secured by the Property and no such security interest, lien, pledge or other encumbrance remains outstanding;
(xiv) it has maintained adequate capital in light of its contemplated business operations;
(xv) it has maintained a sufficient number of employees (if any) in light of its contemplated business operations and has paid the salaries of its own employees (if any) from its own funds;
(xvi) it has not owned any subsidiary or any equity interest in any other Person, except, the case of SPE Constituent Entity, the applicable Borrower;
(xvii) it has not made loans to any other person that have not been released or discharged nor has it bought or held evidence of indebtedness issued by any other person or entity other than cash and investment grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity;
(xix) it has not incurred any Indebtedness that is still outstanding other than Indebtedness that is permitted under the Loan Documents;
(xx) it has never been party to any material lawsuit, arbitration, summons, or legal proceeding that resulted in a monetary judgment against it that has not been paid in full to the extent required pursuant to such judgment;
(xxi) it has no material contingent or actual obligations not related to (A) in the case of Borrower, the Properties and/or its Individual Property and/or Previously Owned Property (if any) and (B) in the case of SPE Constituent Entity, its partnership interest or limited liability company interest in the applicable Borrower;
(xxii) it is and has since its formation been duly formed, validly existing, and in good standing in the state of its formation and in all other jurisdictions where it is qualified to do business;
(xxiii) except for guarantees or obligations that have been released or discharged or that will be released or discharged as of the closing of the Loan, and other than in connection with the Loan, it has not had any of its obligations guaranteed by an Affiliate except for TI Guarantees;
(xxiv) intentionally omitted;
(xxv) except as set forth in the Title Insurance Policy, has no judgments or liens of any nature which are outstanding against it as of the Closing Date except for tax liens not yet delinquent;
(xxvi) is not currently involved in any material dispute with any taxing authority.
(n) (i) that any amendment or restatement of Borrower’s organizational documents has been accomplished in accordance with, and was permitted by, the relevant provisions of applicable law and the relevant provisions of said document prior to its amendment or restatement from time to time, and (ii) that at all times since the formation of the Borrower there has been at least one member of the Borrower and that the Borrower was not dissolved prior to the entering into of the Borrower’s current limited liability agreement.
4.1.31
Management Agreement. Each Management Agreement is in full force and effect and there is no default thereunder by Affiliate Manager or, to Borrower’s knowledge, any other Manager party thereto and, to Borrower’s knowledge, no event has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder. Each Management Agreement was entered into on commercially reasonable terms. Except as set forth on
Schedule 4.1.31, no base management fee under any Management Agreement exceeds, with respect to each Individual Property, the greater of (i) three and one-half percent (3.5%) of the Gross Income from Operations attributable to such Individual Property, or
(ii) such other amount in excess of three and one-half percent (3.5%) of the Gross Income from Operations attributable to such Individual Property, so long as, solely with respect to this
clause (ii), the aggregate base management fees under all Management Agreements for all Properties that are then subject to the Lien of the Mortgages does not exceed
three and one-half percent (3.5%) of Gross Income from Operations (such greater fee, the “
Individual Management Fee Cap”), provided that in any instance that the Manager is an Affiliate Manager and a Management Fee Cap Election has been made, any such management fees shall be subject to the Affiliate Management Fee Subordination Condition. For the avoidance of doubt, in no event shall any management fees in excess of the Base Fee (or actual, if lower) shall be payable to an Affiliated Manager during a Cash Sweep Period. In no instance shall Borrower pass-through any management fees to any Tenant in excess of the amount permitted under the related Lease.
4.1.32
Illegal Activity. No portion of any Individual Property has been or will be purchased by Borrower with proceeds of any illegal activity.
4.1.33
No Change in Facts or Circumstances; Disclosure. Except as set forth on
Schedule 4.1.33, all information (after giving effect to any supplements to such information submitted to Lender) submitted by and on behalf of Borrower, Guarantor and Affiliate Manager to Lender and in all financial statements, reports, certificates and other documents submitted in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made by Borrower, Guarantor and Affiliate Manager in this Agreement or in any other Loan Document, in each case, are true, complete and correct in all material respects (or to the extent any such data was incorrect in any material respect when delivered, the same was corrected by information subsequently delivered to Lender on or prior to the Closing Date). The foregoing representation shall not apply to any such financial information that constitutes projections, provided that Borrower represents and warrants that it has no reason to believe that such projections are materially inaccurate.
Except as set forth on
Schedule 4.1.33 (after giving effect to any supplements to such information submitted to Lender), there has been no material adverse change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading in any material respect or that otherwise has or would be reasonably likely to have an Individual Material Adverse Effect with respect to any Individual Property or an Aggregate Material Adverse Effect. Borrower has disclosed to Lender all material facts known to Borrower and has not failed to disclose any material fact known to Borrower that could have caused any Provided Information or could cause any representation or warranty made herein to be materially misleading.
4.1.34
Investment Company Act. Borrower is not (a) an “investment company” within the meaning of the Investment Company Act of 1940, as amended; or (b) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.
4.1.35
Embargoed Person. None of the funds or other assets of Borrower constitute property of, or are beneficially owned, directly or, to the best of Borrower’s knowledge, indirectly, by any Embargoed Person. None of the funds or other assets of Guarantor constitute property of, or are beneficially owned, to the best of Borrower’s knowledge directly or indirectly, by any Embargoed Person. No Embargoed Person has any interest of any nature whatsoever in Borrower or Guarantor, as applicable, with the result that the investment in Borrower or Guarantor, as applicable (whether directly or, to the best of Borrower’s knowledge, indirectly), is prohibited by law or the Loan is in violation of law, and none of the funds of Borrower or Guarantor, as applicable, have been derived from any unlawful activity with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law.
