Exhibit 10.1
REVOLVING CREDIT AGREEMENT
Dated as of April 30, 2002
among
EACH OF THE PARTIES SET FORTH ON SCHEDULE I,
collectively, jointly and severally, as Borrowers,
BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH,
as Lender and Agent,
and
THE LENDERS PARTY HERETO
FROM TIME TO TIME
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS, PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions .......................................................1
Section 1.2 Principles of Construction........................................32
ARTICLE II
GENERAL
Section 2.1 The Loan..........................................................32
Section 2.2 Interest..........................................................33
Section 2.3 Loan Payment......................................................39
Section 2.4 Prepayment........................................................41
Section 2.5 Disposition of Properties; Additional Properties..................42
Section 2.6 Pro Rata Treatment................................................47
Section 2.7 Sharing of Payments...............................................48
Section 2.8 Rights and Remedies Against a Defaulting Lender...................48
Section 2.9 Commitment Fee....................................................51
Section 2.10 Fees Non-refundable..............................................51
Section 2.11 Illinois Properties..............................................51
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to the initial Advance of the Loan...........51
Section 3.2 Conditions Precedent to All Advances of the Loan..................54
Section 3.3 Method of Disbursement of Loan Amount.............................56
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
Section 4.1 Representations and Warranties of the Borrowers...................57
Section 4.2 Survival of Representations.......................................65
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1 Affirmative Covenants with Respect to the Borrowers 66
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1 Negative Covenants ...............................................78
Section 6.2 Agent's Approval..................................................84
ARTICLE VII
MORTGAGE CONVERSION OPTION
Section 7.1 Mortgage Conversion. .............................................84
ARTICLE VIII
CASUALTY AND CONDEMNATION
Section 8.1 Insurance, Casualty and Condemnation..............................86
ARTICLE IX
DEFAULTS
Section 9.1 Event of Default..................................................96
Section 9.2 Remedies Cumulative...............................................99
ARTICLE X
PROPERTY MANAGEMENT
Section 10.1 Termination of Property Manager..................................99
ARTICLE XI
LIMITATIONS ON RECOURSE
Section 11.1 Exculpation.....................................................100
ARTICLE XII
MISCELLANEOUS
Section 12.1 Survival........................................................101
Section 12.2 Governing Law; Consent to Jurisdiction..........................101
Section 12.3 Modification, Waiver in Writing.................................102
Section 12.4 Delay Not a Waiver..............................................103
Section 12.5 Notices.........................................................103
Section 12.6 Trial by Jury...................................................104
Section 12.7 Headings........................................................105
Section 12.8 Severability....................................................105
Section 12.9 Preferences.....................................................105
Section 12.10 Waiver of Notice...............................................105
Section 12.11 Remedies of the Borrowers......................................105
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Section 12.12 Expenses; Indemnity............................................106
Section 12.13 Exhibits and Schedules Incorporated............................106
Section 12.14 No Joint Venture or Partnership................................107
Section 12.15 Publicity......................................................107
Section 12.16 Waiver of Marshaling of Assets.................................107
Section 12.17 Waiver of Counterclaim.........................................107
Section 12.18 Conflict; Construction of Documents............................107
Section 12.19 Brokers and Financial Advisors.................................107
Section 12.20 No Third Party Beneficiaries...................................108
Section 12.21 Prior Agreements...............................................108
Section 12.22 Right of Setoff................................................108
Section 12.23 Loan Assignability.............................................109
Section 12.24 Exculpation of Lender; No Petition.............................111
Section 12.25 Borrower's Obligations.........................................112
Section 12.26 Confidentiality................................................112
Section 12.27 Payment and Performance........................................112
ARTICLE XIII
AGENCY DECISIONS
Section 13.1 Appointment and Authorization...................................113
Section 13.2 Delegation of Duties............................................114
Section 13.3 Liability of Agent..............................................114
Section 13.4 Reliance by Agent...............................................114
Section 13.5 Notice of Default; Expenses.....................................115
Section 13.6 Credit Decision.................................................115
Section 13.7 Indemnification.................................................116
Section 13.8 Agent in Individual Capacity....................................116
Section 13.9 Successor Agents................................................117
Section 13.10 Amendments.....................................................117
ARTICLE XIV
Section 14.1 Security for Debt...............................................117
Section 14.2 Additional Rights of Lender.....................................118
EXHIBITS AND SCHEDULES
Exhibit A Properties
Exhibit 1.1 Form of Mortgage
Exhibit 3.3.1 Form of Notice of Borrowing
Exhibit 3.3.1(c) Form of Borrowing Certificate
Schedule I Borrowers
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Schedule A Property Owners/Ownership of Properties
Schedule 1.1(a) Allocated Loan Amounts and Release Amounts
Schedule 1.1(b) Core Properties
Schedule 1.1(c) Reports
Schedule 4.1(d) Litigation
Schedule 4.1(e) Leases
Schedule 4.1(k) Material Agreements
Schedule 4.1(q) Engineering Reports
Schedule 4.1(cc) Certified Ownership Structure Chart
Schedule 4.1(ff) Environmental Reports
Schedule 4.1(gg) Operating Agreements
Schedule 4.1(jj) Subsidiaries
Schedule 5.1(m) Form of Lease Term Sheet
Schedule 5.1(s) Deferred Maintenance
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THIS REVOLVING CREDIT AGREEMENT, dated as of April 30, 2002 (this
"Agreement"), by and among EACH OF THE PARTIES SET FORTH ON SCHEDULE I (each a
"Borrower", and collectively, jointly and severally as the "Borrowers"), and
BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH ("HypoVereinsbank"), a
banking corporation organized under the laws of the Federal Republic of Germany,
as a lender and as agent for the Lenders, and the lenders that are from time to
time a party hereto (each a "Lender" and collectively, the "Lenders").
All capitalized terms used herein shall have the respective meanings set
forth in Section 1.1.
W I T N E S S E T H:
WHEREAS, each of the parties listed on Schedule A (each, a "Property
Owner", and collectively, the "Property Owners") owns the respective Properties
listed opposite such Property Owner's name on Schedule A;
WHEREAS, the Parent Entities collectively own, directly or indirectly, one
hundred percent (100%) of the legal and beneficial interests in each Property
Owner as set forth on Schedule 4.1(cc);
WHEREAS, the Borrowers have requested and the Lenders have agreed, subject
to and in accordance with the terms of this Agreement and the other Loan
Documents, to make the Loan to the Borrowers in an aggregate principal amount at
any time outstanding not to exceed the Loan Amount; and
WHEREAS, as a condition precedent to the obligations of the Lenders to make
the Loan to the Borrowers, the Parent Entities have entered into the Pledge
Agreement, pursuant to which the Parent Entities granted to Agent for the
ratable benefit of the Lenders a first priority security interest in the
Collateral, as collateral security for the Debt.
NOW, THEREFORE, in consideration of the making of the Loan by the Lenders
and the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
ARTICLE I
DEFINITIONS, PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided herein:
"Acceptable Letter of Credit" means an irrevocable, unconditional,
transferable, clean sight draft letter of credit acceptable to Agent (either an
evergreen letter of credit or one which does not expire until at least thirty
(30) Business Days after the Maturity Date) in favor of Agent for the ratable
benefit of the Lenders and entitling Agent to draw thereon in New York City, New
York, issued by a domestic Eligible Institution or the U.S. agency or branch of
a foreign Eligible Institution. Such Acceptable Letter of Credit shall permit
partial and multiple draws thereon. Such Acceptable Letter of Credit may be
secured (if at all) only by Cash collateral and none of the Borrowers, General
Partners or REITs shall have or be permitted to have any liability or other
obligation under any reimbursement agreement with respect to any Acceptable
Letter of Credit or otherwise in connection with reimbursement to the issuer
thereof for draws on such Letter of Credit.
"Additional Property" has the meaning given to such term in Section
2.5.2(a).
"Addition Effective Date" has the meaning given to such term in Section
2.5.2(b).
"Adjusted LIBO Rate" means a rate of interest per annum determined in
accordance with the following formula:
LIBO Rate + LIBOR Margin
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1.00 - Reserve Requirements
"Advance" means each disbursement of any portion of the Loan by the Lenders
to the Borrowers pursuant to the terms of this Agreement.
"Advisor" means Presidio Capital Investment Company, LLC, a Delaware
limited liability company.
"Advisory Agreement" means the agreement of Advisor to perform certain
advisory services with respect to the Borrowers and the Parent Entities in
accordance with the provisions of Section 5.2 of the Purchase Agreement.
"Affiliate" means, with respect to any Person or Persons, a Person or
Persons directly or indirectly, through one or more intermediaries, Controlling,
Controlled by or under common Control with the Person or Persons in question.
"Agent" means HypoVereinsbank, in its capacity as agent for the Lenders,
and any successor agent appointed hereunder in accordance with the provisions of
Section 13.9.
"Agent-Related Persons" has the meaning given to such term in Section 13.3.
"Agreement" has the meaning given to such term in the preamble to this
Agreement, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"Allocated Loan Amount" means the principal amount of the Loan allocated to
each Property as set forth on Schedule 1.1(a); provided, however, that the
Allocated Loan Amount for a Property may be adjusted upon the addition of any
Additional Property in Agent's sole and absolute discretion.
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"Applicable Interest Rate" has the meaning given to such term in Section
2.2.2(a).
"Appraisal" means, as to any Property, an appraisal of such Property in its
then "as is" condition, prepared not more than forty-five (45) days (or such
longer period as shall be acceptable to Agent) prior to the Closing Date (or
other relevant date with respect to an updated Appraisal or an Appraisal with
respect to an Additional Property) by either (a) Xxxxxxx & Xxxxxxxxx or (b) a
member of the American Institute of Real Estate Appraisers selected by Agent,
which appraisal (i) shall meet the minimum appraisal standards for national
banks promulgated by the Comptroller of the Currency pursuant to Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended
(FIRREA), and (ii) otherwise shall be in both form and substance reasonably
satisfactory to Agent.
"Approval", "Approved", "approval" or "approved" means, as the context so
determines, an approval in writing given to the party seeking approval after
full disclosure to the party giving approval of all material facts necessary in
order to determine whether approval should be granted.
"Approved Banks" means (a) HypoVereinsbank or (b) banks or other financial
institutions which have (i) (A) a minimum net worth of $500,000,000 or (B) total
assets of $5,000,000,000 and (ii) a minimum long-term senior unsecured debt
rating from the Rating Agencies at least equivalent to the Required Rating.
"Approved Other Guaranties" means, with respect to any Other Borrower
Indebtedness, a customary guaranty of recourse obligations and/or a customary
environmental indemnification agreement which, in each case, (a) is secured
solely by (i) Cash collateral posted by the applicable Other Borrower, (ii) a
letter of credit secured solely by Cash collateral posted by the applicable
Other Borrower, or (iii) a mortgage on Other Property of an Other Borrower
(which is not the applicable Other Borrower), which satisfies the requirements
of Sections 2.5.2(d)(ii)(C), (D), (E), (F) and (G), (b) is neither an obligation
nor a Contingent Obligation of any Borrower, General Partner or REIT and (c) is
not secured by any Property or Collateral.
"Assigned Mortgages" means, collectively, the Mortgage with respect to the
Properties located in the States of Michigan, Nevada, Virginia, and North
Carolina assigned to Agent for the ratable benefit of the Lenders in connection
with the closing of the Loan.
"Assignment" has the meaning given to such term in Section 12.23(e).
"Assignment and Acceptance" has the meaning given to such term in Section
12.23(b)(i).
"Available Commitment" means, with respect to any Lender, the product of
(a) the Commitment of such Lender at the time of determination, multiplied by
(b) a ratio (i) the numerator of which is equal to the Total Available
Commitments at the time of determination, and (ii) the denominator of which is
equal to the Loan Amount.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy" as the same may be amended, modified, succeeded or replaced from
time to time.
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"Base Rate" means the sum of (a) the rate of interest per annum equal to
the greater of: (i) the Prime Rate and (ii) the Federal Funds Rate plus one-half
(1/2) of one percent (1%) per annum, and (b) the Base Rate Margin.
"Base Rate Loan Tranche" means any portion of the Loan that bears interest
as provided in Section 2.2.2(a)(i).
"Base Rate Margin" means one hundred basis points (1.0%) per annum;
provided, that the Base Rate Margin shall be equal to zero (0) with respect to
any portion of the Loan which would otherwise bear interest at the Conversion
Rate hereunder but for an election by the Borrower that such portion of the Loan
bear interest as or as part of a Base Rate Loan Tranche pursuant to a Rate
Request.
"Basic Carrying Costs" means the sum of the following costs associated with
each Property: (a) Taxes and Other Charges and (b) Insurance Premiums.
"Borrower" or "Borrowers" has the meaning given to such terms in the
preamble to this Agreement.
"Borrower Affiliate" means any of the Borrowers, the REITS, the General
Partners and their respective Affiliates or any of their respective successors
and assigns as permitted hereunder, and "Borrower Affiliate" shall refer to all
of them, collectively.
"Borrowing Date" has the meaning given to such term in Section 3.3.1.
"Breakage Costs" has the meaning set forth in Section 2.2.2(c).
"Budget" means, with respect to each Property, the operating and capital
budget for such Property for the applicable Fiscal Year setting forth, in
reasonable detail, the Borrowers' good faith estimates of (a) all Operating
Income and all Operating Expenses, (b) Management Fees, if any, and (c) Capital
Expenditures, in each case, for such Property for such Fiscal Year.
"Business Day" means any day (other than a Saturday or Sunday) on which
commercial banks are not authorized or required to close in New York City and,
whenever such day relates to a LIBOR Loan Tranche or a Conversion Rate Loan
Tranche, an Interest Period with respect to a LIBOR Loan Tranche or a Conversion
Rate Loan Tranche, or notice with respect to a LIBOR Loan Tranche or a
Conversion Rate Loan Tranche, any such day on which dollar deposits are also
carried out in the London interbank market and banks are also open for business
in London, England.
"Capital Expenditures" means the costs incurred by a Borrower with respect
to equipment leases and capital replacements and repairs made to the applicable
Property (including, without limitation, repairs to, and replacements of, the
structural components, roofs, building systems, parking garages and parking
lots), in each case to the extent required to be capitalized in accordance with
GAAP.
"Capital Stock" (a) in the case of a corporation, capital stock, (b) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other
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equivalents (however designated) of capital stock, (c) in the case of a
partnership, partnership interests (whether general or limited), (d) in the case
of a limited liability company, membership interests and (e) any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash" means coin or currency of the United States of America or
immediately available federal funds, including such funds delivered by wire
transfer.
"Cash and Cash Equivalents" means (a) Cash, (b) U.S. Government Securities,
(c) interest bearing or discounted obligations of federal agencies and
government sponsored entities or pools of such instruments offered by Approved
Banks and dealers, including, without limitation, Federal Home Loan Mortgage
Corporation participation sale certificates, Government National Mortgage
Association modified pass-through certificates, Federal National Mortgage
Association bonds and Notes, Federal Farm Credit System securities (provided all
of the obligations described in this clause (c) shall be rated "AAA" by the
Rating Agencies or backed by the full faith and credit of the United States
government for full and timely payment), (d) time deposits, domestic and
Eurodollar certificates of deposit, bankers acceptances or commercial paper
rated at least A-1+ (or its equivalent) by the Rating Agencies, and/or
guaranteed by HypoVereinsbank or an entity having a long-term rating at least
equal to the Required Rating, (e) floating rate notes, other money market
instruments and letters of credit each issued by Approved Banks (provided that
if the scheduled maturity of any such notes, instrument or letter of credit is
more than six (6) months after the date of purchase and such obligation is
guaranteed by an irrevocable letter of credit, the letter of credit must be
issued by HypoVereinsbank or a bank having a long-term senior unsecured debt
rating from the Rating Agencies at least equal to the Required Rating), (f)
obligations issued by state and local governments or their agencies, carrying a
rating at least equal to the Required Rating and/or guaranteed by an irrevocable
letter of credit of an Approved Bank (provided that if the scheduled maturity of
any such obligation is more than six (6) months after the date of purchase and
such obligation is guaranteed by a letter of credit, the letter of credit
guaranteeing such obligation must be issued by HypoVereinsbank or an Approved
Bank having a long-term senior unsecured debt rating from the Rating Agencies at
least equal to the Required Rating), (g) repurchase agreements with major banks
and primary government securities dealers fully secured by U.S. government or
agency collateral with a value equal to or exceeding the principal amount on a
daily basis and held in safekeeping (provided that at the time of purchase the
counterparty to such repurchase agreement must be HypoVereinsbank or have a
long-term senior unsecured debt rating at least equal to the Required Rating),
(h) investments in money market funds and money market mutual funds
substantially all of the assets of which are comprised of investments described
in clauses (a) through (h) above, and (i) the aggregate amount of the Advances
available under this Agreement which have not yet been made as of the date of
determination. Except as otherwise provided in this definition, Cash and Cash
Equivalents shall not include any investments commonly known as "derivatives",
any investments requiring a payment above par for an obligation, and under no
circumstances shall Cash and Cash Equivalents include interest-only strips. Any
investment in Cash and Cash Equivalents shall have a maturity date not later
than one Business Day prior to the date that the proceeds therefrom are required
hereunder.
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"Cash Management Agreement" means the Cash Management Agreement, dated as
of the date hereof, among the Borrowers, Agent and Deposit Bank, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.
"Casualty" means a fire, explosion, flood, collapse or other casualty
affecting any Property.
"Cause" means, with respect to any Agent, any act or omission by such Agent
which constitutes gross negligence, willful misconduct or fraud.
"Change of Control" means with respect to any Person (i) the Transfer by
Persons who are the direct beneficial owners of such Person as of the Closing
Date of more than forty-nine and nine-tenths percent (49.9%) of the direct or
indirect right to distributions from such Person in the aggregate to Persons who
were not direct or indirect beneficial owners of such Person as of such date or
(ii) the Transfer by such direct or indirect beneficial owners of such Person as
of the Closing Date of more than forty-nine and nine-tenths percent (49.9%) of
the direct or indirect voting rights in such Person to Persons who were not
direct or indirect beneficial owners as of such Person of such date.
"Closing Date" means the date of this Agreement.
"Closing Mortgages" means, collectively, the Mortgages with respect to the
Properties located in the States of Maryland and Florida granted by the
applicable Borrowers for the benefit of Agent for the ratable benefit of the
Lenders in connection with the closing of the Loan.
"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" has the meaning given to such term in the Pledge Agreement.
"Commitment" means, with respect to each Lender, an amount equal to each
Lender's Loan Percentage of the Loan Amount.
"Commitment Fee" has the meaning given to such term in Section 2.9.
"Commitment Fee Multiplier" means the product of (i) a rate (calculated on
a daily basis, based upon a 360-day year) equal to 0.25% per annum, multiplied
by (ii) the actual number of days in the applicable Commitment Fee Quarterly
Period.
"Commitment Fee Quarterly Period" has the meaning given to such term in
Section 2.9.
"Condemnation" means a taking or voluntary conveyance during the term
hereof (including, without limitation, any transfer made in lieu of or in
anticipation of the exercise of such taking) of all or any part of any Property
(whether for any permanent or temporary use or occupancy) or any interest
therein or right accruing thereto or use thereof, as the result of, or in
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settlement of, any condemnation or other eminent domain proceeding by any
Governmental Authority, whether or not the same shall have actually been
commenced.
"Condemnation Proceeds" has the meaning given to such term in the
definition of "Net Proceeds".
"Consolidated Subsidiary" means, as to any Borrower, any Subsidiary or
other entity which is consolidated with such Borrower in accordance with GAAP.
"Contingent Obligation" as to any Person means, without duplication, (a)
any contingent obligation of such Person required to be shown on such Person's
balance sheet in accordance with GAAP, and (b) any obligation required to be
disclosed in the footnotes to such Person's financial statements in accordance
with GAAP, guaranteeing partially or in whole any non recourse Indebtedness,
lease, dividend or other obligation, exclusive of contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or of the assets) and guarantees
of non monetary obligations (other than guarantees of completion) which have not
yet been called on or quantified, of such Person or of any or any other Person.
The amount of any Contingent Obligation described in clause (b) shall be deemed
to be (i) with respect to a guaranty of interest or interest and principal, or
operating income guaranty, the net present value of the sum of all payments
required to be made thereunder (which in the case of an operating income
guaranty shall be deemed to be equal to the debt service for the note secured
thereby), calculated at the then LIBO Rate, through (A) in the case of an
interest or interest and principal guaranty, the stated date of maturity of the
obligation (and commencing on the date interest could first be payable
thereunder), or (B) in the case of an operating income guaranty, the date
through which such guaranty will remain in effect, and (ii) with respect to all
guarantees not covered by the preceding clause (i), an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
guaranty is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder), as recorded on the balance sheet and on the footnotes to
the most recent financial statements of the Borrowers required to be delivered
pursuant hereto. Subject to the preceding sentence, (I) in the case of a joint
and several guaranty given by such Person and another Person, the amount of the
guaranty shall be deemed to be 100% thereof unless and only to the extent that
such other Person has delivered Cash and Cash Equivalents to secure all or any
part of such Person's guaranteed obligation and (II) in the case of a guaranty
(whether or not joint and several) of an obligation otherwise constituting
Indebtedness of such Person, the amount of such guaranty shall be deemed to be
only that amount in excess of the amount of the obligation constituting
Indebtedness of such Person. All matters constituting "Contingent Obligations"
shall be calculated without duplication.
"Contribution Agreement" means the Contribution and Cross-Indemnification
Agreement, dated as of the date hereof, among the Borrowers and Agent, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
"Control" means, with respect to a Person that is a corporation, the right
to exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the shares of the controlled corporation and, with
respect to a Person that is not a corporation, the
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possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled Person. "Controlling"
and "Controlled" shall have meanings correlative thereto.
"Conversion Loan Documents" has the meaning given to such term in Section
7.1(a).
"Conversion Margin" means one hundred fifty basis points (1.50%) per annum.
"Conversion Notice" has the meaning given to such term in Section 7.1(a).
"Conversion Property" has the meaning given to such term in Section 7.1(a).
"Conversion Rate" means, a rate of interest per annum determined in
accordance with the following formula:
LIBO Rate + Conversion Margin
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1.00 - Reserve Requirements
"Conversion Rate Loan Tranche" means any portion of the Loan bearing
interest at the Conversion Rate pursuant to the terms of this Agreement.
"Core Property" and "Core Properties" means, individually each, and
collectively all of, the Properties set forth on Schedule 1.1(b), less and
except any Disposed Core Property.
"Debt" means the outstanding principal amount set forth in, and evidenced
by, the Notes, together with all interest accrued and unpaid thereon (including
any Recaptured Interest in accordance with Section 7.1(c)) and all other sums
due to the Lenders and Agent in respect of the Loan, including any Breakage
Costs and any sums due or any obligation of any kind owing under the Notes, this
Agreement, the Pledge Agreement or in any other Loan Document (including,
without limitation, any then unpaid (at the time of determination) reimbursement
or indemnity obligation).
"Debt Yield Maintenance Ratio" means, as of the end of any calendar
quarter, a ratio (expressed as a percentage) for the twelve (12) month period
commencing six (6) months prior to the end of such calendar quarter. The
numerator of such ratio is the sum of (a) the actual Net Operating Income of the
most recent prior two (2) calendar quarters and (b) the projected Net Operating
Income for the Properties for the next ensuing two (2) calendar quarters (based
on Leases existing as of the dated hereof and in-place Leases which comply with
the Leasing Criteria and are otherwise in accordance with the terms of this
Agreement (including scheduled increases in Rents expressly contained in such
Leases and rent for additional space not initially demised to a Tenant pursuant
to such Leases which the Tenant thereunder is expressly required and obligated
to rent without the occurrence of any condition, event or option in favor of
such Tenant other than the occurrence of a date certain or availability of such
space as determined by Borrower, and all charges for electricity, oil, gas,
water, heat, ventilation, air conditioning and any other energy,
telecommunications, telephone, utility or similar items, HVAC equipment
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charges, sprinkler charges, escalation charges, license fees, maintenance and
cleaning fees, charges for improvements, Taxes and Other Charges and other
amounts payable to Borrowers under the Leases, to the extent included in
projected Operating Expenses) and projected Operating Expenses, which Operating
Expenses shall be as set forth in the most recent Budget at all times following
the submission of a Budget to Agent in accordance with the provisions hereof),
and the denominator of such ratio is (b) the difference between (i) the
outstanding principal amount of the Loan at the end of such calendar quarter,
and (ii) the Letter of Credit Amount at the end of such calendar quarter.
"Default" means the occurrence of any event hereunder or under any other
Loan Document which, but for the giving of notice or passage of time, or both,
would be or constitute an Event of Default.
"Default Rate" means a rate per annum equal at all times to the lesser of
(a) the maximum non usurious rate permitted by law and (b) five hundred basis
points (5.0%) in excess of the Applicable Interest Rate.
"Defaulting Lender" has the meaning given to such term in Section 2.8.
"Deficiency" or "Deficiencies" has the meaning given to such terms in
Section 2.8.
"Deposit Bank" means Fleet National Bank and its successors, and any
replacement thereof selected by the Borrowers, subject to the reasonable
approval of Agent, which approval shall not be unreasonably withheld,
conditioned or delayed.
"Disposed Core Property" has the meaning given to such term in Section
2.5.1(c).
"Disposed Property" has the meaning given to such term in Section 2.5.1(a).
"Disposition Effective Date" has the meaning given to such term in Section
2.5.1(a).
"Disposition Letter of Credit" has the meaning given to such term in
Section 2.5.1(b).
"Distribution" means, with respect to any Person, the declaration or
payment of any dividends or return of any capital to such Person's partners,
members or shareholders, as applicable, or to any one or more of its or their
respective Affiliates, or the making by such Person of any other distribution,
payment or delivery of property or Cash to its partners, members or
shareholders, as applicable, or to any one or more of its or their respective
Affiliates as such (whether in respect of revenues received in connection with
any Property or otherwise), or the redemption, retiring, repurchasing, or
otherwise acquiring, directly or indirectly, for consideration, any shares or
interests in such Person.
"Eligible Account" means (a) an account maintained with a federal or
state-chartered depository institution or trust company which complies with the
definition of Eligible
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Institution, or (b) a segregated trust account or accounts maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution 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. No Eligible Account shall be evidenced by a
certificate of deposit, passbook or other instrument. Each Eligible Account (i)
shall be a separate and identifiable account from all other funds held by the
holding institution, (ii) shall be established and maintained in the name of
Agent on behalf of the Lenders, (iii) shall be under the sole dominion and
control of Agent, and should contain only funds held for its benefit. Following
a rating downgrade, withdrawal, qualification or suspension of an Eligible
Institution which maintains an Eligible Account each such Eligible Account must
promptly (and in any case within not more than thirty (30) calendar days) be
moved to a qualifying Eligible Institution.
"Eligible Assignee" means (a) any Lender or any Affiliate of any Lender or
(b) one or more of the following reasonably acceptable to Agent: (i) a real
estate investment trust, commercial bank, savings and loan association, savings
bank, investment bank, insurance company, trust company, commercial credit
corporation, lease financing company, pension plan, pension fund or pension
advisory firm, mutual fund, government entity or plan, (ii) investment company,
money management firm or "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act of 1933 or an institutional "accredited
investor" within the meaning of Regulation D under the Securities Act of 1933,
(iii) an institution substantially similar to any of the foregoing or (iv) any
entity Controlled by any of the entities described in clause (a) or clauses
(b)(i) or (b)(iii) above; in each case of clauses (b) (i), (ii) or (iii) of this
definition, which (A) has total assets (in name or under management) in excess
of $100,000,000 and (except with respect to a pension advisory firm or similar
fiduciary) a capital/statutory surplus or shareholder's equity of $50,000,000
and (B) is regularly engaged in the business of making or owning commercial real
estate loans or operating commercial properties.
"Eligible Institution" means an institution whose (a) commercial paper,
short-term debt obligations or other short-term deposits are rated at least
"A-1+" or the equivalent by the Rating Agencies, and (b) long-term senior
unsecured debt obligations are rated at least "AA" or the equivalent.
"Encumbrances" means Liens, easements, rights-of-way, zoning and other
restrictions (including any restriction or exclusive use provision in any lease
or other occupancy agreement), covenants and other similar charges or
encumbrances.
"Engineering Report" means, with respect to any Property, the structural
engineering report or reports with respect to such Property prepared by an
independent engineer and delivered to Agent in connection with the Loan, and any
amendments or supplements thereto delivered to Agent.
"Environmental Auditor" means an independent environmental auditor (not
affiliated with any Borrower Affiliate) reasonably approved by Agent.
"Environmental Claim" means any written notice, claim, proceeding,
investigation, demand or other communication by any Person or Governmental
Authority
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alleging or asserting liability with respect to any Borrower or any
Property arising out of, based on or resulting from (a) the presence, use or
Release of any Hazardous Substance, (b) any fact, circumstance, condition or
occurrence forming the basis of any violation, or alleged violation, of any
Environmental Law, or (c) any alleged injury or threat of injury to property,
health or safety or to the environment caused by Hazardous Substances.
"Environmental Indemnity" means the Environmental Indemnity Agreement,
dated as of the date hereof, by the Borrowers in favor of Agent for the ratable
benefit of the Lenders, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"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 pollution, protection or cleanup of the environment, the
impact of Hazardous Substances on property, health or safety, or the use or
Release of Hazardous Substances.
"Environmental Reports" means, with respect to any Property, the
Environmental Site Assessment and any amendments or supplements thereto
delivered to Agent, and shall also include any other environmental reports
delivered to Agent in connection with this Agreement and the Environmental
Indemnity.
"Environmental Site Assessment" means, with respect to any Property, a
"Phase 1 Site Assessment" in respect of such Property, performed by an
Environmental Auditor in accordance with ASTM Standard 1527-97 as modified by
additional reasonable and customary requirements of Agent, if any, and any
"Phase 2" environmental site assessment reasonably required by Agent to be
undertaken by the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
"ERISA Group" means any Borrower Affiliate and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with such Borrower Affiliate, are treated
as a single employer under Section 414 of the Code or are considered to be one
employer under Section 4001 of ERISA.
"Event of Default" has the meaning given to such term in Section 9.1(a).
"Exchange Act" means the Securities and Exchange Act of 1934, as amended
from time to time.
"Exculpated Parties" has the meaning set forth in Section 11.1.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum (based on a 360 day year) equal, for each day of such period, to the rate
of interest quoted at 11:00 A.M. New York time charged on overnight federal
funds transactions with member banks of the Federal Reserve System.
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"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"Fee Letter" means that certain Fee Letter, dated as of the date hereof,
between the Borrowers and Agent, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"Final Notice" has the meaning given to such term in Section 5.1(m)(iii).
"Fiscal Year" means the period commencing on the Closing Date and ending on
and including December 31 of the calendar year in which the Closing Date occurs
and thereafter each twelve-month period commencing on January 1 and ending on
December 31 until the Debt is repaid in full.
"GAAP" means generally accepted accounting principles in the United States
of America as of the relevant date in question, consistently applied.
"General Partner" means any of Shelbourne Properties I GP, LLC, a Delaware
limited liability company, Shelbourne Properties II GP, LLC, a Delaware limited
liability company and Shelbourne Properties III GP, Inc., a Delaware
corporation, and "General Partners" shall refer to all of them, collectively.
"Governmental Approvals" means all approvals, consents, waivers, orders,
acknowledgments, authorizations, permits and licenses required under applicable
Legal Requirements to be obtained from any Governmental Authority, including,
without limitation, for any construction of Improvements or otherwise relating
to the use, occupancy and operation of any Property.
"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 or
quasi-governmental issues (including, without limitation, any court, arbiter,
government department, agency, board, commission, bureau or instrumentality).
"Guaranty Obligations" means any obligations (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guarantying any Indebtedness, leases, dividends or other obligations
of any other Person in any manner, whether direct or indirect, and including,
any obligation, whether or not contingent, (a) to purchase any such Indebtedness
or other obligation or any property constituting security therefor, (b) to
advance or provide funds or other support for the payment or purchase of such
Indebtedness or obligation or to maintain working capital, solvency or other
balance sheet condition of such other Person (including, without limitation,
keep well agreements, maintenance agreements, comfort letters or similar
agreement or arrangement), (c) to lease or purchase any property, securities or
services primarily for the purpose of assuring the owner of such Indebtedness or
obligation, or (iv) to otherwise assure or hold harmless the owner of such
Indebtedness or obligation against loss in respect thereof.
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"Hazardous Substance" means, collectively, (i) any petroleum or petroleum
products or waste oils, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), 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.
"HypoVereinsbank" has the meaning given to such term in the preamble to
this Agreement.
"Icahn Litigation" means that certain litigation entitled "Xxxx X. Icahn,
and Xxxxxxxx Corp. Derivatively on Behalf of Shelbourne Properties I, Inc.,
Shelbourne Properties II, Inc., and Shelbourne Properties III, Inc. v. Northstar
Capital Investment Corp., et al." pursuant to a complaint filed February 22,
2002 in the Supreme Court of the State of New York, County of New York.
"Illinois Amount" means an amount equal to $1,669,925.
"Illinois Borrower" has the meaning given to such term in the definition of
Pledge Event.
"Illinois Borrower Ownership Interests" has the meaning given to such term
in the definition of Pledge Event.
"Illinois Event" means either (a) a Mortgage Conversion with respect to
each Illinois Property has been effected pursuant to each of the terms and
conditions of Section 7.1 or (b) Borrower has effected a Pledge Event with
respect to each Illinois Property.
"Illinois Properties" means, collectively, the Properties identified on
Schedule A as Melrose Crossing I, Melrose Crossing Outparcel and Melrose
Crossing II.
"Improvements" means, with respect to any Property, all buildings,
structures, fixtures and improvements thereon, together with any additions
thereto or alterations, replacements or restorations thereof, now or hereafter a
part thereof.
"Increased Costs" has the meaning set forth in Section 2.2.2(d)(iii).
"Indebtedness" means, with respect to any Person, without duplication, the
following, whether direct or contingent:
(a) all indebtedness for borrowed money;
(b) the deferred purchase price of assets or services which in
accordance with GAAP would be shown to be a liability (or on the liability
side of a balance sheet);
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(c) all Guaranty Obligations;
(d) the maximum amount of all letters of credit issued or acceptance
facilities established for the account of such Person and, without
duplication, all drafts drawn thereunder (other than letters of credit
supporting other Indebtedness of any Borrower and which are otherwise
permitted hereunder);
(e) all capitalized lease obligations;
(f) all Indebtedness of another Person secured by any lien on any
property of any Borrower, whether or not such indebtedness has been
assumed;
(g) all obligations under take-or-pay or similar arrangements or under
any interest rate swaps, caps, floors, collars and other interest hedge or
protection agreements, treasury locks, equity forward contracts, currency
agreements or commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements and any other
derivative instruments, in each case, whether such Person is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations such Person otherwise assures a creditor
against loss;
(h) indebtedness created or arising under any conditional sale or
title retention agreement; and
(i) obligations of such Person with respect to withdrawal liability to
or on behalf of any "multi employer plan" as defined in Section 4001(a) of
ERISA;
provided, however, that Indebtedness shall not include (i) current accounts
payable (other than for borrowed money or purchase money obligations) incurred
in the ordinary course of business; provided that all such liabilities, accounts
and claims shall be paid when due (or in conformity with customary trade terms
or customary dispute resolution procedures), (ii) accrued expenses (other than
for borrowed money or purchase money obligations) incurred in the ordinary
course of business, (iii) indemnification and similar Contingent Obligations
which are not assurances of payment of the items described in subclauses (a)
through (i) of this definition, (iv) customary non recourse carve-outs, and (v)
indebtedness or other obligations in respect of which Cash or Cash Equivalents
have been deposited with a lender or its agent as collateral to defease or
secure such indebtedness.
"Initial Property Management Agreements" means, collectively, (a) that
certain Commercial Management Agreement, dated as of April 1, 2000, between
Shelbourne Properties I L.P., a Delaware limited partnership (as
successor-in-interest to Integrated Resources High Equity Partners, Series 85)
and Initial Property Manager; (b) that certain Commercial Management Agreement,
dated as of April 1, 2000, between Shelbourne Properties II L.P., a Delaware
limited partnership (as successor-in-interest to High Equity Partners L.P.,
Series 86) and Initial Property Manager; (c) that certain Commercial Management
Agreement, dated as of May 1, 2000, between Shelbourne Properties III L.P., a
Delaware limited partnership (as successor-in-interest to High Equity Partners
L.P., Series 88) and Initial Property Manager; (d) that certain Commercial
Management Agreement, dated as of April 1, 2000, between 000 Xxxxxxxx Joint
Venture, a Delaware general partnership, and Initial Property Manager; (e) that
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certain Commercial Management Agreement, dated as of April 1, 2000, between
Century Park I Joint Venture, a Delaware general partnership, and Initial
Property Manager; (f) that certain Commercial Management Agreement, dated as of
April 1, 2000, between Seattle Landmark Joint Venture, a Delaware general
partnership, and Initial Property Manager; and (g) that certain Commercial
Management Agreement, dated as of April 1, 2000, between Tri-Columbus
Associates, a Delaware general partnership and Initial Property Manager.
"Initial Property Manager" means Kestrel Management, L.P., a Delaware
limited partnership.
"Insurance Premiums" has the meaning given to such term in Section
8.1.1(d).
"Insurance Proceeds" has the meaning given to such term in the definition
of "Net Proceeds".
"Insurance Requirements" means (a) all material terms of any insurance
policy required hereunder covering or applicable to any Property or any part
thereof, (b) all requirements of the issuer of any such policy, and (c) all
orders, rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting a Property or any part thereof or any use of any Property or any part
thereof.
"Intermediate Entity" means any of Shelbourne I Century Park Company LLC, a
Delaware limited liability company, Shelbourne II Century Park Company LLC, a
Delaware limited liability company, Shelbourne I Seattle Landmark Company LLC, a
Delaware limited liability company, Shelbourne II Seattle Landmark Company LLC,
a Delaware limited liability company, Shelbourne II Tri-Columbus Company LLC, a
Delaware limited liability company, Shelbourne III Tri-Columbus Company LLC, a
Delaware limited liability company, Shelbourne I 000 Xxxxxxxx Company LLC, a
Delaware limited liability company, Shelbourne II 000 Xxxxxxxx Company LLC, a
Delaware limited liability company, and Shelbourne III 000 Xxxxxxxx Company LLC,
a Delaware limited liability company, and "Intermediate Entities" shall refer to
all of them, collectively.
"Interest Payment Date" means the date through which interest is accrued
and on which interest is due. Interest, whether payable on a Base Rate Loan
Tranche, a LIBOR Loan Tranche or a Conversion Rate Loan Tranche, shall be
payable monthly in arrears, on the first Business Day of the first month
following the initial funding of the Loan proceeds under this Agreement and on
the first Business Day of each month thereafter until the Notes are repaid in
full.
"Interest Period" means:
(a) with respect to Base Rate Loan Tranches, the period commencing on
the date on which the Base Rate Loan Tranche is made and ending on the
earliest to occur of (i) the date on which such Base Rate Loan Tranche is
repaid, (ii) the date on which such Base Rate Loan Tranche is converted to
a LIBOR Loan Tranche or a Conversion Loan Tranche or (iii) the Maturity
Date; and
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(b) with respect to any LIBOR Loan Tranche or any Conversion Rate Loan
Tranche:
(i) initially, the period commencing on (A) the borrowing or
conversion date, as the case may be, with respect to such LIBOR Loan
Tranche or (B) the effective date of a Mortgage Conversion with
respect to such Conversion Rate Loan Tranche, as applicable, and
ending one, two, three, six or twelve months thereafter, as selected
by the Borrowers in their Rate Request given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
then expiring Interest Period applicable to such LIBOR Loan Tranche or
Conversion Rate Loan Tranche, as applicable, and ending one, two,
three, six or twelve months thereafter, as selected by the Borrowers
in their Rate Request; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(A) if any Interest Period pertaining to a LIBOR Loan
Tranche or a Conversion Rate Loan Tranche would otherwise end on
a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(B) any Interest Period that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date; and
(C) any Interest Period pertaining to a LIBOR Loan Tranche
or a Conversion Rate Loan Tranche that begins on the last
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of
the subsequent calendar month.
"knowledge" or words of similar import , when used to qualify any
representation or warranty of the Borrowers made herein, means the actual
knowledge of Xxxxxx Xxxxx, after due inquiry by such Person and by such Person
of the Property Manager.
"Lease" means any lease, sublease, any further sub sublease (regardless of
tier), license, letting, concession, occupancy agreement or other agreement
(whether written or oral and whether now or hereafter in effect), existing as of
the date hereof or hereafter entered into by a Borrower (as the lessor
thereunder) in accordance with this Agreement, pursuant to which any Person is
granted a possessory interest in, or right to use or occupy all or any portion
of any space in any Property, and every modification, amendment or other
agreement relating to such lease, sublease, or other agreement entered into in
accordance with the terms of the Loan Documents, and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.
