would constitute a default thereunder.
4.1.32 GROUND LEASE. Borrower hereby represents and warrants to Lender the
following with respect to the Ground Lease:
(a) Recording; Modification. A memorandum of the Ground Lease has been duly
recorded. The Ground Lease permits the interest of Borrower to be encumbered by
a mortgage or the ground lessor has approved and consented to the encumbrance of
the Property by the Mortgage. There have not been amendments or modifications to
the terms of the Ground Lease since its recordation, with the exception of
written instruments which have been recorded. The Ground Lease may not be
canceled, terminated, surrendered or amended by Borrower without the prior
written consent of Lender.
(b) No Liens. Except for the Permitted Encumbrances, Borrower's interest in
the Ground Lease is not subject to any Liens or encumbrances superior to, or of
equal priority with, the Mortgage other than the ground lessor's related fee
interest and the existing mortgage on the ground lessor's fee interest.
(c) Ground Lease Assignable. Borrower's interest in the Ground Lease is
assignable to Lender upon notice to, but without the consent of, the ground
lessor (or, if any such consent is required, it has been obtained prior to the
Closing Date). The Ground Lease contains no restrictions on assignment by
Lender, its successors and assigns.
(d) Default. As of the date hereof, the Ground Lease is in full force and
effect and no default has occurred under the Ground Lease and, to the best of
Borrower's knowledge, there is no existing condition which, but for the passage
of time or the giving of notice, could result in a default under the terms of
the Ground Lease.
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(e) Notice. The Ground Lease requires the ground lessor to give notice of
any default by Borrower to Lender. The Ground Lease, or estoppel letters
received by Lender from the ground lessor, further provides that notice of
termination given under the Ground Lease is not effective against Lender unless
a copy of the notice has been delivered to Lender in the manner described in the
Ground Lease.
(f) Cure. Lender is permitted the opportunity to cure any default under the
Ground Lease, which is curable after the receipt of notice of any of the default
before the ground lessor thereunder may terminate the Ground Lease in accordance
with Article XI of the Ground Lease.
(g) Term. The Ground Lease has a term which extends not less than ten (10)
years beyond the Maturity Date.
(h) New Lease. The Ground Lease (together with an estoppel received from
the ground lessor) provides, in accordance with Article XI thereof, that the
ground lessor shall enter into a new lease upon termination of the Ground Lease
for any reason, including rejection of the Ground Lease in a bankruptcy
proceeding.
(i) Insurance Proceeds. Under the terms of the Ground Lease and the
Mortgage, taken together, any related insurance and condemnation proceeds will
be applied either to the repair or restoration of all or part of the Property,
with Lender having the right to hold and disburse the proceeds payable to
Borrower in accordance with Article XI thereof as the repair or restoration
progresses, or to the payment of the outstanding principal balance of the Loan
together with any accrued interest thereon.
(j) Subleasing. Subject to the provisions of Articles XXI and XXXI of the
Ground Lease, Borrower may enter into subleases from time to time for all or any
portion of the property demised thereby.
4.1.33 ILLEGAL ACTIVITY. To the best of Borrower's knowledge no portion of
the Property has been or will be purchased with proceeds of any illegal
activity.
4.1.34 NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE. To the best of
Borrower's knowledge, all information submitted by Borrower to Lender and in all
financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan or in satisfaction of the terms thereof
and all statements of fact made by Borrower in this Agreement or in any other
Loan Document, are accurate, complete and correct in all material respects.
There has been no material adverse change in any condition, fact, circumstance
or event that would make any such information inaccurate, incomplete or
otherwise misleading in any material respect or that otherwise materially and
adversely affects or might materially and adversely affect the Property or the
business operations or the financial condition of Borrower. Borrower has
disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any representation or warranty made herein to be
materially misleading.
Section 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 survive for so long as any amount remains owing to Lender under
this Agreement or any of the other Loan Documents by Borrower. 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
Section 5.1 AFFIRMATIVE COVENANTS.
From the date hereof and until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Lien of the Mortgage (and all related obligations) in accordance with the terms
of this Agreement and the other Loan Documents, Borrower hereby covenants and
agrees with Lender that:
5.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTs; INSURANCE. Borrower
shall do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its existence, rights, licenses, permits and franchises
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and comply with all Legal Requirements applicable to it and the Property. There
shall never be committed by Borrower or any other person in occupancy of or
involved with the operation or use of the Property any act or omission affording
the federal government or any 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, 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 and preserve all
the remainder of its property used or useful in the conduct of its business and
shall keep the Property in good working order and repair, and from time to time
make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully provided
in the Mortgage. Borrower shall keep the Property insured at all times by
financially sound and reputable insurers, to such extent and against such risks,
and maintain liability and such other insurance, as is more fully provided in
this Agreement.
5.1.2 TAXES AND OTHER CHARGES. Borrower shall pay all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Property or
any part thereof as the same become due and payable; provided, however,
Borrower's obligation to directly pay Taxes shall be suspended for so long as
Borrower complies with the terms and provisions of Section 7.2 hereof. Borrower
will deliver to Lender receipts for payment or other evidence satisfactory to
Lender that the Taxes and Other Charges have been so paid or are not then
delinquent no later than ten (10) days prior to the date on which the Taxes
and/or Other Charges would otherwise be delinquent if not paid. Borrower shall
furnish to Lender receipts for the payment of the Taxes and the Other Charges
prior to the date the same shall become delinquent (provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 7.2 hereof).
Borrower shall not suffer and shall promptly cause to be paid and discharged any
Lien or charge whatsoever which may be or become a Lien or charge against the
Property, and shall promptly pay for all utility services provided to the
Property. After prior written notice to Lender, Borrower, at its own expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any Taxes, Liens or Other Charges, provided that (i) no
Event of Default has occurred and remains uncured; (ii) Borrower is permitted to
do so under the provisions of any mortgage or deed of trust superior in lien to
the Mortgage; (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with all applicable statutes, laws and ordinances;
(iv) neither the Property nor any part thereof or interest therein will be in
danger of being sold, forfeited, terminated, canceled or lost; (v) Borrower
shall promptly upon final determination thereof pay the amount of any such
Taxes, Liens, or Other Charges, together with all costs, interest and penalties
which may be payable in connection therewith; (vi) such proceeding shall suspend
the collection of such contested Taxes or Other Charges from the Property; and
(vii) Borrower shall furnish such security as may be required in the proceeding,
or as may be requested by Lender, to insure the payment of any such Taxes or
Other Charges, together with all interest and penalties thereon. Lender may pay
over any such cash deposit or part thereof held by Lender to the claimant
entitled thereto at any time when, in the judgment of Lender, the entitlement of
such claimant is established.
5.1.3 LITIGATION. Borrower shall give prompt written notice to Lender of
any litigation or governmental proceedings pending or threatened against
Borrower which might materially adversely affect Borrower's condition (financial
or otherwise) or business or the Property.
5.1.4 ACCESS TO PROPERTY. Borrower shall permit agents, representatives and
employees of Lender to inspect the Property or any part thereof at reasonable
hours upon reasonable advance notice.
5.1.5 NOTICE OF DEFAULT. Borrower shall promptly advise Lender of any
material adverse change in Borrower's condition, financial or otherwise, or of
the occurrence of any Event of Default of which Borrower has knowledge.
5.1.6 COOPERATE IN LEGAL PROCEEDINGS. Borrower shall cooperate fully with
Lender with respect to any proceedings before any court, board or other
Governmental Authority which may in any way affect the rights of Lender
hereunder or any rights obtained by Lender under any of the other Loan Documents
and, in connection therewith, permit Lender, at its election, to participate in
any such proceedings.
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5.1.7 PERFORM LOAN DOCUMENTS. Subject to the limitations on liability set
forth in Section 9.4 hereof, 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.
5.1.8 INSURANCE BENEFITS. Borrower shall cooperate with Lender in obtaining
for Lender the benefits of any Insurance Proceeds lawfully or equitably payable
in connection with the Property, and Lender shall be reimbursed for any
reasonable expenses incurred in connection therewith (including reasonable
attorneys' fees and disbursements, and the payment by Borrower of the expense of
an appraisal on behalf of Lender in case of a fire or other casualty affecting
the Property or any part thereof) out of such Insurance Proceeds.
5.1.9 FURTHER ASSURANCES. Borrower shall, at Borrower's sole cost and
expense:
(a) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and
(b) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
shall reasonably require from time to time.
5.1.10 MORTGAGE TAXES. As of the date hereof, Borrower represents that it
has paid all state, county and municipal recording and all other taxes imposed
upon the execution and recordation of the Mortgage.