4.1.36
Cash Management Account.
(a) This Agreement, together with the other Loan Documents, creates a valid and continuing security interest (as defined in the Uniform Commercial Code of the State of New York) in each Lockbox Account and the Cash Management Account (to the extent the Cash Management Account is open as of the Closing Date) in favor of Lender, which security interest is prior to all other Liens, other than Permitted Encumbrances, and is enforceable as such against creditors of and purchasers from Borrower. Other than (i) with respect to prior financings that have been repaid or otherwise discharged or that will be repaid or discharged as of the closing of the Loan, (ii) in connection with the Loan Documents or (iii) Permitted Encumbrances, Borrower has not sold, pledged, transferred or otherwise conveyed any Lockbox Account or the Cash Management Account;
(b) Each Lockbox Account and Cash Management Account (to the extent that the Cash Management Account is open as of the Closing Date) constitutes a “deposit account” within the meaning of the Uniform Commercial Code as in effect in the State of New York;
(c) Pursuant and subject to the terms hereof and the other applicable Loan Documents, the Lockbox Bank and Agent have agreed to comply with all instructions originated by Lender, without further consent by Borrower, directing disposition of the Lockbox Account and the Cash Management Account, to the extent open, and all sums at any time held, deposited or invested therein, together with any interest or other earnings thereon, and all proceeds thereof (including proceeds of sales and other dispositions), whether accounts, general intangibles, chattel paper, deposit accounts, instruments, documents or securities, and Borrower has not consented to the Lockbox Bank or Agent complying with instructions with respect to each Lockbox Account and Cash Management Account from any Person other than Lender;
(d) Each Lockbox Account is not in the name of any Person other than Borrower, as pledgor or Lender, as pledgee and the Cash Management Account (to the extent the Cash Management Account is open as of the Closing Date) is not in the name of any Person other than Borrower, as pledgor and Lender, as pledgee; and
(e) None of the Rents from the Properties are deposited by or on behalf of Borrower into any “deposit accounts” or “securities accounts” which are subject to a security interest in favor of third parties, other than pursuant to the Loan Documents.
4.1.37
Reciprocal Easement Agreement. To Borrower’s knowledge, each Reciprocal Easement Agreement is in full force and effect. Except as set forth in REA estoppels delivered to Lender on or prior to the Closing Date, (i) neither the applicable Borrower, nor, to Borrower’s knowledge, any other party to the Reciprocal Easement Agreement, is in default under any of the material provisions thereof (except for violations or defaults that have been cured or that have not resulted, or would not reasonably be expected to result, individually or in the aggregate, in an Individual Material Adverse Effect) and (ii) Borrower has not delivered a written notice to any party under a Reciprocal Easement Agreement that it is in default thereunder (other than notices relating to defaults that have been cured by such party) and no such party to a Reciprocal Easement Agreement is in monetary or, to Borrower’s knowledge, material non-monetary default under such Reciprocal Easement Agreement (except for defaults that do not have, or would not reasonably be expected to result in, individually or in the aggregate, an Individual Material Adverse Effect on the applicable Individual Property).
4.1.38
Equipment, Fixtures and Personal Property. Except as set forth on
Schedule 4.1.38, Borrower is the owner of all of the Equipment, Fixtures and Personal Property located on or at each Individual Property, other than any such Equipment, Fixtures and Personal Property which are owned by Tenants or other third parties or which has been leased by Borrower as permitted under the terms of this Agreement under any Leases. All of the Equipment, Fixtures and Personal Property were sufficient to operate each Individual Property in the manner required hereunder and in the manner in which it is currently operated.
4.1.39
Full and Accurate Disclosure. No statement of fact made by Borrower in this Agreement, the other Loan Documents, or any written statement or document furnished by or on behalf of Borrower in connection with the Loan or pursuant to the terms
of this Agreement or any other Loan Document contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. There is no material fact known to Borrower which has not been disclosed to Lender and which could reasonably be expected to have an Individual Material Adverse Effect, or which could reasonably be expected to materially and adversely affect the business, operations or condition (financial or otherwise) of Borrower or SPE Constituent Entity, or materially impair Guarantor’s ability to fulfill its obligations under the Guaranty.
4.1.40
Underwriting Representations. Except as set forth on
Schedule 4.1.40 or as disclosed in writing to Lender prior to the Closing Date, Borrower hereby represents that it:
(a) has no judgments or liens of any nature against it except for Permitted Encumbrances and tax liens not yet delinquent;
(b) is not involved in any dispute with any taxing authorities (other than, for the avoidance of doubt, appeals of real property taxes in accordance with the terms of this Agreement);
(c) is not, nor has it ever been, a party to any lawsuit, arbitration, summons, or legal proceeding that was still pending (other than those that are covered by insurance and which would not reasonably be expected to have an Individual Material Adverse Effect, an Aggregate Material Adverse Effect or, with respect to Guarantor, materially impair Guarantor’s ability to perform its obligations under the Guaranty) or that resulted in a final judgment against it or its assets or properties that had not been paid in full; and
(d) each amendment and restatement of Borrower’s organizational documents, if any, has been accomplished in accordance with, and was permitted by, the relevant provisions of said documents prior to such amendment or restatement from time to time.
