Exhibit 10.1
LOAN AGREEMENT
Dated as of February 26, 1997
by and among
EACH OF THE ENTITIES IDENTIFIED ON SCHEDULE 1 HERETO,
as Borrower,
SALOMON BROTHERS REALTY CORP.
as Agent and initial Lender,
BANK LEUMI TRUST COMPANY OF NEW YORK
as Collateral Agent,
KRANZCO REALTY TRUST
as Guarantor,
and
Each Lender Signatory Hereto
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . 2
ARTICLE II
GENERAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.1. The Loan. . . . . . . . . . . . . . . . . . . . 25
Section 2.2. Use of Proceeds . . . . . . . . . . . . . . . . 26
Section 2.3. Security for the Loan . . . . . . . . . . . . . 26
Section 2.4. Borrowers' Global Note. . . . . . . . . . . . . 26
Section 2.5. Interest. . . . . . . . . . . . . . . . . . . . 27
Section 2.6. Voluntary Prepayment. . . . . . . . . . . . . . 28
Section 2.7. Mandatory Prepayment Upon Release . . . . . . . 28
Section 2.8. Application of Payments After Event of Default. 29
Section 2.9. Method and Place of Payment . . . . . . . . . . 29
Section 2.10. Taxes. . . . . . . . . . . . . . . . . . . . . 29
Section 2.11. Release of Collateral. . . . . . . . . . . . . 29
Section 2.12. Central Cash Management. . . . . . . . . . . . 30
Section 2.13. Repair Reserve Account . . . . . . . . . . . . 34
Section 2.14. Security Agreement . . . . . . . . . . . . . . 34
Section 2.15. Mortgage Recording Taxes . . . . . . . . . . . 36
Section 2.16. General Collateral Agent Provisions. . . . . . 37
Section 2.17. Extension Options. . . . . . . . . . . . . . . 39
ARTICLE III
CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . 40
Section 3.1. Conditions Precedent to Effectiveness . . . . . 40
Section 3.2. Execution and Delivery of Agreement . . . . . . 42
Section 3.3. Procedure for Disbursement of an Advance. . . . 42
Section 3.4. Information Delivery Requirements . . . . . . . 43
Section 3.5. Conditions Precedent to Each Disbursement of an
Advance. . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 3.6. Conditions Precedent to Disbursement of an
Advance on an Advance Closing Date on Which a Mortgaged
Property Will be Added to Collateral . . . . . . . . . . . 47
Section 3.7. Acceptance of Borrowings. . . . . . . . . . . . 49
Section 3.8. Form of Loan Documents and Related Matters. . . 49
ARTICLE IV
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . 49
Section 4.1. Representations . . . . . . . . . . . . . . . . 49
Section 4.2. Advance Closing Date Representations. . . . . . 54
Section 4.3. Survival of Representations . . . . . . . . . . 59
ARTICLE V
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 59
Section 5.1. Borrower Covenants. . . . . . . . . . . . . . . 59
ARTICLE VI
NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 72
Section 6.1. Borrower Negative Covenants . . . . . . . . . . 72
ARTICLE VII
DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 7.1. Event of Default. . . . . . . . . . . . . . . . 74
Section 7.2. Remedies. . . . . . . . . . . . . . . . . . . . 76
Section 7.3. Remedies Cumulative . . . . . . . . . . . . . . 77
Section 7.4. Default Administration Fee. . . . . . . . . . . 77
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.1. Survival. . . . . . . . . . . . . . . . . . . . 78
Section 8.2. Lenders' Discretion . . . . . . . . . . . . . . 78
Section 8.3. Governing Law . . . . . . . . . . . . . . . . . 78
Section 8.4. Modification, Waiver in Writing.. . . . . . . . 79
Section 8.5. Delay Not a Waiver. . . . . . . . . . . . . . . 79
Section 8.6. Notices . . . . . . . . . . . . . . . . . . . . 79
SECTION 8.7. TRIAL BY JURY . . . . . . . . . . . . . . . . . 80
Section 8.8. Headings. . . . . . . . . . . . . . . . . . . . 80
Section 8.9. Assignment. . . . . . . . . . . . . . . . . . . 80
Section 8.10. Severability . . . . . . . . . . . . . . . . . 81
Section 8.11. Preferences. . . . . . . . . . . . . . . . . . 81
Section 8.12. Waiver of Notice . . . . . . . . . . . . . . . 81
Section 8.13. Remedies of Borrowers. . . . . . . . . . . . . 81
Section 8.14. Exhibits Incorporated. . . . . . . . . . . . . 81
Section 8.15. Offsets, Counterclaims and Defenses. . . . . . 81
Section 8.16. No Joint Venture or Partnership. . . . . . . . 82
Section 8.17. Waiver of Marshalling of Assets Defense. . . . 82
Section 8.18. Waiver of Counterclaim . . . . . . . . . . . . 82
Section 8.19. Conflict; Construction of Documents. . . . . . 82
Section 8.20. Brokers and Financial Advisors . . . . . . . . 82
Section 8.21. Counterparts . . . . . . . . . . . . . . . . . 83
Section 8.22. Estoppel Certificates. . . . . . . . . . . . . 83
Section 8.23. Payment of Expenses. . . . . . . . . . . . . . 83
Section 8.24. Non-Recourse . . . . . . . . . . . . . . . . . 83
Section 8.25. Confidentiality. . . . . . . . . . . . . . . . 84
ARTICLE IX
AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.1. Appointment, Powers and Immunities. . . . . . . 85
Section 9.2. Reliance by Agent . . . . . . . . . . . . . . . 85
Section 9.3. Defaults. . . . . . . . . . . . . . . . . . . . 85
Section 9.4. Rights as a Lender. . . . . . . . . . . . . . . 86
Section 9.5. Indemnification . . . . . . . . . . . . . . . . 86
Section 9.6. Non-Reliance on Agent and Other Lenders . . . . 86
Section 9.7. Failure to Act. . . . . . . . . . . . . . . . . 87
Section 9.8. Resignation or Removal of Agent . . . . . . . . 87
Section 9.9. Agency Fee. . . . . . . . . . . . . . . . . . . 87
Section 9.10. Consents under Lender Loan Documents . . . . . 87
Section 9.11. Notices, Reports and Other Communications. . . 87
Exhibits
A - Assignment of Contracts, Licenses, Permits,
Agreements, Warranties and Approvals (Form)
B - Global Note (Form)
C - Mortgage (Deed of Trust), Assignment of Leases and
Rents, Security Agreement and Fixture Filing (Form)
D - Management Agreement
E - Manager's Consent and Subordination of Management
Agreement (Form)
F-1 - Closing Date Opinion of Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll
(Guarantor matters)
F-2 - Closing Date Opinion of Xxxxxxxx Xxxxxxxxx Xxxxxx
Aronsohn & Xxxxxx LLP
(Loan Document enforceability)
G - Registered Note (Form)
H - Financing Statements (Form)
I - Lien Search Jurisdictions
J - Guaranty (Form)
K - Assignment of Rents and Leases (Form)
L - Pledge Agreement (Form)
Schedules
1 - Borrowers
2 - Appraisers
3 - Ground Leases
4 - Rights of First Refusal, etc.
LOAN AGREEMENT
THIS LOAN AGREEMENT, made as of February 26, 1997, is
by and among SALOMON BROTHERS REALTY CORP., a New York
corporation, having an address at Seven Xxxxx Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as agent for Lender (in such capacity,
together with its successors and assigns in such capacity,
"Agent"), each of the financial institutions signatory hereto
that is identified as a "Lender" on the signature pages hereto or
that, pursuant to Section 8.9 hereof shall become a "Lender"
hereunder (individually, a "Lender" and collectively, the
"Lenders"), each of the entities named on Schedule 1 hereto or
which join this Agreement after the date of execution of this
Agreement, each having an address at c/o Kranzco Realty Trust,
000 Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (each
borrowing entity is hereinafter referred to individually as a
"Borrower" and collectively as "Borrowers"), BANK LEUMI TRUST
COMPANY OF NEW YORK, a New York corporation, having an address at
000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx 00000, as collateral
agent for Agent ("Collateral Agent") and KRANZCO REALTY TRUST, a
Maryland real estate investment trust, having an office at 000
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 ("Guarantor").
RECITALS
WHEREAS, Borrowers desire to obtain a series of loans
(each, an "Advance" and collectively, the "Loan") from Lender in
an aggregate amount at any time outstanding of up to $50,000,000
(the "Loan Amount") in order to provide Borrowers and/or
Affiliates of Borrowers with funds, among other things, (i) to
acquire real property, (ii) for working capital, (iii) to pay
certain fees and expenses associated with the Loan, and (iv) for
other general corporate purposes;
WHEREAS, Agent is unwilling to make the Loan unless (i)
Borrowers join in the execution and delivery of this Agreement
and the Loan Documents (hereinafter defined) which shall
establish the terms and conditions of the Loan and of each
Advance and (ii) Guarantor joins in the execution and delivery of
the Guaranty (hereinafter defined) which shall establish the
terms and conditions of the Guaranty;
WHEREAS, Borrowers have agreed to establish certain
accounts and to grant to Collateral Agent on behalf of, and for
the benefit of, Lender a security interest therein upon the terms
and conditions of the security agreement set forth in Section
2.14;
WHEREAS, Bank Leumi Trust Company of New York, in its
capacity as Collateral Agent, is willing to join in the security
agreement set forth in Section 2.14 by execution and delivery of
this Agreement in that capacity.
NOW, THEREFORE, in consideration of the making of the
Loan by the initial Lender and for other good and valuable
consideration, the mutual receipt and legal sufficiency of which
are hereby acknowledged, the parties hereby covenant, agree,
represent and warrant as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions. For all purposes of this
Agreement: (1) the capitalized terms defined in this Article I
have the meanings assigned to them in this Article I, and include
the plural as well as the singular; (2) all accounting terms have
the meanings assigned to them in accordance with GAAP; (3) the
words "herein", "hereof", and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section, or other subdivision; and (4) the
following terms have the following meanings:
"Accepted Practices" means such general practices as
commercial mortgage collateral agents or banks would follow in
the normal course of their business in performing administrative
and custodial duties with respect to collateral which is
generally similar to the Account Collateral; provided, however,
that "Accepted Practices" shall not be deemed to include any
custodial practices now followed by Collateral Agent for any such
collateral held for its own account to the extent that such
practices are more stringent than the practices followed by
commercial collateral agents or banks generally.
"Account Collateral" has the meaning provided in
Section 2.14(a).
"Accounts" means all accounts (as defined in the UCC),
now owned or hereafter acquired by Borrowers, and arising out of
or in connection with, the operation of the Mortgaged Property
and all other accounts described in the Management Agreement and
all present and future accounts receivable, inventory accounts,
contract rights, chattel paper, notes, acceptances, insurance
policies, Instruments, Documents or other rights to payment and
all forms of obligations owing at any time to Borrowers
thereunder, whether now existing or hereafter created or
otherwise acquired by or on behalf of Borrowers, and all Proceeds
thereof and all liens, security interests, guaranties, remedies,
privileges and other rights pertaining thereto, and all rights
and remedies of any kind forming the subject matter of any of the
foregoing. Without limiting the generality of the foregoing, the
term "Accounts" shall include all of Borrowers' right, title and
interest in and to:
(i) all income, Rents, issues, profits, revenues,
deposits and other benefits from the Mortgaged Property;
(ii) all receivables and other obligations now existing
or hereafter arising or created out of the sale, lease,
sublease, license, concession or other grant of the right of
the use and occupancy of property or rendering of services
by Borrowers or any operator or manager of the Mortgaged
Property (arising out of or in connection with, directly or
indirectly, the Mortgaged Property) or other commercial
space located at the Mortgaged Property or acquired from
others (including, without limitation, from rental of space,
halls, stores, and offices, and deposits securing
reservations of such space, exhibit or sales space of every
kind, license, lease, sublease and concession fees and
rentals, health club membership fees, food and beverage
wholesale and retail sales of merchandise, service charges,
vending machine sales and proceeds, if any, from business
interruption or other loss of income insurance);
(iii) all sums of money, and all instruments, documents
and securities held in any accounts of Borrowers in
connection therewith, or any demand, time, savings or other
account maintained by Borrowers with any bank or certificate
of deposit issued by any bank with the proceeds of such
account;
(iv) all of the records and books of account now or
hereafter maintained by or on behalf of Borrowers or Manager
in connection with the operation of the Mortgaged Property;
and
(v) the Collection Account and the Repair Reserve
Account.
"Activity Statement" and "Activity Statement Date" have
the meaning provided in Section 2.12(d).
"Adjusted Operating Expenses" means, as of any date of
calculation, the accrued Operating Expenses with respect to the
Mortgaged Property (calculated on an individual Mortgaged
Property basis and aggregated) during the most recent twelve (12)
month period for which such information was furnished to Agent
pursuant to Section 2.12(e) hereof, adjusted by Agent to reflect
(i) expenses for management fees equal to the greater of actual
management fees and 3% of Gross Revenues, (2) an annual minimum
replacement reserve in an amount reasonably determined by Agent,
(3) a normalized annual TI Costs and Leasing Commissions reserve
as reasonably determined by Agent and (4) material increases in
future Operating Expenses as reasonably projected by Agent.
"Adjusted Operating Revenue" means, as of any date of
calculation, the sum of (A) the Operating Revenues reasonably
projected to be received with respect to the Mortgaged Property
during the twelve (12) month period beginning on the first day of
the following month and ending on the last day of the month in
which such calculation is being made in the following year on a
pro forma basis, based solely upon the base rent portion of the
Rents due pursuant to executed Leases for part or all of such
period, for tenants which either are in occupancy from a current
rent roll or have yet to occupy the related space and in any such
case are not in monetary or other material default under such
Leases as of such date of calculation and (B) the lesser of (i)
the actual recoveries and other recurring income which were
received with respect to the Mortgaged Property during the prior
twelve (12) month period for which such information was furnished
to Agent pursuant to Section 2.12(e) hereof and (ii) the amount
of recoveries and other recurring income reasonably projected to
be received with respect to the Mortgaged Property during the
period referred to in clause (A) above on a pro forma basis based
solely on executed Leases for part or all of such period, for
tenants which either are in occupancy from a current rent roll or
have yet to occupy the related space and in any such case are not
in monetary or other material default under such Leases as of
such date of calculation, as the same are adjusted by Agent to
reflect (1) a credit loss/vacancy allowance equal to the greatest
of 5%, actual vacancy or comparable market vacancy as reasonably
determined by Agent, and (2) with respect to the projected
Operating Revenues described in (A) above only, reduction of
above market rents to market, as reasonably determined by Agent.
Adjusted Operating Revenue shall be calculated on an individual
Mortgaged Property basis and in aggregate.
"Adjusted Property Net Cash Flow" for any period shall
mean the amount by which Adjusted Operating Revenue exceeds
Adjusted Operating Expenses for such period.
"Advance" has the meaning provided in the Recitals
hereto.
"Advance Closing Date" means the Closing Date and each
other date on which an Advance is made pursuant to Section 3.3(c)
hereunder.
"Affiliate" of any specified Person means any other
Person controlling or controlled by or under common control with
such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means
the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities or other beneficial interests, by contract or
otherwise; and the terms "controlling" and "controlled" have the
meanings correlative to the foregoing.
"Agent" has the meaning provided in the first paragraph
of this Agreement.
"Agreement" means this Loan Agreement, together with
any Schedules and Exhibits hereto, as the same may from time to
time hereafter be modified, supplemented or amended.
"Allocated Loan Amount" means the portion of the Loan
Amount allocated to each Mortgaged Property as of the Advance
Closing Date on which such Mortgaged Property becomes subject to
the Lien of the related Mortgage, as such amounts may be adjusted
by Agent on behalf of Lender from time to time, such adjustments
to be based upon, without limitation, revised Adjusted Property
Net Cash Flow, Appraisals and a Material Adverse Effect.
"Application Letter" means the letter dated January 17,
1997 entered into between Kranzco Realty Trust and the initial
Lender.
"Appraisal" means an appraisal with respect to a
Mortgaged Property prepared by an Appraiser in accordance with
the Uniform Standards of Professional Appraisal Practice of the
Appraisal Foundation, in compliance with the requirements of
Title 11 of the Financial Institution Reform, Recovery and
Enforcement Act and using customary valuation methods such as the
income, sales/market and cost approaches, as any of the same may
be updated by recertification from time to time by the Appraiser
performing the appraisal.
"Appraiser" means any of the MAI appraisers set forth
on Schedule 2 to this Agreement.
"Assignment" has the meaning provided in
Section 5.1(V).
"Assignment of Rents and Leases" means, with respect to
each Mortgaged Property, an Assignment of Rents and Leases, in
the form attached hereto as Exhibit K, dated as of the date
hereof, granted by the respective Borrower to the initial Lender
with respect to the Leases, as same may hereafter from time to
time be supplemented, amended, modified or extended.
"Basic Carrying Costs" means the following costs with
respect to the Mortgaged Property: (i) Impositions and
(ii) insurance premiums for policies of insurance required to be
maintained pursuant to this Agreement or the other Loan Documents
(including the allocable portion of any insurance premiums under
policies covering properties in addition to the Mortgaged
Property).
"Borrower" and "Borrowers" have the meanings provided
in the first paragraph of this Agreement and such terms shall be
deemed to include any Leasehold Borrower.
"Business Day" means any day other than a Saturday and
a Sunday and a day on which federally insured depository
institutions in the State of New York or Pennsylvania are
authorized or obligated by law, governmental decree or executive
order to be closed. When used with respect to an Interest
Determination Date, "Business Day" shall mean a day on which
banks are open for dealing in foreign currency and exchange in
London and New York City.
"Capital Event Proceeds" means, with respect to any
Mortgaged Property which has been the subject of a Transfer, the
excess of Liquidation Proceeds received by Borrower with respect
to such Mortgaged Property over Liquidation Expenses incurred
with respect thereto.
"Capital Improvement Costs" means costs incurred by
Borrower in connection with replacements and capital repairs
required to be made to the Mortgaged Property (including, without
limitation, repairs to the structural components, roofs, building
systems, parking lots, TI Costs and Leasing Commissions).
"Change of Control" means (i) the sale or transfer by
Guarantor of a majority of the direct or indirect right to
distributions from a Borrower in the aggregate to a Person or
Persons who are not controlled, directly or indirectly, by the
Guarantor or (ii) the sale or transfer by Guarantor of a majority
of the direct or indirect voting rights in a Borrower to a Person
or Persons who are not controlled, directly or indirectly, by the
Guarantor.
"Closing Date" means the date on which this Agreement
shall become effective pursuant to Section 3.1, such date being
February 27, 1997.
"Code" means the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any
successor statutes thereto, and applicable U.S. Department of
Treasury regulations issued pursuant thereto in temporary or
final form.
"Collateral" means, collectively, the Ground Leases,
Land, Improvements, Contracts, Documents, Trademarks, Equipment,
Leases, Rents, Accounts, General Intangibles, Instruments,
Inventory, Money and rights to payment from Persons arising from
the operation of the Mortgaged Property and all Proceeds, and (to
the full extent assignable) Permits, all whether now owned or
hereafter acquired and all other property which is or hereafter
may become subject to a Lien in favor of Agent or in favor of
Collateral Agent on behalf of Lender as security for the Loan.
"Collateral Agent" means Bank Leumi Trust Company of
New York or such Person's successor in interest or other
successor.
"Collateral Security Instrument" means any right,
document or instrument, other than a Mortgage, given as security
for the Loan (including, without limitation, the Pledge
Agreement, the Management Subordination and the Contract
Assignment, as same may be amended or modified from time to
time).
"Collection Account" has the meaning provided in
Section 2.12(a).
"Collection Period" means, with respect to any Payment
Date, the period beginning on the immediately preceding Payment
Date and ending on the day prior to such Payment Date; provided,
however, that in the case of the first Payment Date, the
"Collection Period" shall be the period from the Closing Date to
the day prior to such Payment Date.
"Commitment Fee" has the meaning provided in the
Application Letter.
"Condemnation Proceeds" means, in the event of a Taking
with respect to the Mortgaged Property, the proceeds in respect
of such Taking.
"Contingent Obligation" means, as used in the
definition of Other Borrowings, any obligation of a Borrower
guaranteeing any indebtedness, leases, dividends or other
obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner. Without limiting the
generality of the foregoing, the term "Contingent Obligation"
shall include any obligation of such Borrower, whether or not
contingent:
(i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor;
(ii) to advance or supply funds (x) for the purchase or
payment of any such primary obligation or (y) to maintain
working capital or equity capital of the primary obligor;
(iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to
make payment of such primary obligation; or
(iv) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Borrower
is required to perform thereunder) as determined by Agent in good
faith.
"Contract Assignment" means, with respect to each
Mortgaged Property, the Assignment of Contracts, Licenses,
Permits, Agreements, Warranties and Approvals in the form
attached hereto as Exhibit A, dated as of the Closing Date and
executed by the related Borrower.
"Contracts" means the Management Agreement and all
other agreements to which a Borrower is a party, of which such
Borrower is a beneficiary or which are assigned to such Borrower
by Manager in the Management Agreement and which are executed in
connection with the construction, operation and management of the
Mortgaged Property (including, without limitation, agreements for
the sale, lease or exchange of goods or other property and/or the
performance of services by it, in each case whether now in
existence or hereafter arising or acquired), as any such
agreements have been or may be from time to time amended,
supplemented or otherwise modified.
"Debt Service Coverage" means the ratio, expressed as a
percentage to two decimal places, of Adjusted Property Net Cash
Flow to Loan Debt Service.
"Debt Service Coverage Test" means a test which shall
be satisfied if the Adjusted Property Net Cash Flow at the time
of determination is at least equal to the product of 1.50 and the
Loan Debt Service.
"Debt Service Coverage/Property Release Test Date"
means the twenty-fifth (25th) day of each month (or, if such day
is not a Business Day, the next succeeding Business Day) until
the Loan is repaid in full.
"Debt Service Deposit Amount" means, as of any Payment
Date, the sum of (i) the interest payments that are due and
payable in accordance with the Global Note on such Payment Date,
(ii) the principal payments, if any, that are due and payable
pursuant to Section 2.7(b) on such Payment Date and (iii) any
other amounts under this Agreement, the Global Note, the Loan
Documents or the Fee Letter due on such Payment Date.
"Default" means the occurrence of any event which, but
for the giving of notice or the passage of time, or both, would
be an Event of Default.
"Default Administration Fee" means an amount equal to
the product of (x) 1% and (y) the Principal Indebtedness as of
the date the Default Administration Fee becomes payable;
provided, that the Default Administration Fee shall not be
payable in the circumstance described in Section 7.4.
"Default Rate" means the per annum interest rate equal
to 5.0% per annum in excess of the rate otherwise applicable
hereunder.
"Deposit Account" has the meaning provided in Section
2.12(a).
"Deposit Bank" has the meaning provided in Section
2.12(a).
"Documents" means all "documents" as defined in the UCC
or other receipts covering, evidencing or representing goods now
owned or hereafter acquired by a Borrower.
"Eligible Account" means a separate and identifiable
account from all other funds held by the holding institution that
is: (i) an account maintained with a federal or state chartered
depository institution or trust company whose (1) commercial
paper, short-term debt obligations or other short-term deposits
(or, in the case of a depository institution or trust company
that is the principal subsidiary of a holding company, the
commercial paper, short-term debt obligations or other short-term
deposits of such holding company) are rated by the Rating
Agency(ies) not less than "A-1" (or the equivalent), if the
deposits are to be held in the account for less than thirty (30)
days or (2) long-term unsecured debt obligations are rated at
least "AA-" (or the equivalent), if the deposits are to be held
in the account more than thirty (30) days, (ii) an account the
deposits in which are fully insured by the FDIC or (iii) a
segregated trust account maintained with the corporate trust
department of a federal or state chartered depository institution
or trust company subject to regulations regarding fiduciary funds
on deposit similar to Title 12 of the Code of Federal Regulations
Section 9.10(b) which, in either case, has corporate trust
powers, acting in its fiduciary capacity. An Eligible Account
shall not be evidenced by a certificate of deposit, passbook or
other instrument. Following a downgrade, withdrawal,
qualification or suspension of such institution's rating, each
account must promptly (and in any case within not more than
thirty (30) calendar days) be moved to a qualifying institution
or to one or more segregated trust accounts in the trust
department of such institution, if permitted.
"Engineer" means Xxxxxx X. Xxxxxxx Associates, Inc. and
EMG or such other independent Engineer as shall be approved by
Agent.
"Engineering Report" means the structural engineering
reports with respect to the Mortgaged Property prepared by an
Engineer and delivered to Agent in connection with the Loan and
any amendments or supplements thereto delivered to Agent.
"Environmental Auditor" means EMG or such other
independent environmental auditor as shall be approved by Agent.
"Environmental Claim" means any notice, notification,
request for information, claim, administrative, regulatory or
judicial action, suit, judgment, demand or other communication
(whether written or oral) by any Person or Governmental Authority
alleging or asserting liability with respect to a Borrower,
Manager or the Mortgaged Property (whether for damages,
contribution, indemnification, cost recovery, compensation,
injunctive relief, investigatory, response, remedial or cleanup
costs, damages to natural resources, personal injuries, fines or
penalties) arising out of, based on or resulting from (i) the
presence, Use or Release into the environment of any Hazardous
Substance at any location (whether or not owned, managed or
operated by such Borrower or Manager), (ii) any fact,
circumstance, condition or occurrence forming the basis of any
violation, or alleged violation, of any Environmental Law or
(iii) any alleged injury or threat of injury to health, safety or
the environment.
"Environmental Laws" means any and all present and
future federal, state or local laws, statutes, ordinances or
regulations, any judicial or administrative orders, decrees or
judgments thereunder, and any permits, approvals, licenses,
registrations, filings and authorizations, in each case as now or
hereafter in effect, relating to the environment, human health or
safety, or the Release or threatened Release of Hazardous
Substances or otherwise relating to the Use of Hazardous
Substances.
"Environmental Reports" means a "Phase I Environmental
Site Assessment" (and, if necessary, a "Phase II Environmental
Site Assessment") as referred to in the ASTM Standard Practice
for Environmental Site Assessments: Phase 1 Environmental Site
Assessment Process, E 1527-94 and an asbestos survey, with
respect to the Mortgaged Property, prepared by an Environmental
Auditor and delivered to Agent and any amendments or supplements
thereto delivered to Agent.
"Equipment" means all "equipment" as defined in the
UCC, now or hereafter owned by a Borrower or in which such
Borrower has or shall acquire an interest, now or hereafter
located on, attached to or contained in or used in connection
with the Mortgaged Property, and shall also mean and include all
building materials, construction materials, personal property
constituting furniture, fittings, appliances, apparatus,
leasehold improvements, machinery, devices, interior
improvements, appurtenances, equipment, plant, furnishings,
fixtures, computers, electronic data processing equipment,
telecommunications equipment and other fixed assets now owned or
hereafter acquired by such Borrower and now or hereafter used in
the operation of the business conducted at the Mortgaged
Property, and all Proceeds thereof and as well as all additions
to, substitutions for, replacements of or accessions to any of
the items recited as aforesaid and all attachments, components,
parts (including spare parts) and accessories, whether installed
thereon or affixed thereto, and wherever located, now or
hereafter owned by such Borrower and used in connection with, or
with the operation of, the Mortgaged Property or the buildings,
structures, or other improvements now or hereafter located at the
Mortgaged Property, or in connection with any construction being
conducted or which may be conducted thereon, all regardless of
whether the same are located on the Mortgaged Property or are
located elsewhere (including, without limitation, in warehouses
or other storage facilities or in the possession of or on the
premises of a bailee, vendor or manufacturer) for purposes of
manufacture, storage, fabrication or transportation and all
extensions and replacements to, and proceeds of, any of the
foregoing, but exclusive of those items which are property of
tenants of the Mortgaged Property.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated thereunder. Section references to ERISA are to
ERISA, as in effect at the date of this Agreement and, as of the
relevant date, any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" means any corporation or trade or
business that is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which Borrower
is a member and (ii) solely for purposes of potential liability
under Section 302(c)(11) of ERISA and Section 412(c)(11) of the
Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of
the Code of which Borrower is a member.
"Event of Default" has the meaning provided in
Section 7.1.
"Exchange Act" has the meaning provided in
Section 5.1(R)(iv).
"Extended Maturity Date" has the meaning provided in
Section 2.17.
"Extension Conditions" has the meaning provided in
Section 2.17.
"Extension Fee" has the meaning provided in
Section 2.17.
"Extension Notice" has the meaning provided in
Section 2.17.
"Extension Option" has the meaning provided in
Section 2.17.
"Fee Letter" means the letter entered into by and among
Guarantor and Collateral Agent, with respect to the fees of
Collateral Agent under this Agreement.
"Financial Covenants" has the meaning provided in the
Guaranty.
"Fiscal Year" means the 12-month period ending on
December 31st of each year (or, in the case of the first fiscal
year, such shorter period from the Closing Date through such
date) or such other fiscal year of Borrowers as Borrowers may
select from time to time upon notice to Agent on behalf of
Lenders.
"Fund" has the meaning provided in the definition of
"Permitted Investments."
"GAAP" means generally accepted accounting principles
in the United States of America as of the date of the applicable
financial report.
"General Intangibles" means all "general intangibles"
as defined in the UCC, now owned or hereafter acquired by a
Borrower. Without limiting the generality of the foregoing, the
term "General Intangibles" shall include:
(i) all obligations or indebtedness owing to such
Borrower from whatever source arising (other than Accounts,
Rents, Instruments, Inventory, Money, Contracts, Documents,
Trademarks and Permits);
(ii) all unearned premiums accrued or to accrue under
all insurance policies for the Mortgaged Property obtained
by such Borrower, all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing into cash or
liquidated claims (including, without limitation, proceeds
of insurance, condemnation awards, and all rights of such
Borrower to refunds of real estate taxes and assessments);
(iii) all royalties and license fees;
(iv) all trademark licenses, trademarks, rights in
intellectual property, goodwill, trade names, service marks,
trade secrets, copyrights, permits and licenses, together
with the registrations therefor and the goodwill appurtenant
thereto;
(v) all rights or claims in respect of refunds for
taxes paid; and
(vi) all rights in respect of any pension plan or
similar arrangement maintained for employees of such
Borrower.
"Global Note" means the global note, substantially in
the form of Exhibit B hereto, made by Borrowers to the initial
Lender pursuant to this Agreement, as such note may be modified,
amended, supplemented or extended.
"Governmental Authority" means any national or federal
government, any state, regional, local or other political
subdivision thereof with jurisdiction and any Person with
jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Gross Revenue" means, for any period, the total dollar
amount of all income and receipts received in the ordinary course
of business with respect to the Mortgaged Property (including,
without limitation, all Rents, Money and Proceeds of any
Accounts), but excluding Loss Proceeds and Proceeds from any
Transfer of the Mortgaged Property.
"Ground Lease" means each of those ground leases
described on Schedule 3 hereto between the applicable landlord,
and the applicable Leasehold Borrower, as tenant, as the same may
be supplemented, amended, modified, renewed or extended.
"Ground Lease Impairment" means with respect to a
Ground Lease: (i) any termination, cancellation or surrender
affecting any Ground Lease (in each case in whole or in part and
whether or not pursuant to an express right contained in the
Ground Lease); (ii) any modification, amendment, supplementation,
or other change materially and adversely affecting any Ground
Lease; (iii) any subordination, or consent to the subordination
of, any Ground Lease to any mortgage or other Lien encumbering
(or that may in the future encumber) the estate of the lessor
under the Ground Lease in any premise(s) demised to a Leasehold
Borrower under a Ground Lease; or (iv) a Leasehold Borrower's
delivery of any notice to any lessor under a Ground Lease that
impairs or is reasonably projected to impair, or purports to
limit the exercise of, Lender's rights and remedies under the
related leasehold Mortgage or the applicable Ground Lease in any
material respect, whether caused by a Leasehold Borrower or
suffered or permitted to occur by a Leasehold Borrower.