5.1.11 FINANCIAL REPORTING.
(a) Borrower will keep and maintain or will cause to be kept and maintained
on a Fiscal Year basis, in accordance with GAAP (or such other accounting basis
acceptable to Lender), proper and accurate books, records and accounts
reflecting all of the financial affairs of Borrower and all items of income and
expense in connection with the operation of the Property. Lender shall have the
right from time to time at all times during normal business hours upon
reasonable notice to examine such books, records and accounts at the office of
Borrower or other Person maintaining such books, records and accounts and to
make such copies or extracts thereof as Lender shall desire. After the
occurrence of an Event of Default, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower's accounting records with respect to the
Property, as Lender shall determine to be necessary or appropriate in the
protection of Lender's interest.
(b) Borrower will furnish to Lender annually within ninety (90) days
following the end of each Fiscal Year of Borrower, a complete copy of Borrower's
annual financial statements audited by a "Big Five" accounting firm or other
independent certified public accountant acceptable to Lender (Ernst & Young is
hereby approved) in accordance with GAAP (or such other accounting basis
acceptable to Lender) covering the Property for such Fiscal Year and containing
statements of operations for Borrower and a balance sheet for Borrower. Such
statements shall set forth the financial condition and the results of operations
for the Property for such Fiscal Year. Borrower's annual financial statements
shall be accompanied by (i) a comparison of the budgeted income and expenses and
the actual income and expenses for the prior Fiscal Year, (ii) a certificate
executed by the chief financial officer of Borrower or the general partner of or
the general partner of the general partner of Borrower, as applicable, stating
that each such annual financial statement presents fairly the financial
condition and the results of operations of Borrower and the Property being
reported upon and has been prepared in accordance with GAAP and (iii) an
unqualified opinion on Borrower's annual financial statements of a "Big Five"
(Ernst & Young is hereby approved) accounting firm or other independent
certified public accountant reasonably acceptable to Lender. Together with
Borrower's annual financial statements, Borrower shall furnish to Lender an
Officer's Certificate certifying as of the date thereof whether there exists an
event or circumstance which constitutes a Default or Event of Default under the
Loan Documents executed and delivered by, or applicable to, Borrower, and if
such Default or Event of Default exists, the nature thereof, the period of time
it has existed and the action then being taken to remedy the same.
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(c) Borrower will furnish, or cause to be furnished, to Lender on or before
forty-five (45) days after the end of each quarter the following items,
accompanied by a certificate of the chief financial officer of Borrower or the
general partner or the general partner of the general partner of Borrower, as
applicable, stating that such items are true, correct, accurate, and complete
and fairly present the financial condition and results of the operations of
Borrower and the Property (subject to normal year-end adjustments): (i) a rent
roll for the subject quarter accompanied by an Officer's Certificate with
respect thereto; (ii) quarterly and year-to-date operating statements (including
Capital Expenditures) prepared for each quarter in Borrower's standard form.
(d) For the partial year period commencing on the date hereof, and for each
Fiscal Year thereafter, Borrower shall submit to Lender an Annual Budget not
later than thirty (30) days prior to the commencement of such period or Fiscal
Year in form reasonably satisfactory to Lender.
(e) In the event that Borrower must incur an extraordinary operating
expense or capital expense not set forth in the Annual Budget (each an
"Extraordinary Expense"), then Borrower shall promptly deliver to Lender a
reasonably detailed explanation of such proposed Extraordinary Expense.
(f) Borrower shall furnish to Lender, within ten (10) Business Days after
request (or as soon thereafter as may be reasonably possible), such further
detailed information with respect to the operation of the Property and the
financial affairs of Borrower as may be reasonably requested by Lender so long
as such information is customarily available to Borrower.
(g) Any reports, statements or other information required to be delivered
under this Agreement shall be delivered in Borrower's customary format.
5.1.12 BUSINESS AND OPERATIONS. Borrower will continue to engage in the
businesses presently conducted by it as and to the extent the same are necessary
for the ownership, maintenance, management and operation of the Property.
Borrower will qualify to do business and will remain in good standing under the
laws of the jurisdiction as and to the extent the same are required for the
ownership, maintenance, management and operation of the Property.
5.1.13 INTENTIONALLY DELETED.
5.1.14 COSTS OF ENFORCEMENT. In the event (a) that the Mortgage is
foreclosed in whole or in part or that the Mortgage is put into the hands of an
attorney for collection, suit, action or foreclosure, (b) of the foreclosure of
any mortgage prior to or subsequent to the Mortgage 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 general partners or an
assignment by Borrower or any of its general partners 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.
5.1.15 ESTOPPEL STATEMENT. (a) After request by either party, the other
party shall within ten (10) days furnish the requesting party with a statement,
duly acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, (ii) the unpaid principal amount of the Note,
(iii) the Applicable Interest Rate of the Note, (iv) the date installments of
interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, and (vi) that the Note, this Agreement, the
Mortgage and the other Loan Documents are valid, legal and binding obligations
and have not been modified or if modified, giving particulars of such
modification.
(b) Borrower shall deliver to Lender upon request, tenant estoppel
certificates from each commercial tenant leasing space at the Property in form
and substance reasonably satisfactory to Lender (or in the form required in such
tenant's Lease if a form is specified in such Lease) provided that Borrower
shall not be required to deliver such certificates more frequently than one (1)
time in any calendar year.
5.1.16 LOAN PROCEEDS. Borrower shall use the proceeds of the Loan received
by it on the Closing Date only for the purposes set forth in Section 2.1.4.
5.1.17 PERFORMANCE BY BORROWER. Borrower 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
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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 without the prior written consent of Lender.
5.1.18 CONFIRMATION OF REPRESENTATIONS. Borrower shall deliver, in
connection with any Securitization, (a) one or more Officer's Certificates
certifying as to the accuracy of all representations made by Borrower in the
Loan Documents as of the date of the closing of such Securitization in all
relevant jurisdictions or stating in such Certificate the manner in which any
representation is no longer true, and (b) certificates of the relevant
Governmental Authorities in all relevant jurisdictions indicating the good
standing and qualification of Borrower and its general partner as of the date of
the Securitization.
5.1.19 NO JOINT ASSESSMENT. Except to the extent required by law, 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 LEASING MATTERS. Any Leases with respect to the Property written
after the date hereof, for more than 15,000 square feet and any Leases to
Affiliates of Borrower shall be approved by Lender, which approval shall not be
unreasonably withheld, conditioned or delayed and which approval shall be deemed
given if Lender does not respond within five (5) Business Days after receipt of
such proposed Lease, provided that the notice requesting such approval shall
contain a legend stating that Lender's approval shall be deemed given if Lender
fails to respond within such five (5) Business Day period. Upon request,
Borrower shall furnish Lender with executed copies of all Leases. All renewals
of Leases and all proposed Leases shall provide for rental rates comparable to
existing local market rates, as reasonably determined by Borrower. All proposed
Leases shall be on commercially reasonable terms and shall not contain any terms
which would materially and adversely affect Lender's rights under the Loan
Documents. All Leases executed after the date hereof shall provide that they are
subordinate to the Mortgage and that the lessee agrees to attorn to Lender or
any purchaser at a sale by foreclosure. Borrower (i) shall observe and perform
the obligations imposed upon the lessor under the Leases in a commercially
reasonable manner; (ii) shall enforce and may amend or terminate the terms,
covenants and conditions contained in the Leases upon the part of the lessee
thereunder to be observed or performed in a commercially reasonable manner and
in a manner not to materially impair the value of the Property involved except
that no termination by Borrower or acceptance of surrender by a tenant of any
Leases shall be permitted unless by reason of a tenant default and then only in
a commercially reasonable manner to preserve and protect the Property provided,
however, that no such termination or surrender of any Lease covering more than
15,000 square feet will be permitted without the written consent of Lender;
(iii) shall not collect any of the rents more than one (1) month in advance
(other than security deposits); (iv) shall not execute any other assignment of
lessor's interest in the Leases or the Rents (except as contemplated by the Loan
Documents); (v) shall not alter, modify or change the terms of the Leases in a
manner inconsistent with the provisions of the Loan Documents; and (vi) shall
execute and deliver at the request of Lender all such further assurances,
confirmations and assignments in connection with the Leases as Lender shall from
time to time reasonably require.
5.1.21 ALTERATIONS. Borrower shall obtain Lender's prior written consent to
any alterations to any Improvements, which consent shall not be unreasonably
withheld or delayed except with respect to alterations that may have a material
adverse effect on Borrower's financial condition, the value of the Property or
the Net Operating Income. Notwithstanding the foregoing, Lender's consent shall
not be required in connection with any alterations that will not have a material
adverse effect on Borrower's financial condition, the value of the Property or
the Net Operating Income, provided that such alterations are made in connection
with (a) tenant improvement work performed pursuant to the terms of any Lease
executed on or before the date hereof, (b) tenant improvement work performed
pursuant to the terms and provisions of a Lease and not adversely affecting any
structural component of any Improvements, any utility or HVAC system contained
in any Improvements or the exterior of any building constituting a part of any
Improvements, or (c) alterations performed in connection with the restoration of
the Property after the occurrence of a casualty in accordance with the terms and
provisions of this Agreement. If the total unpaid amounts due and payable with
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respect to alterations to the Improvements at the Property (other than such
amounts to be paid or reimbursed by tenants under the Leases) shall at any time
exceed Seven Million Two Hundred Thousand and 00/100 Dollars ($7,200,000) (the
"Threshold Amount"), Borrower shall promptly deliver to Lender as security for
the payment of such amounts and as additional security for Borrower's
obligations under the Loan Documents any of the following: (A) cash, (B) U.S.
