1
Exhibit 10.77
AMENDED AND RESTATED
CASH COLLATERAL ACCOUNT
SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT
among
MAGNOLIA ASSOCIATES, LTD.,
as Borrower
and
THE CHASE MANHATTAN BANK,
as Agent
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE CAPITAL INC.,
as Lender
DATED: as of November 26, 1997
2
AMENDED AND RESTATED CASH COLLATERAL ACCOUNT
SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT
AMENDED AND RESTATED CASH COLLATERAL ACCOUNT SECURITY, PLEDGE AND
ASSIGNMENT AGREEMENT (this "Agreement"), dated as of November 26, 1997, among
MAGNOLIA ASSOCIATES, LTD. ("Borrower"), THE CHASE MANHATTAN BANK ("Agent"), and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE CAPITAL INC. ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower is the holder of certain real property described
in Exhibit A attached hereto (collectively, the "Premises", and the portion of
the Premises described in Exhibit A-1 attached hereto, the "Orlando Premises",
and the portion of the Premises described in Exhibit A-2 attached hereto, the
"Tower 45 Premises");
WHEREAS, Lender and 286 Madison, L.P., 290 Madison, L.P. and 292
Madison, L.P., collectively as mortgagor ("Mortgagor") have spread the lien of
the Original Mortgage to the Tower 45 Premises and have consolidated, amended
and restated the Original Mortgages and those mortgages encumbering the Tower 45
Premises (the "Additional Mortgages") in their entirety to secure indebtedness
in the maximum principal amount of One Hundred Seven Million Dollars
($107,000,000) (the "Loan") which Loan is evidenced by a consolidated, amended
and restated mortgage note dated as of the date hereof (as the same may be
amended, modified, increased or restated, the "Note"), made by Borrower, as
maker, in favor of Lender, as payee, and secured by (i) a Consolidated, Amended
and Restated Mortgage, Security Agreement, Financing Statement, Fixture Filing
and Assignment of Leases, Rents and Security Deposits, dated as of the date
hereof (as the same may be amended, modified, consolidated or restated, the
"Mortgage"), between Mortgagor, and Lender, as mortgagee, (ii) an Amended and
Restated Assignment of Rents and Leases made by Mortgagor, as assignor, to
Lender, as assignee, dated as of the date hereof (as the same may be amended,
modified or restated, the "Assignment"), and (iii) the other Loan Documents;
WHEREAS, pursuant to Section 38(b) of the Mortgage, the properties
owned by 286 Madison, L.P., 290 Madison, L.P. and 292 Madison, L.P.
(collectively, the "Madison Borrowers") shall be released from the lien of the
Mortgage by
3
December 15, 1997 upon the satisfaction of certain conditions set forth therein,
and as a result of such contemplated release, the Madison Borrowers are not a
party to this Agreement;
WHEREAS, pursuant to the Mortgage and the Assignment, Borrower has
granted to Lender a security interest in the rents and other revenues derived
from or otherwise attributable or allocable to the Premises, and has absolutely
assigned and conveyed to Lender all of the rents, income, revenue, issues and
profits due and to become due or to which Borrower is now or may hereafter
become entitled, arising out of the leases or the Premises or any part or parts
thereof; and
WHEREAS, in order to further effectuate the assignment of rents and
profits by Borrower to Lender, Borrower has established, pursuant to the Cash
Collateral Account Security, Pledge and Assignment Agreement, dated as of
October 15, 1997, by and among Mortgagor, as borrower, Agent and Midland Loan
Services, L.P. ("Midland"), as assigned by Midland to Lender (the "Original
Agreement"), the Operating Account, the P&I Escrow Account, the Mortgage Escrow
Account, the Capital Expenditure Reserve Account, the TI and Leasing Reserve
Account, the Security Deposit Account/Orlando, the Security Deposit
Account/Tower 45 and the ▇.▇.▇▇▇▇ Security Deposit Account (as such terms are
defined in Section 3(a) hereof) (the Operating Account, the P&I Escrow Account,
the Mortgage Escrow Account, the Capital Expenditure Reserve Account, the TI
and Leasing Reserve Account and the Security Deposit Account are hereinafter
collectively referred to as the "Accounts") and has granted to Agent, as agent
for Lender, a perfected first priority security interests therein upon the terms
and subject to the conditions thereof.
WHEREAS, as a condition to making the Loan, Lender has required that
Borrower amend and restate this Agreement for the benefit of the Lender;
NOW, THEREFORE, in consideration of the agreements and covenants
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
and restate this Agreement as follows:
1. Defined Terms. Capitalized terms not otherwise defined herein shall be as
defined in the Mortgage.
2
4
(i) "Air Rights Reserve Amounts" means those amounts required to be
deposited on a monthly basis by Borrower with Agent in connection with basic
rental due under the Air Rights Lease, for so long as the Air Rights Lease may
be in existence.
(ii) "Approved Annual Budget" means the annual budget to be prepared
by Borrower from and after the Reset Date and approved by Lender in accordance
with Section 18 of the Note.
(iii) "Approved Bank" means banks or other financial institutions
which have a minimum long-term unsecured debt rating of at least "AA" by each of
the Rating Agencies, or if any such bank or other financial institution is not
rated by all the Rating Agencies, then a minimum long-term rating of at least
"AA" or its equivalent by the Rating Agencies involved in any securitization of
which the Loan forms a part.
(iv) "Cash Expenses" means, for any period, the operating expenses
for the operation and maintenance of the Premises to the extent that such
expenses are actually incurred by Borrower after the Reset Date and as the same
are set forth on the Approved Annual Budget, less Mortgage Escrow Amounts.