"Ground Rent" means any and all payments required of a
Leasehold Borrower under a Ground Lease, including base rent,
fixed rent, additional rent, and any other payments, sums or
charges payable or required to be paid, whether to the ground
lessor or to a third party, under a Ground Lease.
"Guaranty" means, with respect to the Loan, the
Guaranty Agreement in the form attached hereto as Exhibit J,
dated as of the Closing Date and executed by Guarantor.
"Hazardous Substance" means, collectively, (i) any
petroleum or petroleum products or waste oils, explosives,
radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls ("PCBs"), lead in drinking
water, and lead-based paint, (ii) any chemicals or other
materials or substances which are now or hereafter become defined
as or included in the definitions of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous
wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (iii) any other
chemical or any other material or substance, exposure to which is
now or hereafter prohibited, limited or regulated under any
Environmental Law.
"Impositions" means all taxes (including, without
limitation, all real estate, ad valorem, sales (including those
imposed on lease rentals), use, single business, gross receipts,
value added, intangible transaction privilege, privilege or
license or similar taxes), assessments (including, without
limitation, all assessments for public improvements or benefits,
whether or not commenced or completed within the term of the
Mortgage), ground rents, water, sewer or other rents and charges,
excises, levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees), and all
other governmental charges, in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, of
every character in respect of the Mortgaged Property, including
any Rents and Accounts (including all interest and penalties
thereon), which at any time prior to, during or in respect of the
term hereof may be assessed or imposed on or in respect of or be
a lien upon (i) a Borrower (including, without limitation, all
income, franchise, single business or other taxes imposed on such
Borrower for the privilege of doing business in the jurisdiction
in which the Mortgaged Property, or any other collateral
delivered or pledged to Lender in connection with the Loan, is
located) or Lender, (ii) the Mortgaged Property, or any other
collateral delivered or pledged to Lender in connection with the
Loan, or any part thereof or any Rents therefrom or any estate,
right, title or interest therein, or (iii) any occupancy,
operation, use or possession of, or sales from, or activity
conducted on, or in connection with the Mortgaged Property or the
leasing or use of the Mortgaged Property or any part thereof, or
the acquisition or financing of the acquisition of the Mortgaged
Property by such Borrower; provided, that "Impositions" shall not
include sales tax on sales by tenants or income taxes of tenants
at the Mortgaged Property.
"Improvements" means all buildings, structures,
fixtures and improvements of every nature whatsoever situated on
the Land on the Closing Date or thereafter (including, without
limitation, all gas and electric fixtures, radiators, heaters,
engines and machinery, boilers, ranges, elevators and motors,
plumbing and heating fixtures, carpeting and other floor
coverings, water heaters, awnings and storm sashes, and cleaning
apparatus which are or shall be attached to the Land or said
buildings, structures or improvements and including any
additions, enlargements, extensions, modifications, repairs or
replacements thereto, but exclusive of those items which are the
property of the tenants (other than Leasehold Borrowers) of the
Mortgaged Property).
"Indebtedness" means the Principal Indebtedness,
together with all other obligations and liabilities due or to
become due to Lender pursuant hereto, under the Global Note, the
Mortgage or in accordance with any of the other Loan Documents,
and all other amounts, sums and expenses paid by or payable to
Lender hereunder or pursuant to the Global Note or any of the
other Loan Documents.
"Indemnified Liabilities" has the meaning set forth in
Section 5.1(J).
"Indemnified Parties" has the meaning set forth in
Section 5.1(I).
"Independent" means, when used with respect to any
Person, a Person who (i) does not have any direct financial
interest or any material indirect financial interest in any
Borrower or in any Affiliate of any Borrower, and (ii) is not
connected with any Borrower or any Affiliate of any Borrower as
an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions; provided, that,
notwithstanding the foregoing, the shareholders of Guarantor
shall be deemed "Independent" of Borrowers under this Agreement.
"Index Maturity" has the meaning set forth in the
definition of LIBOR.
"Instruments" means (i) all "instruments" as defined in
the UCC, "chattel paper" as defined in the UCC, or letters of
credit, evidencing, representing, arising from or existing in
respect of, relating to, securing or otherwise supporting the
payment of, any of the Collateral (including, without limitation,
promissory notes, drafts, bills of exchange and trade
acceptances) and chattel paper obtained by a Borrower in
connection with the Mortgaged Property (including, without
limitation, all ledger sheets, computer records and printouts,
data bases, programs, books of account and files of such Borrower
relating thereto) and (ii) notes or other obligations of
indebtedness owing to such Borrower from whatever source arising,
in each case now owned or hereafter acquired by such Borrower.
"Insurance Proceeds" means, in the event of a casualty
with respect to the Mortgaged Property, the proceeds received
under any insurance policy.
"Insurance Requirements" means all material terms of
any insurance policy required pursuant to this Agreement or the
Mortgages and all material regulations and then current standards
applicable to or affecting the Mortgaged Property or any part
thereof or any use or condition thereof, which may, at any time,
be recommended by the Board of Fire Underwriters, if any, having
jurisdiction over the Mortgaged Property, or such other body
exercising similar functions.
"Interest Accrual Period" means, in connection with the
calculation of interest accrued with respect to any Payment Date,
the period from and including the preceding Payment Date to but
excluding such Payment Date; provided, however, that the first
Interest Accrual Period for the Loan shall be from the initial
Advance Closing Date to but excluding the first Payment Date.
"Interest Determination Date" means, in connection with
the calculation of interest accrued for any Interest Accrual
Period, the second Business Day preceding the first day of such
Interest Accrual Period.
"Inventory" means all "inventory" as defined in the
UCC, whether now or hereafter existing or acquired, and which
arises out of or is used in connection with, directly or
indirectly, the ownership and operation of the Mortgaged
Property, all Documents representing the same and all Proceeds
and products of such Inventory. Without limiting the generality
of the foregoing, the term "Inventory" shall include, without
limitation:
(i) all goods, merchandise, raw materials, work in
process and other personal property, wherever located, now
or hereafter owned or held by a Borrower for manufacture,
processing, the providing of services or sale, use or
consumption in the operation of the Mortgaged Property
(including, without limitation, fuel, supplies and similar
items and all substances commingled therewith or added
thereto); and
(ii) all rights and claims of such Borrower against
anyone who may store or acquire the Inventory for the
account of such Borrower, or from whom such Borrower may
purchase the Inventory.
"Land" has the meaning provided in the Mortgages.
"Leasehold Borrower" means each of the Borrowers
identified as such on Schedule 3 hereto.
"Leases" means all leases, subleases, lettings,
occupancy agreements, tenancies and licenses by a Borrower as
landlord or sublandlord of the related Mortgaged Property or any
part thereof now or hereafter entered into, and all amendments,
extensions, renewals and guarantees thereof, and all security
therefor.
"Leasing Commissions" means leasing commissions
incurred by a Borrower in connection with leasing or subleasing
the related Mortgaged Property.
"Legal Requirements" means all governmental statutes,
laws, rules, orders, regulations, ordinances, judgments, decrees
and injunctions of Governmental Authorities (including, without
limitation, Environmental Laws) affecting either the Mortgaged
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, at any time in force affecting the Mortgaged
Property or any part thereof (including, without limitation, any
which may (i) require repairs, modifications or alterations in or
to the Mortgaged Property or any part thereof, or (ii) in any way
limit the use and enjoyment thereof).
"Lender" has the meaning provided in the first
paragraph of this Agreement.
"LIBOR" means the rate per annum calculated as set
forth below:
(i) On each Interest Determination Date, LIBOR will be
determined on the basis of the offered rate for deposits of
not less than U.S. $1,000,000 for a period of one month (the
"Index Maturity"), commencing on such Interest Determination
Date, which appears on Telerate Page 3750 as of 11:00 a.m.,
London time (or such other page as may replace the Telerate
Page on that service for the purposes of displaying London
interbank offered rates of major banks). If no such offered
rate appears, LIBOR with respect to the relevant Interest
Accrual Period will be determined as described in (ii)
below.
(ii) With respect to an Interest Determination Date on
which no such offered rate appears on Telerate Page 3750 as
described in (i) above, LIBOR shall be the arithmetic mean,
expressed as a percentage, of the offered rates for deposits
in U.S. dollars for the Index Maturity which appears on the
Reuters Screen LIBO Page as of 11:00 a.m., London time, on
such date. If, in turn, such rate is not displayed on the
Reuters Screen LIBO Page at such time, then LIBOR for such
date will be obtained from the preceding Business Day for
which the Reuters Screen LIBO Page displayed a rate for the
Index Maturity.
(iii) If on any Interest Determination Date Agent is
required but unable to determine LIBOR in the manner
provided in paragraphs (i) and (ii) above, LIBOR for the
next Interest Accrual Period shall be LIBOR as determined on
the previous Interest Determination Date or, in the case of
the first Interest Determination Date, 5.38%.
All percentages resulting from any calculations of LIBOR referred
to in this Agreement will be rounded to the nearest multiple of
1/100 of 1% (with one-half of 1/100 of 1% or more being rounded
upwards) and all U.S. dollar amounts used in or resulting from
such calculations will be rounded to the nearest cent (with one-
half cent or more being rounded upwards).
"Lien" means any mortgage, deed of trust, lien
(statutory or other), pledge, hypothecation, assignment,
preference, priority, security interest, or any other encumbrance
or charge on or affecting the Mortgaged Property or any portion
thereof or a Borrower, 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 or similar instrument under the UCC or
comparable law of any other jurisdiction, domestic or foreign,
and mechanic's, materialmen's and other similar liens and
encumbrances).
"Liquidation Expenses" means the following expenses
paid directly by a Borrower to Persons who are generally in the
business of providing goods and services of the type provided and
who are not Affiliates of any Borrower incurring such expenses:
(a) sales brokerage expenses; (b) other costs of conveyance
customarily paid by a seller of commercial properties of the type
sold in the applicable geographic area (including, any applicable
state and local transfer or franchise taxes); and (c) other
expenses approved in writing by Agent as costs reasonably
incurred in connection with such sale or conveyance; provided, in
each case that such expenses are reasonable for the types of
goods and services provided in the applicable geographical area.
"Liquidation Proceeds" means the aggregate cash amount
received by any Borrower or its designee (i) in connection with a
sale or refinancing of all or any portion of a Mortgaged
Property, or (ii) in any other manner with respect to the
liquidation of all or any portion of a Mortgaged Property
(including, without limitation, the proceeds of the disposition
of any non-cash consideration received in connection with such
liquidation).
"Loan" means the loan made by initial Lender to
Borrowers pursuant to the terms of this Agreement.
"Loan Amount" has the meaning provided in the Recitals
to this Agreement.
"Loan Debt Service" means the product of the Market
Constant and the outstanding Principal Indebtedness.
"Loan Documents" means this Agreement, the Global Note,
any Registered Note, the Guaranty, the Mortgages, the Management
Agreement, the Management Subordinations, the Contract
Assignments, the Pledge Agreement, the Assignments of Leases and
Rents and all other agreements, instruments, certificates and
documents delivered by or on behalf of Borrowers, Guarantor,
Manager or an Affiliate to evidence or secure the Loan or
otherwise in satisfaction of the requirements of this Agreement,
the Mortgages or the other documents listed above as same may be
amended or modified from time to time.
"Loss Proceeds" means Condemnation Proceeds and/or
Insurance Proceeds.
"Management Agreement" means, with respect to each
Mortgaged Property, each Management Agreement entered into
between the related Borrower and Manager, in the form attached
hereto as Exhibit D, or in such other form as may be approved by
Agent, as such agreement may be amended, modified or supplemented
and in effect from time to time.
"Manager" means Kranzco Realty Trust or its successor
in interest.
"Management Subordination" means each Manager's Consent
and Subordination of Management Agreement attached hereto as
Exhibit E, dated as of the Closing Date, executed by Manager,
each Borrower and Agent.
"Managing Entity" means, with respect to any Borrower
that is a limited partnership or limited liability company, the
general partner or the managing member, respectively, of such
Borrower.
"Market Constant" means the highest of (a) the current
annual interest rate on the Loan adjusted to reflect amortization
on a twenty-five (25) year schedule, (b) 10% and (c) the U.S.
Treasury Rate plus 220 basis points adjusted to reflect
amortization on a twenty-five (25) year schedule.
"Material Adverse Effect" means a material adverse
effect upon (i) the business operations, properties, assets or
condition (financial or otherwise) of Borrowers taken as a whole,
(ii) the ability of Borrowers to perform, or of Lender to
enforce, any of the Loan Documents or (iii) the value of the
Mortgaged Property taken as a whole or the operation thereof.
"Maturity Date" means the earlier of (a) the Original
Maturity Date, or if such date has been extended pursuant to the
provisions of Section 2.17 hereof, the Extended Maturity Date, or
(b) any earlier date on which the entire Loan is required to be
paid in full, by acceleration or otherwise, under this Agreement
or any of the other Loan Documents.
"Money" means all moneys, cash, rights to deposit or
savings accounts or other items of legal tender obtained from or
for use in connection with the operation by any Borrower of the
related Mortgaged Property.
"Monthly Statement" has the meaning provided in Section
2.12(d).
"Mortgage" means, with respect to any Mortgaged
Property, a first priority Mortgage (or Deed of Trust),
Assignment of Leases and Rents, Security Agreement and Fixture
Filing, in the form attached hereto as Exhibit C, dated as of the
applicable Advance Closing Date, granted by the related Borrower
to Lender with respect to such Mortgaged Property as security for
the Loan, as same may hereafter from time to time be
supplemented, amended, modified or extended.
"Mortgaged Property," individually and in the
aggregate, means, at any time, the Ground Leases, the Land, the
Improvements, the Personalty, the Leases, the Rents, the Property
Agreements and the Equipment (to the extent the same shall be
deemed to be fixtures), and all rights, titles, interests and
estates appurtenant thereto, encumbered by, and more particularly
described in, the applicable Mortgage.
"Multiemployer Plan" means a multiemployer plan defined
as such in Section 3(37) of ERISA to which contributions have
been, or were required to have been, made by Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Proceeds" means either (x) the purchase price (at
foreclosure or otherwise) actually received by Agent from a third
party purchaser with respect to the Mortgaged Property, as a
result of the exercise by Agent of its rights, powers, privileges
and other remedies after the occurrence of an Event of Default or
(y) in the event that Agent is the purchaser at foreclosure of
the Mortgaged Property, the higher of (i) the amount of Agent's
credit bid or (ii) such amount as shall be determined in
accordance with applicable law, and in either case minus all
customary and reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys' fees and
disbursements and any brokerage fees, if applicable) incurred by
Agent in connection with the exercise of such remedies; provided,
however, that such costs and expenses shall not be deducted to
the extent such amounts previously have been added to the
Indebtedness in accordance with the terms of the Mortgage or
applicable law.
"New Ground Lease" means, after the termination or
expiration of any Ground Lease, any new, replacement or
substitute Ground Lease issued to or obtained by Lender or its
designees with respect to or in place of the terminated Ground
Lease, whether pursuant to any provision of the terminated Ground
Lease or otherwise.
"New Mortgaged Property" means any Ground Lease, Land,
Improvements, Personalty, Leases, Rents, Property Agreements and
Equipment (to the extent the same shall be deemed fixtures), and
all rights, titles, interests and estates appurtenant thereto,
which a Borrower proposes to encumber by a Mortgage at any time
after the initial Advance Closing Date.
"Officer's Certificate" means a certificate delivered
to Agent by a Borrower which is signed by an authorized officer
of the Managing Entity of such Borrower or by an authorized
officer of such Borrower, as the case may be.
"Operating Budget" means, with respect to any Fiscal
Year, the operating budget for the Mortgaged Property reflecting
Borrowers' projections of Gross Revenues, property expenses and
Capital Improvement Costs (separately identifying TI Costs and
Leasing Commissions) for the Mortgaged Properties for such Fiscal
Year on an annual and monthly basis and submitted by Borrowers to
Agent in accordance with the provisions of Section 5.1(R)(vii).
"Operating Expenses" means, for any period of
calculation, all expenditures incurred by Borrowers and required
to be expensed under GAAP during such period in connection with
the ownership, operation, maintenance, repair and/or leasing of
the Mortgaged Property. Notwithstanding the foregoing, Operating
Expenses shall not include (a) Capital Improvement Costs, (b) any
extraordinary items (unless Agent and Borrowers approve of the
inclusion of such items), (c) depreciation, amortization and
other non-cash charges, (d) Ground Rent to the extent any Ground
Lease is subordinate to the Lien of the related Mortgage or (e)
any payments made by Borrowers in connection with the
Indebtedness. Operating Expenses shall be calculated on the
accrual basis of accounting.
"Operating Revenues" means, for any period, all regular
ongoing income during such period from the operation of the
Mortgaged Property which, in accordance with GAAP, is included in
Borrowers' annual financial statements as operating income.
Notwithstanding the foregoing, Operating Revenues shall not
include (a) any Loss Proceeds (other than business interruption
proceeds or Condemnation Proceeds in connection with a temporary
Taking and, in either case, only to the extent allocable to such
period or other applicable reporting period), (b) any proceeds
resulting from the sale, exchange, transfer, financing or
refinancing of the Mortgaged Property, (c) any Rent attributable
to a Lease either prior to the date on which the actual payment
of Rent is required to be made thereunder or to the extent such
Rent would not qualify as Operating Revenues under the cash basis
of accounting, (d) any interest income from any source, or (e)
any other extraordinary items. Operating Revenues shall be
calculated on the accrual basis of accounting.
"Organizational Documents" means, with respect to each
Borrower that is a limited partnership or limited liability
company, the partnership agreement, or operating or limited
liability company agreement, of such Borrower, and with respect
to each Borrower that is a corporation, the articles or
certificate of incorporation and the by-laws of such Borrower, as
such documents may be amended and restated from time to time.
"Original Maturity Date" has the meaning provided in
Section 2.17.
"Origination Fee" means 1.50% of the amount of an
Advance, which Origination Fee shall be payable on the Advance
Closing Date with respect to such Advance; provided, however that
Borrower shall receive a credit against the first Origination
Fees due and payable hereunder in an aggregate amount equal to
the Commitment Fee paid by Borrower to Lender on the Closing
Date.
"Other Borrowings" means, with respect to any Borrower,
without duplication (but not including the Indebtedness) (i) all
indebtedness of such Borrower for borrowed money or for the
deferred purchase price of property or services, (ii) all
indebtedness of such Borrower evidenced by a note, bond,
debenture or similar instrument, (iii) the face amount of all
letters of credit issued for the account of such Borrower and,
without duplication, all unreimbursed amounts drawn thereunder,
(iv) all indebtedness of such Borrower secured by a Lien on any
property owned by such Borrower (whether or not such indebtedness
has been assumed), (v) all Contingent Obligations of such
Borrower, (vi) liabilities and obligations for the payment of
money relating to a capitalized lease obligation or
sale/leaseback obligation (other than the Ground Leases), (vii)
liabilities and obligations representing the balance deferred and
unpaid of the purchase price of any property or services, except
those incurred in the ordinary course of business that would
constitute ordinarily a trade payable to trade creditors and
(viii) all payment obligations of such Borrower under any
interest rate protection agreement (including, without
limitation, any interest rate swaps, caps, floors, collars or
similar agreements) and similar agreements.
"Participation" has the meaning provided in Section
5.1(V).
"Payment Date" has the meaning provided in Section 2.5.
"PBGC" means the Pension Benefit Guaranty Corporation
established under ERISA, or any successor thereto.
"Permits" means all licenses, permits, variances and
certificates used in connection with the ownership, operation,
use or occupancy of the Mortgaged Property (including, without
limitation, business licenses, state health department licenses,
licenses to conduct business and all such other permits, licenses
and rights, obtained from any Governmental Authority or private
Person concerning ownership, operation, use or occupancy of the
Mortgaged Property).
"Permitted Encumbrances" means, with respect to the
Mortgaged Property, collectively, (i) the Lien created by the
Mortgages or the other Loan Documents of record, (ii) all Liens
and other matters disclosed on the Title Insurance Policy
concerning the Mortgaged Property, (iii) Liens, if any, for
Impositions imposed by any Governmental Authority not yet
delinquent or being contested in good faith and by appropriate
proceedings in accordance with the Mortgages, (iv) mechanic's or
materialmen's Liens, if any, being contested in good faith and by
appropriate proceedings in accordance with the Mortgages, (v)
rights of existing and future tenants and residents as tenants
only pursuant to Leases and (vi) Liens permitted pursuant to
Section 6.1(C).
"Permitted Investments" means any one or more of the
following obligations or securities acquired at a purchase price
of not greater than par:
(i) obligations of, or obligations fully guaranteed as
to payment of principal and interest by, the United States
or any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the
United States of America;
(ii) obligations of the following United States of
America government sponsored agencies: Federal Home Loan
Mortgage Corp. (debt obligations), the Farm Credit System
(consolidated systemwide bonds and notes), the Federal Home
Loan Banks (consolidated debt obligations), the Federal
National Mortgage Association (debt obligations), the
Student Loan Marketing Association (debt obligations), the
Financing Corp. (debt obligations), and the Resolution
Funding Corp. (debt obligations);
(iii) federal funds, unsecured certificates of
deposit, time deposits, bankers' acceptances and repurchase
agreements with maturities of not more than 365 days of any
bank, the short-term obligations of which are rated in the
highest short-term rating category by the Rating
Agency(ies);
(iv) fully Federal Deposit Insurance Corporation-
insured demand and time deposits in or certificates of
deposit of, or bankers' acceptances issued by, any bank or
trust company, savings and loan association or savings bank,
the short-term obligations of which are rated in the highest
short-term rating category by the Rating Agency(ies);
(v) debt obligations with maturities of not more than
365 days and rated by the Rating Agency(ies) in its highest
long-term unsecured rating category;
(vi) commercial paper (including both non-interest-
bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not
more than one year after the date of issuance thereof) with
maturities of not more than 270 days and that is rated by
the Rating Agency(ies) in their highest short-term unsecured
debt rating;
(vii) the Federated Prime Obligation Money Market Fund
(the "Fund") so long as the Fund is rated "AAA" by the
Rating Agency(ies); and
(viii) any other demand, money market or time deposit,
demand obligation or any other obligation, security or
investment, which Agent shall have approved in writing;
provided, however, that the investments described in clauses (i)
through (vi) above must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if such
investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (C)
such investments must not be subject to liquidation prior to
their maturity; and provided, further, that, in the judgment of
Agent, such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) earning a passive
return in the nature of interest and that no instrument or
security shall be a Permitted Investment if such instrument or
security evidences (x) a right to receive only interest payments
or (y) the right to receive principal and interest payments
derived from an underlying investment at a yield to maturity in
excess of 120% of the yield to maturity at par of such underlying
investment.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, estate, trust,
unincorporated association, any federal, state, county or
municipal government or any bureau, department or agency thereof
and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"Personalty" means all right, title and interest of a
Borrower in and to all goods, accounts, general intangibles,
instruments, documents, chattel paper and all other personal
property of any kind or character (including such items of
personal property as defined in the UCC), now owned or hereafter
acquired by such Borrower and now or hereafter affixed to, placed
upon, used in connection with, arising from or otherwise related
to the Mortgaged Property or which may be used in or relating to
the planning, development, financing or operation of the
Mortgaged Property (including, without limitation, furniture,
furnishings, Equipment, machinery, money, insurance proceeds,
Accounts, contract rights, Trademarks, goodwill, chattel paper,
documents, trade names, licenses and/or franchise agreements,
rights of such Borrower under leases of fixtures or other
personal property or equipment, inventory, all refundable,
returnable or reimbursable fees, deposits or other funds or
evidences of credit or indebtedness deposited by or on behalf of
such Borrower with any Governmental Authorities, boards,
corporations, providers of utility services, public or private,
including specifically, but without limitation, all refundable,
returnable or reimbursable tap fees, utility deposits, commitment
fees and development costs).
"Plan" means an employee benefit or other plan
established or maintained by a Borrower or any ERISA Affiliate
during the five-year period ended prior to the date of this
Agreement or to which such Borrower or any ERISA Affiliate makes,
is obligated to make or has, within the five-year period ended
prior to the date of this Agreement, been required to make
contributions and that is covered by Title IV of ERISA or
Section 302 of ERISA or Section 412 of the Code, other than a
Multiemployer Plan.
"Pledge Agreement" means that certain Pledge Agreement,
in the form attached hereto as Exhibit L, dated as of the Closing
Date, by each of the principals of each Borrower, collectively as
pledgor, to the initial Lender, as pledgee, as the same may
thereafter from time to time be supplemented, amended, modified
or extended.
"Principal Indebtedness" means the principal amount of
the Loan outstanding from time to time.
"Proceeds" shall have the meaning given in the UCC and,
in any event, shall include, without limitation, all proceeds,
product, offspring, rents, profits or receipts, in whatever form,
arising from the Collateral. Without limiting the generality of
the foregoing, the term "Proceeds" shall include:
(i) cash, Instruments and other property received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Collateral or the Mortgaged
Property;
(ii) the collection, sale, lease, sublease, concession,
exchange, assignment, licensing or other disposition of, or
realization upon, any item or portion of the Collateral or
the Mortgaged Property (including, without limitation, all
claims of a Borrower against third parties for loss of,
damage to, destruction of, or for proceeds payable under, or
unearned premiums with respect to, policies of insurance in
respect of, any Collateral or the Mortgaged Property now
existing or hereafter arising);
(iii) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to a Borrower from time to time
with respect to any of the Collateral or the Mortgaged
Property;
(iv) any and all payments (in any form whatsoever) made
or due and payable to such Borrower from time to time in
connection with the requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral
or the Mortgaged Property by any Governmental Authority (or
any Person acting under color of Governmental Authority);
and
(v) any and all other amounts from time to time paid
or payable to or on behalf of such Borrower under or in
connection with any of the Collateral or the Mortgaged
Property.
"Property Release Test" means a test which shall be
satisfied if, after the release of a Mortgaged Property from the
Lien of the Mortgage encumbering said Mortgaged Property, with
respect to the remaining Mortgaged Property, (i) no individual
remaining Mortgaged Property's contribution to the aggregate
Adjusted Property Net Cash Flow exceeds 20%, (ii) the five (5)
largest remaining Mortgaged Properties' contribution (based on
Adjusted Property Net Cash Flow) to the aggregate Adjusted
Property Net Cash Flow does not exceed 50%, and (iii) the
remaining Mortgaged Properties in any single state do not
contribute more than 40% of the aggregate Adjusted Property Net
Cash Flow.
"Quarterly Statement" has the meaning provided in
Section 2.12(e).
"Rating Agencies" means at least two of Fitch Investors
Service, L.P., Xxxxx'x Investors Service, Inc., Duff & Xxxxxx
Credit Rating Co. and Standard & Poor's Ratings Services.
"Registered Notes" has the meaning provided in Section
2.4(b).
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment
(including, without limitation, the movement of Hazardous
Substances through ambient air, soil, surface water, ground
water, wetlands, land or subsurface strata).
"Rents" means all income, rents, issues, profits,
revenues (including all oil and gas or other mineral royalties
and bonuses), deposits (other than security deposits) and other
benefits from the Mortgaged Property payable to or receivable by
a Borrower. Without limiting the generality of the foregoing,
the "Rents" shall include all receivables and other obligations
now existing or hereafter arising or created out of the sale,
lease, sublease, license, concession or other grant of the right
of the use and occupancy of property or rendering of services by
such Borrower and which are payable to or receivable by such
Borrower (including, without limitation, from the rental of any
office space, retail space, warehouse and manufacturing space or
other space, halls, and offices, and deposits securing
reservations of such space, exhibit or sales space of every kind,
license, lease, sublease and concession fees and rentals and
proceeds, if any, from business interruption or other loss of
income insurance relating to the use, enjoyment and occupancy of
the Mortgaged Property).
"Repair Reserve Account" has the meaning provided in
Section 2.13.
"Repair Reserve Amount" has the meaning provided in
Section 2.13.
"Repayment Fee" means 1% of the outstanding Principal
Indebtedness prepaid or repaid on any Payment Date (including the
Maturity Date), which Repayment Fee shall be due and payable on
the earlier to occur of (i) the Maturity Date and (ii) such other
date upon which the Indebtedness is repaid in full and this
Agreement is terminated; provided, however, that (a) in no event
shall the aggregate Repayment Fee payable hereunder exceed
$500,000, (b) the Repayment Fee shall not be payable in
connection with any payment of the Principal Indebtedness
pursuant to Section 2.7(b) hereunder, and (c) in the event
Borrowers obtain the funds for such prepayment or repayment
through a Salomon Transaction, then the Repayment Fee payable as
hereinbefore described shall be credited against any fees earned
by Salomon in such Salomon Transaction, unless such Salomon
Transaction is a transaction of the type described in clause (ii)
of such definition in which case in the event Salomon elects to
have co-underwriter(s) in the transaction, the Repayment Fee
shall be credited against the total underwriting fees for the
transaction, rather than only the portion of those fees earned by
Salomon.
"Required Work" has the meaning provided in Section
2.13(a).
"Salomon" means the initial Lender or any of its
Affiliates.
"Salomon Transaction" means (i) any transaction in
which Salomon is the lender and Borrowers or any of their
Affiliates are the borrower in connection with any or all of the
Mortgaged Properties and/or other properties owned by Borrowers
and/or such Affiliates, (ii) any commercial mortgaged-backed
securities issued by Borrowers or any of their Affiliates in
which Salomon is the sole underwriter or, at Salomon's election,
lead-underwriter and/or (iii) any equity offering by Guarantor in
which Salomon is a co-lead underwriter.
"SEC" has the meaning provided in Section 5.1(R)(iv).
"Single-Purpose Entity" means a Person, other than an
individual, which (i) is formed or organized solely for the
purpose of acquiring and directly holding an ownership interest
in a Mortgaged Property, (ii) does not engage in any business
unrelated to a Mortgaged Property, (iii) does not have any assets
other than those related to its interest in a Mortgaged Property
or any indebtedness other than as permitted by this Agreement,
the applicable Mortgage or the other Loan Documents, (iv) has its
own separate books and records and has its own accounts, in each
case which are separate and apart from the books and records and
accounts of any other Person (other than another Borrower), (v)
is subject to all of the limitations on powers set forth in the
Organizational Documentation of a Borrower (and, in the case of a
limited partnership or limited liability company, that of its
Managing Entity as such powers relate to the activities of the
limited partnership or limited liability company) as of the
Closing Date or applicable Advance Closing Date and (vi) holds
itself out as being a Person separate and apart from any other
Person.
"Survey" means a certified as-built title survey of the
Mortgaged Property prepared by a registered Independent surveyor
and in form and content satisfactory to the initial Lender and
the company issuing the Title Insurance Policy for the Mortgaged
Property.
"Taking" means a taking or voluntary conveyance during
the term hereof of all or part of the Mortgaged Property, or any
interest therein or right accruing thereto or use thereof, as the
result of, or in settlement of, any condemnation or other eminent
domain proceeding by any Governmental Authority affecting the
Mortgaged Property or any portion thereof whether or not the same
shall have actually been commenced.
"TI Costs" means tenant improvement costs incurred by a
Borrower in connection with renewing or extending existing Leases
or executing new Leases on the related Mortgaged Property.
"Title Insurance Policy" means a mortgagee's title
insurance policy or policies (a) issued by one or more title
companies satisfactory to Agent which policy or policies shall be
in form ALTA 1992 (with waiver of arbitration provisions) (with
co-insurance or reinsurance as Agent may require reasonably
satisfactory to Agent), naming Agent as the insured party, (b)
insuring the applicable Mortgage as being a first and prior lien
upon the related Mortgaged Property, (c) showing no encumbrances
against such Mortgaged Property (whether junior or superior to
such Mortgage) which are not acceptable to Agent other than
Permitted Encumbrances, (d) in an amount reasonably acceptable to
Agent, and (e) otherwise in form and content acceptable to Agent.
Such Title Insurance Policy shall include the following
endorsements or affirmative coverages in form and substance
reasonably acceptable to Agent: variable rate endorsement; survey
endorsement; comprehensive endorsement; first loss endorsement;
access coverage; tax parcel coverage; contiguity (if applicable)
coverage; and such other endorsements as Agent shall reasonably
require in order to provide insurance against specific risks
identified by Agent in connection with such Mortgaged Property.