Obligations, (C) other securities having a rating acceptable to Lender and that
the applicable Rating Agencies have confirmed in writing will not, in and of
itself, result in a downgrade, withdrawal or qualification of the initial, or,
if higher, then current ratings assigned in connection with any Securitization,
or (D) a completion bond or letter of credit issued by a financial institution
having a rating by Standard & Poor's Ratings Group of not less than A-1+ if the
term of such bond or letter of credit is no longer than three (3) months or, if
such term is in excess of three (3) months, issued by a financial institution
having a rating that is acceptable to Lender and that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any Securitization. Such security
shall be in an amount equal to the excess of the total unpaid amounts with
respect to alterations to the Improvements on the Property (other than such
amounts to be paid or reimbursed by tenants under the Leases) over the Threshold
Amount and applied from time to time at the option of Lender to Pay for such
alterations or to terminate any of the alterations and restore the Property to
the extent necessary to prevent any material adverse effect on the value of the
Property.
Section 5.2 NEGATIVE COVENANTS.
From the date hereof until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Lien of the Mortgage 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 OPERATION OF PROPERTY. Borrower shall not, without the prior consent
of Lender (which consent shall not be unreasonably withheld), terminate the
Management Agreement or otherwise replace the Manager or enter into any other
management agreement with respect to the Property.
5.2.2 LIENS. Borrower shall not, without the prior written consent of
Lender, create, incur, assume or suffer to exist any Lien on any portion of the
Property or permit any such action to be taken, except:
(i) Permitted Encumbrances;
(ii) Liens created by or permitted pursuant to the Loan Documents;
(iii) Liens for Taxes or Other Charges not yet due; and
(iv) Liens which are contested by Borrower in accordance with the terms of
the Loan Documents.
5.2.3 DISSOLUTION. Borrower shall not (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership and operation
of the Property, (c) transfer, lease or sell, in one transaction or any
combination of transactions, the assets or all or substantially all of the
properties or assets of Borrower except to the extent permitted by the Loan
Documents, (d) modify, amend, waive or terminate its organizational documents or
its qualification and good standing in any jurisdiction or (e) cause the SPC
Party to (i) dissolve, wind up or liquidate or take any action, or omit to take
an action, as a result of which the SPC Party would be dissolved, wound up or
liquidated in whole or in part, or (ii) amend, modify, waive or terminate the
certificate of incorporation or bylaws of the SPC Party, in each case, without
obtaining the prior written consent of Lender or Lender's designee.
5.2.4 CHANGE IN BUSINESS. Borrower shall not enter into any line of
business other than the ownership and operation of the Property, or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business.
5.2.5 DEBT CANCELLATION. Borrower shall not cancel or otherwise forgive or
release any claim or debt (other than termination of Leases in accordance
herewith) owed to Borrower by any Person, except for adequate consideration and
in the ordinary course of Borrower's business.
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5.2.6 AFFILIATE TRANSACTIONS. Borrower shall not enter into, or be a party
to, any transaction with an Affiliate of Borrower or any of the partners of
Borrower except in the ordinary course of business and on terms which are fully
disclosed to Lender in advance and are no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm's-length transaction with
an unrelated third party.
5.2.7 ZONING. Borrower shall not initiate or consent to any zoning
reclassification of any portion of the Property or seek any variance under any
existing zoning ordinance or use or permit the use of any portion of the
Property in any manner that could result in such use becoming a non-conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior consent of Lender.
5.2.8 ASSETS. Borrower shall not purchase or own any property other than
the Property.
5.2.9 DEBT. Borrower shall not create, incur or assume any Indebtedness
other than the Debt except to the extent expressly permitted hereby.
5.2.10 NO JOINT ASSESSMENT. Except as required by law, Borrower shall not
suffer, permit or initiate the joint assessment of the Property with (a) any
other real property constituting a tax lot separate from the Property, or (b)
any portion of the Property which may be deemed to constitute personal property,
or any other procedure whereby the Lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the Property.
5.2.11 PRINCIPAL PLACE OF BUSINESS. Borrower shall not change its principal
place of business set forth on the first page of this Agreement without first
giving Lender written notice of such change.
5.2.12 ERISA. (a) Borrower shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA.
(b) Borrower further covenants and agrees to deliver to lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (A) Borrower is not
and does not maintain an "employee benefit plan" as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(3) of ERISA; (B) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans; and (C) one or more of the following circumstances is true;
(i) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. ss.2510.3 101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding class of
equity interests in Borrower are held by "benefit plan investors" within the
meaning of 29 C.F.R. ss.2510.3 101(f)(2); or
(iii) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R. ss.2510.3 101(c) or (e).
5.2.13 TRANSFERS. Except as set forth in the Mortgage, without the prior
written consent of Lender, neither Borrower nor any other Person having an
ownership or beneficial interest, direct or indirect, in Borrower or the SPC
Party shall (a) directly or indirectly sell, transfer, convey, mortgage, pledge,
or assign the Property, any part thereof or any interest therein (including any
ownership interest in Borrower or the SPC Party), (b) further encumber,
alienate, xxxxx x Xxxx or xxxxx any other interest in the Property or any part
thereof (including any ownership interest in Borrower and the SPC Party),
whether voluntarily or involuntarily or (c) enter into any easement or other
agreement granting rights in or restricting the use or development of the
Property.
VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS
Section 6.1 INSURANCE.
(a) Borrower shall obtain and maintain, or cause to be maintained,
insurance for Borrower and the Property providing at least the following
coverages:
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(i) comprehensive all risk insurance on the Improvements and the
Personal Property, including contingent liability from Operation of Building
Laws, Demolition Costs and Increased Cost of Construction Endorsements, in each
case (A) in an amount equal to one hundred percent (100%) of the "Full
Replacement Cost," which for purposes of this Agreement shall mean actual
replacement value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation, but the amount shall in
no event be less than the outstanding principal balance of the Loan; (B)
containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of Ten Thousand and No/100 Dollars ($10,000) for all such
insurance coverage; and (D) containing an "Ordinance or Law Coverage" or
"Enforcement" endorsement if any of the Improvements or the use of the Property
shall at any time constitute legal non-conforming structures or uses. In
addition, Borrower shall obtain: (y) if any portion of the Improvements is
currently or at any time in the future located in a federally designated
"special flood hazard area", flood hazard insurance in an amount equal to the
lesser of (1) the outstanding principal balance of the Note or (2) the maximum
amount of such insurance available under the National Flood Insurance Act of
1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended or such greater amount as Lender
shall require; and (z) earthquake insurance in amounts and in form and substance
satisfactory to Lender in the event the Property is located in an area with a
high degree of seismic activity, provided that the insurance pursuant to clauses
(y) and (z) hereof shall be on terms consistent with the comprehensive all risk
insurance policy required under this subsection (i).
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in or
about the Property, such insurance (A) to be on the so-called "occurrence" form
with a combined limit, including umbrella coverage, of not less than Two Hundred
Twenty Million and No/100 Dollars ($220,000,000) or, if any of the Improvements
contain elevators, Two Hundred Twenty Million and No/100 Dollars ($220,000,000);
(B) to continue at not less than the aforesaid limit until reasonably required
to be changed by Lender in writing by reason of changed economic conditions
making such protection inadequate and any new limits shall not exceed limits for
similar properties in similar location; and (C) to cover at least the following
hazards: (1) premises and operations; (2) products and completed operations on
an "if any" basis; (3) independent contractors; (4) blanket contractual
liability for all legal contracts; and (5) contractual liability covering the
indemnities contained in Article 9 of the Mortgage to the extent the same is
available;
(iii) business income insurance (A) with loss payable to Lender;
(B) covering all risks required to be covered by the insurance provided for in
subsection (i) above; (C) containing an extended period of indemnity endorsement
which provides that after the physical loss to the Improvements and Personal
Property has been repaired, the continued loss of income will be insured until
such income either returns to the same level it was at prior to the loss, or the
expiration of eighteen (18) months from the date that the Property is repaired
or replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such period; and
(D) in an amount equal to one hundred percent (100%) of the projected gross
income from the Property for a period of eighteen (18) months from the date that
the Property is repaired or replaced and operations are resumed. The amount of
such business income insurance shall be determined prior to the date hereof and
at least once each year thereafter based on Borrower's reasonable estimate of
the gross income from the Property for the succeeding eighteen (18) month
period. All proceeds payable to Lender pursuant to this subsection shall be held
by Lender and shall be applied to the obligations secured by the Loan Documents
from time to time due and payable hereunder and under the Note; provided,
however, that nothing herein contained shall be deemed to relieve Borrower of
its obligations to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;
(iv) at all times during which structural construction, repairs
or alterations are being made with respect to the Improvements, and only if the
Property coverage form does not otherwise apply, (A) owner's contingent or
protective liability insurance covering claims not covered by or under the terms
or provisions of the above mentioned commercial general liability insurance
policy; and (B) the insurance provided for in subsection (i) above written in a
so-called builder's risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to subsection (i) above, (3)
including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
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(v) workers' compensation, subject to the statutory limits of the
State, and employer's liability insurance with a limit of at least Five Hundred
Thousand and No/100 Dollars ($500,000) per accident and per disease per
employee, and Five Hundred Thousand and No/100 Dollars ($500,000) for disease
aggregate in respect of any work or operations on or about the Property, or in
connection with the Property or its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if applicable,
in amounts as shall be reasonably required by Lender on terms consistent with
the commercial property insurance policy required under subsection (i) above;
(vii) umbrella liability insurance in an amount not less than Two
Hundred Twenty Million and No/100 Dollars ($220,000,000) per occurrence on terms
consistent with the commercial general liability insurance policy required under
subsection (ii) above;
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing minimum
limits per occurrence, including umbrella coverage, of One Million and No/100
Dollars ($1,000,000); and
(ix) upon sixty (60) days' written notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time are
commonly insured against for property similar to the Property located in or
around the region in which the Property is located.