(v) "Extraordinary Expense" means an extraordinary operating expense
or capital expense not set forth in the Approved Annual Budget.
(vi) "Lease Expiration Reserve Amounts" means those amounts required
pursuant to Section 48(b)(ii) of the Mortgage to be deposited by Borrower with
Agent in connection with any Material Lease scheduled to expire within one year
from the date in question.
(vii) "Loan Documents" means the Note, the Mortgage, the Assignment,
this Agreement, and any and all other agreements, instruments or documents
executed by Borrower evidencing, securing or delivered in connection with the
Loan and the transactions contemplated thereby.
(viii) "Material Lease" means a lease demising not less than (i)
20,000 rentable square feet at the Orlando Premises and (ii) 25,000 rentable
square feet at the Tower 45 Premises.
(ix) "Mortgage Escrow Amounts" means amounts required pursuant to
Section 8 of the Mortgage to be deposited by Borrower with Agent for the
3
5
payment of real estate taxes and insurance premiums, and which, for the purposes
of this Agreement shall include Air Rights Reserve Amounts.
(x) "Mortgage Escrow Security" means a letter of credit or cash or
cash equivalents that satisfy the requirements of the Mortgage and that may be
delivered by Borrower to Lender in lieu of depositing Mortgage Escrow Amounts
with Agent.
(xi) "Payment Date" means the first business day of each month
commencing on January 1, 1998, through November 1, 2027.
(xii) "Person" means any individual, corporation, partnership, joint
venture, estate, trust, unincorporated association, and any federal, state,
county or municipal government or any political subdivision thereof.
(xiii) "Rating Agencies" means Standard & Poor's Ratings Services,
Duff & ▇▇▇▇▇▇ Credit Rating Co., ▇▇▇▇▇'▇ Investors Services, Inc. and Fitch
Investor Services, L.P. or, if such corporation shall for any reason no longer
perform the functions of a securities rating agency, any other nationally
recognized statistical rating agency designated by Lender, provided, however,
that at any time during which the Loan is an asset of a securitization, "Rating
Agencies" shall mean the rating agencies that from time to time rate the
securities issued in connection with such securitization.
(xiv) "Reset Date" means November 1, 2004.
2. Security for Obligations. To secure the full and punctual payment
and performance of all obligations of Borrower now or hereafter existing with
respect to the Loan, whether for principal, interest, fees, expenses or
otherwise, and all obligations of Borrower now or hereafter existing under the
Note, the Mortgage, this Agreement and all other Loan Documents (all such
obligations, collectively, the "Obligations"), Borrower hereby sells, assigns,
conveys, pledges and transfers to Agent, as agent for Lender, a first priority
continuing security interest in and to the following property of Borrower to the
extent of Borrower's ownership interest therein, whether now owned or existing
or hereafter acquired or arising and regard less of where located (all of the
same, collectively, the "Collateral"):
(a) the Accounts and all cash, checks, drafts, certificates
and instruments, if any, from time to time deposited or held in the Accounts
from time to
4
6
time including, without limitation, all deposits or wire transfers made to the
Accounts pursuant to Paragraph 3(a) hereof;
(b) any and all amounts invested in Permitted Investments (as
hereinafter defined);
(c) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise payable in respect
of, or in exchange for, any or all of the foregoing; and
(d) to the extent not covered by clauses (a), (b) or (c)
above, all proceeds (as defined under the Uniform Commercial Code as in effect
in the State in which the Accounts are located (the "UCC") of any or all of the
foregoing.
Agent, as agent for Lender, shall have with respect to the
Collateral, in addition to the rights and remedies herein set forth, all of the
rights and remedies available to a secured party under the UCC, as if such
rights and remedies were fully set forth herein.
3. Operating Accounts.
(a) Borrower has established in the name of Agent, as agent for
Lender, as secured party, two cash collateral accounts (individually, an
"Operating Account", and collectively, the "Operating Accounts") with Agent.
Borrower represents, warrants and covenants that (w) all tenants of the Premises
will have been instructed as of the date hereof, pursuant to letters of
instruction delivered to tenants, evidence of which has been delivered to
Lender, to either mail all checks or wire all funds with respect to rental due
under the leases of the Premises to the applicable Operating Account (any such
checks to be delivered to the lock boxes maintained with Agent, as described on
Exhibit B attached hereto), (x) all operating revenue from the Premises will be
deposited by Borrower into the applicable Operating Account, (y) there are no
other accounts other than the Operating Accounts maintained by Borrower or any
other Person for the collection of rents with respect to the Premises, and (z)
so long as the Note shall be outstanding, neither it nor any other Person shall
open any other operating accounts with respect to the Premises. Borrower has
established in the name of Agent, as agent for Lender, as secured party, a
segregated cash collateral account (the "P&I Escrow Account") with Agent.
Borrower has established in the name of Agent, as agent for Lender, as secured
party, a segregated cash collateral account (the "Mortgage Escrow Account") with
Agent. Borrower has established in the name of Agent, as agent for Lender, as
secured party,
5
7
a segregated cash collateral account (the "Capital Expenditure Reserve Account")
with Agent. Borrower has established in the name of Agent, as agent for Lender,
as secured party, a segregated cash collateral account (the "TI and Leasing
Reserve Account") with Agent. Borrower has established in the name of Agent, as
agent for Lender, as secured party, a segregated cash collateral account (the
"Security Deposit Account/Orlando") with Agent. Borrower has established in the
name of Agent, as agent for Lender, as secured party, a segregated cash
collateral account (the "Security Deposit Account/Tower 45") with Agent.