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"Lease Amendment" has the meaning given to such term in Section
5.1(m)(iii).
"Lease Approval Request" has the meaning given to such term in Section
5.1(m)(iii).
"Leasing Criteria" means, with respect to any proposed Lease, that such
proposed Lease (a) is on commercially reasonable terms, (b) provides for rental
rates comparable to existing local market rates and on market terms for new
leases for similar premises in similar facilities located near the applicable
Property and (c) does not contain any terms which would materially and adversely
affect Agent's or any Lender's rights under the Loan Documents, in each case, as
determined by Agent in its reasonable discretion.
"Legal Requirements" means all statutes, laws, treaties, codes, rules,
orders, regulations, ordinances, judgments, decrees and injunctions,
determinations or requirements of any Governmental Authority, including, without
limitation, Environmental Laws, and with respect to any Property, includes all
Permits and Encumbrances.
"Lender" and "Lenders" has the meaning provided in the preamble to this
Agreement.
"Lender Expenses" means (a) all origination costs and all out-of-pocket
expenses and costs incurred by Agent with respect to the making of the Loan (as
well as such costs and expenses as Agent customarily includes in reimbursables),
including for preparation of audits, agreed-upon-procedures, reasonable travel
expenses, preparation of environmental, seismic and engineering reports, credit
reports, appraisals, preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby (including reasonable attorneys' fees and
disbursements in connection therewith), mortgage recording taxes and other
document filing fees and any other out-of-pocket expenses incurred by Agent
relating to credit and collateral evaluations in connection with the Loan; and
(b) any and all reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements in connection therewith) (i)
incurred by Agent in pursuing any of its remedies and/or enforcing any of its
rights under this Agreement or the other Loan Documents, (ii) relating to any
other post-closing matters contemplated herein or in any other Loan Document for
which the Borrower has an obligation hereunder or under any of the other Loan
Documents, and (iii) any costs incurred by Agent in amending, modifying,
supplementing, restating or otherwise changing the Loan or any of the Loan
Documents.
"Letter of Credit Amount" means, from time to time, the undrawn amount of
any Disposition Letter of Credit held by Agent.
"LIBO Rate" means, with respect to any Interest Period pertaining to a
LIBOR Loan Tranche or a Conversion Rate Loan Tranche, the rate of interest per
annum quoted by HypoVereinsbank at approximately 11:00 A.M. New York time two
(2) Business Days prior to the beginning of such Interest Period for the
offering to leading banks in the London interbank market of dollar deposits in
immediately available funds for delivery on the first day of such Interest
Period for a period equal to such Interest Period and in an amount comparable to
the
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amount of the LIBOR Loan Tranche or the Conversion Rate Loan Tranche, as
applicable, to be outstanding during such Interest Period.
"LIBOR" means the London Interbank Offer Rate.
"LIBOR Loan Tranche(s)" means any portion or portions of the Loan bearing
interest as provided in Section 2.2.2(a)(ii).
"LIBOR Margin" means two hundred fifty basis points (2.50%) per annum.
"Lien" means any mortgage, deed of trust, lien (statutory or other),
pledge, hypothecation, assignment, preference, priority, security interest, or
any other Encumbrance on any Property or any portion thereof or any Borrower
(including, without limitation, any conditional sale or other title retention
agreement, any sale-leaseback, 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 mechanics', materialmen's and other similar liens and
Encumbrances).
"Loan" means each Advance and all Advances in the aggregate made pursuant
to this Agreement and the other Loan Documents, and evidenced by the Notes and
secured by the Pledge Agreement and the other Loan Documents.
"Loan Amount" means Seventy-Five Million and No/100 Dollars
($75,000,000.00).
"Loan Documents" means, collectively, this Agreement, the Notes, the Pledge
Agreement, the Environmental Indemnity, the Cash Management Agreement, the
Contribution Agreement and any other document executed in connection with the
Loan by any of the Borrowers, as well as all other documents executed and/or
delivered in connection with the Loan or hereafter delivered by or on behalf of
the Borrowers pursuant to the requirements hereof or of any other Loan Document,
together with all modifications, amendments, restatements, replacements,
extensions, supplements and assignments of any of the foregoing occurring after
the date hereof pursuant to the provisions thereof.
"Loan Percentage" means (a) prior to any assignment by the initial Lender
of any portion of the Loan in accordance herewith, for the Lender named herein,
one hundred percent (100%), and (b) subsequent to any such assignment, for each
Lender, the percentage obtained from time to time as the quotient of the
principal amount of the Loan assigned to such Lender over the aggregate
principal amount of the Loan, provided that at no time shall the aggregate of
such percentages held by Lenders equal more or less than one hundred percent
(100%).
"Losses" means any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, fines, penalties, assessments, demands,
charges, fees, judgments, awards, disbursements and amounts paid in settlement
of whatever kind or nature (including reasonable attorneys' fees and other costs
of defense and disbursements).
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"Major Lease" means any Lease by a Tenant which, when taken together with
all other Leases by such Tenant or any Affiliate thereof in the same Property,
in the aggregate demises greater than the lesser of (a) twenty percent (20%) of
the NRSF in such Property and (b) 30,000 NRSF in such Property.
"Management Fees" means, with respect to any Property, all fees,
commissions, expenses and other compensation (including any incentive management
fees) payable by the applicable Borrower to any Property Manager, which
Management Fees shall be commercially reasonable based upon the then current
market for the area in which such Property is located for a property of similar
type and quality. Agent hereby acknowledges that the fees under the Initial
Property Management Agreements are acceptable.
"Manager's Consent" means that certain Manager's Consent and Subordination
of Management Agreement, dated the date hereof, by the Parent Entities and
Initial Property Manager in favor of Agent for the ratable benefit of the
Lenders, as same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
"Material Adverse Change" has the meaning given to such term in Section
3.1(f).
"Material Adverse Effect" means any material adverse effect upon (a) the
business operations, economic performance, assets or condition (financial or
otherwise) of any Borrower Affiliate or any Property, (b) the ability of any
Borrower to perform, in all material respects, its obligations under each of the
Loan Documents, (c) the enforceability or validity of any Loan Document or the
perfection or priority of any Lien created under any Loan Document, (d) the
value of, or cash flow from, any Property or the operations thereof or (e) the
rights, interests and remedies of Agent or any Lender under the Loan Documents.
"Material Agreement" means any contract or agreement relating to the
ownership, maintenance, development or use of any Property or portion thereof
(other than contracts or agreements with respect to leasing commissions or
Tenant improvement work, in either case, in connection with any Lease which
satisfies the Leasing Criteria, and if and to the extent required under this
Agreement, which has been approved by Agent) to which a Borrower Affiliate is a
party which (a) imposes an obligation on a Borrower Affiliate to pay more than
$50,000 per annum or (b) has a term of greater than one (1) year and may not be
terminated by a Borrower Affiliate without cause or material penalty or premium
upon thirty (30) or fewer days' notice.
"Maturity Date" means May 1, 2005, or if such day is not a Business Day
then on the first Business Day prior thereto, or such other date on which the
final payment of principal of the Note becomes due and payable as herein
provided, whether at such stated maturity date, by declaration of acceleration,
or otherwise.
"Minimum Debt Yield" means seventeen percent (17%).
"Monthly Debt Service Payment Amount" has the meaning given to such term in
Section 2.3.1.
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"Mortgage" means, as applicable, individually or collectively, (a) the
Closing Mortgages, (b) the New York Mortgage, (c) the Assigned Mortgages and (d)
a first priority mortgage or deed of trust by an applicable Borrower in favor of
Agent for the ratable benefit of the Lenders (substantially in the form of
Exhibit A annexed hereto, as modified to reflect legal requirements, custom and
practice of the jurisdiction in which the applicable Conversion Property is
located), which mortgage or deed of trust encumbers a Conversion Property and is
delivered to Agent in connection with a Mortgage Conversion.
"Mortgage Conversion" has the meaning given to such term in Section 7.1.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any member of the applicable ERISA Group is making
or accruing an obligation to make contributions or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Net Operating Income" means, with respect to the Properties for any
period, Operating Income less Operating Expenses.
"Net Proceeds" means, with respect to any Property, (a) the net amount of
all insurance proceeds received by Agent as a result of any damage or
destruction to such Property, after deduction of Agent's reasonable costs and
expenses (including, but not limited to, reasonable counsel fees), if any, in
collecting same ("Insurance Proceeds"); or (b) the net amount of all
condemnation awards, proceeds and payments received by Agent with respect to any
Partial Condemnation or Total Condemnation (as applicable) of any Property,
after deduction of Agent's reasonable costs and expenses (including, but not
limited to, reasonable counsel fees), if any, in collecting same ("Condemnation
Proceeds").
"Net Proceeds Deficiency" has the meaning given to such term in Section
8.1.4.
"Net Sale Proceeds" means, for all or any portion of any Property (as
applicable), an amount equal to either (as applicable) the gross sales price and
all other consideration derived or to be derived from the sale of such Property,
minus the sum of (a) the amount of any sales commission actually paid or payable
to an independent broker unaffiliated with the Borrower Affiliates with respect
to such sale, (b) the amount of any transfer taxes actually paid or payable by
the Borrower Affiliates with respect to such sale, and (c) other reasonable,
actual and customary third party closing and transaction costs.
"New Borrower" has the meaning given to such term in Section 2.5.2(a).
"New Borrower Ownership Interests" has the meaning given to such term in
Section 2.5.2(a).
"New York Mortgage" means the Mortgage with respect to the Property located
in the State of New York granted by the applicable Borrower for the benefit of
Agent for the ratable benefit of the Lenders in connection with the closing of
the Loan.
"Note" or "Notes" means the promissory note or notes made by the Borrower
in favor of each Lender in the aggregate principal amount of $75,000,000, and
evidencing that
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portion of the Loan Amount owing to such Lender, as such promissory note or
notes may be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.
"Notice of Borrowing" has the meaning given to such term in Section 3.3.1.
"NRSF" means the net rentable square feet determined in accordance with the
Standard Method for Measuring Floor Area in Office Buildings (ANSI/BOMA Section
65.1, 1996).
"Officer's Certificate" means, with respect to any Borrower Affiliate, a
certificate made by an individual authorized to act on behalf of such Borrower
Affiliate, provided that such individual is also a principal or senior officer
of such Borrower Affiliate and, in the case of any senior officer, Agent has
theretofore received an incumbency certificate with respect thereto.
"Operating Agreements" means reciprocal easement and/or operating
agreements; covenants, conditions and restrictions; and similar agreements
affecting any of the Properties and binding upon and/or benefiting any Borrower
and any other Borrower or a third party, including the instruments listed in
Schedule 4.1(gg), as the same may be modified, amended, extended, supplemented,
restated and/or assigned from time to time as permitted hereunder.
"Operating Expenses" means, in respect of the Properties and for any
specified period, on an accrual basis, all expenses of the Borrowers (or of a
Property Manager for the account of any Borrower) during such period in
connection with the operation of the Properties (including, without limitation,
Basic Carrying Costs), as well as bookkeeping, accounting, insurance costs,
actual Management Fees, wages and other costs and expenses incurred for the
Properties and legal expenses incurred in connection with the operation of the
Properties, determined, in each case, consistently with GAAP. "Operating
Expenses" shall not include (a) depreciation or amortization or other non-Cash
items (other than expenses that are accrued but not yet paid), (b) the principal
of and interest on the Notes or any other Indebtedness of the Borrowers, (c)
income taxes or other taxes in the nature of income taxes, (d) any expenses
(including legal, accounting and other professional fees, expenses and
disbursements) incurred in connection with and allocable to the issuance of the
Notes, (e) the cost of Capital Expenditures, (f) distributions to the members or
partners of the Borrowers or any management fees or similar compensation payable
to any Affiliate of the Borrowers, (g) all ordinary and customary leasing costs
(which shall be deemed to include those leasing costs in connection with Leases
expressly approved by Agent) incurred in connection with the Properties,
including, without limitation, tenant improvement costs and reasonable
attorneys' fees, and/or (h) any item of expense which otherwise would be
considered within Operating Expenses but is paid directly by any Tenant.
Expenses that are accrued as Operating Expenses during any period shall not be
included in Operating Expenses when paid during any subsequent period. To the
extent any Operating Expense accrues over more than a period but is paid in a
lump sum (e.g., Taxes and Insurance Premiums), such Operating Expense shall be
expensed over the entire accrual period.
"Operating Income" means, in respect of the Properties and for any
specified period, all income of the Borrowers (or receivable by a Property
Manager for the account of any Borrower) from any Person during such period in
connection with the operation of the
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Properties, determined on an accrual basis of accounting consistent with GAAP,
including the following:
(a) all Rents and, without duplication, all charges for electricity,
oil, gas, water, steam, heat, ventilation, air conditioning and any other
energy, telecommunications, telephone, utility or similar items, including
overtime usage, HVAC equipment charges, sprinkler charges, escalation
charges, license fees, maintenance and cleaning fees, charges for
improvements, Taxes and Other Charges and other amounts payable to the
Borrowers under any Lease (including tenant security deposits but only to
the extent a Borrower is entitled to apply or retain the security deposit
in accordance with the Lease and any interest income earned thereon and
retained by such Borrower) or other agreement relating to the applicable
Property;
(b) all amounts payable to the Borrowers pursuant to Operating
Agreements relating to the Properties;
(c) condemnation awards to the extent that such awards are
compensation for lost Rent or allocable to such specified period;
(d) business interruption and loss of "rental value" insurance
proceeds to the extent such proceeds are allocable to such specified
period; and
(e) all other income, which is recurring and collected in the ordinary
course of business of operating the Properties.
Notwithstanding the foregoing clauses (a) through (e), Operating Income
shall not include (i) any condemnation or insurance proceeds (other than of the
types described in clauses (c) and (d) above), (ii) any proceeds resulting from
the sale, exchange, transfer, financing or refinancing of all or any part of the
Properties, (iii) any repayments received from Tenants of principal loaned or
advanced to Tenants by Borrowers, (iv) any extraordinary, non-recurring items of
income, and (v) any type of income that would otherwise be considered Operating
Income pursuant to the provisions above but is (A) more than sixty (60) days
past due or (B) paid directly by any Tenant to a Person other than the
applicable Borrower or its agent (other than amounts paid by Tenants in
accordance with the Tenant direction letters delivered pursuant to the Cash
Management Agreement) and (v) any fees or other amounts payable by a Tenant or
another Person that are reimbursable by such Borrower to Tenant or such other
Person.
"Organizational Documents" means (a) with respect to any Person that is a
corporation, the certificate of incorporation or charter and by-laws of such
Person, (b) with respect to any Person that is a partnership, the partnership
agreement and, if a limited partnership, the certificate of limited partnership
of such Person, and (c) with respect to any Person that is a limited liability
company, the certificate of formation or the articles of organization and the
operating agreement of such Person.
"Original Advisory Agreement" means any of (i) the Advisory Agreement dated
as of April 17, 2001 among Advisor, Shelbourne Properties I, Inc., a Delaware
corporation, and Shelbourne Properties I GP, Inc., a Delaware corporation, (ii)
the Advisory Agreement dated as of April 17, 2001 among Advisor, Shelbourne
Properties II, Inc., a Delaware corporation, and
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Shelbourne Properties II GP, Inc., a Delaware corporation, and (iii) the
Advisory Agreement dated as of April 17, 2001 among Advisor, Shelbourne
Properties III, Inc., a Delaware corporation, and Shelbourne Properties III GP,
Inc., a Delaware corporation; and "Original Advisory Agreements" shall refer to
all of them, collectively.
"Other Borrower" has the meaning given to such term in Section 2.5.2(d).
"Other Charges" means all ground rents, maintenance charges, impositions
other than Taxes, and any other charges, including vault charges and license
fees for the use of vaults and similar areas adjoining any Property, now or
hereafter levied or assessed or imposed against any Property or any part thereof
and payable by the applicable Borrower.
"Other Property" has the meaning given to such term in Section 2.5.2(d).
"Other Property Indebtedness" has the meaning given to such term in Section
2.5.2(d).
"Parent Entity" means any of Shelbourne Properties I L.P., a Delaware
limited partnership, Shelbourne Properties II L.P., a Delaware limited
partnership, and Shelbourne Properties III L.P., a Delaware limited partnership,
and "Parent Entities" shall refer to all of them, collectively.
"Partial Condemnation" means any Condemnation other than a Total
Condemnation.
"Participation" has the meaning given to such term in Section 12.23(e).
"Partnership Units" means, with respect to any Parent Entity, the
partnership units of such Parent Entity designated as Class A Partnership Units.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means an employee pension benefit plan as defined in Section
3(2) of ERISA (other than a Multiemployer Plan) which (a) is subject to the
provisions of Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code and (b) is maintained by, or contributed to by,
any Borrower or any member of the applicable ERISA Group or with respect to
which any member of the ERISA Group could reasonably be expected to incur
liability under Section 4069 of ERISA.
"Permits" means all material licenses, approvals, authorizations,
accreditations, consents, permits, variances and certificates used in connection
with the ownership, operation, use or occupancy of any Property (including,
without limitation, business licenses, state health department licenses, liquor
licenses, certificates of completion and occupancy permits and all such other
permits, licenses and rights, obtained from any Governmental Authority or
private Person concerning ownership, operation, use or occupancy of such
Property) as the same may be modified, amended, extended, supplemented and/or
assigned from time to time, but excluding
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licenses, approvals, authorizations, accreditations, consents, permits,
variances and certificates, the responsibility for which lies solely with any
Tenant.
"Permitted Encumbrances" means, collectively, (a) the Liens and security
interests created by the Loan Documents, (b) all Liens, Encumbrances and other
matters disclosed in the Title Policy with respect to each Property as of the
date hereof (or, in the case of any Additional Property, as of the date of the
applicable Property Addition) which are approved by Agent, (c) Liens, if any,
for Taxes or Other Charges not yet due, payable or delinquent or which are being
diligently contested in good faith in accordance with Section 5.1(b)(ii), (d)
Leases, and (e) currently existing zoning restrictions which Encumber any
Property and (f) such other title and survey exceptions as Agent has approved or
may approve in writing in Agent's sole discretion.
"Permitted Indebtedness" means (a) the Debt, (b) Trade Payables incurred in
the ordinary course of Borrowers' business, customarily paid by Borrower within
sixty (60) days of incurrence and in fact not more than sixty (60) days
outstanding, provided that the aggregate amount of Trade Payables outstanding at
any time shall not exceed (i) $50,000 with respect to any single Property or
(ii) $1,000,000, in the aggregate, with respect to all of the Properties, (c)
written indemnities entered into in the ordinary course of business and on
customary terms and conditions in connection with the acquisitions of goods or
services, or in connection with the execution of Leases or amendments thereto,
(d) Other Property Indebtedness and (e) Indebtedness by (i) any Borrower
Affiliate to another Borrower Affiliate or (ii) Indebtedness by any Borrower to
a REIT; provided that, in either case, such Indebtedness shall be in amounts
which are reasonably acceptable to Agent and the terms of any such Indebtedness
provide that (A) such Indebtedness is expressly subject and subordinate to all
of the terms, covenants, provisions, rights and remedies contained in, and the
Liens created in favor of Agent and the Lenders pursuant to, this Agreement and
the other Loan Documents, and (B) the creditor enters into a subordination of
affiliate debt agreement with Agent for the ratable benefit of the Lenders in
both form and substance acceptable to Agent in its sole discretion on or prior
to any such extension of credit or creation of Indebtedness.
"Person" means any individual, sole proprietorship, corporation, general
partnership, limited partnership, limited liability company or partnership,
joint venture, association, joint stock company, bank, trust, estate,
unincorporated organization, any federal, state, county or municipal government
(or any agency or political subdivision thereof), endowment fund or any other
form of entity.
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) which is maintained or contributed to by any
Borrower or any member of its ERISA Group.
"Plan Assets" means assets of (a) an employee benefit plan, as defined in
Section 3(3) of ERISA, whether or not it is subject to the provisions of Title I
of ERISA (including governmental plans), (b) a plan described in Section
4975(e)(1) of the Code, and (c) an entity the underlying assets of which include
plan assets by reason of a plan's investment in the entity.
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"Pledge Agreement" means the Pledge and Security Agreement, dated as of the
date hereof, by the Borrowers in favor of Agent for the ratable benefit of the
Lenders, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"Pledge Event" means that (a) each Illinois Property has been effectively
conveyed of record to a wholly owned single member limited liability company (an
"Illinois Borrower") organized in the State of Delaware pursuant to a
certificate of formation and operating agreement in the form approved by Agent
in connection with the closing of the Loan (including with respect to the
separateness covenants and other restrictions contained therein), all of the
legal and beneficial interests ("Illinois Borrower Ownership Interests") of
which are owned directly by the grantor of such conveyance (i.e., Shelbourne
Properties II L.P. or Shelbourne Properties III L.P., as applicable), (b) each
Illinois Borrower has pledged its Illinois Borrower Ownership Interests to Agent
(in the form of the Pledge Agreement) for the ratable benefit of the Lenders,
together with any shares, certificates or other indicia of such ownership
interests duly endorsed as required by Agent, and any UCC financing statements,
documents and instruments required by Agent in connection therewith, all of
which shall be acceptable to Agent in its reasonable discretion, (c) Agent has
been provided with a Title Policy with respect to each Illinois Property (i)
insuring each Illinois Borrower's ownership of the respective Illinois Property,
(ii) containing no exceptions other than Permitted Encumbrances and (iii) in
form and substance consistent with the Title Policies delivered to Agent upon
the Closing with respect to the Properties, (d) the Illinois Borrowers shall
have executed and delivered such modifications and amendments to this Agreement
and the other Loan Documents as Agent may reasonably require, including an
assumption agreement, and (e) Borrower shall have paid all reasonable costs and
expenses, including, without limitation, reasonable legal fees and disbursements
incurred by Agent in connection with the Illinois Event.
"Policies" has the meaning given to such term in Section 8.1.1(c).
"Prepayment" has the meaning given to such term in Section 2.4.1.
"Prepayment Date" has the meaning given to such term in Section 2.4.1.
"Prepayment Notice" has the meaning given to such term in Section 2.4.1.
"Prime Rate" means the rate of interest, determined on a daily basis,
publicly announced by HypoVereinsbank in New York, New York from time to time as
its prime commercial lending rate. The prime rate is not intended to be the
lowest rate of interest charged by Agent in connection with extensions of credit
to debtors.
"Property" means, individually each, and collectively all of, the real
properties together with the Improvements thereon, all as more fully described
in Exhibit 1.1 hereto, including any Additional Property and less and except any
Disposed Property.
"Property Addition" has the meaning given to such term in Section 2.5.2(a).
"Property Disposition" has the meaning given to such term in Section
2.5.1(a).
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"Property Management Agreement" means a property management and/or leasing
agreement entered into by a Borrower and the applicable Property Manager and
approved by Agent as set forth in Section 10.1, pursuant to which such Property
Manager is to provide management and other services with respect to a Property
and any other management agreement entered into with the prior written consent
of Agent, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time as permitted hereunder.
"Property Manager" means the Initial Property Manager, or any property
manager appointed in replacement thereof in accordance with Section 10.1.
"Property Manager Criteria" means, with respect to any Property Manager, a
reputable and experienced professional property management company which shall
(a) have at least five (5) years experience in the management of facilities
substantially similar to the Properties proposed to be managed, (b) have
facilities under management, which in the aggregate exceed ten (10) times the
total NRSF of the Properties proposed to be managed (excluding the Properties)
at the time of its engagement as Property Manager and (c) be nationally or
regionally recognized, if available given the location of the respective
Property.
"Property Owner" or "Property Owners" has the meaning given to such term in
the recitals to this Agreement, and shall include the respective successors and
permitted assigns thereof.
"Proportionate Loan Amount" means, from time to time, the product of (i)
the aggregate Allocated Loan Amounts of all Conversion Properties with respect
to Mortgage Conversions which are owned by the Borrowers at the time of
determination, multiplied by (ii) a ratio (A) the numerator of which is equal to
the aggregate principal amount of the Loan outstanding at the time of
determination, and (B) the denominator of which is equal to the Loan Amount.
"Purchase Agreement" means that certain Purchase and Contribution Agreement
, dated as of February 14, 2002, among Advisor, certain subsidiaries of Advisor,
Northstar Capital Investment Corp., Shelbourne Management, LLC, the REITs and
the Parent Entities.
"Purchaser" has the meaning given to such term in Section 2.5.1(a).
"ratable share" or "ratably" means, with respect to any Lender, its share
of the Loan based on the proportion of the outstanding principal of the Loan
advanced by such Lender to the total outstanding principal of the Loan.
"Rate Request" means, the Borrowers' irrevocable telephonic notice (to be
promptly confirmed in writing), to be received by Agent by 11:00 A.M. New York
time three (3) Business Days prior to the date specified in the Rate Request for
the commencement of the Interest Period (which specified date must be a Business
Day), of: (a) its intention to have (i) all or any portion of the principal
amount under the Notes which is not then the subject of an Interest Period
(other than an Interest Period which is terminating on the Business Day
specified in the notice), and/or (ii) all or any portion of any advance of
proceeds of the Loan evidenced by the Notes, which is to be made on the Business
Day specified in the notice, bear interest as a Base Rate Loan Tranche, a LIBOR
Loan Tranche or, if a Mortgage Conversion shall have
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occurred, a Conversion Rate Loan Tranche; and (b) the Interest Period desired by
Borrower in respect of the amount specified whenever such notice is for LIBOR
Loan Tranches or, if a Mortgage Conversion shall have occurred, Conversion Rate
Loan Tranches, which Interest Period shall have a minimum duration of one month.
"Rating Agency" means any one or more of Standard & Poor's Rating Services,
a division of the McGraw Hill Companies, Inc., Xxxxx'x Investors Service, Inc.,
Fitch, Inc., or any other nationally recognized statistical rating agency, as
selected by Agent, and their respective successors.
"RBC Change" has the meaning given to such term in Section 2.2.2(d)(iii).
"Recaptured Interest" has the meaning given to such term in Section 7.1(c).
"Reduced Letter of Credit Amount" has the meaning given to such term in
Section 2.5.2(f).
"Register" has the meaning given to such term in Section 2.1.2(b).
"Required Repairs" has the meaning given to such term in Section 5.1(s).
"Regulation D" means Regulation D of the Federal Reserve Board, as in
effect from time to time.
"Regulatory Change" means any change after the date of this Agreement in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to a
class of banks or companies Controlling banks, including any Lender or any
company Controlling a Lender, of or under any federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"REIT" means any of Shelbourne Properties I, Inc., a Delaware corporation,
Shelbourne Properties II, Inc., a Delaware corporation and Shelbourne Properties
III, Inc., a Delaware corporation, and "REITS" shall refer to all of them,
collectively.
"REIT Change in Control" means, with respect to any REIT, (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder), of shares
representing more than 49.9% of the aggregate ordinary voting power represented
by the issued and outstanding Capital Stock of such REIT; or (b) the occupation
of a majority of the seats (other than vacant seats) on the board of directors
of such REIT by Persons who were neither (i) nominated by the board of directors
of such REIT (or a committee thereof) nor (ii) appointed by directors so
nominated (or a committee thereof); or (c) the acquisition by any Person or
group of the power, directly or indirectly, to direct or cause the direction of
the management or policies of such REIT.
"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor
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environment (including, without limitation, the movement of Hazardous Substances
through ambient air, sol, surface water, groundwater, wetlands, land or
subsurface strata).
"Release Amount" means, for each Property, the amount indicated as the
Release Amount on Schedule 1.1(a); provided, however, that with respect to the
Core Properties, the Release Amount means the greater of (a) the amount
indicated as the Release Amount for such Core Property on Schedule 1.1(a) and
(b) the Net Sales Proceeds with respect to the Property Disposition of such Core
Property.
"Rents" means all rents, rent equivalents, moneys payable as damages
pursuant to a Lease or in lieu of rent or rent equivalents, Lease termination
fees and payments, royalties (including all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, deposits
(including security, utility and other deposits), parking income, accounts,
Cash, issues, profits, charges for services rendered, and other consideration of
whatever form or nature received by or paid to or for the account or benefit of
any Borrower or its agents or employees from any and all sources arising from or
attributable to any Property and/or the use and occupancy thereof, including,
without limitation, any 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 any Property or rendering of services by any
Borrower and proceeds, if any, from business interruption or other loss of
income insurance.
"Reports" means, collectively, the reports and studies set forth on
Schedule 1.1(c).
"Required Lenders" means, subject to Section 2.8(h), if there is only one
Lender hereunder, that Lender, and, if there is more than one Lender, one or
more Lenders holding more than 50% of the total principal amount outstanding
under the Loan.
"Required Rating" means "AA" (or its equivalent) by the Rating Agencies.
"Reserve Requirements" means, for any day applied to a LIBOR Loan Tranche
or any Conversion Rate Loan Tranche, as applicable, the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on such day, if any (including without limitation
supplemental, marginal and emergency reserves) under any regulations of the
Board of Governors of the Federal Reserve System or other Governmental Authority
having jurisdiction with respect thereto dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D) required to be maintained by the applicable Lender
or its participants, if any. Without limiting the effect of the foregoing, the
Reserve Requirements shall reflect any other reserves required to be maintained
by any Lender or any Lender's respective participants, if any, by reason of any
Regulatory Change against (a) any category of liabilities which includes
deposits by reference to which the LIBO Rate is to be determined as provided in
this Agreement or (b) any category of extensions of credit or other assets which
includes loans the interest on which is determined on the basis of rates used in
determining the LIBO Rate.
"Response" has the meaning given to such term in Section 5.1(m)(iii).
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"Restoration" means the repair and restoration of the applicable Property
as nearly as possible to the condition such Property was in immediately prior to
such Casualty or Partial Condemnation, as applicable, together with such
alterations as may be approved by Agent acting reasonably.
"Retainage" means, until fifty percent (50%) of the Restoration has been
completed, as certified by Borrowers' architect, and as to each contractor,
subcontractor or materialman engaged in a Restoration, an amount equal to the
greater of (a) ten percent (10%) of the costs actually incurred for work in
place as part of the Restoration, as certified by the Borrowers' architect, and
(b) the actual retainage agreed to by the Borrowers and such party; provided,
that, until fifty percent (50%) of the Restoration has been completed as
aforesaid in no event shall the Retainage be less than the amount actually
retained by the Borrowers from contractors, subcontractors and materialmen
engaged in a Restoration.
"Risk-Based Capital Guidelines" has the meaning given to such term in
Section 2.2.2(d)(iii).
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Service Contract" means any contract or agreement relating to the
operation, maintenance, repair or management of any Property, but excluding any
contract or agreement which is a Material Agreement.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (a) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (b) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay such debts and liabilities as they mature
in their ordinary course, (c) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person is
engaged or is to engage, (d) the fair value of its property exceeds the total
amount of liabilities, including, without limitation, contingent liabilities, of
such Person and (e) the present fair salable value of its assets is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing the amount
of contingent liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subsidiary" means (a) any corporation more than 50% of whose Capital Stock
of any class or classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation (irrespective of whether
or not at the time, any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, trust, joint venture, limited liability company or
other entity in
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which such Person directly or indirectly through Subsidiaries has more than a
50% equity interest at any time.
"Survey" with respect to any Property, means a survey of recent date
delivered to Agent in connection with the Loan and prepared by a professional
and properly licensed and insured land surveyor reasonably acceptable to Agent,
which survey is in both form and substance reasonably satisfactory to Agent.
"Taxes" means all real estate and personal property taxes, assessments,
fees, taxes on Rents or rentals, water rates or sewer rents, and other
governmental charges now or hereafter levied or assessed or imposed against any
Borrower or any Property or Rents therefrom or which may become Liens.
"Tenant" means any Person liable by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) pursuant to a
Lease.
"Term Sheet" has the meaning given to such term in Section 5.1(m)(iii).
"Term Sheet Approval Request" has the meaning given to such term in Section
5.1(m)(ii).
"Title Policy" with respect to any Property, means either (a) in the case
of a Mortgage Conversion pursuant to Section 7.1, and in the case of the Closing
Mortgages and the New York Mortgage, an ALTA mortgagee's policy of title
insurance (1970 unmodified form, where issuable) of recent date delivered to
Agent in connection with a Mortgage Conversion and issued by one or more title
companies reasonably acceptable to Agent, which title insurance policy (i)
provides coverage in an amount not less than the Allocated Loan Amount (other
than with respect to the New York Mortgage which policy shall be in the amount
of the New York Mortgage) with respect to such Property, (ii) insures Agent for
the benefit of the Lenders that the related Mortgage creates a valid first
mortgage Lien on such Property, free and clear of all exceptions from coverage
other than Permitted Encumbrances and such standard exceptions and exclusions
from coverage as Agent shall approve, (iii) contains such endorsements and
affirmative coverage as Agent may reasonably require, (iv) names the Agent for
the benefit of the Lenders as the insured party thereunder, (v) is assignable by
its terms with a Transfer of the Loan and (vi) is otherwise in both form and
substance reasonably satisfactory to Agent, or (b) in all other cases, an ALTA
owner's policy of title insurance of recent date delivered to Agent in
connection with the Loan and issued by one or more title companies reasonably
acceptable to Agent, which title insurance policy (i) provides coverage in an
amount not less than the Allocated Loan Amount with respect to such Property,
(ii) contains such endorsements and affirmative coverage as Agent may require
(including an endorsement insuring Agent's interest in the Collateral) and (iii)
is otherwise in both form and substance reasonably satisfactory to Agent, in
either case, as such Title Policy may be amended, restated, replaced,
supplemented or otherwise modified from time to time as expressly permitted
hereunder.
"Total Available Commitments" means, from time to time, the lesser of (a)
the Loan Amount, and (b) the sum of (i) the difference between (A) (I) until the
occurrence of the Illinois Event, the difference between (1) the Loan Amount and
(2) the Illinois Amount and (II)
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from and after the occurrence of the Illinois Event, the Loan Amount and (B) the
aggregate Allocated Loan Amounts with respect to any Disposed Property (other
than any Disposed Property for which a Disposition Letter of Credit has been
delivered to Agent pursuant to Section 2.5.1) at the time of determination, and
(ii) the aggregate Allocated Loan Amounts with respect to any Additional
Property at the time of determination; provided, however, that if the amounts in
clauses (a) and (b) are equal, the Total Available Commitments shall mean the
amount specified in clause (a).
"Total Condemnation" means, with respect to any Property, any Condemnation
which, when so taken or condemned, would leave, in Agent's reasonable
determination, a balance of such Property subject to such Condemnation that, due
either to the area so taken or the location of the part so taken in relation to
the part not taken, would not, under economic conditions, physical constraints,
zoning laws, building regulations and other Legal Requirements applicable to
such Property then existing, readily accommodate a new or reconstructed building
or buildings and other improvements of a type fully comparable to the
Improvements existing as of the date of such taking or condemnation.
"Trade Payables" means unsecured amounts payable by or on behalf of any
Borrower for or in respect of the operation of any Property in the ordinary
course and which would under GAAP be regarded as ordinary expenses, including
amounts payable to suppliers, vendors, contractors, mechanics, materialmen or
other Persons providing property or services to such Property or such Borrower.
"Transfer" means any voluntary or involuntary, direct or indirect (at any
tier of ownership), sale, grant, bargain, conveyance, lease, license,
assignment, Encumbrance, pledge, mortgage, hypothecation, transfer, grant of
security interest, financing or other disposition of, directly or indirectly (at
any tier of ownership), by operation of law or otherwise, any legal, equitable
or beneficial interest, including, without limitation, any event or occurrence
which results in a Change in the Control of any such Person. The terms
"Transferred", "Transferor", "Transferee" and other derivatives of the word
"Transfer" means the past tense of Transfer, the party which Transfers, the
party which receives or benefits from the Transfer, and the other correlative
grammatical meanings of Transfer, as applicable.
"UCC" means the Uniform Commercial Code as in effect in the applicable
state.
"U.S. Government Securities" means securities evidencing an obligation to
pay principal and interest in a full and timely manner that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person Controlled or
supervised by and acting as an agency or instrumentality of and guaranteed as a
full faith and credit obligation by the United States of America (including a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such securities or a specific
payment of principal of or interest on any such securities held by such
custodian for the account of the holder of such depository receipt; provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the securities or the
specific payment of principal of or interest on the securities evidenced by such
depository receipt).
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"U.S. Tax" means any present or future tax, assessment or other charge or
levy imposed by or on behalf of the United States of America or any taxing
authority thereof.
Section 1.2 Principles of Construction. All references to sections,
schedules and exhibits are to sections, schedules and exhibits in or to this
Agreement unless otherwise specified. Unless otherwise specified, the words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The words "includes", "including" and similar terms
shall be construed as if followed by the words "without limitation". The term
"Property" or "Properties" shall be construed to be followed by the phrase "or
any part or portion thereof". The term "Borrower" shall mean any Borrower, each
Borrower or "all Borrowers" as applicable to the context. Unless otherwise
specified, all meanings attributed to defined terms herein shall be equally
applicable to both the singular and plural forms of the terms so defined. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP, as may be modified herein. As a matter of convenience
herein, rating categories are generally stated in the nomenclature of Standard &
Poor's Ratings Services, it being understood that unless otherwise expressly
stated to the contrary, reference to such category shall also be deemed to be a
reference to the comparable category of each other Rating Agency. Whenever in
this Agreement any Person is referred to, such reference shall be deemed to
include the legal representatives, successors and assigns of such Person,
provided that the foregoing shall not be deemed to permit any Transfer of any
ownership interest that is otherwise prohibited hereunder. All covenants,
promises and agreements in this Agreement contained, by or on behalf of the
Borrower, shall inure to the benefit of the respective legal representatives,
successors and assigns of each Lender and Agent. Whenever in this Agreement any
consent, approval, determination or decision of Agent is to be made in Agent's
sole discretion, such provision shall be deemed to mean that such consent,
approval, determination or decision of Agent shall be made by Agent in its sole
and absolute discretion for any or no reason.
ARTICLE II
GENERAL
Section 2.1 The Loan.
2.1.1 Commitment; Revolving Loan; Use of Proceeds. (a) Commitment. Subject
to and upon the terms and conditions set forth herein, each Lender hereby
severally agrees to make available to the Borrowers such Lender's Loan
Percentage of the Advances requested by the Borrowers from time to time from the
Closing Date until the Maturity Date, or such earlier date as the Commitments
shall have been terminated as provided herein; provided, however, that (i) no
request for an Advance by any Borrower shall be effective unless each of the
Parent Entities shall have signified its assent thereto in accordance with the
provisions of Section 3.3.1 hereof, (ii) the aggregate principal amount of the
Loan at any time outstanding shall not exceed the lesser of (a) the Loan Amount
and (b) the Total Available Commitments; and (iii) with respect to any Lender,
the aggregate principal amount of the Loan at any time outstanding which is
Advanced by such Lender shall not exceed its Available Commitment. The Loan
shall mature on the Maturity Date. The Borrowers hereby agree to accept the Loan
to the extent advanced as of the date hereof and to accept each subsequent
Advance hereunder as of the date made, subject to and upon the terms and
conditions set forth herein.
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(b) Revolving Loan. Notwithstanding anything to the contrary contained
herein, the Loan is a revolving loan and, subject to the terms and conditions
hereof, any amounts advanced in respect of the Loan and repaid or prepaid
hereunder may be reborrowed.
(c) Use of Proceeds. The Borrowers shall use the proceeds of the Loan for
any lawful purpose.
2.1.2 The Notes. (a) The Loan shall be evidenced by one or more Note(s)
from the Borrowers in favor of each Lender, each in a principal amount equal to
such Lender's Commitment and all of which shall not exceed in the aggregate the
principal amount of the Loan. The Notes shall bear interest at the Applicable
Interest Rate to and including the date upon which the Debt is paid in full. The
Notes shall be subject to repayment as provided in Section 2.3, shall be
entitled to the benefits of this Agreement and shall be secured by the Pledge
Agreement and by certain of the other Loan Documents.
(b) Agent shall maintain, or cause to be maintained, a register (the
"Register") at the address set forth in Section 12.5 to which notices to Agent
are to be sent hereunder, on which it shall enter the name or names of the
registered owner or owners from time to time of the Notes or multiple Notes.
Subject to the terms of Section 12.23, each Note may be independently assigned
or otherwise transferred to an Eligible Assignee (or to such other Person
permitted by Section 12.23) in whole or in part by registration of such
assignment or transfer on the Register (and each Note shall expressly so
provide). At the request of any Lender or any designated assignee or transferee
of a Note, the Borrowers shall issue to such Lender or the designated assignee
or transferee one or more new Notes on the same terms and conditions and in the
same aggregate principal amount of the Notes so assigned or transferred upon
delivery to the Borrowers of the Notes so assigned or transferred; provided,
however, that the failure to issue new Notes in connection with a transfer to an
Eligible Assignee or to such other Person permitted by Section 12.23 (whether
due to any failure on the part of the Borrowers or otherwise) shall in no way
affect the validity of the Loan, the Notes or the transfer thereof to such
Eligible Assignee or to such other Person permitted by Section 12.23. The
Register shall be available for inspection by the Borrowers at any reasonable
time upon reasonable prior notice.