(b) All insurance provided for in Section 6.1(a) shall be obtained under
valid and enforceable policies (collectively, the "Policies" or in the singular,
the "Policy") and shall be subject to approval of lender as to deductibles. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and having a claims paying
ability rating of "AA" or better by Standard & Poor's Ratings Group or, if the
insurance companies do not have claims paying ability rating of "AA" or better
by Standard & Poor's Ratings Group, a reinsurance endorsement shall be provided
by an insurance company satisfying such requirement. The Policies described in
Section 6.1 (other than those strictly limited to liability protection) shall
designate Lender as loss payee. Not less than ten (10) days prior to the
expiration dates of the Policies theretofore furnished to Lender, certificates
of insurance evidencing the Policies accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the "Insurance Premiums"),
shall be delivered by Borrower to Lender.
(c) Any blanket insurance Policy shall specifically allocate to the
Property the amount of coverage from time to time required hereunder and shall
otherwise provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 6.1(a).
(d) All Policies of insurance provided for or contemplated by Section
6.1(a), except for the Policy referenced in Section 6.1(a)(v), shall name
Borrower, as the insured and Lender as the additional insured, as its interests
may appear, and in the case of property damage, boiler and machinery, flood and
earthquake insurance, shall contain a standard non-contributing mortgagee clause
in favor of Lender providing that the loss thereunder shall be payable to
Lender.
(e) All Policies of insurance provided for in Section 6.1(a)(v) shall
contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for Borrower,
or of any Tenant or other occupant, or failure to comply with the provisions of
any Policy, which might otherwise result in a forfeiture of the insurance or any
part thereof, shall in any way affect the validity or enforceability of the
insurance insofar as Lender is concerned;
(ii) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least thirty (30)
days' written notice to Lender and any other party named therein as an
additional insured;
(iii) the issuers thereof shall give written notice to Lender if the
Policy has not been renewed fifteen (15) days prior to its expiration; and
(iv) Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder.
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(f) If at any time Lender is not in receipt of written evidence that all
insurance required hereunder is in full force and effect, Lender shall have the
right, without notice to Borrower, to take such action as Lender deems necessary
to protect its interest in the Property, including, without limitation, the
obtaining of such insurance coverage as Lender in its sole discretion deems
appropriate. All premiums incurred by Lender in connection with such action or
in obtaining such insurance and keeping it in effect shall be paid by Borrower
to Lender upon demand and, until paid, shall be secured by the Mortgage and
shall bear interest at the Default Rate.
Section 6.2 CASUALTY. If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (a "Casualty"), Borrower shall give
prompt notice of such damage to Lender and, provided that the Net Proceeds are
made available for restoration, shall promptly commence and diligently prosecute
the completion of the repair and restoration of the Property as nearly as
possible to the condition the Property was in immediately prior to such fire or
other casualty, with such alterations as may be reasonably approved by Lender (a
"Restoration") and otherwise in accordance with Section 6.4. Borrower shall pay
all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to make proof of loss if not
made promptly by Borrower. If Lender should elect to apply the insurance
proceeds it receives to the payment of the Debt without first making such
insurance proceeds available for the full restoration of the Property, then
notwithstanding anything to the contrary contained herein, Borrower shall be
excused from any obligation to restore the Property following an insured
casualty and such failure to restore shall not constitute a default or an Event
of Default.
Section 6.3 CONDEMNATION. Borrower shall promptly give Lender notice of the
actual or threatened commencement of any proceeding for the Condemnation of the
Property and shall deliver to Lender copies of any and all papers served in
connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments reasonably requested by it to permit such participation. Borrower
shall, at its expense, diligently prosecute any such proceedings, and shall
consult with Lender, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. Notwithstanding any taking by
any public or quasi-public authority through Condemnation or otherwise
(including but not limited to any transfer made in lieu of or in anticipation of
the exercise of such taking), Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement and the Debt shall not be reduced until any Award shall have been
actually received and applied by Lender, after the deduction of expenses of
collection, to the reduction or discharge of the Debt. Lender shall not be
limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by a
condemning authority, Borrower shall, provided the Net Proceeds are made
available for Restoration, promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of Section
6.4. If the Property is sold, through foreclosure or otherwise, prior to the
receipt by Lender of the Award, Lender shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.
Section 6.4 RESTORATION. The following provisions shall apply in connection
with the Restoration of the Property:
(a) If the Net Proceeds shall be less than Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000) and the costs of completing the
Restoration shall be less than Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000), the Net Proceeds will be disbursed by Lender to Borrower
upon receipt, provided that all of the conditions set forth in Section 6.4(b)(i)
are met and Borrower delivers to Lender a written undertaking to expeditiously
commence and to satisfactorily complete with due diligence the Restoration in
accordance with the terms of this Agreement.
(b) If the Net Proceeds are equal to or greater than Two Million Five
Hundred Thousand and No/100 Dollars ($2,500,000) or the costs of completing the
Restoration is equal to or greater than Five Hundred Thousand and No/100 Dollars
($500,000) Lender shall make the Net Proceeds available for the Restoration in
accordance with the provisions of this Section 6.4. The term "Net Proceeds" for
purposes of this Section 6.4 shall mean: (i) the net amount of all insurance
proceeds received by Lender pursuant to Section 6.1 (a)(i), (iv), (vi) and (ix)
as a result of such damage or destruction, after deduction of its reasonable
costs and expenses (including, but not limited to, reasonable counsel fees), if
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any, in collecting same ("Insurance Proceeds"), or (ii) the net amount of the
Award, after deduction of its reasonable costs and expenses (including, but not
limited to, reasonable counsel fees), if any, in collecting same ("Condemnation
Proceeds"), whichever the case may be.
(i) The Net Proceeds shall be made available to Borrower for
Restoration provided that each of the following conditions are met:
(A) no Event of Default shall have occurred and be continuing;
(B) (1) in the event the Net Proceeds are Insurance Proceeds,
less than twenty-five percent (25%) of the total floor area of the
Improvements on the Property has been damaged, destroyed or rendered
unusable as a result of such fire or other casualty or (2) in the
event the Net Proceeds are Condemnation Proceeds, less than ten
percent (10%) of the land constituting the Property is taken, and such
land is located along the perimeter or periphery of the Property, and
no material portion of the Improvements is located on such land;
(C) Leases demising in the aggregate a percentage amount
equal to or greater than the Rentable Space Percentage of the
total rentable space in the Property which has been demised under
executed and delivered Leases in effect as of the date of the
occurrence of such fire or other casualty or taking, whichever
the case may be, shall remain in full force and effect during and
after the completion of the Restoration. The term "Rentable Space
Percentage" shall mean a percentage amount equal to seventy-five
percent (75%);
(D) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than sixty (60)
days after such damage or destruction or taking, whichever the
case may be, occurs) and shall diligently pursue the same to
satisfactory completion;
(E) Lender shall be satisfied that any operating deficits,
including all scheduled payments of principal and interest under
the Note, which will be incurred with respect to the Property as
a result of the occurrence of any such fire or other casualty or
taking, whichever the case may be, will be covered out of (1) the
Net Proceeds, (2) the insurance coverage referred to in Section
6.1(a)(iii), if applicable, or (3) by other funds of Borrower;
(F) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) the Maturity
Date, (2) the earliest date required for such completion under
the terms of any Major Leases, (3) such time as may be required
under applicable zoning law, ordinance, rule or regulation in
order to repair and restore the Property to the condition it was
in immediately prior to such fire or other casualty or to as
nearly as possible the condition it was in immediately prior to
such taking, as applicable or (4) the expiration of the insurance
coverage referred to in Section 6.1(a)(iii);
(G) the Property and the use thereof after the Restoration
will be in compliance with and permitted under all applicable
zoning laws, ordinances, rules and regulations;
(H) the Restoration shall be done and completed by Borrower
in a diligent fashion and in compliance with all applicable
governmental laws, rules and regulations (including, without
limitation, all applicable environmental laws); and
(I) such fire or other casualty or taking, as applicable,
does not result in the loss of access to the Property or the
related Improvements; and
(J) the Casualty Consultant shall have determined that the
Net Proceeds are sufficient to fully pay for the Restoration.