Borrower has established in the name of Agent, as agent for Lender, as secured
party, a segregated cash collateral account (the "▇.▇. ▇▇▇▇ Security Deposit
Account") with Agent. Borrower has established in the name of Agent, as agent
for Lender, as secured party, a segregated custodial account (the "▇.▇. ▇▇▇▇
Bond Account"). The Accounts are more particularly described on Exhibit B
hereto. The Accounts shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other banking or governmental authority, as may now or hereafter be
in effect. Interest accruing on the Permitted Investments shall be periodically
added to the principal amount of the Operating Accounts, the Security Deposit
Account/Orlando, the Security Deposit Account/Tower 45 and the ▇.▇. ▇▇▇▇
Security Deposit Account and shall be held, disbursed and applied in accordance
with the provisions of this Agreement. All statements relating to the Accounts
shall be issued by Agent to Lender (or such other Person as Lender may designate
as Lender's representative) and Borrower. Borrower shall be the beneficial owner
of the Accounts for federal income tax purposes and shall report all income on
the Accounts. Returned items in the Operating Accounts will be charged against
the Borrower in the succeeding month. The Accounts (other than the Operating
Accounts, the Security Deposit Account/Orlando, the Security Deposit
Account/Tower 45 and the ▇.▇. ▇▇▇▇ Security Deposit Account) shall be
subaccounts of the Operating Accounts. Any thing in this Agreement to the
contrary notwithstanding, Agent shall never be obligated to release funds from
the Accounts in excess of the collected and available amount therein.
(b) Borrower hereby agrees that all amounts required to be
deposited in the Operating Accounts and received by Borrower or any of its
Affiliates shall be deposited immediately into the applicable Operating
Account. Until so deposited, any such amounts held by Borrower shall be deemed
to be Collateral and shall be held in trust by it for the benefit, and as the
property, of Agent, as agent for Lender and shall not be commingled with any
other funds or property of Borrower.
6
8
(c) Borrower shall deliver to Agent for deposit in the P&I
Escrow Account on the date hereof the amount of One Million Nine Hundred Fifty
One Thousand Three Hundred Fifty Five and 86/100 ($1,951,355.86).
(d) Borrower shall have delivered to Agent, as of the date of
the Original Agreement, for deposit in the Mortgage Escrow Account on the date
hereof the amount of Nine Hundred Forty One Thousand Four Hundred Sixty Seven
and 74/100 Dollars ($941,467.74), unless Lender shall notify Agent that,
pursuant to Section 8(b) of the Mortgage, Borrower has elected to replace any
Mortgage Escrow Amounts with Mortgage Escrow Security.
(e) Borrower shall deliver to Agent for deposit in the Capital
Expenditure Reserve Account on the date hereof the amount of Four Hundred Fifty
Two Thousand One Hundred Twenty Seven Dollars ($452,127).
(f) Borrower shall deliver to Agent for deposit in the
Security Deposit Account/Orlando on the date hereof the amount of Seventy Six
Thousand Eighty Nine and 55/100 Dollars ($76,089.55). Borrower shall deliver to
Agent for deposit in the Security Deposit Account/Tower 45 on the date hereof
the amount of Five Hundred Sixty Three Thousand Six Hundred Fifty Seven and
12/100 Dollars ($563,657.12). Borrower shall deliver to Agent for deposit in the
▇.▇. ▇▇▇▇ Security Deposit Account on the date hereof the amount of One Million
One Hundred Eighty Seven Thousand Seventy Three and 42/100 Dollars
($1,187,073.42). Borrower shall transfer or cause to be transferred into the
name of Agent, the Bonds (as defined herein) which shall be held by Agent in the
▇.▇. ▇▇▇▇ Bond Account.
(g) At such time as Borrower shall be required to fund Lease
Expiration Reserve Amounts into the TI and Leasing Reserve Account in accordance
with Section 48(b) of the Mortgage, Lender shall deliver to Agent and Borrower a
statement setting forth the monthly Lease Expiration Reserve Amounts to be
transferred by Agent from the applicable Operating Account into the TI and
Leasing Reserve Account with respect to the expiring Material Lease. In
addition, from and after such time as Borrower shall be required to fund Lease
Expiration Reserve Amounts, Borrower shall deliver no later than the fifteenth
(15th) day of each month, or, if the fifteenth day shall not be a business day,
on the business day following the fifteenth day of the month, to Agent and
Lender a certificate of an officer of Bor rower certifying, as of the date
thereof, the anticipated Cash Expenses for the Premises for the applicable
month, provided, however, that the monthly Lease Expiration Reserve Amounts
shall only be funded to the extent of available cash in
7
9
the applicable Operating Account after payment of the Monthly Amount, the
Monthly Mortgage Escrow Amount, Reserve Amounts, the Monthly Capex Amount, the
Monthly TI and Leasing Amount and the funding of Cash Expenses. At such time as
Borrower shall be required to fund Lease Expiration Reserve Amounts and if in
any month, pursuant to the provisions of the clause (g), Borrower shall have
funded less than the full amount of the required monthly Lease Expiration
Reserve Amounts and such amounts shall not have been previously furnished
pursuant to this clause or other wise, Borrower shall deliver to Agent and
Lender, on the fifteenth day of each month, or, if the fifteenth day shall not
be a Business Day, on the Business Day following the fifteenth day of the month,
a certificate of an officer of Borrower certifying as of the date thereof, (y)
the anticipated Cash Expenses of the Premises for the next month, and (z) the
actual Cash Expenses of the Premises for the preceding month. The difference
between actual and budgeted Cash Expenses for the previous month shall be
adjusted by Borrower out of or to available cash to be paid by Borrower to
Agent.