"Trademark" means the trademark licenses, trademarks,
rights in intellectual property, trade names, service marks and
copyrights relating to the Mortgaged Property or the license to
use intellectual property such as computer software owned or
licensed by a Borrower or other proprietary business information
relating to such Borrower's policies, procedures, manuals and
trade secrets.
"Transaction" means the transaction contemplated by the
Loan Documents.
"Transaction Costs" means all costs and expenses paid
or payable by Borrowers relating to the Transaction (including,
without limitation, appraisal fees, legal fees and accounting
fees and the costs and expenses described in Section 8.23).
"Transfer" means any liquidation, transfer, sale,
assignment, conveyance or other disposition (other than a Lease)
of all or any portion of the Mortgaged Property or an interest
therein.
"UCC" means with respect to a Mortgaged Property, the
Uniform Commercial Code as in effect on the date hereof in the
state where such Mortgaged Property is located, as amended from
time to time; provided, that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-
perfection of the security interest in any item or portion of the
Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the state where such
Mortgaged Property is located, "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or
effect of perfection or non-perfection.
"UCC Searches" has the meaning specified in
Section 3.5(A).
"Use" means, with respect to any Hazardous Substance,
the generation, manufacture, processing, distribution, handling,
use, treatment, recycling or storage of such Hazardous Substance
or transportation of such Hazardous Substance.
"U.S. Treasury Rate" means the yield on the U.S.
Treasury issue (primary issue) with a maturity date closest to,
but not earlier than, the tenth (10th) anniversary of the date on
which such rate is calculated with such yield being based on the
bid price for such issue as published in The Wall Street Journal
in New York, New York on the date of calculation (or, if such bid
price is not published on that date, the next preceding date on
which such bid price is so published). In the event The Wall
Street Journal is no longer published or ceases to publish the
bid price for such U.S. Treasury issues, Agent shall select a
comparable publication to determine the U.S. Treasury Rate.
"Welfare Plan" means an employee welfare benefit plan
as defined in Section 3(1) of ERISA established or maintained by
Borrower or any ERISA Affiliate or that covers any current or
former employee of Borrower or any ERISA Affiliate.
ARTICLE II
GENERAL TERMS
Section 2.1. The Loan. (a) Subject to the terms and
conditions of this Agreement, from and including the Closing Date
to, but not including, the Maturity Date, the Lenders shall lend
to Borrowers in one or more Advances such amounts as Borrowers
may request in accordance herewith; provided, however, that the
outstanding Principal Indebtedness may in no event exceed the
Loan Amount. The proceeds of the Loan shall be used solely for
the purposes identified in Section 2.2 hereof.
(b) The Loan shall constitute one general obligation
of Borrowers to Lenders, shall be secured by the security
interest in, and Liens granted upon, all of the Collateral, and
by all other security interests and Liens at any time or times
hereafter granted by Borrowers to Lenders or to Collateral Agent
on behalf of Lenders and shall be guaranteed by Guarantor
pursuant to the Guaranty.
(c) On each Debt Service Coverage/Property Release
Test Date, Agent shall notify Borrowers in writing (or
telephonically promptly confirmed in writing) (1) if the Debt
Service Coverage Test and the Property Release Test have or have
not been satisfied as of such date and (2) if the Debt Service
Coverage Test has been satisfied, of the maximum amount which may
be advanced under the Loan, as of such date. In the event the
Agent does not notify the Borrower with respect to satisfaction
of the Debt Service Coverage Test on or prior to the Debt Service
Coverage/Property Release Test Date, the Debt Service Coverage
Test shall be deemed to have been satisfied with respect to such
Debt Service Coverage/Property Release Test Date. In the event
the Debt Service Coverage Test has been or is deemed to have been
satisfied, Borrowers may request up to two Advances in accordance
with the Advance disbursement procedures set forth in Section 3.3
in the period commencing on such Debt Service Coverage/Property
Release Test Date and ending on the day preceding the subsequent
Debt Service Coverage/Property Release Test Date. The maximum
principal amount of each Advance shall be determined as of the
applicable Advance Closing Date and shall, in any event, be in an
amount less than an amount which would cause Borrowers to be in
violation of the Debt Service Coverage Test and the Property
Release Test (assuming such Advance was made), as determined
pursuant to Section 3.3 of this Agreement in connection with the
related Advance; provided, that the foregoing restriction with
respect to the Property Release Test shall not apply unless and
until the Borrowers shall have consummated a release for the
first time pursuant to Section 2.7.
(d) On each Advance Closing Date, the Lenders shall
deduct from the principal amount of the Advance made available to
Borrowers on such date (i) the Origination Fee with respect to
the Advance, (ii) the reasonable fees, expenses and disbursements
of counsel to Agent for which Borrowers have been billed or
otherwise notified and which remain unpaid and (iii) if requested
by Borrowers or required by Lenders not later than the Business
Day prior to such Advance Closing Date, any amounts which are to
be deposited by Lenders in the Repair Reserve Account pursuant to
Section 2.13. Subject to the provisions of the last sentence of
Section 2.1(c), each Advance shall be in an amount equal to or
greater than $1,000,000.
Section 2.2. Use of Proceeds. Proceeds of each
Advance shall be used for the following purposes: (a) to fund
the acquisition price for real property being acquired by a
Borrower, an Affiliate of Borrowers or Guarantor, and the
reasonable costs and expenses directly related to such
acquisition, (b) to fund working capital of Guarantor and/or
Borrowers, (c) to pay to Lender the Origination Fee, (d) to pay
to Lenders the out-of-pocket expenses incurred by Lenders in
connection with the funding of the Advance, (e) to pay to counsel
to Agent its reasonable fees, expenses and disbursements, (f) to
fund the Repair Reserve Account, (g) to pay all fees and expenses
incurred by Borrowers and their Affiliates in connection with the
negotiation, preparation and consummation of this Agreement
and/or the funding of any Advances, and (h) to fund other general
corporate purposes of Borrowers, Affiliates of Borrowers or
Guarantor.
Section 2.3. Security for the Loan. The Global Note
and Borrowers' obligations hereunder and under the other Loan
Documents shall be secured by (a) the Mortgages, (b) the Contract
Assignments, (c) the Pledge Agreement, (d) the Management
Subordinations, (e) the Assignments of Rents and Leases, (f) the
Guaranty and (g) the security interest and Liens granted in this
Agreement and in the other Loan Documents.
Section 2.4. Borrowers' Global Note. (a) Borrowers'
obligation to pay the principal of and interest on the Loan and
all other amounts due under the Loan Documents shall be evidenced
initially by the Global Note, duly executed and delivered by
Borrowers and registered in the name of the initial Lender on the
initial Advance Closing Date. The Global Note shall be payable
as to principal, interest and all other amounts due under the
Loan Documents, as specified in this Agreement, with a final
maturity on the Maturity Date. Agent is hereby authorized to
endorse on the schedule attached to the Global Note (or on a
continuation of such schedule attached to the Global Note and
made a part thereof) an appropriate notation evidencing (i) the
date and amount of each payment of principal, interest or other
amounts due under the Loan Documents, in respect thereof, and
(ii) the date and amount of each Advance on each Advance Closing
Date. Such schedule shall, absent manifest error, constitute
prima facie evidence of the accuracy of the information contained
therein. The failure of Agent to make a notation on the schedule
to the Global Note as aforesaid shall not affect the obligations
of Borrowers hereunder or under the Global Note or any other Loan
Document in any respect. At no time shall the aggregate
principal amount of the Global Note exceed the Loan Amount.
(b) At any time or from time to time, upon request of
Agent, Agent may exchange interests in the Global Note, in whole
or in part, for notes in the form of registered notes
("Registered Notes") set forth in Exhibit G hereto. Registered
Notes shall be issued in the name of Agent in the initial
principal amount requested by Agent and Agent shall make
appropriate notations on the Global Note to reflect the reduced
aggregate principal amount of the Global Note in an amount equal
to such initial principal amount of such Registered Note. No
such exchange of a beneficial interest shall be effective absent
such notation. Upon delivery to Borrowers of Agent's request
referred to above and a copy of the Global Note containing such
notation, Borrowers shall deliver to Agent Registered Notes in
the form of Exhibit G. Registered Notes are not exchangeable for
interests in the Global Note. Until the Global Note is exchanged
in full, the Global Note shall in all respects be entitled to the
same benefits under, and subject to the same terms and conditions
of, this Agreement as Registered Notes delivered hereunder. All
Registered Notes issued upon any exchange of interests in the
Global Note for a Registered Note shall be the valid obligations
of Borrowers evidencing the same debt, and entitled to the same
benefits, as the Global Note under this Agreement.
Section 2.5. Interest. (a) Interest on the Global
Note shall accrue on the Principal Indebtedness commencing on the
initial Advance Closing Date and shall be payable in arrears on
the first (1st) day of the month following the month in which the
initial Advance Closing Date occurs and on the first (1st) day of
each and every month thereafter through the month in which the
Maturity Date occurs, unless, in any such case, such day is not a
Business Day, in which event such interest shall be payable on
the first (1st) Business Day following such date (such date for
any particular month, the "Payment Date"). Agent shall calculate
LIBOR on each Interest Determination Date for the related
Interest Accrual Period and communicate in writing to Borrowers
such rate for such period. The entire outstanding Principal
Indebtedness of the Loan and the Global Note, together with all
accrued but unpaid interest thereon and all other amounts due
under the Loan Documents (including, without limitation, the
Repayment Fee, if applicable), shall be due and payable by
Borrowers to Lender on the Maturity Date. Interest shall be
computed on the basis of a 360-day year and the actual number of
days elapsed.
(b) Each Advance shall bear interest during each
interest Accrual Period from and including its respective Advance
Closing Date at a rate per annum equal to LIBOR determined as of
the Interest Determination Date immediately preceding such
Interest Accrual Period plus 1.75%.
(c) After an Event of Default has occurred and is
continuing, Borrowers shall pay to Lenders interest at the
Default Rate on any amount owing to Lenders not paid when due
until such amount is paid in full.
Section 2.6. Voluntary Prepayment. (a) Borrowers may
voluntarily prepay the Loan in whole or in part on any Business
Day; provided, however, that, any such prepayment shall be
accompanied by an amount representing all accrued interest on the
portion of the Loan being prepaid and other amounts then due
under the Loan Documents (including, without limitation, the
Repayment Fee if the Indebtedness is being repaid in full and the
Agreement is being terminated).
(b) In the event of any such voluntary prepayment,
Borrowers shall give Agent written notice of their intent to
prepay, which notice shall be given at least five (5) Business
Days' prior to the date upon which prepayment is to be made and
shall specify the Business Day on which such prepayment is to be
made and the amount of such prepayment (which shall not be less
than, if such prepayment is being made on a Business Day other
than a Payment Date, the lesser of (i) $1,000,000 and (ii) the
then outstanding Principal Indebtedness). If any such notice is
given, the amount specified in such notice shall be due and
payable on the date specified therein (unless such notice is
revoked by Borrowers prior to the date specified therein in which
event Borrowers shall immediately reimburse Agent for any costs
reasonably incurred in connection with the giving of such notice
and its revocation).
Section 2.7. Mandatory Prepayment Upon Release. (a)
So long as no Event of Default has occurred and is continuing, at
any time a Borrower may request in writing that the Agent release
a Mortgaged Property from the Lien of the related Mortgage;
provided, that after giving effect to such release, the Borrowers
shall be in compliance with the Debt Service Coverage Test and
the Property Release Test. Notwithstanding the foregoing, if
after giving effect to such release, the Borrowers shall satisfy
the Debt Service Coverage Test but shall not satisfy the Property
Release Test, such Borrower may nonetheless obtain a release of
such Mortgaged Property from the Lien of the related Mortgage
(and Lenders shall release the individual Mortgaged Property from
the Lien of the related Mortgage) only if the Borrowers shall
have made a voluntary prepayment pursuant to Section 2.6 or
otherwise taken action such that, after giving effect to such
release, the Borrowers shall satisfy the Property Release Test.
(b) Unless after giving effect to a casualty or a
Taking of a Mortgaged Property Borrowers shall be in compliance
with the Debt Service Coverage Test and the Property Release Test
in which event Loss Proceeds are required to be made available
for restoration pursuant to the related Mortgage, in the event of
a casualty or a Taking of a Mortgaged Property, in whole or in
part, Borrowers shall deposit or cause to be deposited all Loss
Proceeds received by Borrowers with respect to such Mortgaged
Property into the Collection Account in accordance with Section
2.12(a), up to the amount necessary to cause Borrowers to be in
compliance with the Debt Service Coverage Test and the Property
Release Test and shall make any balance of such Loss Proceeds in
excess of such amount available for restoration pursuant to the
related Mortgage. On the Payment Date occurring on or
immediately following the receipt of the Loss Proceeds, Borrowers
shall apply such portion of the Loss Proceeds in the Collection
Account solely to make the payments required pursuant to clause
fourth of Section 2.12(b) of this Agreement.
(c) Upon payment or prepayment of the Loan in full,
Borrowers shall pay to Lenders, in addition to the amounts
specified in Section 2.6, Section 2.7 and Section 2.12, as
applicable, all other amounts then due and payable to Lenders
pursuant to the Loan Documents (including, without limitation,
the Repayment Fee).
Section 2.8. Application of Payments After Event of
Default. All proceeds relating to any repayments of the Loan
after the occurrence and during the continuance of an Event of
Default shall be applied to pay: first, any reasonable out-of-
pocket costs and expenses of Agent and Collateral Agent arising
as a result of such repayment; second, any accrued and unpaid
interest then payable with respect to the Loan or the portion
thereof being repaid; third, the Repayment Fee, if applicable,
and the outstanding principal amount of the Loan or the portion
thereof being repaid; and fourth, the Default Administration Fee.
Any remainder shall be paid to the Borrowers.
Section 2.9. Method and Place of Payment. (a) Except
as otherwise specifically provided herein, all payments and
prepayments under this Agreement and the Global Note shall be
made to Agent not later than 12:00 p.m., New York City time, on
the date when due and shall be made in lawful money of the United
States of America by wire transfer in federal or other
immediately available funds to its account at Mellon Bank,
Pittsburgh, Pennsylvania (ABA No. 000000000, Account No. 117-
7107, Reference: Kranzco Portfolio) and Agent shall disburse such
payments to the Person entitled thereto as soon as practical
after Agent's receipt of such payments to the account designated
by such Person in writing to Agent from time to time. Any funds
received by Agent after such time shall, for all purposes hereof,
be deemed to have been paid on the next succeeding Business Day.
Agent shall notify Borrowers in writing of any changes in the
account to which payments are to be made. All payments made by
Borrowers hereunder, or by Borrowers under the other Loan
Documents, shall be made irrespective of, and without any
deduction for, any set-offs or counterclaims.
(b) Except to the extent otherwise provided herein,
(i) each payment or prepayment of principal of the Loan by
Borrowers shall be made to Agent for the account of each Lender
pro rata in accordance with the respective unpaid portion of the
Loan held by such Lender and (ii) each payment of interest on the
Loan by Borrowers shall be made to Agent for the account of each
Lender pro rata in accordance with the amounts of interest on the
portion of the Loan held by such Lender then due and payable to
the respective Lender.
Section 2.10. Taxes. All payments made by Borrowers
under the Global Note and this Agreement shall be made free and
clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by
any Governmental Authority (other than taxes imposed on the
income of Lenders).
Section 2.11. Release of Collateral. (a) Notwith-
standing any other provision of this Agreement or any other Loan
Document, upon a Transfer or release of all or any portion of the
Mortgaged Property as permitted by Section 2.7(a) hereof, Agent
shall, simultaneously with such Transfer or release, release the
Lien of the related Mortgage and UCC-1 financing statements and
any other Liens in favor of Lenders relating to the Mortgaged
Property so Transferred or, at Borrowers' option, assign (without
representation or recourse) such Liens (and deliver the
documentation evidencing such Liens) to the Borrower's designee.
(b) If (i) the Agent receives Loss Proceeds with
respect to a Mortgaged Property in the event of a Taking or
casualty affecting a Mortgaged Property as described in
Section 2.7(b), and (ii) such Loss Proceeds are applied to reduce
the Indebtedness in accordance with Sections 2.7(b) and 2.12(b),
Agent shall simultaneously with such application release the Lien
of the related Mortgage and UCC-1 financing statements and any
other Liens in favor of Lenders relating to the Mortgaged
Property so affected or, at Borrowers' option, assign (without
representation or recourse) such Liens (and deliver the
documentation evidencing such Liens) to Borrower's designee.
(c) Upon repayment of the Loan and all other amounts
due hereunder and under the Loan Documents in full in accordance
with the terms hereof and thereof, Agent shall release its Liens
with respect to all Collateral or, at Borrowers' option, assign
(without representation or recourse) such Liens (and deliver the
documentation evidencing such Liens) to Borrower's designee.
Section 2.12. Central Cash Management.
(a) Collection Account and Deposit Accounts; Deposits
to and Withdrawals from the Collection Account.
(i) On or before the Closing Date, Borrowers shall
establish and maintain for the Mortgaged Properties with
Collateral Agent an Eligible Account with a separate and
unique identification number and entitled "Each of the
entities identified on Schedule 1 to the Loan Agreement as
Borrower for Bank Leumi Trust Company of New York (as
Collateral Agent for Salomon Brothers Realty Corp.) pursuant
to a Loan Agreement dated as of February 26, 1997 among
Salomon Brothers Realty Corp. as Agent and initial Lender,
such Borrowers and Bank Leumi Trust Company of New York, as
such Collateral Agent" (the "Collection Account"). So long
as Collateral Agent has not received written notice from
Agent, on behalf of Lenders, that an Event of Default has
occurred and is continuing, all Rents and Money received
from Accounts and under Leases for the Mortgaged Property
and all Proceeds thereof shall be payable to Borrowers or
Manager, at the election of Borrowers. The Borrowers shall
not have any right to withdraw Money from the Collection
Account. On or before the Closing Date, the Borrowers shall
establish and maintain with one or more financial
institutions acceptable to the Agent in its sole discretion
(each, a "Deposit Bank" and collectively, the "Deposit
Banks"), one or more accounts for the Mortgaged Properties
with a separate and unique identification number (each a
"Deposit Account" and collectively, the "Deposit Accounts").
The Agent acknowledges that CoreStates Bank, N.A. shall be
an acceptable Deposit Bank. Each Deposit Account shall be
an Eligible Account. The Borrowers shall cause each Deposit
Bank to deliver to the Agent on behalf of the Lenders a
Depository Acknowledgment. Subject to the following
sentence, each of the Borrowers shall deposit or shall cause
the Manager to deposit in the applicable Deposit Account,
all Rents and Money received from Accounts or under Leases
and derived from the applicable Mortgaged Property and all
Proceeds thereof, in each case no later than the Business
Day following its collection and receipt thereof. So long
as no Event of Default shall have occurred and be continuing
and the Indebtedness has not been accelerated, the Borrowers
and Manager shall be permitted to make withdrawals from the
Deposit Accounts for the payment of Property Expenses, to
make any payments or deposits to the Collection Account
required to be made by the Borrowers pursuant to this
Agreement and, upon the payment of, or setting aside of
sufficient funds in the Deposit Accounts for the payment of
the foregoing items, to make distributions to Affiliates of
the Borrowers or the Guarantor. Except as otherwise
provided in the preceding sentence, the Borrowers shall not
be permitted to make any withdrawals from the Deposit
Accounts. Each Depository Acknowledgment shall provide that
upon the Deposit Bank's receipt of written notice from the
Agent that an Event of Default has occurred and is
continuing, the Collateral Agent may make withdrawals from
the Deposit Accounts on behalf of the Lenders for the
payment of the Indebtedness pursuant to Section 2.8 of this
Agreement. After Collateral Agent has received written
notice from Agent, on behalf of Lenders, that an Event of
Default has occurred and is continuing, (w) all Rents and
Money received from accounts or under Leases and derived
from the Mortgaged Property and all Proceeds thereof shall
be payable to Agent, on behalf of Lenders, or as otherwise
directed by Agent, (x) Agent, on behalf of Lenders, shall
make deposits, or cause deposits to be made, of such Rents,
Money and Proceeds to the Collection Account, and Borrowers
and the Manager shall make such deposits (to the extent not
made by Agent) and cooperate with Agent in the making of
such deposits or causing such deposits to be made and (y)
Proceeds on deposit in the Collection Account may be applied
by Collateral Agent on behalf of Lenders for the payment of
the Indebtedness pursuant to Section 2.8 of this Agreement.
(ii) So long as no Event of Default shall have occurred
and be continuing, Borrowers shall deposit in the Collection
Account not later than the close of business on the Business
Day prior to each Payment Date, the Debt Service Deposit
Amount.
(b) Distribution of Cash. So long as no Event of
Default has occurred and is continuing, on each Payment Date,
Collateral Agent shall withdraw the funds on deposit in the
Collection Account on such Payment Date, and shall apply such
funds, in each case to the extent of the amounts set forth in the
related Payment Date Statement delivered by Borrower, as follows:
first, to the payment of the fees of Collateral
Agent payable pursuant to the Fee Letter;
second, to the payment of any indemnification to
which an Indemnified Party is entitled pursuant to
Sections 5.1(I) and 5.1(J);
third, to the payment to Agent for the account of
Lenders of the interest then due and payable on the
Global Note with respect to the related Interest
Accrual Period;
fourth, to the payment to Agent for the account of
Lenders of the Principal Indebtedness in an amount
equal to any additional amount to which Agent is
entitled pursuant to Section 2.7(b) of this Agreement;
and
fifth, to the Borrowers.
(c) Permitted Investments. Borrowers shall direct
Collateral Agent in writing to invest and reinvest any balance in
the Collection Account and the Repair Reserve Account, from time
to time in Permitted Investments; provided, however, that (i) the
maturity of the Permitted Investments on deposit therein shall be
at the discretion of Borrowers, but in any event no later than
the Business Day immediately preceding the date on which such
funds are required to be withdrawn therefrom pursuant to Section
2.12(b) of this Agreement, (ii) after Collateral Agent has
received written notice from Agent on behalf of Lenders that an
Event of Default has occurred and is continuing, Borrowers shall
not have any right to direct investment of the balance in the
Collection Account or the Repair Reserve Account, and (iii) all
such Permitted Investments shall be held in the name of
Collateral Agent on behalf of the Collection Account and the
Repair Reserve Account. Agent, Lenders and Collateral Agent
shall have no liability for any loss in investments of funds in
the Collection Account or the Repair Reserve Account that are
invested in Permitted Investments (unless, in the case of
Collateral Agent, invested contrary to Agent's direction) and no
such loss shall affect Borrowers' obligation to fund, or
liability for funding, the Collection Account or the Repair
Reserve Account. Borrowers shall include all earnings on the
Collection Account and the Repair Reserve Account as income of
Borrower for federal and applicable state tax purposes.
(d) Monthly and Payment Date Statements; Activity
Statements. With respect to each Collection Period, Borrower
shall prepare and deliver, or shall cause to be prepared and
delivered, to Agent a statement (each, a "Monthly Statement") no
later than five Business Days after the end of such Collection
Period setting forth the aggregate deposits to the Collection
Account and deposits to and withdrawals from the Deposit Account
and Repair Reserve Account and the opening and closing balances
in such accounts. With respect to each Payment Date and the
related Collection Period and Interest Accrual Period, Borrower
shall prepare and deliver, or shall cause to be prepared and
delivered to Collateral Agent and Agent, a statement (each, a
"Payment Date Statement") no later than the Business Day prior to
such Payment Date with respect to each of the items below,
setting forth the following:
(i) the aggregate deposits to the Collection Account
during the related Collection Period for each category of
deposits under this Agreement and the opening and closing
balances in the Collection Account and the Repair Reserve
Account;
(ii) the amount of interest then due and payable on the
Global Note with respect to the Interest Accrual Period
(including the applicable number of days and interest rate
which were applied in determining such amount);
(iii) the amount of any fees and expenses of Collateral
Agent pursuant to the Fee Letter;
(iv) any indemnification to which an Indemnified Party
is entitled under this Agreement and with respect to which
Borrowers have not less than five (5) Business Days advance
notice; and
(v) the following information with respect to the
Principal Indebtedness in a format acceptable to Agent:
(1) the Principal Indebtedness as of the preceding Payment
Date, (2) any principal paid to Lenders since the prior
Payment Date, (3) any principal payable to Lenders on such
Payment Date, and (4) the Principal Indebtedness on the
current Payment Date (taking into account such payments).
In addition, no later than the twentieth (20th) day of each
calendar month (the "Activity Statement Date"), Borrowers shall
prepare and deliver, or shall cause to be prepared and delivered
to the Collateral Agent and the Agent, a statement (each, an
"Activity Statement") with respect to the Collection Period and
Interest Accrual Period for the Payment Date immediately
preceding such Activity Statement Date setting forth the
following: (x) a cash flow report in a format reasonably
acceptable to the Agent describing on the basis of each
individual Mortgaged Property, the related Gross Revenue,
Property Expenses, Capital Improvement Costs (including TI Costs
and Leasing Commissions) and net operating income; (y) a
liquidation activity report in a format reasonably acceptable to
the Agent describing with respect to each Mortgaged Property that
has been the subject of a Transfer, the related Capital Event
Proceeds, if any; and (z) a summary report of Lease modifications
and similar proposals with respect to each Mortgaged Property.
No errors or inaccuracies in any information or data provided to
the Agent pursuant to this Section 2.12(d) in favor of the
Lenders shall act as an estoppel against the Borrowers; provided,
however, that, such errors or inaccuracies were made
inadvertently and in good faith and are promptly corrected by the
Borrowers upon obtaining knowledge thereof.
(e) Quarterly Statements. No later than the fifteenth
(15) day of May, August, November, and February, beginning with
May, 1997, Borrowers shall prepare and deliver to Agent and
Collateral Agent a statement (each a "Quarterly Statement"), in
hard copy and on diskette and/or a copy through electronic mail,
in form reasonably satisfactory to Agent, setting forth with
respect to the applicable Mortgaged Property (i) a cash flow
report detailing the historic accrued Operating Revenues and the
historic accrued Operating Expenses, in each case for the period
ending on the last day of the second month preceding the month in
which such calculation is being made in the preceding year, (ii)
the accrued Operating Revenues, the accrued Operating Expenses,
in each case, with respect to the most recent calendar quarter
(or in the case of the initial Quarterly Statement, the most
recent four (4) calendar quarters), (iii) a current property rent
roll and occupancy level report (expressing the level as a
percentage based upon rentable square footage) for the most
recent date available and a list of any tenants included on such
rent roll who are in monetary or other material default under the
applicable Leases, (iv) for any Leases entered into by Borrowers
since the delivery of the prior Quarterly Statement (or, in the
case of the first Quarterly Statement, since the Closing Date)
with a new or renewal tenant, any free Rent, TI Costs and Leasing
Commission paid in connection with such Leases, (v) a summary of
any notices or other correspondences received from any tenant at
the Mortgaged Property with respect to its vacating of leased
premises or its "going dark" or otherwise suspending business
operations therein, (vi) a list of Capital Improvement Costs
incurred and Required Work completed during the period covered by
such Quarterly Statement and any updates to local market studies
or reports in the Borrowers' possession and (vii) any additional
information reasonably requested by Agent to enable Agent to
calculate Adjusted Operating Expenses and Adjusted Operating
Revenues; provided, that the additional information referred to
in clause (vii) shall not be required unless Borrowers have not
less than five (5) Business Days' notice.
(f) Loss Proceeds. If Loss Proceeds are to be made
available for restoration pursuant to a Mortgage, such Loss
Proceeds shall be held by Collateral Agent in a segregated
interest-bearing escrow account in the name of Collateral Agent
on behalf of Lenders to be withdrawn by Collateral Agent for
delivery to the related Borrower from time to time to pay
restoration costs pursuant to a schedule reasonably acceptable to
Agent and such Borrower. If any Loss Proceeds are received by
Borrowers (other than from Collateral Agent pursuant to the
previous sentence), such Loss Proceeds shall be received in trust
for Lenders, shall be segregated from other funds of Borrowers,
and shall be forthwith paid to Collateral Agent to the extent
necessary to comply with this Agreement.
(g) Collateral Agent's Reliance. Collateral Agent may
rely and shall be protected in acting or refraining from acting
upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been
signed or presented by the proper party or parties. Collateral
Agent may rely on notice from Agent as to the occurrence and
continuance of an Event of Default, without further written
notice by Lenders to the contrary.
Section 2.13. Repair Reserve Account.
(a) On or before the Closing Date, Borrowers shall
establish and maintain with Collateral Agent an Eligible Account
with the same title as the Collection Account and designated the
Repair Reserve Account (the "Repair Reserve Account"). On each
Advance Closing Date, if requested by Borrowers or to the extent
required by Lenders based upon the Engineering Reports, Lenders
shall fund into the Repair Reserve Account an amount (the "Repair
Reserve Amount") sufficient to pay for necessary capital
expenditures and structural repairs (the "Required Work") as
identified in the Engineering Reports related to the Mortgaged
Property or New Mortgaged Property added to the Collateral and
subjected to the Lien of a Mortgage on such date and satisfactory
to Lender.
(b) Any and all Moneys remitted to the Repair Reserve
Account, together with any Permitted Investments in which such
Moneys are or will be invested or reinvested during the term of
this Agreement, shall be held in the Repair Reserve Account (i)
to be withdrawn by Collateral Agent promptly upon written request
of a Borrower to reimburse a Borrower for the cost of any
Required Work incurred by such Borrower or (ii) for purposes
otherwise approved by Agent; provided, that if the Borrowers
shall not have satisfied the Property Release Test, any such
withdrawal pursuant to clause (i) shall require the prior written
consent of Agent. Not less than three (3) Business Days prior to
such Borrower's delivery of a request to Collateral Agent to
withdraw any funds from the Repair Reserve Account, such Borrower
shall provide Agent with written notice (with a copy to
Collateral Agent) of such request (including therein a statement
of the purpose for the withdrawal and copies of invoices and
other materials demonstrating the completion of items of the
Required Work for which reimbursement is so requested).
(c) After Collateral Agent has received written notice
from Agent that an Event of Default has occurred and is
continuing, Borrowers shall not be permitted to make any
withdrawals from the Repair Reserve Account and Agent may
liquidate any Permitted Investments of the amount on deposit in
the Repair Reserve Account and use such amount on deposit in the
Repair Reserve Account in immediately available funds to make
payments on account of the Loan in accordance with the priorities
set forth in Section 2.8.
Section 2.14. Security Agreement. (a) Pledge of
Account. To secure the full and punctual payment and performance
of all of the Indebtedness, Borrowers hereby assign, convey,
pledge and transfer to Lenders, to be held by Collateral Agent on
behalf of Lenders as agent/bailee, and grants a first and
continuing security interest in and to, the following property,
whether now owned or existing or hereafter acquired or arising
and regardless of where located (collectively, the "Account
Collateral"):
(i) all of Borrowers' right, title and interest in the
Collection Account, the Repair Reserve Account, and all
Money and Permitted Investments, if any, from time to time
deposited or held in the Collection Account and the Repair
Reserve Account;
(ii) all interest, dividends, Money, Instruments and
other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any of
the foregoing until such time as such items are disbursed
from the Collection Account and the Repair Reserve Account;
and
(iii) to the extent not covered by clause (i) or (ii)
above, all Proceeds of any or all of the foregoing.
(b) Covenants. So long as any portion of the
Indebtedness is outstanding and an Event of Default has occurred
and is continuing, Borrowers shall not open (or permit Manager to
open) any account other than the Deposit Accounts or Collection
Account for the deposit of Rents or Money received from Accounts
or under Leases and derived from the Mortgaged Property and all
Proceeds to pay amounts owing hereunder, other than any account
for amounts required by law to be segregated by Borrowers. The
Account Collateral shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the
Federal Reserve System and of any other banking authority or
Governmental Authority, as may now or hereafter be in effect, and
to the rules, regulations and procedures of Collateral Agent
relating to demand deposit accounts from time to time in effect.