(ii) The Net Proceeds shall be held by Lender in an interest-bearing
account and, until disbursed in accordance with the provisions of this
Section 6.4(b), shall constitute additional security for the Debt and other
obligations under the Loan Documents. The Net Proceeds shall be disbursed
by Lender to, or as directed by, Borrower from time to time during the
course of the Restoration, upon receipt of evidence satisfactory to Lender
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that (A) all materials installed and work and labor performed (except to
the extent that they are to be paid for out of the requested disbursement)
in connection with the Restoration have been paid for in full, and (B)
there exist no notices of pendency, stop orders, mechanic's or
materialman's liens or notices of intention to file same, or any other
liens or encumbrances of any nature whatsoever on the Property which have
not either been fully bonded to the satisfaction of Lender and discharged
of record or in the alternative fully insured to the satisfaction of Lender
by the title company issuing the Title Insurance Policy.
(iii) All plans and specifications required in connection with the
Restoration shall be subject to prior review and acceptance in all respects
by Lender and by an independent consulting engineer selected by Lender (the
"Casualty Consultant"). Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained
in connection with the Restoration. The identity of the contractors,
subcontractors and materialmen engaged in the Restoration, as well as the
contracts under which they have been engaged, shall be subject to prior
review and acceptance by Lender and the Casualty Consultant. All reasonable
costs and expenses incurred by Lender in connection with making the Net
Proceeds available for the Restoration including, without limitation,
reasonable counsel fees and disbursements and the Casualty Consultant's
fees, shall be paid by Borrower.
(iv) In no event shall Lender be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the Restoration, as
certified by the Casualty Consultant, minus the Casualty Retainage. The
term "Casualty Retainage" shall mean an amount equal to ten percent (10%)
(with release of retainage for subcontract where work is completed) of the
costs actually incurred for work in place as part of the Restoration, as
certified by the Casualty Consultant, until the Restoration has been
completed. The Casualty Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Section 6.4(b), be less
than the amount actually held back by Borrower from contractors,
subcontractors and materialmen engaged in the Restoration. The Casualty
Retainage shall not be released until the Casualty Consultant certifies to
Lender that the Restoration has been completed in accordance with the
provisions of this Section 6.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all
appropriate governmental and quasi-governmental authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration
have been paid in full or will be paid in full out of the Casualty
Retainage; provided, however, that Lender will release the portion of the
Casualty Retainage being held with respect to any contractor, subcontractor
or materialman engaged in the Restoration as of the date upon which the
Casualty Consultant certifies to Lender that the contractor, subcontractor
or materialman has satisfactorily completed all work and has supplied all
materials in accordance with the provisions of the contractor's,
subcontractor's or materialman's contract, the contractor, subcontractor or
materialman delivers the lien waivers and evidence of payment in full of
all sums due to the contractor, subcontractor or materialman as may be
reasonably requested by Lender or by the title company issuing the Title
Insurance Policy, and Lender receives an endorsement to the Title Insurance
Policy insuring the continued priority of the lien of the Mortgage and
evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Casualty
Retainage shall be approved by the surety company, if any, which has issued
a payment or performance bond with respect to the contractor, subcontractor
or materialman.
(v) Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Lender in consultation with the
Casualty Consultant, be sufficient to pay in full the balance of the costs
which are estimated by the Casualty Consultant to be incurred in connection
with the completion of the Restoration, no further disbursements shall be
made until such time as such deficiency shall no longer exist.
(vii) The excess, if any, of the Net Proceeds deposited with Lender
after the Casualty Consultant certifies to Lender that the Restoration has
been completed in accordance with the provisions of this Section 6.4(b),
and the receipt by Lender of evidence satisfactory to Lender that all costs
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incurred in connection with the Restoration have been paid in full, shall
be remitted by Lender to Borrower, provided no Event of Default shall have
occurred and shall be continuing under the Note, this Agreement or any of
the other Loan Documents.
(c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 6.4(b)(vii) may be retained and applied by Lender toward the payment
of the Debt whether or not then due and payable in such order, priority and
proportions as Lender in its sole discretion shall deem proper, or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate, in its discretion.
(d) In the event of foreclosure of the Mortgage with respect to the
Property, or other transfer of title to the Property in extinguishment in whole
or in part of the Debt all right, title and interest of Borrower in and to the
Policies that are not blanket Policies then in force concerning the Property and
all proceeds payable thereunder shall thereupon vest in the purchaser at such
foreclosure or Lender or other transferee in the event of such other transfer of
title.
VII. RESERVE FUNDS
Section 7.1 INTENTIONALLY OMITTED.
Section 7.2 TAX ESCROW FUND.
On each Payment Date, Borrower shall deposit with Agent in accordance with
the Cash Management Agreement (a) one-twelfth of the Taxes that Lender estimates
will be payable during the next ensuing twelve (12) months in order to
accumulate with Lender sufficient funds to pay all such Taxes at least thirty
(30) days prior to their respective due dates (said amounts in (a) hereinafter
called the "Tax Escrow Fund"). Lender will apply the Tax Escrow Fund to payments
of Taxes required to be made by Borrower pursuant to Section 5.1.2 hereof and
under the Mortgage. In making any payment relating to the Tax Escrow Fund,
Lender may do so according to any xxxx, statement or estimate procured from the
appropriate public office (with respect to Taxes), without inquiry into the
accuracy of such xxxx, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount
of the Tax Escrow Fund shall exceed the amounts due for Taxes pursuant to
Section 5.1.2 hereof, Lender shall, in its sole discretion, return any excess to
Borrower or credit such excess against future payments to be made to the Tax
Escrow Fund. Any amount remaining in the Tax Escrow Fund after the Debt has been
paid in full shall be returned to Borrower. In allocating such excess, Lender
may deal with the Person shown on the records of Lender to be the Owner of the
Property. If at any time Lender reasonably determines that the Tax Escrow Fund
is not or will not be sufficient to pay Taxes and Insurance Premiums by the
dates set forth in (a) and (b) above, Lender shall notify Borrower of such
determination and Borrower shall increase its monthly payments to Lender by the
amount that Lender estimates is sufficient to make up the deficiency at least
thirty (30) days prior to delinquency of the Taxes and/or thirty (30) days prior
to expiration of the Policies, as the case may be.
Section 7.3 INTENTIONALLY DELETED.
Section 7.4 TERMINATION ACCOUNT.
In the event that any termination payments are paid pursuant to Section 35
of the Everen Lease, all such amounts shall be delivered to Lender and deposited
into a segregated account with Agent (the "Termination Account"). All amounts
deposited into the Termination Account shall be invested in accordance with
Section 35 of the Lease and shall constitute additional security for payment of
the Debt; provided, however, that if an Event of Default shall occur, Lender
shall not apply such amounts to the payment of the Debt until the occurrence of
the Early Termination Date (as defined in the Everen Lease).
Section 7.5 RESERVE FUNDS, GENERALLY.
7.5.1 Borrower grants to Lender a first-priority perfected security
interest in each of the Reserve Funds and any and all monies now or hereafter
deposited in each Reserve Fund as additional security for payment of the Debt.
Until expended or applied in accordance herewith, the Reserve Funds shall
constitute additional security for the Debt.
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7.5.2 Upon the occurrence of an Event of Default, Lender may, in addition
to any and all other rights and remedies available to Lender, apply any sums
then present in any or all of the Reserve Funds to the payment of the Debt in
any order in its sole discretion.
7.5.3 Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in any Reserve
Fund or the monies deposited therein or permit any lien or encumbrance to attach
thereto, or any levy to be made thereon, or any UCC-1 Financing Statements,
except those naming Lender as the secured party, to be filed with respect
thereto.
7.5.4 Lender shall not be liable for any loss sustained on the investment
of any funds constituting the Reserve Funds.
VIII. DEFAULTS
Section 8.1 EVENT OF DEFAULT.