(h) Borrower hereby instructs Agent to withdraw from each
Operating Account by 12:00 p.m. New York time on the first Business Day of each
month, or as soon thereafter as there shall be sufficient collected funds on
deposit in the Operating Accounts, the following amounts and in the following
order of priority:
(i) funds in an amount equal to the monthly principal and
interest payment (each, a "P&I Payment" and collectively the
"Monthly Amount") as more particularly set forth on Schedule 1
hereto, and deposit the same into the P&I Escrow Account;
(ii) funds in an amount equal to the monthly Mortgage
Escrow Amounts (including the Air Rights Reserve Amounts) (the
"Monthly Mortgage Escrow Amount") as more particularly set forth on
Schedule 2 hereto, and deposit the same into the Mortgage Escrow
Account;
(iii) funds in an amount equal to the Reserve Amounts,
if any, as certified by Borrower pursuant to clause (j) hereof, and
deposit the same into the Mortgage Escrow Account;
(iv) funds in an amount equal to Four Thousand Five
Hundred Eighty Five Dollars ($4,585) from the Orlando Operating
Account and Five Thousand Five Hundred Dollars ($5,500)
8
10
from the Tower 45 Operating Account (collectively, the "Monthly
Capex Amount") and deposit the same into the Capital Expenditure
Reserve Account;
(v) funds in an amount equal to Forty Five Thou sand
Dollars ($45,000) from the Orlando Operating Account and Seventy
Three Thousand Three Hundred Thirty Three Dollars ($73,333)
(collectively, the "Monthly TI and Leasing Amount") and deposit the
same into the TI and Leasing Reserve Account.
(vi) from time to time in accordance with Paragraph 3(g)
hereof, funds in an amount equal to the Lease Expiration Reserve
Amounts and deposit the same into the TI and Leasing Reserve
Account.
(i) Provided that (i) no Event of Default shall have occurred
and be continuing hereunder or under any of the other Loan Documents, (ii)
Borrower shall have delivered to Agent and Lender a certificate of an officer of
Borrower's general partner certifying that (x) the signatory knows of no Event
of Default that has occurred and is then outstanding hereunder or under any of
the other Loan Documents, (y) there are no payables of Borrower outstanding that
are more than sixty (60) days past due, unless the same are being contested by
Borrower in good faith, and no other obligations of Borrower that are past due
that are not being contested in accordance with the Mortgage, and (z) Borrower
has delivered to Agent for deposit into the Mortgage Escrow Account (or shall
deliver simultaneously there with) or has instructed (or shall instruct
simultaneously therewith) Agent to transfer from the applicable Operating
Account to the Mortgage Escrow Account, an amount equal to one hundred
twenty-five percent (125%) of any amounts being contested in connection with any
payables which exceed Two Hundred-Fifty Thousand Dollars ($250,000) in the
aggregate (such amounts in excess of Two Hundred-Fifty Thou sand Dollars
($250,000) delivered in connection with any such contest in excess of Two
Hundred Fifty Thousand Dollars ($250,000) being hereinafter referred to as the
"Reserve Amount"), and (iii) Borrower shall have deposited into the Accounts all
funds then required to have been so deposited, then, Borrower may, at any time
during a month, instruct Agent in writing (which instructions Agent agrees to
follow) to transfer all amounts (less any accrued and unpaid fees and expenses
of Agent) remaining on deposit from time to time in the Operating Accounts for
the balance of the applicable month, from the Operating Accounts after all
withdrawals for such month have been made pursuant to Paragraph 3(h) above, to
such account or accounts of Borrower as Borrower may direct (the "Borrower
Accounts"), to transfer
9
11
such excess funds to Borrower Accounts in order for Borrower to pay operating
expenses of the Premises, to make distributions to the partners of Borrower, or
other wise. Lender hereby disclaims any security interest in the amounts
deposited into the Borrower Accounts and such accounts shall not be deemed
"Accounts" as such term is defined herein or in the Mortgage. Notwithstanding
the foregoing, Lender, in connection with any securitization of which the Loan
forms a part, shall request that the Rating Agencies waive the requirement that
Borrower deliver the certificate referred to in clause (ii) as a condition to
the release of amounts remaining in the Operating Accounts and if all the Rating
Agencies shall agree to such request, such requirement shall be deemed waived.
(j) In the event the Borrower has not paid or caused to be
paid, the principal of and interest on the Note in full on or before the Reset
Date, Borrower hereby instructs Agent to withdraw from each Operating Account by
12:00 p.m. New York time on the first Business Day of each month or as soon
thereafter as there shall be collected funds on deposit in the Operating
Accounts, the following amounts and in the following order of priority, based on
the information set forth in a statement delivered to Agent by Borrower at least
two (2) business days prior to the date of withdrawal (or if no statement is
received by Agent then, based on the information set forth in the most recent
statement delivered to Agent by Borrower) and upon which Agent may conclusively
rely:
(i) funds in an amount equal to the related P&I Payment as set
forth in Schedule 1 hereto and deposit the same into the P&I Escrow
Account;
(ii) funds in an amount equal to the related Monthly Mortgage
Escrow Amounts (including the Air Rights Reserve Amounts) as set forth on
Schedule 2 hereto and deposit the same into the Mortgage Escrow Account;
(iii) funds in an amount equal to the Reserve Amounts, if any,
and deposit the same into the Mortgage Escrow Account;
(iv) funds in an amount equal to the monthly allocation of
Cash Expenses in the Approved Annual Budget ("Approved Operating
Expenses") and approved Extraordinary Expenses ("Approved Extraordinary
Expenses"), if any, and pay the same to Lender;
(v) funds in an amount equal to the Monthly Capex Amount and
deposit the same into the Capital Expenditure Reserve Account;
10
12
(vi) funds in an amount equal to the Monthly TI and Leasing
Amounts and deposit the same into the TI and Leasing Reserve Account;
(vii) funds in an amount equal to the Lease Expiration Re
serve Amounts and deposit the same into the TI and Leasing Reserve
Account;
(viii) funds in an amount equal to the lesser of the
outstanding principal due under the Note and the balance of funds in the
Operating Accounts until such time as Lender shall notify Agent in writing
that the principal amount is paid in full, and pay the same to Lender; and
(ix) funds in an amount (as Lender shall certify in writing to
Agent) equal to the Accrued Interest (which shall not be duplicative of
amounts paid in clause (viii) above), including, if applicable, interest
at the Default Rate applicable from and after the Reset Date and pay the
same to Lender.