(c) Financing Statements; Further Assurances. On the
Closing Date, Borrowers shall execute and deliver to the initial
Lender for filing a financing statement or statements in
connection with the Account Collateral in the form required to
properly perfect Collateral Agent's security interest on behalf
of Lender in the Account Collateral to the extent that it may be
perfected by such a filing. From time to time, at the expense of
Borrowers, Borrowers shall promptly execute and deliver all
further instruments, and take all further action, that Agent may
reasonably request, in order to perfect and protect the pledge
and security interest granted or purported to be granted hereby,
or to enable Collateral Agent to exercise and enforce Collateral
Agent's rights and remedies hereunder with respect to, any
Account Collateral. Collateral Agent shall not be responsible
for the determination of the financing statements and other
instruments necessary to perfect such security interest or for
the filing of such financing statements and other instruments at
the locations necessary to perfect such security interest.
(d) Transfers and Other Liens. Borrowers shall not
sell or otherwise dispose of any of the Account Collateral other
than pursuant to the terms hereof, or create or permit to exist
any Lien upon or with respect to all or any of the Account
Collateral, except for the Lien granted to Collateral Agent under
this Agreement.
(e) No Waiver. Every right and remedy granted to
Collateral Agent under this Agreement or by law may be exercised
by Collateral Agent at any time and from time to time, and as
often as Collateral Agent may deem it expedient. Any and all of
Collateral Agent's rights with respect to the pledge of and
security interest in the Account Collateral granted hereunder
shall continue unimpaired, and Borrowers shall be and remain
obligated in accordance with the terms hereof, notwithstanding
(i) any proceeding of Borrowers under the United States
Bankruptcy Code or any bankruptcy, insolvency or reorganization
laws or statutes of any state, (ii) the release or substitution
of Account Collateral at any time, or of any rights or interests
therein or (iii) any delay, extension of time, renewal,
compromise or other indulgence granted by Collateral Agent in the
event of any Default with respect to the Account Collateral or
otherwise hereunder. No delay or extension of time by Collateral
Agent in exercising any power of sale, option or other right or
remedy hereunder, and no notice or demand which may be given to
or made upon Borrowers by Collateral Agent, shall constitute a
waiver thereof, or limit, impair or prejudice Collateral Agent's
right, without notice or demand (except as set forth herein, in
any of the Collateral Security Instruments or as required by
Legal Requirements), to take any action against Borrowers or to
exercise any other power of sale, option or any other right or
remedy.
(f) Collateral Agent Appointed Attorney-In-Fact.
Borrowers hereby irrevocably constitute and appoint Collateral
Agent as Borrowers' true and lawful attorney-in-fact, with full
power of substitution, at any time after the occurrence and
during the continuation of an Event of Default, to execute,
acknowledge and deliver any instruments and to exercise and
enforce every right, power, remedy, option and privilege of
Borrowers with respect to the Account Collateral, and do in the
name, place and stead of Borrowers, all such acts, things and
deeds for and on behalf of and in the name of Borrowers with
respect to the Account Collateral, which Borrowers could or might
do in the absence of an Event of Default or which Agent may deem
necessary or desirable to more fully vest in Collateral Agent the
rights and remedies provided for herein with respect to the
Account Collateral and to accomplish the purposes of this
Agreement. The foregoing powers of attorney are irrevocable and
coupled with an interest.
(g) Continuing Security Interest; Termination. This
Section 2.14 shall create a continuing pledge of and security
interest in the Account Collateral and shall remain in full force
and effect until payment in full by Borrowers of the
Indebtedness. Upon payment in full by Borrowers of the
Indebtedness, Borrowers shall be entitled to the return, upon
their request and at their expense, of such of the Account
Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof. Agent shall promptly give notice
to Collateral Agent that the Indebtedness has been paid in full,
whereupon Collateral Agent shall immediately release any funds
then held by it in accounts established by Borrowers with
Collateral Agent pursuant to this Agreement and execute such
instruments and documents as may be reasonably requested by
Borrowers to evidence such termination and the release of the
pledge and lien hereof; provided, however, that Borrowers shall
pay on demand all of Collateral Agent's reasonable expenses in
connection therewith (including reasonable attorneys' fees and
disbursements).
(h) Right of Set-off. Collateral Agent waives any
and all rights it may have at law or otherwise to set off or make
any claim against the Account Collateral, except for the payment
of Collateral Agent's fees and expenses for the maintenance of
the Account Collateral.
Section 2.15. Mortgage Recording Taxes. The Lien to
be created by the Mortgages is intended to encumber the Mortgaged
Property described therein to the full extent of the Loan Amount
(or, in the case of any Mortgaged Property located in a State
which imposes a tax on the recordation of Mortgages, an amount
reasonably acceptable to Agent). On each Advance Closing Date,
Borrower shall have paid all state, county and municipal
recording and all other taxes imposed upon the execution and
recordation of each newly executed Mortgage, if any, and all
other Mortgages dated on or prior to the Advance Closing Date for
which any such taxes shall not have been paid, if any.
Section 2.16. General Collateral Agent Provisions.
(a) Appointment. Lenders hereby designate and
appoint Bank Leumi Trust Company of New York as Collateral Agent
of Lenders under this Agreement and the other Loan Documents, and
authorizes Bank Leumi Trust Company of New York as Collateral
Agent for Lenders, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly
delegated to Collateral Agent by the terms of this Agreement and
the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, Collateral Agent shall
not have any duties or responsibilities, except those expressly
set forth herein, or any fiduciary relationship with Lenders, and
no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
any other Loan Document or otherwise exist against Collateral
Agent.
(b) Collateral Agent's Right to Perform. If Borrowers
fail to perform any covenant or obligation contained herein after
the expiration of any applicable notice and cure periods and such
failure shall continue for a period of five (5) Business Days (or
such longer period reasonably requested by Borrowers due to force
majeure) after Borrowers' receipt of written notice thereof from
Collateral Agent, Collateral Agent may, but shall have no
obligation to, itself perform, or cause performance of, such
covenant or obligation, and the reasonable expenses of Collateral
Agent incurred in connection therewith shall be payable by
Borrowers to Collateral Agent upon demand. Notwithstanding the
foregoing, Collateral Agent shall have no obligation to send
notice to Borrowers of any such failure unless directed to do so
by Agent, except that Collateral Agent shall not have the right
set forth in this Section 2.16(b) to perform unless such notice
has been sent.
(c) Standard of Care. Beyond the exercise of
reasonable care in the custody or disbursements thereof,
Collateral Agent shall not have any duty as to any Account
Collateral or any income thereon in its possession or control or
in the possession or control of any agents for, or of Collateral
Agent, or the preservation of rights against any Person or
otherwise with respect thereto. Collateral Agent shall be deemed
to have exercised reasonable care in the custody of the Account
Collateral in its possession if the Account Collateral is
accorded treatment in accordance with the Accepted Practices.
Collateral Agent shall not be liable for any action or failure to
act or mistake on the part of Collateral Agent's agents,
officers, employees or attorneys with respect to any transactions
relating to this Agreement or to the Collection Account, provided
that this sentence shall not protect Collateral Agent against any
liability that would otherwise be imposed by reason of
negligence.
(d) Exculpatory Provisions. Neither Collateral Agent
nor any of its officers, directors, employees, agents, attorneys-
in-fact or Affiliates shall be responsible in any manner to Agent
for any recitals, statements, representations or warranties made
by Borrowers or any officer thereof contained in this Agreement
or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or
received by Collateral Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the Global Note or any other Loan Document or for any
failure of Borrowers to perform its obligations hereunder or
thereunder. Collateral Agent shall not be under any obligation
to Lenders to ascertain or to inquire as to the agreements
contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of
Borrowers. Collateral Agent shall not be required to take any
discretionary actions hereunder except at the written direction
of Borrowers or Agent, it being understood and agreed that
Collateral Agent's duties hereunder shall be wholly ministerial
in nature. In connection with any discretionary action which
Borrowers are permitted hereunder to direct Collateral Agent to
take, if Collateral Agent shall follow Agent's directions and not
Borrowers' directions, it shall have no liability to Borrowers
(or to any other Person) for following any such directions of
Agent and for not following such directions of Borrowers (if
expressly permitted herein). Collateral Agent shall not be under
any obligation or duty to perform any act which, in Collateral
Agent's sole reasonable judgment, could involve it in expense or
liability or to institute or defend any suit in respect hereof,
or to advance any of its own monies, unless Lenders or Borrowers,
as the case may be, shall have offered to Collateral Agent
reasonable security or indemnity against such expense, liability,
suit or advance.
(e) Indemnification. Borrowers shall indemnify and
hold Collateral Agent, and its agents, employees and officers
harmless from and against any loss, cost or damage (including,
without limitation, reasonable attorneys' fees and disbursements)
incurred by Collateral Agent in connection with the transactions
contemplated hereby, excluding any loss, cost or damage arising
as a result of Collateral Agent's failure to adopt and follow
Accepted Practices, bad faith, willful misconduct or violation of
applicable law. The indemnification set forth in this paragraph
shall survive the satisfaction and payment of the Indebtedness
and the termination of this Agreement.
(f) Collateral Agent's Reliance. Collateral Agent
shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document
reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel and other experts
selected by Collateral Agent. Collateral Agent may deem and
treat the payee of the Global Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with Collateral Agent.
Collateral Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence
of Agent as it deems appropriate or it shall first be indemnified
to its satisfaction by Agent against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. Collateral Agent shall in
all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in
accordance with a request of Agent, and such request and any
action taken or failure to act pursuant thereto shall be binding
upon Lenders and all future holders of the Global Note.
(g) Notice of Default. Collateral Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless Collateral Agent has
received notice from Agent referring to this Agreement,
describing such Default or Event of Default and stating that such
notice is a "notice of default". Collateral Agent shall take
such action with respect to such Default or Event of Default as
shall be directed by Agent, including any action under this
Agreement.
(h) Non-Reliance on Collateral Agent. Neither
Collateral Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any
representations or warranties to Lenders and no act by Collateral
Agent hereinafter taken (including any review of the affairs of
Borrowers) shall be deemed to constitute any representation or
warranty by Collateral Agent to Lenders. Except for notices,
reports and other documents expressly required to be furnished to
Agent by Collateral Agent hereunder, Collateral Agent shall not
have any duty or responsibility to provide Agent with any credit
or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or
creditworthiness of Borrowers which may come into the possession
of Collateral Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
(i) Removal and Resignation. Collateral Agent shall
have the right to resign as collateral agent hereunder and Agent
or, so long as no Event of Default has occurred and is
continuing, Borrowers shall have the right to remove Collateral
Agent as collateral agent hereunder, in each case upon thirty
(30) days' written notice to the other parties to this Agreement.
In the event of such resignation or removal, Borrowers or, if an
Event of Default has occurred and is continuing, Agent shall
appoint a successor Collateral Agent with the consent of Agent
(if such appointment is made by Borrowers) (such consent not to
be unreasonably withheld or delayed). No such removal of or
resignation by Collateral Agent shall become effective until a
successor Collateral Agent shall have accepted such appointment
and executed an instrument by which it shall have assumed all of
the rights and obligations of Collateral Agent hereunder. If no
such successor Collateral Agent is appointed within sixty (60)
days after receipt of the resigning Collateral Agent's notice of
resignation or removal, the resigning Collateral Agent may
petition a court for the appointment of a successor Collateral
Agent. In connection with any removal of or resignation by
Collateral Agent, (A) the removed or resigning Collateral Agent
shall (1) duly assign, transfer and deliver to the successor
Collateral Agent this Agreement and all Money and Permitted
Investments held by it hereunder, (2) execute such financing
statements and other instruments as may be necessary to assign to
the successor Collateral Agent the security interest existing in
favor of the retiring Collateral Agent hereunder, and to
otherwise give effect to such succession and (3) take such other
actions as may be reasonably required by Borrowers, Agent or the
successor Collateral Agent in connection with the foregoing and
(B) the successor Collateral Agent shall establish in its name,
as agent for Lenders, as secured party, a Collection Account and
a Repair Reserve Account as Borrower is required to maintain
pursuant to the terms of this Agreement.
(j) Individual Capacity. Collateral Agent and its
Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with Borrowers or any Affiliate,
as though Collateral Agent were not Collateral Agent hereunder,
or under the other Loan Documents.
Section 2.17. Extension Options. (a) The Borrowers
shall have the option (an "Extension Option"), to extend the
Maturity Date of the Note from the Payment Date in March, 1999
(the "Original Maturity Date"), to the Payment Date in March,
2000 (the "Extended Maturity Date"), upon satisfaction of each of
the following conditions (the "Extension Conditions"):
(i) the Borrowers shall have given written notice (an
"Extension Notice") to the Agent and Collateral Agent not
less than ninety (90) days prior to the Original Maturity
Date of their election to exercise the Extension Option;
(ii) no Default or Event of Default shall have occurred and
be continuing on the date the Extension Notice is given and
on the Original Maturity Date (the Agent agreeing to provide
Borrowers written notice of any Default of which the Agent
has actual knowledge during the period between delivery of
the Extension Notice and the Original Maturity Date);
(iii) the Borrowers shall have paid to the Agent for the
benefit of the Lenders on the Original Maturity Date, a fee
(an "Extension Fee") equal to the product of 1.00% and the
Principal Indebtedness as of the Original Maturity Date
(taking into account any principal payments made on such
date);
(iv) the Borrowers shall have delivered to the Agent such
evidence of corporate and partnership authorization and
other documents relating to the Extension Option as the
Agent shall reasonably require; and
(v) the Borrowers shall be in compliance with the Debt
Service Coverage Test and the Property Release Test and the
Guarantor shall be in compliance with the Financial
Covenants.
(b) The Borrowers may revoke the Extension Notice by
written notice (or telephonic notice promptly confirmed in
writing) to the Agent on behalf of the Lenders and Collateral
Agent on or prior to the fifteenth (15th) Business Day preceding
the Original Maturity Date; provided, however, that the Borrowers
shall pay the reasonable costs incurred by the Agent and
Collateral Agent in connection with the giving of the Extension
Notice and its revocation.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to Effectiveness.
This Agreement shall become effective on the date that all of the
following conditions shall have been satisfied (or waived in
accordance with Section 8.4) (the "Closing Date"):
(A) Loan Agreement. Borrowers, Guarantor, Agent and
initial Lender shall have executed and delivered this Agreement.
(B) Guaranty. Guarantor shall have executed and
delivered to the initial Lender the Guaranty.
(C) Opinions of Counsel. The initial Lender shall
have received from (i) counsel to Guarantor, its legal opinions
in substantially the form attached hereto as Exhibit F-1 with
respect to Guarantor matters, (ii) counsel to Borrowers and any
Managing Entity, its legal opinions in substantially the form
attached hereto as Exhibit F-2 with respect to corporate matters,
and (iii) real estate counsel to each Borrower, its legal opinion
in form acceptable to Lender with respect to the enforceability
of the Mortgage on each of the Mortgaged Properties. Such legal
opinions will be addressed to Agent and the Lenders, dated the
Closing Date, and in form and substance satisfactory to the
Agent.
(D) Organizational Documents. The initial Lender
shall have received with respect to each Borrower, the Managing
Entity of each partnership Borrower, and Guarantor, its
Organizational Documents, as applicable, as amended, modified or
supplemented to the Closing Date, as filed with the Secretary of
State or other appropriate Governmental Authority in the
jurisdiction of organization and in effect on the Closing Date
and certified to be true, correct and complete by the appropriate
Secretary of State as of a date not more than ten (10) days prior
to the Closing Date, together with a good standing certificate
from such Secretary of State or other appropriate Governmental
Authority and a good standing certificate from the Secretaries of
State or other appropriate Governmental Authority of each other
State in which Borrowers are required to be qualified to transact
business.
(E) Certified Resolutions, etc. The initial Lender
shall have received an Officer's Certificate of each Borrower or
the Managing Entity of each Borrower that is a limited
partnership, as the case may be, and Guarantor and Manager dated
the Closing Date, certifying (i) the names and true signatures of
its incumbent officers authorized to sign the Loan Documents to
which each Borrower, Guarantor or Manager is a party, (ii) the
Organizational Documents of each Borrower, the Managing Entity of
each Borrower that is a limited partnership, Guarantor and
Manager, in each case as in effect on the Closing Date, (iii) the
resolutions of the board of directors of each Borrower or the
Managing Entity of each Borrower that is a limited partnership,
as the case may be, Guarantor and Manager as applicable,
approving and authorizing the execution, delivery and performance
of the Loan Documents to which it is a party, and (iv) in the
case of each Borrower or the Managing Entity of each Borrower
that is a limited partnership, as the case may be, that there
have been no changes in the Organizational Documents since the
date of execution thereof.
(F) No Default or Event of Default. No Default with
respect to the payment of money or Event of Default shall have
occurred and be continuing on such date either before or after
the execution and delivery of this Agreement.
(G) No Injunction. No law or regulation shall have
been adopted, no order, judgment or decree of any Governmental
Authority shall have been issued, and no litigation shall be
pending or threatened, which in the good faith judgment of Agent
would enjoin, prohibit or restrain, or impose or result in the
imposition of any material adverse condition upon, the making or
repayment of the Loan or the consummation of the Transaction.
(H) Representations and Warranties. The
representations and warranties herein and in the other Loan
Documents shall be true and correct in all material respects on
such date both before and after the execution and delivery of
this Agreement.
(I) Transaction Costs. Borrowers shall have paid all
Transaction Costs then required to be paid hereunder and for
which bills have been submitted.
(J) Additional Matters. The initial Lender shall have
received such other certificates, opinions, documents and
instruments relating to the Loan as may have been reasonably
requested by the initial Lender. All corporate and other
proceedings, all other documents (including, without limitation,
all documents referred to herein and not appearing as exhibits
hereto) and all legal matters in connection with the Loan and the
Guaranty shall be reasonably satisfactory in form and substance
to the initial Lender.
Section 3.2. Execution and Delivery of Agreement. The
execution and delivery by Borrowers of this Agreement shall
constitute a representation and warranty by Borrowers to Agent
that all of the conditions required to be satisfied under Section
3.1 have been satisfied or waived in accordance with Section 8.4.
Section 3.3. Procedure for Disbursement of an Advance.
(a) Request for Advance. In the event a Borrower
wishes to receive an Advance on an Advance Closing Date, such
Borrower shall submit to Agent, on behalf of Lenders, a written
request for such Advance, including therein (A) the amount of the
proposed Advance; (B) with respect to each individual Mortgaged
Property comprising the Mortgaged Property as of the Advance
Closing Date occurring on the Closing Date or, if such Borrower
proposes to add a New Mortgaged Property to the Mortgaged
Property on the proposed Advance Closing Date occurring after the
Closing Date, with respect to the New Mortgaged Property only,
the items set forth in Section 3.4 below for such Mortgaged
Property or New Mortgaged Property; and (C) if a New Mortgaged
Property is proposed to be added to the Mortgaged Property on the
proposed Advance Closing Date, calculations and other backup
information demonstrating with respect to the New Mortgaged
Property, the Operating Revenues and recoveries information
specified in the definition of "Adjusted Operating Revenues," and
Operating Expenses incurred, in each case during the most recent
twelve-month period for which such information was furnished to
Agent in a Quarterly Statement (or, in connection with the
Closing Date, pursuant to Section 3.4), together with an
Officer's Certificate from an officer of Borrower stating that
such calculations and backup information are, to such officer's
knowledge, true, correct and complete in all material respects.
(b) Grant or Denial. If such Borrower does not
propose to add a New Mortgaged Property to the Mortgaged Property
on the proposed Advance Closing Date occurring after the Closing
Date, Agent shall confirm in writing its determination of whether
Borrowers shall satisfy the Debt Service Coverage Test and the
Property Release Test after the making of the proposed Advance or
shall deny such Borrower's request (including therein an
explanation for the failure to satisfy the Debt Service Coverage
Test or the Property Release Test) within five (5) Business Days
after its receipt of such information. If such Borrower proposes
to add a New Mortgaged Property to the Mortgaged Property on the
proposed Advance Closing Date occurring after the Closing Date,
Agent shall, in its sole discretion and subject to the terms of
this Agreement, grant or deny Borrower's request to add such New
Mortgaged Property and Agent, on behalf of Lenders, shall confirm
such decision in writing within twenty (20) Business Days after
its receipt of all the information delivered pursuant to Section
3.3(a).
(c) If Agent approves a request for an Advance, an
Advance shall be made on the date that the conditions set forth
in Section 3.5 and, if applicable, Section 3.6 below shall have
been satisfied (or waived in accordance with Section 8.4), which
date shall be at Borrower's option but not more than ten (10)
Business Days after Agent's approval has been given (each, an
"Advance Closing Date"). In the event on an Advance Closing Date
occurring after the Closing Date, a New Mortgaged Property will
not be added to the Mortgaged Property, Borrowers shall be
required to satisfy or cause to be satisfied only the conditions
set forth in Section 3.5 below. On the Advance Closing Date
occurring on the Closing Date and on each Advance Closing Date
occurring after the Closing Date on which a New Mortgaged
Property will be added to the Mortgaged Property, Borrower shall
be required to satisfy or cause to be satisfied, in addition to
the conditions set forth in Section 3.5, with respect to each
Mortgaged Property (including each New Mortgaged Property) being
added to the Mortgaged Property on such Advance Closing Date, the
conditions set forth in Section 3.6 below.
Section 3.4. Information Delivery Requirements. If a
Borrower proposes to add a Mortgaged Property (including a New
Mortgaged Property, if applicable) to the Mortgaged Property on
an Advance Closing Date, Borrower shall be required to satisfy
the following information delivery requirements with respect to
such Mortgaged Property:
(A) Survey. Agent shall have received the Survey with
respect to the Mortgaged Property which shall be in form and
substance satisfactory to Agent.
(B) Engineering Report. Agent shall have received the
Engineering Report with respect to the Mortgaged Property
prepared by the Engineer, which Engineering Report shall be
acceptable to Agent.
(C) Environmental Matters. Agent shall have received
an Environmental Report prepared by an Environmental Auditor with
respect to the Mortgaged Property, which Environmental Report
shall be acceptable to Agent.
(D) Financial Information. Agent shall have received
acceptable financial information relating to the Mortgaged
Property. Such information shall include the following, to the
extent reasonably available:
(i) operating statements for the current year
(including actual to date information, an annual budget and
trailing twelve month data in hard copy and on diskette) and
for not less than the three preceding years (including
tenant improvements costs, leasing commissions, capital
reserves, major repairs, replacement items and occupancy
rates in hard copy and on diskette);
(ii) copies of Leases with respect to tenants occupying
more than 10% of the rentable square footage of the
Mortgaged Property or contributing more than 10% of the
revenue for the Mortgaged Property, a copy of the standard
lease form and tenant lease abstracts, if available;
(iii) current property rent roll data on a tenant by
tenant basis in hard copy and on diskette (including name,
square footage, lease term, expiration date, renewal
options, base rent per square foot, sales volume psf,
percentage rent terms, additional rent clauses (including
stops, offsets, and other special provisions), escalation
clauses for increase in operating expense, maintenance,
insurance, real estate taxes and utilities, assignment,
sublet and cancellation provisions and purchase options);
(iv) current property leasing information (including
asking rent rates for available anchor and in-line space,
amount of current vacant space out for signature and under
negotiation, typical tenant improvement cost per square foot
(new versus renewal) and leasing concessions (free rent),
leasing commissions (new versus renewal) and historical
turnover ratio),
(v) current real estate tax bills and historical real
estate tax bills of record for the Mortgaged Property for
not less than the three preceding years,
(vi) insurance certificates indicating the type and
amount of coverage, and
(vii) the most recent annual consolidated financial
statements and unaudited quarterly consolidated financial
statements).
The annual consolidated financial statements relating to the
Mortgaged Property shall be either (x) audited by a "Big Six"
accounting firm or another firm of certified public accountants
acceptable to Agent in its sole discretion or (y) done in
accordance with agreed upon procedures reasonably acceptable to
Agent to be performed by a "Big Six" accounting firm or another
firm of certified public accountants acceptable to Agent in its
sole discretion to create similar information; provided, that if
the Mortgaged Property was not audited, but the operations of the
Mortgaged Property were included in the audited financial
statements of another entity, a certification from the certified
public accounting firm which performed the audit to the effect
that the financial statements of the Mortgaged Property are
consistent with the financial statements of the Mortgaged
Property included in the audited consolidated financial
statements of such entity is acceptable in lieu of audited
financial statements for the Mortgaged Property.
(E) Pro-Forma Financial Statement. Agent shall have
received (i) the initial pro forma financial statement for the
Mortgaged Property for the following twelve months (including on
an annual and monthly basis a break-down of projected revenues
and property expenses and Capital Improvement Costs (including
Leasing Commissions and TI Costs) and replacement reserve costs,
(ii) a financial statement that forecasts projected revenues and
operating expenses for not less than three to five years
(including the assumptions used in such forecast), and (iii) any
local retail market study and/or research and demographics report
prepared for Borrower and/or commercially available.
(F) Additional Real Estate Matters. Agent shall have
received such other real estate related certificates and
documentation relating to the Mortgaged Property as may have been
reasonably requested by Agent. Such documentation shall include
the following, to the extent reasonably available:
(i) certificates of occupancy issued by the appropriate
Governmental Authority of the jurisdiction in which the
Mortgaged Property is located reflecting the use of the
Mortgaged Property as of the Advance Closing Date,
(ii) at Borrower's option, letters from the appropriate
local Governmental Authority of the jurisdiction in which
the Mortgaged Property is located, certifying that the
Mortgaged Property is in compliance with all applicable
zoning laws, rules and regulations, or a zoning endorsement
to the applicable Title Insurance Policy with respect to the
Mortgaged Property or an opinion of zoning counsel to such
effect,
(iii) abstracts of all Leases in effect at the Mortgaged
Property and copies of such of the Leases as Agent may
request (in addition to the copies delivered above),
(iv) an estoppel certificate, in form and substance
acceptable to Agent or in a form substantially similar to
the form used in connection with any Ground Lease in effect
as of the Closing Date, from the lessor under any Ground
Lease on the Mortgaged Property;
(v) estoppel certificates in form and substance
acceptable to Agent in respect of all anchor-tenant Leases
and 70% of the in-line tenant Leases at the Mortgaged
Property;
(vi) a copy of the purchase agreement, if any, pursuant to
which a Borrower intends to acquire the Mortgaged Property,
and
(vii) graphics (including interior and exterior
photographs, rental brochures and a competitive properties
map).
(G) Site Inspection. Agent shall have performed, or
caused to be performed on its behalf, an on-site due diligence
review of the Mortgaged Property to be acquired or refinanced
with the Loan which inspection is satisfactory to Agent in its
sole discretion.
Section 3.5. Conditions Precedent to Each Disbursement
of an Advance. An Advance shall be made on an Advance Closing
Date only when each of the conditions set forth below shall have
been satisfied (or waived in accordance with Section 8.4),
together with the conditions set forth in Section 3.6 (if
applicable):
(A) Lien Search Reports. Not more often than once
every three (3) months (or more frequently in the event Agent has
reasonable grounds to believe any Liens may exist on the
Collateral) Agent shall have received satisfactory reports of UCC
(collectively, the "UCC Searches"), tax lien, judgment and
litigation searches and title updates conducted by search firms
and/or title companies acceptable to Agent with respect to the
Collateral and Borrowers, such searches to be conducted in each
of the locations set forth on Exhibit I attached hereto.
(B) Consents, Licenses, Approvals, etc. Agent shall
have received copies of all consents, licenses and approvals, if
any, required in connection with the execution, delivery and
performance by Borrowers and Manager, and the validity and
enforceability, of the Loan Documents, and such consents,
licenses and approvals shall be in full force and effect.
(C) Financial Statements. Agent shall have received
the audited consolidated financial statements of the Guarantor
for the most recent fiscal year, and the unaudited consolidated
financial statements of the Guarantor for the three-, six- and
nine-month periods ended on a date not more than three (3) months
prior to the Advance Closing Date. All audited financial
statements must have been prepared by a "Big Six" certified
public accounting firm or other firm reasonably acceptable to
Agent.
(D) Representations and Warranties. The
representations and warranties herein and in the other Loan
Documents shall be true and correct in all material respects on
such date both before and after giving effect to the making of
the Advance.
(E) No Default or Event of Default. No Default with
respect to the payment of money or Event of Default shall have
occurred and be continuing on such date either before or after
giving effect to the making of the Advance.
(F) No Injunction. No law or regulation shall have
been adopted, no order, judgment or decree of any Governmental
Authority shall have been issued, and no litigation shall be
pending or threatened, which in the good faith judgment of Agent
would enjoin, prohibit or restrain, or impose or result in the
imposition of any material adverse condition upon, the making or
repayment of the Advance or the Loan or the consummation of the
Transactions.
(G) Transaction Costs. Borrowers shall have paid all
Transaction Costs for which bills have been submitted and have
not been previously paid.
(H) Title Insurance Policy. With respect to each
Advance Closing Date after the initial Advance Closing Date with
respect to the Mortgaged Properties commonly known as
Xxxx/Raynham, Massachusetts and Wampanoag, Rhode Island, Agent
shall have received an endorsement to the existing Title
Insurance Policy (in form and substance satisfactory to Agent)
which amends the existing Title Insurance Policy by stating that
the amount of insurance is equal to one hundred twenty-five
percent (125%) of the then Allocated Loan Amount of such
Mortgaged Property; provided, however, that if a New Mortgaged
Property is being added to the Mortgaged Property on such Advance
Closing Date, then the conditions precedent set forth in Section
3.6 shall control with respect to the requirements of the Title
Insurance Policy and this Section 3.5(H) shall be of no force or
effect.
(I) Bring-Down Certificates. Agent shall have
received a certificate of the secretary or assistant secretary of
each Borrower or the Managing Entity of each Borrower that is a
limited partnership, as the case may be, and Guarantor dated the
Advance Closing Date, certifying that (i) the representations and
warranties herein are true and correct in all material respects
on such Advance Closing Date as if made on such date (subject to
any exceptions to such representations and warranties set forth
in an exhibit to such certificate which exceptions shall not have
a Material Adverse Effect), (ii) no Default with respect to the
payment of money or Event of Default shall have occurred and be
continuing on such Advance Closing Date, (iii) such Borrower, the
Managing Entity of each Borrower that is a limited partnership
and Guarantor are in good standing in their respective
jurisdictions of organization and (iv) there have been no changes
in the Organizational Documents of each Borrower, the Managing
Entity of each such Borrower that is a limited partnership or
Guarantor, respectively, since the date of the most recent
certification thereof (or if there have been changes, certifying
as to the changes).
Section 3.6. Conditions Precedent to Disbursement of
an Advance on an Advance Closing Date on Which a Mortgaged
Property Will be Added to Collateral. On each Advance Closing
Date on which a Mortgaged Property (including a New Mortgaged
Property) will be added to the Mortgaged Property, an Advance
shall be made on such date only when each of the conditions set
forth below shall have been satisfied (or waived in accordance
with Section 8.4), together with the conditions set forth in
Section 3.5:
(A) Loan Documents.
With respect to the initial Advance Closing Date only:
(i) Global Note. Borrowers shall have executed and
delivered to the Agent the Global Note.
(ii) Pledge Agreement. Each of the principals of
Borrowers shall have executed and delivered the Pledge
Agreement to the Agent.
(iii) Financing Statements. Borrowers shall have
executed and delivered to Agent all financing statements
specified on Exhibit H attached hereto and such financing
statements shall have been filed of record in the
appropriate filing offices in each of the appropriate
jurisdictions or irrevocably delivered to a title agent for
such recordation.
(iv) Mortgage; Assignment of Leases and Rents. Each
Borrower shall have executed and delivered to Agent the duly
executed (i) Mortgage and (ii) Assignments of Leases and
Rents in recordable form with respect to the related
Mortgaged Property and such Mortgages and Assignments of
Leases and Rents shall have been filed of record in the
appropriate filing office in the jurisdiction in which the
Mortgaged Property is located or irrevocably delivered to
the title insurance company issuing the Title Insurance
Policy for recordation.