(a) Each of the following events shall constitute an event of default
hereunder (an "Event of Default"):
(i) if any portion of the Debt is not paid when due;
(ii) if any of the Taxes or Other Charges are not paid when the same
are due and payable unless sufficient escrows are deposited for the payment
thereof in accordance with the provisions of Article VII and the Cash Management
Agreement;
(iii) if the Policies are not kept in full force and effect, or if
certified copies of the Policies are not delivered to Lender within ten (10)
days after request;
(iv) if Borrower transfers or encumbers any portion of the Property
without Lender's prior written consent or otherwise violates the provisions of
Article 6 of the Mortgage;
(v) if any representation or warranty made by Borrower herein or in
any other Loan Document, or in any report, certificate, financial statement or
other instrument, agreement or document furnished to Lender shall have been
false or misleading in any material respect as of the date the representation or
warranty was made;
(vi) if Borrower shall make an assignment for the benefit of
creditors;
(vii) if a receiver, liquidator or trustee shall be appointed for
Borrower shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower or such guarantor, or if any proceeding for the
dissolution or liquidation of Borrower or such guarantor shall be instituted;
provided, however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Borrower or such guarantor, upon the same
not being discharged, stayed or dismissed within sixty (60) days;
(viii) if Borrower attempts to assign its rights under this Agreement
or any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents;
(ix) if Borrower breaches any of its respective negative covenants
contained in Section 5.2 or any covenant contained in Section 4.1.30 hereof;
(x) with respect to any term, covenant or provision set forth herein
which specifically contains a notice requirement or grace period, if Borrower
shall be in default under such term, covenant or condition after the giving of
such notice or the expiration of such grace period;
(xi) if Borrower shall continue to be in Default under any of the
other terms, covenants or conditions of this Agreement not specified in
subsections (i) to (x) above, for ten (10) days after notice to Borrower from
Lender, in the case of any Default which can be cured by the payment of a sum of
money, or for thirty (30) days after notice from Lender in the case of any other
Default; provided, however, that if such non-monetary Default is susceptible of
cure but cannot reasonably be cured within such 30-day period and provided
further that Borrower shall have commenced to cure such Default within such
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30-day period and thereafter diligently and expeditiously proceeds to cure the
same, such 30-day period shall be extended for such time as is reasonably
necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed sixty (60) days; or
(xii) if there shall be default under any of the other Loan Documents
beyond any applicable cure periods contained in such documents, whether as to
Borrower or the Property, or if any other such event shall occur or condition
shall exist, if the effect of such event or condition is to accelerate the
maturity of any portion of the Debt or to permit Lender to accelerate the
maturity of all or any portion of the Debt.
(b) Upon the occurrence of an Event of Default (other than an Event of
Default described in clauses (vi), (vii) or (viii) above) and at any time
thereafter Lender may, in addition to any other rights or remedies available to
it pursuant to this Agreement and the other Loan Documents or at law or in
equity, Lender may take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower and in the
Property, including, without limitation, declaring the Debt to be immediately
due and payable, and Lender may enforce or avail itself of any or all rights or
remedies provided in the Loan Documents against Borrower and the Property,
including, without limitation, all rights or remedies available at law or in
equity; and upon any Event of Default described in clauses (vi), (vii) or (viii)
above, the Debt and all other obligations of Borrower hereunder and under the
other Loan Documents shall immediately and automatically become due and payable,
without notice or demand, and Borrower hereby expressly waives any such notice
or demand, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
Section 8.2 REMEDIES.
(a) Upon the occurrence of an Event of Default, all or any one or more of
the rights, powers, privileges and other remedies available to Lender against
Borrower under this Agreement or any of the other Loan Documents executed and
delivered by, or applicable to, Borrower or at law or in equity may be exercised
by Lender at any time and from time to time, whether or not all or any of the
Debt shall be declared due and payable, and whether or not Lender shall have
commenced any foreclosure proceeding or other action for the enforcement of its
rights and remedies under any of the Loan Documents with respect to the
Property. Any such actions taken by Lender shall be cumulative and concurrent
and may be pursued independently, singly, successively, together or otherwise,
at such time and in such order as Lender may determine in its sole discretion,
to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender permitted by law, equity or contract or
as set forth herein or in the other Loan Documents. Without limiting the
generality of the foregoing, Borrower agrees that if an Event of Default is
continuing (i) Lender is not subject to any "one action" or "election of
remedies" law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until Lender
has exhausted all of its remedies against the Property and the Mortgage has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or
the Debt has been paid in full.
(b) Lender shall have the right from time to time to partially foreclose
the Mortgage in any manner and for any amounts secured by the Mortgage then due
and payable as determined by Lender in its sole discretion including, without
limitation, the following circumstances: (i) in the event Borrower defaults
beyond any applicable grace period in the payment of one or more scheduled
payments of principal and interest, Lender may foreclose the Mortgage to recover
such delinquent payments, or (ii) in the event Lender elects to accelerate less
than the entire outstanding principal balance of the Loan, Lender may foreclose
the Mortgage to recover so much of the principal balance of the Loan as Lender
may accelerate and such other sums secured by the Mortgage as Lender may elect.
Notwithstanding one or more partial foreclosures, the Property shall remain
subject to the Mortgage to secure payment of sums secured by the Mortgage and
not previously recovered.
(c) Lender shall have the right from time to time to sever the Note and the
other Loan Documents into one or more separate notes, mortgages and other
security documents (the "Severed Loan Documents") in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
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substance reasonably satisfactory to Lender. After the occurrence of an Event of
Default, Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents necessary or desirable to effect the aforesaid severance,
Borrower ratifying all that its said attorney shall do by virtue thereof;
provided, however, Lender shall not make or execute any such documents under
such power until three (3) days after notice has been given to Borrower by
Lender of Lender's intent to exercise its rights under such power. Except as may
be required in connection with a securitization pursuant to Section 9.1 hereof,
(i) Borrower shall not be obligated to pay any costs or expenses incurred in
connection with the preparation, execution, recording or filing of the Severed
Loan Documents, and (ii) the Severed Loan Documents shall not contain any
representations, warranties or covenants not contained in the Loan Documents and
any such representations and warranties contained in the Severed Loan Documents
will be given by Borrower only as of the Closing Date.
Section 8.3 REMEDIES CUMULATIVE; WAIVERS.
The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.
IX. SPECIAL PROVISIONS
Section 9.1 SALE OF NOTES AND SECURITIZATION.
At the request of the holder of the Note and, to the extent not already
required to be provided by Borrower under this Agreement, Borrower shall use
reasonable efforts to satisfy the market standards to which the holder of the
Note customarily adheres or which may be reasonably required in the marketplace
or by the Rating Agencies in connection with the sale of the Note or
participations therein or the first successful securitization (such sale and/or
securitization, the "Securitization") of rated single or multi-class securities
(the "Securities") secured by or evidencing ownership interests in the Note and
the Mortgage, including, without limitation, to:
(a) (i) provide such financial and other information with respect to the
Property, Borrower and the Manager which is customarily maintained by Borrower,
(ii) provide budgets relating to the Property which is customarily maintained by
Borrower and (iii) at Lender's expense, to perform or permit or cause to be
performed or permitted such site inspection, appraisals, market studies,
environmental reviews and reports (Phase I's and, if appropriate, Phase II's),
engineering reports and other due diligence investigations of the Property, as
may be reasonably requested by the holder of the Note or the Rating Agencies or
as may be necessary or appropriate in connection with the Securitization (the
"Provided Information"), together, if customary, with appropriate verification
and/or consents of the Provided Information through letters of auditors or
opinions of counsel of independent attorneys acceptable to Lender and the Rating
Agencies;
(b) at Lender's expense, cause counsel to render opinions, which may be
relied upon by the holder of the Note, the Rating Agencies and their respective
counsel, agents and representatives, as to non-consolidation, fraudulent
conveyance, and true sale and/or lease or any other opinion customary in
securitization transactions, which counsel and opinions shall be reasonably
satisfactory to the holder of the Note and the Rating Agencies;
(c) update such representations and warranties made in the Loan Documents
as of the closing date of the Securitization with respect to the Property,
Borrower, and the Loan Documents as are customarily provided in securitization
transactions and as may be reasonably requested by the holder of the Note or the
Rating Agencies; and
(d) execute such amendments to the Loan Documents and organizational
documents, enter into a lockbox or similar arrangement with respect to the Rents
as may be requested by the holder of the Note or the Rating Agencies or
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otherwise to effect the Securitization; provided, however, that Borrower shall
not be required to modify or amend any Loan Document if such modification or
amendment would (i) change the interest rate, the stated maturity or the
amortization of principal set forth in the Note, or (ii) modify or amend any
other material economic term of the Loan or materially increase any liability,
indemnity or other obligation.