(k) Borrower hereby instructs the Agent to withdraw from the
P&I Escrow Account by 12:00 p.m. New York time on each Payment Date and pay to
Lender the Monthly Amount due to Lender on such Payment Date, and, from and
after the Reset Date, to pay to Lender any additional interest amounts required
under the Note from the funds deposited into the P&I Escrow Account pursuant to
Section 3(j) hereof.
(l) The Capital Expenditure Reserve Amounts shall be disbursed
by Agent at the written instructions of Lender in accordance with Section 48(a)
of the Mortgage. If Agent shall reasonably determine that there will be
insufficient amounts in the Capital Expenditures Reserve Account to disburse
such amounts, Agent shall provide written notice of same to Borrower and
disburse such available amounts in accordance with the written instructions of
Lender as shall be available in accordance with such instructions.
(m) The TI and Leasing Reserve Amounts shall be disbursed by
Agent at the written instructions of the Lender in accordance with Section 48(b)
of the Mortgage. If Agent shall reasonably determine that there will be
insufficient amounts in the TI and Leasing Reserve Account to disburse such
amounts, Agent shall provide written notice of same to Borrower and disburse
such available amounts in accordance with the written instructions of Lender as
shall be available in accordance with such instructions.
11
13
(n) On or before the first day of each calendar year during
the term of the Note, Borrower shall deliver to the Agent a statement setting
forth the Monthly Mortgage Escrow Amounts (including Air Rights Reserve Amounts)
and the Monthly Amounts which will be required to be paid pursuant to the
provisions of the Mortgage for the succeeding calendar year. In the event
Borrower subsequently determines that any such statement delivered to the Agent
hereunder contains incorrect or incomplete information, Borrower shall promptly
deliver an amended statement of Mortgage Escrow Amounts to the Agent, clearly
identifying the revised or additional information contained therein. Lender
shall instruct Agent in writing to withdraw funds from the Mortgage Escrow
Account from time to time, in accordance with Section 8(d) of the Mortgage, to
pay all real estate taxes and insurance premiums allocable to the Mortgaged
Property in accordance with Section 8 of the Mortgage.
(o) The Security Deposit Account/Orlando and the Security
Deposit Account/Tower 45 shall be disbursed by Agent at the written instruction
of Lender in accordance with Section 15(e) of the Mortgage.
(p) Upon the occurrence of an Event of Default and the
acceleration of the Note, Lender shall promptly notify Agent in writing of such
Event of Default and acceleration and, without notice from Agent or Lender, (x)
Borrower shall have no further right in respect of (including, without
limitation, the right to instruct Lender or Agent to transfer from) the
Accounts, and (y) Lender may direct Agent to liquidate and transfer any amounts
then invested in Permitted Investments to the Accounts or reinvest such amounts
in other Permitted Investments as Lender may reasonably determine is necessary
to perfect or protect any security interest granted or purported to be granted
hereby or to enable Agent, as agent for Lender, or Lender to exercise and
enforce Lender's rights and remedies hereunder with respect to any Collateral.
In the absence of such written notice, Agent may assume that no Event of Default
shall have occurred.
(q) Any amounts held in any of the Accounts shall be in
vested, liquidated and reinvested at Borrower's written direction (provided no
Event of Default shall have occurred and be continuing), or if an Event of
Default shall have occurred and be continuing, at Lender's written direction, in
the name of Agent, as agent for Lender, as secured party under this Agreement,
in either case, in permitted investments, as set forth on Exhibit C hereto (the
"Permitted Investments") (or, if Borrower so directs and no Event of Default
shall have occurred and be continuing, shall be retained in the applicable
Account) and disbursed in accordance with this Agreement. Amounts held in the
Accounts, may be commingled for
12
14
purposes of purchasing Permitted Investments. In no event shall Agent have any
responsibility or liability for the types of investments that Borrower may
direct it to make, nor shall it have any duty or responsibility to confirm that
the same are in fact Permitted Investments. In addition, the Agent shall not be
liable for any investment losses resulting from any investment of funds on
deposit in the Accounts.
(r) All of the Accounts shall be established and maintained at
Borrower's election either as segregated "trust" accounts or as segregated
accounts with an Approved Bank. All of the Accounts which are not held at an
Approved Bank shall be Eligible Accounts. An Eligible Account is 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.