(v) Title Insurance Policy. Agent shall have received
a marked commitment (in form and substance satisfactory to
Agent) to issue the Title Insurance Policy in respect of the
Mortgaged Property with the amount of the insurance equal to
one hundred twenty-five percent (125%) of the then Allocated
Loan Amount of each Mortgaged Property subject only to such
exceptions as are satisfactory to Agent for the Mortgaged
Property.
(vi) Management Agreement and Manager's Subordination.
Agent shall have received the executed Management Agreement.
Manager shall have executed and delivered each Manager's
Subordination to Agent.
(vii) Contract Assignment. Borrower shall have executed
and delivered to Agent a Contract Assignment with respect to
the Mortgaged Property being acquired, if applicable.
With respect to each Advance Closing Date subsequent to
the initial Advance Closing Date and with respect only to the
applicable Borrower joining this Agreement (or adding a Mortgaged
Property to the Collateral pledged by it) and the Mortgaged
Property being added to the Collateral securing the Loan:
(i) Mortgage; Assignment of Rents and Leases. Such
Borrower shall have executed and delivered to Agent a
Mortgage and an Assignment of Rents and Leases with respect
to each New Mortgaged Property being added to the Mortgaged
Property or, if approved by Agent, an amendment to an
existing Mortgage and Assignment of Rents and Leases and
such Mortgage and Assignment of Rents and Leases or
amendment shall have been filed of record in the appropriate
filing office in the jurisdiction in which such New
Mortgaged Property is located or irrevocably delivered to a
title agent for such recordation.
(ii) Loan Agreement, Global Note Signature Pages,
Pledge Agreement. To the extent that with respect to a New
Mortgaged Property, the Mortgage is executed and delivered
by a new Borrower joining this Agreement, such new Borrower
shall have executed and delivered to Agent a counterpart
signature page to this Agreement and the Global Note which,
from and after the date so executed and delivered by such
new Borrower and when taken together with the existing
signature pages for such documents, shall constitute the
signature pages to such documents and each of the principals
of such new Borrower shall have executed and delivered a
Pledge Agreement to the Agent.
(iii) Financing Statements. Such Borrower shall have
executed and delivered to Agent all financing statements
specified on Exhibit H attached hereto and such financing
statements shall have been filed of record in the
appropriate filing offices in each of the appropriate
jurisdictions or irrevocably delivered to a title agent for
such recordation.
(iv) Management Agreement and Manager's Subordination.
Agent shall have received the executed Management Agreement.
Manager shall have executed and delivered each Manager's
Subordination to Agent.
(v) Contract Assignment. Such Borrower shall have
executed and delivered to Agent a Contract Assignment with
respect to the New Mortgaged Property being pledged, if
applicable.
B. Opinions of Counsel. Agent shall have received
from real estate counsel to Borrower in each jurisdiction in
which a Mortgaged Property is located, its legal opinion in
substantially the form delivered to Lender on the Closing Date as
to the enforceability of the Mortgage and other matters referred
to therein. Each of such legal opinions will be addressed to
Agent and Lenders, dated the Advance Closing Date, and in form
and substance satisfactory to Agent and its counsel. Borrowers
hereby instruct such counsel to deliver to Agent and Lenders such
opinions addressed to Agent.
C. Insurance. Agent shall have received certificates
of insurance demonstrating insurance coverage in respect of the
Mortgaged Property of types, in amounts, with insurers and
otherwise in compliance with the terms, provisions and conditions
set forth in the Mortgage. Such certificates shall indicate that
Agent and Collateral Agent are named additional insureds as their
interests may appear and shall contain a loss payee endorsement
in favor of Agent and the Collateral Agent with respect to the
property policies required to be maintained under the Mortgage.
D. Title Insurance Policy. Agent shall have received
either (i) an unconditional commitment (in form and substance
reasonably satisfactory to Agent) to issue the Title Insurance
Policy covering the New Mortgaged Property with an amount of
insurance equal to one hundred twenty-five percent (125%) of the
then Allocated Loan Amount of such New Mortgaged Property, or
(ii) an endorsement to the existing Title Insurance Policy (in
form and substance satisfactory to Agent) which amends the
existing Title Insurance Policy by (x) adding the legal
description of the New Mortgaged Property to Schedule A thereof,
(u) adding Permitted Encumbrances to Schedule B thereof, if
applicable and (z) stating that the amount of insurance is equal
to the then outstanding principal balance of the Loan or such
other amount as shall be reasonably acceptable to Lender.
Section 3.7. Acceptance of Borrowings. The acceptance
by Borrowers of the proceeds of an Advance shall constitute a
representation and warranty by Borrowers to Agent that all of the
conditions to be satisfied under Section 3.4 through 3.6 in
connection with the making of the Advance have been satisfied or
waived in accordance with Section 8.4.
Section 3.8. Form of Loan Documents and Related
Matters. All of the Loan Documents, whether or not referred to
in this Article III, unless otherwise specified, shall be
delivered to Agent, and shall be satisfactory in form and
substance to Agent in its sole discretion (unless the form
thereof is prescribed herein).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties. Each
Borrower (for itself) and Guarantor, as applicable, represent and
warrant that, as of the Closing Date:
(A) Organization. Borrower (i) is duly incorporated
or organized (in the case of a corporation or limited
partnership, respectively), validly existing and in good standing
under the laws of the state of its incorporation or organization,
(ii) has the requisite power and authority to own in fee or lease
pursuant to a ground lease its properties (including, without
limitation, the Mortgaged Property) and to carry on its business
as now being conducted and is qualified to do business in the
jurisdiction in which the Mortgaged Property is located, and
(iii) has the requisite power to execute and deliver, and perform
its obligations under all of the Loan Documents to which it is a
party. Guarantor (i) is a duly organized and validly existing
real estate investment trust in good standing under the laws of
the State of Maryland, (ii) has the requisite power and authority
to carry on its business as now being conducted, and (iii) has
the requisite power to execute and deliver, and perform its
obligations under all of the Loan Documents to which it is a
party.
(B) Authorization; No Conflict; Consents and
Approvals. The execution and delivery by each Borrower and
Guarantor of this Agreement, and each of the other Loan Documents
to which it is a party, each Borrower's and Guarantor's
performance of its respective obligations hereunder and
thereunder and the creation of the security interests and liens
provided for in this Agreement and the other Loan Documents to
which it is a party (i) have been duly authorized by all
requisite action on the part of Borrower and Guarantor, as the
case may be, (ii) will not violate any provision of any Legal
Requirements, any order of any court or other Governmental
Authority, the Organizational Documents of Borrower or Guarantor,
respectively, or any indenture or material agreement or other
material instrument to which Borrower and/ or Guarantor is a
party or by which Borrower and/or Guarantor is bound, and (iii)
will not be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default
under, or result in the creation or imposition of any Lien of any
nature whatsoever upon any of the property or assets of Borrower
or Guarantor pursuant to any such indenture or material agreement
or instrument. Other than those obtained or filed on or prior to
the Closing Date, no Borrower or Guarantor is required to obtain
any consent, approval or authorization from, or to file any
declaration or statement with, any Governmental Authority or
other agency in connection with or as a condition to the
execution, delivery or performance of this Agreement, or the
other Loan Documents executed and delivered by Borrower or
Guarantor on or prior to the Closing Date.
(C) Enforceability. This Agreement executed by
Borrower and Guarantor, the Global Note, each Registered Note,
the Mortgage and each other Loan Document executed by Borrower,
and the Guaranty executed by Guarantor in connection with the
Loan (including, without limitation, any Collateral Security
Instrument), are the legal, valid and binding obligations of
Borrower and/or Guarantor, as the case may be, enforceable
against Borrower and/or Guarantor, as the case may be, in
accordance with their terms, subject to bankruptcy, insolvency
and other limitations on creditors' rights generally and to
equitable principles. This Agreement, the Global Note, the
Guaranty, the Mortgage and such other Loan Documents are, as of
the Closing Date, not subject to any right of rescission, set-
off, counterclaim or defense by Borrower or Guarantor (including
the defense of usury), nor will the operation of any of the terms
of this Agreement, the Global Note, the Guaranty, the Mortgage
and such other Loan Documents, or the exercise of any right
thereunder, render the Mortgage unenforceable against Borrower,
in whole or in part, or subject to any right of rescission, set-
off, counterclaim or defense by Borrower, including the defense
of usury, and Borrower has not asserted any right of rescission,
set-off, counterclaim or defense with respect thereto.
(D) Litigation. Except as disclosed in writing to
Lender, there are no actions, suits or proceedings at law or in
equity by or before any Governmental Authority or other agency
now pending and served or, to the best knowledge of Borrower and
Guarantor, threatened against Borrower, Guarantor or the
Mortgaged Property which actions, suits or proceedings, if
determined against Borrower, Guarantor or the Mortgaged Property,
are reasonably likely to result in a Material Adverse Effect.
(E) Agreements. Neither Borrower nor Guarantor is in
default 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 Guarantor is bound which is reasonably likely to have
a Material Adverse Effect. Neither Borrower nor Guarantor is a
party to any agreement or instrument or subject to any
restriction which is reasonably likely to have a Material Adverse
Effect.
(F) No Bankruptcy Filing. Neither Guarantor nor
Borrower is contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a major portion of its assets or property.
Neither Guarantor nor Borrower has knowledge of any Person
contemplating the filing of any such petition against it.
(G) Solvency. Giving effect to the transactions
contemplated hereby, the fair saleable value of Borrowers'
assets, taken as a whole, exceeds and will, immediately following
the making of the Loan, exceed Borrowers' total liabilities
(including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities). Giving effect to the
transactions contemplated hereby, the fair saleable value of
Guarantor's assets exceeds and will, immediately following the
making of the Loan, exceed Guarantor's total liabilities
(including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities). The fair saleable value of
Borrowers' assets, taken as a whole, is and will, immediately
following the making of the Loan, be greater than Borrowers'
probable liabilities (including the maximum amount of its
contingent liabilities on its debts as such debts become absolute
and matured). The fair saleable value of Guarantor's assets is
and will, immediately following the making of the Loan, be
greater than Guarantor's probable liabilities (including the
maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured). Borrower's assets do not
and, immediately following the making of the Loan will not,
constitute unreasonably small capital to carry out its business
as conducted or as proposed to be conducted. Guarantor's assets
do not and, immediately following the making of the Loan will
not, constitute unreasonably small capital to carry out its
business as conducted or as proposed to be conducted. Borrower
does not intend to, and does not believe that it will, incur
debts and liabilities (including, without limitation, contingent
liabilities and other commitments) beyond its ability to pay such
debts as they mature (taking into account the timing and amounts
to be payable on or in respect of obligations of Borrower).
Guarantor does not intend to, and does not believe that it will,
incur debts and liabilities (including, without limitation,
contingent liabilities and other commitments) beyond its ability
to pay such debts as they mature (taking into account the timing
and amounts to be payable on or in respect of obligations of
Guarantor).
(H) Full and Accurate Disclosure. No statement of
fact made by or on behalf of Borrower or Guarantor in this
Agreement or in any of the other Loan Documents contains any
untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or
therein not misleading. There is no fact presently known to
Borrower or Guarantor which has not been disclosed to Agent which
is likely to result in a Material Adverse Effect.
(I) Financial Information. All financial data
concerning Borrower and Guarantor that has been delivered by
Borrower and Guarantor to Agent is true, complete and correct in
all material respects. Since the delivery of such data, except
as otherwise disclosed in writing to Agent, there has been no
change in the financial position of Borrower and Guarantor or in
the results of operations of Borrower or Guarantor which change
is reasonably likely to result in a Material Adverse Effect.
Neither Borrower nor Guarantor has incurred any obligation or
liability, contingent or otherwise, not reflected in such
financial data which is reasonably likely to result in a Material
Adverse Effect.
(J) Investment Company Act; Public Utility Holding
Company Act. Borrower is
not (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment
Company Act of 1940, as amended, (ii) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as
amended, or (iii) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to
borrow money.
(K) Compliance. Borrower and Guarantor are in
compliance with all applicable Legal Requirements the
noncompliance with which is not reasonably likely to have a
Material Adverse Effect. Neither Borrower nor Guarantor is in
default or violation of any order, writ, injunction, decree or
demand of any Governmental Authority the violation of which is
reasonably likely to have a Material Adverse Effect.
(L) Single-Purpose Entity.
(i) Borrower at all times since its formation has been
duly formed and validly existing and (other than in the case
of KRT Union Corp.) a Single-Purpose Entity. If Borrower is
formed under the law of a State other than the State where
the Mortgaged Property owned by it is located, Borrower is
duly qualified as a foreign corporation or limited
partnership in the jurisdiction in which the Mortgaged
Property is located.
(ii) Borrower at all times since its formation has
complied with the provisions of its Organizational Document
since same was executed and delivered and the laws of the
State of its organization relating to corporations or
limited partnerships.
(iii) All customary formalities regarding the corporate
or limited partnership existence of Borrower have been
observed at all times since its organizational document was
executed and delivered.
(iv) Borrower has at all times since it began
maintaining such items accurately maintained its financial
statements, accounting records and other documents separate
from those of its shareholders or partners, as the case may
be, Affiliates of its shareholders or partners, as the case
may be, and any other Person. Borrower has not at any time
since its formation commingled its assets with those of its
shareholders or partners, as the case may be, any Affiliates
of its shareholders or partners, as the case may be, or any
other Person (other than other Borrowers). Borrower has at
all times since establishing its own bank accounts
accurately maintained its own bank accounts and separate
books of account.
(v) Borrower has at all times since receiving funds
paid its own liabilities from its own separate assets.
(vi) Borrower has at all times since its formation
identified itself in all dealings with the public, under
Borrower's own name and as a separate and distinct entity.
Borrower has not at any time since its formation identified
itself as being a division or a part of any other entity.
Borrower has not at any time since its formation identified
its shareholders or partners, as the case may be, or any
Affiliates of its shareholders or partners, as the case may
be, as being a division or part of Borrower.
(vii) Borrower is as of the date hereof adequately
capitalized in light of the nature of its business.
(viii) Borrower has not at any time since its formation
assumed or guaranteed the liabilities of its shareholders or
partners, as the case may be (or any predecessor
corporation, partnership or limited liability company), any
Affiliates of its shareholders or partners, as the case may
be, or any other Persons, except for liabilities relating to
the Mortgaged Property and except as permitted by or
pursuant to this Agreement. Borrower has not at any time
since its formation acquired obligations or securities of
its shareholders or partners, as the case may be (or any
predecessor corporation, partnership or limited liability
company), or any Affiliates of its shareholders or partners,
as the case may be. Borrower has not at any time since its
formation made loans to its shareholders or partners, as the
case may be (or any predecessor corporation, partnership or
limited liability company), or any Affiliates of its
shareholders or partners, as the case may be.
(ix) Borrower has not at any time since its formation
entered into and was not a party to any transaction with its
shareholders or partners, as the case may be (or any
predecessor corporation, partnership or limited liability
company), or any Affiliates of its shareholders or partners,
as the case may be, except for in the ordinary course of
business of Borrower on terms which are no less favorable to
Borrower than would be obtained in a comparable arm's length
transaction with an unrelated third party (other than in
connection with the execution by Borrower and Manager of the
Management Agreement).
(M) Plans and Welfare Plans. The assets of Borrower
are not treated as "plan assets" under regulations currently
promulgated under ERISA. Each Plan, and, to the best knowledge
of Borrower, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material
respects in compliance with, its terms and the applicable
provisions of ERISA, the Code and any other federal or state law,
and no event or condition has occurred and is continuing as to
which Borrower would be under an obligation to furnish a report
to Agent under Section 5.1(U)(i). Other than an application for
a favorable determination letter with respect to a Plan, there
are no pending issues or claims before the Internal Revenue
Service, the United States Department of Labor or any court of
competent jurisdiction related to any Plan or Welfare Plan. No
event has occurred, and there exists no condition or set of
circumstances, in connection with any Plan or Welfare Plan under
which Borrower or, to the best knowledge of Borrower, any ERISA
Affiliate, directly or indirectly (through an indemnification
agreement or otherwise), could be subject to any material risk of
liability under Section 409 or 502(i) of ERISA or Section 4975 of
the Code. No Welfare Plan provides or will provide benefits,
including, without limitation, death or medical benefits (whether
or not insured) with respect to any current or former employee of
Borrower, or, to the best knowledge of Borrower, any ERISA
Affiliate beyond his or her retirement or other termination of
service other than (i) coverage mandated by applicable law, (ii)
death or disability benefits that have been fully provided for by
fully paid up insurance or (iii) severance benefits.
(N) Location of Chief Executive Offices. The location
of Borrower's and Guarantor's principal place of business and
chief executive office is 000 Xxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000.
(O) Not Foreign Person. Borrower is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Code.
(P) Labor Matters. Borrower is not a party to any
collective bargaining agreements.
(Q) Pre-Closing Date Activities. Borrower has not
conducted any business or other activity on or prior to the
Closing Date, other than in connection with the acquisition,
ownership and operations of the Mortgaged Property.
Section 4.2. Advance Closing Date Representations. As
of each Advance Closing Date, Borrower and Guarantor shall make
all of the foregoing representations and warranties and shall
additionally represent and warrant that:
(A) Title to the Mortgaged Property. Borrower owns
good, marketable and insurable fee simple title to the Mortgaged
Property (or, with respect to the Leasehold Borrowers, holds the
leasehold estate in the Mortgaged Property), free and clear of
all Liens, other than the Permitted Encumbrances applicable to
the Mortgaged Property. Except as set forth on Schedule 4, there
are no outstanding options to purchase or rights of first refusal
or restrictions on transferability affecting the Mortgaged
Property.
(B) Other Debt. Except for the debt permitted under
Section 6.1(C), Borrower has not borrowed or received other debt
financing whether unsecured or secured by the Mortgaged Property
or any part thereof.
(C) Condemnation. No Taking has been commenced or, to
Borrower's or Guarantor's knowledge, is contemplated with respect
to all or any portion of the Mortgaged Property or for the
relocation of roadways providing access to the Mortgaged Property
except to the extent set forth in any Title Insurance Policy.
(D) Use of Proceeds; Margin Regulations. Borrower
and/or Guarantor and/or their Affiliates will use the proceeds of
the Advance for the purposes described in Section 2.2. No part
of the proceeds of the Advance 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.
(E) Utilities and Public Access. Each Mortgaged
Property has adequate rights of access to public ways and is
served by water, electric, sewer, sanitary sewer and storm drain
facilities. Except as set forth in any Title Insurance Policy,
all public utilities necessary to the continued use and enjoyment
of the Mortgaged Property as presently used and enjoyed are
located in the public right-of-way abutting the premises, and all
such utilities are connected so as to serve the Mortgaged
Property without passing over other property except for land of
the utility company providing such utility service. All roads
necessary for the full utilization of the Mortgaged Property for
its current purpose have been completed and dedicated to public
use and accepted by all Governmental Authorities or are the
subject of access easements for the benefit of the Mortgaged
Property.
(F) Environmental Compliance. Except for matters set
forth in the Environmental Reports delivered to Agent in
connection with the Loan (true, correct and complete copies of
which have been provided to Agent by Borrower):
(i) Borrower and the Mortgaged Property are each in
compliance with all applicable Environmental Laws (which
compliance includes, but is not limited to, the possession
by Borrower or Manager of all environmental, health and
safety permits, licenses and other governmental
authorizations required in connection with the ownership and
operation of the Mortgaged Property under all Environmental
Laws) except where the failure to comply with such laws is
not reasonably likely to result in a Material Adverse
Effect.
(ii) There is no Environmental Claim pending or, to the
best knowledge of Borrower, threatened, and no penalties
arising under Environmental Laws have been assessed, with
respect to the Mortgaged Property or otherwise, against
Borrower or Manager or, to the best knowledge of Borrower,
against any Person whose liability for any Environmental
Claim Borrower or Manager has or may have retained or
assumed either contractually or by operation of law, and no
investigation or review is pending or, to the best knowledge
of Borrower, threatened by any Governmental Authority,
citizens group, employee or other Person with respect to the
Mortgaged Property or any alleged failure by Borrower or
Manager or any Mortgaged Property to have any environmental,
health or safety permit, license or other authorization
required under, or to otherwise comply with, any
Environmental Law or with respect to any alleged liability
of Borrower or Manager for any Use or Release of any
Hazardous Substances.
(iii) There have been and are no past or present
Releases of any Hazardous Substance that are reasonably
likely to form the basis of any Environmental Claim against
Borrower, Manager, or, to Borrower's knowledge, against any
Person whose liability for any Environmental Claim Borrower
or Manager has or may have retained or assumed either
contractually or by operation of law.
(iv) Without limiting the generality of the foregoing,
there is not present at, on, in or under the Mortgaged
Property, PCB-containing equipment (to the best of
Borrower's knowledge), asbestos or asbestos containing
materials, underground storage tanks or surface impoundments
for Hazardous Substances, lead in drinking water (except in
concentrations that comply with all Environmental Laws), or,
to the best of Borrower's knowledge, lead based paint.
(v) No liens are presently recorded with the
appropriate land records under or pursuant to any
Environmental Law with respect to the Mortgaged Property
and, to Borrower's knowledge, no Governmental Authority has
been taking or is in the process of taking any action that
could subject the Mortgaged Property to Liens under any
Environmental Law.
(vi) There have been no environmental investigations,
studies, audits, reviews or other analyses conducted by or
that are in the possession of Borrower in relation to the
Mortgaged Property which have not been made available to
Agent.
(G) Mortgage and Other Liens. The Mortgage creates a
valid and enforceable first priority Lien on the Mortgaged
Property, as security for the repayment of the Indebtedness,
subject only to the Permitted Encumbrances. Each Collateral
Security Instrument establishes and creates a valid, subsisting
and enforceable Lien on and a security interest in, or claim to,
the rights and property described therein. All property covered
by any Collateral Security Instrument is subject to a UCC
financing statement filed and/or recorded, as appropriate (or
irrevocably delivered to an agent for such recordation or filing)
in all places necessary to perfect a valid first priority Lien
with respect to the rights and property that are the subject of
such Collateral Security Instrument to the extent governed by the
UCC.
(H) Assessments. There are no pending or proposed
special or other assessments for public improvements or otherwise
affecting the Mortgaged Property, nor are there any contemplated
improvements to the Mortgaged Property that may result in such
special or other assessments.
(I) No Joint Assessment; Separate Lots. Borrower has
not suffered, permitted or initiated the joint assessment of the
Mortgaged Property (i) (other than in the case of the leasehold
estate comprising a portion of the Mortgaged Property held by
Lilac New York Corp.) with any other real property constituting a
separate tax lot, and (ii) with any portion of the Mortgaged
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 Mortgaged Property as a single lien. The
Mortgaged Property is comprised of one or more parcels, each of
which constitutes a separate tax lot and none of which
constitutes a portion of any other tax lot (other than in the
case of the leasehold estate comprising a portion of the
Mortgaged Property held by Lilac New York Corp.).
(J) No Prior Assignment. Agent is the assignee of
Borrower's interest under the Leases. There are no prior
assignments of the Leases or any portion of the Rent due and
payable or to become due and payable which are presently
outstanding.
(K) Permits; Certificate of Occupancy. Borrower has
obtained all Permits necessary to the use and operation of the
Mortgaged Property, except where the failure to obtain such
Permits would not have a Material Adverse Effect. The use being
made of the Mortgaged Property is in conformity in all material
respects with the certificate of occupancy and/or Permits for the
Mortgaged Property and any other restrictions, covenants or
conditions affecting the Mortgaged Property.
(L) Flood Zone. Except as shown on the Survey, the
Mortgaged Property is not located in a flood hazard area as
defined by the Federal Insurance Administration.
(M) Physical Condition. Except as set forth in the
Engineering Report, the Mortgaged Property is free of structural
defects and all building systems contained therein are in good
working order subject to ordinary wear and tear.
(N) Security Deposits. Borrower and Manager are in
compliance with all Legal Requirements relating to all security
deposits with respect to the Mortgaged Property as to which
failure to comply is reasonably likely to have a Material Adverse
Effect.
(O) No Defaults. No Default or Event of Default
exists under or with respect to any Loan Document.
(P) Intellectual Property. All material trademarks,
trade names and service marks that Borrower or Guarantor owns or
has pending, or under which it is licensed, are in good standing
and uncontested. There is no right under any trademark, trade
name or service xxxx necessary to the business of Borrower or
Guarantor as presently conducted or as Borrower or Guarantor
contemplates conducting its business. Neither Borrower nor
Guarantor has infringed, is infringing, and has received notice
of infringement with respect to asserted trademarks, trade names
and service marks of others.
(Q) No Encroachments. Except as shown on the Survey,
all of the Improvements which were or would be included in
determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property, and no easements
or other encumbrances upon the Mortgaged Property encroach upon
any of the Improvements, so as to materially and adversely affect
the value or marketability of the Mortgaged Property except those
which are insured against by title insurance. All of the
Improvements comply with all requirements of any applicable
zoning and subdivision laws and ordinances, except where the
failure to comply is not reasonably likely to result in a
Material Adverse Effect.
(R) Management Agreement. Each Management Agreement
is in full force and effect. There is no default, breach or
violation existing thereunder by any party thereto and no event
(other than payments due but not yet delinquent) which, with the
passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach or violation by
any party thereunder.
(S) Leases. The Mortgaged Property is not subject to
any Leases other than the Ground Leases and other than the Leases
described in the rent roll delivered to Agent in connection with
the making of the Loan. To the best of Borrower's knowledge, no
person has any possessory interest in the Mortgaged Property or
right to occupy the same except under and pursuant to the
provisions of the Leases or sub-leases granted thereunder.
Subject to any exceptions set forth in the estoppel certificates
and/or rent rolls delivered to Agent pursuant to this Agreement,
the current Leases are in full force and effect and there are no
material defaults thereunder by either party and no conditions
which with the passage of time and/or notice would constitute
material defaults thereunder.
(T) Compliance. Borrower, Guarantor, each Mortgaged
Property and Borrower's use thereof and operations thereat comply
with all applicable Legal Requirements (including, without
limitation, building and zoning ordinances and codes), except
where the failure to comply is not reasonably likely to result in
a Material Adverse Effect.
(U) Financial Information. All financial data
concerning Borrower, Guarantor and the Mortgaged Property that
has been delivered by or on behalf of Borrower to Agent is true,
complete and correct in all material respects and, in the case of
financial statements only, have been prepared in accordance with
GAAP. Since the delivery of such data, except as otherwise
disclosed in writing to Agent, there has been no change in the
financial position of Borrower, Guarantor and the Mortgaged
Properties which change is reasonably likely to result in a
Material Adverse Effect. Neither Borrower nor Guarantor has
incurred any obligation or liability, contingent or otherwise,
not reflected in such financial data which might materially
adversely affect its business operations or any Mortgaged
Property.
(V) Ground Leases. Other than the Ground Leases
described on Schedule 3 attached hereto and made a part hereof,
no Mortgaged Property consists of a leasehold estate in whole or
in part. With respect to the Ground Leases described on Schedule
3:
(i) each such Ground Lease or memorandum thereof,
including all amendments and modifications thereto, or a
separate agreement signed by the applicable lessor has been
duly recorded; each such Ground Lease by its terms permits
the interest of the Leasehold Borrower thereunder to be
encumbered by the applicable Mortgage; and there has been no
change in the terms of such Ground Lease since its
recordation other than as set forth in Schedule 3;
(ii) no Ground Lease is subject to any Liens or
encumbrances other than the related Mortgage, subject to the
Permitted Encumbrances, and each Ground Lease is prior to
all Liens (other than the Lien of the related Mortgage),
charges and encumbrances on the fee interest of the lessor
thereunder;
(iii) each such Ground Lease is valid and subsisting and
is in full force and effect in accordance with its terms and
no uncured event of default has occurred under such Ground
Lease;
(iv) the Mortgage encumbering each Ground Lease
conforms and complies with such Ground Lease, does not
constitute a violation or default under such Ground Lease,
and is and shall at all times constitute a valid Lien
(subject only to Permitted Encumbrances) on the applicable
Leasehold Borrower's entire estate under such Ground Lease;
(v) all Ground Rent due and payable through and
including the Closing Date has been paid; and
(vi) all terms, conditions, and agreements contained in
the Ground Leases have been performed to the extent they
apply to periods through and including the Closing Date.
Section 4.3. Survival of Representations. Borrowers
and Guarantor agree that (i) all of the representations and
warranties of Borrowers and Guarantor set forth in Section 4.1
and elsewhere in this Agreement (but not in Section 4.2) and in
the other Loan Documents delivered on the Closing Date are made
as of the Closing Date, (ii) all of the representations and
warranties of Borrowers and Guarantor set forth in Section 4.2
and elsewhere in this Agreement (including in Section 4.1) and in
the other Loan Documents are, except as set forth in Section
3.5(I), made as of each Advance Closing Date, and (iii) all
representations and warranties made by Borrowers and Guarantor
shall survive the delivery of the Global Note, any Registered
Note, the Guaranty and making of the Advances and shall continue
for so long as any amount remains owing to Lenders under this
Agreement, the Global Note or any of the other Loan Documents;
provided, however, that the representations set forth in
Section 4.2(F) shall survive in perpetuity. All representations,
warranties, covenants and agreements made in this Agreement or in
the other Loan Documents shall be deemed to have been relied upon
by Lenders notwithstanding any investigation heretofore or
hereafter made by Lenders or on their behalf.
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1. Borrower Covenants. Each Borrower (for
itself) covenants and agrees that, from the date hereof and until
payment in full of the Indebtedness:
(A) 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 as a corporation or limited partnership, rights,
licenses, Permits and franchises necessary for the conduct of its
business and comply with all Legal Requirements and Insurance
Requirements applicable to it and the Mortgaged Property, the
failure to comply with which would have a Material Adverse
Effect. Borrower shall at all times maintain, preserve and
protect all franchises and trade names and preserve all the
remainder of its property necessary for the continued conduct of
its business and keep the Mortgaged Property in good repair,
working order and condition, except for reasonable wear and use,
and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and
improvements thereto. Borrower shall keep or shall cause Manager
to keep the Mortgaged 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.
(B) Basic Carrying Costs and Other Claims. Borrower
shall pay and discharge or cause Manager to pay and discharge all
Impositions, as well as all lawful claims for labor, materials
and supplies or otherwise, which could become a Lien, all as more
fully provided in, and subject to any rights to contest contained
in, the Mortgage. Borrower shall pay all Basic Carrying Costs
with respect to Borrower and the Mortgaged Property in accordance
with the provisions of the Mortgage, subject, however, to
Borrower's rights to contest payment of Impositions in accordance
with the Mortgage. Borrower's obligation to pay Basic Carrying
Costs pursuant to this Agreement shall include, to the extent
permitted by applicable law, Impositions resulting from future
changes in law which impose upon Lender an obligation to pay any
property taxes or other Impositions or which otherwise adversely
affect Lender's interests.
(C) Litigation. Borrower shall give prompt written
notice to Agent of any litigation or governmental proceeding
pending or threatened (in writing) against Borrower or Manager
which is reasonably likely to have a Material Adverse Effect.
(D) Environmental Remediation.