Section 2.2 Interest.
2.2.1 Generally. Interest on the Loan and the Notes shall accrue at the
Applicable Interest Rate and shall be calculated on the basis of a year of 360
days for the actual number of days elapsed in the applicable Interest Period,
provided that in the case of interest the first day of the Interest Period shall
be included and the last day of said Interest Period shall be excluded. If an
Advance is repaid on the same day on which it is made one (1) day's interest
shall be paid on such Advance as well as all Breakage Costs. Any change in the
Prime Rate or the Federal Funds Rate shall be automatically effective as of the
day on which such change in rate occurs. Each determination by Agent of the
Applicable Interest Rate shall be conclusive and binding on the Borrowers for
all purposes, absent manifest error.
2.2.2 Determination of Interest Rate. (a) Applicable Interest Rate. The
rate or rates at which the outstanding principal amount of the Loan bears
interest from time to time shall be referred to as the "Applicable Interest
Rate". Subject to the terms and conditions of this
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Section 2.2.2, the Borrowers shall pay interest on the outstanding principal
amount of the Loan at the Applicable Interest Rate for the applicable Interest
Period. The Applicable Interest Rate with respect to any portion of the Loan
shall be:
(i) Base Rate. During the periods, if any, during which this Agreement
provides that any portion of the Loan shall bear interest as a Base Rate Loan
Tranche, then, with respect to such portion, a rate per annum equal at all times
to the Base Rate, payable monthly in arrears on each Interest Payment Date.
(ii) LIBO Rate. Except as specified herein to the contrary, during the
periods, if any, during which this Agreement provides that any portion of the
Loan shall bear interest as a LIBOR Loan Tranche, then, with respect to such
portion, a rate per annum equal at all times during each Interest Period to the
Adjusted LIBO Rate for such Interest Period, payable monthly in arrears on each
Interest Payment Date.
(iii) Conversion Rate. During the periods, if any, during which this
Agreement provides that any portion of the Loan shall bear interest as a
Conversion Rate Loan Tranche, then, with respect to such portion, a rate per
annum equal at all times during each Interest Period to the Conversion Rate for
such Interest Period, payable monthly in arrears on each Interest Payment Date.
(b) Conversion and Continuation Options. Each Rate Request shall specify
the portion of the Loan to be designated as (i) a Base Rate Loan Tranche, (ii) a
LIBOR Loan Tranche, or (iii) if applicable and subject to Section 7.1, a
Conversion Rate Loan Tranche (subject to this Section 2.2.2(b)), and, if
applicable, the Interest Period applicable thereto. The Borrowers may elect
pursuant to a Rate Request to convert all or any portion of an outstanding Base
Rate Loan Tranche to a LIBOR Loan Tranche or, if applicable and subject to
Section 7.1, all or any portion of a Base Rate Loan Tranche or a LIBOR Loan
Tranche to a Conversion Rate Loan Tranche, provided that no Base Rate Loan
Tranche may be converted to a LIBOR Loan Tranche and, if applicable and subject
to Section 7.1, no Base Rate Loan Tranche or LIBOR Loan Tranche may be converted
to a Conversion Rate Loan Tranche: (i) when any monetary Default or any Event of
Default has occurred under the Loan Documents and is continuing and Agent has
reasonably determined that such conversion is not appropriate; or (ii) after the
date which is one month prior to the Maturity Date. The Borrowers may elect
pursuant to a Rate Request to convert all or any portion of the outstanding
LIBOR Loan Tranches or any Conversion Rate Loan Tranche to a Base Rate Loan
Tranche. Any LIBOR Loan Tranche or Conversion Rate Loan Tranche may be continued
upon the expiration date of its then current Interest Period by the Borrowers
pursuant to a Rate Request, provided that no LIBOR Loan Tranche or Conversion
Rate Loan Tranche may be continued: (A) when any monetary Default or any Event
of Default has occurred and is continuing and Agent has reasonably determined
that such a continuation is not appropriate or (B) after the date that is one
month prior to the Maturity Date. If the Borrowers fail to submit a Rate Request
to Agent in accordance with the provisions of this Section 2.2.2(b), Agent shall
(subject to Section 2.2.2(e)) continue the LIBOR Loan Tranche or any Conversion
Rate Loan Tranche, as applicable, automatically as a one month LIBOR Loan
Tranche or Conversion Rate Loan Tranche, respectively, unless the applicable
Interest Period is less than thirty (30) days, in which event Agent shall
convert the LIBOR Loan Tranche or Conversion Rate Loan Tranche, as applicable,
to a Base Rate Loan Tranche. All
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borrowings, conversions and continuations of the Loan and all selections of
Interest Periods shall be in such amounts and be made pursuant to such elections
so that after giving effect thereto, the aggregate principal amount of each
LIBOR Loan Tranche or any Conversion Rate Loan Tranche shall be at least equal
to $1,000,000, and any such amounts in excess of $1,000,000 shall be in integral
multiples of $100,000. No more than (I) two (2) Conversion Rate Loan Tranches,
(II) four (4) LIBOR Loan Tranches (if no Conversion Rate Loan Tranche shall be
outstanding), (III) three (3) LIBOR Loan Tranches (if one (1) Conversion Rate
Loan Tranche shall be outstanding), (IV) two (2) LIBOR Loan Tranches (if two (2)
Conversion Rate Loan Tranches shall be outstanding) and (V) one (1) Base Rate
Loan Tranche, in each case, may be outstanding at any time under this Agreement
and the Notes. Each Rate Request will be irrevocable and binding on the
Borrowers. If at any time a Conversion Rate Loan Tranche shall be outstanding,
the aggregate amount of the Loan bearing interest at the Conversion Rate,
including after giving effect to any Advance hereunder, shall at all times
remain equal to the Proportionate Loan Amount. Notwithstanding anything
contained in this Agreement to the contrary, the Borrowers may designate
pursuant to a Rate Request that a portion of the Loan bear interest as a
Conversion Rate Loan Tranche only if a Mortgage Conversion shall have occurred
in accordance with Section 7.1.
(c) Breakage Costs. The Borrowers shall pay directly to a Lender,
immediately upon request such amounts as shall, in the reasonable judgment of
each Lender, compensate it for any Losses incurred by it as a result of (i) any
payment or prepayment (under any circumstances whatsoever, whether voluntary or
involuntary) of any portion of the Loan bearing interest as a LIBOR Loan Tranche
or a Conversion Rate Loan Tranche on a date other than the last day of an
applicable Interest Period, (ii) the conversion (for any reason whatsoever,
whether voluntary or involuntary) of a LIBOR Loan Tranche or a Conversion Rate
Loan Tranche to a Base Rate Loan Tranche with respect to any portion of the Loan
then bearing interest as a LIBOR Loan Tranche or a Conversion Rate Loan Tranche,
as applicable, on a date other than the last day of an applicable Interest
Period, (iii) the failure of all or a portion of an Advance of the Loan which
was to have borne interest as a LIBOR Loan Tranche (including any portion
thereof to bear interest as a Conversion Rate Loan Tranche in accordance with
subsection b above) pursuant to a Rate Request to be made, (iv) the failure of
the Borrowers to borrow in accordance with a Rate Request submitted by it or the
Borrowers' failure to continue or convert a LIBOR Loan Tranche or a Conversion
Rate Loan Tranche in accordance with a Rate Request submitted by it, (v) the
failure of the Borrowers to make a prepayment after the Borrowers have given
notice thereof in accordance with this Agreement or (vi) the early termination
of any swap or other interest rate hedging arrangement, including, without
limitation, any such Losses arising from the reemployment of funds obtained by
it, from fees payable to terminate the deposits from which such funds were
obtained or from reversing any swap or other interest rate hedging arrangements.
Such amounts shall include, without limitation, an amount equal to the present
value (using as a discount rate, the rate at which interest is computed pursuant
to clause (B) below) of the excess, if any, of (A) the amount of interest which
would have accrued at the Adjusted LIBO Rate or the Conversion Rate (as the case
may be) on the amount so prepaid, converted, not advanced, not borrowed, not
continued, not converted or not prepaid, as the case may be, for the period from
the date of the occurrence to the last day of the applicable Interest Period at
the applicable rate of interest for such Loans provided for herein (excluding,
however, the applicable margin included therein, if any) over (B) the amount of
interest (as reasonably determined by such Lender in good faith) which would
have accrued to such Lender on such
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amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. The provisions of this Section shall
survive the repayment of the Loan and the termination of this Agreement (all
amounts payable to the Borrowers pursuant to this subsection 2.2.2(c) are herein
referred to as "Breakage Costs"). Any statement of a Lender setting forth the
determination of the amount of such Breakage Costs shall be conclusive and
binding on the Borrowers absent manifest error. Notwithstanding any contrary
provision contained in this Section 2.2.2(c), Borrowers shall have no liability
to any Lender for Breakage Costs which arise by reason of the failure of such
Lender to act in accordance with the terms of this Agreement.
(d) Increased Costs. If as a result of any Regulatory Change or RBC Change,
in each case which affects similarly situated banks or financial institutions
generally and is not applicable to a Lender primarily by reason of such Lender's
particular conduct or condition:
(i) the basis of taxation of payments to any Lender of the principal of or
interest on the Loan is changed; or
(ii) any reserve, special deposit or similar requirements (other than such
requirements as are taken into account in determining the LIBO Rate) relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities of any Lender is imposed, modified or deemed applicable to any
Lender; or
(iii) any other condition affecting the Loan is imposed on any Lender and
such Lender reasonably determines that, by reason thereof, the cost to such
Lender of making or maintaining the Loan is increased or its rate of return is
reduced, or any amount receivable by such Lender hereunder in respect of any
portion of the Loan is reduced, in each case by an amount deemed by such Lender
to be material (such increases in cost and reductions in amounts receivable
being herein called "Increased Costs"),
then the Borrowers agree that they will pay to such Lender upon that
Lender's request such additional amount or amounts as will compensate such
Lender for such Increased Costs. Agent on behalf of the Lenders will notify the
Borrowers of any event occurring after the date hereof which will entitle any
Lender to compensation pursuant to this Section 2.2.2(d) as promptly as
practicable after it obtains knowledge thereof and such Lender notifies Agent
that it has determined to request such compensation hereunder. Notwithstanding
the foregoing, in no event shall the Borrowers be required to compensate the
Lenders for any portion of the income or franchise taxes of such Lender, whether
or not attributable to payments made by the Borrowers. If any Lender requests
compensation under this Section 2.2.2(d), the Borrowers may, by notice to Agent
or such Lender, require that, and Agent and such Lender, as applicable, shall
(A) furnish to the Borrowers a statement setting forth the basis for requesting
such compensation and the method for determining the amount thereof; (B) convert
the interest rate on the Loan from the Adjusted LIBO Rate or the Conversion
Rate, as applicable, to the Base Rate; and/or (C) designate a different lending
office to maintain its portion of the Loan if such different designation would
avoid, or reduce the amount of, Increased Costs, provided that such designation
does not in any manner limit or disturb the rights of such Lender hereunder or
under any of the other Loan Documents or otherwise be disadvantageous to such
Lender in its sole discretion and provided further that no Lender shall have any
obligation to designate an
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applicable lending office in the United States. As used in this Section
2.2.2(d), the term "Lender" shall mean "Lender or any Person Controlling
Lender." "RBC Change" shall mean (I) any change after the date of this Agreement
in the Risk-Based Capital Guidelines or (II) adoption of or change in any other
law, governmental or quasi-governmental rule, statute, ordinance, order, decree,
injunction, regulation, policy, guideline, interpretation, or directive (whether
or not having the force of law) after the date of this Agreement which affects
the amount of capital required or expected to be maintained by any Lender or any
lending office or any company controlling any Lender. "Risk-Based Capital
Guidelines" means (1) the risk-based capital guidelines in effect in the United
States on the date of this Agreement, including transition rules, and (2) the
corresponding capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices entitled "International Convergence
of Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this Agreement.
Notwithstanding anything to the contrary contained in this Section 2.2.2(d), a
Lender may impose Increased Costs upon the Borrowers only if such Increased
Costs are generally being imposed by such Lender on similarly situated
borrowers.
(e) Lender Conversion to Base Rate. Without limiting the effect of Section
2.2.2(d), in the event that, (i) by reason of any Regulatory Change which
affects similarly situated banks or financial institutions generally and is not
applicable to a Lender primarily by reason of such Lender's particular conduct
or condition, any Lender incurs Increased Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or other
liabilities of such Lender, which includes deposits by reference to which the
LIBO Rate is determined, or (ii) Agent shall have determined that U.S. dollar
deposits in the principal amount of the Loan are not generally available in the
London interbank market, or (iii) Agent shall have determined that reasonable
means do not exist for ascertaining the LIBO Rate, then, if Agent or such Lender
so elects by notice to the Borrowers, the interest rate applicable to the then
outstanding principal balance of the Loan shall be converted to the Base Rate.
As used in this Section 2.2.2(e), the term "Lender" shall mean "Lender or any
Person Controlling Lender." If subsequent to the conversion of the interest rate
to the Base Rate, the event which caused such conversion shall cease to exist,
Agent shall notify the Borrowers of same and the Borrower shall again have the
right to make Rate Requests in accordance with Section 2.2.2(b). Notwithstanding
anything to the contrary contained in this Section 2.2.2.(e), a Lender may not
convert the outstanding principal balance of the Loan to the Base Rate in
accordance with the provisions of this Section 2.2.2.(e) unless conversions of
like kind are generally being imposed by such Lender on similarly situated
borrowers.
(f) Additional Amounts. If the Borrowers are required by law to withhold or
deduct any amount from any payment hereunder in respect of any U.S. Tax, the
Borrowers shall withhold or deduct the appropriate amount, remit such amount to
the appropriate Governmental Authority and pay to the Lenders named herein
and/or to each Person to whom there has been an Assignment of the Loan and who
is not a U.S. Person such additional amounts as are necessary in order that the
net payment of any amount due to such non U.S. Person hereunder after deduction
for or withholding in respect of any U.S. Tax imposed with respect to such
payment (or in lieu thereof, payment of such U.S. Tax by such non U.S. Person),
will not be less than the
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amount stated herein to be then due and payable, provided that the foregoing
obligation to pay such additional amounts shall not apply:
(i) to any payment to Agent unless Agent simultaneously with the execution
and delivery hereof furnishes to the Borrowers a form prescribed by the United
States Internal Revenue Service (currently, Form W-8ECI or Form W-8BEN) wherein
Agent claims entitlement to exemption from U.S. federal withholding tax on all
interest payments hereunder;
(ii) to any payment to any other Person unless such Person (or if such
Person is not the beneficial owner of the relevant Loan, such beneficial owner)
has contemporaneously with its becoming a party to an Assignment, complied with
its obligations under Section 12.23(b);
(iii) to any U.S. Taxes imposed solely by reason of the failure by such
Person (or, if such Person is not the beneficial owner of the relevant Loan,
such beneficial owner) to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of such
Person (or beneficial owner, as the case may be) if such compliance is required
by statute or regulation of the United States of America as a precondition to
relief or exemption from such U.S. Taxes unless such Person is legally unable to
do so;
(iv) with respect to any Person who is a fiduciary or partnership or other
than the sole beneficial owner of such payment, to any U.S. Tax imposed with
respect to payments made under any Notes to a fiduciary or partnership to the
extent that the beneficial owner or member of the partnership would not have
been entitled to the additional amounts if such beneficial owner or member of
the partnership had been the holder of the Notes; or
(v) to any U.S. Tax imposed as a result of any act or omission by a Person
that is a holder or beneficial owner of the Notes that would cause the Person to
be unable to comply with Section 12.23(b).
(g) Evidence of Deduction. Within thirty (30) days after paying any amount
from which it is required by law to make any deduction or withholding, and
within thirty (30) days after they are required by law to remit such deduction
or withholding to any relevant taxing or other authority, the Borrowers shall
deliver to such non U.S. Person reasonably satisfactory evidence of such
deduction, withholding or payment (as the case may be).
(h) Survival. Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.2.2 shall survive the payment in full of principal
and interest hereunder, and the termination of this Agreement.
2.2.3 Default Rate. If a monetary Default or any Event of Default shall
have occurred and is continuing, the Borrowers shall pay interest at the Default
Rate on the outstanding amount of the Loan and accrued but unpaid interest
thereon, upon demand from time
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to time (which interest is payable both before and after any Lender has obtained
a judgment with respect to the Loan), to the extent permitted by applicable law.
Payment or acceptance of the increased rates provided for in this Section 2.2.3
is not a permitted alternative to timely payment or full performance by the
Borrowers and shall not constitute a waiver of any Default or Event of Default
or an amendment to this Agreement or any other Loan Document and shall not
otherwise prejudice or limit any rights or remedies of Agent or any Lender.
2.2.4 Late Payment Premium. The Borrowers shall pay to Agent for the
account of the Lenders a late payment premium in the amount of five percent
(5.0%) of any regular monthly payment of principal or interest under the Loan
made more than five (5) days after the due date thereof, which late payment
premium shall be due with any such late payment. The acceptance of a late
payment premium shall not constitute a waiver of any default then existing or
thereafter arising under this Agreement. Furthermore, Agent's failure to collect
a late payment premium at any time shall not constitute a waiver of Agent's
right to thereafter, at any time and from time to time (including, without
limitation, upon acceleration of the Notes or upon payment in full of the Loan),
collect such previously uncollected late payment premiums or to collect
subsequently accruing late payment premiums.
2.2.5 Illegality. Notwithstanding any other provision of this Agreement, if
a Lender, in the exercise of its reasonable discretion, decides that the
introduction of, or any change in, or in the interpretation of, any law or
regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for such Lender to perform its
obligations or agreements hereunder to fund or maintain LIBOR Loan Tranches or
any Conversion Rate Loan Tranche hereunder: (a) the obligation of such Lender to
make, or to convert any portion of the Loan into, LIBOR Loan Tranches or to make
any Conversion Rate Loan Tranche, as applicable, shall be suspended until such
Lender shall notify the Borrowers that the circumstances causing such suspension
no longer exist and (b) the Borrowers shall forthwith prepay in full all LIBOR
Loan Tranches or any Conversion Rate Loan Tranche then outstanding, as
applicable, together with interest accrued thereon and any costs payable
pursuant to Section 2.2.2(c)(iv), unless the Borrowers, within five (5) Business
Days of notice from the Lender, convert all LIBOR Loan Tranches or any
Conversion Rate Loan Tranche then outstanding, as applicable, into Base Rate
Loan Tranches in accordance with Section 2.2.2.
Section 2.3 Loan Payment.
2.3.1 Monthly Debt Service Payments. From and after the first Advance made
to the Borrowers, and on each and every Interest Payment Date thereafter until
the Debt has been paid in full, the Borrowers shall pay interest in arrears at
the Applicable Interest Rate on the outstanding principal balance of the Loan as
computed in accordance with Section 2.2.2 (the "Monthly Debt Service Payment
Amount").
2.3.2 Payment on Maturity Date. The Borrowers shall repay any and all
outstanding principal indebtedness of the Loan in full on the Maturity Date,
together with all accrued and unpaid interest thereon to (but excluding) the
date of repayment and all other amounts due to the Lenders or Agent hereunder or
under the Notes and the other Loan Documents.
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2.3.3 Making of Payments. Each payment by the Borrowers hereunder or under
the Notes shall be made in funds settled through the New York Clearing House
Interbank Payments System or other funds immediately available to Agent by 11:00
p.m. New York City time, on the date such payment is due and shall be made in
lawful money of the United States of America by wire transfer in federal or
other immediately available funds. Payments of interest and principal in respect
of each such Note shall be made to Agent in respect of such Note (subject to
Sections 2.7 and 2.8) to Agent's account pursuant to the wiring instructions
provided by Agent to the Borrowers (such wiring instructions for Bayerische
Hypo- und Vereinsbank AG shall be: ABA No. 000000000, Account No.
594-012-033-4055-02, Reference: RL/Shelbourne Properties I, II and III,
Attention: Xxxxxxx Xxxxxx). 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. Except as otherwise provided herein, whenever any payment
hereunder or under the Notes shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the first Business Day immediately
prior thereto. Concurrently with making any payment to a Lender hereunder, the
Borrowers shall provide Agent with a notice of such payment. Promptly upon its
receipt of payments by Borrowers hereunder, Agent will cause like funds to be
distributed (a) if such payment by Borrowers is in respect of principal,
interest or any other obligation then payable hereunder and under the Notes to
more than one Lender, to such Lender for the account of their applicable lending
offices ratably, and (b) if such payment by Borrowers is in respect of any
obligation then payable hereunder to one Lender, to such Lender for the account
of its applicable lending office, in each case to be applied in accordance with
this Agreement. Notwithstanding the foregoing, Agent and Lenders hereby
authorize Borrowers to make all payments hereunder directly to Agent and Agent
shall distribute such payments to the Lenders on behalf of Agent in accordance
with the terms of this Agreement. Borrowers shall be under no obligation to see
to the application of such payments.
2.3.4 Application of Payments. Payments made by the Borrowers in respect of
the principal and interest of the Loan shall be applied first to the payment of
interest at the Applicable Interest Rate and other sums due and outstanding
under the Loan Documents, with the remainder of such payment being applied to
the reduction of the outstanding principal balance of the Notes; provided,
however, that notwithstanding any provision hereof to the contrary, following
and during the continuance of an Event of Default, each Lender may apply any
payments received in respect of the Debt in such order, manner and amount as
such Lender in its sole discretion shall determine and Agent may exercise any
remedies available under this Agreement, at law, in equity or otherwise.
2.3.5 No Setoffs. All amounts due hereunder or under the Notes or the other
Loan Documents shall be payable without setoff, counterclaim or any other
deduction whatsoever.
2.3.6 Loan Account. Agent shall maintain a loan account on its books in the
name of the Borrowers in which will be recorded the Loan and all payments and
prepayments of principal of and interest on the Loan (provided that any error in
such loan account shall not in any manner affect the obligations of the
Borrowers to repay the Loan in accordance with the terms of this Agreement, the
Notes and the other Loan Documents, and the Lenders and the Borrowers
acknowledge that Agent's ability to maintain such loan account shall be
dependent
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on, among other things, the Borrowers' accurate reporting of payments made in
accordance herewith and the Lenders' objection to any inaccuracies therein).
Section 2.4 Prepayment.
2.4.1 Permitted Prepayment. Subject to the terms and conditions set forth
in this Section 2.4.1, the Borrowers may prepay the Loan in whole or in part
without penalty or premium (other than Breakage Costs, if applicable) prior to
the Maturity Date (hereinafter, a "Prepayment"), provided that the Borrowers
give an irrevocable written notice of such Prepayment (a "Prepayment Notice") to
Agent not less than thirty (30) Business Days prior to the date on which such
Prepayment is to be made (the "Prepayment Date") specifying (a) the date and
amount of the Prepayment, (b) whether the Prepayment is of a Base Rate Loan
Tranche , a LIBOR Loan Tranche, a Conversion Rate Loan Tranche or a combination
thereof (subject in all cases to Sections 2.2.2 and 2.4.2), and if a combination
thereof, the amount allocable to each and (c) in the case of the Prepayment of a
LIBOR Loan Tranche or a Conversion Rate Loan Tranche, the expiration date of the
applicable Interest Period. Agent shall provide each Lender with written notice
of such Prepayment within one (1) day of receiving the Prepayment Notice from
the Borrowers. A Prepayment of all or any portion of the Loans may be made in
accordance with this Section 2.4.1; provided that: (i) the principal amount of
the Loans prepaid is not less than $1,000,000 (unless such prepayment is in
respect of a Property Disposition in accordance with Section 2.5.1); and (ii) on
the Prepayment Date, the Borrowers shall pay to Agent (A) the amount of the
Prepayment specified in the notice, all accrued and unpaid interest on the
principal amount being prepaid, all other sums then due under the Notes, this
Agreement (including any Breakage Costs, if applicable), and the other Loan
Documents and (B) all reasonable and customary costs and expenses of each Lender
incurred in connection with the Prepayment, including reasonable attorneys' fees
and disbursements. Agent shall not be obligated to accept any Prepayment of the
principal balance of the Notes, or any portion thereof, unless it is accompanied
by all sums due in connection therewith pursuant to the terms hereof.
Notwithstanding the foregoing, the Borrowers shall be entitled to a postponement
or postponements of any Prepayment Date (not to exceed thirty (30) days in the
aggregate) if such Prepayment is made in connection with a Property Disposition,
without penalty to the Borrowers (other than any Breakage Costs in respect of
such Prepayment).
2.4.2 Allocation of Prepayments to Conversion Rate Loan Tranches.
Notwithstanding the foregoing, if the Borrowers shall make any Prepayment
hereunder (whether voluntary or involuntary) at any time during which any
Conversion Rate Loan Tranche shall be outstanding, such Prepayment shall be
applied by Agent such that after giving effect to such Prepayment, the
outstanding principal amount of the Loan allocable to such Conversion Rate Loan
Tranche shall be equal to the Proportionate Loan Amount; provided, however, that
with respect to any Prepayment of the Loan occurring solely as the result of a
Property Disposition of a Conversion Property in accordance with Section 2.5,
such Prepayment shall be applied by Agent to the Conversion Rate Loan Tranche or
portion thereof being prepaid.
2.4.3 Repayment upon Default. If all or any part of the principal amount of
the Loan is prepaid upon acceleration of the Loan following the occurrence of an
Event of Default, the Borrowers shall be obligated to pay all amounts that would
be payable in connection with a prepayment under Section 2.4.1, including all
accrued and unpaid interest on the principal
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balance of the Notes to the date of repayment (including interest owed at the
Default Rate), all other sums then due under the Notes, this Agreement
(including any Breakage Costs, if applicable) and the other Loan Documents, and
all costs and expenses of Agent and any Lender incurred in connection with such
Event of Default, including reasonable attorneys' fees and disbursements.
2.4.4 Involuntary Prepayment. If all or any part of the principal amount of
the Loan is prepaid in connection with the application of Net Proceeds by Agent
pursuant to Section 8.1.4, and if such Prepayment does not occur on an Interest
Payment Date, then if Borrower shall pay to Agent on the date of such
application all interest which would have accrued thereon to the next Interest
Payment Date, such amount prepaid shall be held by Agent as collateral security
for the Loan in an interest bearing Eligible Account at an Eligible Institution
(which may be HypoVereinsbank), with interest accruing on such amount to the
benefit of Borrower, and shall be applied by Lender on the next Interest Payment
Date, with any interest on such funds paid to Borrower on such date so long as
no Event of Default has occurred and is then continuing.
Section 2.5 Disposition of Properties; Additional Properties.
2.5.1 Disposition of Properties. (a) Notwithstanding anything contained in
Section 6.1(i) to the contrary, provided that (i) until such time as all of the
Properties are Conversion Properties, no Material Adverse Change shall have
occurred and (ii) no monetary Default or any Event of Default shall have
occurred and be continuing, the Borrowers shall have the right from time to time
to sell (or cause to be sold) (a "Property Disposition") one or more of the
Properties (each such Property sold as permitted by this Section 2.5.1, a
"Disposed Property") and in connection therewith obtain a release of such
Disposed Property from the Liens of the Loan Documents, upon satisfaction of
each of the following conditions:
(A) the Property Disposition shall constitute a bona fide sale to a Person
which is not a Borrower Affiliate ("Purchaser"), and shall otherwise be on an
arm's-length basis and on commercially reasonable terms;
(B) the Borrowers shall have delivered to Agent written notice of such
proposed Property Disposition fifteen (15) days prior to the effective date of
the Property Disposition (the "Disposition Effective Date"), together with each
of the following items which shall be in both form and substance reasonably
acceptable to Agent: (I) a release of Liens (and related Loan Documents) for
each Disposed Property subject to such Property Disposition (for execution by
Agent on behalf of the Lenders) in appropriate form and all other documentation
that Agent reasonably requires to be delivered by the Borrowers in connection
with such release, (II) a copy of the contract or agreement of sale with respect
to such Property Disposition, and such other documentation and information with
respect to the Property Disposition and the Purchaser as Agent may reasonably
require, all of which shall be certified by the Borrowers as being true, correct
and complete in all material respects and (III) an Officer's Certificate
certifying (1) as to the matters set forth in subsections (E) and (F) below, (2)
that any release of Liens in connection with such Property Disposition will not
impair or otherwise
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adversely affect the Liens, security interests and other rights of Agent or the
Lenders under the Loan Documents not being released (or as to the parties to the
Loan Documents and the Properties subject to the Loan Documents not being
released) and (III) that, other than with respect to the Prepayment required
under Section 2.5.1(a)(D) or any other Prepayment made under this Section
2.5.1(a)(F), all of the conditions to such Property Disposition set forth in
this Section 2.5.1 have been satisfied or will be satisfied as of the
Disposition Effective Date;
(C) the Net Sale Proceeds received by the Borrowers in respect the Property
Disposition shall be in an amount of not less than the aggregate Release Amount
applicable to the Disposed Properties subject to such Property Disposition;
(D) on or prior to the Disposition Effective Date, the Borrowers shall have
(I) subject to Section 2.5.1(b), prepaid the Loan in an amount equal to the
aggregate Release Amount applicable to the Disposed Properties subject to such
Property Disposition (unless (1) an Additional Property shall have been
substituted for such Disposed Property pursuant to a Property Addition in
accordance with Section 2.5.2, and (2) the Additional Property is of reasonably
equivalent value and quality to such Disposed Property as determined by Agent in
its sole discretion), together with all other amounts due in connection with
such Prepayment pursuant to Section 2.4.1 hereof, and (II) complied with the
requirements of Section 2.4.1 with respect to such Prepayment (other than the
requirement to provide Agent with a Prepayment Notice not less than thirty (30)
Business Days prior to the Prepayment Date);
(E) the consummation of the Property Disposition will not violate the terms
of this Agreement or any other Loan Document, including, without limitation, the
representations, warranties and covenants set forth in Articles IV, V and VI
hereof;
(F) after giving effect to the Property Disposition and the Prepayments in
respect thereof, the Debt Yield Maintenance Ratio for the preceding fiscal
quarter for the Properties not subject to the Property Disposition shall not
have been less than the Minimum Debt Yield, provided that Borrowers may,
simultaneously with any prepayment made in accordance with Section 2.5.1(a)(D),
prepay such portion of the Loan as shall be necessary to comply with the
foregoing condition;
(G) with respect to each Disposed Property subject to such Property
Disposition, the parcel or parcels of such Disposed Property to be conveyed in
connection therewith constitute the entire Disposed Property; and
(H) Agent shall have received with respect to each Property Disposition
hereunder, on or prior to the Disposition Effective Date, payment of (A) a
non-refundable administrative fee equal to $7,500 and (B) all customary and
reasonable costs and expenses, including, without limitation, reasonable legal
fees
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and disbursements, incurred by Agent in connection with such Property
Disposition.
(b) Subject to the terms and provisions of Section 2.5.1(c), in connection
with any Property Disposition hereunder, the Borrowers may (in lieu of any
Prepayment of the Loan required under Section 2.5.1(a)(D) above) (i) deposit
with Agent an Acceptable Letter of Credit in a face amount equal to the
aggregate Release Amount applicable to the Disposed Properties subject to such
Property Disposition (each such Acceptable Letter of Credit, a "Disposition
Letter of Credit") or (ii) in the event that any Disposition Letter of Credit
shall be outstanding on or prior to the Disposition Effective Date, deposit with
Agent either (A) a substitute Disposition Letter of Credit (in exchange for the
existing Disposition Letter of Credit then held by Agent) in a face amount equal
to the aggregate Release Amount applicable to all Disposed Properties including
the aggregate Release Amount applicable to such Property Disposition or (B) an
amendment to the existing Disposition Letter of Credit then held by Agent
increasing the face amount thereof by an amount equal to the aggregate Release
Amount applicable to the Disposed Properties subject to such Property
Disposition.
(c) From and after the delivery by the Borrowers to Agent of a Disposition
Letter of Credit, the Borrowers may, at their option, deliver a Prepayment
Notice to Agent pursuant to Section 2.4.1 with respect to all or any portion of
the Disposition Letter of Credit. On or prior to the applicable Prepayment Date,
Agent shall notify the Borrowers whether Agent, upon the applicable Prepayment
Date, will either (i) draw upon the Disposition Letter of Credit to effect the
Prepayment or (ii) upon the payment by the Borrowers of all amounts required to
effect the Prepayment, release and return the Disposition Letter of Credit to
the Borrowers. If Agent elects to draw upon the Disposition Letter of Credit,
then upon the applicable Prepayment Date, Agent is hereby authorized and
directed by the Borrowers to draw upon such Disposition Letter of Credit to
effect such Prepayment. The Borrowers shall in all events be required to comply
with all provisions of Section 2.4 with respect to any Prepayment pursuant to
this Section, including the payment of all amounts contemplated therein. If
Agent elects to release and return the Disposition Letter of Credit, then upon
the applicable Prepayment Date, upon payment by the Borrowers of all amounts
required to effect the Prepayment and compliance by the Borrowers with all the
provisions of Section 2.4 with respect to such Prepayment, Agent shall release
and return the Disposition Letter of Credit to the Borrowers if such Prepayment
is in the full amount of such Disposition Letter of Credit. If such Prepayment
is in an amount which is less than the full amount of such Disposition Letter of
Credit, then upon the applicable Prepayment Date and as a condition to such
Prepayment, the Borrowers shall deliver to Agent a new replacement Disposition
Letter of Credit in the amount of the difference between the original
Disposition Letter of Credit and the amount of such Prepayment. Upon Agent's
receipt of such new replacement Disposition Letter of Credit, it shall release
and return the Disposition Letter of Credit upon the payment by the Borrowers of
all amounts required to effect the Prepayment and compliance by the Borrowers
with all of the provisions of Section 2.4 with respect to such Prepayment.
(d) Notwithstanding anything contained herein to the contrary, in
connection with any Property Disposition hereunder in which one or more of the
Disposed Properties are Core Properties (each, a "Disposed Core Property"),
effective as of the Disposition Effective Date, (i) the Commitments of the
Lenders shall be ratably and permanently reduced in the
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aggregate by an amount equal to the aggregate Release Amounts applicable to the
Disposed Core Properties subject to such Property Disposition, (ii) the Loan
Amount shall be permanently reduced by an amount equal to the aggregate Release
Amounts applicable to the Disposed Core Properties subject to such Property
Disposition, and (iii) the Borrowers shall have no right to reborrow or receive
any Advance by any Lender hereunder of any amount so repaid and prepaid by the
Borrowers pursuant to such Property Disposition of a Core Property. In addition,
if the Borrowers desire to effect a Property Disposition of a Core Property then
(A) the Borrowers shall not have the right to deliver to Agent a Disposition
Letter of Credit in connection with a Property Disposition of a Core Property
and (B) the Borrowers shall be required to effect a Prepayment of the Loan in
the amount of the Release Price of such Core Property as required pursuant to
Section 2.5.1(a)(D).
2.5.2 Addition of Properties.
(a) Notwithstanding anything contained in Section 6.1(i) hereof to the
contrary, provided that (a) no Material Adverse Change shall have occurred and
(b) no monetary Default or any Event of Default shall have occurred and be
continuing, the Borrowers shall have the right from time to time to request
Agent to add, subsequent to a Property Disposition and in replacement of a
Disposed Property (a "Property Addition"), one or more other properties of the
Borrowers as a Property hereunder (each such property approved by Agent and
added as a Property in accordance with this Section 2.5.2, an "Additional
Property"), each of which Property Additions shall be at Agent's sole and
absolute discretion. Notwithstanding the foregoing, an Additional Property shall
be owned by a single member limited liability company organized in the State of
Delaware pursuant to a certificate of formation and operating agreement in the
form approved by Agent in connection with the closing of the Loan (including
with respect to the separateness covenants and other restrictions contained
therein), all of the legal and beneficial interests ("New Borrower Ownership
Interests") of which are owned, directly or indirectly, by one or more Parent
Entities, in which event, effective as of the Addition Effective Date, such
limited liability company shall constitute a Borrower for all purposes hereunder
(a "New Borrower"); provided that (i) the Borrowers shall have complied with all
of the conditions and requirements with respect to the addition of the
Additional Property, including, without limitation, the pledge to Agent of the
New Borrower Ownership Interests pursuant to subsection (c)(ii) below, and (ii)
New Borrower shall have executed and delivered to Agent an assumption or other
agreement in both form and substance satisfactory to Agent in its sole and
absolute discretion whereby such New Borrower covenants and agrees to be bound
by all of the terms and provisions of this Agreement and the other Loan
Documents.
(b) With respect to any proposed Property Addition, the Borrowers shall
deliver to Agent a written request for approval thereof thirty (30) days prior
to the proposed effective date of the Property Addition (the "Addition Effective
Date"), together with each of the following items which shall be in both form
and substance acceptable to Agent in its sole and absolute discretion: (i) an
updated Appraisal of the Properties, (ii) with respect to each proposed
Additional Property (A) an Appraisal, and such other documentation and
information with respect to the proposed Property Addition as Agent may require
in its sole and absolute discretion, including, without limitation, information
with respect to the character, value and financial performance (including,
without limitation, the Net Operating Income, tenant mix, tenant
creditworthiness, projected tenant rollover, deferred maintenance and physical
condition)
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of such proposed Additional Property, all of which information shall be
acceptable to Agent in its sole and absolute discretion, (B) a Title Policy with
respect to such proposed Additional Property, (C) a Survey of such proposed
Additional Property, (D) copies of all Leases applicable to such proposed
Additional Property and a rent roll, in each case, certified to be true,
complete and correct in all material respects, (E) financial statements with
respect to such proposed Additional Property showing the results of operations
thereof and such other matters as required by Agent, certified to be true,
complete and correct, (F) to the extent not previously delivered to Agent, the
Organizational Documents with respect to the Borrower proposed to own such
proposed Additional Property (together with the Organizational Documents of the
constituent entities thereof), and (G) evidence of compliance in all material
respects by the proposed Additional Property with zoning laws and all other
applicable Legal Requirements, (iii) an Officer's Certificate certifying that
the consummation of the Property Addition will not violate the terms of this
Agreement or any other Loan Document, including, without limitation, the
representations, warranties and covenants set forth in Articles IV, V and VI
hereof, and (iv) an administrative fee equal to $10,000, which administrative
fee shall be non-refundable (whether or not Agent approves (in its sole and
absolute discretion) any proposed Property Addition).
(c) Notwithstanding anything contained herein to the contrary, the
effectiveness of any Property Addition approved by Agent (in its sole and
absolute discretion) in accordance with this Section 2.5.2 shall be conditioned
on (i) the execution and delivery by the Borrowers and Agent of modifications
and amendments to this Agreement and the other Loan Documents to reflect such
Property Addition, all of which shall be acceptable to Agent in its sole and
absolute discretion, (ii) to the extent not previously delivered to Agent, a
pledge (in the form of the Pledge Agreement) by the appropriate Parent Entities
and/or other Person to Agent for the benefit of the Lenders of all of their
respective interests in the Borrower proposed to own such proposed Additional
Property, together with any shares, certificates or other indicia of such
ownership interests duly indorsed as required by Agent, and any UCC financing
statements, documents and instruments required by Agent in connection therewith,
all of which shall be acceptable to Agent in its sole and absolute discretion,
and (iii) the receipt by Agent, on or prior to the Addition Effective Date, of
payment by the Borrowers of all reasonable costs and expenses, including,
without limitation, reasonable legal fees and disbursements, incurred by Agent
in connection with the Property Addition. Notwithstanding anything contained
herein to the contrary, in the event that any Additional Property approved by
Agent hereunder (in its sole and absolute discretion) is subject to a mortgage
or a deed of trust in favor of Agent and otherwise satisfies all of the
requirements of a Mortgage Conversion, effective as of the Addition Effective
Date, such Additional Property shall be deemed to be a Conversion Property for
all purposes of this Agreement up to the full extent of the Debt secured by such
mortgage or deed of trust.
(d) Notwithstanding anything contained herein to the contrary, in the event
that Agent elects not to accept any Property Addition proposed by the Borrowers
hereunder, the acquisition of the applicable proposed Additional Property
("Other Property") may be (i) acquired for Cash or (ii) financed with another
lender; provided that (A) the borrower under any such financing (the "Other
Borrower") is a single purpose, bankruptcy remote special purpose entity which
satisfies then-current Rating Agency criteria, all of the legal and beneficial
interests of which are owned, directly or indirectly, by one or more Parent
Entities, (B) the Borrowers shall have delivered to Agent a non-consolidation
and insolvency opinion acceptable to Agent in
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its reasonable discretion, (C) such financing represents purchase money
Indebtedness of such Other Borrower, (D) such financing is fully non-recourse to
such Other Borrower and its Affiliates (including, without limitation, any
Borrower, General Partner or REIT), except that such Other Borrower may deliver
to the holder of a mortgage, deed of trust or other encumbrance with respect to
such financing such Approved Other Guaranties as such holder may require, (E)
the loan to value ratio calculated with respect to such Other Property and such
financing, as determined by Agent in its reasonable discretion, shall not exceed
eighty percent (80%), (F) the Debt Yield Maintenance Ratio calculated with
respect to such Other Property and such financing, as determined by Agent in its
reasonable discretion, shall not be less than eight percent (8%), and (G)
neither such financing nor the incurrence by such Other Borrower of any
Indebtedness in connection with such financing permitted under this Section
2.5.2(d) will impair or otherwise adversely affect the Liens, security interests
and remedies of Agent or the Lenders under the Loan Documents (any Indebtedness
of the Borrowers which satisfies the requirements of this Section 2.5.2(d),
being "Other Property Indebtedness").