(s) Reference is hereby made to that certain lease dated July
8, 1991 made by Tower 45 Associates Limited Partnership, predecessor in interest
to Borrower, as landlord, and ▇.▇.▇▇▇▇ & Co., L.P. ("▇.▇.▇▇▇▇"), as tenant (the
"▇▇▇▇ Lease"). Pursuant to Article 33 of the ▇▇▇▇ Lease, ▇.▇.▇▇▇▇ is required to
fund a lump sum security deposit in the amount of One Hundred Twenty One
Thousand Seven Hundred Sixty Two Dollars ($121,762) (the "Cash Security"), which
funds have been deposited in the ▇.▇.▇▇▇▇ Security Deposit Account on the date
hereof. In addition, D.E. Shaw is required to deliver United States Treasury
bills, notes and/or bonds as more particularly set forth on Schedule 3 attached
hereto (the "Bonds") to Borrower, as security for the payment of the
Cancellation Penalty (as defined in the ▇▇▇▇ Lease) as well as other amounts due
thereunder. Borrower has transferred or caused to be transferred to Agent on the
date hereof such Bonds and all amounts received with respect thereto shall be
deposited in the ▇.▇. ▇▇▇▇ Bond Account. Lender shall instruct Agent in writing
to disburse the Cash Security, or a portion thereof, and the ▇.▇. ▇▇▇▇ Bond
Account, or a portion thereof, at the end of the ▇▇▇▇ Lease or as may otherwise
be provided in Articles 33 and 37 thereof, provided that Borrower shall deliver
an Officer's Certificate to Lender stating that, pursuant to the terms of the
▇▇▇▇ Lease, or upon termination of the ▇▇▇▇ Lease as provided therein, the
security deposit shall be released to D.E. Shaw.
4. Financing Statement; Further Assurances. Simultaneously herewith,
Borrower shall execute and deliver to Agent for filing a financing statement or
statements in connection with the Collateral in the form required to properly
perfect Agent's security interest therein as agent for Lender. Borrower agrees
that at any time and from time to time, at the expense of Borrower, Borrower
13
15
will promptly execute and deliver all further instruments and documents, and
take all further action, that may be reasonably necessary or desirable, or that
Agent or Lender may reason ably request, in order to perfect and protect any
security interest granted or purported to be granted hereby (including, without
limitation, any security interest in and to any Permitted Investments) or to
enable Agent or Lender to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. The Agent shall be under no obligation
whatsoever to file any financing statement or continuation statement to any such
financing statement, or to make any other filing or other registration under the
UCC, other relevant legislation or similar statute in connection with this
Agreement.
5. Transfers and Other Liens. Except as permitted under the Mortgage
and hereunder, Borrower agrees that it will not (i) sell or otherwise dispose of
any of the Collateral or (ii) create or permit to exist any Lien upon or with
respect to all or any of the Collateral, except for the Lien granted to Agent,
as agent for Lender, under this Agreement.
6. Lender's Right to Perform Borrower's Obligations; No Liability of
Lender. If Borrower fails to perform any of the covenants or obligations
contained herein, and such failure shall continue for a period five (5) Business
Days after Borrower's receipt of written notice thereof from Lender, Lender may
itself perform, or cause performance of, such covenants or obligations, and the
reasonable expenses of Lender incurred in connection therewith shall be payable
by Borrower to Lender in accordance with Section 10 hereof. Notwithstanding the
Lender's right to perform certain obligations of Borrower, it is acknowledged
and agreed that Borrower retains control of the Premises and operation thereof
and notwithstanding anything contained herein or Agent's or Lender's exercise
of any of its rights or remedies hereunder, under the Loan Documents or
otherwise at law or in equity, neither Agent nor Lender shall be deemed to be a
mortgagee-in-possession nor shall Lender be subject to any liability with
respect to the Premises or otherwise based upon any claim of lender liability.
7. Reasonable Care. (a) Beyond the exercise of reasonable care in
the custody thereof, neither Agent nor Lender shall have any duty as to any
Collateral in its possession or control as agent therefor or bailee thereof or
any income thereon or the preservation of rights against any person or otherwise
with respect thereto. Agent and Lender each shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which Agent or Lender accords its own property, it being understood that Lender
shall not be liable or responsible for any
14
16
loss or damage to any of the Collateral, or for any diminution in value thereof,
by reason of the act or omission of Agent or Lender, its Affiliates, agents,
employees or bailees, except to the extent that such loss or damage results from
Agent's or Lender's gross negligence or willful misconduct.
(b) In the event that Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands from any party
hereto which, in its opinion, conflict with any provisions of this Agreement, it
shall be entitled to refrain from taking any action and its sole obligation
shall be to keep safely all property held in the Accounts until it shall be
directed otherwise in writing by all of the parties hereto or by a final order
or judgment of a court of competent jurisdiction.
8. Remedies.
Upon the occurrence and during the continuance of an Event of
Default, Agent, as agent for Lender, may:
(a) without notice to Borrower, except as required by law, and
at any time or from time to time, charge, set-off and other wise apply all
or any part of the Collateral against the Obligations or any part thereof;
(b) in its sole discretion, at any time and from time to time,
exercise any and all rights and remedies available to it under this
Agreement, and/or as a secured party under the UCC; and
(c) demand, collect, take possession of, receipt for, settle,
compromise, adjust, ▇▇▇ for, foreclose or realize upon the Collateral (or
any portion thereof) as Lender may determine in its sole discretion.
Borrower hereby expressly waives, to the fullest extent permitted by law,
presentment, demand, protest or any notice of any kind in connection with this
Agreement or the Collateral. Borrower acknowledges and agrees that ten (10)
days' prior written notice of the time and place of any public sale of the
Collateral or any other intended disposition thereof shall be reasonable and
sufficient notice to Borrower within the meaning of the UCC.