(i) If any investigation, site monitoring, cleanup,
removal, restoration or other remedial work of any kind or
nature is required of a Borrower pursuant to an order or
directive of any Governmental Authority or under any
applicable Environmental Law, because of or in connection
with the current or future presence, suspected presence,
Release or suspected Release of a Hazardous Substance on,
under or from the Mortgaged Property or any portion thereof
(collectively, the "Remedial Work"), Borrower shall promptly
commence and diligently prosecute to completion all such
Remedial Work. In all events, such Remedial Work shall be
commenced within forty-five (45) days after any demand
therefor by Agent or such shorter period as may be required
under any applicable Environmental Law; provided, however,
that Borrower shall not be required to commence such
Remedial Work within the above specified time periods: (x)
if prevented from doing so by any Governmental Authority,
(y) if commencing such Remedial Work within such time
periods would result in Borrower or such Remedial Work
violating any Environmental Law or (z) if Borrower, at its
expense and after prior notice to Agent, is contesting by
appropriate legal, administrative or other proceedings
conducted in good faith and with due diligence the need to
perform Remedial Work, as long as (1) Borrower is permitted
by the applicable Environmental Laws to delay performance of
the Remedial Work pending such proceedings, (2) neither the
Mortgaged Property nor any part thereof or interest therein
will be sold, forfeited or lost if Borrower does not perform
the Remedial Work being contested, and Borrower would have
the opportunity to do so, in the event of Borrower's failure
to prevail in the contest, (3) Lenders would not, by virtue
of such permitted contest, be exposed to any risk of any
civil liability for which Borrower has not furnished
additional security as provided in clause (4) below, or to
any risk of criminal liability, and neither the Mortgaged
Property nor any interest therein would be subject to the
imposition of any lien for which Borrower has not furnished
additional security as provided in clause (4) below, as a
result of the failure to perform such Remedial Work and (4)
Borrower shall have furnished to Lenders additional security
in respect of the Remedial Work being contested and the loss
or damage that may result from Borrower's failure to prevail
in such contest in such amount as may be reasonably
requested by Agent.
(ii) If requested by Agent, all Remedial Work under
clause (i) above shall be performed by contractors, and
under the supervision of a consulting Engineer, each
approved in advance by Agent which approval will not be
unreasonably withheld or delayed. All costs and expenses
reasonably incurred in connection with such Remedial Work
shall be paid by Borrower. If Borrower does not timely
commence and diligently prosecute to completion the Remedial
Work, Agent may (but shall not be obligated to), upon thirty
(30) days' prior written notice to Borrower of its intention
to do so, cause such Remedial Work to be performed.
Borrower shall pay or reimburse Agent on demand for all
expenses (including reasonable attorneys' fees and
disbursements), reasonably relating to or incurred by Agent
in connection with monitoring, reviewing or performing any
Remedial Work in accordance herewith.
(iii) Borrower shall not commence any Remedial Work
under clause (i) above, nor enter into any settlement
agreement, consent decree or other compromise relating to
any Hazardous Substances or Environmental Laws which is
reasonably likely to have a Material Adverse Effect.
Notwithstanding the foregoing, if the presence or threatened
presence of Hazardous Substances on, under or about the
Mortgaged Property poses an immediate threat to the health,
safety or welfare of any Person or the environment, or is of
such a nature that an immediate response is necessary or
required under applicable Environmental Law, Borrower may
complete all necessary Remedial Work. In such events,
Borrower shall notify Agent as soon as practicable and, in
any event, within three Business Days, of any action taken.
(E) Environmental Matters; Inspection.
(i) Borrower shall not permit a Hazardous Substance to
be present on, under or to emanate from the Mortgaged
Property, or migrate from adjoining property controlled by
Borrower onto or into the Mortgaged Property, except under
conditions permitted by applicable Environmental Laws and,
in the event that such Hazardous Substances are present on,
under or emanate from the Mortgaged Property, or migrate
onto or into the Mortgaged Property, Borrower shall cause
the removal or remediation of such Hazardous Substances, in
accordance with this Agreement and Environmental Laws.
Borrower shall use reasonable efforts to prevent, and to
seek the remediation of, any migration of Hazardous
Substances onto or into the Mortgaged Property from any
adjoining property.
(ii) Upon reasonable prior written notice, Agent shall
have the right, except as otherwise provided under Leases,
at all reasonable times to enter upon and inspect all or any
portion of the Mortgaged Property, provided that such
inspections shall not unreasonably interfere with the
operation or the tenants or occupants of the Mortgaged
Property. If Agent has reasonable grounds to suspect that
Remedial Work may be required, Agent shall notify Borrower
and, if Borrower is not complying with Section 5.1(D), may
select a consulting Engineer to conduct and prepare reports
of such inspections (with notice to Borrower prior to the
commencement of such inspection). Borrower shall be given a
reasonable opportunity to review any reports, data and other
documents or materials reviewed or prepared by the Engineer,
and to submit comments and suggested revisions or rebuttals
to same. The inspection rights granted to Agent in this
Section 5.1(E) shall be in addition to, and not in
limitation of, any other inspection rights granted to Agent
in this Agreement, and shall expressly include the right (if
Agent suspects that Remedial Work may be required) to
conduct soil borings, establish ground water monitoring
xxxxx and conduct other customary environmental tests,
assessments and audits.
(iii) Borrower agrees to bear and shall pay or reimburse
Agent on demand for all sums advanced and expenses incurred
(including reasonable attorneys' fees and disbursements)
reasonably relating to, or incurred by Agent in connection
with, the inspections and reports described in this
Section 5.1(E) (to the extent such inspections and reports
relate to the Mortgaged Property) in the following
situations:
(x) If Agent has reasonable grounds to believe,
at the time any such inspection is ordered, that there
exists an occurrence or condition that could lead to an
Environmental Claim;
(y) If any such inspection reveals an occurrence
or condition that is reasonably likely to lead to an
Environmental Claim; or
(z) If an Event of Default with respect to the
Mortgaged Property exists at the time any such
inspection is ordered, and such Event of Default
relates to any representation, covenant or other
obligation pertaining to Hazardous Substances,
Environmental Laws or any other environmental matter.
(F) Environmental Notices. Borrower shall promptly
provide notice to Agent of:
(i) any Environmental Claim asserted by any
Governmental Authority with respect to any Hazardous
Substance on, in, under or emanating from the Mortgaged
Property, which might involve remediation cost or liability
greater than $25,000;
(ii) any proceeding, investigation or inquiry commenced
or threatened in writing by any Governmental Authority,
against Borrower, with respect to the presence, suspected
presence, Release or threatened Release of Hazardous
Substances from or onto, in or under any property owned by
Borrower (including, without limitation, proceedings under
the Comprehensive Environmental Response, Compensation, and
Liability Act, as amended, 42 U.S.C. Section 9601, et seq.), which
might involve remediation cost or liability greater than
$25,000;
(iii) all Environmental Claims asserted or threatened
against Borrower, against any other party occupying the
Mortgaged Property or any portion thereof which become known
to Borrower or against the Mortgaged Property, which might
involve remediation cost or liability greater than $25,000;
(iv) the discovery by Borrower of any occurrence or
condition on the Mortgaged Property or on any real property
adjoining the Mortgaged Property which could involve
Remedial Work greater than $25,000; and
(v) the commencement or completion of any Remedial
Work.
(G) Copies of Notices. Borrower shall transmit to
Agent copies of any citations, orders, notices or other written
communications received from any Person and any notices, reports
or other written communications submitted to any Governmental
Authority with respect to the matters described in
Section 5.1(F).
(H) Environmental Claims. Agent may join and
participate in, as a party if Agent so determines, any legal or
administrative proceeding or action concerning the Mortgaged
Property or any portion thereof under any Environmental Law, if,
in Agent's reasonable judgment, the interests of Lenders will not
be adequately protected by Borrower. Borrower shall pay or
reimburse Agent on demand for all reasonable sums advanced and
expenses incurred (including reasonable attorneys' fees and
disbursements) incurred by Agent in connection with any such
action or proceeding.
(I) Environmental Indemnification. Borrower shall
indemnify, reimburse, defend, and hold harmless each Lender,
Agent, Collateral Agent and each of its respective parents,
subsidiaries, Affiliates, directors, officers, employees,
representatives, agents, successors, assigns and attorneys
(collectively, the "Indemnified Parties") for, from, and against
all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses (including,
without limitation, interest, penalties, reasonable attorneys'
fees, disbursements and expenses, and reasonable consultants'
fees, disbursements and expenses) asserted against, resulting to,
imposed on, or incurred by any Indemnified Party, directly or
indirectly, in connection with any of the following (except to
the extent same are directly and solely caused by the fraud, bad
faith, gross negligence or willful misconduct of any Indemnified
Party and except that any Indemnified Party shall not be
indemnified against claims resulting from actions taken with
respect to the Mortgaged Property after Agent forecloses its Lien
or security interest upon the Mortgaged Property and is a so-
called "mortgagee-in-possession" unless and to the extent such
indemnification relates to any of the following which occurred
while Borrower owned the Mortgaged Property):
(i) events, circumstances, or conditions which are
alleged to, or do, form the basis for an Environmental
Claim;
(ii) any pollution or threat to human health or the
environment that is related in any way to Borrower's or any
previous owner's or operator's management, use, control,
ownership or operation of the Mortgaged Property (including,
without limitation, all on-site and off-site activities
involving Hazardous Substances), and whether occurring,
existing or arising prior to or from and after the date
hereof, and whether or not the pollution or threat to human
health or the environment is described in the Environmental
Reports;
(iii) any Environmental Claim against any Person whose
liability for such Environmental Claim Borrower has or may
have assumed or retained either contractually or by
operation of law; or
(iv) the breach of any representation, warranty or
covenant set forth in Section 4.1(Q) and Sections 5.1(D)
through 5.1(I), inclusive.
The provisions of and undertakings and indemnification
set forth in this Section 5.1(I) shall survive the satisfaction
and payment of the Indebtedness and termination of this
Agreement.
(J) General Indemnity. Borrower shall indemnify,
protect, and hold the Indemnified Parties harmless from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses
(including, without limitation, reasonable attorneys' fees and
legal expenses whether or not suit is brought and settlement
costs) and disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the
Indemnified Parties, in any way relating to or arising out of the
Loan Documents or any of the transactions contemplated in any
thereof (collectively, the "Indemnified Liabilities"), to the
extent that any of the Indemnified Liabilities results, directly
or indirectly, from any claim made (whether or not in connection
with any legal action, suit, or proceeding) by or on behalf of
any Person other than the parties to this Agreement; provided,
however, that no Indemnified Party shall have the right to be
indemnified hereunder for its own fraud, bad faith, gross
negligence or willful misconduct. The provisions of and
undertakings and indemnification set forth in this Section 5.1(J)
shall survive the satisfaction and payment of the Indebtedness
and termination of this Agreement.
(K) Access to Mortgaged Property. Borrower shall
permit or shall cause Manager to permit agents, representatives
and employees of Agent and each Lender to inspect the Mortgaged
Property or any part thereof at such reasonable times as may be
requested upon reasonable advance notice, subject, however, to
the rights of the tenants of the Mortgaged Property.
(L) Notice of Default. Borrower shall promptly advise
Agent of any change in Borrower's condition, financial or
otherwise, which is reasonably likely to have a Material Adverse
Effect, or of the occurrence of any Default or Event of Default.
(M) Cooperate in Legal Proceedings. Except with
respect to any claim by Borrower against Lenders, Borrower shall
cooperate fully with each Lender and/or Agent with respect to any
proceedings before any Governmental Authority which may in any
way affect the rights of Lenders hereunder or any rights obtained
by Lenders under any of the Loan Documents and, in connection
therewith, not prohibit Agent, at its election, from
participating in any such proceedings.
(N) Perform Loan Documents. Borrower shall observe,
perform and satisfy or cause Manager to observe, perform and
satisfy all the terms, provisions, covenants and conditions
required to be observed, performed or satisfied by it or Manager,
and shall pay when due all costs, fees and expenses required to
be paid by it or Manager, under the Loan Documents executed and
delivered by Borrower and Manager.
(O) Insurance Benefits. Borrower shall cooperate with
Agent in obtaining for Lenders the benefits of any Insurance
Proceeds lawfully or equitably payable to Lenders in connection
with the Mortgaged Property. Agent shall be reimbursed for any
expenses reasonably incurred in connection therewith (including
reasonable attorneys' fees and disbursements) out of such
Insurance Proceeds.
(P) Further Assurances. Borrower shall, at Borrower's
sole cost and expense:
(i) upon Lender's reasonable request therefor given
from time to time (without in any way limiting the Agent's
rights under Section 3.5, but not more frequently than once
every three (3) months), pay for (a) reports of UCC, tax
lien, judgment and litigation searches with respect to
Borrower and (b) searches of title to the Mortgaged
Property, each such search to be conducted by search firms
designated by Borrower and reasonably acceptable to Agent in
each of the locations designated by Agent;
(ii) furnish to Agent all instruments, documents,
boundary surveys, footing or foundation surveys,
certificates, plans and specifications, Appraisals, title
and other insurance reports and agreements, and each and
every other document, certificate, agreement and instrument
required to be furnished pursuant to the terms of the Loan
Documents or reasonably requested by Agent in connection
therewith;
(iii) execute and deliver to Agent such documents,
instruments, certificates, assignments and other writings,
and do such other acts necessary, to evidence, preserve
and/or protect the Collateral at any time securing or
intended to secure the Global Note, as Agent may reasonably
require (including, without limitation, an amended or
replacement Mortgage, UCC financing statements or Collateral
Security Instruments); and
(iv) 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.
(Q) Management of Mortgaged Property. The Mortgaged
Property will be managed at all times by Manager pursuant to the
Management Agreement until terminated as herein provided.
Pursuant to the Manager's Subordination, Manager will agree that
the Management Agreement is subject and subordinate in all
respects to the Lien of the Mortgage. The Management Agreement
may be terminated by Agent upon thirty (30) days' prior written
notice to Borrower and Manager (a) upon the occurrence and
continuation of an Event of Default, or (b) if Manager commits
any act which would permit termination under the Management
Agreement, or (c) at any time after the capital stock of the
Guarantor ceases to be listed on a national securities exchange
in the United States, there is a change in the majority control
of Manager. Borrower may from time to time appoint a successor
manager to manage the Mortgaged Property with Agent's prior
written consent, such consent not to be unreasonably withheld or
delayed. Notwithstanding the foregoing, any successor manager
selected hereunder by Agent or Borrower to manage the Mortgaged
Property shall be a reputable management company having
experience in the management of real property of a similar type,
size and quality in the state in which the Mortgaged Property is
located. Borrower further covenants and agrees that Manager
(including any successor property manager serving as Manager)
shall at all times during the term of the Loan maintain worker's
compensation insurance as required by Governmental Authorities.
(R) Financial Reporting.
(i) Borrower shall keep and maintain or shall cause to
be kept and maintained on a Fiscal Year basis in accordance
with GAAP consistently applied, books, records and accounts
reflecting in reasonable detail all of the financial affairs
of Borrower and all items of income and expense in
connection with the operation of the Mortgaged Property and
in connection with any services, equipment or furnishings
provided in connection with the operation of the Mortgaged
Property, whether such income or expense may be realized by
Borrower or by any other Person whatsoever. Agent, on
behalf of Lenders, shall have the right from time to time at
all times during normal business hours upon reasonable prior
written notice to Borrower 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 Agent shall reasonably
desire. After the occurrence of an Event of Default with
respect to Borrower or the Mortgaged Property, Borrower
shall pay any costs and expenses incurred by Agent to
examine Borrower's accounting records with respect to the
Mortgaged Property, as Agent shall reasonably determine to
be necessary or appropriate in the protection of Lenders'
interest.
(ii) Borrower shall cause Guarantor to furnish to Agent
annually, within one hundred twenty (120) days following the
end of each Fiscal Year, a complete copy of Guarantor's
financial statement audited by Xxxxxx Xxxxxxxx LLP or such
other Independent certified public accountant reasonably
acceptable to Agent covering Guarantor's financial position
and results of operations, for such Fiscal Year and
containing a statement of revenues and expenses, a statement
of assets and liabilities and a statement of Guarantor's
equity, all of which shall be in form reasonably acceptable
to Agent. Agent shall have the right from time to time to
review the auditing procedures used in the preparation of
such annual financial statements and to request additional
procedures. Together with Guarantor's annual financial
statements, Guarantor shall furnish to Agent an Officer's
Certificate certifying as of the date thereof (x) that the
annual financial statements present fairly in all material
respects the results of operations and financial condition
of Guarantor all in accordance with GAAP consistently
applied, and (y) whether there exists an Event of Default,
and if such Event of Default exists, the nature thereof, the
period of time it has existed and the action then being
taken to remedy same.
(iii) Borrowers shall furnish to Lender, within forty-
five (45) days following the end of each Fiscal Year quarter
a true, complete and correct unaudited quarterly financial
statement with respect to each Mortgaged Property for that
quarter.
(iv) Borrower shall furnish to Agent (i) copies of all
filings with the Securities and Exchange Commission ("SEC")
by the Guarantor, other than Registration Statements on Form
S-8 and reports under Sections 13(d) and 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") and (ii) copies of the Guarantor's annual reports and
quarterly reports within 15 days following each date on
which Guarantor is (or would have been, in the event
Guarantor ceases to be subject to Section 13 or 15(d) of the
Exchange Act) required to file with the SEC.
(v) Borrower shall furnish or shall cause Manager to
furnish to Agent, within fifteen (15) Business Days after
request, such further information with respect to the
operation of the Mortgaged Property and the financial
affairs of Borrower as may be reasonably requested by Agent,
including all business plans prepared for Borrower.
(vi) Borrower shall furnish to Agent, within fifteen
(15) Business Days after request, such further information
regarding any Plan or Multiemployer Plan and any reports or
other information required to be filed under ERISA as may be
reasonably requested by Agent.
(vii) Not later than the Closing Date and,
subsequently, at least thirty (30) days prior to the end of
each of Borrower's Fiscal Years, Borrower shall submit or
cause to be submitted to Agent an Operating Budget for
Borrower's property expenses, Capital Improvement Costs
(including Leasing Commissions and TI Costs) and replacement
reserve costs for the next Fiscal Year for the Mortgaged
Property.
(S) Conduct of Business. Borrower shall cause the
operation of the Mortgaged Property to be conducted at all times
in a manner consistent with at least the level of operation of
the Mortgaged Property as of the Closing Date, including, without
limitation, the following:
(i) to maintain or cause to be maintained the standard
of the Mortgaged Property at all times at a level not lower
than that maintained by prudent managers of similar
facilities or land in the region where the Mortgaged
Property is located;
(ii) to operate or cause to be operated the Mortgaged
Property in a prudent manner in compliance in all material
respects with applicable Legal Requirements and Insurance
Requirements relating thereto and maintain or cause to be
maintained all licenses, Permits and any other agreements
necessary for the continued use and operation of the
Mortgaged Property; and
(iii) to maintain or cause to be maintained sufficient
Inventory and Equipment of types and quantities at the
Mortgaged Property to enable Borrower or Manager to operate
the Mortgaged Property.
(T) Single-Purpose Entity.
(i) Borrower at all times will continue to be a duly
formed and validly existing corporation or limited
partnership under the laws of the State of its formation and
a Single-Purpose Entity.
(ii) Borrower shall at all times comply with the
provisions of its Organizational Documents and the laws of
the State of its formation relating to corporations or
limited partnerships.
(iii) Borrower shall observe all customary formalities
regarding its existence.
(iv) Borrower shall accurately maintain its financial
statements, accounting records and other corporate documents
separate from those of its shareholders or partners,
Affiliates of its shareholders or partners and any other
Person. Borrower shall not commingle its assets with those
of its shareholders or partners, any Affiliates of its
shareholders or partners, or any other Person (other than
another Borrower). Borrower shall continue to accurately
maintain its own bank accounts (together with other
Borrowers, if applicable) and separate books of account.
(v) Borrower shall continue to pay its own liabilities
from its own separate assets.
(vi) Borrower shall continue to identify itself in all
dealings with the public, under its own name or trade names
and as a separate and distinct entity. Borrower will not
identify itself as being a division or a part of any other
entity. Borrower will not identify its shareholders,
partners or any Affiliates of its shareholders or partners
as being a division or part of Borrower.
(vii) Borrower shall continue to be adequately
capitalized in light of the nature of its business.
(viii) Except as contemplated by this Agreement, Borrower
shall not assume or guarantee the liabilities of its
shareholders or partners (or any predecessor corporation),
any Affiliates of its shareholders or partners, or any other
Persons, except for liabilities relating to the Mortgaged
Property and except as permitted by or pursuant to this
Agreement. Borrower shall not acquire obligations or
securities of its shareholders or partners (or any
predecessor corporation, partnership or limited liability
company), or any Affiliates of its shareholders or partners.
Borrower shall not make loans to its shareholders or
partners (or any predecessor corporation), or any Affiliates
of its shareholders or partners.
(ix) Borrower shall not enter into or be a party to any
transaction with its shareholders or partners (or any
predecessor corporation, partnership or limited liability
company) or any Affiliates of its partners, except for in
the ordinary course of business on terms which are no less
favorable to Borrower than would be obtained in a comparable
arm's length transaction with an unrelated third party
(other than in connection with the execution by Borrower and
Manager of the Management Agreement).
(U) ERISA. Borrower shall deliver to Agent as soon as
possible, and in any event within ten days after Borrower knows
or has reason to believe that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan
has occurred or exists, a statement signed by a senior financial
officer of Borrower setting forth details respecting such event
or condition and the action, if any, that Borrower or its ERISA
Affiliate proposes to take with respect thereto (and a copy of
any report or notice required to be filed with or given to PBGC
by Borrower or an ERISA Affiliate with respect to such event or
condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC has not
by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within thirty (30) days of the
occurrence of such event (provided that a failure to meet
the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA, including, without limitation, the
failure to make on or before its due date a required
installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code); and any request for a waiver
under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan or any action taken
by Borrower or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by Borrower or any ERISA Affiliate of Borrower of a
notice from a Multiemployer Plan that such action has been
taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by Borrower or any ERISA Affiliate of
Borrower that results in material liability under
Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser
default) or the receipt by Borrower or any ERISA Affiliate
of Borrower of notice from a Multiemployer Plan that it is
in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against Borrower or any ERISA
Affiliate of Borrower to enforce Section 515 of ERISA, which
proceeding is not dismissed within thirty (30) days;
(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if Borrower or an ERISA
Affiliate of Borrower fails to timely provide security to
the Plan in accordance with the provisions of said Sections;
and
(vii) the imposition of a lien or a security interest in
connection with a Plan.
(V) Assignment or Participation of Global Note. In
the event that Agent notifies Borrower that a secondary market
sale (an "Assignment") of, or a sale of a participation interest
(a "Participation") in, the Global Note to another party is a
desirable course of action with respect to the Loan, then
Borrower shall cooperate with Agent, in the preparation of any
information reasonably necessary or incidental to such Assignment
or Participation with respect to the Collateral which is
reasonably within the possession or control of Borrower or is
obtainable by Borrower without unreasonable expense or effort and
shall in good faith enter into any amendments to this Agreement
necessary to accomplish the Assignment or Participation;
provided, however, that Agent shall bear the cost of any third
party out-of-pocket fees and expenses (including reasonable fees
and disbursements of counsel) incurred by Borrower in
implementing any such amendments.
(W) Appraisal. Borrower shall furnish to Agent at
Borrower's expense upon request of Agent after the Closing Date
and prior to the Maturity Date one Appraisal from an Appraiser
selected by Agent with respect to the Mortgaged Property.
(X) Ground Leases.
(i) Each Leasehold Borrower shall pay, promptly when
due and payable (before the commencement of any "cure" or
"grace" period), all Ground Rent. With respect to the
Ground Leases affecting the Mortgaged Property commonly
referred to as the Bradford, Pennsylvania property and the
Yonkers, New York property, upon notice from Agent,
simultaneously with the making of each and every payment of
Ground Rent payable after the delivery of such notice, each
Leasehold Borrower shall simultaneously deliver to Agent a
copy of the check in the amount of such payment delivered to
the payee.
(ii) Each Leasehold Borrower shall perform and observe
(before the commencement of any "cure" or "grace" period)
all terms, covenants, and conditions that each such
Leasehold Borrower is required to perform and observe under
the applicable Ground Lease and do everything necessary to
preserve and to keep unimpaired and in full force and effect
the applicable Ground Lease. Leasehold Borrower shall not
permit any Ground Lease to go into default (whether or not
any cure period in the Ground Lease has expired).
(iii) Each Leasehold Borrower shall enforce the
obligations of the applicable lessor under each Ground Lease
so that such Leasehold Borrower may at all times enjoy all
its rights, benefits and privileges under the applicable
Ground Leases.
(iv) Leasehold Borrower shall not, without Agent
consent, cause, agree to, permit, or suffer to occur any
Ground Lease Impairment. Any Ground Lease Impairment made
without Agent consent shall be null, void, and of no force
or effect. Any party entering into or purportedly obtaining
the benefit of such a purported Ground Lease Impairment is
hereby placed on notice that Leasehold Borrower has no power
or authority to cause, consent, or agree to such Ground
Lease Impairment without Agent's consent.
(v) Leasehold Borrower shall not, without Agent
consent, such consent not to be unreasonably withheld or
delayed, refuse to consent or consent to any action that any
lessor under a Ground Lease or any third party takes or
desires to take under or with respect to any Ground Lease,
where Leasehold Borrower has such right.
(vi) Each Leasehold Borrower shall promptly deliver to
Agent a copy of any notice of default or termination, or
demand for performance (other than routine bills for current
Ground Rent) that it receives from any lessor under a Ground
Lease. Leasehold Borrower shall furnish to Agent all
information that Agent may reasonably request from time to
time concerning the Ground Leases and Leasehold Borrower's
compliance with the Ground Leases. Leasehold Borrower,
immediately upon learning that any lessor under a Ground
Lease has failed to perform any material terms and
provisions under any Ground Lease (including by reason of a
rejection or disaffirmance or purported rejection or
disaffirmance of such Ground Lease pursuant to any state or
federal bankruptcy law), shall notify Agent thereof.
Promptly after the Closing Date, and again promptly after
execution of any amendment to the related leasehold
Mortgage, each Leasehold Borrower shall notify the
applicable Ground Lessor of the execution and delivery of
the related leasehold Mortgage or such amendment. Such
notice shall set forth, verbatim, in a form satisfactory to
Agent, all provisions of the related leasehold Mortgage
relating to Ground Lease Impairments. Agent shall have the
right, but not the obligation, to give any lessor under a
Ground Lease at any time any notice described in this
paragraph or otherwise relating to the related leasehold
Mortgage or the Loan.
(vii) Leasehold Borrower shall promptly notify Agent
of any request that any party to a Ground Lease makes for
arbitration or other dispute resolution procedure pursuant
to such Ground Lease and of the institution of any such
arbitration or dispute resolution. Leasehold Borrower
hereby authorizes Agent to participate in any such
arbitration or dispute resolution. Leasehold Borrower shall
promptly deliver to Agent a copy of the determination of
each such arbitration or dispute resolution procedure.
(viii) If Agent or its designee shall acquire or
obtain a New Ground Lease, then Borrower shall have no
right, title or interest whatsoever in or to such New Ground
Lease, or any proceeds or income arising from the estate
arising under any such New Ground Lease, including from any
sale or other disposition thereof. Agent or its designee
shall hold such New Ground Lease free and clear of any right
or claim of Borrower, except that the proceeds thereof shall
be applied as set forth in Section 2.7(b).
(ix) Leasehold Borrower shall not amend, modify or
cancel any Ground Lease without the prior written consent of
Agent, which consent shall not be unreasonably withheld or
delayed.
(Y) Post-Closing Matters. With respect to the
Borrower as of the Closing Date named XX Xxxxxxxx Mall, L.P., it
shall be understood and agreed that (i) the Agent shall have the
right after the initial Advance Closing Date (and on a subsequent
Advance Closing Date) to require that a deposit be made to the
Repair Reserve Account pursuant to Section 2.13(a) for the
related Mortgaged Property and (ii) such Borrower shall deliver
to the Agent within one hundred twenty (120) days following the
Closing Date either (i) evidence that the underground storage
tanks have been removed or sealed in accordance with all
applicable Legal Requirements or (ii) a Phase II Environmental
Report with respect thereto reasonably acceptable to the Agent.
With respect to the Borrowers named KR Barn, L.P. and Lilac New
York Corp., it shall be understood and agreed that upon
completion of the planned construction at the related Mortgaged
Properties, such Borrowers shall deliver to the Agent final
Engineering Reports reasonably acceptable to the Agent.
(Z) Miscellaneous Covenants.
(i) Notwithstanding anything in this Agreement to the
contrary, on the initial Advance Closing Date, Lilac New
York Corp. delivered, and the Agent accepted, (a) a Mortgage
securing $2,500,000 of the outstanding Principal
Indebtedness which Mortgage has been filed of record in the
appropriate filing office in the jurisdiction where the
related Mortgaged Property is located and (b) a second
priority mortgage (substantially similar in form to the
Mortgage except to the extent necessary to reflect such
priority) securing $1,600,000 of the outstanding Principal
Indebtedness, which second priority mortgage has not been
filed of record but is being held in escrow by Agent in
accordance with the provisions hereof. Such second priority
mortgage shall be held in escrow by Agent during the term of
the Loan, but may, at the option of the Agent, be released
from escrow and filed of record upon the occurrence of an
Event of Default hereunder. In the event such second
priority mortgage is not recorded, as aforesaid, same shall
be returned to the Borrowers upon the earlier to occur of
(x) the release of the Mortgage securing the same Mortgaged
Property pursuant to this Agreement and (y) repayment in
full of the Loan and termination of this Agreement. On the
initial Advance Closing Date, Lilac New York Corp. shall
deposit in the Repair Reserve Account, in addition to the
amounts referred to in Section 2.13(a), an amount sufficient
to pay all state, county and municipal recording taxes and
any other fees which would be imposed on the recordation of
such second priority mortgage, which amount shall only be
withdrawn by Agent in connection with such recordation
pursuant to this clause (Z)(i) or by the Borrowers upon the
earlier to occur of (x) the release of the Mortgage securing
the same Mortgaged Property pursuant to this Agreement and
(y) repayment in full of the Loan and termination of this
Agreement.
(ii) With respect to the Mortgaged Property leased by
Lilac New York Corp., such Borrower shall promptly deliver
to the Agent evidence of the payment of all Impositions with
respect to the tax lot of which such Mortgaged Property
constitutes a portion.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1. Borrower Negative Covenants. Each
Borrower, for itself, covenants and agrees that, until payment in
full of the Indebtedness, it will not do, directly or indirectly,
any of the following unless Agent consents thereto in writing:
(A) Liens on the Mortgaged Property. Incur, create,
assume, become or be liable in any manner with respect to, or,
except as expressly permitted by or pursuant to the Mortgage,
permit to exist, any Lien with respect to the Mortgaged Property,
except: (i) Liens in favor of Agent and (ii) the Permitted
Encumbrances.
(B) Transfer. Except as expressly permitted by or
pursuant to this Agreement or the Mortgage, own any real property
other than the Mortgaged Property or Transfer the Mortgaged
Property.
(C) Other Borrowings. Incur, create, assume, become
or be liable in any manner with respect to Other Borrowings,
except that Borrower may (i) incur secured or unsecured
indebtedness relating solely to financing or leasing of Equipment
used in the ordinary course of Borrower's business, to the extent
that such loans or leases are ordinary and customary in the
industry of operating properties similar to the Mortgaged
Property, and the proceeds of which are not distributed to
Borrower except as reimbursement for monies expended by Borrower
to fund the financing or leasing of such Equipment or (ii) incur
loans from its shareholders or partners or their Affiliates
(other than the Loan), provided that (a) such loans are
subordinate to the Loan and unsecured, (b) the terms of such
loans provide that the related shareholders or partners shall not
take any judicial or non-judicial action to commence any
foreclosure proceeding with respect thereto for so long as any of
the Indebtedness remains outstanding, (c) the proceeds of such
loans are used by Borrower to pay expenses (including property
expenses) or closing costs relating to the Mortgaged Property or
to make interest payments on the Loan, and (d) such loans are on
terms satisfactory to Agent.
(D) Dissolution; Merger or Consolidation. Dissolve,
terminate, liquidate, merge with or consolidate into another
Person (other than another Borrower).
(E) Change In Business. Cease to be a Single-Purpose
Entity, 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.
(F) Debt Cancellation. Cancel or otherwise forgive or
release any material claim or debt owed to Borrower by any
Person, except for adequate consideration or in the ordinary
course of Borrower's business.
(G) Affiliate Transactions. Enter into, or be a party
to, any transaction with an Affiliate of Borrower, except in the
ordinary course of business and on terms which 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 (other than in connection with the execution by Borrower
and Manager of the Management Agreement).