(e) In connection with each Property Addition hereunder, Agent shall update
Schedule 1.1(a) to reflect the Allocated Loan Amount and Release Amount for each
Additional Property, which Allocated Loan Amounts and Release Amounts shall be
determined by Agent in its sole and absolute discretion.
(f) Notwithstanding anything contained herein to the contrary, in the event
that any Disposition Letter of Credit shall be outstanding on or prior to the
Addition Effective Date of any Property Addition hereunder, the Borrowers may
deposit with Agent either (i) a substitute Disposition Letter of Credit (in
exchange for the existing Disposition Letter of Credit then held by Agent) in a
face amount equal to the difference between (A) the face amount of the existing
Disposition Letter of Credit and (B) the aggregate Release Amounts for the
Additional Properties subject to such Property Addition as determined by Agent
in accordance with subsection (e) above (such amount, the "Reduced Letter of
Credit Amount") or (B) an amendment to the existing Disposition Letter of Credit
then held by Agent reducing the face amount thereof to the Reduced Letter of
Credit Amount.
(g) The Borrowers acknowledge that the approval by Agent of a Property
Addition is in Agent's sole and absolute discretion which may be granted or
withheld for any or no reason by Agent, regardless of whether such determination
is arbitrary, and that the Borrowers waive any right to claim that Agent was not
reasonable, commercially reasonable or failed to act in good faith in making
such determination regardless of whether the Borrowers have otherwise complied
with the requirements of Section 2.5.2. Borrowers hereby acknowledge that Agent
shall have no obligation to be reasonable, commercially reasonable or otherwise
act in good faith in its determination of whether to approve a Property
Addition.
Section 2.6 Pro Rata Treatment. Except to the extent otherwise provided
herein, the Loan, each payment or prepayment of principal of the Loan and each
payment of interest on the Loan shall be allocated by Agent pro rata among the
Lenders in accordance with their respective Loan Percentages. Borrowers shall be
under no obligation to see to such allocation by Agent.
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Section 2.7 Sharing of Payments. Each Lender agrees that, in the event that
any Lender shall obtain payment in respect of the Loan owing to such Lender
under this Agreement through the exercise of a right of set-off, banker's lien,
counterclaim or otherwise (including, but not limited to, pursuant to the
Bankruptcy Code) in excess of its Loan Percentage as provided for in this
Agreement, such Lender shall promptly notify Agent of such fact and purchase
from the other Lenders a participation in the portion of the Loan held by such
other Lenders, in such amounts and with such other adjustments from time to time
as shall be equitable in order that all Lenders share such payment in accordance
with their respective Loan Percentages as provided for in this Agreement. Each
Lender further agrees that if a payment to a Lender (which is obtained by such
Lender through the exercise of a right of set-off, banker's lien, counterclaim
or otherwise) shall be rescinded or must otherwise be restored, each Lender
which shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrowers
agree that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of the Loan or other obligation in the amount of such
participation. Agent shall keep records (which shall be conclusive and binding
in the absence of manifest error) of participations purchased pursuant to this
Section 2.7 and shall in each case notify the Lenders following any such
purchases. Except as otherwise expressly provided in this Agreement, if any
Lender shall fail to remit to Agent or any other Lender an amount payable by
such Lender to Agent or such other Lenders pursuant to this Agreement on the
date when such amount is due, such payments shall accrue interest thereon, for
each day from the date such amount is due until the day such amount is paid to
Agent or such other Lender, at a rate per annum equal to the Federal Funds Rate.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NO LENDER MAY EXERCISE ANY RIGHT OF
SET-OFF, BANKER'S LIEN, COUNTERCLAIM OR OTHER RIGHT OR REMEDY WITH RESPECT TO
ANY BORROWER, ANY GUARANTOR OR ANY PROPERTY WITHOUT AGENT'S CONSENT, WHICH
CONSENT SHALL BE IN AGENT'S SOLE AND ABSOLUTE DISCRETION.
Section 2.8 Rights and Remedies Against a Defaulting Lender. If and to the
extent that any Lender (the "Defaulting Lender") shall be subject to any
bankruptcy or similar proceeding in which such Lender is a debtor, or fails to
make available to Agent its ratable portion of any Advance to Borrowers pursuant
to Section 3.3 or fails to reimburse Agent pursuant to Section 13.5 for its
ratable portion of any Lender Expenses, Losses and other expenses or amounts
incurred or paid by Agent in connection with the Loan (individually, a
"Deficiency", and collectively, "Deficiencies"), the following shall apply:
(a) If Agent has advanced such amount to the Borrowers, such Defaulting
Lender and the Borrowers severally agree to repay to Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrowers until the date such amount
is repaid to Agent at (i) in the case of Borrower, the Applicable Interest Rate
and (ii) in the case of the Defaulting Lender, 500 basis points (5%) in excess
of the Federal Funds Rate. If such Defaulting Lender shall repay to Agent such
corresponding amount, such amount (excluding interest) so repaid shall
constitute such Defaulting Lender's ratable portion of the Advance and the
Borrowers shall have no further
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obligation to repay such amount forthwith on demand, but such amount shall be
treated as an Advance hereunder. Each of the Lenders agrees that the other
Lenders shall have the right to proceed directly against any Defaulting Lender
in respect of any right or claim arising out of the default of such Defaulting
Lender hereunder. If there shall be a Deficiency in respect of any Lender, the
other Lenders, or any of them, shall have the right, but not the obligation, to
advance all or any part of the ratable portion of an Advance that should have
been made by the Defaulting Lender, and the Defaulting Lender agrees to repay
upon demand to each of the Lenders who has advanced a portion of the Deficiency
the amount advanced on behalf of the Defaulting Lender, together with interest
thereon at the Default Rate. If more than one Lender elects to advance a portion
of the Deficiency such Lenders' advances shall be made based on the relative
ratable shares of the Loan of each advancing Lender or as otherwise agreed to by
such Lenders.
(b) If any Defaulting Lender shall owe a Deficiency to Agent on account of
the failure of such Defaulting Lender to reimburse Agent or such Lender pursuant
to Section 13.5, such Defaulting Lender shall repay to Agent forthwith on demand
such amount together with interest thereon from the date paid by Agent until
such amount is repaid at 500 basis points (5%) in excess of the Federal Funds
Rate.
(c) In the event that, at any time, a Defaulting Lender shall owe a
Deficiency to the Borrowers and the Borrowers shall be required to make any
payment hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrowers may, in addition to any other remedies
available hereunder, at law, in equity or otherwise, so long as no Default or
Event of Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set off and otherwise apply the obligation
of the Borrowers to make such payment to or for the account of such Defaulting
Lender against the obligation of such Defaulting Lender to pay such Deficiency.
In the event that, on any date, the Borrowers shall so set off and otherwise
apply their obligation to make any such payment against the obligation of such
Defaulting Lender to pay any such Deficiency on or prior to such date, the
amount so set off and otherwise applied by the Borrowers shall constitute for
all purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on the date of such setoff at the Base Rate. The
Borrowers shall notify Agent at any time the Borrowers exercise their right of
set-off pursuant to this Section 2.8(c) and shall set forth in such notice (i)
the name of the Defaulting Lender and the Deficiency required to be repaid by
such Defaulting Lender and (ii) the amount set off and otherwise applied in
respect of such Deficiency pursuant to this Section 2.8(c).
(d) In the event that, at any time, any Defaulting Lender shall owe a
Deficiency to Agent or any of the Lenders and the Borrowers shall make any
payment hereunder or under any other Loan Document to Agent for the account of
such Defaulting Lender, then Agent may, to the fullest extent permitted by
applicable law, apply at such time the amount so paid by the Borrowers to or for
the account of such Defaulting Lender to the payment of such Deficiency. Any
such amount so applied by Agent shall be retained by Agent or distributed by
Agent to the Lenders, ratably in accordance with the respective portions of such
Deficiencies payable at such time.
(e) In the event that, at any time, Agent shall be required to pay or
distribute any amount hereunder or under any other Loan Document to or for the
account of a Defaulting
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Lender and at such time such Defaulting Lender shall be subject to a bankruptcy
or similar proceeding in which such Lender is a debtor but shall not owe a
Deficiency, then Agent shall, to the fullest extent permitted by applicable law,
hold in escrow such amount in an account in the name and under the control of
Agent, but subject to the provisions of this Section 2.8(e). The terms
applicable to such account, including the rate of interest payable with respect
to the credit balance of such account from time to time, shall be the depository
bank's standard terms applicable to escrow accounts maintained with it. Any
interest credited to such account from time to time shall be held by Agent in
escrow under, and applied by Agent from time to time in accordance with the
provisions of, this Section 2.8(e). Agent shall, to the fullest extent permitted
by applicable law, apply all funds so held in escrow from time to time to the
extent necessary to make any Advances required to be made by such Defaulting
Lender and to pay any amount payable by such Defaulting Lender hereunder and
under the other Loan Documents to Agent or any other Lender, as and when such
Advances or amounts are required to be made or paid. In the event that any
Lender that is a Defaulting Lender shall, at any time, cease to be a Defaulting
Lender, any funds held by Agent in escrow at such time with respect to such
Lender shall be distributed by Agent to such Lender and applied by such Lender
to the obligations owing to such Lender at such time under this Agreement and
the other Loan Documents.
(f) The rights and remedies against a Defaulting Lender under this Section
2.8 are in addition to any other rights and remedies, at law, in equity or
otherwise that the Borrowers may have against such Defaulting Lender with
respect to any Deficiency and that Agent or any Lender may have against such
Defaulting Lender with respect to any Deficiency.
(g) The failure of any Lender to pay any Deficiency shall not relieve any
other Lender of its obligation, if any, hereunder to make its ratable portion of
the Advance on the date of such Advance or its ratable portion of any amount
payable under Section 13.5, but no Lender shall be responsible for the failure
of any Lender to make its ratable portion of the Advance or other amount to be
made or paid by such other Lender on the date of any Advance or other payment,
as the case may be; provided, however, that the Lenders shall be obligated to
fund the balance of the then current Advance (i.e., excluding the Deficiency) in
the manner required hereunder, subject, however, to the following sentences. In
the event the following occurs, the Lenders, in the sole discretion of Agent,
shall have the right to make no further Advances (other than the then current
Advance) under the Loan: (i) any and all Deficiencies in respect of prior
Advances made more than thirty (30) days prior to the current Advance have not
been funded by (A) the Defaulting Lender(s) responsible therefor, (B) one or
more of the other Lenders or (C) the Borrowers with their own equity, and (ii)
the Deficiency shall exceed the greater of (I) $500,000 and (II) fifteen percent
(15%) of the Advance to be funded. In such event, the Loan Amount shall be
permanently reduced by any and all Deficiencies unless and until funded as
provided in subsection (A), (B) or (C) above or a substitute lender, reasonably
acceptable to the Lenders other than the Defaulting Lender(s), pays such
Deficiency(ies). If pursuant to this Section, the Lenders are not obligated to
make an Advance, Agent may nonetheless make a determination that Lenders shall
make such Advances and all the Lenders shall be bound by such determination.
(h) Notwithstanding anything to the contrary contained herein, for as long
as a Lender is a Defaulting Lender, such Lender shall have no right to consent
to any action with respect to the Loan hereunder requiring the consent of any
Lender, and for purposes of
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determining how many or which Lenders constitute the Required Lenders for
purposes of approving any action by Agent, the portion of the outstanding
principal amount of the Loan allocated to any Defaulting Lender shall be
disregarded for such determination.
Section 2.9 Commitment Fee. The Borrowers shall pay to Agent for the
account of the Lenders ratably in proportion to their respective Commitments, an
annual commitment fee ("Commitment Fee") in quarterly amounts equal to the
product of (i) the average daily difference during the three (3) month period
immediately preceding the due date of the Commitment Fee installment (each such
three-month period being the "Commitment Fee Quarterly Period") between (A) the
aggregate amount of the Commitments and (B) the outstanding principal balance of
the Loan, multiplied by (ii) the Commitment Fee Multiplier. The Commitment Fee
shall be payable by the Borrowers quarterly, in arrears, on the first Business
Day of each April, July, October and January during the term of the Loan and on
the earlier of (i) the date all of the Commitments have been terminated and (ii)
the Maturity Date.
Section 2.10 Fees Non-refundable. All fees set forth in Sections 2.5, 2.9
and 7.1 hereof and in the Fee Letter shall be deemed to have been earned on the
date payment is due in accordance with the provisions hereof and thereof and
shall be non-refundable. The obligation of the Borrowers to pay such fees in
accordance with the provisions hereof shall be binding upon the Borrowers and
shall inure to the benefit of Agent and the Lenders regardless of whether any
Advances are actually made.
Section 2.11 Illinois Properties. The Borrowers shall, within one
hundred-twenty (120) days subsequent to the date hereof, cause an Illinois Event
to occur. If an Illinois Event has not occurred within one hundred-twenty (120)
days subsequent to the date hereof, then upon such date (a) the Commitments of
the Lenders shall be ratably and permanently reduced in the aggregate by the
Illinois Amount, (b) the Loan Amount shall be permanently reduced by the
Illinois Amount and (c) the Borrowers shall have no right to reborrow or receive
an Advance by any Lender hereunder of the Illinois Amount. The failure of
Borrowers to cause an Illinois Event to occur within one hundred-twenty (120)
days subsequent to the date hereof shall not constitute a Default or Event of
Default hereunder.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to the initial Advance of the Loan. The
obligation of each Lender to make the initial Advance of the Loan is subject to
the satisfaction of each of the following conditions precedent not later than
the Closing Date:
(a) Representation and Warranties; Covenants; Compliance with Conditions.
Each of the representations and warranties of each Borrower contained in this
Agreement or any other Loan Document shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and as
of such date, and no Default or Event of Default shall have occurred and be
continuing, and each Borrower shall be in compliance in all material respects
with all material terms, covenants and conditions set forth in this Agreement
and in each other Loan Document on its part to be observed or performed.
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(b) Loan Agreement and Notes. Agent shall have received originals of this
Agreement and the Notes, in each case duly executed and delivered on behalf of
each Borrower that is a party thereto.
(c) Loan Documents; Title Policies; Reports; Leases.
(i) Pledge Agreement. Agent shall have received from the Borrowers (A)
the Pledge Agreement, duly executed by the Borrowers, together with all
appropriate documentation and instruments in order to effectively pledge
the Collateral to Agent for the ratable benefit of the Lenders, and (B) the
appropriate UCC financing statements in form satisfactory for filing in the
appropriate public records, so as to effectively create upon such filing a
valid, enforceable and perfected first priority Lien on the Collateral in
favor of Agent for the ratable benefit of the Lenders.
(ii) Other Loan Documents. Agent shall have also received duly
executed by the Borrowers counterparts of the Environmental Indemnity, the
Cash Management Agreement and each of the other Loan Documents.
(iii) Title Policies. Agent shall have received a Title Policy of
recent date with respect to each Property reasonably satisfactory to Agent,
together with legible copies of all documents and instruments referenced as
exceptions therein.
(iv) Survey. Agent shall have received for its review a Survey of
recent date with respect to each Property reasonably satisfactory to Agent.
(v) Insurance. Agent shall have received valid certificates of
insurance for the Policies reasonably satisfactory to Agent, and evidence
of the payment of all premiums then due and payable for the existing policy
period. Such certificates shall indicate that Agent for the benefit of the
Lenders is named as an additional insured, and shall contain a loss payee
endorsement in favor of Agent on behalf of the Lenders with respect to the
Policies.
(vi) Environmental Reports. Agent shall have received the
Environmental Reports with respect to each Property which shall be
reasonably satisfactory to Agent.
(vii) Zoning. Agent shall have received evidence reasonably
satisfactory to Agent that each Property complies with applicable Legal
Requirements.
(viii) Material Agreements. Agent shall have received true and
complete copies of all Material Agreements which shall be reasonably
satisfactory to Agent.
(ix) Operating Agreements. Agent shall have received true and complete
copies of all Operating Agreements which shall be reasonably satisfactory
to Agent.
(x) Search Reports. Agent shall have received search reports
satisfactory to it with respect to UCC financing statements, tax liens,
bankruptcy, pending litigation and judgment searches conducted by a search
firm reasonably acceptable to Agent with respect to the Properties and
Borrower Affiliates in such jurisdictions as Agent shall have
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requested. Agent hereby approves either Corporation Service Company or
National Corporate Research, Ltd. as acceptable search firms for purposes
hereof.
(xi) Engineering Report. Agent shall have received an Engineering
Report with respect to each Property reasonably satisfactory to Agent.
(d) Organizational Documents. Each Borrower Affiliate shall have delivered
or caused to be delivered to Agent copies of all Organizational Documents
related to each Borrower Affiliate and/or the incorporation, formation,
organization, structure, existence, good standing and/or qualification to do
business (except in such jurisdictions where the failure to be so qualified
would not reasonably be expected to have a Material Adverse Effect) as Agent may
request in its reasonable discretion, in each case, certified by an officer or
other authorized Person of such Borrower Affiliate or, where appropriate, by
public officials, including, without limitation, good standing certificates,
qualifications to do business in the appropriate jurisdictions, resolutions
authorizing the Loan, incumbency certificates and evidence of such other
corporate proceedings as Agent may reasonably request.
(e) Opinions of Counsel. Agent shall have received legal opinions from
counsel reasonably satisfactory to Agent in form, scope and substance reasonably
satisfactory to Agent and Agent's counsel.
(f) No Material Adverse Change. As of the Closing Date, no event,
condition, occurrence or circumstance has occurred which constitutes, or is
reasonably likely to result in, a Material Adverse Effect (a "Material Adverse
Change").
(g) Operating Agreement Estoppels. Agent shall have received an executed
estoppel letter from each party to an Operating Agreement, which shall be in
form and substance reasonably satisfactory to Agent.
(h) Appraisals. Agent shall have received an Appraisal with respect to each
Property indicating a ratio of the Loan Amount to the aggregate market value of
the Properties (based on the stabilized values) of not greater than 37.5%.
(i) Financial Statements. Agent shall have received financial statements of
each Borrower Affiliate for the most recent published fiscal quarter ending
prior to the Closing Date, all of which statements shall be (i) in the form
provided to Agent in connection with the underwriting of the Loan and (ii)
otherwise satisfactory to Agent and accompanied by an Officer's Certificate
certifying that each such financial statement presents fairly the financial
condition or operating results of such Borrower Affiliate and has been prepared
in accordance with GAAP, as applicable.
(j) Consents, Licenses, Approvals, Etc. Agent shall have received copies or
other evidence of all material waivers, consents, licenses and approvals, if
any, required in connection with the execution, delivery and performance by the
Borrowers of the Loan Documents, and such waivers, consents, licenses and
approvals shall be in full force and effect in all material respects.
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(k) Closing Statement. Agent shall have received a fully executed
counterpart of the Loan closing statement prepared by Agent, duly executed by
the Borrowers.
(l) No Injunction; Litigation. No Legal Requirements shall have been
adopted and no order, judgment or decree of any Governmental Authority shall
have been issued, 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 transactions contemplated hereby. Except for the Icahn Litigation, no
litigation shall be pending or threatened which in the good faith judgment of
Agent is likely to result in a Material Adverse Effect.
(m) Payments by the Borrowers. The Borrowers shall have paid all Lender
Expenses.
(n) Additional Information. Agent shall have received such other
information and documentation with respect to the Borrowers, the other Borrower
Affiliates, the Properties and the transactions contemplated herein as Agent may
reasonably request, such information and documentation to be reasonably
satisfactory in form and substance to Agent.
(o) Site Inspections. Agent shall have performed or caused to be performed
on its behalf, on-site due diligence reviews of the Properties, satisfactory to
Agent in its sole discretion.
(p) Leases. Agent shall have received copies of all the Leases, accompanied
by an Officer's Certificate certifying that to the knowledge of the Borrowers
such copies are true, correct, accurate and complete.
(q) Tenant Estoppel Certificates. Agent shall have received an estoppel
certificate executed by each Tenant under a Lease listed on Schedule 4.1(e).
(r) Telephonic Notice Agreement. The Borrowers shall have executed and
delivered to Agent that certain telephonic notice agreement.
(s) Property Management Agreement; Consent of Manager. Agent shall have
received a copy of each Initial Property Management Agreement duly executed by
the applicable Parent Entity and the Initial Property Manager together with a
Manager's Consent duly executed by the Property Manager, each of which shall be
in form and substance reasonably satisfactory to Agent.
(t) Fees. Borrower shall have paid all fees under the Fee Letter, the
Commitment Fees and any other reasonable fees due to Agent and its Affiliates
upon the closing of the Loan.
Section 3.2 Conditions Precedent to All Advances of the Loan. The
obligation of each Lender to make any Advance (including the initial Advance) of
the Loan is subject to the satisfaction of the following conditions precedent in
addition to the satisfaction on the Closing Date of the conditions set forth in
Section 3.1:
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(a) Notice of Borrowing. The Borrowers shall have executed and delivered to
Agent a Notice of Borrowing complying with the provisions of this Agreement,
which shall constitute the Borrowers' representation and warranty to the Lenders
that, immediately before and after giving effect to the Advance: (i) the Loan
Documents are in full force and effect, (ii) the Loan Documents constitute the
valid and binding obligations of each Borrower party thereto, enforceable
against such Borrower in accordance with their respective terms, (iii) no
Borrower has any offsets, counterclaims or defenses with respect to the payment
of the Loan or with respect to the Loan Documents or the Borrowers' respective
obligations and liabilities under the Loan Documents, (iv) all of the
representations and warranties made by the Borrowers contained in the Loan
Documents and otherwise made with respect to the Loan (including, without
limitation, those set forth in Article IV of this Agreement) remain true and
correct in all material respects on and as of the date of such Advance (except
to the extent that any such representation or warranty (A) expressly relates
only to an earlier date in which case such representation or warranty shall be
true and correct in all material respects as of such earlier date, or (B) may no
longer be true due to a change in circumstances which neither constitutes nor
evidences a Default, an Event of Default or a Material Adverse Change), (v) to
the best of the Borrowers' knowledge, no Default or Event of Default has
occurred and is continuing, and (vi) each Borrower continues to be in compliance
with all of the other material terms, covenants and conditions contained in this
Agreement and the other Loan Documents.
(b) Debt Yield Maintenance Ratio. Immediately before and after giving
effect to the Advance, the Debt Yield Maintenance Ratio shall not be less than
the Minimum Debt Yield.
(c) Performance; No Default. (i) Each Borrower shall have performed and
complied with all terms and conditions herein required to be performed or
complied with by it at or prior to the date of such Advance, (ii) on the date of
such Advance, there shall exist no Default or Event of Default and (iii) no
Event of Default shall have occurred more than twice prior to the date of such
Advance (regardless of whether any such Event of Default or Events of Default
had been cured prior to such date).
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(d) Loan Documents. The Loan Documents shall be in full force and effect,
and the Pledge Agreement and the UCC financing statements shall constitute a
valid, enforceable and perfected first priority Lien on the Collateral in favor
of Agent for the ratable benefit of the Lenders.
(e) Representations and Warranties. The representations and warranties made
by the Borrowers in the Loan Documents or otherwise made by or on behalf of the
Borrowers or any other Borrower Affiliate in connection therewith or after the
date thereof shall have been true and correct in all material respects on the
date on which made and shall continue to be true and correct in all material
respects on, and as of, the date of such Advance (except to the extent that any
such representation or warranty (i) expressly relates only to an earlier date in
which case such representation or warranty shall be true and correct in all
material respects as of such earlier date, or (ii) may no longer be true due to
a change in circumstances which neither constitutes nor evidences a Default, an
Event of Default or a Material Adverse Change).
(f) Other Documents. The Borrowers shall have delivered such other
documents and certificates as Agent or its counsel may reasonably request.
(g) Fees and Expenses. Each Borrower shall have paid all fees, expenses and
other charges then payable by it hereunder or under any other Loan Document.
(h) No Material Adverse Change. Since the date of the preceding Advance (or
in the case of the initial Advance, since the date hereof) no Material Adverse
Change shall have occurred.
(i) Loan Amount. After giving effect to the Advance, the outstanding
principal balance of the Loan will not exceed the lesser of (i) the Total
Available Commitments and (ii) the Loan Amount.
(j) Title Policies. The Borrowers shall have delivered to Agent such
updated reports and continuations to the Title Policies delivered by the
Borrowers in connection with the Loan which are acceptable to Agent in its
reasonable discretion and which contain no Encumbrances other than Permitted
Encumbrances.
Section 3.3 Method of Disbursement of Loan Amount. Each Lender severally,
but not jointly, agrees to make its ratable share of Advances for the Loan,
subject to the following procedures:
3.3.1 Notice of Borrowing. The Borrowers shall submit to Agent a request
for an Advance (substantially in the form attached hereto as Exhibit 3.3.1) (a
"Notice of Borrowing") not less than six (6) Business Days prior to the date
upon which an Advance of the Loan is requested (the "Borrowing Date") and no
more frequently than once in each calendar month. Each Notice of Borrowing shall
be (a) for an Advance of not less than $1,000,000, (b) executed by an authorized
officer or authorized representative of each Parent Entity, and (c) accompanied
by a Borrowing Certificate in the form attached hereto as Exhibit 3.3.1(c) and
such other information and documents as may reasonably be requested or required
by Agent.
3.3.2 Procedure of Advances. (a) Not later than two (2) Business Days prior
to the Borrowing Date with respect to any Advance, Agent shall deliver written
notice to each Lender at the address specified by such Lender from time to time
which notice shall include the Borrowing Date and such Lender's ratable share of
such Advance. The Lenders shall make the requested Advance on the Borrowing Date
so long as all conditions to such Advance are satisfied as reasonably determined
by Agent or are waived by Agent. Unless otherwise notified by Agent, each Lender
may assume that all conditions to such Advance are satisfied on the Borrowing
Date.
(b) Not later than 10:30 A.M., New York City time, on the Borrowing Date
with respect to any Advance, each Lender shall make available for the account of
Agent at its address referred to in Section 12.5, in same day funds, such
Lender's ratable portion of such Advance. After Agent's receipt of such funds
and upon fulfillment of the applicable conditions in Sections 3.1 and 3.2, Agent
will make such funds available to the Borrowers in accordance with the terms of
this Section 3.3.
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(c) Unless Agent shall have received notice from a Lender prior to the date
of any Advance that such Lender will not make available to Agent such Lender's
ratable portion of such Advance, Agent may assume that such Lender has made such
portion available to Agent on the date of such Advance in accordance with
Section 3.3.2(b), and Agent may, in reliance upon such assumption, make
available to the Borrowers on such date a corresponding amount.
3.3.3 Funds Advanced. The proceeds of Advances shall be made by Agent by
wire transfer to an account of or as directed by the Property Owners to be
designated by the Borrowers in the applicable Notice of Borrowing. Borrowers
acknowledge and agree that all Advances hereunder shall only be made to or as
directed by the Property Owners.
3.3.4 Advances Do Not Constitute a Waiver. No Advance shall constitute a
waiver of any of the conditions of the Lenders' obligation to make further
Advances nor, in the event the Borrowers are unable to satisfy any such
condition, shall any Advance have the effect of precluding Agent from thereafter
declaring such inability to be an Event of Default hereunder.
3.3.5 Conditions Precedent. Agent shall not be obligated to make any
disbursement of the Loan unless Agent is reasonably satisfied that the
conditions precedent to the making of such disbursement, as set forth in this
Agreement, have been satisfied by the Borrowers.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
Section 4.1 Representations and Warranties of the Borrowers. Except as
otherwise disclosed in the Reports, each Borrower represents and warrants to
Agent and the Lenders on behalf and in respect of itself and each other Borrower
that, as of the Closing Date:
(a) Organization. Each Borrower Affiliate has been duly incorporated,
formed or organized, as the case may be, and is validly existing and is in good
standing with requisite power and authority to own its property and to transact
the businesses in which it is now engaged. Each Borrower Affiliate is duly
qualified to do business and is in good standing in each jurisdiction where it
is required to be so qualified in connection with its businesses, operations,
and properties, including the Properties, except where the failure to be so
qualified would not reasonably be expected to have a Material Adverse Effect.
(b) Proceedings. All necessary action has been taken by each Borrower
Affiliate to authorize the execution, delivery and performance of this Agreement
and the other Loan Documents to which it is a party. This Agreement and other
Loan Documents have been duly authorized, executed and delivered by each
Borrower Affiliate which is a party hereto or thereto.
(c) No Conflicts. The execution, delivery and performance of this Agreement
and the other Loan Documents to which each Borrower is a party will not conflict
with or result in a breach of any of the material terms or provisions of, or
constitute a default under, or result in the creation or imposition of any Lien
(other than pursuant to the Loan Documents) upon any Property or assets pursuant
to the terms of, any indenture, mortgage, deed of trust, the loan
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agreement, partnership agreement, trust agreement or other material agreement or
instrument to which it or any of its Affiliates is a party or by which it or any
of its Affiliates' properties or assets is subject, nor will such action result
in any violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
it or any of its Affiliates' properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by it of this Agreement or any other Loan
Documents to which it is a party has been obtained and is in full force and
effect in all material respects. (d) Litigation. Except as disclosed on Schedule
4.1(d), there are no actions, suits or proceedings at law, in equity or
otherwise by or before any Governmental Authority or other agency now pending
or, to Borrowers' knowledge, threatened against or affecting any Borrower
Affiliate that is reasonably likely to have a Material Adverse Effect on any
Property or any Borrower Affiliate's ability to perform its obligations
hereunder.
(e) Leases. No person has any possessory interest in the Properties or
right to occupy the same except under and pursuant to the provisions of the
applicable Leases, and true and complete copies of all Leases have been
delivered to Agent (and any Leases executed and delivered after the Closing Date
shall promptly be delivered to Agent). With respect to each Lease in effect as
of the date hereof and (upon execution thereof) each future Lease, the
applicable Borrower will be the sole owner of the lessor's interest therein. As
to all Leases:
(i) except as disclosed in Schedule 4.1(e)(i), there are no
outstanding landlord obligations with respect to tenant allowances or free
rent periods or tenant improvement work; all of the obligations and duties
of landlord under the Leases that are due or are to be performed (as
applicable) on or prior to the date hereof have been fulfilled, and there
are no pending claims asserted by any Tenant for offsets or abatements
against rent or any other monetary claim;
(ii) except as disclosed on Schedule 4.1(e)(ii), no brokerage or
leasing commission or other compensation is or will be due or payable to
any person, firm, corporation or other entity with respect to or on account
of the current term of any of the Leases, other than in connection with (A)
the leasing of any space pursuant to a right of first offer or first
refusal or other right or option expressly set forth in the Lease, the
effective date of which has not occurred as of the date hereof or (B) the
failure timely to exercise, or the expiration of, any right to terminate or
cancel any of the Leases;
(iii) Schedule 4.1(e)(iii) sets forth all security deposits and
letters of credit held by or on behalf of any Borrower Affiliate under the
Leases; all such security deposits held by any Borrower Affiliate are held
in accordance with the terms of the applicable Leases; and any security
deposits or letters of credit which have previously been drawn upon and/or
applied have been redeposited with such Borrower Affiliate such that such
Borrower Affiliate is currently holding all security deposits and letters
of credit required under the applicable Leases prior to a default
thereunder;
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(iv) No Borrower Affiliate has given or suffered any present
assignment, pledge or Encumbrance in respect of any of the Leases or its
interests thereunder, except pursuant to the Loan Documents, and each
Borrower has the sole right to collect Rents and other amounts due under
its respective Leases;
(v) Except as disclosed in Schedule 4.1(e)(v), (A) no Tenant is more
than thirty (30) days in arrears on its rent or other amounts due to the
landlord under its Lease and (B) the Leases are in full force and effect
and there are no material non monetary defaults thereunder by either party
thereto and to the best of its knowledge there are no conditions that, with
the passage of time or the giving of notice, or both, would constitute a
material non monetary default thereunder;
(vi) Except as disclosed on Schedule 4.1(e)(vi), none of the Leases
contains any option to purchase, any right of first refusal or right of
first offer to purchase or any right to terminate the Lease term (except in
the event of the condemnation or destruction of all or a portion of the
applicable Property, as more specifically set forth in the Leases); and
(vii) Schedule 4.1(e)(vii) sets forth a schedule of all Leases of each
Property as of the date hereof, which schedule is true, complete and
correct in all material respects, and which schedule sets forth the name of
the Tenant, the Lease expiration date and base or fixed rent payable under
each of such Leases.
(f) Title. Each Borrower has good and indefeasible title in fee to each
Property owned by it (as such ownership is reflected on Schedule A hereto, which
sets forth a true, correct and complete schedule of each Borrower's ownership
interest in the Properties as of the date hereof), in each case free and clear
of all Liens whatsoever except customary utility easements which do not
materially and adversely affect the value of such Property, the Permitted
Encumbrances and such other Liens as are permitted pursuant to the Loan
Documents. The Permitted Encumbrances do not and would not constitute, result
in, or cause a Material Adverse Effect or materially adversely affect or
interfere with the value, or current use or operation, of the applicable
Property, or the Borrowers' ability to repay the Note or any other Loan Document
in accordance with the terms of the Loan Documents. There are no claims for
payment for work, labor or materials affecting any Property (other than
mechanic's or materialmen's liens for work or materials performed or supplied
the costs for which are not yet past due or which are being contested in
accordance with Section 5.1(b)(ii)).
(g) No Bankruptcy Filing; Solvency. None of the Borrower Affiliates is
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of its assets or property, or
has knowledge of any Person contemplating the filing of any such petition
against a Borrower Affiliate, and each of the Borrower Affiliates is, and after
consummation of the transactions contemplated by this Agreement, will be
Solvent.
(h) Full and Accurate Disclosure. No information contained in this
Agreement, the other Loan Documents, or any written statement furnished by or on
behalf of any Borrower Affiliate pursuant to the terms of this Agreement
contains any untrue statement of a
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material fact or omits to state a material fact necessary to make the statements
contained herein or therein, taken as a whole, not misleading in light of the
circumstances under which they were made. There is no fact or circumstance
presently known to the Borrowers which has not been disclosed to Agent and which
is reasonably likely to have a Material Adverse Effect.
(i) Compliance with ERISA. There are no Plans, Pension Plans or
Multiemployer Plans with respect to any member of any ERISA Group with respect
to any Borrower Affiliate. No Borrower Affiliate has incurred any withdrawal
liability under Part I of Subtitle E of Title IV of ERISA with respect to a
Multiemployer Plan, nor has any Borrower Affiliate received any notification
that any Multiemployer Plan is in reorganization or has been terminated within
the meaning of Title IV of ERISA.
(j) Compliance. Each Borrower and each Property, and the use thereof,
comply in all material respects with all applicable Legal Requirements. No
Property's compliance with Legal Requirements is due to a non conforming use or
legal non conforming use (except to the extent that the same would not affect in
any material respect the operation, maintenance, value or use of such Property
in question or the ability to reconstruct such Property). None of the Borrower
Affiliates is in default or violation of any order, writ, injunction, decree,
judgment, directive or demand of any Governmental Authority. There has not been
committed by or on behalf of any Borrower or, to the Borrowers' knowledge, any
other Person in occupancy of or involved with the operation or use of any
Property any act or omission affording any Governmental Authority the right of
forfeiture as against such Property or any part thereof or any monies paid in
performance of its obligations under any of the Loan Documents.
(k) Contracts; Agreements. Except as set forth in Schedule 4.1(k), there
are no Material Agreements. Each Material Agreement, Property Management
Agreement, Advisory Agreement and Operating Agreement has been entered into at
arm's length in the ordinary course of business by or on behalf of it or has
otherwise been approved by Agent and provides for the payment of fees in amounts
and upon terms not less favorable to it than market rates and terms. Each of the
Material Agreements, Property Management Agreements, Advisory Agreements and
Operating Agreements to which a Borrower Affiliate is a party as of the date
hereof is the legal, valid and binding obligation of such Borrower Affiliate,
and to the Borrowers' knowledge, each other party thereto, and enforceable
against each Borrower Affiliate , and to Borrowers' knowledge, each other party
thereto, subject in each case to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; there are no
defaults, breaches or violations thereunder by any Borrower Affiliate or, to
Borrowers' knowledge, any other party thereto, and to Borrowers' knowledge,
there are no conditions (other than payments that are due but not yet delinquent
and other non delinquent executory obligations) that, with the passage of time
or the giving of notice, or both, would constitute a default by any party
thereunder. Neither the execution and delivery by any Borrower of the Loan
Documents, its performance thereunder, nor the exercise of any remedies by
Agent, will materially adversely affect its rights under any of the Material
Agreements, the Property Management Agreements, the Advisory Agreements or
Operating Agreements to which it is a party.
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(l) Financial Information. All financial statements prepared by or on
behalf of the Borrowers, the REITS and the General Partners and delivered to
Agent prior to the date hereof, (i) are true, complete and correct in all
material respects, to the extent not subsequently corrected in a written
document delivered to Agent, (ii) accurately represent in all material respects
the financial condition or operating results of the Borrowers, the REITS or the
General Partners, as applicable, as of the date of such reports, and (iii) have
been prepared in accordance with GAAP. None of the Borrowers, the REITS or the
General Partners has any material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, that are known to it, except as referred to or
reflected in said financial statements and operating statements.
(m) Condemnation. No Condemnation has been commenced or, to the Borrowers'
knowledge, is thereafter contemplated with respect to all or any portion of any
Property or for the relocation of roadways providing access to any Property.
(n) Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of purchasing or acquiring any "margin stock" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
or for any other purpose which would be inconsistent with such Regulation U or
any other Regulations of such Board of Governors, or for any purposes prohibited
by Legal Requirements or by the terms and conditions of this Agreement or the
other Loan Documents.
(o) Utilities and Public Access. Each Property has rights of access to
dedicated public ways (and makes no material use of any means of access or
egress that is not pursuant to such dedicated public ways or recorded,
irrevocable rights-of-way or easements) and is served by water, steam, electric,
telephone, sewer, sanitary sewer and storm drain facilities adequate to service
such Property for its current uses. All public utilities reasonably necessary
for the full use and enjoyment of any Property are located in the public
right-of-way abutting such Property or in or through a recorded irrevocable
easement in favor of such Property, and all such utilities are connected so as
to serve such Property without passing over other property, except to the extent
that such utilities are accessible to such Property by virtue of a recorded
irrevocable easement, applicable Legal Requirement or similar agreement or
right. All roads necessary for the use of any Property for its current purposes
have been completed and are either part of such Property (by way of deed or
recorded easement) or dedicated to public use and accepted by all Governmental
Authorities.
(p) Not a Foreign Person. Neither it nor any of its Subsidiaries is a
"foreign person" within the meaning of Section 1445(f)(3) of the Code.
(q) Physical Condition. Except as disclosed in the engineering reports
listed on Schedule 4.l(q), each Property, including all Improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components (subject to reasonable wear and tear), is in good condition, order
and repair in all respects material to the use, operation or value of such
Property. Except as disclosed in such engineering reports, there exist no
structural or other material defects or damages in such Property, whether latent
or otherwise, which will materially impair the value of
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or the annual Net Operating Income from such Property. No Borrower Affiliate has
received notice from any insurance company or bonding company of any defects or
inadequacies in any Property or any part thereof, which is reasonably likely,
alone or in the aggregate, to materially, adversely affect the insurability of
the same or cause the imposition of increased premiums or charges thereon or of
any termination or threatened termination of any policy of insurance or bond.
(r) Basic Carrying Costs, Assessments. All Basic Carrying Costs due and
payable as of the date hereof in respect of each Property have been paid, and
there are no pending or proposed special or other assessments for public
improvements or other material matters affecting any Property.
(s) Enforceability. Each Loan Document to which each Borrower is a party is
a legal, valid and binding obligation, enforceable against such Borrower in
accordance with its terms, subject only to bankruptcy, insolvency and similar
laws affecting the enforcement of the rights or remedies of creditors generally
and/or equitable principles of general application. The Loan Documents are not
subject to any right of rescission, set-off, counterclaim or defense by any
Borrower, including the defense of usury, nor would the operation of any of the
terms of the Loan Documents, or the exercise of any right thereunder, render the
Loan Documents unenforceable, subject to laws affecting the enforcement of the
rights or remedies of creditors generally and/or equitable principles of general
application, and no Borrower has asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.
(t) No Prior Assignment. There are no Transfers of the Leases or any
portion of the Rents due and payable or to become due and payable which are
presently outstanding.