4.1.41 Ground Lease. Except as set forth on Schedule 4.1.41, with respect to the applicable Ground Lease:
(a) The Ground Lease or a memorandum of such Ground Lease has been duly recorded. The Ground Lease permits the interest of Borrower to be encumbered by a mortgage or the Ground Lessor has approved and consented to the encumbrance of the Ground Leased Property by the applicable Mortgage. There have not been amendments or modifications to the terms of the Ground Lease since recordation of the Ground Lease (or a memorandum thereof), with the exception of written instruments disclosed to Lender in this Agreement or ground lessor estoppels delivered to Lender in connection with the closing of the Loan.
(b) The Ground Lease may not be terminated, surrendered or amended by Ground Lessor in any material respect without the prior written consent of Lender; provided that the Ground Lessor shall not be prevented from exercising its remedies in
accordance with the Ground Lease if the obligations of Borrower under the Ground Lease are not performed as provided in the Ground Lease.
(c) Except for the Permitted Encumbrances and other encumbrances of record, to Borrower’s knowledge, Borrower’s interest in the Ground Lease is not subject to any Liens or encumbrances superior to, or of equal priority with, the applicable Mortgage other than the Ground Lessor’s related fee interest.
In the event of a foreclosure or assignment or transfer in lieu of foreclosure, the Lender has a one-time right to assign the Ground Lease
without the Ground Lessor’s consent.
(d) The Ground Lease is in full force and effect and no default has occurred on the part of the Borrower under the Ground Lease, nor to Borrower’s knowledge has any default occurred by the Ground Lessor under the Ground Lease (except in each case, any such default that has been previously cured)
.
(e) Under the terms of the Ground Lease and the Loan Documents, taken together, any related insurance and condemnation proceeds that are paid or awarded to Borrower with respect to the leasehold interest will be applied to the Restoration of the Ground Leased Property or pursuant to the terms of the Loan Documents.
(f) The Ground Lease requires the Ground Lessor to give notice of any default by Borrower to Lender prior to exercising its remedies thereunder. Lender is permitted
the opportunity to cure any default under the Ground Lease, which is curable, after the receipt of notice of the default before the Ground Lessor thereunder may terminate the Ground Lease.
(g) The Ground Lease has a term which extends not less than thirty (30) years beyond the Maturity Date (including any unexercised option periods and automatic renewal periods).
(h) The Ground Lease requires the Ground Lessor to enter into a new lease upon termination (prior to expiration of the term thereof) of the Ground Lease as a result of Borrower’s default and in connection with a termination or rejection of the Ground Lease in a bankruptcy proceeding.
4.1.42 Condominium. Each of the Condominium Documents is (a) to Borrower’s knowledge, in full force and effect and (b) have not been amended, restated or otherwise modified in any material respect. As of the date hereof, Borrower has received no written notice of default under the Condominium Documents and, to the best of the Borrower’s knowledge, there are no defaults by any other party under the Condominium Documents, in each case that would be reasonably expected to have an Aggregate Material Adverse Effect or Individual Material Adverse Effect. All charges, fees, assessments and reserves, if any, payable by Borrower under the Condominium Documents (whether annual, monthly, regular, special or otherwise) have been paid to the extent they are due and payable as of the date hereof. Borrower has no knowledge of any pending assessments which have been called for in writing to which Borrower would be subject under the Condominium Documents.
Section 4.2
Survival of Representations. Borrower agrees that all of the representations and warranties of Borrower 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 amount remains owing to Lender under this Agreement or any of the other Loan Documents by Borrower (
provided,
however, such representations and warranties shall not be deemed remade as of any date after the Closing Date). All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documents by Borrower shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf.
Section 4.3
ERISA Representations of Lender. Lender represents, warrants and covenants that:
(a) As of the Closing Date and for so long as Lender is holder of all or part of the Loan
(i) no portion of the assets used by Lender to fund any portion of the Loan constitutes Plan Assets (unless Lender is relying on an applicable prohibited transaction exemption, the conditions for exemptive relief which are and continue to be satisfied in connection with the transactions contemplated under the Loan Documents), (ii) Lender is not a “governmental plan” within the meaning of Section 3(32) of ERISA, and (iii) the making of the Loan by Lender and the exercise of Lender’s rights under the Loan Documents is not in violation of any Applicable Similar Law.
(b) With respect to transfers of an interest in the Loan by Lender to a third party (a “
Purchaser”), Lender shall for the benefit of Borrower:
(i) obtain from such Purchaser
(A) a representation essentially the same as the representation set forth in
paragraph (a) of this
Section 4.3 (but substituting the term “Purchaser” for the term “Lender” therein) or
(B) a representation providing reasonable assurance that the transfer of the interest in the Loan and the holding by Purchaser of such interest for so long as Purchaser holds such interest are exempt from or otherwise not prohibited under
Section 406 of ERISA, Section 4975 of the Internal Revenue Code and Applicable Similar Law; or
(ii) transfer such interest through the sale of the Loan to a trust or other entity which would issue securities structured in such manner as would not result in a non-exempt prohibited transaction under
Section 406 of ERISA, Section 4975 of the Internal Revenue Code and Applicable Similar Law.