(H) Creation of Easements. Except as expressly
permitted by or pursuant to the Mortgage or this Agreement,
create, or permit the Mortgaged Property or any part thereof to
become subject to, any easement, license or restrictive covenant,
other than a Permitted Encumbrance.
(I) Misapplication of Funds. Distribute any Rents or
Moneys received from Accounts in violation of the provisions of
Section 2.12, or fail to deliver any security deposit to Manager,
or misappropriate any security deposit or portion thereof.
(J) Certain Restrictions. Enter into any agreement
which expressly restricts the ability of Borrower to enter into
amendments, modifications or waivers of any of the Loan
Documents.
(K) Assignment of Licenses and Permits. Assign or
transfer any of its interest in any Permits pertaining to the
Mortgaged Property, or assign, transfer or remove or permit any
other Person to assign, transfer or remove any records pertaining
to the Mortgaged Property.
(L) Place of Business. Change its chief executive
office or its principal place of business without giving Agent at
least thirty (30) days' prior written notice thereof and promptly
providing Lender such information as Agent may reasonably request
in connection therewith.
(M) Leases. Enter into, amend or cancel Leases,
except as permitted by or pursuant to the Mortgage or this
Agreement.
(N) Management Agreement. (i) Surrender, terminate or
cancel the Management Agreement, (ii) reduce or consent to either
the reduction of the term of or the assignment of the Management
Agreement, (iii) increase or consent to the increase of the
amount of any charges under the Management Agreement, or (iv)
otherwise modify, change, supplement, alter or amend, or waive or
release any of its rights and remedies under, the Management
Agreement in any material respect; provided, however, that if
Borrower terminates the Management Agreement and does not appoint
a successor manager to manage the Mortgaged Property within three
(3) months of the date of termination, then Agent may appoint a
successor manager.
(O) Plans and Welfare Plans. Knowingly engage in or
permit any transaction in connection with which Borrower or any
ERISA Affiliate could be subject to either a material civil
penalty or tax assessed pursuant to Section 502(i) or 502(l) of
ERISA or Section 4975 of the Code, permit any Welfare Plan to
provide benefits, including without limitation, medical benefits
(whether or not insured), with respect to any current or former
employee of Borrower beyond his or her retirement or other
termination of service other than (i) coverage mandated by
applicable law, (ii) death or disability benefits that have been
fully provided for by paid up insurance or otherwise or (iii)
severance benefits (unless such coverage is provided after
notification of and with the reasonable approval of Agent),
permit the assets of Borrower to become "plan assets", whether by
operation of law or under regulations promulgated under ERISA or
adopt, amend (except as may be required by applicable law) or
increase the amount of any benefit or amount payable under, or
permit any ERISA Affiliate to adopt, amend (except as may be
required by applicable law) or increase the amount of any benefit
or amount payable under, any Plan or Welfare Plan, except for
normal increases in the ordinary course of business consistent
with past practice that, in the aggregate, do not result in a
material increase in benefits expense to Borrower or any ERISA
Affiliate.
(P) Transfer Ownership Interests. Permit any transfer
of a direct ownership interest or voting right in Borrower that
would cause a Change of Control to occur.
ARTICLE VII
DEFAULTS
Section 7.1. Event of Default. The occurrence of one
or more of the following events shall be an "Event of Default"
hereunder:
(i) if on any Payment Date the funds in the Collection
Account are insufficient to pay the accrued and unpaid
interest due on the Global Note on such Payment Date;
(ii) if any Borrower fails (a) to pay the outstanding
Indebtedness on the Maturity Date or (b) to deposit into the
Collection Account the amount required pursuant to Section
2.7(a) or 2.7(b), respectively;
(iii) if any Borrower or Guarantor fails to pay any
other amount payable pursuant to this Agreement, the
Guaranty or any other Loan Document when due and payable in
accordance with the provisions hereof or thereof, as the
case may be, and such failure continues for ten (10) days
after Agent delivers written notice thereof to such
Borrower;
(iv) if, as of any Debt Service Coverage/Property
Release Test Date, the Debt Service Coverage Test is not met
and such test continues to not be met for ten (10) days
after Agent delivers written notice thereof to Borrowers;
(v) if Guarantor breaches any of the Financial
Covenants contained in the Guaranty and such breach
continues for ten (10) days after Agent delivers written
notice thereof to Borrowers and Guarantor;
(vi) if any representation or warranty made herein or
in any other Loan Document, or in any report, certificate,
financial statement or other Instrument, agreement or
document furnished by Borrower, Guarantor or Manager in
connection with this Agreement, the Global Note, the
Guaranty or any other Loan Document executed and delivered
by Borrower, Guarantor or Manager, shall be false in any
material respect as of the date such representation or
warranty was made;
(vii) if any Borrower, Guarantor, or any Managing
Entity makes an assignment for the benefit of creditors;
(viii) if a receiver, liquidator or trustee shall be
appointed for any Borrower, Guarantor, or any Managing
Entity, or if any Borrower, Guarantor, or any Managing
Entity 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, any Borrower, Guarantor, or any Managing
Entity or if any proceeding for the dissolution or
liquidation of any Borrower, Guarantor, or any Managing
Entity shall be instituted; provided, however, that if such
appointment, adjudication, petition or proceeding was
involuntary and not consented to by such Borrower,
Guarantor, or such Managing Entity upon the same not being
discharged, stayed or dismissed within forty-five (45) days,
or if any Borrower, Guarantor, or any Managing Entity shall
generally not be paying its debts as they become due;
(ix) if any Borrower or Guarantor attempts to delegate
its obligations or assign its rights under this Agreement,
any of the other Loan Documents or any interest herein or
therein, or if any Transfer occurs other than in accordance
with this Agreement, the Mortgage or any other Loan Document
and such delegation or assignment of rights or impermissible
Transfer continues or is not corrected for ten (10) days
after Agent delivers written notice thereof to Borrower or
Guarantor, as the case may be;
(x) if any provision of the Organizational Documents
affecting the purpose for which any Borrower or Guarantor,
is formed is amended or modified in any material respect
which may adversely affect Agent or Collateral Agent, or if
any Borrower, Guarantor, or any Managing Entity fails to
perform or enforce the provisions of its Organizational
Documents or attempts to dissolve, or if any Borrower
breaches any of its representations, warranties or covenants
set forth in Section 4.1(L) or 6.1(E);
(xi) if an Event of Default as defined or described in
the Global Note, the Mortgage, the Guaranty or any other
Loan Document occurs, whether as to any Borrower, Guarantor
or all or any portion of the Mortgaged Property; or
(xii) if any Borrower, Guarantor, or any Managing Entity
shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement, the Global
Note, the Guaranty or the other Loan Documents, for ten (10)
days after notice to Borrowers from Agent or its successors
or assigns, in the case of any Default which can be cured by
the payment of a sum of money (other than Events of Default
pursuant to clauses (i) and (ii) above as to which the grace
period, if any, set forth therein is applicable), or for
forty-five (45) days after notice from Agent or its
successors or assigns, in the case of any other Default
(unless otherwise provided herein or in such other Loan
Document); provided, however, that if such non-monetary
Default is susceptible of cure but cannot reasonably be
cured within such forty-five (45) day period and such
Borrower, Guarantor, or such Managing Entity, as the case
may be, shall have commenced to cure such Default within
such forty-five (45) day period and thereafter diligently
and expeditiously proceeds to cure the same, such forty-five
(45) day period shall be extended for an additional forty-
five (45) days; or
(xiii) if a Change of Control has occurred;
then, upon the occurrence of any such Event of Default and at any
time thereafter, Lenders or their successors or assigns, may, in
addition to any other rights or remedies available to them
pursuant to this Agreement, the Global Note, the Mortgages, the
Guaranty and the other Loan Documents, or at law or in equity,
take such action, without further notice or demand, as Lenders or
their successors or assigns, deems advisable to protect and
enforce their rights against a Borrower and in and to all or any
portion of the Mortgaged Property (including, without limitation,
declaring the entire Indebtedness to be immediately due and
payable) and may enforce or avail themselves of any or all rights
or remedies provided in the Loan Documents against such Borrower,
Guarantor and/or the Mortgaged Property (including, without
limitation, all rights or remedies available at law or in
equity).
Section 7.2. Remedies. (a) Upon the occurrence of an
Event of Default, all or any one or more of the rights, powers,
other remedies available to Lenders against Borrower or Guarantor
under this Agreement, the Global Note, the Mortgages, the
Guaranty or any of the other Loan Documents executed by or with
respect to Borrowers, or at law or in equity may be exercised by
Lenders at any time and from time to time, whether or not all or
any portion of the Indebtedness shall be declared due and
payable, and whether or not Lenders 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 all or any portion of the Mortgaged Property. Any such
actions taken by Lenders shall be cumulative and concurrent and
may be pursued independently, singly, successively, together or
otherwise, at such time and in such order as Lenders may
determine in its sole discretion, to the fullest extent permitted
by law, without impairing or otherwise affecting the other rights
and remedies of Lenders permitted by law, equity or contract or
as set forth herein or in the other Loan Documents.
(b) In the event of the foreclosure or other action by
Lenders to enforce its remedies in connection with all or any
portion of the Mortgaged Property, Lenders shall apply all Net
Proceeds received to repay the Indebtedness in accordance with
Section 2.8, the Indebtedness shall be reduced to the extent of
such Net Proceeds and the remaining portion of the Indebtedness
shall remain outstanding and secured by the Mortgages, the
Guaranty and the other Loan Documents, it being understood and
agreed by Borrowers that Borrowers are liable for the repayment
of all the Indebtedness and that any "excess" foreclosure
proceeds are part of the cross-collateralized, cross-defaulted
security granted to Lenders pursuant to the Mortgages; provided,
however, that the Global Note shall be deemed to have been
accelerated only to the extent of the Net Proceeds actually
received by Lenders with respect to the Mortgaged Property and
applied in reduction of the Indebtedness evidenced by the Global
Note in accordance with the provisions of the Global Note, after
payment by Borrowers of all transaction costs and expenses and
costs of enforcement.
Section 7.3. Remedies Cumulative. The rights, powers
and remedies of Lenders under this Agreement shall be cumulative
and not exclusive of any other right, power or remedy which
Lenders may have against Borrowers or Guarantor pursuant to this
Agreement, the Guaranty or the other Loan Documents executed by
or with respect to Borrowers or Guarantor, or existing at law or
in equity or otherwise. Subject to applicable Legal
Requirements, Lenders' rights, powers and remedies may be pursued
singly, concurrently or otherwise, at such time and in such order
as Lenders may determine in Lenders' 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 any Default or Event of
Default shall not be construed to be a waiver of any subsequent
Default or Event of Default or to impair any remedy, right or
power consequent thereon. Notwithstanding any other provision of
this Agreement, Lenders reserve the right to seek a deficiency
judgment or preserve a deficiency claim, in connection with the
foreclosure of a Mortgage on any of the Mortgaged Property, to
the extent necessary to foreclose on other parts of the Mortgaged
Property.
Section 7.4. Default Administration Fee. At any time
after the occurrence of an Event of Default and the acceleration
of the Indebtedness, as reimbursement and compensation for the
additional internal expenditures, administrative expenses, fees
and other costs associated with actions to be taken in connection
with such Event of Default, and regardless of whether Agent shall
have commenced the exercise of any remedies pursuant to Section
7.2, the Default Administration Fee shall be payable by Borrowers
to Lenders upon demand; provided, that the Default Administration
Fee shall not be payable in connection with any repayment or
prepayment of the Principal Indebtedness in the event the
Borrowers shall be paying the Repayment Fee together with such
repayment or prepayment.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival. This Agreement and all
covenants, agreements, representations and warranties made herein
and in the certificates delivered pursuant hereto shall survive
the execution and delivery of this Agreement, the making by Agent
of the Loan hereunder and the execution and delivery by Borrowers
to Lenders of the Global Note, and shall continue in full force
and effect so long as any portion of the Indebtedness is
outstanding and unpaid. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party. All covenants,
promises and agreements in this Agreement contained, by or on
behalf of Borrowers or Guarantor, shall inure to the benefit of
the respective successors and assigns of Lenders. Nothing in
this Agreement or in any other Loan Document, express or implied,
shall give to any Person other than the parties and the holder of
the Global Note, the Guaranty, the Mortgages and the other Loan
Documents, and their legal representatives, successors and
assigns, any benefit or any legal or equitable right, remedy or
claim hereunder.
Section 8.2. Lenders' Discretion. Whenever pursuant
to this Agreement, Agent exercises any right given to it to
approve or disapprove, or any arrangement or term is to be
satisfactory to Agent, the decision of Agent 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 Agent
and shall be final and conclusive.
Section 8.3. Governing Law. (a) This Agreement was
negotiated in New York, and made by Lenders and accepted by
Borrowers in the State of New York, and the proceeds of the
Global Note delivered pursuant hereto were disbursed from 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
limitation, 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 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 liens and security
interests created pursuant to the Mortgages and the other Loan
Documents shall be governed by and construed according to the law
of the State in which the applicable Mortgaged Property is
located, it being understood that, to the fullest extent
permitted by law of such States, the law of the State of New York
shall govern the validity and the enforceability of all Loan
Documents, and the Indebtedness or obligations arising hereunder
or thereunder.
(b) Any legal suit, action or proceeding against
Lenders or Borrowers arising out of or relating to this Agreement
shall be instituted in any federal or state court in New York,
New York. Borrowers hereby (i) irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they, or
any of them, may now or hereafter have to the laying of venue of
any such suit, action or proceeding brought in such a court and
any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum, and (ii) irrevocably
submit to the jurisdiction of any such court in any such suit,
action or proceeding. Borrowers do hereby designate and appoint
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X.
Xxxxxx, Esq. as their authorized agent to accept and acknowledge
on their behalf service of any and all process which may be
served in any such suit, action or proceeding in any federal or
state court in New York, New York, and agrees that service of
process upon said agent at said address (or at such other office
in New York, New York as may be designated by Borrower from time
to time in accordance with the terms hereof) with a copy to
Borrowers at their principal executive offices, and written
notice of said service of Borrowers mailed or delivered to
Borrowers in the manner provided herein shall be deemed in every
respect effective service of process upon Borrowers, in any such
suit, action or proceeding in the State of New York. Borrowers
(i) shall give prompt notice to Agent of any changed address of
their authorized agents hereunder, (ii) may at any time and from
time to time designate substitute authorized agents with offices
in New York, New York (which offices shall be designated as the
addresses for service of process), and (iii) shall promptly
designate such substitutes if their authorized agents cease to
have offices in New York, New York or are dissolved without
leaving successors.
Section 8.4. Modification, Waiver in Writing. No
modification, amendment, extension, discharge, termination or
waiver of any provision of this Agreement, the Global Note or any
other Loan Document, or consent to any departure by Borrowers
therefrom, shall in any event be effective unless the same shall
be in a writing signed by the party against whom enforcement is
sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to or
demand on Borrowers shall entitle Borrowers to any other or
future notice or demand in the same, similar or other
circumstances.
Section 8.5. Delay Not a Waiver. Neither any failure
nor any delay on the part of Lenders in insisting upon strict
performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, or
under the Global Note, or of 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 Global Note or any other Loan Document, Lenders 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
Global Note or the other Loan Documents, or to declare a default
for failure to effect prompt payment of any such other amount.
Section 8.6. Notices. Any notice, consent, approval
or request on behalf of the Borrowers given by a single Borrower
which states that it is given on behalf of all Borrowers shall
constitute action of all the Borrowers hereunder. 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 (with
appropriate receipt) 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,
and by telecopier (with answer back acknowledged), addressed if
to Agent or initial Lender at its address set forth on the first
page hereof, Attention: XxxxXxxx Xxxxxx, if to Collateral Agent
at its address set forth on the first page hereof, and if to any
Borrower at its address set forth on the first page hereof, 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 8.6. A copy of all notices, consents, approvals and
requests directed to Agent or initial Lender shall be delivered
to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx Xxxxxxxx, Esq.; a copy of all notices,
consents, approvals and requests directed to Borrowers shall be
delivered to Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxx Xxxxxxxx, Esq., and a copy of all notices, consents,
approvals and requests directed to Collateral Agent shall be
delivered to Bank Leumi Trust Company of New York, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxxxx Xxxxxx.
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 or expedited prepaid delivery, when delivered; or
in the case of telecopy, on the Business Day the same was sent.
A party receiving a notice which does not comply with the
technical requirements for notice under this Section 8.6 may
elect to waive any deficiencies and treat the notice as having
been properly given.
SECTION 8.7. TRIAL BY JURY. EACH BORROWER, TO THE
FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL BY JURY
IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS
AGREEMENT, THE GLOBAL NOTE OR THE OTHER LOAN DOCUMENTS.
Section 8.8. Headings. The Article and
Section headings 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 8.9. Assignment. No Borrower may sell, assign
or transfer any interest in the Loan Documents or any portion
thereof (including, without limitation, such Borrower's rights,
title, interests, remedies, powers and duties hereunder and
thereunder). Each Lender shall have the right to assign or
participate this Agreement and/or any of the other Loan Documents
and the obligations hereunder to any Person. In the case of an
Assignment by a Lender, (a) the assignee shall have, to the
extent of such Assignment, the same rights, benefits and
obligations as it would have if it were the original "Lender"
hereunder and (b) upon any such substitution of a Lender, a
replacement "Lender signature page" shall be executed and
attached to this Agreement and thereupon become a part of this
Agreement. Each potential assignee or participant lender shall
be required to sign a confidentiality agreement which shall
provide for protection of all proprietary and confidential
information of each Borrower and Guarantor. Such Lender shall
procure same and provide a copy to Guarantor and Borrower.
Subject to the preceding sentence, each participating lender
shall be entitled to receive all information received by Agent
under this Agreement. Borrowers shall keep confidential to the
same extent as such potential assignee or participant lender
shall have agreed in such confidentiality agreement all
information relating to such proposed Assignment or Participation
and the identity of such potential assignee or participant.
After the effectiveness of any Participation, Agent shall provide
notice to Borrowers of the identity, address and other pertinent
information pertaining to the participant lender.
Notwithstanding anything in this Agreement to the contrary, after
an Assignment by a Lender, "Lender" (prior to the Assignment)
shall continue to have the benefits of any rights or
indemnifications and shall continue to have the obligations
contained herein which such Agent had during the period such
party was "Lender" hereunder. Notwithstanding anything in this
Agreement to the contrary, Salomon Brothers Realty Corp. shall
remain as Agent for the Loan.
Section 8.10. 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 8.11. Preferences. Lenders shall have no
obligation to marshal any assets in favor of Borrower or any
other party or against or in payment of any or all of the
obligations of Borrowers pursuant to this Agreement, the Global
Note or any other Loan Document. Lenders shall have the
continuing and exclusive right to apply or reverse and reapply
any and all payments by Borrowers to any portion of the
obligations of Borrowers hereunder. To the extent Borrowers make
a payment or payments to Lenders for Borrowers' benefit, 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 Lenders.
Section 8.12. Waiver of Notice. Borrowers shall not
be entitled to any notices of any nature whatsoever from Lenders
or Collateral Agent except with respect to matters for which this
Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lenders and/or Collateral
Agent to Borrowers and except with respect to matters for which a
Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrowers hereby
expressly waive the right to receive any notice from Lenders and
Collateral Agent with respect to any matter for which this
Agreement or the other Loan Documents does not specifically and
expressly provide for the giving of notice by Lenders or
Collateral Agent to Borrowers.
Section 8.13. Remedies of Borrowers. In the event
that a claim or adjudication is made that Lenders or its agents
have unreasonably delayed acting in any case where by law or
under this Agreement, the Global Note, the Mortgages or the other
Loan Documents, Lenders or such agent, as the case may be, have
an obligation to act promptly, each Borrower agrees that neither
Agent, any Lender nor its agents shall be liable for any monetary
damages, and each Borrower's sole remedies shall be limited to
commencing an action seeking injunctive relief or declaratory
judgment.
Section 8.14. Exhibits Incorporated. The information
set forth on the cover, heading and recitals hereof, and the
Exhibits attached hereto, are hereby incorporated herein as a
part of this Agreement with the same effect as if set forth in
the body hereof.
Section 8.15. Offsets, Counterclaims and Defenses.
Any assignee of Lenders' interest in and to this Agreement, the
Global Note, the Mortgages, the Guaranty and the other Loan
Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to this Agreement,
the Global Note, the Mortgages, the Guaranty and the other Loan
Documents which Borrowers and/or Guarantor may otherwise have
against any assignor of this Agreement, the Global Note, the
Mortgages, the Guaranty and the other Loan Documents, and no such
unrelated counterclaim or defense shall be interposed or asserted
by Borrowers and/or Guarantor in any action or proceeding brought
by any such assignee upon this Agreement, the Global Note, the
Mortgages, the Guaranty and other Loan 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 Borrowers and/or Guarantor.
Section 8.16. No Joint Venture or Partnership.
Borrowers and Lenders intend that the relationship created
hereunder be solely that of borrower and lender. Nothing herein
is intended to create a joint venture, partnership, tenancy-in-
common, or joint tenancy relationship between Borrowers and
Lenders nor to grant Lenders any interest in the Mortgaged
Property other than that of mortgagee or lender.
Section 8.17. Waiver of Marshalling of Assets Defense.
To the fullest extent Borrowers may legally do so, Borrowers
waive all rights to a marshalling of the assets of Borrowers, and
others with interests in Borrowers, and of the Mortgaged
Property, or to a sale in inverse order of alienation in the
event of foreclosure of the interests hereby created, 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 Agent under the Loan Documents to a sale of the
Mortgaged Property for the collection of the Indebtedness without
any prior or different resort for collection, or the right of
Agent to the payment of the Indebtedness out of the Net Proceeds
of the Mortgaged Property in preference to every other claimant
whatsoever.
Section 8.18. Waiver of Counterclaim. Borrowers and
Guarantor each hereby waives the right to assert a counterclaim,
other than compulsory counterclaim, in any action or proceeding
brought against it by Lenders or their agents.
Section 8.19. Conflict; Construction of Documents. In
the event of any conflict between the provisions of this
Agreement and the provisions of the Global Note, the Mortgages,
the Guaranty or any of the other Loan Documents, the provisions
of this Agreement shall prevail. The parties hereto acknowledge
that they were represented by counsel in connection with the
negotiation and drafting of the Loan Documents and that the Loan
Documents shall not be subject to the principle of construing
their meaning against the party which drafted same.
Section 8.20. Brokers and Financial Advisors.
Borrowers, Guarantor and Lenders hereby represent that they have
dealt with no financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Borrowers,
Guarantor and Lenders hereby agree to indemnify and hold the
others and Collateral Agent harmless from and against any and all
claims, liabilities, costs and expenses of any kind in any way
relating to or arising from a claim by any Person that such
Person acted on behalf of the indemnifying party in connection
with the transactions contemplated herein. The provisions of
this Section 8.20 shall survive the expiration and termination of
this Agreement and the repayment of the Indebtedness.
Section 8.21. Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so
executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
Section 8.22. Estoppel Certificates. Borrowers and
Lenders each hereby agree at any time and from time to time upon
not less than fifteen (15) days prior written notice by the other
to execute, acknowledge and deliver to the party specified in
such notice, a statement, in writing, certifying that this
Agreement is unmodified and in full force and effect (or if there
have been modifications, that the same, as modified, is in full
force and effect and stating the modifications hereto), and
stating whether or not, to the knowledge of such certifying
party, any Default or Event of Default has occurred and is then
continuing, and, if so, specifying each such Default or Event of
Default; provided, however, that it shall be a condition
precedent to Agent's obligation to deliver the statement pursuant
to this Section 8.22, that Lenders shall have received, together
with such Borrower's request for such statement, an Officer's
Certificate stating that no Default or Event of Default exists as
of the date of such certificate (or specifying such Default or
Event of Default).
Section 8.23. Payment of Expenses. Borrowers shall
pay all Transaction Costs, which shall include, without
limitation, (a) reasonable out-of-pocket costs and expenses of
Lenders in connection with (i) the negotiation, preparation,
execution and delivery of the Loan Documents and the documents
and instruments referred to therein, (ii) the creation,
perfection or protection of Lenders' Liens in the Collateral
(including, without limitation, fees and expenses for title and
lien searches or amended or replacement Mortgages, UCC Financing
Statements or Collateral Security Instruments, title insurance
premiums and filing and recording fees, third party due diligence
expenses for the Mortgaged Property plus travel expenses,
accounting firm fees, costs of the Appraisals, Environmental
Reports (and an environmental consultant), and the Engineering
Reports), (iii) the negotiation, preparation, execution and
delivery of any amendment, waiver or consent relating to any of
the Loan Documents and (iv) the preservation of rights under and
enforcement of the Loan Documents and the documents and
instruments referred to therein, including any restructuring or
rescheduling of the Indebtedness, (b) the reasonable fees,
expenses and disbursements of counsel to Lenders in connection
with all of the foregoing, (c) all fees and expenses of
Collateral Agent and (d) Agent's reasonable out-of-pocket travel
expenses in connection with site visits contemplated in this
Agreement. Prior to retention of third parties, Lenders shall
consult with Borrowers regarding the services required, the
procurement of good faith estimates, and the third parties
selected to assure that costs will be reasonable in scope and
amount.
Section 8.24. Non-Recourse. Anything contained
herein, in the Global Note or in any other Loan Document to the
contrary notwithstanding, no recourse shall be had for the
payment of the principal or interest on the Global Note or for
any other Indebtedness hereunder or for any claim based hereon or
thereon or otherwise in respect hereof or thereof against (i) any
partner, agent, contractor, director, officer, member,
consultant, manager, stockholder, subscriber to capital stock,
incorporator, beneficiary, participant, trustee or advisor of any
Borrower, any partner or member in any Borrower, or any partner
or member therein; (ii) any trustee, officer or shareholder of
Kranzco Realty Trust, or any of their personal assets; (iii) any
legal representative, heir, estate, successor or assign of any
thereof; (iv) any corporation (or any officer, director, employee
or shareholder thereof), partnership (or any partner thereof),
individual or entity to which any ownership interest in any
Borrower shall have been transferred; (v) any purchaser of any
asset of any Borrower; or (vi) any other Person (except Borrowers
and Guarantor), for any deficiency or other sum owing with
respect to the Global Note or any other Indebtedness or arising
under this Agreement or any Loan Document. It is understood that
the Global Note and any other Indebtedness under or with respect
to this Agreement and any other Loan Document may not be enforced
against any Person described in clauses (i) through (v) above;
provided, however, that the foregoing provisions of this
paragraph shall not (i) prevent recourse to Borrowers, Guarantor,
the assets of Borrowers or Guarantor, any Mortgage, the Guaranty,
any Collateral Security Instrument or other instrument or
document which is pledged by Borrowers to Lenders pursuant to the
Loan Documents, (ii) in the event of any actual fraud,
misappropriation of funds or intentional misrepresentation, estop
Lender from instituting or prosecuting a legal action or
proceeding or otherwise making a claim against the Person or
Persons committing such actual fraud, misappropriating such
funds, or making such intentional misrepresentation, or the
recipient or beneficiary of such actual fraud, misappropriation
or intentional misrepresentation, whether or not such Person,
recipient or beneficiary, is any Person described in clauses (i)
through (iii) above for losses relating to or arising from such
actual fraud, misappropriation or intentional misrepresentation,
(iii) have any applicability whatsoever to the Pledge Agreement
or the liability of the principals thereunder, (iv) prevent
recourse to Borrowers (but not any of the Persons described in
clauses (i) through (iii) above) with respect to the breach of
any provision in this Agreement or the Environmental Indemnity
Agreement, concerning Environmental Laws, Hazardous Substances
and any indemnification of Lender with respect thereto contained
in either document, (v) prevent recourse to the Borrowers in the
event that any Borrower causes or permits a Ground Lease
Impairment to occur, and (vi) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by the
Global Note or secured by the Loan Documents, and the same shall
continue until paid or discharged in full. Notwithstanding the
foregoing, this Agreement and all other Loan Documents relating
to the Transaction which have been executed by Guarantor have
been executed by an officer or trustee of Guarantor which has
been formed as a Maryland real estate investment trust pursuant
to a Declaration of Trust of the Guarantor, dated June 17, 1992,
as amended and restated, and not individually, and none of the
trustees, officers or shareholders of the Guarantor or Borrowers
shall be bound or have any personal liability hereunder or
thereunder. Each party hereto shall look solely to the assets of
such Borrower for satisfaction of any liability of such Borrower
in respect of this Agreement and all other Loan Documents
relating to the Transaction (other than the assets of Guarantor
which shall be available for satisfaction of liability of
Guarantor in respect of the Guaranty), and shall not seek
recourse or commence an action against any of the trustees,
officers or shareholders of the Guarantor or any of their
personal assets for the performance or payment of any obligation
hereunder or thereunder. The foregoing shall also apply to any
future documents, agreements, understandings, arrangements and
transactions between the parties hereto. Nothing set forth in
the preceding two sentences shall limit the obligations of the
Borrowers and the Guarantor set forth in this Agreement and the
other Loan Documents.
Section 8.25. Confidentiality. The Lenders shall
exercise commercially reasonable efforts to keep any non-public
information delivered or made available to the Lenders pursuant
to this Agreement or the Loan Documents confidential from any
Person other than (a) Persons employed by or retained by the
Lenders who are or are expected to become engaged in evaluating,
approving, structuring or administering the Loan and other
extensions of credit hereunder, (b) subject to Section 8.9, any
potential assignee or transferee of the Loan or participant in
the Loan, (c) any Governmental Authority or representative
thereof pursuant to Legal Requirements, or (d) in connection with
the exercise of any remedy under the Loan Documents.
ARTICLE IX
AGENT
Section 9.1. Appointment, Powers and Immunities. Each
Lender hereby irrevocably appoints and authorizes Agent to act as
its agent hereunder and under the other Loan Documents with such
powers as are specifically delegated to Agent by the terms of
this Agreement and of the other Loan Documents, together with
such other powers as are reasonably incidental thereto. Agent
(which term as used in this sentence and in Section 9.5 and the
first sentence of Section 9.6 hereof shall include reference to
its Affiliates and its own and its Affiliates' officers,
directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this
Agreement and in the other Loan Documents, and shall not by
reason of this Agreement or any other Loan Document be a trustee
for any Lender; (b) shall not be responsible to any Lender for
any recitals, statements, representations or warranties contained
in this Agreement or in any other Loan Document, or in any
certificate or other document referred to or provided for in, or
received by any of them under, this Agreement or any other Loan
Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any
other Loan Document or any other document referred to or provided
for herein or therein or for any failure by Borrowers or any
other Person to perform any of their obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other
Loan Document; and (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other
Loan Document or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful
misconduct. Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it in good faith.
Section 9.2. Reliance by Agent. Agent shall be
entitled to rely upon any certification, notice or other
communication (including, without limitation, any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by Agent. As to any matters not expressly
provided for by this Agreement or any other Loan Document, Agent
shall in all cases be fully protected in acting, or in refraining
from acting, hereunder or thereunder in accordance with the
instructions given by any Lender, and such instructions of such
Lender and any action taken or failure to act pursuant thereto
shall be binding on such Lender.
Section 9.3. Defaults. Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default or Event
of Default unless Agent has received written notice from a Lender
or Borrowers specifying such Default and stating that such notice
is a "Notice of Default". In the event that Agent receives such
a notice of the occurrence of a Default or Event of Default,
Agent shall give prompt notice thereof to Lenders. Agent shall
(subject to Section 9.7 hereof) take such action with respect to
such Default or Event of Default as shall be directed by Lender,
provided that, unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the
best interest of Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not be taken,
only with the consent or upon the authorization of Lenders.
Section 9.4. Rights as a Lender. With respect to the
Loan made by it, Agent in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as
Agent, and the term "Lender" shall, unless the context otherwise
indicates, include Agent in its individual capacity. Agent and
its Affiliates may (without having to account therefor to any
Lender) lend money to, make investments in and generally engage
in any kind of business with any Borrower or any of their
Affiliates as if it were not acting as Agent, and Agent and its
Affiliates may accept fees and other consideration from Borrowers
or their Affiliates for services in connection with this
Agreement or otherwise without having to account for the same to
Lenders.