(u) Insurance. Each Borrower has obtained and has delivered to Agent the
Policies or certificates thereof reflecting the insurance coverages, amounts and
other requirements set forth in this Agreement. All Insurance Premiums have been
paid for the current policy period. No claims have been made under any such
policy, and no Person, including any of the Borrower Affiliates, has done, by
act or omission, anything which could or might impair the coverage of any such
policy.
(v) Certificate of Occupancy; Licenses. Each Borrower Affiliate has
obtained all material Permits required by, and have accomplished all material
filings, notifications, registrations and qualifications with (or obtained
exemptions from any of the foregoing from), any Governmental Authority to
properly and legally own, manage and operate each Property and reasonably
necessary for the conduct of its business. Each Permit has been duly obtained,
is valid and in full force and effect, and is not subject to any pending or, to
the Borrowers' knowledge, threatened proceeding of any Governmental Authority to
revoke, cancel or declare such Permit invalid in any respect. No Borrower
Affiliate is in default or violation with respect to any Permit in a manner that
would or is likely to result in a Material Adverse Effect, and no event has
occurred which constitutes, or with due notice or lapse of time or both is
reasonably likely to constitute, a default by such Borrower Affiliate under, or
a violation of, any Permit that would or is likely to result in a Material
Adverse Effect.
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(w) Flood Zone. No Property is located in an area identified by the Federal
Emergency Management Agency or the Federal Insurance Administration as an area
having special flood hazards (Zone A), and, to the extent that any part of any
Property is located in an area identified by the Federal Emergency Management
Agency as an area federally designated a "100 year flood plain," such Property
is covered by flood insurance meeting the requirements set forth in Section
8.1.1(b)(i).
(x) Survey. All of the Improvements relating to each Property lie as
depicted on the Surveys and the Surveys accurately reflect the physical location
of all Improvements and easements as depicted therein.
(y) Filing and Recording Taxes. All transfer taxes, deed stamps, intangible
taxes or other amounts in the nature of transfer taxes required to be paid by
any Person under applicable Legal Requirements currently in effect in connection
with the Transfer of any Property to a Borrower have been paid in full. All
stamp, intangible or other similar tax required to be paid by any Person under
applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents and the Liens intended to be created
thereby, have been paid.
(z) Taxes. Each Borrower Affiliate has filed, or caused to be filed, all
material tax returns (federal, state, local and foreign) required to be filed
and paid all amounts of taxes shown thereon to be due (including interest and
penalties) and has paid all other taxes (including intangible fees, assessments
and other governmental charges taxes) owing (or necessary to preserve any Liens
in favor of Agent), by it, except for such taxes as are not yet delinquent.
There are no proposed material tax assessments against any Borrower Affiliate.
No extension of time for assessment or payment by any Borrower Affiliate of any
federal, state or local tax is in effect.
(aa) Investment Company Act. No Borrower Affiliate nor any of its
Subsidiaries is (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended; or (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.
(bb) Fraudulent Transfer. None of the Borrowers (i) has entered into the
Loan or any Loan Document with the intent to hinder, delay, or defraud any
creditor and (ii) has received reasonably equivalent value in exchange for its
obligations under the Loan Documents. Giving effect to the transactions
contemplated by the Loan Documents, the fair saleable value of each Borrower's
assets exceeds and will, immediately following the execution and delivery of the
Loan Documents, exceed its total liabilities, including subordinated,
unliquidated, disputed or contingent liabilities. The fair saleable value of
each Borrower's assets is and will, immediately following the execution and
delivery of the Loan Documents, be greater than its probable liabilities,
including the maximum amount of its contingent liabilities or its debts as such
debts
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become absolute and matured. Each Borrower's assets do not and, immediately
following the execution and delivery of the Loan Documents will not, constitute
unreasonably small capital to carry on its business as conducted or as proposed
to be conducted. No Borrower intends to incur debts and liabilities (including
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 its obligations).
(cc) Ownership. Set forth on Schedule 4.1(cc) is a true, accurate and
complete depiction of the ownership structure of the Borrower Affiliates,
including the direct and indirect ownership interests in each Borrower.
(dd) Illegal Activity. None of the Borrower Affiliates has purchased any
portion of any Property with proceeds of any illegal activity, and none of the
Properties is subject to forfeiture or confiscation by any Governmental
Authority as the result of the violation by any Borrower Affiliate of applicable
Legal Requirements, including, without limitation, the anti-money laundering
laws and regulations of the USA Patriot Act of 2001.
(ee) Consents. No consent, approval, authorization or order of, or
qualification with, any court or Governmental Authority is required in
connection with the execution, delivery or performance by any Borrower of this
Agreement or the other Loan Documents to which it is a party that has not be
obtained.
(ff) Environmental Matters. Except as otherwise disclosed in the Reports
(including in the Environmental Reports listed on Schedule 4.1(ff)):
(i) Each Property is in compliance in all material respects with all
applicable Environmental Laws (which compliance includes, but is not
limited to, the possession by the applicable Borrower of all Permits
required in connection with the ownership and operation of each Property
under all Environmental Laws).
(ii) There is no Environmental Claim pending or, to the Borrowers'
knowledge, threatened against any Borrower Affiliate or any Property.
(iii) There are no present Releases of any Hazardous Substance that
are reasonably likely to form the basis of any Environmental Claim.
(iv) Without limiting the generality of the foregoing, there is not
present at, on, in or under any Property, PCB-containing equipment,
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
lead-based paint.
(v) No Liens are presently recorded with the appropriate land records
under or pursuant to any Environmental Law with respect to any Property and
no Governmental Authority has been taking or is in the process of taking
any action to subject any Property to Liens under any Environmental Law.
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(vi) There have been no material environmental investigations,
studies, audits, reviews or other analyses conducted by any Borrower
Affiliate or that are in any Borrower Affiliate's possession in relation to
any Property which have not been made available to Agent.
(gg) Sharing Agreements. Except for the Operating Agreements set forth on
Schedule 4.1(gg), there are no joint services or other similar sharing
agreements relating to any of the Properties.
(hh) REIT Status. Each REIT is qualified and intends to continue to qualify
as a real estate investment trust under the Code.
(ii) Business Loan. The Borrowers acknowledge that the Loan is a business
loan and no portion of the proceeds of the Loan will be used for personal,
family or household purposes.
(jj) Subsidiaries. Set forth on Schedule 4.1(jj) is a complete and accurate
list of all Subsidiaries of each REIT, Borrower and Consolidated Subsidiary,
which Schedule includes (i) jurisdiction of incorporation, formation or
organization and (ii) with respect to any Subsidiary which is not a wholly owned
subsidiary, the number of shares of each class of Capital Stock outstanding, the
number and percentage of outstanding shares of each class owned (directly or
indirectly) by such Subsidiary, and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all other
similar rights with respect thereto. The outstanding Capital Stock of all such
Subsidiaries is validly issued, fully paid and non-assessable and is owned by
the applicable REIT, Borrower or Consolidated Subsidiary free and clear of all
Liens (other than those arising under or contemplated by the Loan Documents).
Other than as set forth in Schedule 4.1(jj), no Subsidiary has outstanding any
securities convertible into or exchangeable for its Capital Stock nor does any
Person have outstanding any rights to subscribe for or to purchase or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to its Capital Stock.
(kk) Assets. None of the Parent Entities, General Partners, REITs,
Intermediate Entities or Property Owners own any assets (exclusive of Cash and
non-material personal property) other than (i) in the case of such Parent
Entities, their respective interests as members or partners, as applicable, in
the Property Owners (or in the Intermediate Entities), (ii) in the case of such
General Partners, their respective interests as general partners of such Parent
Entities, (iii) in the case of such REITs, their respective interests as limited
partners of such Parent Entities and their respective interests as members or
stockholders, as applicable, of such General Partners, (iv) in the case of the
Intermediate Entities, their respective interests as members or partners as
applicable, in the Property Owners and (v) in the case of the Property Owners,
their respective interests in the fee simple ownership of the Properties.
Section 4.2 Survival of Representations. The parties hereto agree that all
of the representations and warranties set forth in Section 4.1 hereof and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any portion of the Debt is outstanding. All representations, warranties,
covenants and agreements made in this
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Agreement or in the other Loan Documents by any Borrower shall be deemed to have
been relied upon by Agent and the Lenders notwithstanding any investigation
heretofore or hereafter made by Agent, the Lenders or on behalf of Agent or the
Lenders.
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1 Affirmative Covenants with Respect to the Borrowers. Except as
otherwise expressly agreed to in writing by Agent or expressly waived in writing
by Agent, the Borrowers hereby covenant and agree, jointly and severally, with
Agent and the Lenders as set forth below in this Article V. Except as otherwise
expressly agreed to in writing by Agent or expressly waived in writing by Agent,
with respect to each covenant of the Borrowers set forth below relating to any
or all of the Properties, each Borrower which is a Parent Entity shall be deemed
to covenant and agree to cause the respective Property Owners to take the action
or actions required by such covenant.
(a) Existence; Compliance with Legal Requirements. Each Borrower shall use
its best efforts to do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence, rights, Permits and
franchises, and, subject to the rights of the Borrowers under Section
5.1(b)(ii), comply in all respects with all Legal Requirements applicable to it
and the Properties. At all times, each Borrower shall maintain and preserve the
Properties and shall keep, and cause to be kept, each Property in good working
order and repair, reasonable wear and tear excepted, and from time to time make,
or cause to be made, all reasonably necessary and desirable repairs, renewals,
replacements, betterments and improvements thereto. Each Borrower shall operate,
maintain, repair and improve the Properties in compliance with all applicable
Legal Requirements, and will not cause or allow the same to be misused or wasted
or to deteriorate. Promptly upon receipt thereof (but in any event within five
(5) Business Days), each Borrower shall deliver, or cause to be delivered, to
Agent copies of any and all notices received by it or by any other Borrower
Affiliate from any licensing and/or certifying agencies that any material
license or permit relating to the operation of any of the Properties is being
suspended or revoked or that any investigation or proceeding with respect to any
such action is pending.
(b) Taxes and Other Charges; Contest for Taxes and Other Charges, Legal
Requirements and Liens. (i) Subject to the provisions of Section 5.1(b)(ii),
each Borrower shall pay, or cause to be paid, all Taxes and Other Charges now or
hereafter levied or assessed or imposed against each Property or any part
thereof prior to the date on which such sums become delinquent. Each Borrower
shall deliver or cause to be delivered to Agent, upon reasonable request,
receipts for payment or other evidence reasonably satisfactory to Agent that the
Taxes and Other Charges have been so paid. Subject to the provisions of Section
5.1(b)(ii) and other than Permitted Encumbrances, the Borrowers shall not suffer
and shall promptly pay and discharge, or cause to be paid and discharged, any
Lien whatsoever that may be or become a Lien against any Property, and the
Borrowers shall promptly pay, or cause to be paid, all utility services provided
to such Property. Subject to the provisions of Section 5.1(b)(ii), the Borrowers
shall pay, bond or otherwise discharge, or cause to be paid, bonded or
discharged, from time to time when the same shall become due, all claims and
demands of mechanics,
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materialmen, laborers and others that, if unpaid, might result in, or permit the
creation of, a Lien on the Properties, or on the Rents arising therefrom.
(ii) Notwithstanding the foregoing, after prior written notice to
Agent, any of the Borrowers, at its own expense, may contest by appropriate
legal, administrative or other proceeding, promptly initiated and conducted
in good faith and with due diligence, the amount or validity or application
in whole or in part of any Taxes or Other Charges or Lien therefor or any
Legal Requirement or Insurance Requirement or the application of any
instrument of record affecting any Property or any part thereof (other than
the Loan Documents) or any claims or judgments of mechanics, materialmen,
suppliers, vendors or other Persons or any Lien therefor, and may withhold
payment of the same pending such proceedings if permitted by law; provided
that (A) no Event of Default has occurred and remains uncured, except for,
prior to acceleration, a Default caused by the matter being contested, (B)
such proceeding shall suspend any collection of the contested Liens (other
than Taxes or Other Charges) from the applicable Property or Borrower and
from Agent, and with respect to Taxes or Other Charges, Borrower shall have
paid same pending the resolution of such proceeding to the extent required
in order for Borrower to pursue such proceeding, (C) such proceeding shall
be permitted under and be conducted in accordance with the provisions of
any other instrument to which the applicable Borrower is subject and shall
not constitute a default thereunder, (D) neither the applicable Property
nor any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, canceled or lost during such contest, (E) to the
extent not already bonded or otherwise deposited or paid in connection with
such proceedings, such Borrower shall have furnished Agent with security
(in an amount reasonably approved by Agent) to insure the payment of any
such Taxes or Other Charges, or the cost of the contested Legal Requirement
or Insurance Requirement or the removal of the Lien, in each case together
with all reasonably anticipated interest and penalties thereon, (F) in the
case of an Insurance Requirement, failure to comply therewith shall not
impair the validity of any insurance required to be maintained by any
Borrower or the right to full payment of any claims thereunder, (G) in the
case of any essential or significant service with respect to any Property,
any contest or failure to pay will not result in a discontinuance of any
such service, (H) in the case of any instrument of record affecting any
Property or any part thereof, the contest or failure to perform under any
such instrument shall not result in the placing of any Lien on such
Property or any part thereof, (I) neither the failure to pay or perform any
obligation which is permitted to be contested under this Section nor an
adverse determination of any such contest shall result in a Material
Adverse Effect, and (J) such Borrower shall promptly upon final
determination thereof pay the full amount of any such Taxes, Other Charges
or Liens, together with all costs, interest and penalties that may be
payable in connection therewith.
(iii) If any Borrower shall fail, within sixty (60) days after
becoming aware of any matter referenced in Section 5.1(b)(ii), to either
(A) discharge (or cause to be discharged), or (B) contest (or cause to be
contested) the same and give (or cause to be given) security or indemnity
in the manner provided in clause (b)(ii) above, or having commenced (or
caused the commencement of) a contest of the same, and having given (or
having caused to be given) such security or indemnity, shall fail to
prosecute (or shall fail to cause to be prosecuted) such contest with
diligence, or upon adverse conclusion of
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any such contest, to satisfy and release (or to cause to be satisfied and
released) any judgment, decree and Lien, then and in any such event Agent
upon prior notice to the Borrower (except if an Event of Default has
occurred and is continuing, whereupon no notice shall be required), may, at
its election (but shall not be required to), procure the release and
discharge of any such claim and any judgment, Lien or decree thereon and,
further, may in its sole discretion effect any settlement or compromise of
the same, and any amounts so expended by Agent, including premiums paid or
security furnished in connection with the issuance of any surety company
bonds, shall be deemed to constitute disbursement of the proceeds of the
Loan hereunder. In settling, compromising or discharging any such claim or
Lien, Agent shall not be required to inquire into the validity or amount of
any such claim or Lien.
(c) Litigation. Promptly after having knowledge thereof, Borrower shall
give written notice to Agent of any litigation or governmental proceedings
pending or threatened in writing against it or against or affecting any of the
Properties or any Borrower Affiliate which is not covered by insurance or that,
if determined adversely to it or any such Property, is reasonably likely to
result in a Material Adverse Effect.
(d) Inspection. Subject to the rights of Tenants under the Leases, Borrower
shall permit agents, representatives and employees of Agent to inspect the
Properties, including, without limitation, to perform appraisals, engineering
and environmental inspections thereof, on any Business Day at reasonable
business hours upon reasonable advance notice.
(e) Notice of Default. It shall promptly advise Agent (i) of any change in
the condition (financial or otherwise) of any Borrower that is reasonably likely
to have a Material Adverse Effect or materially impair such Borrower's ability
to comply with its obligations under any Loan Document, or (ii) of the
occurrence of any Default or Event of Default.
(f) Cooperate in Legal Proceedings. Except for any proceeding brought by
Agent, any Lender or any of their respective Affiliates against the Borrowers,
each Borrower shall reasonably cooperate fully with Agent with respect to any
proceedings before any Governmental Authority that may in any way affect the
rights of any Lender or Agent hereunder or any rights obtained by any Lender or
Agent under any of the other Loan Documents and, in connection therewith, shall
permit any Lender or Agent, at its election, to participate in any such
proceedings.
(g) Further Assurances. Each Borrower shall, at its sole cost and expense:
(i) furnish, or cause to be furnished to Agent all instruments,
documents, 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 by
any Borrower pursuant to the terms of the Loan Documents or reasonably
requested by Agent in connection therewith;
(ii) execute and deliver to Agent such documents, instruments,
certificates, assignments and other writings, and do, or cause to be done
such other acts reasonably necessary to evidence, preserve and/or protect
the Lien of Agent for the benefit of the
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Lenders at any time securing or intended to secure the obligations of any
Borrower under the Loan Documents, as Agent may reasonably require; and
(iii) do and execute, or cause to be done and executed 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 Agent shall reasonably require
from time to time.
Without limiting the foregoing, in the event that (A) the complaint with
respect to the Icahn Litigation shall be amended by the plaintiffs thereto to
seek (I) monetary damages in any material amount (whether specified or
unspecified and whether in lieu of or in addition to any other remedy or
remedies set forth therein) against Borrower or any other Borrower Affiliate or
(II) any other relief which, in Agent's reasonable determination, is likely (if
the Icahn Litigation were determined adversely to any defendant) to result in
either (1) a Lien on all or any portion of any Collateral, any Property or any
other assets of any Borrower or any other Borrower Affiliate or (2) a judgment
against any Borrower or any other Borrower Affiliate; or (B) Agent shall
otherwise determine that the Icahn Litigation is reasonably likely to materially
affect or otherwise impair any Lien granted by, or any right or remedy of Agent
or any Lender under, this Agreement or any other Loan Document, the Borrowers
hereby agree, at the request of Agent, promptly to execute and deliver or
otherwise provide to Agent such documents, instruments, reports, legal opinions,
financing statements, title insurance and other deliveries, and to pay such
amounts, as would be required in connection with a Mortgage Conversion with
respect to all of the Properties in accordance with Section 7.1.
(h) Financial Reporting and Other Information. (i) Financial Records. Each
Parent Entity will keep and maintain or will cause to be kept and maintained on
a Fiscal Year basis, in accordance with GAAP, to the extent applicable, proper
and accurate books, records and accounts reflecting all of the financial affairs
and all items of Operating Income, Operating Expenses and Capital Expenditures,
in each case, with respect to such Parent Entity and each Property Owner owned
by such Parent Entity. Agent or any Lender shall have the right, upon reasonable
request, from time to time at all times during normal business hours to examine
such books, records and accounts at the office of any Parent Entity or other
Person maintaining such books, records and accounts and to make such copies or
extracts thereof, as Agent shall reasonably require. From and after the
occurrence and during the continuance of an Event of Default, each such Borrower
shall pay, or cause to be paid, any reasonable third party costs and expenses
incurred by Agent or any Lender to examine its accounting records with respect
to the Properties, as Agent shall reasonably determine to be necessary or
appropriate. Notwithstanding anything contained herein to the contrary, if at
any time any Other Borrower or any Other Property shall exist, all of the
financial and other information and deliveries required to be delivered to Agent
under this Section 5.1(h) shall, in addition to being provided with respect to
each Parent Entity, be provided with respect to each Other Borrower.
(ii) Annual Financial Statements. Each Parent Entity shall furnish or
cause to be furnished to Agent within one hundred twenty (120) days
following the end of each Fiscal Year, a complete copy of its annual
financial statements, audited by a "Big Five" accounting firm or another
independent certified public accounting firm reasonably acceptable to
Agent, in accordance with GAAP, together with an audit certificate from
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such accounting firm, for such Fiscal Year and containing a balance sheet,
income statement and cash flow statement for such Parent Entity and
statements of profit and loss, all in such detail as Agent may reasonably
request. Such annual financial statements shall be accompanied by (A) an
Officer's Certificate from the Person submitting such statements certifying
(I) that each such annual financial statement presents fairly, in all
material respects, the financial condition and results of operation of the
applicable Properties covered thereby being reported upon and has been
prepared in accordance with GAAP and (II) reaffirming the truth and
accuracy of the representations and warranties made by the Borrowers in
Section 4.1(kk), or if an Other Borrower or New Borrower has been created
and/or Other Property or Additional Property has been acquired as permitted
hereunder, identifying the same and restating and reaffirming such
representations and warranties, as restated to include such Other Borrower,
New Borrower, Other Property or Additional Property (as applicable) and (B)
a management report from each Borrower in form and substance reasonably
satisfactory to Agent, discussing the reconciliation between the financial
statements for such Fiscal Year and the applicable annual Budget. Together
with each Parent Entity's annual financial statements, each Parent Entity
shall furnish to Agent on behalf of the Lenders (I) an Officer's
Certificate of such Parent Entity certifying as of the date thereof
whether, to such Parent Entity's knowledge, there exists a Default or Event
of Default, and if one exists, the nature thereof, the period of time it
has existed and the action then being taken to remedy the same; and (II) an
annual report, for the most recently completed Fiscal Year, containing: (1)
Capital Expenditures made with respect to each Property covered thereby
during such Fiscal Year, including separate line items with respect to any
Capital Expenditure in excess of $50,000, (2) leasing and occupancy levels
for each Property covered thereby (including a then-current occupancy
report as at the end of such Fiscal Year together with rentable square
footage rental rates), and (3) a statement of Net Operating Income for the
fourth calendar quarter of such Fiscal Year for each Property covered
thereby.
(iii) Quarterly. Each Parent Entity shall furnish, or cause to be
furnished, to Agent on or before the forty-fifth (45th) day after the end
of each of the first three (3) fiscal quarters of each Fiscal Year, the
following items, accompanied by an Officer's Certificate of such Parent
Entity, certifying (A) that such items are true, correct, accurate and
complete in all material respects and fairly present the financial
condition and results of the operations of such Parent Entity and the
Properties covered thereby in a manner consistent with GAAP (subject to
normal year-end adjustments and the absence of footnotes), and (B)
reaffirming the truth and accuracy of the representations and warranties
made by the Borrowers in Section 4.1(kk), or if an Other Borrower or New
Borrower has been created and/or Other Property or Additional Property has
been acquired as permitted hereunder, identifying the same and restating
and reaffirming such representations and warranties, as restated to include
such Other Borrower, New Borrower, Other Property or Additional Property
(as applicable) to the extent applicable:
(A) quarterly and year-to-date unaudited financial statements
prepared for such fiscal quarter with respect to such Parent Entity,
including a balance sheet, income statement and cash flow statement
for such quarter and a statement of Net Operating Income for each
Property covered thereby, in the aggregate for such fiscal quarter in
such detail as is reasonably acceptable to Agent;
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(B) within twenty (20) days after the end of each such fiscal
quarter, on a Property by Property basis, monthly occupancy reports,
leasing status reports, tenant receivable report, current rent roll,
and unaudited operating statements, all in form reasonably
satisfactory to Agent and in the form customarily prepared by the
Property Manager; and
(C) an Officer's Certificate of such Parent Entity certifying (I)
as of the date thereof whether to such Parent Entity's knowledge,
there exists a Default or an event of Default, and if such Default or
Event of Default exists, the nature thereof, the period of time it has
existed and the action being taken to remedy the same, and (II)
compliance with the Minimum Debt Yield for such quarter, and setting
forth the calculation thereof.
(iv) Monthly. Each Borrower shall furnish, or cause to be furnished,
to Agent on or before the twentieth (20th) day after the end of each
calendar month, any written notice received by any Borrower Affiliate from
any Tenant or a Person representing any Tenant threatening nonpayment of
Rent or other material default, alleging or acknowledging a default by the
landlord, requesting a termination, or any other similar written
correspondence received by any Borrower Affiliate during such month,
accompanied by an Officer's Certificate of such Borrower, certifying that
such items are true, correct, accurate and complete.
(v) Budget. The Borrowers shall prepare and deliver to Agent, on or
before the thirtieth (30th) day prior to the commencement of each Fiscal
Year a Budget in respect of the Properties for such Fiscal Year which shall
be approved by Agent, which approval shall not be unreasonably withheld. If
any Borrower materially modifies or amends such Budget after delivery to
Agent, such Borrower shall provide a written copy of such modified or
amended Budget to Agent which shall be approved by Agent, which approval
shall not be unreasonably withheld. Until such Budget or amendment thereto
is approved by Agent, the Borrowers shall comply with the previously
approved Budget; provided, however, that the Borrowers shall be permitted
to expend sums consistent with the previously approved Budget which do not
exceed 103% of any line item of such previously approved Budget until such
Budget or amendment thereto is approved by Agent.
(vi) REIT Information. Subject to Section 12.26, the Borrowers shall
furnish, or cause to be furnished to Agent promptly after the sending or
filing thereof, copies of all (A) proxy statements, financial statements
and reports which any REIT or any Affiliate thereof sends to its respective
shareholders, and (B) regular, periodic and special reports, and all
registration statements which any REIT or any Affiliate thereof files with
the Securities and Exchange Commission or any Governmental Authority which
may be substituted therefor, or with any national securities exchange.
(vii) Additional Information. The Borrowers shall furnish, or cause to
be furnished to Agent within ten (10) Business Days after request, such
further detailed information with respect to the operation of any Property
and the financial affairs of the Borrowers as may be reasonably requested
by Agent.
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(viii) Delivery of Notices. The Borrowers shall furnish, or cause to
be furnished to Agent on behalf of Lenders, promptly after receipt, a copy
of any notice received by or on behalf of any Borrower Affiliate from any
Governmental Authority having jurisdiction over the Properties with respect
to a condition existing or alleged to exist or emanate therefrom or thereat
which if adversely determined would or is likely to have a Material Adverse
Effect.
(ix) Right to Audit. Agent shall have the right to audit the financial
information provided by the Borrowers pursuant to the terms of this
Agreement in accordance with the then customary audit policies and
procedures of Agent. Agent shall pay for the costs of such auditors;
provided, however, that if (A) such audit shall have been commenced during
an Event of Default or (B) such audit reveals a material discrepancy from
the information previously provided by any Borrower to Agent, the Borrowers
shall pay the reasonable cost and expenses of such audit.
(x) Electronic Delivery. At Agent's reasonable request, the Borrowers
shall cause any of the reports delivered pursuant to this Section 5.1(h) to
also be delivered on a computer diskette.
(i) Business and Operations; Material Agreements. Each Borrower shall
continue to engage in the businesses currently conducted by it as and to the
extent the same are reasonably necessary for the ownership, maintenance,
management and operation of the Properties. Each Borrower shall qualify to do
business and remain in good standing under the laws of each jurisdiction as and
to the extent the same are required for the ownership, maintenance, management
and operation of the Properties, except where the failure to be so qualified and
in good standing would not reasonably be expected to have a Material Adverse
Effect. Each Borrower shall, and shall cause each Borrower Affiliate to, at all
times (A) maintain the Properties or cause such Properties to be maintained
consistent with commercially reasonable customs and practices in the areas in
which the Properties are located (subject to normal wear and tear), and with the
commercially reasonable customs and practices found in the management and
operation of office buildings, retail facilities, mixed use facilities or
industrial facilities, as applicable, similar to the Properties; (B) maintain
such Permits, or arrangements in connection therewith, so as to permit each
Property to be maintained at the commercially reasonable standards of similar
facilities located near such Property; (C) promptly perform and/or observe in
all material respects all of the covenants and agreements required to be
performed and observed by it under each Property Management Agreement, Advisory
Agreement and any other Material Agreement, and do all things reasonably
necessary to preserve and to keep unimpaired its rights thereunder; (D) promptly
notify Agent in writing of its receipt or delivery of any notice of any default
sent by any party under any Material Agreement, including, without limitation,
each Property Management Agreement and Advisory Agreement; and (vi) promptly
enforce the performance and observance of all of the material covenants and
agreements required to be performed and/or observed by the other party under
each Material Agreement, including, without limitation, each Property Management
Agreement and Advisory Agreement.
(j) Title to the Properties. Each Borrower shall warrant and defend against
the claims of all Persons whomsoever the title to each Property and every part
thereof.
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(k) Estoppel Statement. (i) After written request by Agent, the Borrowers
shall within ten (10) Business Days furnish Agent with a statement, duly
acknowledged and certified, setting forth (A) the unpaid principal amount of the
Notes, (B) the Applicable Interest Rate, (C) the date installments of interest
and/or principal were last paid, (D) any offsets or defenses to the payment of
the Debt, (E) that the Notes, this Agreement, the Pledge Agreement and the other
Loan Documents are valid, legal and binding obligations of the Borrowers and
have not been modified or, if modified, giving particulars of such modification,
and (F) such other matters as Agent may reasonably request. Any prospective
purchaser of any interest in the Loan shall be permitted to rely on such
certificate. The Borrowers shall request and use reasonable good faith efforts
to obtain for Agent, upon request, estoppel certificates from any Tenant in the
form reasonably required by Agent.
(l) No Joint Assessment. None of the Borrowers shall suffer, permit or
initiate the joint assessment of any of the Properties (i) with any other
Property or any other real property constituting a tax lot separate from any of
the Properties, and (ii) unless required by applicable Legal Requirement, with
any portion of any of the Properties that may be deemed to constitute personal
property, or any other procedure whereby the Lien of any taxes that may be
levied against such personal property shall be assessed or levied or charged to
any of the Properties.
(m) Leasing Matters. (i) Borrowers shall not, and shall not permit the
Property Manager to, materially amend, modify, supplement, restate, extend,
terminate, accept a surrender of or otherwise change (or permit any of the
foregoing actions to be taken with respect to) any existing Major Lease),
without Agent's consent, which consent (subject to compliance by the Borrowers
with the provisions of subsection (iii) below) shall not be unreasonably
withheld, conditioned or delayed if such Major Lease continues to satisfy the
Leasing Criteria. Notwithstanding the foregoing, Agent's consent shall not be
required in connection with a termination by any Borrower of a Lease if such
termination is in connection with any material default by the Tenant thereunder.
(ii) The Borrowers shall not, and shall not permit the Property
Manager to, enter into any Major Lease without Agent's consent. Agent's
consent to a Major Lease shall not be unreasonably withheld (subject to
compliance by the Borrowers with the provisions of subsection (iii) below)
if:
(A) all other requirements and conditions set forth in this
Section 5.1(m) are satisfied;
(B) the Major Lease is on a standard lease form which is
customary for the applicable Property and its location (or if the
Tenant is a nationally recognized retail Tenant, then on such standard
form which such Tenant requires on a national basis);
(C) Agent has been provided such information as Agent shall
reasonably require regarding the financial status, creditworthiness
and reputation of the Tenant under such Major Lease and has approved
same in its reasonable discretion; and
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(D) the Major Lease complies with the Leasing Criteria.
(iii) With respect to all Leases, or any amendment, modification,
supplement, restatement, extension, termination, surrender or change of any
thereof (collectively, "Lease Amendment") which require Agent's prior
approval pursuant to this Section 5.1(m), the Borrowers shall deliver to
Agent via a nationally recognized overnight courier for overnight delivery,
either (A) an execution copy of any such Lease, or any such Lease
Amendment, and, in the case of Leases, together with a blacklined version
thereof marked to show changes from any standard lease form which may have
been previously approved by Agent (each, a "Lease Approval Request") in
accordance with Section 5.1(m)(v) below, or (B) a term sheet in
substantially the form of Schedule 5.1(m) hereto setting forth the
information required thereby with respect to any such proposed Lease, or
any Lease Amendment (the "Term Sheet"), together with all materials,
financial statements and any other information (and in such detail) as
reasonably requested by Agent in order to evaluate the proposed Lease, or
any Lease Amendment to which the Term Sheet relates (each, a "Term Sheet
Approval Request") in accordance with Section 5.1(m)(iv) below.
(iv) Each Term Sheet Approval Request submitted to Agent by the
Borrowers pursuant to Section 5.1(m)(iii) shall contain a legend on the top
of the cover page thereof, which legend shall be in boldface type and in a
font size of not less than 20 points, stating that Agent's failure to
respond to the Term Sheet Approval Request within fifteen (15) days shall
be deemed to be an approval by Agent, pursuant to Section 5.1(m) of this
Agreement, of the specific terms set forth in the Term Sheet with respect
to the Lease, or any Lease Amendment to which such Term Sheet Approval
Request relates. In the event that Lender fails to provide a Response (as
hereinafter defined) to the Borrowers within fifteen (15) days of Agent's
receipt of a Term Sheet Approval Request, the Borrowers shall send to Agent
a Final Notice (as hereinafter defined). In the event that Agent fails to
provide a Response to the Borrowers within five (5) Business Days of
Agent's receipt of the Final Notice, Agent shall be deemed to have approved
such proposed Term Sheet with respect to the Lease, or any Lease Amendment
to which such Term Sheet Approval Request relates. Following the Term Sheet
approval procedure set forth above, the Borrowers shall deliver to Agent
via a nationally recognized overnight courier for overnight delivery an
execution copy of any Lease, or any Lease Amendment with respect to which
Agent has approved or shall be deemed to have approved a Term Sheet in
accordance with this Section 5.1(m), and, in the case of Leases, together
with a blacklined version thereof marked to show changes from any standard
lease form which may have been previously approved by Agent pursuant to a
Lease Approval Request in accordance with Section 5.1(m)(v) below. Such
delivery shall constitute a Lease Approval Request.
(v) Each Lease Approval Request submitted to Agent by the Borrowers
pursuant to Section 5.1(m)(iii) or Section 5.1(m)(iv) above shall contain a
legend on the top of the cover page thereof, which legend shall be in
boldface type and in a font size of not less than 20 points, stating that
Agent's failure to respond to the Lease Approval Request within (A) fifteen
(15) days (in the case of a Lease Approval Request pursuant to
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Section 5.1(m)(iii)) or (B) five (5) Business Days (in the case of a Lease
Approval Request pursuant to Section 5.1(m)(iv)) shall be deemed to be an
approval by Agent, pursuant to Section 5.1(m) of this Agreement, of the
proposed Lease, or Lease Amendment to which such Lease Approval Request
relates. In the event Agent fails to provide a Response to the Borrowers
within (A) fifteen (15) days (in the case of a Lease Approval Request
pursuant to Section 5.1(m)(iii)) or (B) five (5) Business Days (in the case
of a Lease Approval Request pursuant to Section 5.1(m)(iv)) of Agent's
receipt of a Lease Approval Request, the Borrowers shall send to Agent a
Final Notice with respect to such proposed Lease, renewal, amendment or
modification to which such Lease Approval Request relates. In the event
that Agent fails to provide a Response to the Borrowers within five (5)
Business Days of Agent's receipt of the Final Notice, Agent shall be deemed
to have approved of such proposed Lease or Lease Amendment to which such
Lease Approval Request relates; provided, that with respect to any Lease or
any Lease Amendment which is deemed approved by Agent for which the
Borrowers shall have previously submitted a Term Sheet Approval Request in
accordance with Section 5.1(m)(iv), such deemed approval shall extend only
to such Lease or such Lease Amendment to the extent that the executed copy
thereof (A) contains the terms set forth in the Term Sheet therefor, (B)
does not contain any material terms which conflict with such Term Sheet,
(C) does not violate the Lease Criteria and (D) in the case of any Lease or
any renewal thereof, is on a standard lease form which is customary for
such Property and its location (with the terms set forth in clauses (A) and
(B) above), subject to modifications to reflect commercially reasonable
terms for similarly situated properties. For purposes of this Section
5.1(m), (I) the term "Response" means any notice by Agent to the Borrowers
in connection with a Term Sheet Approval Request or a Lease Approval
Request that Agent (1) requires additional information or documentation to
evaluate the proposed Term Sheet, Lease or Lease Amendment, as applicable,
(2) requires modifications, amendments or other changes to the proposed
Term Sheet, Lease or Lease Amendment, as applicable, as a condition to the
approval thereof, (3) consents to such proposed Term Sheet, Lease or Lease
Amendment, as applicable, or (4) withholds its consent to such proposed
Term Sheet, Lease or Lease Amendment, as applicable, and (II) the term
"Final Notice" means a written notice via a nationally recognized overnight
courier for overnight delivery by the Borrowers to Agent in connection with
a Term Sheet Approval Request or a Lease Approval Request, which notice
shall contain a legend in boldface type and in a font size of not less than
20 points on the top of the cover page thereof, stating that Agent's
failure to respond to the Term Sheet Approval Request or the Lease Approval
Request, as applicable, previously submitted to Agent within five (5)
Business Days of Agent's receipt of the Final Notice, in the case of a Term
Sheet Approval Request, and five (5) Business Days of Agent's receipt of
the Final Notice, in the case of a Lease Approval Request, shall be deemed
to be an approval by Lender, pursuant to Section 5.1(m) of this Agreement,
of the specific terms set forth in the proposed Term Sheet, Lease or Lease
Amendment, as applicable.
(vi) Agent's consent shall not be required with respect to any Lease
other than a Major Lease, provided that such Lease (including any Lease
entered into upon termination of any existing Lease) complies with the
Leasing Criteria and is on the standard lease form which has been
previously approved by Agent without material deviations from such form
which has not been approved by Agent.
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(vii) All new Leases entered into from and after the date hereof shall
be the result of arm's-length negotiations, shall provide for "market"
rental rates and other market terms and shall not contain any terms that
would adversely affect any Lender's or Agent's rights under the Loan
Documents.
(viii) Each Borrower (A) shall observe and perform (or cause to be
observed and performed) the obligations imposed upon the lessor under the
Leases in a commercially reasonable manner; (B) shall enforce (or cause to
be enforced) the terms, covenants and conditions contained in the Leases on
the part of the Tenants thereunder to be observed or performed in a
commercially reasonable manner; (C) shall not collect (or permit to be
collected) any of the base or minimum Rents more than one (1) month in
advance (other than security deposits and the first month's rent upon the
initial execution of a Lease) and (D) shall not execute (or permit to be
executed) any assignment of lessor's interest in the Leases or the Rents.
(ix) The Borrowers shall not enter into a Lease other than in the
ordinary course of its business (and, without limitation, it is hereby
agreed by such Borrower that a lease of all or substantially all of any one
or more buildings of any Property is not in the ordinary course of such
Borrower's business), except after having received Agent's written consent.
(n) ERISA. Each Borrower will comply in all material respects with the
applicable provisions of ERISA and the Code with respect to each Plan, if any,
and furnish to Agent (i) within ten (10) days after such Borrower knows or has
reason to know that any "reportable event" (as defined in Section 4043(b) of
ERISA) has occurred with respect to a Pension Plan, a statement setting forth
details as to such reportable event and the action proposed to be taken with
respect thereto, (ii) promptly, but in no event later than three (3) days, after
any Borrower becomes aware of the receipt thereof, a copy of any notice that any
Borrower or any member of its ERISA Group may receive from the PBGC relating to
the intention of the PBGC to terminate any Pension Plan or to appoint a trustee
to administer any Plan, (iii) promptly, but in no event later than five (5)
days, after any Borrower becomes aware of the filing with any affected party (as
such term is defined in Section 4001 of ERISA) of a notice of intent to
terminate a Pension Plan, a copy of such notice and a statement setting forth
the details of such termination, including the amount of liability, if any, of a
Borrower or any member of its ERISA Group under Title IV of ERISA, (iv) within
ten (10) days after such Borrower becomes aware of the adoption of an amendment
to a Pension Plan if, after giving effect to such amendment, the Pension Plan is
a plan described in Section 4021(b) of ERISA, a statement setting forth the
details thereof, (v) within thirty (30) days after any Borrower becomes aware of
the withdrawal from a Pension Plan during a plan year for which such Borrower or
any member of its ERISA Group could be subject to liability under Section 4063
or 4064 of ERISA, a statement setting forth the details thereof, including the
amount of such liability, (vi) within thirty (30) days after any Borrower
becomes aware of the cessation of operations by such Borrower or any member of
its ERISA Group at a facility under the circumstances described in Section
4062(e) of ERISA, a statement setting forth the details thereof, including the
amount of liability of such Borrower or a member of its ERISA Group under Title
IV of ERISA, (vii) within five (5) days after any Borrower becomes aware of the
adoption of an amendment to a Pension Plan that would require security to be
given to the Pension Plan pursuant to Section 401(a)(29) of the Code or
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Section 307 of ERISA, a statement setting forth the details thereof, including
the amount of such security, (viii) within five (5) days after any Borrower
becomes aware of the failure by such Borrower or any member of its ERISA Group
to make payment to a Pension Plan which would give rise to a Lien in favor of
the Plan under Section 302(f) of ERISA, a statement setting forth the details
thereof, including the amount of such Lien, (ix) within ten (10) days after any
Borrower becomes aware of the due date for filing with the PBGC pursuant to
Section 412(n) of the Code of a notice of failure to make a required installment
or other payment with respect to a Pension Plan, a statement setting forth
details as to such failure and the action proposed to be taken with respect
thereto and (x) promptly, but in any event within thirty (30) days, after any
Borrower becomes aware of the receipt thereof by such Borrower or any member of
its ERISA Group from the sponsor of a Multiemployer Plan, a copy of each notice
concerning the imposition of withdrawal liability or the termination or
reorganization of a Multiemployer Plan.