Section 5.1
Affirmative Covenants. From the Closing Date and until payment and performance in full of all obligations of Borrower under the Loan Documents or the earlier release or assignment of the Liens of the Mortgages encumbering the Properties (and all related obligations) in accordance with the terms of this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:
5.1.1 Existence; Compliance with Legal Requirements. Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits and franchises and comply in all material respects with all Legal Requirements applicable to Borrower and the Properties (and the respective use thereof), including, without limitation, building and zoning ordinances and codes and certificates of occupancy. There shall never be committed by Borrower and Borrower shall not permit any other Person in occupancy of or involved with the operation or use of the Properties to commit any act or omission affording the federal government or any state or local government the right of forfeiture against any Individual Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents. Borrower hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. Borrower shall at all times maintain, preserve and protect all franchises and trade names and preserve all the remainder of its property used or useful in the conduct of its business and shall keep the Properties in good working order and repair (normal wear and tear excepted), and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully provided in the Loan Documents. Borrower shall keep the Properties insured at all times by financially sound and reputable insurers, to such extent and against such risks, and maintain liability and such other insurance, as is more fully provided in this Agreement. After prior written notice to Lender (which notice shall not be required in connection with clause (z) below), Borrower, at Borrower’s own expense, may contest by appropriate legal proceeding promptly initiated and conducted in good faith and with due diligence, (x) the validity of any Legal Requirement, (y) the applicability of any Legal Requirement to Borrower or any Individual Property or (z) any alleged violation of any Legal Requirement, provided that, with respect to the foregoing clauses (x) and (y), (a) no Event of Default has occurred and remains uncured; (b) such proceeding shall be permitted under and be conducted in accordance with the provisions of any instrument to which Borrower is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; (c) no Individual Property nor any part thereof or interest therein will be in imminent danger of being sold, forfeited, terminated, cancelled or lost; (d) Borrower shall promptly upon final determination thereof comply with any such Legal Requirement determined to be valid or applicable or cure any violation of any Legal Requirement; (e) such proceeding shall suspend the enforcement of the contested Legal Requirement against Borrower and any Individual Property; and (f) to the extent that the aggregate amount reasonably determined to cause Borrower’s compliance with such Legal Requirement exceeds $12,000,000 (excluding any amounts required to be paid directly by Tenants), Borrower shall furnish such security as may be required in the proceeding, or as may be reasonably requested by Lender (provided, in no event shall the security requested by Lender be in an amount greater than one hundred percent (100%) of the maximum amount reasonably expected by Lender to be payable in the event such contest is unsuccessful), to insure compliance with such Legal Requirement, together with all interest and penalties payable in connection therewith. Lender may apply any such security, as necessary to cause compliance with such Legal Requirement at any time when, in the reasonable judgment of Lender, the validity, applicability or violation of such Legal Requirement is finally
established or any Individual Property (or any part thereof or interest therein) shall be in imminent danger of being sold, forfeited, terminated, cancelled or lost.
5.1.2
Taxes and Other Charges. Subject to
Section 7.2 hereof and any PILOT Documents, except as otherwise provided in this
Section 5.1.2, Borrower shall pay or cause to be paid all Taxes and Other Charges now or hereafter levied or assessed or imposed against the Properties or any part thereof prior to delinquency; provided, the foregoing obligation to pay Taxes directly with respect to the Properties shall be deemed satisfied for so long as Borrower is making deposits into the Tax and Insurance Reserve Account and complies with the terms and provisions of
Section 7.2. Except as otherwise provided in this
Section 5.1.2, Borrower shall, not later than ten (10) Business Days after receipt of a written request from Lender, deliver to Lender receipts for payment or other evidence reasonably satisfactory to Lender that all Taxes and Other Charges that are due and payable at such time have been duly paid by Borrower prior to delinquency (provided, however, that Lender shall have no right to deliver such written request to Borrower during any period that such Taxes and Other Charges are being paid by Lender pursuant to
Section 7.2 hereof). Except as provided in the following sentence, Borrower shall not suffer and shall promptly cause to be paid and discharged any Lien (other than a Permitted Encumbrance) or charge whatsoever which may be or become a Lien or charge against the Properties, and shall promptly pay for all utility services provided to the Properties (other than any such utilities which are, pursuant to the terms of any Lease, required to be paid by the Tenant thereunder directly to the applicable service provider). After prior written notice to Lender (except with respect to Taxes or Other Charges not yet delinquent, for which no notice is required), Borrower, at Borrower’s own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or application in whole or in part of any Taxes or Other Charges, provided that
(a) no Event of Default has occurred and remains uncured;
(b) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances;
(c) no Individual Property nor any part thereof or interest therein will be in imminent danger of being sold, forfeited, terminated, cancelled or lost;
(d) Borrower shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (e) such proceeding shall suspend the collection of such contested Taxes or Other Charges from the applicable Individual Property (or Borrower pays the same under protest); and
(f) to the extent that the aggregate amount at issue exceeds $12,000,000 (excluding any amounts required to be paid directly by Tenants or held by Lender in the Tax and Insurance Reserve Account for Taxes) and a Cash Sweep Period shall then be in effect, Borrower shall furnish such security as may be reasonably required in the proceeding, or as may be reasonably requested by Lender (provided, in no event shall the security requested by Lender be in an amount greater than one hundred percent (100%) of the maximum amount of such excess that is reasonably expected by Lender to be payable in the event such contest is unsuccessful), to insure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon. Lender may pay over any such cash deposit or part thereof held by Lender to the claimant entitled thereto at any time when, in the judgment of Lender, the entitlement of such claimant is
established or any Individual Property (or part thereof or interest therein) shall be in imminent danger of being sold, forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of the related Mortgage being primed by any related Lien. Notwithstanding anything to the contrary, the provisions of this
Section 5.1.2 shall not apply with respect to any contest of Taxes or Other Charges to the extent such Taxes or Other Charges are actually paid by Borrower prior to delinquency (including if such payment is made under protest) and Borrower delivers to Lender receipts for payment or other evidence reasonably satisfactory to Lender that such Taxes or Other Charges are actually paid by Borrower prior to delinquency (including if such payment is made under protest).