15
17
9. No Waiver. The rights and remedies provided in this Agreement and
the other Loan Documents are cumulative and may be exercised independently or
concurrently, and are not exclusive of any other right or remedy provided at law
or in equity. No failure to exercise or delay by Agent or Lender in exercising
any right or remedy hereunder or under the Loan Documents shall impair or
prohibit the exercise of any such rights or remedies in the future or be deemed
to constitute a waiver or limitation of any such right or remedy or acquiescence
therein. Every right and remedy granted to Agent and/or Lender under Section 8
or by law may be exercised by Agent and/or Lender at any time and from time to
time, and as often as Agent and/or Lender may deem it expedient. Any and all of
Agent's and/or Lender's rights with respect to the lien and security interest
granted hereunder shall continue unimpaired, and Borrower shall be and remain
obligated in accordance with the terms hereof, notwithstanding (a) any
proceeding of Borrower under the Federal Bankruptcy Code or any bankruptcy,
insolvency or reorganization laws or statutes or any state, (b) the release or
substitution of Collateral at any time, or of any rights or interests therein or
(c) any delay, extension of time, renewal, compromise or other indulgence
granted by the Agent and/or Lender in the event of any default, with respect to
the Collateral or otherwise hereunder. No delay or extension of time by Agent
and/or Lender in exercising any power of sale, option or other right or remedy
hereunder, and no notice or demand which may be given to or made upon Borrower
by Agent and/or Lender, shall constitute a waiver thereof, or limit, impair or
prejudice Agent's and/or Lender's right, without notice or demand, to take any
action against Borrower or to exercise any other power of sale, option or any
other right or remedy.
10. Fees and Expenses. The Collateral shall secure, and Borrower
shall pay to Agent and Lender and/or Agent's and Lender's counsel on demand,
from time to time, all costs and expenses (including, but not limited to,
reasonable attorneys' fees and disbursements, and transfer, recording and filing
fees, taxes and other charges) of, or incidental to, the creation or perfection
of any lien or security interest granted or intended to be granted hereby, the
custody, care, sale, transfer, administration, collection of or realization on
the Collateral, or in any way relating to the enforcement, protection or
preservation of the rights or remedies of Agent and/or Lender under this
Agreement, the Note, the Mortgage, or the other Loan Documents. Agent shall be
paid certain fees in connection with the performance of its services hereunder
pursuant to a separate agreement among Borrower, Agent and Tower Realty
Operating Partnership, L.P., which fees, together with reimbursable expenses, if
not paid in accordance with such agreement, may be set off against any amounts
from time to time in the Operating Accounts.
16
18
11. Agent Appointed Attorney-In-Fact. Borrower hereby irrevocably
constitutes and appoints Agent as Borrower's true and lawful attorney-in-fact,
with full power of substitution, to execute, acknowledge and deliver any
instruments and to exercise and enforce every right, power, remedy, option and
privilege of Borrower with respect to the Collateral upon the occurrence and
during the continuance of an Event of Default, and is empowered hereunder to do
in the name, place and stead of Borrower, all such acts, things and deeds for
and on behalf of and in the name of Borrower, which Borrower could or might do
or which Agent or Lender may deem necessary or desirable to more fully vest in
Agent as agent for Lender the rights and remedies provided for herein and to
accomplish the purposes of this Agreement. The foregoing powers of attorney are
irrevocable and coupled with an interest. If Borrower fails to perform any
agreement herein contained, Agent as agent for Lender may itself perform or
cause performance of any such agreement, and any reasonable expenses of Agent
and Lender incurred in connection therewith shall be paid by Borrower as
provided in Section 10 hereof.
12. No Liability.
(a) Except as set forth herein, Agent shall not incur any liability for
following the instructions herein contained or expressly provided for, or
written instructions given by the parties hereto.
(b) Agent undertakes to perform only such duties as are expressly set
forth herein. The duties and responsibilities of Agent hereunder shall be
determined solely by the express provisions of this Agreement, and no other or
further duties or responsibilities shall be implied. Agent shall not have any
liability under, nor duty to inquire into the terms and provisions of any
agreement or instructions, other than as outlined in this Agreement. Agent shall
use the same degree of care and skill as is reasonably expected of financial
institutions acting in comparable capacities.
(c) Agent may rely and shall be protected in acting or refraining from
acting upon any written notice, instruction or request furnished to it hereunder
and believed by it to be genuine and to have been signed or presented by the
proper party or parties. Agent shall be under no duty to inquire into or
investigate the validity, accuracy or content of any such document. Agent shall
have no duty to solicit any payments which may be due it hereunder. Agent shall
not in any way be held liable by reason of any insufficiency in any Account
unless it is determined by a court of competent jurisdiction that Agent's gross
negligence or willful misconduct was the primary cause of such insufficiency.
17
19
(d) Agent shall not be liable for any action taken or omitted by it in
good faith unless a court of competent jurisdiction determines that Agent's
gross negligence or willful misconduct was the primary cause of any loss to
Borrower or Lender. Agent may consult with independent counsel of its own choice
and shall have full and complete authorization and protection for any action
taken or omitted by it hereunder in good faith and in accordance with the
opinion of such counsel, except in those cases where Agent has been guilty of
gross negligence or willful misconduct. Agent assumes no liability for any
matter or merchandise received through the Post Office Box which are not
depositable items, except in those cases where Agent has been guilty of gross
negligence or willful misconduct.
(e) It is understood that Agent may rely solely upon any account numbers
or similar identifying number provided by either of the parties hereto to
identify (i) the beneficiary, (ii) the beneficiary's bank, or (iii) an
intermediary bank. Agent may apply any of the deposited funds for any payment
order it executes using any such identifying number, even where its use may
result in a person other than the beneficiary being paid, or the transfer of
funds to a bank other than the beneficiary's bank, or an intermediary bank
designated by such beneficiary.