(o) Easements and Restrictions. The Borrowers shall submit to Agent for
Agent's written approval, which approval shall not be unreasonably withheld,
conditioned or delayed prior to the execution thereof by the applicable Borrower
Affiliate all proposed Encumbrances, Permits and other instruments which would
affect the title to the applicable Property, accompanied by a Survey showing the
proposed location thereof and such other information as Agent shall reasonably
require.
(p) Further Assurance of Title. The Borrowers shall, as promptly as
reasonably practicable, do all things and matters reasonably necessary
(including execution and delivery to Agent of all further documents and
performance of all other acts which Agent reasonably deems necessary or
appropriate) to assure to the reasonable satisfaction of Agent (i) that any
Advance previously made hereunder or to be made hereunder is secured or will be
secured by the Pledge Agreement as a first and prior Lien or security interest
with respect to the Collateral, and (ii) the enforceability and validity of the
Loan Documents and the perfection and priority of the Liens granted thereby. The
Lenders, in accordance with the terms of this Agreement, may decline to make
further Advances hereunder until Agent has received such assurance.
(q) Subsidiary Distributions. Each Borrower shall cause its Subsidiaries to
distribute to such Borrower as promptly as possible, such Borrower's share of
the Cash available for distribution by such Subsidiaries, other than (i) Cash
necessary to pay ordinary course expenses of such Subsidiary and to maintain
appropriate reserves or (ii) Cash required to be distributed or reserved as
provided in the Cash Management Agreement.
(r) Property Management. As of the Closing Date, the Properties are, and,
subject to the terms and provisions of Section 10.1, at all times shall remain
(unless consented to by Agent), managed by Initial Property Manager.
(s) Deferred Maintenance. The Borrowers shall timely perform and comply
with each of the deferred maintenance items with respect to the Properties set
forth on Schedule 5.1(s) (such items of deferred maintenance hereinafter
referred to as the "Required Repairs"). The Borrowers shall complete each of the
Required Repairs on or before the required deadline therefor as set forth on
Schedule 5.1(s). Notwithstanding anything contained in this Agreement
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to the contrary, it shall be an Event of Default if the Borrowers do not
complete any Required Repair by the deadline therefor as set forth on Schedule
5.1(s).
(t) REIT Qualification. Each Borrower shall at all times take all necessary
or appropriate actions to cause each REIT to, and each REIT shall, continue to
qualify as a real estate investment trust under the Code.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1 Negative Covenants. Except upon the express prior written
consent or express prior written waiver of Agent, the Borrowers hereby covenant
and agree, jointly and severally, with Agent and the Lenders as set forth below
in this Article VI. With respect to each covenant of the Borrowers set forth
below relating to any or all of the Properties, each Borrower which is a Parent
Entity shall be deemed to covenant and agree to cause the respective Property
Owners not to take the action or actions prohibited or restricted by such
covenant.
(a) Operation of Property. Without Agent's express prior written consent,
none of the Borrowers shall permit any of the following occurrences, if such
occurrence is likely to result in a Material Adverse Effect: (i) surrender or
terminate any Material Agreement unless the other party thereto is in material
default and the termination of such agreement would be commercially reasonable),
(ii) increase or consent to the material increase of the amount of any charges
under any Material Agreement, except as provided therein or on an arm's-length
basis and commercially reasonable terms, (iii) enter into any Material Agreement
without the prior written approval of Agent, which approval shall not be
unreasonably withheld, conditioned or delayed, (iv) enter into any Service
Contract unless the same is entered into in the ordinary course, on an
arm's-length basis and on commercially reasonable terms and is terminable upon a
transfer of the applicable Property or on thirty (30) days' notice without
payment of any material fee, premium or penalty, or (v) otherwise modify,
change, supplement, restate, replace, alter or amend any Material Agreement, or
waive or release any of its rights and remedies under any Material Agreement in
any material respect, without the prior written approval of Agent. Nothing
contained herein shall be deemed to preclude the Borrowers from terminating (A)
any Property Management Agreement (including the Initial Property Management
Agreements), provided that a Property Management Agreement is entered into with
a Property Manager satisfying the Property Manager Criteria in replacement
thereof in accordance with Section 10.1 or (B) the advisory arrangement with
Advisor in accordance with the provisions of the Advisory Agreement.
(b) Liens. Except for customary utility easements and subject to Section
5.1(b)(ii) hereof, no Borrower shall create, incur, assume, permit or suffer to
exist any Lien on any portion of the Properties or any of its assets, except:
(i) Permitted Encumbrances, (ii) Liens created by or permitted pursuant to the
Loan Documents, (iii) Liens for Taxes or Other Charges not yet due, payable or
delinquent or (iv) Liens permitted under Section 2.5.2.
(c) Dissolution, Significant Capital Transactions, Restrictions on
Acquisitions and Commencement of Development.
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(i) None of the Borrowers shall dissolve, terminate, wind up its
affairs, liquidate, merge with or consolidate into another Person or,
except as expressly permitted in Sections 2.5 and 6.1(i), Transfer, in one
transaction or any combination of transactions, all or any part of any of
the Properties or all or any part of its assets (whether now or hereafter
acquired), or make any change in its present methodology of conducting
business. Notwithstanding the foregoing, (A) a dissolution of a Borrower
shall be permitted, provided that such Borrower no longer owns any
Collateral and such dissolution is not reasonably likely to have a Material
Adverse Effect, (B) any REIT shall may merge into or consolidate with one
or more other REITs, (C) any Parent Entity may merge into or consolidate
with one or more Parent Entities and (D) any REIT or Parent Entity may
merge into or consolidate with one or more other REITs or Parent Entities.
(ii) No Borrower shall commence, any material development,
construction or material alteration of any Property without Agent's prior
written consent, which consent shall not be unreasonably withheld,
conditioned or delayed, provided that Agent's consent shall not be required
for any construction or alteration required (i) by applicable Legal
Requirements or Insurance Requirements or (ii) pursuant to the terms of an
existing Lease or any other Lease consented to by Agent hereunder or with
respect to which no consent by Agent is required, in each case, subject to
the Budget with respect to such Property approved by Agent hereunder;
provided, however, that the cost of such construction or alteration need
not comply with such Budget in the event of an emergency or in connection
with the compliance by such Borrower with Legal Requirements, as long as
such cost which does not comply with such Budget does not exceed $100,000.
(d) No Change in Business. The Borrowers shall not make any material change
in the scope or nature of its business objectives or purposes, or undertake or
participate in activities other than the ownership and operation of the
Properties, except such objective purposes or activities that are incidental to
the Properties.
(e) Debt Cancellation. None of the Borrowers shall, nor shall any Borrower
permit any Borrower Affiliate to, cancel or otherwise forgive or release any
material claim or debt owed to it in connection with the Properties, including
any arising under any of the applicable Leases and Material Agreements in any
one (1) year in excess of $50,000 per Property or $100,000 in the aggregate,
except (i) with respect to such Leases and Material Agreements, in accordance
with and subject to the terms of this Agreement or (ii) with Agent's consent
(which consent shall not be unreasonably withheld, conditioned or delayed), with
respect to other matters, for adequate consideration in the ordinary course of
such Person's business and on commercially reasonable terms, subject to other
restrictions contained herein or in any other Loan Document.
(f) Affiliate Transactions. None of the Borrowers shall enter into, or be a
party to, any transaction with any Borrower Affiliate relating to or which
affects any Property, other than (i) on terms and conditions substantially as
favorable to such Borrower as would be obtainable by such Borrower in a
comparable arm's-length transaction with a Person other than an Affiliate or
(ii) after notice to and approval by Agent on behalf of the Lenders, which
approval shall not be unreasonably withheld, conditioned or delayed.
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(g) Zoning and Uses. None of the Borrowers shall (i) initiate or support
any limiting change in the permitted uses of its Property (or to the extent
applicable, zoning reclassification of such Property) or any portion thereof,
seek any variance under existing land use restrictions, laws, rules or
regulations (or, to the extent applicable, zoning ordinances) applicable to such
Property or use or permit the use of such Property in a manner that would result
in such use becoming a nonconforming use under applicable land-use restrictions
(and, if any, zoning ordinances) or that would violate the terms of any Lease,
Legal Requirements or any Permitted Encumbrance, (ii) modify, amend or
supplement any of the terms of any Permitted Encumbrance in a manner materially
adverse to the interests of Agent or any Lender, (iii) impose or permit or
suffer the imposition of any Encumbrances upon such Property in any manner that
adversely affects in any material respect the value or utility of such Property,
(iv) institute, or permit the institution of (other than by a Governmental
Authority without instigation by any Borrower), proceedings to alter any tax lot
comprising such Property if such alteration would have a material adverse impact
on such Property or (v) permit or suffer such Property to be used by the public
or any Person in such manner as could reasonably be expected to make possible a
claim of adverse usage or possession or of any implied dedication or easement.
(h) Debt; Investments. None of the Borrowers shall (i) incur or assume any
Indebtedness for borrowed money not existing as of the date hereof except for
Permitted Indebtedness or (ii) make any advance, loan, extension of credit or
capital contribution to, or purchase any Capital Stock, bonds, notes, debentures
or other securities of or assets constituting a business unit of, or make any
other investment in, any Person.
(i) Transfers. (i) Sale of the Properties. Except in compliance with
Section 2.5 and other than the Permitted Encumbrances, no Borrower Affiliate
shall, nor shall any Borrower Affiliate permit any other Borrower Affiliate to,
Transfer any Property or any portion thereof without the prior written consent
of Agent.
(ii) No Indirect Transfers. A Transfer of any Property within the
meaning of this Section 6.1(i) shall be deemed to include, but is not
limited to, (A) an installment sales agreement wherein any Borrower
Affiliate agrees to sell a Property or any part thereof for a price to be
paid in installments; (B) an agreement by any Borrower Affiliate, as
landlord, leasing all or a substantial part of any Property or the Transfer
of the right, title and interest in and to any Leases or any Rents; or (C)
any Transfer which results in (I) the Parent Entities ceasing to own
(directly or indirectly) collectively one hundred percent (100%) of the
legal and beneficial interests in each Property Owner, (II) a Change of
Control of any Borrower or any General Partner or (III) a REIT Change in
Control.
(iii) Agent's Rights. All of Agent's reasonable expenses incurred in
connection with any Transfer shall be payable by the Borrowers whether or
not Agent consents to the Transfer. Agent shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable
upon any Transfer without Agent's consent in violation of the provisions of
this Section 6.1(i). Except as otherwise provided in this Section 6.1(i),
this provision shall apply to every Transfer regardless of whether
voluntary or not, or whether or not Agent has consented to any previous
Transfer.
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(j) Assignment of Permits. Except as required under the Leases or in
connection with a Transfer permitted under Sections 2.5 or 6.1(i), no Borrower
shall (i) Transfer any of its interest in any Permits pertaining to its
respective Property, or (ii) Transfer or remove or permit any other Person to
Transfer or remove any records pertaining to such Property.
(k) Place of Business. None of the Borrowers shall 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
Agent such information as Agent may reasonably request in connection therewith.
(l) Property Management Agreements; Advisory Agreements. Subject to Section
10.1, none of the Borrowers shall, nor shall any Borrower permit any Borrower
Affiliate to permit or suffer any significant delegation or contracting of the
applicable Property Manager's or Advisor's duties, except to the extent such
delegation or contracting is permissible under the terms of the applicable
Property Management Agreement or the terms of the Advisory Agreement.
(m) Operating Obligations. None of the Borrowers will, nor shall any
Borrower permit any Borrower Affiliate to, enter into, assume or permit to
exist, any obligations for the payment of rent for any property (real, personal
or mixed, tangible or intangible) under leases, subleases or similar
arrangements as lessee and other than operating leases entered into in ordinary
course of business for assets incidental to the management and operations of the
applicable Property.
(n) Assets. None of the Borrowers shall, nor shall any Borrower permit any
Borrower Affiliate to, purchase or own any property other than (i) the
Properties and any property or fixtures necessary or incidental for the
operation of the Properties and (ii) the Other Properties pursuant to Section
2.5.2.
(o) Sale and Leaseback. None of the Borrowers shall, nor shall any Borrower
permit any Borrower Affiliate to, enter into any arrangement pursuant to which
it will lease back, as lessee, any property (real, personal or mixed, tangible
or intangible) previously owned by any of them and sold or otherwise transferred
or disposed of, directly or indirectly, to the owner-lessor of such property.
(p) Limitation on Distributions. No Borrower shall make any Distribution at
any time the Loan or any portion thereof is outstanding in the event that (i) an
Event of Default shall have occurred and is continuing or (ii) after giving
effect to such Distribution, the Debt Yield Maintenance Ratio would be less than
the Minimum Debt Yield. No REIT shall make any extraordinary Distribution at any
time the Loan or any portion thereof is outstanding which is not otherwise
required pursuant to Legal Requirements.
(q) Limitation on Negative Pledge Clauses. None of the Borrowers shall
enter into, nor shall any Borrower permit any Borrower Affiliate to enter into
with any Person any agreement (other than this Agreement and the other Loan
Documents) which (i) prohibits or limits the ability of the applicable Borrower
Affiliate to create, incur, assume or suffer to exist
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any Lien on any Property or the Collateral or (ii) restricts, limits or impairs
the ability of any Subsidiaries of the Borrowers to make Cash dividends and
other distributions to such Borrowers.
(r) Limitation on Securities Issuances. Except as expressly permitted
hereunder, none of the Borrowers or its Subsidiaries shall, nor shall any
Borrower permit any Borrower Affiliate or its Subsidiaries to, issue any
additional Capital Stock, securities (as defined in the Securities Act) or
warrants, rights or options or other indicia of ownership, directly or
indirectly, and regardless of form, except to their respective employees,
officers and directors under commercially reasonable compensation agreements,
other than (i) issuances by any REIT of Capital Stock in connection with any
private placement or registered follow-on offering which issuances (in the
aggregate) do not result in a REIT Change of Control and do not contain any
provision or requirement for the mandatory redemption or buyback of such Capital
Stock until the Debt is repaid in full, (ii) issuances by any Parent Entity of
Partnership Units in consideration for the acquisition of Other Property by an
Other Borrower or to a REIT in consideration of the contribution by such REIT of
capital in connection with the issuance by such REIT of Capital Stock permitted
hereunder, and (iii) issuances by any REIT of perpetual, redeemable and/or
convertible preferred stock having rights, preferences and privileges which (A)
do not permit such preferred stock to be repurchased or mandatorily redeemed
until the Debt is repaid in full, (B) do not contain any requirement for the
payment of Distributions until the Debt is repaid in full other than ordinary
dividends which are consistent with market terms of other dividends pursuant to
preferred stock of other publicly traded real estate investment trusts and (C)
is otherwise reasonably acceptable to Agent.
(s) Limitation on Subsidiary Formation. None of the Borrowers shall, nor
shall permit any Borrower Affiliate to, form any direct or indirect Subsidiary
not in existence on the date hereof except for (i) Other Borrowers formed by one
or more Parent Entities in accordance with Section 2.5.2(d) or (ii) any entity
incorporated or formed by any REIT (other than any Borrower or General Partner)
and in which no Borrower or General Partner has any direct or indirect ownership
interest (and including any further entities incorporated or formed by any such
entity which are owned, directly or indirectly, by any REIT and in which no
Borrower or General Partner has no direct or indirect ownership interest).
(t) Organizational Documents. None of the Borrowers will cause or permit
(i) any amendment, modification, supplement, waiver or termination of any of its
Organizational Documents, except for non material changes, it being agreed that,
without limitation to other changes, any changes to the ownership structure or
the purpose or business of a Borrower Affiliate shall be a material change and
(ii) any activity or conduct in violation of its Organizational Documents;
provided that such prohibitions shall not be applicable to a Borrower upon a
permitted Transfer by such Borrower of all of its interest in the Properties.
None of the Borrower Affiliates (other than the Borrowers) will cause or permit
(A) any amendment, modification, supplement, restatement, waiver or termination
of any provisions of its respective Organizational Documents, in a manner that
would impair or limit its ability to satisfy its obligations hereunder and under
the other Loan Documents and (B) any activity or conduct in violation of its
Organizational Documents.
(u) Minimum Debt Yield. For each calendar quarter during the term of the
Loan, the Debt Yield Maintenance Ratio shall not be less than the Minimum Debt
Yield;
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provided that the Borrowers may, subject in all cases to Sections 2.2.2(c) and
2.4, prepay such portion of the Loan as may be required to comply with the
foregoing covenant.
(v) Fiscal Year. No Borrower shall (i) change its fiscal year to end on a
day other than December 31 or (ii) change its methods or procedures of
accounting from those in effect as of the Closing Date.
(w) Borrower Affiliates. Except to the extent permitted by this Agreement,
no Property Owner shall allow or permit its respective Parent Entity, General
Partner, REIT or Intermediate Entity (and no Parent Entity shall permit its
respective General Partner or REIT) (a) to own any assets (other than Cash and
non-material personal property and (i) in the case of such Parent Entity, its
interest as member or partner, as applicable, in each Property Owner or Other
Borrower owned by it (or in each Intermediate Entity owned by it), (ii) in the
case of such General Partner, its interest as general partner of such Parent
Entity, (iii) in the case of such REIT, its interest as limited partner of such
Parent Entity and its interest as member or stockholder, as applicable, of such
General Partner) and (iv) in the case of such Intermediate Entity, its interest
as a member or partner, as applicable, in each Property Owner or Other Borrower
or engage in any line of business (other than, (i) in the case of such Parent
Entity, owning membership or partnership interests, as applicable, in each
Property Owner or Other Borrower owned by it (or in each Intermediate Entity
owned by it), (ii) in the case of such General Partner, owning general
partnership interests in such Parent Entity, (iii) in the case of such REIT,
owning limited partnership interests in such Parent Entity and membership
interests or stock, as applicable, in such General Partner and (iv) in the case
of such Intermediate Entity, owning membership or partnership interests, as
applicable, in each Property Owner or Other Borrower owned by it), (b) to
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness (other than the
Loan and any Permitted Indebtedness of the Borrowers), (c) to directly or
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any of its assets or (d) to directly or indirectly Transfer (except as
otherwise expressly permitted by the Loan Documents) (i) in the case of such
Parent Entity, any of its membership interests or partnership interests, as
applicable, in such Property Owner (or in each Intermediate Entity owned by it),
(ii) in the case of such General Partner, any of its general partnership
interests in such Parent Entity, (iii) in the case of such REIT, any of its
limited partnership interests in such Parent Entity or any of its membership
interests or stock, as applicable, in such General Partner, or (iv) in the case
of such Intermediate Entity, any of its membership or partnership interests, as
applicable, in such Property Owner.
(x) REIT Qualification. No Borrower shall suffer or permit any REITs to
fail to continue to qualify as a real estate investment trust under the Code. No
Borrower shall take any action and shall not permit any action to be taken
whereby any REIT's status as a real estate investment trust under the Code is
revoked or any REIT would be disqualified as a real estate investment trust
under the Code.
(y) Original Advisory Agreements. The Original Advisory Agreements were
contributed to the applicable Parent Entity pursuant to the Purchase Agreement.
If and to the extent that the Original Advisory Agreement remains in force and
effect, (i) the Borrowers shall not Transfer any of the Original Advisory
Agreements, in whole or in part, (ii) the Borrowers shall not modify, amend,
supplement, restate or otherwise change any Advisory Agreement or
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term, covenant, provision or condition thereof, (iii) the Borrowers shall not
enforce any term, covenant, provision or condition contained in any Original
Advisory Agreement and (iv) the Borrowers shall not make any payment pursuant to
or contemplated in or pay or incur any cost, fee, expense or other amount in
connection with any Original Advisory Agreement.
Section 6.2 Agent's Approval. In any instance in Section 6.1 hereof in
which Agent agrees to be reasonable in its approval or disapproval of a
transaction that would otherwise be prohibited thereunder, it is agreed that
such approval may be conditioned on, among other things, Agent's satisfaction
that the provisions of this Agreement and the other Loan Documents (including
the Liens and security interests granted hereby and thereby) shall be applicable
to any Transferee of the business or assets of a Borrower or a Borrower
Affiliate.
ARTICLE VII
MORTGAGE CONVERSION OPTION
Section 7.1 Mortgage Conversion.
(a) Provided no Event of Default shall have occurred and be continuing, the
Borrowers shall have the right at any time (but only once during any
twelve-month calendar period during the term of the Loan and exclusive of any
Mortgage Conversion with respect to the Closing Mortgages) to additionally
secure the Loan with first priority mortgage Liens on all or any of the
Properties (a "Mortgage Conversion") securing not less than the full amount of
the Loan (or, with respect to any Mortgage Conversion with respect a Conversion
Property located in a state imposing mortgage tax, securing an amount of the
Loan of not less than 125% of the Allocated Loan Amount with respect to such
Conversion Property) upon delivery of written notice thereof to Agent (the
"Conversion Notice") specifying the Properties which Borrowers elect to effect
such Mortgage Conversion (each such Property subject to a Mortgage Conversion, a
"Conversion Property"). Within thirty (30) days of Agent's receipt of the
Conversion Notice, the Borrowers and Agent shall each use good faith efforts to
negotiate mutually acceptable modifications and amendments to this Agreement and
the other Loan Documents to effect such Mortgage Conversion, including a
Mortgage, assignments of leases and rents, assignments of licenses and
contracts, UCC fixture filings and such other documents and instruments as are
customarily required by Agent in connection with mortgage loan facilities
(collectively, the "Conversion Loan Documents"). The consummation of a Mortgage
Conversion pursuant to this Section 7.1 is expressly conditioned upon (A) the
execution and delivery by the Borrowers and Agent of Conversion Loan Documents
reasonably acceptable to Agent; (B) the receipt by Agent of (I) Title Policies
insuring the Liens of the Mortgages (Agent acknowledges that it has reviewed and
approved the state of title as of the date hereof reflected in the Title
Policies obtained by the Borrowers at the closing of the Loan with respect to
the Properties set forth on Exhibit 1.1), (II) Surveys of the Properties
certified to Agent and the Lenders, which Surveys shall be in both form and
substance and prepared by licensed surveyors reasonably acceptable to Agent
(Agent acknowledges that it has reviewed and approved the Surveys delivered to
Agent at the closing of the Loan with respect to the state of facts shown
thereon for the Properties set forth on Exhibit 1.1), (III) subordination,
non-disturbance and attornment agreements from each of the Tenants under Major
Leases designated by Agent (unless applicable Legal Requirements or local custom
and practice otherwise dictate that Agent receive subordination, non-disturbance
and attornment agreements from Tenants under all Leases, substantially all
Leases or Leases in
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addition to the Major Leases), and estoppel certificates from each of the
Tenants under Major Leases and from such other Tenants as reasonably designated
by Agent, in each case, on Agent's form and otherwise reasonably acceptable to
Agent, (IV) one or more legal opinions with respect to the due authorization,
execution, delivery and enforceability of the Conversion Loan Documents, the
perfection of the Lien of the mortgages and/or deeds of trust and such other
matters as reasonably required by Agent, in each case, reasonably acceptable to
Agent, and (V) an Officer's Certificate certifying (1) that, after giving effect
to the Mortgage Conversion, each Borrower shall be Solvent, and (2) that all of
the conditions to such Mortgage Conversion set forth in this Section 7.1 have
been satisfied; and (3) the payment by the Borrowers of (y) an administrative
fee equal to $10,000 and (z) all reasonable and customary costs and expenses
incurred in connection with the Mortgage Conversion, including, without
limitation, Breakage Costs, title insurance premiums and fees, mortgage,
transfer, recording and/or filing taxes, fees and charges, and all other
reasonable costs and expenses incurred by Agent and the Lenders in connection
with such Mortgage Conversion including, without limitation, reasonable
attorneys' fees and disbursements. Agent agrees that, upon request of the
Borrowers, Agent shall execute and deliver to any Tenant under a Major Lease
approved by Agent hereunder or any other Lease specifically approved by Agent
hereunder which satisfies the Leasing Criteria (which Lease demises all or any
portion of a Conversion Property), a subordination, non-disturbance and
attornment agreement on Agent's form and otherwise in both form and substance
reasonably acceptable to Agent in its sole and absolute discretion, to the
extent that the Borrowers are obligated to obtain (or to use reasonable or best
efforts to obtain) such agreement of Agent pursuant to the terms of the
applicable Lease. For the avoidance of doubt, the New York Mortgage and the
Closing Mortgages shall not constitute a Mortgage Conversion hereunder or
entitle Borrower to the Conversion Rate with respect to the Allocated Loan
Amount for the Properties encumbered thereby.
(b) From and after the consummation of any Mortgage Conversion in
accordance with this Section 7.1, (i) that portion of the Loan equal to the
Proportionate Loan Amount shall bear interest at the Conversion Rate (such
portion of the Loan, the "Conversion Rate Loan Tranche"), and (ii) the remaining
portion of the Loan (if any) not otherwise bearing interest at the Conversion
Rate shall continue to bear interest at the LIBO Rate or the Base Rate, as
applicable. Notwithstanding the foregoing, if a Mortgage Conversion shall result
in the conversion of all or any portion of a LIBO Rate Loan Tranche, and the
consummation of the Mortgage Conversion occurs on any day other than the last
day of an Interest Period, then, at the election of the Borrowers, (A) the
portion of the Loan subject to the Mortgage Conversion shall continue to bear
interest at the LIBO Rate for the duration of such Interest Period and (B)
effective as of the first day of the immediately succeeding Interest Period,
such portion of the Loan shall commence to bear interest at the Conversion Rate.
(c) Notwithstanding anything contained herein to the contrary, upon the
occurrence of any of the events set forth in Sections 9.1(a)(v) or (vi), all
Recaptured Interest shall automatically and immediately be reinstated, due and
payable (to the fullest extent permitted by applicable Legal Requirements),
without any further action by the parties hereto, and the Borrowers shall pay to
Agent, without demand, such Recaptured Interest as though such Recaptured
Interest has been due but not made. For purposes hereof "Recaptured Interest"
shall mean the positive result of (i) the aggregate amount of interest accrued
during the term of the Loan in respect of any Conversion Rate Loan Tranche
calculated at the Conversion Rate,
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minus (ii) the aggregate amount of interest that would have accrued during the
term of the Loan in respect of any Conversion Rate Loan Tranche had the
Applicable Interest Rate been the LIBO Rate.
(d) The Borrowers hereby acknowledge that (i) each Mortgage Conversion
hereunder shall be deemed to constitute a refinance of the Loan with respect to
the portion thereof equal to the aggregate Allocated Loan Amounts of the
Conversion Property (and such amount shall be deemed to be repaid and readvanced
effective as of the consummation of such Mortgage Conversion) and (ii) Agent or
any Lender may reflect the same on its books without accepting any such
repayment or making any such readvance.
ARTICLE VIII
CASUALTY AND CONDEMNATION
Section 8.1 Insurance, Casualty and Condemnation.
8.1.1 Insurance. (a) Required Coverage. The Borrowers, at their sole cost
and expense, for the mutual benefit of itself and Agent, shall obtain and
maintain or cause to be obtained and maintained the following policies of
insurance with respect to the Properties:
(i) Insurance against loss customarily included under standard "All
Risk" policies including flood, earthquake, boiler and machinery, and such
other insurable hazards as, under good insurance practices, from time to
time are insured against for other property and buildings similar to the
Properties in nature, use, location, height, and type of construction. Such
insurance policy shall also insure costs of demolition and increased cost
of construction. The amount of such insurance shall be not less than one
hundred percent (100%) of the replacement cost value of the Improvements,
exclusive of footings and foundations. Each such insurance policy shall
contain an agreed amount and replacement cost endorsement and shall cover,
without limitation, all tenant improvements and betterments that Borrower
is required to insure in any Lease, on a replacement cost basis. Insurance
required under this Section 8.1.1 may be provided by blanket insurance
policies covering improvements in an amount subject to the consent of
Agent, which consent shall not be unreasonably conditioned or delayed.
Agent (for the benefit of Lenders) shall be named Loss Payee with respect
to the coverage hereunder, provided that a Tenant may be named Loss Payee
with respect to any coverage pertaining to improvements or betterments
owned by such Tenant. Such insurance shall have deductibles no greater than
$50,000 (except for the perils of Named Windstorm, Flood and Earthquake
which shall not exceed 5% of the declared location value of the Property),
the premiums therefor shall be paid annually in advance.
(ii) Comprehensive boiler and machinery insurance (to the extent not
already provided by the coverage set forth in subsection (i) above)
covering all mechanical and electrical equipment against physical damage,
and covering, without limitation, all tenant improvements and betterments
that Agent is required to insure pursuant to all Leases on a replacement
cost basis and in the minimum amount of $100,000.
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(iii) Rent loss and/or business interruption insurance shall be
included as an endorsement to the coverage required in Section 8.1.1(a)(i)
and (ii) above, in an amount not less than the amount of rent payable
annually and be endorsed to provide a 365-day Extended Period of Indemnity.
Agent (for the benefit of Lenders) shall be named as "Lender Loss Payee" as
respects this coverage.
(iv) The so-called comprehensive "All Risk" insurance and business
interruption insurance policies required under subsections (i) and (iii)
above shall be required to cover actions of terrorists and acts of
terrorism. If the policies required above do not contain such coverage,
then the Borrowers shall obtain a separate policy or policies providing
such coverages with limits satisfactory to Agent. Agent hereby agrees that
such a policy with limits of $25,000,000 is acceptable to Agent.
(b) Additional Coverage. Each Borrower, at its sole cost and expense, for
the mutual benefit of itself and Agent, shall also obtain and maintain or cause
to be obtained and maintained the following policies of insurance:
(i) Flood insurance, with respect to any Property that is located (in
whole or in part) in an area identified by the Federal Emergency Management
Agency as an area federally designated a "100 year flood plain," at least
equal to the maximum amount available in the Federal flood insurance plan.
Agent reserves the right to require flood insurance in excess of and in
addition to that available in the Federal program, provided such right is
reasonably exercised;
(ii) Liability insurance, including without limitation, Commercial
General Liability insurance; Owned, Hired and Non Owned Auto Liability; and
Umbrella Liability coverage for Personal Injury, Bodily Injury, Death,
Accident and Property Damage, providing in combination no less than
$25,000,000 per occurrence and in the annual aggregate, per location; if
aggregate limits are shared a $40,000,000 limit shall be provided. The
policies described in this subsection shall cover, without limitation:
elevators, escalators, independent contractors, Contractual Liability
(covering, to the maximum extent permitted by law, Borrower's obligation to
indemnify Agent as required under this Agreement, Products and Completed
Operations Liability coverage;
(iii) Workers Compensation and Disability insurance as required by
law;
(iv) During any period of repair or restoration of any Property, if
customary under the circumstances, builder's "all risk" insurance in an
amount equal to not less than the full insurable value of such repair or
restoration against such risks or such other amount as to avoid a
co-insurance penalty (including the coverage required in subsections
(a)(i), (ii) and (iii) above to agreed limits) as Agent may request, in
form and substance reasonably acceptable to Agent; and
(v) Such other types and amounts of insurance with respect to each
Property and the operation thereof that are commonly maintained in the case
of other property and buildings similar to such Property in nature, use,
location, height, and type of construction, as may from time to time be
reasonably required by Agent.
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(c) Requirements of Policies. (i) All policies of insurance (the
"Policies") required pursuant to this Section 8.1.1 shall be issued by an
insurer or insurers with an A.M. Best rating of A:X or better or other
equivalent rating from another agency acceptable to Agent. All insurers shall be
licensed to do business in the state or states where the applicable Properties
are located.
(ii) The property, boiler and machinery insurance policies shall also
name Agent as an Additional Insured and Lender Loss Payee under an
endorsement which shall be satisfactory to Agent in both form and content.
(iii) All Policies shall contain coverage for tenant improvements and
betterments that Borrowers are required to insure. All property insurance
policies also shall include a co-insurance waiver and agreed amount
endorsement. Subject to the provisions of Section 8.1.1(a)(i), the amount
of any deductible under any other Policy must be reasonably acceptable to
Agent. Without Agent's prior written consent, Borrowers shall not name any
person other than Agent, as loss payee under any Property insurance
policies covering the Improvements and such tenant improvements and
betterments that Borrowers are required to insure pursuant to all Leases
nor shall Borrowers carry separate or additional insurance coverage
covering the Improvements and such tenant improvements and betterments that
Borrowers are required to insure pursuant to all Leases concurrent in form
or contributing in the event of loss with that required by this Agreement
or any of the other Loan Documents; provided that, if blanket policies are
obtained, this sentence shall not apply to property covered by such blanket
policies other than the Improvements and such tenant improvements and
betterments that Borrowers are required to insure pursuant to this Loan.
(iv) The Policies (A) shall name Agent for the benefit of the Lenders
and its successors and/or assigns as their interest may appear as an
additional insured and, subject to the provisions of Section 8.1.1(a)(i)
and except with respect to general liability insurance, a Lender's Loss
Payable Endorsement, or its equivalent, naming Agent as the person to which
all payments made by such insurance company shall be paid; (B) shall
include effective waivers by the insurer of all claims for insurance
premiums against all loss payees, additional insureds and named insureds
(other than the Borrowers) and all rights of subrogation (and the Borrowers
hereby waive the same) against any loss payee, additional insured or named
insured; (C) shall be assigned to Agent for the benefit of the Lenders if
such assignments are commercially available at reasonable premiums; (D)
shall contain such provisions as Agent deems reasonably necessary or
desirable to protect its interest including endorsements providing that no
Borrower Affiliate, Agent, the Lenders or any other party shall be a
co-insurer under said Policies and that no modification, reduction,
cancellation or termination in amount of, or material change (other than an
increase) in, coverage of any of the Policies shall be effective until at
least thirty (30) days after receipt by each named insured, additional
insured mortgagee, certificate holder and loss payee of written notice
thereof or ten (10) days after receipt of such notice with respect to
nonpayment of premium; (E) shall permit Agent to pay the premiums and
continue any insurance upon failure of any Borrower to pay or cause to be
paid premiums when due, upon the insolvency of such Borrower or through
foreclosure or other transfer of title to the applicable Property (it being
understood that such
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Borrower's rights to coverage under such policies may not be assignable
without the consent of the insurer); and (F) subject to the provisions of
Section 8.1.1(a)(i), shall provide that any proceeds shall be payable to
Agent for the benefit of the Lenders and that the insurance shall not be
impaired or invalidated by virtue of (I) any act, failure to act,
negligence of, or violation of declarations, warranties or conditions
contained in such policy by the applicable Borrower, Agent, the Lenders or
any other named insured, additional insured or loss payee, except for the
willful misconduct of Agent, the Borrowers or a Lender knowingly in
violation of the conditions of such policy, (II) the occupation, use,
operation or maintenance of the applicable Property for purposes more
hazardous than permitted by the terms of the Policy, (III) any foreclosure
or other proceeding or notice of sale relating to such Property or the
Collateral or (IV) any change in the possession of such Property without a
change in the identity of the holder of actual title to such Property
(provided that with respect to items (III) and (IV), any notice
requirements of the applicable Policies are satisfied).
(d) Insurance Premiums, Certificates of Insurance.
(i) The Borrowers shall pay or cause to be paid the premiums for such
Policies (the "Insurance Premiums") as the same become due and payable and
shall furnish or cause to be furnished to Agent receipts for the payment of
the Insurance Premiums or other evidence of such payment reasonably
satisfactory to Agent (provided, however, that such evidence shall not be
required if such Insurance Premiums are to be paid by Agent pursuant to the
terms of this Agreement). Within thirty (30) days after request by Agent,
the Borrowers shall obtain or cause to be obtained such increases in the
amounts of coverage required hereunder as may be reasonably requested by
Agent provided such insurance is commercially available at reasonable
premiums, taking into consideration changes in liability laws, changes in
prudent customs and practices, and the like. In the event any Borrower
Affiliate satisfies the requirements under this Section 8.1.1 through the
use of a Policy covering properties in addition to its Property, then
(unless such policy is provided in substantially the same manner as it is
as of the date hereof), such Borrower shall provide evidence reasonably
satisfactory to Agent that the Insurance Premiums for such Property are
separately allocated under such Policy to such Property or Properties and
that payment of such allocated amount (A) shall maintain the effectiveness
of such Policy as to such Property and (B) shall otherwise provide the same
protection as would a separate policy that complies with the terms of this
Agreement as to such Property, notwithstanding the failure of payment of
any other portion of the insurance premiums.
(ii) The Borrowers shall deliver or cause to be delivered to Agent on
or prior to the Closing Date certificates setting forth in reasonable
detail the material terms (including any applicable notice requirements) of
all Policies from the respective insurance companies (or their authorized
agents) that issued the Policies, including that such Policies may not be
reduced, cancelled or terminated in amount of, or materially changed (other
than increased) in coverage without thirty (30) days' prior notice to
Agent, or ten (10) days' notice with respect to nonpayment of premium. The
Borrowers shall deliver or cause to be delivered to Agent, concurrently
with each change in any Policy, a certificate with respect to such changed
Policy certified by the insurance company issuing that Policy, in
substantially the same form and containing substantially
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the same information as the certificates required to be delivered by the
Borrowers pursuant to the first sentence of this clause (d)(ii) and stating
that all premiums then due thereon have been paid to the applicable
insurers and that the same are in full force and effect (or if such
certificate and report shall not be obtainable by such Borrower, such
Borrower may deliver an Officer's Certificate to such effect in lieu
thereof). Notwithstanding the delivery of any Policies to Agent or any
Lender, neither Agent nor any Lender shall be deemed by reason of the
receipt thereof to have any knowledge of the contents thereof.
(iii) From time to time, Agent may request that the Borrowers deliver
to Agent, within ten (10) Business Days of receipt of such request, a
report from a consultant selected by Agent or from the insurer, setting
forth the particulars as to all insurance obtained by such Borrower
pursuant to this Section 8.1.1 and then in effect and stating that all
Insurance Premiums then due thereon have been paid in full to the
applicable insurers, that such insurance policies are in full force and
effect and that, in the opinion of such insurance broker or insurer, such
insurance otherwise complies with the requirements of this Section 8.1.1.
(e) Renewal and Replacement of Policies.
(i) Prior to the expiration, termination or cancellation of any
Policy, the Borrowers shall renew or cause to be renewed such policy or
obtain or cause to be obtained a replacement policy or policies (or a
binding commitment for such replacement policy or policies), which shall be
effective no later than the date of the expiration, termination or
cancellation of the previous policy, and shall deliver or cause to be
delivered to Agent a certificate or other evidence of insurance
satisfactory to Agent in respect of such policy or policies (A) containing
the same information as the certificates required to be delivered pursuant
to clause (d)(ii) above, or a copy of the binding commitment for such
policy or policies and (B) confirming that such policy complies with all
requirements hereof.
(ii) If the certificates as required under subsection (e)(i) above are
not furnished to Agent, Agent may procure after notice to the Borrowers,
but shall not be obligated to procure, such replacement policy or policies
and pay the Insurance Premiums therefor, and the applicable Borrower agrees
to reimburse Agent for the cost of such Insurance Premiums promptly on
demand, together with interest at the Default Rate from the date Agent paid
such Insurance Premium to and including the date of reimbursement of Agent
by the applicable Borrower.
(iii) Concurrently with the delivery of each replacement policy or a
binding commitment for the same pursuant to this clause (e), each Borrower
shall deliver or cause to be delivered to Agent a report from a consultant
selected by Agent or from the insurer, setting forth the particulars as to
all insurance obtained by such Borrower or by such Borrower on behalf of
another Borrower Affiliate pursuant to this Section 8.1.1 and then in
effect and stating that all Insurance Premiums then due thereon have been
paid in full to the applicable insurers, that such insurance policies are
in full force and effect and
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that, in the opinion of such insurance broker or insurer, such insurance
otherwise complies with the requirements of this Section 8.1.1.
(f) Separate Insurance. No Borrower Affiliate will take out separate
insurance concurrent in form or contributing in the event of loss with that
required to be maintained pursuant to this Section 8.1.1 unless such insurance
complies with clause (c) above.
8.1.2 Casualty. (a) Notice; Restoration. (i) The Borrowers shall give Agent
prompt written notice of the occurrence of any casualty affecting any Property
or any portion thereof. In the event of any casualty affecting such Property,
the Borrowers shall promptly commence and diligently prosecute, or cause the
prompt commencement and diligent prosecution of Restoration of such Property
regardless of whether insurance proceeds are available or sufficient for such
Restoration.
(ii) Subject to clause (v) below, in the event of a Casualty where the
loss does not exceed $250,000, the Borrowers may settle and adjust such
claim; provided that such adjustment is carried out in a competent and
timely manner. In such case, the Borrowers are hereby authorized to collect
and receipt for Agent on behalf of the Lenders any Net Proceeds.
(iii) Subject to clause (v) below, in the event of a Casualty where
the loss is equal to or exceeds $250,000, the Borrowers may settle and
adjust such claim only with the consent of Agent (which consent shall not
be unreasonably withheld, conditioned or delayed) and Agent shall have the
opportunity to participate, at the Borrowers' cost, in any such
adjustments.