5.1.3
Litigation. Borrower shall give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened in writing against Borrower, any SPE Constituent Entity or any Individual Property which might materially adversely affect the condition of Borrower, any SPE Constituent Entity (financial or otherwise) or business of any Individual Property.
5.1.4
Access to Properties. Subject to the rights of Tenants and the rights of Ground Lessor under the Ground Lease, during the continuance of an Event of Default, Borrower shall permit agents, representatives and employees of Lender to inspect the Properties or any part thereof at reasonable hours upon reasonable advance notice. Except during the continuance of an Event of Default, Lender’s access to the Properties pursuant to any other terms of the Loan Documents, may be reasonably conditioned by Borrower in order to comply with the written policies of Tenants of the applicable Individual Property.
5.1.5
Notice of Default. Borrower shall promptly advise Lender of any material adverse change in the condition of Borrower or any SPE Constituent Entity, financial or otherwise, or of the occurrence of any Event of Default of which Borrower has knowledge.
5.1.6
Cooperate in Legal Proceedings. Borrower shall cooperate fully, in a commercially reasonable manner, with Lender with respect to any proceedings before any court, board or other Governmental Authority which may in any way materially and adversely affect the rights of Lender hereunder or any rights obtained by Lender under any of the other Loan Documents and, in connection therewith, permit Lender, at its election, to participate in any such proceedings.
5.1.7
Perform Loan Documents. Borrower shall, in a timely manner, observe, perform and satisfy all the terms, provisions, covenants and conditions of the Loan Documents executed and delivered by, or applicable to, Borrower, and in accordance with and to the extent required under such Loan Documents.
5.1.8
Award and Insurance Benefits. Subject to the terms of the applicable Ground Lease, Borrower shall cooperate with Lender in obtaining for Lender, in accordance with the relevant provisions of this Agreement, the benefits of any Awards or Insurance Proceeds lawfully or equitably payable in connection with any Individual Property, and Lender shall be reimbursed for any reasonable, actual, out-of-pocket expenses incurred in connection therewith (including reasonable actually incurred
attorneys’ fees and disbursements, and the payment by Borrower of the reasonable expense of an appraisal on behalf of Lender in case of Casualty or Condemnation affecting any Individual Property or any part thereof) out of such Award or Insurance Proceeds.
5.1.9
Further Assurances. Borrower shall, at Borrower’s sole cost and expense:
(a) upon written request, furnish to Lender all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications, appraisals, title and other insurance reports and agreements, in each case to the extent in Borrower’s possession, and each and every other document, certificate, agreement and instrument required to be furnished by Borrower pursuant to the terms of the Loan Documents or which are reasonably requested by Lender in connection therewith, provided that the foregoing shall not require Borrower to obtain updated appraisals after the Closing Date unless specifically required by the terms of this Agreement;
(b) execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts reasonably necessary, to evidence, preserve and/or protect the collateral at any time securing or intended to secure the obligations of Borrower under the Loan Documents, as Lender may reasonably require; and
(c) do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to time;
provided, with respect to each of the foregoing
clauses (a),
(b) and
(c), in no event shall any document, instrument, certificate, assignment or other writing furnished to Lender, or any act, conveyance or assurance given, pursuant to this
Section 5.1.9 increase any obligations of Borrower or Guarantor or diminish any rights of Borrower or Guarantor beyond those intended by this Agreement and the other Loan Documents.
5.1.10
Supplemental Mortgage Affidavits. Borrower represents that it has paid all state, county and municipal recording and all other taxes imposed upon the execution and recordation of the Mortgages (or sufficient funds have been escrowed with the Title Company for such payment). If at any time during the continuance of an Event of Default Lender reasonably determines, based on applicable law, that Lender is not being afforded the maximum amount of security available from any one or more of the Properties as a direct or indirect result of applicable recording, stamp and like taxes not having been paid upon the execution and recordation of any Mortgage, Borrower agrees that Borrower will execute, acknowledge and deliver to Lender, promptly upon Lender’s request, supplemental affidavits increasing the amount of the Debt attributable to any such Individual Property (as set forth as the Allocated Loan Amount on
Schedule 1.1(a) annexed hereto) for which all applicable taxes have been paid to an amount determined by Lender to be equal to the lesser of (a) the greater of the fair market value of the applicable Individual Property (i) as of the Closing Date and (ii) as of the date such supplemental affidavits are to be delivered to Lender, and (b) the amount of the Debt attributable to any
such Individual Property (as set forth as the Allocated Loan Amount on Schedule 1.1(a) annexed hereto), and Borrower shall, on demand, pay any additional taxes.
5.1.11
Financial Reporting.
(a) Borrower will keep and maintain or will cause to be kept and maintained on a Fiscal Year basis, in accordance with the requirements for a Special Purpose Entity set forth herein and Approved Accounting Principles, proper and accurate books, records and accounts reflecting all of the financial affairs of Borrower and all items of income and expense in connection with the operation on an individual basis of the Properties. Lender shall have the right from time to time at all times during normal business hours upon reasonable notice (and, in any event, not more than twice in any calendar year (unless an Event of Default shall have occurred and be continuing, in which case no such restriction shall apply)) to examine such books, records and accounts at the office of Borrower or any other Person maintaining such books, records and accounts and to make such copies or extracts thereof as Lender shall desire. During the continuance of an Event of Default, Borrower shall pay any reasonable costs and expenses incurred by Lender to examine Borrower’s accounting records with respect to the Properties, as Lender shall reasonably determine to be necessary or appropriate in the protection of Lender’s interest.