(e) If requested by Lender, Borrower shall provide Lender with the
following financial statements (it being understood that Lender shall request
such financial statements if it anticipates that the principal amount of the
Loan at the time of Securitization may, or if the principal amount of the Loan
at any time during which the Loan is included in a Securitization does, equals
or exceeds 20% of the aggregate principal amount of all mortgage loans included
in the Securitization), and summaries of such financial statements if the
principal amount of the Loan at any such time equals or exceeds 10% of such
aggregate principal amount:
(i) As of the Closing Date, a balance sheet with respect to the
Property for the two most recent fiscal years, meeting the requirements of
Section 210.3-01 of Regulation S-X of the Securities Act of 1933, as
amended, and statements of income and statements of cash flows with respect
to the Property for the three most recent fiscal years, meeting the
requirements of Section 210.3-02 of Regulation S-X, and, to the extent that
such balance sheet is more than 135 days old as of the Closing Date,
interim financial statements of the Property meeting the requirements of
Section 210.3-01 and 210.3-02 of Regulation S-X (all of such financial
statements, collectively, the "Standard Statements"); provided, however,
that if the Property would be deemed to constitute a business and not real
estate under Regulation S-X that has been acquired by Borrower from an
unaffiliated third party (an "Acquired Property"), as to which the other
conditions set forth in Section 210.3-05 of Regulation S-X for provision of
financial statements in accordance with such Section have been met, in lieu
of the Standard Statements otherwise required by this paragraph, Borrower
shall instead provide the financial statements acquired by such Section
210.3-05 of Regulation S-X ("Acquired Property Statements").
(ii) Not later than thirty-eight (38) days after the end of each
fiscal quarter following the Closing Date, a balance sheet of the Property
as of the end of such fiscal quarter, meeting the requirements of Section
210.3-01 of Regulation S-X, and statements of income and statements of cash
flows of the Property for the period commencing following the last day of
the most recent fiscal year and ending on the date of such balance sheet
and for the corresponding period of the most recent fiscal year, meeting
the requirements of Section 210.3-02 of Regulation S-X (provided, that if
for such corresponding period of the most recent fiscal year Acquired
Property Statements were permitted to be provided hereunder pursuant to
Section 9.1(e)(i) above, Borrower shall instead provide Acquired Property
Statements for such corresponding period). If requested by Lender, Borrower
shall also provide "summarized financial information," as defined in
Section 210.1-02(bb) of Regulation S-X, with respect to such quarterly
financial statements.
(iii) Not later than eighty-three (83) days after the end of each
fiscal year following the Closing Date, a balance sheet of the Property as
of the end of such fiscal year, meeting the requirements of Section
210.3-01 of Regulation S-X, and statements of income and statements of cash
flows of the Property for such fiscal year, meeting the requirements of
Section 210.3-02 of Regulation S-X. If requested by Lender, Borrower shall
provide summarized financial information with respect to such annual
financial statements.
(iv) Within ten (10) Business Days after notice from Lender in
connection with the Securitization of this Loan, such additional financial
statements, such that, as of the date (each an "Offering Document Date") of
each prospectus, private placement memorandum, offering circular or other
offering document for such Securitization (each an "Offering Document"),
Borrower shall have provided Lender with all financial statements as
described in Section 9.1(e)(i) above; provided that the fiscal year and
interim periods for which such financial statements shall be provided shall
be determined as of such Offering Document Date.
(v) In the event Lender determines, in connection with a
Securitization, that the financial statements required in order to comply
with Regulation S-X or Legal Requirements are other than as provided
herein, then notwithstanding the provisions of this Section, Lender may
request, and Borrower shall promptly provide, such combination of Acquired
Property Statements and/or Standard Statements as may be necessary for such
compliance.
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(vi) Any other or additional financial statements, or financial,
statistical or operating information, as shall be required pursuant to
Regulation S-X or other Legal Requirements in connection with any Offering
Document or any filing under or pursuant to the Securities Exchange Act in
connection with or relating to a Securitization (hereinafter an "Exchange
Act Filing") or as shall otherwise be reasonably requested by Lender to
meet disclosure, rating agency or marketing requirements.
(vii) All financial statements provided by Borrower hereunder shall be
prepared in accordance with generally accepted accounting principles, and
shall meet the requirements of Regulation S-X and other applicable Legal
Requirements. All financial statements relating to a fiscal year shall be
audited by the independent accountants in accordance with generally
accepted auditing standards, Regulation S-X and all other applicable Legal
Requirements, shall be accompanied by the manually executed report of the
independent accountants thereon, which report shall meet the requirements
of Regulation S-X and all other applicable Legal Requirements, and shall be
further accompanied by a manually executed written consent of the
independent accountants, in form and substance acceptable to Lender, to the
inclusion of such financial statements in any offering document and any
Exchange Act Filing and to the use of the name of such independent
accountants and the reference to such independent accountants as "experts"
in any offering document and Exchange Act Filing, all of which shall be
provided at the same time as the related financial statements are required
to be provided, provided however that Lender timely provides to such
accountants such information as is required by such accountants to render
such consent. All other quarterly financial statements which are not
certified by Ernst & Young shall be certified by the chief financial
officer of Borrower, which certification shall state that such financial
statements to such person's knowledge meet the requirements set forth in
the first sentence of this paragraph.
Borrower shall not be obligated to pay any third party costs or expenses in
connection with a Securitization other than (i) costs relating to the
indemnification obligations set forth herein and (ii) costs relating to items
already required to be provided by Borrower under this Agreement.
Section 9.2 SECURITIZATION INDEMNIFICATION.
(a) In connection with a Securitization, Borrower agrees (i) to indemnify
Lender and its Affiliates for any losses, claims, damages or liabilities
(collectively, the "Liabilities") to which Lender or its Affiliates may become
subject insofar as the Liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact in the Provided
Information or arise out of or are based upon the omission or alleged omission
to state in the Provided Information a material fact required to be stated in
the Provided Information necessary in order to make the statements in the
Provided Information, in light of the circumstances under which they were made
not misleading and (ii) to reimburse Lender and its Affiliates for any legal or
other expenses reasonably incurred by Lender or its Affiliates in connection
with defending or investigating the Liabilities.
(b) The liabilities and obligations of both Borrower and Lender under this
Section 9.2 shall survive the termination of this Agreement and the satisfaction
and discharge of the Debt.
Section 9.3 INTENTIONALLY OMITTED.
Section 9.4 EXCULPATION.
Subject to the qualifications below, Lender shall not enforce the liability
and obligation of Borrower to perform and observe the obligations contained in
the Note, this Agreement, the Mortgage or the other Loan Documents by any action
or proceeding wherein a money judgment shall be sought against Borrower, its
partners, officers, directors, employees or agents (the "Exculpated Parties"),
except that Lender may bring a foreclosure action, an action for specific
performance or any other appropriate action or proceeding to enable Lender to
enforce and realize upon its interest under the Note, this Agreement, the
Mortgage and the other Loan Documents, or in the Property, the Rents, or any
other collateral given to Lender pursuant to the Loan Documents; provided,
however, that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's interest in the Property, in the Rents and in any other collateral
given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage
and the other Loan Documents, agrees that it shall not xxx for, seek or demand
any deficiency judgment against the Exculpated Parties in any such action or
proceeding under or by reason of or under or in connection with the Note, this
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Agreement, the Mortgage or the other Loan Documents. The provisions of this
section shall not, however, (a) constitute a waiver, release or impairment of
any obligation evidenced or secured by any of the Loan Documents; (b) impair the
right of Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under any of the Mortgage; (c) impair the right of Lender
to obtain the appointment of a receiver; (d) impair the enforcement of the
Assignment of Leases; (e) constitute a prohibition against Lender to commence
any other appropriate action or proceeding in order for Lender to exercise its
remedies against the Property (y) as set forth in the Loan Documents or (z) as
are available under applicable law; or (f) constitute a waiver of the right of
Lender to enforce the liability and obligation of Borrower, by money judgment or
otherwise, to the extent of any actual loss, damage, cost, expense, liability,
claim or other obligation incurred by Lender (including attorneys' fees and
costs reasonably incurred) arising out of or in connection with the following:
(i) fraud or intentional misrepresentation by Borrower or any guarantor in
connection with the Loan which has a material adverse effect of the
Borrower;
(ii) the gross negligence or willful misconduct of Borrower;
(iii)the breach of any covenant or indemnification provision in the
Environmental Indemnity or in the Mortgage concerning environmental
laws, hazardous substances and asbestos and any indemnification of
Lender with respect thereto in either document;
(iv) the removal or disposal by Borrower or its affiliates of any portion
of the Property after an Event of Default;
(v) the misapplication or conversion by Borrower of (A) any insurance
proceeds paid by reason of any loss, damage or destruction to the
Property, (B) any awards or other amounts received in connection with
the condemnation of all or a portion of the Property, or (C) any Rents
following an Event of Default;
(vi) failure to pay charges for labor or materials or other charges that
can create liens on any portion of the Property;
(vii)any security deposits, advance deposits or any other deposits
collected with respect to the Property which are not delivered to
Lender upon a foreclosure of the Property or action in lieu thereof,
except to the extent any such security deposits were applied in
accordance with the terms and conditions of any of the Leases prior to
the occurrence of the Event of Default that gave rise to such
foreclosure or action in lieu thereof; and
(viii) Borrower's indemnifications of Lender set forth in Section 9.2
hereof.