(iv) The proceeds of any Policy (and under any other policies of
insurance, covering any Property or any use or occupation thereof which a
Borrower or any other Borrower Affiliate may elect to carry whether or not
required by this Agreement or any Loan Document), shall be due and payable
solely to Agent on behalf of the Lenders and held and applied in accordance
with the terms hereof (or, if mistakenly paid to any Borrower Affiliate,
shall be held in trust by such Person for the benefit of Agent and shall be
paid over to Agent on behalf of the Lenders by such Person within one (1)
Business Day of receipt).
(v) Notwithstanding the terms of clauses (ii) and (iii) above, Agent
on behalf of the Lenders shall have the sole authority to adjust any claim
with respect to a Casualty and to collect all Net Proceeds if an Event of
Default shall have occurred and is continuing.
(b) Availability of Proceeds for Restoration. If, in the event of a
casualty to a Property, (A) the Restoration of such Property can be reasonably
completed no later than six (6) months prior to the Maturity Date (such
determination to be made solely by Agent), and (B) all of the conditions and
deliveries set forth in Section 8.1.4(a) are satisfied, the Net Proceeds shall
then be disbursed by Agent to the affected Borrower for Restoration in
accordance with the terms and manner set forth in Section 8.1.4; provided,
however, if the amount of the Net Proceeds is less than $250,000, the Net
Proceeds shall be automatically returned to the
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Borrowers without application of Section 8.1.6. If the Net Proceeds are not
required to be made available for Restoration pursuant to the foregoing
sentence, all Net Proceeds shall be retained by Agent in accordance with the
terms of Section 8.1.5.
8.1.3 Condemnation. (a) Notice; Restoration. The affected Borrower shall
give Agent prompt written notice of the actual or threatened (in writing)
commencement of any Partial Condemnation or Total Condemnation affecting its
Property and shall deliver to Agent copies of any and all material documents
received or prepared by such Borrower in connection therewith. The affected
Borrower shall, at its expense, diligently prosecute any such proceeding. Agent
is hereby irrevocably appointed as Borrower's attorney-in-fact, coupled with an
interest, with exclusive power to collect, receive and retain any Net Proceeds
in respect of a Condemnation and to make any compromise or settlement in
connection with such Condemnation, subject to the provisions of this Section.
Provided no Event of Default has occurred and is continuing, (i) in the event of
a Condemnation where the loss does not exceed $250,000, Borrower may settle and
compromise such Condemnation and to collect and receive any resulting Net
Proceeds; provided that the same is effected in a competent and timely manner,
and (ii) in the event of a Condemnation, where the loss is equal to or exceeds
$250,000, Borrower may settle and compromise the Net Proceeds only with the
consent of Agent (which consent shall not be unreasonably withheld, conditioned
or delayed) and Agent shall have the opportunity to participate, at Borrower's
cost, in any litigation and settlement discussions in respect thereof.
Notwithstanding any Condemnation by any public or quasi-public authority
(including any transfer made in lieu of or in anticipation of such a
Condemnation), Borrower shall continue to pay the Debt at the time and in the
manner provided for in the Notes, this Agreement and the other Loan Documents,
and the Debt shall not be reduced unless and until any Net Proceeds shall have
been actually received and applied by Agent to expenses of collecting such Net
Proceeds and to the reduction and/or the discharge of the Debt. Agent shall not
be limited to the interest paid on the award by the condemning authority but
shall be entitled to receive out of the award interest at the Applicable
Interest Rate provided for herein. If any Property or any portion thereof is the
subject of a Partial Condemnation or Total Condemnation, then, subject to the
foregoing provisions of this Section 8.1.3(a), all Condemnation Proceeds
relating thereto shall be paid to Agent and, in the case of a Partial
Condemnation, the affected Borrower shall promptly commence and diligently
prosecute, or cause to be promptly commenced and diligently prosecuted, the
Restoration of such Property and otherwise comply with the provisions of Section
8.1.4.
(b) Partial Condemnation. Following the occurrence of a Partial
Condemnation, Borrower, regardless of whether Condemnation Proceeds are
available or sufficient, shall promptly commence and diligently prosecute, or
cause to be promptly commenced and diligently prosecuted, Restoration of such
Property. If, in the event of a Partial Condemnation of a Property, (i) the
Restoration of such Property can be reasonably completed no later than six (6)
months prior to the Maturity Date (such determination to be made solely by Agent
in its reasonable discretion), and (ii) all of the conditions and deliveries set
forth in Section 8.1.4(a) are satisfied, the Net Proceeds shall then be
disbursed by Agent to the applicable Borrower for Restoration in accordance with
the terms and manner set forth in Section 8.1.4. If the Net Proceeds are not
required to be made available for Restoration pursuant to the foregoing
sentence, all Net Proceeds shall be retained by Agent in accordance with the
terms of Section 8.1.5.
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(c) Total Condemnation. In the event of a Total Condemnation, all Net
Proceeds shall be retained by Agent in accordance with the terms of Section
8.1.5.
8.1.4 Disbursement of Net Proceeds. (a) If Net Proceeds are required to be
made available for Restoration pursuant to either Section 8.1.2 or 8.1.3, Agent
shall make such Net Proceeds available to the applicable Borrower for the
Restoration; provided that each of the following conditions are met:
(i) no Event of Default shall have occurred and be continuing;
(ii) with respect to any Core Property subject to such Condemnation or
Partial Condemnation (as applicable), such Core Property can be restored to
an economic unit not less valuable (taking into account the effect of the
termination of any Leases or Material Agreements and the proceeds of any
rental loss or business interruption insurance which Borrower receives or
is entitled to receive, in each case, due to such Casualty or Condemnation)
than such Property was prior to the Casualty or Condemnation;
(iii) the Debt Yield Maintenance Ratio of all of the Properties after
such restoration and stabilization as reasonably determined by Agent is
expected to exceed the Minimum Debt Yield;
(iv) with respect to any Core Property subject to such Condemnation or
Partial Condemnation (as applicable), not more than twenty percent (20%) of
Leases in such Core Property shall be terminated as a result of such
Casualty or Partial Condemnation (as applicable) and no Borrower Affiliate
shall have received notice of termination relating to any such level of
termination (or otherwise has no knowledge that a party to any of the
foregoing agreements intends upon terminating such agreement at such
level);
(v) such Borrower promptly commences, or causes the prompt
commencement of, Restoration and diligently pursues, or causes the diligent
pursuit of, the same to Agent's satisfactory completion;
(vi) Restoration is done and diligently completed in compliance with
all applicable Legal Requirements and the affected Property and the use
thereof after Restoration will be in material compliance with and permitted
under applicable Legal Requirements and the terms hereof;
(vii) the quality and character of the affected Property after
Restoration shall be at least equivalent to the quality and character of
such Property immediately prior to such Casualty or Partial Condemnation;
(viii) the estimated time to complete the Restoration, as estimated by
Agent, does not extend beyond (A) the effective period of business
interruption insurance available to Agent on account of such casualty or
Partial Condemnation and (B) six (6) months prior to the Maturity Date; and
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(ix) such Borrower delivers to Agent evidence that the Net Proceeds,
together with any Net Proceeds Deficiency, are sufficient to cover all
costs of the Restoration as determined by Agent.
In the event any of the foregoing conditions are not satisfied at any time,
the disbursement of Net Proceeds shall be made in accordance with Section 8.1.5.
(b) The Net Proceeds shall be held by Agent in an interest-bearing Eligible
Account at an Eligible Institution, and until disbursed in accordance with the
provisions of this Section 8.1.4, shall constitute additional security for
repayment of the Loan. Subject to the terms and conditions of this Article VIII,
the Net Proceeds shall be disbursed by Agent to the Borrowers from time to time
during the course of Restoration, upon receipt of evidence (including lien
waivers) reasonably satisfactory to Agent, providing that (i) all materials
installed and work and labor performed (except to the extent that they are to be
paid for out of the requested disbursement) in connection with the Restoration
have been paid for in full, and (ii) there exist no notices of pendency, stop
orders, mechanic's or materialmen's liens or notices of intention to file same,
or any other Liens or Encumbrances of any nature whatsoever affecting the
affected Property arising out of the Restoration which have not either been
fully bonded to the satisfaction of Agent and discharged of record or are being
contested as permitted under Section 5.1(b)(ii).
(c) All plans and specifications required in connection with any
Restoration shall be reviewed and approved by Agent, which approval shall not be
unreasonably withheld, conditioned or delayed, and provided that no such
approval shall be required if such plans and specifications are the same as, or
otherwise substantially in accordance with, the existing plans and
specifications of the affected Property and the Property will, after a
Restoration in accordance with such plans and specifications, comply in all
respects with applicable Legal Requirements. After the occurrence of and during
the continuance of an Event of Default, Agent shall have the use of the plans
and specifications and all Permits required or obtained in connection with the
Restoration. The identity of the contractors, subcontractors and materialmen
engaged in such Restoration, as well as the contracts under which they have been
engaged, shall be subject to prior review and approval by Agent, which approval
shall not be unreasonably withheld, conditioned or delayed. All reasonable costs
and expenses incurred by Agent in connection with making the Net Proceeds
available for the Restoration including, without limitation, reasonable
attorneys' fees and disbursements, shall be paid by the Borrowers.
(d) In no event shall Agent be obligated to make disbursements of Net
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Borrowers' architect (which architect shall be reasonably acceptable to Agent in
its sole and absolute discretion), minus the Retainage. The final advance of
Retainage shall not be made until (i) the Borrowers' architect certifies to
Agent that (A) the Restoration has been completed in accordance with the
provisions of this Section 8.1.4, and (B) all Governmental Approvals necessary
for the re-occupancy and use of the applicable Property have been obtained from
all appropriate Governmental Authorities, and (ii) Agent receives evidence
reasonably satisfactory to Agent that the costs of the Restoration have been
paid in full or will be paid in full out of the Retainage. If required by Agent,
the release of the final portion of the Retainage shall be approved by the
surety company which has
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issued a Payment and Performance Bond with respect to the contractor,
subcontractor or materialman.
(e) Agent shall not be obligated to make disbursements of the Net Proceeds
more frequently than once in any calendar month.
(f) If at any time the Net Proceeds or the undisbursed balance thereof
shall not be sufficient to pay the balance of the total costs which are
reasonably estimated by the Borrowers' architect or Agent to be incurred in
connection with the completion of the Restoration, the Borrowers shall promptly
deposit with Agent Cash and Cash Equivalents in an amount equal to the
deficiency (the "Net Proceeds Deficiency") before any further disbursement of
the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Agent
shall be held by Agent and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 8.1.4 shall constitute additional security for the Debt.
8.1.5 Retention of Net Proceeds by Agent. All Net Proceeds (together with
any earnings thereon) and Net Proceeds Deficiency not required to be made
available for the Restoration, may be retained and applied by Agent after such
funds are received toward the payment of the outstanding principal of the Loan
and all other amounts provided for under this Agreement or any of the other Loan
Documents, whether or not then due and payable or, at the discretion of Agent,
the same may be paid, either in whole or in part, to the applicable Borrower.
8.1.6 Assignment of Proceeds. All Insurance Proceeds and Condemnation
Proceeds relating to any Property are hereby irrevocably assigned to and shall
be paid to Agent, subject to the provisions of Section 8.1.2 and 8.1.3. Agent
may participate in any action, suit or proceeding relating to any such proceeds,
causes of action, claims, compensation, awards or recoveries, and, subject to
Sections 8.1.2 and 8.1.3, Agent is hereby authorized, in its own name or in the
affected Borrower's name, to adjust any loss covered by insurance, or any
Partial Condemnation or Total Condemnation claim or cause of action, and to
settle or compromise any claim or cause of action in connection therewith, and
such Borrower shall from time to time deliver to Agent any instrument reasonably
required to permit such participation or further evidence such.
8.1.7 Sale of Property Prior to Receipt of Proceeds. If all or any portion
of any Property is sold, through foreclosure or otherwise, prior to the receipt
by Agent of the Insurance Proceeds or Condemnation Proceeds (as applicable), in
respect thereof, Agent shall have the right, whether or not a deficiency
judgment shall have been sought, recovered or denied, to receive such Insurance
Proceeds or Condemnation Proceeds (as applicable), or a portion thereof
sufficient to pay the outstanding principal of the Loan, plus all other amounts
owed by the applicable Borrower under the Loan Documents.
8.1.8 Special Provisions Relating to Properties. In the event that any
Property shall become subject to a Casualty or Condemnation, until such time as
such Property is Restored in accordance with this Article VIII, (i) such
Property shall be deemed to be a Disposed Property for purposes of determining
the Total Available Commitments and (ii) the projected Net Operating Income from
such Property shall not be included in the calculation of
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the Debt Yield Maintenance Ratio. Upon the completion of any such Restoration in
accordance with this Article VIII, the Borrowers shall deliver to Agent an
updated Appraisal with respect to such Restored Property, and Agent shall update
Schedule 1.1(a) to reflect the Allocated Loan Amount and Release Amount of such
Property as Restored, as determined by Agent in its sole discretion, as well as
the Allocated Loan Amount and Release Amount of all of the other Properties in
the sole and absolute discretion of Agent.
ARTICLE IX
DEFAULTS
Section 9.1 Event of Default.
(a) Each of the following events shall constitute an event of default
hereunder (each, an "Event of Default"):
(i) Payment. If Borrowers shall fail to pay the principal of the Loan
when due, whether at the Maturity Date, by acceleration or as part of any
payment or otherwise, as provided in the Loan Documents; or if Borrowers
shall fail to pay any interest payable under the Loan within five (5) days
of the date when due, whether at the Maturity Date, by acceleration or as
part of any payment or Prepayment or otherwise, as provided in the Loan
Documents; or if Borrower shall fail to pay any fees or other amounts
payable under the Loan when due, whether at the Maturity Date, by
acceleration or as part of any payment or Prepayment or otherwise, as
provided in the Loan Documents and such failure to pay shall not be cured
within five (5) days following receipt by the Borrowers of notice from
Agent of such failure to pay; or
(ii) Taxes and Other Charges. If any of the Taxes or Other Charges are
not paid prior to the date on which the same became delinquent, subject to
Borrower's right to contest Taxes in accordance with Section 5.1(b)(ii); or
(iii) Insurance Policies. If the Policies are not kept in full force
and effect; or if the Policies are not delivered to Agent upon request, and
in the latter case, such Default is not cured within five (5) days after
written notice thereof from Agent; or
(iv) Representations. If any representation or warranty made by any
Borrower herein or in any other Loan Document shall be false in any
material respect as of the date the representation or warranty was or shall
be made or repeated or deemed repeated (except to the extent that any such
representation or warranty (A) expressly relates only to an earlier date in
which case such representation or warranty shall be true and correct in all
material respects as of such earlier date, or (B) may no longer be true due
to a change in circumstances which neither constitutes nor evidences a
Default, an Event of Default or a Material Adverse Change); or
(v) Inability to Pay Debts. If any Borrower shall make an assignment
for the benefit of creditors, or if any Borrower shall generally not be
paying its debts as they become due or has admitted in writing its
inability to pay its debts; or
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(vi) Bankruptcy. If a receiver, liquidator or trustee shall be
appointed for any Borrower, or if any Borrower shall be adjudicated a
bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or
state law, shall be filed by or against, consented to or acquiesced in by
any Borrower Affiliate, or if any proceeding for the dissolution or
liquidation of any Borrower shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by all of the Borrower Affiliates, upon the same not being
discharged, stayed or dismissed within sixty (60) days; or
(vii) Prohibited Assignment. If any Borrower assigns or delegates or
encumbers its rights under this Agreement or under any other Loan Document
or any interest herein or therein in violation of the terms of this
Agreement; or
(viii) Breach of Covenant. If any Borrower (A) breaches any of its
negative covenants contained in Article VI; or (B) breaches any of its
affirmative covenants set forth in Article V; or
(ix) REIT. If any REIT ceases to qualify as a real estate investment
trust under the Code, or any REIT Change in Control shall have occurred.
(x) Cross-Default. If an Event of Default, event of default or default
as defined or described herein or in any of the other Loan Documents occurs
beyond the expiration of any grace, notice or cure period specified herein
or therein, or if any other event shall occur or condition shall exist, if
the effect of such event or condition (and the expiration of any applicable
notice and cure periods, if any) is to accelerate the maturity of any
portion of the Debt or to permit Agent to accelerate the maturity of all or
any portion of the Debt in accordance with the terms of any such Loan
Document; or
(xi) Other Defaults. If any Borrower shall continue to be in default
under any of the other terms, covenants or conditions of this Agreement or
any other Loan Document not specified in another subsection of this Section
9.1(a) for ten (10) days after notice thereof from Agent, in the case of
any Default that can be cured by the payment of a sum of money, or for
thirty (30) days after notice from Agent in the case of any other Default;
provided, however, that if such non-monetary Default is susceptible of cure
but cannot reasonably be cured within such 30-day period and provided
further that such Borrower shall have commenced to cure such default within
such 30-day period and thereafter diligently and expeditiously proceeds to
cure the same, such 30-day period shall be extended for an additional
period of time as is reasonably necessary for such Borrower in the exercise
of due diligence to cure such Default, but the aggregate cure period under
this subsection (xi) shall not exceed one hundred (120) days; or
(xii) ERISA. (A) Notice of intent to terminate or to amend a Pension
Plan shall have been filed with any affected party (as defined in Section
4001 of ERISA) if, after giving effect thereto, the Plan is a plan
described in Section 4041(c) of ERISA, or notice of an application by the
PBGC to institute proceedings to terminate a Pension Plan pursuant to
Section 4042 of ERISA shall have been received by any Borrower; (B) any
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Borrower or any member of its ERISA Group incurs liability under Sections
4062(e), 4063 or 4064 of ERISA in respect of a Pension Plan; (C) an
amendment is adopted to a Pension Plan which would require security to be
given to such Pension Plan pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; or (D) any Borrower or any member of its respective
ERISA Group fails to make a payment to a Pension Plan that would give rise
to a Lien in favor of such Plan under Section 302(f) of ERISA, which in any
case described in any of clauses (A) through (D), alone or in the
aggregate, could or may have a Material Adverse Effect; or
(xiii) Invalidity. If any Loan Document shall fail to be in full force
and effect or to give Agent or the Lenders the Liens, rights, powers and
privileges purported to be created thereby, or if any Borrower shall assert
that any Loan Document is not in full force and effect or fails to give
Agent or the Lenders the Liens, rights, powers and privileges purported to
be created thereby; or
(xiv) Judgments. One or more final judgments or decrees shall be
entered against any Borrower involving a liability for which the creditor
has recourse against such Borrower or any Property or Collateral in excess
of (i) $250,000 for each such judgment or decree, or (ii) $1,000,000 in the
aggregate for all such judgments and decrees collectively, and, in each
case, any such judgments or decrees shall not have been vacated,
discharged, paid (or fully covered by insurance provided by a carrier who
has acknowledged such coverage) or stayed or bonded pending appeal within
thirty (30) days after entry thereof; or
(xv) Attachment. Any Property shall be taken, attached or sequestered
on execution or other process of law in any action against any applicable
Borrower.
(b) Upon the occurrence and during the continuation of an Event of Default
and at any time thereafter, Agent shall be entitled to exercise all remedies and
actions available at law, in equity or otherwise, and Agent may take any such
action, without notice or demand, that Agent deems advisable to protect and
enforce its rights against each and every (or less than all) Borrower and in and
to all or any portion of the Collateral, including declaring the Debt to be
immediately due and payable (provided, however, that with respect to an Event of
Default described in clause (v) or (vi) above, the Debt and all other
obligations of the Borrowers hereunder and under the other Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and each Borrower hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary notwithstanding),
and Agent may enforce or avail itself of any or all rights or remedies provided
in the Loan Documents against any of the Borrowers and all or any portion of the
Collateral, including all rights or remedies available at law, in equity or
otherwise.
(c) Upon the occurrence and during the continuation of an Event of Default,
the Lenders may refuse, and shall not be obligated, to make any Advances and/or
may suspend or terminate their respective Commitments.
(d) Upon the occurrence and during the continuation of an Event of Default,
Agent may, but without any obligation to do so and without notice to or demand
on any
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Borrower and without releasing any Borrower from any obligation
hereunder, take any action to cure such Event of Default. The costs and expenses
incurred by Agent in exercising rights under this paragraph (including
reasonable attorneys' fees to the extent permitted by law), with interest at the
Default Rate for the period after notice from Agent that such costs or expenses
were incurred to the date of payment to Agent, shall constitute a portion of the
Debt, shall be secured by the Pledge Agreement and the other Loan Documents and
shall be due and payable to Agent upon demand therefor.
(e) Upon the occurrence and during the continuation of an Event of Default
and at any time thereafter, in addition to other rights and remedies provided
for herein or otherwise available to it, Agent may exercise all the rights and
remedies of a secured party upon default under Article 9 of the UCC.
Section 9.2 Remedies Cumulative. Upon the occurrence and during the
continuation of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to Agent against any Borrower
under this Agreement or any of the other Loan Documents executed and delivered
by, or applicable to, any of the Borrowers or at law (including, without
limitation, an action for collection), in equity or otherwise, may be exercised
by Agent at any time and from time to time, whether or not all or any of the
Debt shall be declared due and payable, and whether or not Agent shall have
commenced any 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 Collateral. Any such actions taken by Agent shall be cumulative and
concurrent and may be pursued independently, singly, successively, together or
otherwise, at such time and in such order as Agent may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Agent permitted by law,
equity, contract or otherwise or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, each Borrower
agrees that if an Event of Default is continuing (a) Agent is not subject to any
"one action" or "election of remedies" law or rule, and (b) all Liens provided
to Agent shall remain in full force and effect until Agent has exhausted all of
its remedies, including against the Collateral in satisfaction of the Debt or
the Debt has been paid in full. All remedies hereunder shall be exercised by
Agent upon the direction of the Required Lenders. In exercising all remedies
hereunder, Agent shall at all times act (or refrain from acting) hereunder upon
the direction of the Required Lenders.
ARTICLE X
PROPERTY MANAGEMENT
Section 10.1 Termination of Property Manager. Each Borrower represents,
warrants and covenants that each Property Management Agreement hereafter entered
into with respect to any of the Properties shall (a) be in form and substance
reasonably satisfactory to Agent, (b) be collaterally assigned to Agent on
behalf of Lenders, (c) be the subject of a consent, reasonably acceptable to
Agent, and executed and delivered to Agent by the applicable Property Manager
and (d) be with a Property Manager approved by Agent in accordance with this
Agreement, which approval shall not be unreasonably withheld, conditioned or
delayed so long as such Property Manager satisfies the Property Management
Criteria. Unless otherwise waived by Agent, such consent shall provide that upon
the occurrence and during the continuance of an Event of Default, each Borrower
shall, or shall cause the applicable Borrower Affiliate to, within
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five (5) Business Days after Agent's written request, issue a notice of
termination to terminate the Property Management Agreement and to replace the
Property Manager with a Property Manager approved by Agent, on commercially
reasonable terms and conditions approved by Agent. If any Borrower fails to
issue, or to cause the applicable Borrower Affiliate to issue the notice of
termination to the Property Manager in the manner required above within such
five (5) Business Day period, then Agent shall have the right, and each Borrower
hereby irrevocably authorizes Agent, as its attorney-in-fact, which power is
hereby coupled with an interest, at its sole option, to terminate on behalf and
in the name of such Borrower, the Property Manager in accordance with the
foregoing provisions of this Section 10.1, provided that Agent shall not have
any liability if Agent shall not exercise such authority. Agent hereby consents
to the Initial Property Management Agreements and the Initial Property Manager.
Agent acknowledges that a default by a Property Manager under the applicable
Property Management Agreement shall not precipitate a Default or an Event of
Default hereunder, unless such Default or Event of Default otherwise constitutes
or results in the occurrence of a Default or an Event of Default hereunder.
ARTICLE XI
LIMITATIONS ON RECOURSE
Section 11.1 Exculpation. The obligations of each Borrower pursuant to the
Loan Documents shall constitute general obligations of such Borrower. The
foregoing notwithstanding and subject to the qualifications below, Agent and the
Lenders shall not be entitled to, and shall not enforce, the liability and
obligation of Borrower to perform and observe the obligations contained in this
Agreement, the Notes or in any of the other Loan Documents by any action or
proceeding wherein a money judgment or personal liability shall be sought
against any General Partner, any other general partner, from time to time, of
any Borrower (other than a Borrower) or any "related person" (as defined in
Treasury Regulation Section 1.752-4(b) of the Code) to any General Partner or
any other general partner (which "related person" shall in no event ever be
construed to include a Borrower, or any Borrower which is a general partner or
member of a Borrower), any REIT or any officers, shareholders, partners, members
or beneficial owners (other than any Borrower), directors, agents, employees or
servants of any Borrower, General Partner or REIT or any other Person (other
than a Borrower) (the "Exculpated Parties"), except that Agent and/or Lenders
may bring an enforcement action, a suit on the Note (provided, that neither
Agent nor any Lender shall be entitled to a money judgment against any
Exculpated Party pursuant to such suit), or an action for specific performance
against any Exculpated Party to enable Agent and/or Lenders to enforce and
realize upon its interests under this Agreement, the Notes, the Pledge Agreement
or the other Loan Documents or in the Collateral, or any other collateral given
to the Lenders pursuant to the Loan Documents; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against the Exculpated Parties only to the extent of
Borrower's interest in the Collateral and in any other collateral given or
granted to Agent and/or Lenders, and Agent and/or Lenders agree that it shall
not xxx for, seek or demand any deficiency judgment against any of the
Exculpated Parties in any such action or proceeding under, or by reason of, or
in connection with this Agreement, the Pledge Agreement, the Notes or the other
Loan Documents. The provisions of this paragraph shall not, however, (a)
constitute a waiver, release or impairment of any obligation evidenced or
secured by this Agreement, the Pledge Agreement, the Notes or any of the other
Loan Documents; (b) impair the right of Agent and/or
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Lenders to name any Borrower as a party defendant in any action or suit to
enforce the Pledge Agreement; (c) affect the validity of any guaranty or
indemnity made in connection with the Loan or any of the rights and remedies of
Agent and/or Lenders thereunder, including, without limitation, the
Environmental Indemnity; (d) impair the right of Agent and/or Lenders to obtain
the appointment of a receiver; or (e) impair the right of Agent and/or Lenders
to obtain a deficiency judgment or other judgment on the Note against Borrower
if necessary to obtain any Net Proceeds to which Agent and/or Lenders would
otherwise be entitled under this Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by the Lenders of the Loan and the
execution and delivery to the Lenders of the Notes, and shall continue in full
force and effect so long as all or any of the Debt of any of the Borrowers is
outstanding and unpaid. Whenever in this Agreement any Person is referred to,
such reference shall be deemed to include the legal representatives, successors
and assigns of such Person (provided that the foregoing shall not be deemed to
permit any Transfer of any ownership interest that is otherwise prohibited
hereunder). All covenants, promises and agreements in this Agreement contained,
by or on behalf of any of the Borrowers, shall inure to the benefit of the
respective legal representatives, successors and assigns of each Lender and
Agent.
Section 12.2 Governing Law; Consent to Jurisdiction.
(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY THE
LENDERS AND THE AGENT AND ACCEPTED BY THE BORROWERS IN THE STATE OF NEW YORK,
AND THE PROCEEDS OF THE NOTES DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE
STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP
TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL
MATERIAL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS OTHER THAN SECTION 5-1401 OF THE NEW YORK OBLIGATIONS LAWS)
AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES
THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE
APPLICABLE STATES, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY
THE LAWS OF SUCH APPLICABLE STATES, THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE VALIDITY AND THE ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE
INDEBTEDNESS OR OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST
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EXTENT PERMITTED BY LAW, THE BORROWERS HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTES, AND THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5 1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ANY LENDER, THE AGENT, ANY
BORROWER OR ANY OTHER BORROWER AFFILIATE ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK,
PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND EACH OF
ANY LENDER, AGENT AND THE BORROWERS WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND EACH OF ANY LENDER, AGENT, THE BORROWERS HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. EACH BORROWER DOES HEREBY DESIGNATE AND APPOINT CORPORATION SERVICE
COMPANY, AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS 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 AND WRITTEN NOTICE OF SAID
SERVICE OF BORROWER MAILED OR DELIVERED TO SUCH BORROWER IN THE MANNER PROVIDED
HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON EACH
BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH
BORROWER (I) SHALL GIVE PROMPT NOTICE TO THE AGENT OF ANY CHANGED ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE
A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR
SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR.
Section 12.3 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
or of any Notes, or of any other Loan Document, nor any consent to any departure
by any Borrower or any guarantor 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 any Borrower or
any guarantor, shall entitle such Borrower or such guarantor (as applicable) to
any other or future notice or demand in the same, similar or other
circumstances.
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Section 12.4 Delay Not a Waiver. Neither any failure nor any delay on the
part of Agent or any Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, or under any Notes or under any other Loan Document, or any
other instrument given as security therefor, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting payment
after the due date of any amount payable under this Agreement, any Note or any
other Loan Document, Agent 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 Notes or the other Loan Documents, or to declare a Default for
failure to effect prompt payment of any such other amount. A waiver of one
Default or Event of Default with respect to any Borrower shall not be construed
to be a waiver of any subsequent Default or Event of Default with respect to
such Borrower or any other Borrower or to impair any remedy, right or power
consequent thereon.
Section 12.5 Notices. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, (b) expedited
overnight prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, (c) personal delivery or (d)
facsimile transmission provided confirmation of receipt is obtained, addressed
as follows (or at such other address and person as shall be designated from time
to time by any party hereto, as the case may be, in a written notice to the
other parties hereto in the manner provided in this Section):
If to the initial Lender named herein or Agent:
Bayerische Hypo- Und Vereinsbank AG
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Bayerische Hypo- Und Vereinsbank AG
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: General Counsel
Facsimile No.: (000) 000-0000
and to:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to any Borrower and any other Borrower Affiliate:
c/o First Winthrop
0 Xxxxxxxx Xxxxx
Xxxxx 000
P.O. Box 9507
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
and a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
A notice shall be deemed to have been given, (i) in the case of hand
delivery, at the time of delivery on a Business Day (or if delivered on a day
other than a Business Day, then the next succeeding Business Day); (ii) in the
case of registered or certified mail, three (3) Business Days from transmittal;
(iii) in the case of expedited overnight prepaid delivery, one (1) Business Day
subsequent to transmittal; or (iv) in the case of facsimile transmission, upon
confirmation that receipt of such transmission was received, provided receipt of
such transmission is confirmed prior to 5:00 P.M. New York time on the Business
Day on which such confirmation is received, otherwise on the next Business Day.
Each Borrower hereby designates each of the Parent Entities as the parties to
give and receive notices on behalf of the Borrower Affiliates hereunder, and any
notice received by Agent or any Lender by a Borrower Affiliate other than a
Parent Entity shall not constitute effective notice to, or be binding upon Agent
or such Lender hereunder. Notwithstanding the foregoing, any notice by Agent or
any Lender to one or more of the Borrower Affiliates shall be deemed to
constitute effective notice to all of the Borrower Affiliates.
Section 12.6 Trial by Jury. EACH OF THE LENDERS, THE AGENT AND THE
BORROWERS HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY
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FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD
TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY EACH OF THE LENDERS, THE AGENT AND THE BORROWERS AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. THE AGENT AND THE BORROWERS ARE
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER.
Section 12.7 Headings. The Article and/or Section headings and the Table of
Contents in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.
Section 12.8 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 12.9 Preferences. Agent and each Lender shall have the continuing
and exclusive right to apply or reverse and reapply any and all payments by any
Borrower Affiliate to any portion of the obligations of the Borrowers hereunder.
To the extent the Borrowers or any other Borrower Affiliate makes a payment or
payments to any Lender or Agent, 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 such
Lender or Agent.
Section 12.10 Waiver of Notice. None of the Borrowers shall be entitled to
any notices of any nature whatsoever from any Lender or 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 Agent to the
Borrowers and except with respect to matters for which any Borrower is not,
pursuant to applicable Legal Requirements, permitted to waive the giving of
notice. The Borrowers hereby expressly waive the right to receive any notice
from any Lender or Agent with respect to any matter for which this Agreement or
the other Loan Documents do not specifically and expressly provide for the
giving of notice by any Lender or Agent to the Borrowers.
Section 12.11 Remedies of the Borrowers. In the event that a claim or
adjudication is made that Agent, any Lender or any of their respective agents,
have acted unreasonably or unreasonably delayed (or refrained from), acting in
any case where by law or under this Agreement or the other Loan Documents,
Agent, such Lender or such agent, as the case may be, has an obligation to act
reasonably or promptly, each Borrower agrees that neither Agent, such Lender nor
its agents, shall be liable for any monetary damages, and the sole
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remedies of each Borrower shall be limited to commencing an action seeking
injunctive relief or declaratory judgment, except in any instance in which it
has been finally determined that the action of such Lender or Agent (as
applicable) has constituted bad faith, gross negligence, fraud, willful
misconduct or an illegal act.
Section 12.12 Expenses; Indemnity. (a) The Borrowers covenant and agree to
reimburse Agent and each Lender upon receipt of written notice from Agent or any
Lender for all (i) Lender Expenses; (ii) costs and expenses reasonably incurred
by Agent or a Lender (including, without limitation, reasonable fees and
disbursements of counsel, experts, consultants and witnesses) in connection with
(A) each Borrower's performance of and compliance with each Borrower's
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date;
(B) the negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and the
other Loan Documents and any other documents or matters requested by any
Borrower Affiliate or by Agent; (C) filing and recording fees and expenses,
title insurance and reasonable fees and disbursements of counsel for providing
to Agent all required legal opinions, and other similar expenses incurred in
creating and perfecting the Liens in favor of Agent on behalf of Lenders
pursuant to this Agreement and the other Loan Documents; (D) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case against,
under or affecting any Borrower Affiliate, this Agreement, the other Loan
Documents or any other security given for the Loan or the Properties; (E)
enforcing any obligations of or collecting any payments due from any Borrower
Affiliate under this Agreement, the other Loan Documents or with respect to the
Properties or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or of
any insolvency or bankruptcy proceedings; (F) enforcing or foreclosing in whole
or in part the Pledge Agreement or the Liens of the other Loan Documents and (G)
any and all present and future stamp taxes, mortgage taxes and transfer taxes in
connection with any of the foregoing. In connection with the syndication of the
Loan, the Borrowers shall pay (i) any and all reasonable costs and fees incurred
by Agent in connection therewith, including, without limitation, reasonable
attorneys' fees and costs and (ii) any and all reasonable fees and costs
incurred by the other Lenders in connection therewith, including, without
limitation, such Lenders' reasonable attorneys' fees and costs.
(b) The Borrowers shall indemnify and hold harmless Agent and the Lenders
from and against any Losses that may be imposed on, incurred by, or asserted
against such Lender in any manner relating to or arising out of any breach by
any Borrower of its obligations under, or any misrepresentation by any Borrower
contained in this Agreement or the other Loan Documents.
(c) The provisions of this Section 12.12 shall survive the repayment of the
Loan.
Section 12.13 Exhibits and Schedules Incorporated. The Exhibits and
Schedules annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.
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Section 12.14 No Joint Venture or Partnership. Each Borrower, on the one
hand, and Lenders and Agent, on the other hand, intend that the relationships
created hereunder and under the other Loan Documents be solely that of borrower
and lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between any
Borrower, on the one hand, and Lenders and Agent, on the other hand, nor to
grant Lenders or Agent any interest in the Properties other than that of
beneficiary, secured party, mortgagee or lender.
Section 12.15 Publicity. Subject to their respective obligations under
Legal Requirements, all news releases, publicity or advertising by the Borrowers
or their Affiliates through any media intended to reach the general public which
refers to the Loan Documents, to the financing evidenced by the Loan Documents,
to any Lender or to Agent, shall be subject to the prior written approval of
Agent, which approval shall not be unreasonably withheld, conditioned or
delayed.
Section 12.16 Waiver of Marshaling of Assets. To the fullest extent a
Borrower may legally do so, each Borrower waives all rights to a marshaling of
the assets of such Borrower, its partners, if any, and others with interests in
said Borrower and of the Properties, 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 marshaling 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 any Lender or Agent on behalf of Lenders under the Loan
Documents to a sale of any one or more of the Properties for the collection of
the related Debt without any prior or different resort for collection, or the
right of any Lender or Agent on behalf of Lenders or any deed of trust trustee
to the payment of the related Debt out of the net proceeds of the Properties in
preference to every other claimant whatsoever.
Section 12.17 Waiver of Counterclaim. Each Borrower hereby waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim, in
any action or proceeding brought against it by any Lender or Agent on behalf of
the Lenders or its agents. Nothing contained in the foregoing sentence shall be
deemed a waiver of the right of any Borrower to assert any claim which would
otherwise constitute a counterclaim of any nature whatsoever against any Lender
or Agent in any separate action or proceeding brought against any Lender or
Agent.
Section 12.18 Conflict; Construction of Documents. In the event of any
conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by counsel in connection with the
negotiation and drafting of the Loan Documents and that such Loan Documents
shall not be subject to the principle of construing their meaning against the
party which drafted same.
Section 12.19 Brokers and Financial Advisors. Each Borrower hereby
represents that it has dealt with no financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the transactions
contemplated by this Agreement. Each Borrower hereby indemnifies each Lender and
Agent and holds each Lender and Agent harmless from and
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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 such Borrower in connection with the transactions contemplated herein.
The provisions of this Section 12.19 shall survive the expiration and
termination of this Agreement and the repayment of the Debt.
Section 12.20 No Third Party Beneficiaries. This Agreement and the other
Loan Documents are solely for the benefit of each Lender and Agent and each
Borrower, and nothing contained in this Agreement or the other Loan Documents
shall be deemed to confer upon anyone other than each Lender and Agent and the
Borrowers any right to insist upon or to enforce the performance or observance
of any of the obligations contained herein or therein. All conditions to the
obligations of each Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of each Lender and Agent, and no other Person shall
have standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that any Lender and Agent will refuse to
make the Loan in the absence of strict compliance with any or all thereof and no
other Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by any
Lender or Agent if, in such Lender's or Agent's sole discretion, such Lender or
Agent deems it advisable or desirable to do so.
Section 12.21 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior or contemporaneous
agreements among or between such parties, whether oral or written, between the
Borrowers (or any Borrower Affiliate) and any Lender or Agent are superseded by
the terms of this Agreement and the other Loan Documents.
Section 12.22 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, Agent is authorized at any time and from time to time (with notice to
the Borrowers promptly thereafter), subject to and with the prior approval of
the Required Lenders, without presentment, demand, protest or other notice of
any kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by a Lender (including branches, agencies
or Affiliates of a Lender wherever located) to or for the credit or the account
of any Borrower (to the extent such credit or account is for the benefit of any
Borrower), against the obligations and liabilities of the Borrowers to the
Lenders hereunder, under the Notes, the other Loan Documents or otherwise,
irrespective of whether a Lender or Agent shall have made any demand hereunder
and although such obligations, liabilities or claims, or any of them, may be
contingent or unmatured in which case it shall promptly notify the Borrowers and
(in the case of a Lender) Agent, and any such set-off shall be deemed to have
been made immediately upon the occurrence of an Event of Default even though
such charge is made or entered on the books of such Lender subsequent thereto.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NO LENDER MAY EXERCISE ANY RIGHT OF
SET-OFF, BANKER'S LIEN, COUNTERCLAIM OR OTHER RIGHT OR REMEDY WITH RESPECT TO
ANY BORROWER, ANY GUARANTOR OR ANY PROPERTY WITHOUT AGENT'S CONSENT, WHICH
CONSENT SHALL BE IN AGENT'S SOLE AND ABSOLUTE DISCRETION.
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Section 12.23 Loan Assignability.
(a) The Loan, and all or any of a Lender's rights, remedies and privileges
hereunder and the other Loan Documents, shall be assignable pursuant to an
Assignment by a Lender at any time and from time to time to an Eligible Assignee
without any Borrower Affiliate's consent or approval; provided, however, that
any such assignee need not be an Eligible Assignee, from and after the
occurrence and during the continuance of an Event of Default or the occurrence
of any Material Adverse Change. The Loan and all of a Lender's rights,
privileges and remedies under the Credit Agreement and the other Loan Documents,
may be participated pursuant to a Participation to any Person, upon notice to
the Borrowers, without any Borrower Affiliate's consent or approval. No Borrower
may sell, assign or transfer any interest in the Loan Documents or any portion
thereof (including, without limitation, the Borrowers' rights, title, interests,
remedies, powers and duties hereunder and thereunder). Subject to Section 12.26,
in connection with any proposed or actual Assignment or Participation by a
Lender, such Lender may provide to such prospective participant, assignee,
transferee or other Person having any relationship to or role in the proposed or
actual transaction (including, without limitation, any Rating Agency, counsel,
analysts, accountants and advisors) any or all information about the Loan, all
Borrower Affiliates and the Properties, including, without limitation, financial
and credit information of any nature, that Agent or such Lender may have in its
possession, whether or not originally delivered to Agent or such Lender.