(b) Borrower will furnish to Lender annually, within one hundred twenty (120)
days following the end of each Fiscal Year commencing with the 2025 Fiscal Year financial statements, a complete copy of Borrower’s (or, at Borrower’s election, any direct or indirect owner of Borrower that owns no significant assets other than such ownership interest and the ownership of any intermediate holding companies that own no assets other than such ownership interest in Borrower (the “
Reporting Entity”)) unaudited annual financial statements prepared in accordance with Approved Accounting Principles (the “
Annual Financial Statements”). Such Annual Financial Statements shall set forth the financial condition and the results of operations for the Reporting Entity (on a combined basis) for such Fiscal Year, and shall include, but not be limited to, Net Operating Income, Gross Income from Operations and Operating Expenses. The Annual Financial Statements shall be accompanied by (i) intentionally omitted, (ii) a current rent roll for each Individual Property, (iii) if reasonably requested by Lender, a schedule detailing the Debt Yield calculation as of each Debt Yield Determination Date as of the last day of such Fiscal Year for the Properties on a combined basis and (iv) an Officer’s Certificate certifying (1) such Annual Financial Statements presents fairly the consolidated financial condition and the results of operations of the Reporting Entity in all material respects, (2) that Annual Financial Statements have been prepared in accordance with Approved Accounting Principles, and (3) whether, as of the date thereof, to the applicable officer’s knowledge, there exists an event or circumstance which constitutes an Event of Default under the Loan Documents executed and delivered by, or applicable to, Borrower, and if such officer has knowledge that an Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same.
(c) Intentionally omitted.
(d) Prior to the Securitization of the entire Loan, provided that Lender has the intent to effectuate a Securitization or is actively pursuing the Securitization of the Loan, if reasonably requested by Lender in connection with Lender’s efforts to effectuate a Securitization and provided that such request is not for a period in excess of six (6) months (in the aggregate during the term of the Loan), Borrower will furnish, or cause to be furnished, to Lender on or before sixty (60) days after the end of each calendar quarter following the date of such written request (other than the calendar quarter that ends concurrently with the end of the calendar year),
(A) an operating statement in respect of such calendar quarter and a trailing twelve (12) month operating statement (on a combined basis with respect to the Properties, but excluding any periods prior to the Closing Date), noting Net Operating Income, Gross Income from Operations, Operating Expenses and for informational purposes only (and not for purposes of determining whether a Debt Yield Trigger Event has occurred), a schedule detailing the Debt Yield calculation for the Properties on a combined basis and containing a comparison of
(I) in respect of the operating statement for such calendar quarter, the same calendar quarter in the immediately preceding calendar year, (II) intentionally omitted, and (III) upon Lender’s request, other information reasonably necessary and sufficient to fairly represent in all material respects the financial position and results of operation of the Properties (on a combined basis) during such calendar quarter and
(B) a rent roll for the subject period for each Individual Property. Each such quarterly report shall be prepared on an accrual basis accompanied by an Officer’s Certificate stating that the items provided are true, correct, accurate, and complete in all material respects and fairly present the financial condition and results of the operations of Borrower and the Properties on a combined basis for the applicable period as well as, where applicable, the financial condition and results of operations of each Individual Property, for the applicable calendar quarter. The reports and statements provided by Borrower pursuant to this
Section 5.1.11(d) may be prepared in accordance with the accounting standards otherwise utilized by Borrower on a consistent basis for interim financial reporting and need not be prepared in accordance with Approved Accounting Principles.
(e) Borrower will furnish, or cause to be furnished, to Lender, on or before sixty (60) days after the end of each calendar quarter (other than a calendar quarter ending concurrently with the end of a Fiscal Year, in which case
Section 5.1.11(b) shall apply) commencing with the calendar quarter ending on March 31, 2025 the following items, accompanied by an Officer’s Certificate stating 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 Borrower and the Properties on a combined basis
for the applicable period as well as, where applicable, the financial condition and results of operations of each Individual Property (subject to normal year-end adjustments) as applicable:
(i) a rent roll for the subject period for each Individual Property, (ii) quarterly and trailing twelve (12) month operating statements prepared for each calendar quarter on an accrual basis, noting Net Operating Income, Gross Income from Operations and Operating Expenses for the Properties (on a combined basis
but excluding any period prior to the Closing Date), and, upon Lender’s request, other information reasonably necessary and sufficient to fairly represent in all material respects the financial position and results of operation of the Properties (on a combined basis but excluding any period prior to the Closing Date) during such calendar quarter; and (iii) a calculation reflecting the Debt Yield as determined with
respect to each Debt Yield Determination Date during the immediately preceding twelve (12) month period.