Section 9.5. Indemnification. Lenders agree to
indemnify Agent (to the extent not reimbursed under Section 5.1
(J) hereof, but without limiting the obligations of Borrower
under said Section 5.1 (J)) ratably in accordance with its
respective portion of the Loan, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted
against Agent (including by any Lender) arising out of or by
reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Loan Document or any
other documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses that any Borrower is
obligated to pay under Section 5.1 (J) hereof, but excluding,
unless a Default or Event of Default has occurred and is
continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such
other documents, provided that no Lender shall be liable for any
of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
Section 9.6. Non-Reliance on Agent and Other Lenders.
Each Lender agrees that it has, independently and without
reliance on Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its
own credit analysis of Borrowers and their Affiliates and
decision to enter into this Agreement and that it will,
independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis
and decisions in taking or not taking action under this Agreement
or under any other Loan Document. Agent shall not be required to
keep itself informed as to the performance or observance by
Borrowers of this Agreement or any of the other Loan Documents or
to inspect the properties or books of Borrowers or any of their
Affiliates. Except for notices, reports and other documents and
information expressly required to be furnished to any Lender by
Agent hereunder, Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of
Borrowers or any of their Affiliates that may come into the
possession of Agent or any of its Affiliates.
Section 9.7. Failure to Act. Except for action
expressly required of Agent hereunder and under the other Loan
Documents, Agent shall in all cases be fully justified in failing
or refusing to act hereunder and thereunder unless it shall
receive further assurances to its satisfaction from Lenders of
their indemnification obligations under Section 9.5 hereof
against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action.
Section 9.8. Resignation or Removal of Agent. Subject
to the appointment and acceptance of a successor Agent as
provided below, Agent may resign with the consent of Borrowers
upon giving notice thereof to Lenders; provided, however, that
such resignation shall not be effective until such time as the
successor Agent is in place. Upon any such resignation, Lenders
shall have the right to appoint a successor Agent subject to the
reasonable approval of Borrowers. If no successor Agent shall
have been so appointed by Lenders and shall have accepted such
appointment within 30 days after the retiring Agent's giving of
notice of resignation and consent thereto by Borrowers, then the
retiring Agent may, on behalf of Lenders, and subject to the
reasonable approval of Borrowers, appoint a successor Agent, that
shall be a sophisticated financial institution. Upon the
acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Article IX shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as Agent.
Section 9.9. Agency Fee. Each Lender will pay to
Agent an agency fee as may be agreed upon between such Lender and
Agent. Borrowers shall not be liable for the payment of such
fee.
Section 9.10. Consents under Lender Loan Documents.
Agent may consent to any modification, supplement or waiver under
any of the Loan Documents, provided that, without the prior
consent of each Lender, Agent shall not release any Collateral or
otherwise terminate any Lien under any Loan Document providing
for collateral security, or agree to additional obligations being
secured by such collateral security (unless the Lien for such
additional obligations shall be junior to the Lien in favor of
the Obligations), except that no such consent shall be required,
and Agent is hereby authorized, to release any Lien covering
Collateral that is the subject of a disposition permitted
hereunder.
Section 9.11. Notices, Reports and Other
Communications. Agent shall provide, at its expense, copies of
each notice, report, document, correspondence or other written
communication delivered to Agent by Borrowers or any Affiliates
of Borrowers pursuant to any Loan Document, to each Lender
identified in such notice, report, document, correspondence or
other written communication or reasonably determined by Agent to
be entitled thereto or affected thereby, as soon as practicable
after Agent's receipt thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized
representatives, all as of the day and year first above written.
AGENT:
SALOMON BROTHERS REALTY CORP. as
agent and initial lender, a New York
corporation
By:/s/ XxxxXxxx Xxxxxx
________________________
Name: XxxxXxxx Xxxxxx
Title: Authorized Agent
BORROWER:
XX XXXXXXXX MALL, L.P.,
a Pennsylvania limited partnership
By: XX XXXXXXXX MALL, INC.,
a Pennsylvania corporation, general
partner
By:/s/ Xxxxxx X. Xxxxxx
________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
KR BARN, L.P.,
a Pennsylvania limited partnership
By: KR BARN, INC.,
a Pennsylvania corporation,
general partner
By:/s/ Xxxxxx X. Xxxxxx
________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
KR VALLEY FORGE, L.P.,
a Pennsylvania limited partnership
By: KR VALLEY FORGE, INC.,
a Pennsylvania corporation,
general partner
By:/s/ Xxxxxx X. Xxxxxx
________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
LILAC NEW YORK CORP.,
a New York corporation
KR PARKWAY PLAZA I, CORP.,
a Connecticut corporation
KR WAMPANOAG, INC.,
a Rhode Island corporation
KR BROOKHAVEN, INC.,
a Mississippi corporation
KR MORGANTON, INC.,
a North Carolina corporation
KR HARRODSBURG, INC.,
a Kentucky corporation
KRT UNION CORP.,
a Delaware corporation
KRANZCO RAYNHAM, INC.,
a Massachusetts corporation
KR MINNETONKA, INC.,
a Minnesota corporation
KR ROSEVILLE INC.,
a Minnesota corporation
KR TUCSON, INC.,
an Arizona corporation
By: /s/ Xxxxxx X. Xxxxxx
________________________________
Name: Xxxxxx X. Xxxxxx
Vice President
of each of the aforementioned
corporations
GUARANTOR:
KRANZCO REALTY TRUST,
a Maryland real estate investment trust
By: /s/ Xxxxxx X. Xxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
COLLATERAL AGENT:
Bank Leumi Trust Company of New York,
a New York corporation
(as Collateral Agent for Salomon
Brothers Realty Corp. only)
By:/s/ Xxxxxx Xxxxxx
_________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
EXHIBIT A - Assignment of Contracts, Licenses,
Permits, Agreements, Warranties and
Approvals (Form attached hereto)
EXHIBIT B - Global Note (Form attached hereto)
EXHIBIT C - Mortgage (Deed of Trust), Assignment of
Leases and Rents, Security Agreement and
Fixture Filing (Form attached hereto)
EXHIBIT D - Management Agreement (Form attached hereto)
EXHIBIT E - Manager's Consent and Subordination of
Management Agreement (Form attached hereto)
EXHIBIT F-1 - Closing Date Opinion of Xxxxxxx Xxxxx
Xxxxxxx & Xxxxxxxxx (Guarantor matters)
(Form attached hereto)
EXHIBIT F-2 - Closing Date Opinion of Xxxxxxxx
Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
(Loan Document enforceability) (Form
attached hereto)
EXHIBIT G - Registered Note
NONE.
EXHIBIT H - Financing Statements:
UCC-1 Financing Statements to be executed and delivered to
Lender (or its counsel) in form suitable for filing as
required in the Offices of the Secretary of State and in the
Offices of the Local Recorder (ie.: County, Town, City
Clerk, etc.), having attached thereto the collateral
descriptions substantially in the form attached hereto, with
respect to (i) Mortgage/Fixture Filings and (ii) Filings in
connection with Borrower's Accounts under the Loan
Agreement, respectively.
EXHIBIT A TO UCC-1 FINANCING STATEMENT
DEBTOR:________________________________ ("DEBTOR")
SECURED PARTY: SALOMON BROTHERS REALTY CORP., a New York
corporation ("SECURED PARTY")
DATE: ___________________, 199___
This financing statement is filed pursuant to a certain
mortgage, assignment of leases and rents, security agreement and
fixture filing, dated as of the date hereof, made by Debtor in
favor of Secured Party (the "Mortgage"), covering the following
items of property:
All of Debtor's right, title and interest in and to the real
property described on Exhibit B attached hereto and made a part
hereof (the "Land"), and the buildings, structures and
improvements of every nature whatsoever now or hereafter located
thereon (including, but not limited to, all gas and electric
fixtures, radiators, heaters, docks and docking facilities,
engines and machinery, boilers, ranges, elevators and motors,
plumbing, heating and air conditioning fixtures, carpeting and
other floor coverings, water heaters, awnings and storm sashes,
and cleaning apparatus which are or shall be attached to the Land
or said buildings, structures or improvements) (the
"Improvements");
TOGETHER WITH: all right, title, interest and estate of
Debtor now owned, or hereafter acquired, in and to the following
property, rights, interest and estates (Debtor's interest in the
Land and the Improvements, together with the following property,
rights, interests and estates being hereinafter described are
collectively referred to herein as the "Mortgaged Property"):
(a) all easements, rights-of-way, strips and gores of
land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development
rights, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances of any
nature whatsoever, in any way belonging, relating to or
pertaining to the Land and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in the
bed of any street, road or avenue, opened or proposed, in front
of or adjoining the Land, to the center line thereof and all the
estates, rights, titles, interests, dower and rights of dower,
curtesy and rights of curtesy, property, possession, claim and
demand whatsoever, both at law and in equity, of Debtor of, in
and to the Land and the Improvements and every part and parcel
thereof, with the appurtenances thereto;
(b) all "equipment" as defined in the Uniform
Commercial Code, as adopted and enacted by the State or States
where any of the Mortgaged Property is located (the "Uniform
Commercial Code"), now or hereafter owned by Debtor or in which
Debtor has or shall acquire an interest, now or hereafter located
on, attached to or contained in or used or usable in connection
with the Mortgaged Property, and shall also mean and include all
building materials, construction materials, personal property
constituting furniture, fittings, appliances, apparatus,
leasehold improvements, machinery, devices, interior
improvements, appurtenances, equipment, plant, furnishings,
fixtures, computers, electronic data processing equipment,
telecommunications equipment and other fixed assets now owned or
hereafter acquired by Debtor which are used in the operation of
the business conducted at the Mortgaged Property; and all
proceeds thereof, as well as all additions to, substitutions for,
replacements of or accessions to any of the items recited as
aforesaid and all attachments, components, parts (including spare
parts) and accessories, whether installed thereon or affixed
thereto, and wherever located, now or hereafter owned by Debtor
and used or intended to be used in connection with, or with the
operation of, the Land or the Improvements, or in connection with
any construction being conducted or which may be conducted
thereon, all regardless of whether the same are located on the
Mortgaged Property or are located elsewhere (including without
limitation, in warehouses or other storage facilities or in the
possession of or on the premises of a bailee, vendor or
manufacturer) for purposes of manufacture, storage, fabrication
or transportation and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to, and
proceeds of, any of the foregoing (collectively, the
"Equipment"); provided, however, that with respect to any items
which are leased and not owned by Debtor, the Equipment shall
include the leasehold interest only of Debtor, together with any
options to purchase any of said items and any additional or
greater rights with respect to such items which Debtor may
hereafter acquire;
(c) all awards or payments, including interest
thereon, which may heretofore and hereafter be made with respect
to the Land and the Improvements, whether from the exercise of
the right of eminent domain (including, but not limited to, any
transfer made in lieu of or in anticipation of the exercise of
said rights), or for a change of grade, or for any other injury
to or decrease in the value of the Land and the Improvements;
(d) all leases, subleases, lettings, occupancy
agreements, tenancies and licenses by Debtor as landlord of the
Mortgaged Property or any part thereof now or hereafter entered
into, and all amendments, extensions, renewals and guarantees
thereof, and all security therefor (collectively, the "Leases")
and all income, rents, rent equivalents, issues, profits,
revenues (including all oil and gas or other mineral royalties
and bonuses), deposits and other benefits from the Land and the
Improvements (including, without limitation, all receivables, and
other obligations now existing or hereafter arising or created
out of the sale, lease, sublease, license, concession or other
grant of the right of the use and occupancy of property or
rendering of services by Debtor or any operator or manager of the
Mortgaged Property or the commercial space located in the
Improvements or acquired from others (including, without
limitation, from the rental of any office space, retail space or
other space, halls, stores, and offices, and deposits securing
reservations of such space, exhibit or sales space of every kind,
license, lease, sublease and concession fees and rentals, health
club membership fees, food and beverage wholesale and retail
sales, service charges, vending machine sales and proceeds, if
any, from business interruption or other loss of income
insurance)) (collectively, the "Rents") and all proceeds from the
sale or other disposition of the Leases and the right to receive
and apply the Rents to the payment of the Obligations;
(e) all proceeds of and any unearned premiums on any
insurance policies covering the Mortgaged Property (including,
without limitation, the right to receive and apply the proceeds
of any insurance, judgments, or settlements made in lieu thereof,
for damage to the Mortgaged Property);
(f) the right, in the name and on behalf of Debtor, to
appear in and defend any action or proceeding brought with
respect to the Mortgaged Property and to commence any action or
proceeding to protect the interest of Secured Party in the
Mortgaged Property;
(g) all accounts (as defined in the Uniform Commercial
Code) now owned or hereafter acquired by Debtor, and arising out
of or in connection with, the operation of the Mortgaged Property
(including, without limitation, the Collection Account and the
Repair Reserve Account), and all other accounts described in the
Management Agreement (as such term is defined in the Mortgage)
and all present and future accounts receivable, inventory
accounts, contract rights, chattel paper, notes, acceptances,
insurance policies, Instruments (hereafter defined), Documents
(hereafter defined), or other rights to payment and all forms of
obligations owing at any time to Debtor thereunder, whether now
existing or hereafter created or otherwise acquired by Debtor,
and all proceeds thereof and all liens, security interests,
guaranties, remedies, privileges and other rights pertaining
thereto, and all rights and remedies of any kind forming the
subject matter of any of the foregoing (including, without
limitation, (i) all income, Rents, issues, profits, revenues,
deposits and other benefits from the Mortgaged Property, (ii) all
receivables and other obligations now existing or hereafter
arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy
of property or rendering of services by Debtor or any operator or
manager of the Mortgaged Property or other commercial space
located at the Mortgaged Property or acquired from others
(including, without limiting the generality of the foregoing,
from rental of space, halls, stores, and offices, and deposits
securing reservations of such space, exhibit or sales space of
every kind, license, lease, sublease and concession fees and
rentals, health club membership fees, food and beverage wholesale
and retail sales of merchandise, service charges, vending machine
sales and proceeds, if any, from business interruption or other
loss of income insurance), (iii) all sums of money, and all
instruments, documents and securities held in any accounts in
connection therewith, or any demand, time, savings or other
account maintained with any bank or certificate of deposit issued
by any bank with the proceeds of such account and (iv) all of the
records and books of account now or hereafter maintained by or on
behalf of Debtor in connection with the operation of the
Mortgaged Property) (collectively, the "Accounts");
(h) all proceeds (as defined in the Uniform Commercial
Code) thereof and, in any event, shall include, without
limitation, all proceeds, products, offspring, rents, profits or
receipts, in whatever form, arising from the Mortgaged Property
(including, without limitation, (i) cash, instruments and other
property received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Mortgaged Property, (ii)
the collection, sale, lease, sublease, concession, exchange,
assignment, licensing or other disposition of, or realization
upon, any item or portion of the Mortgaged Property (including,
without limitation, all claims of Debtor against third parties
for loss of, damage to, destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of
insurance in respect of, any the Mortgaged Property now existing
or hereafter arising), (iii) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to Debtor from
time to time with respect to any of the Mortgaged Property, (iv)
any and all payments (in any form whatsoever) made or due and
payable to Debtor from time to time in connection with the
requisition, confiscation, condemnation, seizure or forfeiture of
all or any part of the Mortgaged Property by any Governmental
Authority (or any person acting under color of Governmental
Authority) and (v) any and all other amounts from time to time
paid or payable under or in connection with any of the Mortgaged
Property) (collectively, the "Proceeds");
(i) all agreements to which Debtor is a party or which
are assigned to debtor in the Management Agreement and which are
executed in connection with the construction, operation and
management of the Improvements located on the Mortgaged Property
(including, without limitation, the Management Agreement and the
agreements for the sale, lease or exchange of goods or other
property and/or the performance of services by it, in each case
whether now in existence or hereafter arising or acquired) as
any such agreements have been or may be from time to time
amended, supplemented or otherwise modified (collectively,
"Contracts");
(j) all "documents" as defined in the Uniform
Commercial Code or other receipts covering, evidencing or
representing goods now owned or hereafter acquired by Debtor
(collectively, "Documents");
(k) all trademark licenses, trademarks, rights in
intellectual property, trade names, service marks and copyrights
relating to the Mortgaged Property or the license to use
intellectual property such as computer software owned or licensed
by Debtor or other proprietary business information relating to
Debtor's policies, procedures, manuals and trade secrets
(collectively, "Trademarks");
(l) all "general intangibles" as defined in the
Uniform Commercial Code, now owned or hereafter acquired by
Debtor (including, without limitation, (i) all obligations or
indebtedness owing to Debtor from whatever source arising (other
than Accounts, Rents, Instruments, Inventory (as such term is
hereinafter defined), Contracts, Documents, Trademarks and
Permits (as such term is hereinafter defined)), (ii) all unearned
premiums accrued or to accrue under all insurance policies for
the Mortgaged Property obtained by Debtor, all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing
into cash or liquidated claims (including, without limitation,
proceeds of insurance, condemnation awards, and all rights of
Debtor to refunds of real estate taxes and assessments),
(iii) all royalties and license fees, (iv) all trademark
licenses, trademarks, rights in intellectual property, goodwill,
trade names, service marks, trade secrets, copyrights, permits
and licenses, together with the registrations therefor and the
goodwill appurtenant thereto, (v) all rights or claims in respect
of refunds for taxes paid and (vi) all rights in respect of any
pension plan or similar arrangement maintained for employees of
Debtor) (collectively, "General Intangibles");
(m) all (i) "instruments" as defined in the Uniform
Commercial Code, "chattel paper" as defined in the Uniform
Commercial Code, or letters of credit, evidencing, representing,
arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Collateral
(including, without limitation, promissory notes, drafts, bills
of exchange and trade acceptances) and chattel paper obtained by
Debtor in connection with the Mortgaged Property (including,
without limitation, all ledger sheets, computer records and
printouts, databases, programs, books of account and files of
Debtor relating thereto) and (ii) notes or other obligations of
indebtedness owing to Debtor from whatever source arising, in
each case now owned or hereafter acquired by Debtor
(collectively, "Instruments");
(n) all "inventory" as defined in the Uniform
Commercial Code, whether now or hereafter existing or acquired,
and which arises out of or is used in connection with, directly
or indirectly, the ownership and operation of the Mortgaged
Property, all Documents representing the same and all Proceeds
and products of the same (including, without limitation, all
goods, merchandise, raw materials, work in process and other
personal property, wherever located, now or hereafter owned or
held by Debtor for manufacture, processing, the providing of
services or sale, use or consumption in the operation of the
Mortgaged Property (including, without limitation, fuel, supplies
and similar items and all substances commingled therewith or
added thereto) and rights and claims of Debtor against anyone who
may store or acquire the same for the account of Debtor, or from
whom Debtor may purchase the same) (collectively, "Inventory");
and
(o) all licenses, permits, variances and certificates
used in connection with the ownership, operation, use or
occupancy of the Mortgaged Property (including, without
limitation, business licenses, state health department licenses,
food service licenses, liquor licenses, licenses to conduct
business and all such other permits, licenses and rights,
obtained from any Governmental Authority or private Person
concerning ownership, operation, use or occupancy of the
Mortgaged Property) (collectively, "Permits").
EXHIBIT B TO UCC-1 FINANCING STATEMENT
The "Land"
EXHIBIT A TO UCC-1 FINANCING STATEMENT
DEBTOR: ________________________
("DEBTOR")
SECURED PARTY: SALOMON BROTHERS REALTY CORP., a New York
corporation ("SECURED PARTY")
DATE: __________________, 199___
I. This Financing Statement covers all of the Debtor's right,
title and interest in, to and under the following property
assigned to the Secured Party in accordance with the Loan
Agreement, dated of even date herewith, by and among, Debtor and
each of the other borrowers named on the signature page thereto,
as borrowers, Kranzco Realty Trust, as guarantor, Secured Party,
as initial Lender and Agent, and Bank Leumi, as collateral agent
(the "Loan Agreement") (all capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to such
terms in the Loan Agreement), whether now owned or hereafter
acquired, now existing or hereafter arising and wherever located
(the "Collateral"):
(i) all of Debtor's right, title and interest in and
to Accounts, the Collection Account, the Deposit Account,
the Eligible Account and the Repair Reserve Account and all
Money and Permitted Investments, if any, from time to time
deposited or held in each such account;
(ii) all interest, dividends, Money, Instruments and
other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any of
the foregoing until such time as such items are disbursed
from Accounts, the Collection Account, the Deposit Account,
the Eligible Account and the Repair Reserve Account; and
(iii) to the extent not covered by clause (i) or (ii)
above, all Proceeds of any or all of the foregoing.
II. As used in this Financing Statement, the following terms
shall have the following meanings:
"Accounts" means all accounts (as defined in the UCC), now
owned or hereafter acquired by Debtor, and arising out of or in
connection with, the operation of the Mortgaged Property and all
other accounts described in the Management Agreement and all
present and future accounts receivables, inventory accounts,
contract rights, chattel paper, notes, acceptances, insurance
policies, Instruments, Documents or other rights to payment and
all forms of obligations owing at any time to Debtor thereunder,
whether now existing or hereafter created or otherwise acquired
by or on behalf of Debtor, and all Proceeds thereof and all
liens, security interests, guaranties, remedies, privileges and
other rights pertaining thereto, and all rights and remedies of
any kind forming the subject matter of any of the foregoing.
Without limiting the generality of the foregoing, the term
"Accounts" shall include all of Debtor's right, title and
interest in and to:
(i) all income, Rents, issues, profits, revenues,
deposits and other benefits from the Mortgaged Property;
(ii) all receivables and other obligations now existing
or hereafter arising or created out of the sale, lease,
sublease, license, concession or other grant of the right of
the use and occupancy of property or rendering of services
by Debtor or any operator or manager of the Mortgaged
Property (arising out of or in connection with, directly or
indirectly, the Mortgaged Property) or other commercial
space located at the Mortgaged Property or acquired from
others (including, without limitation, from rental of space,
halls, stores, and offices, and deposits securing
reservations of such space, exhibit or sales space of every
kind, license, lease, sublease and concession fees and
rentals, health club membership fees, food and beverage
wholesale and retail sales of merchandise, service charges,
vending machine sales and proceeds, if any, from business
interruption or other loss of income insurance);
(iii) all sums of money, and all instruments, documents
and securities held in any accounts of Debtor in connection
therewith, or any demand, time, savings or other account
maintained by Debtor with any bank or certificate of deposit
issued by any bank with the proceeds of such account;
(iv) all of the records and books of account now or
hereafter maintained by or on behalf of Debtor or Manager in
connection with the operation of the Mortgaged Property; and
(v) the Collection Account and the Repair Reserve
Account.
"Collection Account" means the account established and
maintained by the Debtor pursuant to Section 2.12(a) of the Loan
Agreement.
"Deposit Account" means the account established and
maintained by the Debtor pursuant to Section 2.12(a) of the Loan
Agreement.
"Eligible Account" means a separate and identifiable account
from all other funds held by the holding institution that is:
(i) an account maintained with a federal or state chartered
depository institution or trust company whose (1) commercial
paper, short-term debt obligations or other short-term deposits
(or, in the case of a depository institution or trust company
that is the principal subsidiary of a holding company, the
commercial paper, short-term debt obligations or other short-term
deposits of such holding company) are rated by the Rating
Agency(ies) not less than "A-1" (or the equivalent), if the
deposits are to be held in the account for less than thirty (30)
days or (2) long-term unsecured debt obligations are rated at
least "AA-" (or the equivalent), if the deposits are to be held
in the account more than thirty (30) days, (ii) an account the
deposits in which are fully insured by the FDIC or (iii) a
segregated trust account maintained with the corporate trust
department of a federal or state chartered depository institution
or trust company subject to regulations regarding fiduciary funds
on deposit similar to Title 12 of the Code of Federal Regulations
Section 9.10(b) which, in either case, has corporate trust
powers, acting in its fiduciary capacity. An Eligible Account
shall not be evidenced by a certificate of deposit, passbook or
other instrument. Following a downgrade, withdrawal,
qualification or suspension of such institution's rating, each
account must promptly (and in any case within not more than
thirty (30) calendar days) be moved to a qualifying institution
or to one or more segregated trust accounts in the trust
department of such institution, if permitted.
"Instruments" means (i) all "instruments" as defined in the
UCC, "chattel paper" as defined in the UCC, or letters of credit,
evidencing, representing, arising from or existing in respect of,
relating to, securing or otherwise supporting the payment of, any
of the Collateral (including, without limitation, promissory
notes, drafts, bills of exchange and trade acceptances) and
chattel paper obtained by Debtor in connection with the Mortgaged
Property (including, without limitation, all ledger sheets,
computer records and printouts, data bases, programs, books of
account and files of such Debtor relating thereto), and (ii)
notes or other obligations of indebtedness owing to such Debtor
from whatever source arising, in each case now owned or hereafter
acquired by such Debtor.
"Money" means all moneys, cash, rights to deposit or savings
accounts or other items of legal tender obtained from or for use
in connection with the operation by Debtor of the related
Mortgaged Property.
"Mortgaged Property" means, individually and in the
aggregate, at any time, the Ground Leases, the Land, the
Improvements, the Personalty, the Leases, the Rents, the Property
Agreements, and the Equipment (to the extent the same shall be
deemed to be fixtures), and all rights, title, interests and
estates appurtenant thereto, encumbered by, and more particularly
described in, the applicable Mortgage, or Deed of Trust, as the
case may be.
"Permitted Investments" means any one or more of the
following obligations or securities acquired at a purchase price
of not greater than par:
(i) obligations of, or obligations fully guaranteed as
to payment of principal and interest by, the United States
or any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the
United States of America;
(ii) obligations of the following United States of
America government sponsored agencies: Federal Home Loan
Mortgage Corp. (debt obligations), the Farm Credit System
(consolidated systemwide bonds and notes), the Federal Home
Loan Banks (consolidated debt obligations), the Federal
National Mortgage Association (debt obligations), the
Student Loan Marketing Association (debt obligations), the
Financing Corp. (debt obligations), and the Resolution
Funding Corp. (debt obligations);
(iii) federal funds, unsecured certificates of
deposit, time deposits, bankers' acceptances and repurchase
agreements with maturities of not more than 365 days of any
bank, the short-term obligations of which are rated in the
highest short-term rating category by the Rating
Agency(ies);
(iv) fully Federal Deposit Insurance Corporation-
insured demand and time deposits in or certificates of
deposit of, or bankers' acceptances issued by, any bank or
trust company, savings and loan association or savings bank,
the short-term obligations of which are rated in the highest
short-term rating category by the Rating Agency(ies);
(v) debt obligations with maturities of not more than
365 days and rated by the Rating Agency(ies) in its highest
long-term unsecured rating category;
(vi) commercial paper (including both non-interest-
bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not
more than one year after the date of issuance thereof) with
maturities of not more than 270 days and that is rated by
the Rating Agency(ies) in their highest short-term unsecured
debt rating;
(vii) the Federated Prime Obligation Money Market Fund
(the "Fund") so long as the Fund is rated "AAA" by the
Rating Agency(ies); and
(viii) any other demand, money market or time deposit,
demand obligation or any other obligation, security or
investment, which Secured Party shall have approved in
writing;
provided, however, that the investments described in clauses (i)
through (vi) above must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if such
investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (C)
such investments must not be subject to liquidation prior to
their maturity; and provided, further, that, in the judgment of
Secured Party, such instrument continues to qualify as a "cash
flow investment" pursuant to Code Section 860G(a)(6) earning a
passive return in the nature of interest and that no instrument
or security shall be a Permitted Investment if such instrument or
security evidences (x) a right to receive only interest payments
or (y) the right to receive principal and interest payments
derived from an underlying investment at a yield to maturity in
excess of 120% of the yield to maturity at par of such underlying
investment.
"Rating Agencies" means at least two of Fitch Investors
Service, L.P., Xxxxx'x Investors Service, Inc., Duff & Xxxxxx
Credit Rating Co. and Standard & Poor's Ratings Services.
"Repair Reserve Account" has the meaning provided in Section
2.13 of the Loan Agreement.
"UCC" means with respect to the Mortgaged Property, the
Uniform Commercial Code as in effect on the date hereof in the
state where the Mortgaged Property is located, as amended from
time to time; provided, that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-
perfection of the security interest in any item or portion of the
Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the state where the
Mortgaged Property is located, "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or
effect of perfection or non-perfection.
EXHIBIT I - Lien Search Jurisdictions:
Maryland Secretary of State
Pennsylvania Secretary of State
Prothonotary of XxXxxx County, PA
XxXxxx County, PA
Prothonotary of Bucks County, PA
Bucks County, PA
Prothonotary of Xxxxxxx County, PA
Xxxxxxx County, PA
Prothonotary of Franklin County, PA
Franklin County, PA
Prothonotary of Xxxxxxxxxx County, PA
New York Secretary of State
Westchester County, NY
Connecticut Secretary of State
Town of Hamden, CT
Rhode Island Secretary of State
Town of East Providence
Mississippi Secretary of State
Lincoln County, MS
North Carolina Secretary of State
Xxxxx County, NC
Kentucky Secretary of State
Xxxxxx County
Massachusetts Secretary of State
Bristol County, MA
Town of Raynham, MA
Minnesota Secretary of State
Hennepin County, MN
Xxxxxx County, MN
Arizona Secretary of State
Pima County, AZ
EXHIBIT J - Guaranty (Form attached hereto)
EXHIBIT K - Assignment of Rents and Leases (Form attached
hereto)
EXHIBIT L - Pledge Agreement (Form attached hereto)
SCHEDULE 1 - Borrowers
XX XXXXXXXX MALL, L.P., a Pennsylvania limited partnership
KR BARN, L.P., a Pennsylvania limited partnership
KR VALLEY FORGE, L.P., a Pennsylvania limited partnership
LILAC NEW YORK CORP., a New York corporation
KR PARKWAY PLAZA I, CORP., a Connecticut corporation
KR WAMPANOAG, INC., a Rhode Island corporation
KR BROOKHAVEN, INC., a Mississippi corporation
KR MORGANTON, INC., a North Carolina corporation
KR HARRODSBURG, INC., a Kentucky corporation
KRT UNION CORP., a Delaware corporation
KRANZCO RAYNHAM, INC., a Massachusetts corporation
KR MINNETONKA, INC., a Minnesota corporation
KR ROSEVILLE INC., a Minnesota corporation
KR TUCSON, INC., an Arizona corporation
SCHEDULE 2 - Appraisers
Appraisal Group International
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxxxx
SCHEDULE 0 - Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX
Lease, dated September 24, 1979, made by and between
Xxxxxxxx Xxxxxx, as lessor, and XX Xxxxxxxx Mall, L.P., a
Pennsylvania limited partnership, by mesne assignment, as
lessee, a memorandum of which lease was recorded in the
records of the XxXxxx County Clerk, PA on December 10, 1979
in Deed Book Volume 522, Page 821.
"Circuit City", NY
Lease, dated June, 1996, made by and between KRT Property
Holdings, Inc., a Maryland corporation, as lessor, and Lilac
New York Corporation, a New York corporation, as lessee,
recorded in the records of the Westchester County Clerk, NY
on July 29, 1996 in Liber 11485, Page 217.
Barn, PA
Lease, dated February 27, 1997, made by and between KRT
Realty Trust, a Maryland real estate investment trust, as
lessor, and KR Barn, L.P., a Pennsylvania limited
partnership, as lessee, which lease, or a memorandum of
which lease, is intended to be recorded in the records of
the Bucks County Clerk, PA.
"Parkway", CT
Lease, dated February 27, 1997, made by and between KRT
Realty Trust, a Maryland real estate investment trust, as
lessor, and KR Parkway Plaza I, Corp., a Connecticut
corporation, as lessee, which lease, or a memorandum of
which lease, is intended to be recorded in the records of
the Hamden Town Clerk, CT.
SCHEDULE 4 - Rights of First Refusal, etc.
See annex hereto.