(f) Borrower shall indemnify Agent for, and hold it harmless against, any
loss, liability or expense arising out of or in connection with this Agreement
and carrying out its duties hereunder, including the costs and expenses of
defending itself against any claim of liability, except in those cases where
Agent has been guilty of gross negligence or willful misconduct. Anything in
this Agreement to the contrary notwithstanding, in no event shall Agent be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if Agent has been
advised of the likelihood of such loss or damage and regard less of the form of
action. The foregoing indemnifications shall survive any termination of this
Agreement and the resignation or removal of Agent.
13. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall remain in full force
and effect until payment in full of the Indebtedness. Upon payment in full of
the Indebtedness, this Agreement shall terminate and Borrower shall be entitled
to the return, upon its request and at its expense, of such of the Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof and
Agent and/or Lender shall execute such instruments and documents as may be
reasonably requested by Borrower to evidence such termination and the release of
the lien hereof.
18
20
14. Resignation of Agent. (a) Agent shall have the right to resign
as Agent hereunder upon thirty (30) days' prior written notice to Borrower and
the Rating Agencies, and in the event of such resignation, Borrower shall
appoint a successor Agent which may be any banking institution which has a
rating by the Rating Agencies not lower than BBB or its equivalent. No such
resignation by Agent shall become effective until a successor Agent shall have
accepted such appointment and executed an instrument by which it shall have
assumed all of the rights and obligations of Agent hereunder. If no such
successor Agent is appointed within sixty (60) days after receipt of the
resigning Agent's notice of resignation, the resigning Agent may petition a
court for the appointment of a successor Agent.
(b) In connection with any resignation by Agent, (i) the
resigning Agent shall, at the sole cost of Borrower, (A) duly assign, transfer
and deliver to the successor Agent this Agreement and the Operating Account
Agreement and all cash and Permitted Investments held by it hereunder, (B)
execute such financing statements and other instruments as may be necessary to
assign to the successor Agent the security interest in the Collateral existing
in favor of the retiring Agent hereunder and to otherwise give effect to such
succession and (C) take such other actions as may be reasonably required by the
Borrower or the successor Agent in connection with the foregoing and (ii) the
successor Agent shall establish in its name, as secured party, cash collateral
accounts, which shall become the Accounts for purposes of this Agreement upon
the succession of such Agent.
15. Miscellaneous.
(a) This Agreement constitutes the entire and final agreement
between the parties with respect to the subject matter hereof and may not be
changed, terminated or otherwise varied, except by a writing duly executed by
the parties.
(b) No waiver of any term or condition of this Agreement,
whether by delay, omission or otherwise, shall be effective unless in writing
and signed by the party sought to be charged, and then such waiver shall be
effective only in the specific instance and for the purpose for which given.
(c) This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective successors and permitted
assigns.
(d) All notices, demands, requests, consents, approvals and
other communications (any of the foregoing, a "Notice") required, permitted, or
desired, to be given hereunder shall be in writing sent by telefax or by
registered or
19
21
certified mail, postage prepaid, return receipt requested or delivered by hand
or reputable overnight courier addressed to the party to be so notified at its
address hereinafter set forth, or to such other address as such party may
hereafter specify in accordance with the provisions of this Section 15(d). Any
such Notice shall be deemed to have been received three (3) days after the date
such Notice is mailed or on the date of sending by telefax or delivery by hand
or courier addressed to the parties as follows:
If to Lender: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital Inc.
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to: Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
If to Borrower: Magnolia Associates, LTD.
c/o Tower Realty Operating Partnership, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to: Tower Realty Operating Partnership, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to: Battle ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to Agent: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
15th Floor
20
22
New York, New York 10001
Attn: Collateral Management Administration
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(e) All captions in this Agreement are included herein for
convenience of reference only and shall not constitute part of this Agreement
for any other purpose.
(f) This Agreement shall be governed by and construed and
enforced in all respects in accordance with the laws of the State of New York.
(g) Recourse with respect to any claim arising under or in
connection with this Agreement shall be limited to the same extent as is
provided in Section 33 of the Mortgage with respect to claims against Borrower
and the terms, covenants and conditions of Section 33 of the Mortgage are hereby
incorporated by reference as if fully set forth herein.
(h) This Agreement may be executed in any number of
counterparts.
21
23
IN WITNESS WHEREOF, the parties hereto have duly executed this
amended and restated Agreement as of the day and year first above written.
BORROWER:
MAGNOLIA ASSOCIATES, LTD.,
a Florida limited partnership
By: Tower Orlando GP LLC,
a Delaware limited liability company,
its general partner
By: Tower QRS No. 3 Corp.,
a Delaware corporation,
its managing member
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
LENDER:
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE CAPITAL INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
22
24
AGENT:
THE CHASE MANHATTAN BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
25
Schedule 1
Monthly Amount
After Nov. 1, 1999
Until Nov. 1, 1999 Until Reset Date
Orlando Premises $227,348.93 $267,170.88
Tower 45 Premises $380,535.90 $447,189.76
26
Schedule 2
Monthly Mortgage Escrow Amounts
Tax Insurance Air Rights
Escrow Escrow Reserve Amounts Total
------ ------ --------------- -----
Orlando Premises $ 74,370.86 $2,568.13 $ 76,938.99
Tower 45 Premises $310,643.11 $6,309.55 $47,916.67 $364,869.33
----------- --------- ---------- -----------
TOTAL $415,013.97 $8,877.68 $47,916.67 $393,891.65
27
Schedule 3
D.E. Shaw Bond Deposits