(f) For each annual budgeting period following the partial annual budgeting period commencing on the Closing Date, Borrower shall submit to Lender an Annual Budget not later than sixty (60) days after the end of Borrower’s Fiscal Year (the “
Budget Submission Date”). In respect of the partial annual budgeting period commencing on the Closing Date, Borrower has submitted the existing Annual Budget to Lender on or prior to the Closing Date. The Annual Budget shall be for informational purposes only, provided that, during any Cash Sweep Period, any new Annual Budget shall be subject to Lender’s written approval (but only to the extent Borrower has approval rights under the Management Agreement) if a Cash Sweep Cure Date in respect of such Cash Sweep Period does not occur prior to the Budget Submission Date (each such Annual Budget, an “
Approved Annual Budget”), which approval shall not be unreasonably withheld or conditioned and shall be, provided no Event of Default has occurred and is continuing, deemed granted if the Deemed Approval Requirements have been satisfied with respect thereto. For the avoidance of doubt, the Annual Budget in effect as of the commencement of a Cash Sweep Period will be deemed approved and will not require any additional consent or approval from Lender. In the event that Lender timely disapproves a proposed Annual Budget in accordance with the foregoing, Lender shall promptly deliver to Borrower a reasonably detailed description of such objections and Borrower shall promptly revise such Annual Budget and resubmit the same to Lender (and each such resubmittal shall be subject to the provisions of this
Section 5.1.11(f) as if the applicable proposed Annual Budget were being submitted to Lender for its initial review of the same (provided, that it is acknowledged that any resubmitted Annual Budget pursuant to this sentence shall not be subject to the time frames required in the first sentence of this
Section 5.1.11(f)) and shall be, provided, no Event of Default has occurred and is continuing, deemed approved by Lender if the applicable Deemed Approval Requirements have been satisfied with respect to such resubmitted Annual Budget). Borrower shall promptly revise each proposed Annual Budget and resubmit the same to Lender in accordance with the foregoing until Lender approves the proposed Annual Budget or the Deemed Approval Requirements are satisfied. Until such time that Lender approves (or is deemed to approve) a proposed Annual Budget, the most recently Approved Annual Budget shall apply;
provided that,
(i) each line item of such Approved Annual Budget shall be increased by an amount equal to the percentage increase in the Consumer Price Index for the immediately preceding year (other than the line items in respect of (x) Taxes, Insurance Premiums, Ground Rent, association fees and other expenses, including without limitation utilities expenses and Other Charges, which line items shall be adjusted to reflect actual increases in such expenses,
(y) variable operating expenses that are directly related to increased revenues at the Properties, which line items shall reflect the actual expenses therefor and
(z) life safety or emergency repairs, which Borrower shall be permitted to make any without the consent of Lender, subject to
Section 5.1.21 hereof). Subject to the provisions of
Section 5.1.21, in the event that, during any Cash Sweep Period, Borrower proposes to incur an extraordinary operating expense or capital expense that is not consistent with the Approved Annual Budget and does not relate to an Approved Alteration (each an “
Extraordinary Expense”), Borrower shall promptly deliver to Lender a reasonably detailed explanation of such
proposed Extraordinary Expense for Lender’s approval, such approval not to be unreasonably withheld, conditioned or delayed.
(g) Notwithstanding anything to the contrary contained in this
Section 5.1.11, Net Operating Income, Gross Income from Operations, Operating Expenses, Debt Yield calculation, or any other metric defined by the terms of this Agreement, and to be included financial statements delivered to Lender pursuant hereto, shall not be required to be prepared in accordance with Approved Accounting Principles.
(h) Intentionally Omitted.
(i) Borrower will cause Guarantor to furnish to Lender annually, within one hundred twenty (120) days following the end of each Fiscal Year of Guarantor, Guarantor’s (or, at Guarantor’s election, any 100% direct or indirect owner of Guarantor that owns no assets other than such ownership interest and the ownership of any intermediate holding companies that owns no assets other than such ownership interest in Guarantor) either (at Guarantor’s election) audited or unaudited financial statements prepared in accordance with Approved Accounting Principles and certified by Guarantor, which shall include an annual balance sheet and profit and loss statement of Guarantor (or, at Guarantor’s election, any 100% direct or indirect owner of Guarantor that owns no assets other than such ownership interest and the ownership of any intermediate holding companies that owns no assets other than such ownership interest in Guarantor). Notwithstanding the foregoing, if
Initial Guarantor or any entity comprising Initial Sponsor, a Replacement Affiliate Guarantor, a Replacement Sponsor Guarantor or any Approved Sponsor Entity is the Guarantor, then this
Section 5.1.11(i) shall not apply.
(j) If an Excess Cash Flow Guaranty is delivered to Lender pursuant to
Section 7.5.2(c) of this Agreement, Borrower shall furnish to Lender, within fifteen (15) Business Days after the end of each calendar month in which the Excess Cash Flow Guaranty remains in effect, an Officer’s Certificate certifying to the amount of Guaranteed Excess Cash Flow as of such date, together with any back-up information with respect to the amount of Guaranteed Excess Cash Flow as may be reasonably requested by Lender.
(k) Any reports, statements or other information required to be delivered under this Agreement shall be delivered in electronic form,
provided that Borrower may elect to provide the same also in paper form and/or on a data storage device. Subject to
Section 9.1.1(b), each of Borrower agrees that Lender may disclose information regarding the Properties and Borrower that is provided to Lender pursuant to this
Section 5.1.11 in connection with a Securitization to such parties requesting such information in connection with such Securitization.
(l) Except as expressly set forth in this Agreement and the other Loan Documents, neither Borrower, nor Guarantor shall have any obligation to furnish to Lender, Servicer or their respective agents or representatives any additional reports, statements or information with respect to the operation of the Properties or the financial affairs of Borrower or Guarantor or any Affiliate Manager.