(b) (i) Subject to obtaining the prior consent of Agent, which may not be
unreasonably withheld, each Lender, upon notice to the Borrowers, may assign all
or a portion of its rights and obligations hereunder to any Eligible Assignee
(provided, however, that subject to Agent's prior consent, from and after the
occurrence and during the continuance of an Event of Default or the occurrence
of any Material Adverse Change, any such assignee need not be an Eligible
Assignee) who will assume such rights and obligations pursuant to an assignment
and acceptance agreement acceptable to Agent (an "Assignment and Acceptance")
executed by the assignor and assignee and delivered to Agent for its acceptance
and recording in the Register; provided, however, that (A) except for any
assignment made after the occurrence and during the continuance of an Event of
Default or the occurrence of any Material Adverse Change, any such assignment
shall be in a minimum aggregate amount of $10,000,000 (or in the entire amount
of such lesser amount as may then be held by the assigning Lender), and that
each such assignment shall be of a constant, not varying, percentage of all of
the assigning Lender's rights and obligations under this Agreement and (B) after
such assignment, the assignor Lender shall retain a minimum aggregate amount of
$10,000,000 hereunder unless the assignor Lender shall assign its entire
interest in the Loan. Any assignment hereunder shall be effective upon
satisfaction of the conditions set forth in the preceding sentence and delivery
to Agent of the Assignment and Acceptance. Upon the effectiveness of any such
assignment, the assignee shall become a "Lender" for all purposes of this
Agreement and the other Loan Documents and, to the extent of such assignment,
the assigning Lender shall be relieved of its obligations hereunder arising or
accruing from and after the date of such assignment to the extent of the amount
being assigned. The Borrowers agree that upon effectiveness of any such
assignment and surrender of the appropriate Notes, they will promptly provide to
the assigning Lender and to the assignee separate promissory Notes in the amount
of their respective interests substantially in the form of the Notes delivered
in connection with the making of the Loan (with conforming changes thereto and,
if applicable, with notation thereon that it is given in substitution for and
replacement of the
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original Notes or any replacement Notes thereof); provided, however, that the
failure to issue new Notes in connection with any such assignment to an assignee
(whether due to any failure on the part of the Borrowers or otherwise) shall in
no way affect the validity of the Loan, the Notes or the assignment thereof to
such assignee.
(ii) If, pursuant to this subsection, any interest in this Agreement
or any Notes is transferred to any transferee which is organized under the
laws of any jurisdiction other than the United States or any state thereof,
the transferor Lender shall cause such transferee, concurrently with the
effectiveness of such transfer, (A) to represent to the transferor Lender
(for the benefit of the transferor Lender, Agent and the Borrowers) that
under applicable law and treaties no income, franchise, corporate, capital,
stamp or other taxes, levies, duties, imports, deductions, charges or fees
of any nature will be required to be withheld by Agent, the Borrowers, or
the transferor Lender with respect to any payments to be made to such
transferee in respect of the Loan, (B) to furnish to the transferor Lender
and Agent a form prescribed by the United States Internal Revenue Service
(currently, Form W-8ECI or Form W-8BEN) wherein Agent claims entitlement to
exemption from U.S. federal withholding tax on all interest payments
hereunder and (C) to agree (for the benefit of the transferor Lender, Agent
and the Borrowers) to provide the transferor Lender and Agent a new form
upon the expiration or obsolescence of any form previously delivered
pursuant to subsection (C) above and comparable statements in accordance
with applicable U.S. laws and regulations and amendments duly executed and
completed by such transferee, and to comply from time to time with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(c) Subject to obtaining the prior consent of Agent, which may not be
unreasonably withheld, each Lender may sell, transfer, agent or assign
participations in all or any part of such Lender's interests and obligations
hereunder; provided that (i) such selling Lender shall remain a "Lender" for all
purposes under this Agreement (such selling Lender's obligations under the Loan
Documents remaining unchanged) and the participant shall not constitute a Lender
hereunder, (ii) sub participations by the participant shall be prohibited unless
otherwise expressly approved by Agent and (iii) each participation must be in a
minimum amount of $5,000,000 (or in the entire amount of such lesser amount as
may then be held by the selling Lender). In the case of any such participation,
the participant shall not have any rights under this Agreement or the other Loan
Documents (the participant having rights against the selling Lender in respect
of such participation as set forth in the participation agreement with such
Lender creating such participation) and all amounts payable by the Borrowers
hereunder shall be determined as if such Lender had not sold such participation.
(d) Notwithstanding any other provision contained in this Agreement or any
other Loan Document to the contrary, any Lender may assign all or any portion of
the Loan or Notes held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any "Operating Circular" issued by
such Federal Reserve Bank; provided that any payment in respect of such assigned
Loan or Notes made by a Borrower to or for the account of the assigning and/or
pledging Lenders in accordance with the terms of this Agreement shall satisfy
Borrower's obligations hereunder in respect of such assigned Loan or Notes to
the extent of such payment. No such assignment shall release the assigning
Lender from its obligations hereunder.
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(e) In the event that Agent notifies the Borrowers that a sale of any of
the Notes or any interest in any thereof (an "Assignment") (including, without
limitation, a sale or transfer of any Note held by the Lenders to a trust,
partnership, business trust or other issuance vehicle accompanied by the
simultaneous issuance by such vehicle of a security backed by or representing an
interest in such Notes, either alone or together with other assets transferred
by a Lender or other parties), or a sale of a participation interest in any of
the Notes (a "Participation"), to one or more other parties is desirable, then
each Borrower shall and shall cause the other Borrower Affiliates to reasonably
cooperate with, and provide assistance to such Lender in order to effectuate
such Assignment or Participation, which assistance may include, among other
things, (i) providing to Agent information prepared by or on behalf of the
Borrower Affiliates relating to the Properties and the business, assets,
financial condition, operations and prospects of the Borrower Affiliates with
respect to the Properties; (ii) to supplement such information from time to time
after reasonable request by Agent, or otherwise to ensure the accuracy of such
information, until such time as the Assignment or Participation has been
completed; and (iii) to make members of the Borrower Affiliates' management and
their consultants and advisors available from time to time in New York City to
attend and make presentations regarding the business and prospects of the
Borrowers and the Properties, or relating to the terms and conditions of the
Loan or the status of the Properties, as appropriate, at a meeting or meetings
of any Lenders or prospective purchasers of interests in the Loan, all at the
Borrowers' expense (A) to answer questions regarding the Properties and the
Loan, (B) to review, comment on and assist in the preparation of the memorandum
relating to the Assignment or Participation of the Loan, (C) to meet with
prospective Lenders and (D) to use their reasonable efforts, in light of their
lending relationships, to benefit the Assignment or Participation efforts of
Agent.
(f) Notwithstanding anything contained herein to the contrary, with respect
to any Assignments or Participations by any Lender other than the initial Lender
hereunder, each such Lender shall pay to Agent a non-refundable administrative
fee of $5,000 for each such Assignment or Participation, which administrative
fee shall be payable to Agent upon Agent's granting of consent to any such
Assignment or Participation in accordance with this Section.
Section 12.24 Exculpation of Lender; No Petition. Neither any Lender nor
Agent undertakes nor assumes any responsibility or duty to any Borrower
Affiliate or any other party to select, review, inspect, examine, supervise,
pass judgment upon or inform such Borrower Affiliate or any third party of (a)
the existence, quality, adequacy or suitability of appraisals of any Property or
any other collateral, (b) any environmental report, or (c) any other matters or
items, including, but not limited to, engineering, soils and seismic reports
which are contemplated in the Loan Documents. Any such selection, review,
inspection, examination and the like, and any other due diligence conducted by a
Lender or Agent, is solely for the purpose of protecting such Lender or Agent's
rights under the Loan Documents, and shall not render such Lender or Agent
liable to any Borrower Affiliate or any third party for the existence,
sufficiency, accuracy, completeness or legality thereof. Each of the Borrower
Affiliates, the Lenders and Agent and each other Person which becomes a party to
this Agreement hereby acknowledge and agree that (i) Agent has originated the
Loan and is responsible for all conversations and negotiations with the Borrower
and each other Borrower Affiliate with respect to the Loan Documents and for all
negotiation and preparation of the Loan Documents on behalf of the named Lenders
or Agent herein, (ii) the only obligations of such Lender under the Loan
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Documents and in connection therewith is (A) as expressly set forth in the Loan
Documents, and (B) to fund the Loan to be funded in accordance with this
Agreement and the other Loan Documents, that such named Lender have no other
obligations or liabilities arising under or in connection with any Loan Document
and shall not be liable or responsible to any party to act or for the failure to
act in connection with any Loan Document except as provided in the Loan
Documents and for its funding obligation set forth in this clause (ii) (it being
agreed that such Lender's failure to take any action shall not result in
liability to Agent solely as a result of Agent's inability to exercise remedies
except upon the direction of the Lenders (or Required Lenders) as provided
herein, including Section 9.2) and (iii) prior to the date that is one year and
one day after the payment in full of all outstanding senior indebtedness of such
Lender the parties hereto will not institute against, or join any other Person
in instituting against, such Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.
Section 12.25 Borrower's Obligations. Each Borrower agrees that the Loan
has been committed and agreed to, and the Lenders have advanced the Loan to
Borrowers, on the understanding and agreement that each such Borrower is and
will remain jointly and severally liable for the Debt hereunder and under the
other Loan Documents, and that all obligations of each other Borrower now or
hereafter existing under this Agreement for the Debt will be paid strictly in
accordance with the terms of this Agreement and the other Loan Documents
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Agent or the Lenders
with respect thereto. The liability of each Borrower hereunder shall be absolute
and unconditional irrespective of (a) any taking, exchange, release or
nonperfection of any collateral, or any release or amendment or waiver of or
consent to departure from any guaranty, for all or any of such obligations and
(b) any other circumstances which might otherwise constitute a defense available
to, or a discharge of, any Borrower.
Section 12.26 Confidentiality. Notwithstanding anything contained herein to
the contrary, Agent and each Lender agree to keep confidential all non-public
information provided to it by or on behalf of the Borrowers pursuant to this
Agreement; provided, that nothing herein shall prevent Agent or any Lender from
disclosing any such information (a) to the Agent, or to any other Lender, (b) to
any participant or transferee which agrees to comply with the provisions of this
Section 12.26, (c) the employees, directors, agents, attorneys, accountants and
other professional advisors of Agent or such Lender or their respective
Affiliates provided they agree to comply with the provisions of this Section
12.26, (d) upon the request or demand of any Governmental Authority having
jurisdiction over Agent or such Lender, (e) in response to any order or any
court or other Governmental Authority or as may otherwise be required pursuant
to any Legal Requirement, (f) if required to in connection with any litigation
or similar proceeding, (g) which has been publicly disclosed other than in
breach of this Section 12.26, or (h) in connection with the exercise of any
remedy hereunder or under any other Loan Document.
Section 12.27 Payment and Performance. Upon the payment and performance by
the Borrowers of all of their obligations hereunder, Agent shall, on behalf of
the Lenders, execute and deliver to the Borrowers such instruments as shall have
been prepared by the Borrowers at their sole cost and expense, and which
instruments shall be sufficient to release the Liens created by the Loan
Documents and shall otherwise be in both form and substance acceptable to Agent
in its sole and absolute discretion, except that, upon the Borrowers' request,
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Agent shall execute, acknowledge and deliver to the Borrowers designee or
designees an assignment or assignments of any mortgage or deed of trust held by
Agent on behalf of the Lenders, which assignment or assignments shall have been
prepared by the Borrowers at their sole cost and expense and which shall be in
both form and substance consistent with Agent's then customary practices. Any
such assignment shall be without recourse, representation or warranty of any
kind, except that Agent shall make a representation as to the actual outstanding
principal amount of such mortgage or deed of trust and that neither Agent nor
any Lender has otherwise sold, assigned, encumbered or hypothecated such deed of
trust or mortgage. Together with such assignment, Agent shall deliver to such
assignee such original Note or Notes as shall be sufficient to evidence the
principal amount secured by such mortgage or deed of trust. As a condition to
any release or assignment under this Section 12.27, the Borrowers shall
reimburse Agent for any and all costs and expenses incurred by Agent in
connection with Agent's compliance with the foregoing provisions.
ARTICLE XIII
AGENCY DECISIONS
Section 13.1 Appointment and Authorization.
(a) Each Lender hereby appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. Any and all actions, decisions, approvals,
determinations, waivers and changes relating to conditions precedent to
Advances, shall be deemed to have been delegated to Agent exclusively and shall
not constitute a decision requiring the approval of any Lender. As to matters
not expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lenders and all holders of the Notes; provided,
however, that Agent shall not be required to take any action that exposes Agent
to personal liability or that is contrary to this Agreement or applicable law.
Agent shall not agree to any amendment, modification or waiver which would
reduce the Loan Amount or the Applicable Interest Rate, postpone the Maturity
Date (except as expressly permitted herein) or release any security for the Loan
or release any guaranty without the consent of all Lenders.
(b) By their execution of this Agreement, all of the Lenders hereby
authorize and direct Agent to act on their behalf in all material respects in
connection with the Loan Documents and the making of the Loan and agree with the
Borrowers that the Borrowers shall be required to deal with only Agent and each
of the Lenders shall be bound by the acts of Agent. Unless expressly set forth
herein or in any other Loan Document, each of the Lenders acknowledges and
agrees that no individual Lender may separately enforce or exercise any of the
provisions of the Loan Documents (including, without limitation, the Notes)
other than through Agent. Each of the Lenders acknowledges and agrees that no
individual Lender may separately enforce or exercise any of the provisions of
the Loan Documents (including, without limitation, the Notes) other than through
Agent.
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(c) In addition to those actions which are otherwise expressly provided for
in this Agreement, Agent (i) is expressly permitted to take all actions
hereunder and under the other Loan Documents which are not inconsistent with the
terms hereof or thereof and (ii) shall not take any material actions hereunder
or under the Loan Documents contrary thereto. Any provision of this Agreement
which grants to Agent the right to make a decision at its sole discretion or in
its reasonable judgment or at its option or any other similar provision is
intended, unless the context shall clearly require otherwise, to apply only to
relations between the Borrowers and Agent and the respective rights and
obligations of the Borrowers and Agent hereunder and shall not apply to the
relations between Agent and the Lenders or the respective rights and obligations
of Agent and the Lenders hereunder.
Section 13.2 Delegation of Duties. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible to any Lender
for the negligence or misconduct of any agent or attorney-in-fact that it
selects with reasonable care, but the foregoing shall not waive any claims the
Borrowers may have in respect thereof.
Section 13.3 Liability of Agent. Agent, its Affiliates, or their respective
officers, directors, employees, agents, or attorneys-in-fact (all of the
foregoing being collectively referred to as the "Agent-Related Persons") shall
not (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document (except
for its own gross negligence or willful misconduct), or (b) be responsible in
any manner to any Lender for any recital, statement, representation or warranty
made by any Borrower or any Subsidiary or any Affiliate of any such Person, or
any officer thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by Agent under or in connection with, this
Agreement or any other Loan Document, or for the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, any other Loan
Document, or for any failure of any Borrower Affiliate to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Borrower or any Subsidiary or Affiliates thereof. Agent agrees to
promptly furnish to each Lender copies of all financial statements and other
certificates, reports, papers, documents or notices received by it hereunder in
its capacity as Agent. Nothing contained in this Section 13.3 shall in any
manner increase the obligations or decrease the rights of the Borrowers
hereunder in any material respect.
Section 13.4 Reliance by Agent. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telecopy, telex or telephone message,
statement or other document or conversation 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 (including counsel to any
Borrower Affiliate), independent accountants and other experts selected by
Agent. 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 the Required Lenders
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as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
Section 13.5 Notice of Default; Expenses. Promptly after Agent acquires
actual knowledge thereof, Agent will give written notice to each Lender of any
material Default under this Agreement or any of the other Loan Documents which
in Agent's judgment adversely affects the Lenders' interest in the Loan. Agent
agrees to consult with the Lenders in respect of any material remedial action to
be taken in respect of any such Default and shall act substantially in
accordance with any decision of the Required Lenders. Agent agrees that during a
period of ten (10) days from Agent's notice to the Lenders of any such Default,
Agent will not take any such material remedial action without the prior
agreement of the Required Lenders unless in Agent's good faith judgment it is
necessary to take more prompt remedial action within such period, with or
without the agreement of the Required Lenders, in order to preserve any
collateral for the payment of the Loan or substantive rights or remedies under
any of the Loan Documents. Agent shall advise the Lenders from time to time of
such remedial action as Agent shall have taken. Notwithstanding the foregoing,
if the Required Lenders do not agree on the action to be taken, except as
expressly set forth in this Section, Agent reserves the right, in its sole
discretion, in each instance, without prior notice to the Lenders, to exercise
or refrain from exercising any powers or rights Agent may have under or in
respect of this Agreement or any of the other Loan Documents relative thereto or
any collateral therefor, which would be reasonable and prudent. All Lender
Expenses and Losses incurred by Agent in connection with the Loan, the
enforcement thereof or the realization of the security therefor shall be borne
by the Lenders in accordance with their ratable interest in the Loan, and the
Lenders will, upon request, reimburse Agent for their ratable shares of any
expenses incurred by Agent in connection with any Default, any advances made to
pay taxes or insurance or otherwise to preserve the Lien of the Loan Documents
or to preserve and protect the Properties, any other expenses incurred in
connection with the enforcement of the Loan Documents, and any expenses incurred
by Agent in connection with the consummation of the Loan not paid or provided
for by the Borrowers.
Section 13.6 Credit Decision. Each Lender expressly acknowledges that none
of Agent-Related Persons has made any representation or warranty to such Lender
and that no act by Agent hereinafter taken, including any review of the affairs
of the Borrowers, any asset manager, or any Subsidiary or Affiliate thereof,
shall be deemed to constitute any representation or warranty by Agent to any
Lender. Each Lender represents to Agent that such Lender has, independently and
without reliance upon Agent and based on such documents and information as such
Lender has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, properties, financial and other condition
and creditworthiness of each Borrower, and all applicable bank regulatory laws
relating to the transactions contemplated thereby, and made its own decision to
enter into this Agreement and extend credit to the Borrowers hereunder. Each
Lender also represents that it will, independently and without reliance upon
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such
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investigations as it deems necessary to inform itself as to the business,
prospects, operations, properties, financial and other condition and
creditworthiness of each Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by Agent,
Agent shall have no duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, properties,
financial and other condition or creditworthiness of any Borrower or any
Subsidiary or Affiliate thereof which may come into the possession of any of
Agent-Related Persons.
Section 13.7 Indemnification. The Lenders shall indemnify upon demand
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so) ratably
from and against any and all Losses which may at any time (including at any time
following the repayment of the Loan) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
any such Person under or in connection with any of the foregoing; provided,
however, no Lender shall be liable for the payment to Agent-Related Persons of
any portion of such Losses to the extent resulting from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse Agent upon demand (to the extent Agent is not reimbursed
upon demand by the Borrowers, unless Agent is legally restricted from making
such demand upon the Borrowers, in which case demand need not be made upon the
Borrower) for its ratable share of any costs or out-of-pocket expenses
(including attorneys' fees and expenses and the allocated fees of in-house
counsel) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein to the extent
that Agent is not reimbursed for such expenses by or on behalf of the Borrowers.
Without limiting the generality of the foregoing, if the Internal Revenue
Service or any authority of the United States or other jurisdiction asserts a
claim that Agent did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered or was not
properly executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Lender shall indemnify Agent
fully for all amounts paid, directly or indirectly, by Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent under this Section, together
with all costs, expenses and attorneys' fees (including allocated costs for
in-house legal services). The obligation of the Lenders in this Section shall
survive the payment and satisfaction of all of the Debt.
Section 13.8 Agent in Individual Capacity. Agent named herein (and any
other Lender that may hereafter serve as Agent) and each of their respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory or other business with, any Borrower and
their respective Subsidiaries and Affiliates as though Agent named herein (or
any other such Lender) were not the agent hereunder and without notice to or
consent of the Lenders. Lenders acknowledge that pursuant to such activities,
Agent named herein or its Affiliates may receive information regarding the
Borrower Affiliates and their respective Subsidiaries and
-116-
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrower Affiliates and such Subsidiaries and
Affiliates), and acknowledge that Agent named herein and its Affiliates shall be
under no obligation to provide such information to the Lenders.
Section 13.9 Successor Agents. Agent may resign as Agent upon thirty (30)
days' notice to the Lenders and the Borrowers. Agent may be removed at any time
with Cause by an instrument or concurrent instruments in writing delivered to
the Borrowers and Agent and signed by the Required Lenders. If Agent shall
resign or be removed under this Agreement, the Required Lenders shall appoint
from among the Lenders a successor Agent for the Lenders. If no successor Agent
is appointed prior to the effective date of the resignation or removal of the
retiring Agent, the retiring Agent shall appoint a successor Agent, provided
such successor is a Lender hereunder or is a commercial bank or other financial
institution and has a combined capital and surplus of at least $100,000,000.
Upon the acceptance of its appointment as successor Agent hereunder, such
successor Agent shall succeed to all the rights, powers and duties of the
retiring Agent, and the term the "Agent" shall mean such successor Agent, and
the retiring Agent's rights, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article XIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Agreement.
If no successor Agent has accepted appointment as Agent by the date which is
thirty (30) days following a retiring Agent's notice of resignation or removal
of an Agent, the retiring Agent's resignation or removal shall nevertheless be
effective and the Lenders shall perform all of the duties of Agent hereunder
until such time, if any, as the Required Lenders appoint a successor Agent as
provided for above. If at any time Agent assigns its entire interest in the Loan
as Lender to any assignee, such assignee shall, without further action, succeed
Agent as Agent hereunder so long as such assignee is an Eligible Assignee
(provided that from and after the occurrence and during the continuance of an
Event of Default or the occurrence of a Material Adverse Change, any such
successor assignee need not be an Eligible Assignee).
Section 13.10 Amendments. Notwithstanding anything to the contrary in this
Agreement, Agent and the Lenders may amend the provisions of this Article XIII
without the consent of the Borrowers, provided that no such amendment shall in
any manner increase the obligations or decrease the rights of the Borrowers
hereunder in any material respect.
ARTICLE XIV
DISPOSITION LETTERS OF CREDIT
Section 14.1 Security for Debt. Each Disposition Letter of Credit delivered
under this Agreement shall be additional security for the payment of the Debt.
Upon the occurrence of an Event of Default, Agent shall have the right, at its
option, to draw on any Letter of Credit and to apply all or any part thereof to
the payment of the Debt in such order, proportion or priority as Agent in its
sole and absolute discretion may determine. On the Maturity Date, any such
Disposition Letter of Credit may be applied to reduce the Debt; provided, that,
if any such Disposition Letter of Credit (or any proceeds thereof held by Agent)
has not been applied by Agent at the time of the full and indefeasible payment
by the Borrowers of the Debt, then such Disposition Letter of Credit (or any
proceeds thereof held by Agent) shall at such time be returned to the Borrowers.
-117-
Section 14.2 Additional Rights of Lender. In addition to any other right
Agent may have to draw upon a Disposition Letter of Credit pursuant to the
terms, covenants, provisions and conditions of this Agreement, Agent shall have
the additional right to draw in full any Disposition Letter of Credit if Agent
shall have received notice (a) from the Eligible Institution issuing such
Disposition that such Letter of Credit will not be renewed and/or a substitute
Disposition Letter of Credit is not provided at least thirty (30) days prior to
the date on which such Disposition Letter of Credit is scheduled to expire; (b)
from the Eligible Institution issuing the Disposition Letter of Credit that such
Disposition Letter of Credit will be terminated (except if the termination of
such Disposition Letter of Credit is permitted pursuant to the terms and
conditions of this Agreement or a substitute Disposition Letter of Credit is
provided); or (c) from any Person or otherwise reasonably determines that the
bank issuing the Disposition Letter of Credit shall cease to be an Eligible
Institution. Upon the occurrence of an event specified in (a), (b) or (c) above,
Agent shall have the right, at its option, to draw on and hold up to the full
amount of any Disposition Letter of Credit (as additional security for the Debt)
and to apply all or any part thereof, in Agent's sole and absolute discretion,
to payment of the Debt in such order, proportion or priority as Agent in its
sole and absolute discretion may determine. Notwithstanding anything to the
contrary contained in the above, Agent shall not be obligated to draw on any
Disposition Letter of Credit upon the occurrence of any event specified in (a),
(b) or (c) above and shall not be liable for any Losses sustained by any
Borrower Affiliate due to the insolvency of the bank issuing any Disposition
Letter of Credit.
* * *
-118-
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.
BORROWERS:
SHELBOURNE PROPERTIES I L.P.,
a Delaware limited partnership
By: Shelbourne Properties I GP LLC, a
Delaware limited liability company
By: Shelbourne Properties I, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
----------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE PROPERTIES II L.P.,
a Delaware limited partnership
By: Shelbourne Properties II GP LLC, a
Delaware limited liability company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
----------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE PROPERTIES III L.P.,
a Delaware limited partnership
By: Shelbourne Properties III GP, Inc., a
Delaware corporation
By: /s/ Xxxxxx Xxxxx
----------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE RICHMOND COMPANY
LLC, a Delaware limited liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP LLC, a
Delaware limited liability company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
-------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE XXXXXXXX COMPANY
LLC, a Delaware limited liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP LLC, a
Delaware limited liability company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE MELROSE CROSSING I COMPANY
LLC, a Delaware limited liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP LLC, a
Delaware limited liability company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE MELROSE CROSSING II COMPANY
LLC, a Delaware limited liability company
By: Shelbourne Properties III L.P., a
Delaware limited partnership
By: Shelbourne Properties III GP, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE RALEIGH COMPANY
LLC, a Delaware limited liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP LLC, a
Delaware limited liability company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE LAS VEGAS COMPANY
LLC, a Delaware limited liability company
By: Shelbourne Properties III L.P., a
Delaware limited partnership
By: Shelbourne Properties III GP, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE LIVONIA COMPANY
LLC, a Delaware limited liability company
By: Shelbourne Properties III L.P., a
Delaware limited partnership
By: Shelbourne Properties III GP, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE I CENTURY PARK
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties I L.P., a
Delaware limited partnership
By: Shelbourne Properties I GP LLC,
a Delaware limited liability company
By: Shelbourne Properties I, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE I SEATTLE LANDMARK
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties I L.P., a
Delaware limited partnership
By: Shelbourne Properties I GP LLC,
a Delaware limited liability company
By: Shelbourne Properties I, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE I 000 XXXXXXXX
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties I L.P., a
Delaware limited partnership
By: Shelbourne Properties I GP LLC,
a Delaware limited liability company
By: Shelbourne Properties I, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE II SEATTLE LANDMARK
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP LLC,
a Delaware limited liability company
By: Shelbourne Properties II, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE II CENTURY PARK
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP LLC,
a Delaware limited liability company
By: Shelbourne Properties II, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE II 000 XXXXXXXX
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP LLC,
a Delaware limited liability company
By: Shelbourne Properties II, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE II TRI-COLUMBUS
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP LLC,
a Delaware limited liability company
By: Shelbourne Properties II, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE III 000 XXXXXXXX
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties III L.P., a
Delaware limited partnership
By: Shelbourne Properties III GP, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SHELBOURNE III TRI-COLUMBUS
COMPANY LLC, a Delaware limited
liability company
By: Shelbourne Properties III L.P., a
Delaware limited partnership
By: Shelbourne Properties III GP, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CENTURY PARK I JOINT VENTURE,
a Delaware general partnership
By: Shelbourne I Century Park Company
LLC, a Delaware limited liability
company
By: Shelbourne Properties I L.P., a
Delaware limited partnership, its
general partner
By: Shelbourne Properties I GP LLC
a Delaware limited liability
company
By: Shelbourne Properties I, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
By: Shelbourne II Century Park Company
LLC, a Delaware limited liability
company
By: Shelbourne Properties II L.P., a
Delaware limited partnership, its
general partner
By: Shelbourne Properties II GP LLC
a Delaware limited liability
company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SEATTLE LANDMARK JOINT VENTURE,
a Delaware general partnership
By: Shelbourne I Seattle Landmark
Company LLC, a Delaware limited
liability company
By: Shelbourne Properties I L.P.,
a Delaware limited partnership, its
general partner
By: Shelbourne Properties I GP LLC,
a Delaware limited liability
company
By: Shelbourne Properties I, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
By: Shelbourne II Seattle Landmark
Company LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership, its
general partner
By: Shelbourne Properties II GP LLC,
a Delaware limited liability
company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
TRI-COLUMBUS ASSOCIATES, a
Delaware general partnership
By: Shelbourne II Tri-Columbus
Company LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership, its
general partner
By: Shelbourne Properties II GP LLC,
a Delaware limited liability
company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
By: Shelbourne III Tri-Columbus
Company LLC, a Delaware limited
liability company
By: Shelbourne Properties III L.P.,
a Delaware limited partnership, its
general partner
By: Shelbourne Properties III GP, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
000 XXXXXXXX JOINT VENTURE,
a Delaware general partnership
By: Shelbourne I 000 Xxxxxxxx
Company LLC, a Delaware limited
liability company
By: Shelbourne Properties I L.P., a
Delaware limited partnership, its
general partner
By: Shelbourne Properties I GP LLC,
a Delaware limited liability
company
By: Shelbourne Properties I, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
By: Shelbourne II 000 Xxxxxxxx
Company LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership, its
general partner
By: Shelbourne Properties II GP LLC,
a Delaware limited liability
company
By: Shelbourne Properties II, Inc., a
Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
By: Shelbourne III 000 Xxxxxxxx
Company LLC, a Delaware limited
liability company
By: Shelbourne Properties III L.P., a
Delaware limited partnership, its
general partner
By: Shelbourne Properties III GP, Inc.,
a Delaware corporation
By:/s/ Xxxxxx Xxxxx
--------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
AGENT:
BAYERISCHE HYPO- UND VEREINSBANK
AG, NEW YORK BRANCH
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
LENDER:
BAYERISCHE HYPO- UND VEREINSBANK
AG, NEW YORK BRANCH
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
EXHIBIT A
PROPERTIES
[See attached legal descriptions.]
Ex. A-1
EXHIBIT 1.1
FORM OF MORTGAGE
Ex. 1.1-1
EXHIBIT 3.3.1
FORM OF NOTICE OF BORROWING
AGENT: BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH
DATE: __________, 200_
Reference is hereby made to that certain Revolving Credit Agreement, dated
as of April 30, 2002, among each of the borrowers party thereto (collectively,
jointly and severally, the "Borrowers"), the lenders from time to time party
thereto (collectively, the "Lenders") and Agent, as agent for itself and the
other Lenders (as amended, restated, replaced, supplemented or otherwise
modified from time to time, the "Credit Agreement"). Capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Credit Agreement.
The undersigned, as the [___________] of each of the Borrowers, hereby
requests on behalf of the Borrowers in accordance with Sections 3.2(a) and 3.3.1
of the Credit Agreement, (i) an Advance of the Loan in the amount of
[___________] United States Dollars $[(_________)], (ii) that the Advance be
funded as a [LIBOR Loan Tranche] [Base Rate Loan Tranche] [Conversion Rate Loan
Tranche] as permitted under the Credit Agreement, with an Interest Period of
[_____] months (if applicable), and (iii) that the Advance be wired on ________
[BORROWING DATE] in accordance with the following wire instructions:
Bank:
ABA #:
Account Name:
Account #:
Attention:
In connection with and in order to induce the Lenders to make the Advance,
the undersigned hereby represents, warrants and covenants on behalf of each
Borrower as follows:
(1) Each of the conditions to the Advance requested hereby set forth in
[[Section 3.1] and] [Section 3.2] of the Credit Agreement have been
satisfied (or waived by Agent in writing);
(2) Attached hereto is the Borrowing Certificate with respect to the requested
Advance in the form required by Section 3.3.1 of the Credit Agreement; and
(3) If at any time prior to the Advance by the Lenders requested hereby, any
Borrower determines that any matter certified herein will not be true and
correct as of the applicable Borrowing Date, the undersigned shall promptly
so notify Agent.
[SIGNATURES FOLLOW]
Ex. 3.3.1-1
Subscribed and sworn to Very truly yours,
before me on __________, 20__.
___________________________ By: _______________________
Notary Public Name:
Title:
[Stamp and Seal] [Seal]
Ex. 3.3.1-2
EXHIBIT 3.3.1(c)
FORM OF BORROWING CERTIFICATE
Pursuant to Section 3.3.1(c) of that certain Revolving Credit Agreement (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, the "Credit Agreement"), dated as of April 30, 2002, among each of the
borrowers party thereto (collectively, jointly and severally, the "Borrowers"),
the lenders from time to time party thereto (collectively, the "Lenders") and
Bayerische Hypo- Und Vereinsbank AG, New York Branch, as agent for itself and
the other Lenders ("Agent"), the undersigned [_______________] of each of the
Borrowers hereby certifies to Agent and each Lender as follows:
(4) The representations and warranties of the Borrowers set forth in the Credit
Agreement, the Loan Documents, and in each certificate, document, financial
and any other statement furnished pursuant to or in connection with the
Credit Agreement are (both immediately prior to and after giving effect to
the Requested Advance (as defined below)) true and correct on and as of the
date hereof and on and as of the Borrowing Date with the same force and
effect as if made on and as of the date hereof and on and as of the
Borrowing Date;
(5) Immediately prior to and after giving effect to the Advance requested to be
made by the Borrowers on the Borrowing Date pursuant to that certain Notice
of Borrowing dated as of the date hereof (the "Requested Advance"), no
Default or Event of Default has occurred and is continuing under the Loan
Agreement or any other Loan Document;
(6) Since the date of the preceding Advance (or in the case of the initial
Advance, since the Closing Date) no Material Adverse Change has occurred;
(7) Attached hereto is Borrowers' calculation of the Debt Yield Maintenance
Ratio giving effect to the Requested Advance, which calculation
demonstrates that the Debt Yield Maintenance Ratio (as so calculated) is
equal to or exceeds the Minimum Debt Yield; and
(8) The undersigned is the [__________] of each Borrower, and the signature set
forth on the signature line above his name below is such officer's true and
genuine signature.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Credit Agreement.
Dated: Date: __________
By: _______________________
Name:
Title:
Ex. 3.3.1(c)-1
SCHEDULE I
BORROWERS
Shelbourne Properties I L.P., a Delaware limited partnership
Shelbourne Properties II L.P., a Delaware limited partnership
Shelbourne Properties III L.P., a Delaware limited partnership
Shelbourne Richmond Company LLC, a Delaware limited liability company
Shelbourne Xxxxxxxx Company LLC, a Delaware limited liability company
Shelbourne Melrose Crossing I Company LLC, a Delaware limited liability company
Shelbourne Melrose Crossing II Company LLC, a Delaware limited liability company
Shelbourne Raleigh Company LLC, a Delaware limited liability company
Shelbourne Las Vegas Company LLC, a Delaware limited liability company
Shelbourne Livonia Company LLC, a Delaware limited liability company
Shelbourne I Century Park Company LLC, a Delaware limited liability company
Shelbourne II Century Park Company LLC, a Delaware limited liability company
Shelbourne I Seattle Landmark Company LLC, a Delaware limited liability company
Shelbourne II Seattle Landmark Company LLC, a Delaware limited liability company
Shelbourne II Tri-Columbus Company LLC, a Delaware limited liability company
Shelbourne III Tri-Columbus Company LLC, a Delaware limited liability company
Shelbourne I 000 Xxxxxxxx Company LLC, a Delaware limited liability company
Shelbourne II 000 Xxxxxxxx Company LLC, a Delaware limited liability company
Shelbourne III 000 Xxxxxxxx Company LLC, a Delaware limited liability company
Century Park I Joint Venture, a Delaware general partnership
Seattle Landmark Joint Venture, a Delaware general partnership
Tri-Columbus Associates, a Delaware general partnership
000 Xxxxxxxx Joint Venture, a Delaware general partnership
Sched. I-1
SCHEDULE A
PROPERTY OWNERS/OWNERSHIP OF PROPERTIES
PROPERTY OWNER
------------------------------------------------------------------------------
000-000 Xxxxxxxx (NY) 000 Xxxxxxxx Xxxxx Xxxxxxx
Xxxxxxx Xxxx (XX) Century Park I Joint Venture
Commerce Plaza I (VA) Shelbourne Richmond Company LLC
Tri-Columbus Associates (Leap Road)(OH) Tri-Columbus Associates
Lincoln Plaza (MI) Shelbourne Livonia Company LLC
Loch Raven Plaza (MD) Shelbourne Properties I X.X.
Xxxxxxxx Festival (NC) Shelbourne Matthews Company LLC
Melrose Crossing I (IL) Shelbourne Properties II L.P.
Melrose Crossing II (IL) Shelbourne Properties III L.P.
Melrose Crossing (vacant Rally's) (IL) Shelbourne Properties II L.P.
Seattle Tower (WA) Seattle Landmark Joint Venture
Tri-Columbus Associates (Xxxxxxx) (OH) Tri-Columbus Associates
Southport Shopping Center (FL) Shelbourne Properties I L.P.
Sunrise Marketplace (NV) Shelbourne Las Vegas Company LLC
Xxxxxx Square Shopping Center (NC) Shelbourne Raleigh Company LLC
Tri-Columbus Associates (Volvo) (OH) Tri-Columbus Associates
Sched. A
SCHEDULE 1.1(a)
ALLOCATED LOAN AMOUNTS AND RELEASE AMOUNTS
Allocated Loan Amounts and Release Prices
Address/Name Allocated Loan Amount Release Amount
------------ --------------------- --------------
000-000 Xxxxxxxx (NY) $ 21,179,537 $28,500,000
Seattle Tower (WA) $ 6,516,781 $ 8,150,000
Sunrise Marketplace (NV) $ 4,561,746 $ 7,000,000
Commerce Plaza I (VA) $ 2,346,041 $ 3,100,000
Century Park (CA) $ 8,471,815 $10,600,000
Southport Shopping Center (FL) $ 8,080,808 $10,100,000
Lincoln Plaza (MI) $ 3,421,310 $ 4,700,000
Loch Raven Plaza (MD) $ 3,584,229 $ 4,500,000
Matthews Festival (NC) $ 3,095,471 $ 4,250,000
Melrose Crossing Shopping
Center (OH) $ 1,010,101 $ 1,250,000
Melrose Crossing (vacant
Rally's) (OH) $ 73,314 $ 100,000
Melrose Crossing II (OH) $ 586,510 $ 1,900,000
Xxxxxx Square Shopping
Center (NC) $ 4,561,746 $ 6,000,000
Tri-Columbus Associates
(Leap Road) (OH) $ 1,547,735 $ 2,300,000
Tri-Columbus Associates
(Xxxxxxx) (OH) $ 1,564,027 $ 2,100,000
Tri-Columbus Associates
(Volvo) (OH) $ 4,398,827 $ 5,500,000
--------------- ----------------
$ 75,000,000 $100,050,000
Sched 1.1(a)-1
SCHEDULE 1.1(b)
CORE PROPERTIES
000-000 Xxxxxxxx - 000-000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
Century Park - 0000-00 Xxxxxxx Xxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
Seattle Tower - 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
Southport - 0000 Xxxxxxxxx 00xx Xxxxxx Xxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx
Sched 1.1(b)-1
SCHEDULE 1.1(c)
REPORTS
Sched 1.1(c)-1
SCHEDULE 4.1(d)
LITIGATION
Sched 4.1(d)-1
SCHEDULE 4.1(e)
LEASES
Sched 4.1(e)-1
SCHEDULE 4.1(k)
MATERIAL AGREEMENTS
Sched 4.1(k)-1
SCHEDULE 4.1(q)
ENGINEERING REPORTS
Sched 4.1(q)-1
SCHEDULE 4.1(cc)
CERTIFIED OWNERSHIP STRUCTURE CHART
Sched 4.1(cc)-1
SCHEDULE 4.1(ff)
ENVIRONMENTAL REPORTS
Sched 4.1(ff)-1
SCHEDULE 4.1(gg)
OPERATING AGREEMENTS
Sched 4.1(gg)-1
SCHEDULE 4.1(jj)
SUBSIDIARIES
Sched 4.1(jj)-1
SCHEDULE 5.1(m)
FORM OF LEASE TERM SHEET
Sched 5.1(m)-1
SCHEDULE 5.1(s)
DEFERRED MAINTENANCE
1. Sunrise Marketplace (NV): Repairs to roof over Hollywood Video
and Furniture to Go - Estimated cost: $87,000.
2. Commerce Plaza I (VA): Asphalt repairs and balancing and testing HVAC
systems - Estimated cost: $92,000.
3. Lincoln Plaza (MI): Asphalt repairs - Estimated cost: $15,000.
4. Loch Raven Plaza (MD): Asphalt repairs - Estimated cost: $15,000.
5. Melrose Crossing Shopping
Center I (OH): Repairs to pavement - Estimated cost: $257,950.
6. Tri-Columbus Associates -
(Leap Road) (OH): Repairs to concrete pavement - Estimated
cost: $26,900.
All of the foregoing Deferred Maintenance must be completed by Borrowers prior
to December 31, 2002.
Sched 5.1(j)-1