Notwithstanding anything to the contrary in this Agreement, the Note or any
of the Loan Documents, (A) Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Debt secured by the Mortgage or to require that all collateral shall
continue to secure all of the Debt owing to Lender in accordance with the Loan
Documents, and (B) the Debt shall be fully recourse to Borrower in the event
that: (i) Borrower fails to obtain Lender's prior written consent to any
subordinate financing or other voluntary Lien encumbering the Property; or (ii)
Borrower fails to obtain Lender's prior written consent to any assignment,
transfer, or conveyance of the Property or any interest therein as required by
the Mortgage or hereunder.
Section 9.5 TERMINATION OF MANAGER.
If (a) the Manager shall default after applicable notice and cure periods
have expired under the Management Agreement, (b) the amounts evidenced by the
Note have been accelerated pursuant to Section 8.1(b) hereof, (c) at the
Maturity Date, the Debt is not repaid in full, or (d) the Manager shall become
insolvent, Borrower shall, at the request of Lender, terminate the Management
Agreement and replace the Manager with a manager approved by Lender on terms and
conditions reasonably satisfactory to Lender, it being understood and agreed
that the management fee for such replacement manager shall not exceed then
prevailing market rates.
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Section 9.6 SERVICER.
At the option of Lender, the Loan may be serviced at no cost to Borrower by
a servicer/trustee (the "Servicer") selected by Lender and Lender may delegate
all or any portion of its responsibilities under this Agreement and the other
Loan Documents to the Servicer pursuant to a servicing agreement (the "Servicing
Agreement") between Lender and Servicer.
X. MISCELLANEOUS
Section 10.1 SURVIVAL.
This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
Section 10.2 LENDER'S DISCRETION.
Whenever pursuant to this Agreement, Lender exercises any right given to it
to approve or disapprove, or any arrangement or term is to be satisfactory to
Lender, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory shall (except as is
otherwise specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.
Section 10.3 GOVERNING LAW.
(A) THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF
NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED
FROM 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 LAWS) AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE
PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND
SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE
IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD
THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF
ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.
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 AND THE NOTE 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.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX XXXX, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW 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.
(C) NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION 10.3, ANY
ACTION TO ENFORCE OR FORECLOSE THE LIENS AND SECURITY INTERESTS CREATED PURSUANT
HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE INSTITUTED IN THE STATE
IN WHICH THE PROPERTY IS LOCATED.
Section 10.4 MODIFICATION, WAIVER IN WRITING.
No modification, amendment, extension, discharge, termination or waiver of
any provision of this Agreement, or of the Note, or of any other Loan Document,
nor consent to any departure by Borrower 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
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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.
Section 10.5 DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Lender in insisting upon
strict performance of any term, condition, covenant or agreement, or exercising
any right, power, remedy or privilege hereunder, or under the Note or under any
other Loan Document, or any other instrument given as security therefor, shall
operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
Section 10.6 NOTICES.
All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested or (b)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, addressed as follows (or at such
other address and person as shall be designated from time to time by any party
hereto, as the case may be, in a written notice to the other parties hereto in
the manner provided for in this Section):
If to Lender: Xxxxxx Brothers Holdings Inc.,
Three World Financial Center, 12th Floor
Commercial Mortgage Surveillance Group
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
with a copy to: Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
If to Borrower: 77 West Xxxxxx Limited Partnership
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
with a copy to: 77 West Xxxxxx Limited Partnership
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
and with a copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx, Esq.
A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery, upon the first delivery on a Business Day.
Section 10.7 TRIAL BY JURY.
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS,
OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER,
AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO
WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY BORROWER.
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Section 10.8 HEADINGS.
The Article and/or Section headings and the Table of Contents in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 10.9 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
Section 10.10 PREFERENCES.
Lender shall have the continuing and exclusive right to apply or reverse
and reapply any and all payments by Borrower to any portion of the obligations
of Borrower hereunder. 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.
Section 10.11 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.
Section 10.12 REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that Lender or its agents
have acted unreasonably or unreasonably delayed acting in any case where by law
or under this Agreement or the other Loan Documents, Lender or such agent, as
the case may be, has an obligation to act reasonably or promptly, Borrower
agrees that neither Lender nor its agents shall be liable for any monetary
damages, and Borrower's sole remedies shall be limited to commencing an action
seeking injunctive relief or declaratory judgment. The parties hereto agree that
any action or proceeding to determine whether Lender has acted reasonably shall
be determined by an action seeking declaratory judgment.
Section 10.13 EXPENSES; INDEMNITY.
(a) Borrower covenants and agrees to pay or, if Borrower fails to pay, to
reimburse, Lender upon receipt of written notice from Lender for all reasonable
costs and expenses (including reasonable attorneys' fees and disbursements)
incurred by Lender in connection with (i) the preparation, negotiation,
execution and delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby and all the
costs of furnishing all opinions by counsel for Borrower (including without
limitation any opinions reasonably requested by Lender as to any legal matters
arising under this Agreement or the other Loan Documents with respect to the
Property); (ii) Borrower's ongoing performance of and compliance with Borrower's
respective agreements and covenants contained in this Agreement and the other
Loan Documents on its part to be performed or complied with after the Closing
Date; (iv) 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 requested by
Lender; (v) securing Borrower's compliance with any requests made pursuant to
the provisions of this Agreement; (vi) the filing and recording fees and
expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Lien in favor of Lender pursuant to this
Agreement and the other Loan Documents; (vii) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any
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action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Property, or
any other security given for the Loan; and (viii) enforcing any obligations of
or collecting any payments due from Borrower under this Agreement, the other
Loan Documents or with respect to the Property or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by reason of
the gross negligence, illegal acts, fraud or willful misconduct of Lender. Any
cost and expenses due and payable to Lender may be paid from any amounts in the
Lockbox Account.
(b) Borrower shall indemnify, defend and hold harmless Lender from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender in any manner relating to or arising out of (i)
any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the "Indemnified Liabilities"); provided, however, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.
Section 10.14 SCHEDULES INCORPORATED.
The Schedules annexed hereto are hereby incorporated herein as a part of
this Agreement with the same effect as if set forth in the body hereof.
Section 10.15 OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lender's interest in and to this Agreement, the Note and
the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.
Section 10.16 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.
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Section 10.17 PUBLICITY.
All news releases, publicity or advertising by Borrower or their Affiliates
through any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents, to Lender, Xxxxxx
Brothers Holdings Inc., or any of their Affiliates shall be subject to the prior
review and approval of Lender, such approval not to be unreasonably withheld.
Section 10.18 WAIVER OF MARSHALLING OF ASSETS.
To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower's partners and others with interests in Borrower, and of the
Property, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Property for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.
Section 10.19 WAIVER OF COUNTERCLAIM.
Borrower hereby waives the right to assert a counterclaim, other than a
compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents.
SECTION 10.20 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.
In the event of any conflict between the provisions of this Loan Agreement
and any of the other Loan Documents, the provisions of this Loan Agreement shall
control. The parties hereto acknowledge that they were represented by competent
counsel in connection with the negotiation, drafting and execution of the Loan
Documents and that such Loan Documents shall not be subject to the principle of
construing their meaning against the party which drafted same. Borrower
acknowledges that, with respect to the Loan, Borrower shall rely solely on its
own judgment and advisors in entering into the Loan without relying in any
manner on any statements, representations or recommendations of Lender or any
parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender's exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.
Section 10.21 BROKERS AND FINANCIAL ADVISORs.
Borrower hereby represents that it has dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement. Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including Lender's attorneys' fees
and expenses) in any way relating to or arising from a claim by any Person that
such Person acted on behalf of Borrower in connection with the transactions
contemplated herein. The provisions of this Section 10.21 shall survive the
expiration and termination of this Agreement and the payment of the Debt.
Section 10.22 PRIOR AGREEMENTS.
This Agreement and the other Loan Documents contain the entire agreement of
the parties hereto and thereto in respect of the transactions contemplated
hereby and thereby, and all prior agreements among or between such parties,
whether oral or written, between Borrower and Lender are superseded by the terms
of this Agreement and the other Loan Documents.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.
77 WEST XXXXXX LIMITED PARTNERSHIP,
an Illinois limited partnership
By: PRIME GROUP REALTY, L.P.
a Delaware limited partnership,
its Managing Partner
By: PRIME GROUP REALTY TRUST,
a Maryland real estate investment trust,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:Senior Vice President
Xxxxxx Brothers Holdings Inc., doing business
as Xxxxxx Capital, a division of Xxxxxx Brothers
Holding Inc.
By: /s/ Xxxxx Xxxxxxx
----------------------------------------------
Name: Xxxxx Xxxxxxx
Title:
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SCHEDULE I
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RENT ROLL
[Exhibit Omitted]
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