(m) Notwithstanding anything to the contrary, at any time, Borrower shall have the right, but not the obligation, to provide to Lender (and following a Securitization, the Servicer) updates, supplements, amendments or revisions to all or any portion of the reporting required under this to
Section 5.1.11 and any other information relating to the Properties, the Borrower or the performance of the Properties (each, a “
Borrower Reporting Update”). In connection with any Securitization, any Servicing Agreement shall provide that the Servicer shall post the financial reporting delivered by Borrower pursuant to this
Section 5.1.11 and any Borrower Reporting Updates together with Servicer’s posting of regular quarterly reporting to a Servicer controlled website which can be accessed by holders or prospective investors of the Securities issued in any Securitization, or at Borrower’s election, can be accessed by each Privileged Person (as defined in the Servicing Agreement).
5.1.12
Business and Operations. Borrower will continue to engage in the businesses presently conducted by it or the Permitted Uses as and to the extent the same are necessary for the ownership, maintenance, management, leasing and operation of the Properties, and it being understood and agreed that a temporary closure or minimization of operations at the Properties as a result of a Force Majeure event shall not be deemed a breach of this covenant. Borrower will qualify to do business and will 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. Borrower shall, at all times during the term of the Loan, continue to own or lease (or Manager, as agent for Borrower, in accordance with the Management Agreement, shall lease) all Equipment, Fixtures and Personal Property which are necessary to operate the Properties in accordance with the Permitted Uses,
provided that the foregoing shall not be deemed to prohibit or restrict any Permitted Equipment Transfer.
5.1.13
Title to the Properties. Borrower will warrant and defend (a) the title to each Individual Property and every part thereof, subject only to Liens permitted hereunder (including Permitted Encumbrances) and (b) the validity and priority of the Liens of the Mortgages on the Properties, subject only to Liens permitted hereunder (including Permitted Encumbrances), in each case against the claims of all Persons whomsoever. Borrower shall reimburse Lender for any Losses incurred by Lender if an interest in any Individual Property, other than as permitted hereunder, is claimed by another Person.
5.1.14
Costs of Enforcement. In the event (a) that any Mortgage encumbering one or more Individual Properties is foreclosed in whole or in part or that such Mortgage is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent to the Mortgage encumbering any Individual Property in which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of Borrower, Guarantor or any of their respective constituent Persons or an assignment by Borrower, Guarantor or any of their respective constituent Persons for the benefit of its creditors, Borrower, and their successors or assigns, shall be chargeable with and agree to pay all costs of collection and defense, including reasonable actually incurred attorneys’ fees, costs and expenses, incurred by Lender in connection therewith (but excluding regular servicing fees) and in
connection with any appellate proceeding or post‑judgment action involved therein, together with all required service or use taxes and interest at the Default Rate.
5.1.15
Estoppel Statement. After written request by Lender, Borrower shall within fifteen (15) days furnish Lender with a statement, duly acknowledged and certified, setting forth (i) the original principal amount of the Loan, (ii) the unpaid principal amount of the Loan, (iii) the Interest Rate of the Loan, (iv) the date installments of interest and/or principal were last paid, (v) any offsets or defenses to the payment of the Debt, if any, claimed by Borrower, and (vi) that the Note, this Agreement, the Mortgages and the other Loan Documents are valid, legal and binding obligations and have not been modified or if modified, giving particulars of such modification;
provided,
however, Borrower shall not be required to provide such statement more often than two (2) times in any calendar year.
5.1.16
Loan Proceeds. Borrower shall use the proceeds of the Loan received by it on the Closing Date only for the purposes set forth in
Section 2.1.5 hereof.
5.1.17
Intentionally Omitted.
5.1.18
Confirmation of Representations. If requested by Lender, Borrower shall deliver, in connection with any Rated Securitization, one
(1) or more Officer’s Certificates certifying as to the accuracy in all material respects of all representations made by Borrower in the Loan Documents as of the date of the closing of such Securitization or, if any of such representations require qualification on such date, setting forth such qualifications in reasonable detail.
5.1.19
Intentionally Omitted.
(a) Notwithstanding anything to the contrary set forth herein, Lender’s consent shall not be required in connection with (i) any residential Lease (including any amendment, modification or termination thereof), (ii) any commercial Lease (including any amendment, modification or termination thereof),
(iii) intentionally omitted, (iv) any renewals, expansions or extensions of any commercial Lease, (v) Leases that constitute a license to use immaterial portions of an Individual Property solely for storage and/or parking purposes, and (vi) any Excluded Lease. Upon request, Borrower shall furnish Lender with executed copies of such Leases as are identified by Lender (including all Leases, if requested by Lender,
provided that Borrower shall not be required to deliver copies of all Leases more frequently than one
(1) time in any calendar year). All Leases with Affiliates (other than Leases to an Affiliate Manager for space used in connection with the property management of property belonging to Borrower or its Affiliates) or renewals thereof (other than contractual renewal options set forth in an existing Lease) shall be on commercially reasonable terms, shall not contain any terms which would have any materially adverse effect on Lender’s rights under the Loan Documents or the value of the applicable Individual Property and shall be on terms which are substantially similar to those available in an arm’s length transaction with an unrelated party. All Leases executed after the Closing Date shall provide that they are subordinate to the Mortgage encumbering the
applicable Individual Property and, with respect to commercial Leases only, that the Tenant under such Lease agrees to attorn to Lender or any purchaser at a sale by foreclosure or power of sale (provided, such Leases may provide that the foregoing is conditioned upon the delivery by Lender of a subordination, attornment and non-disturbance agreement). Lender, at the request of Borrower and at Borrower’s sole cost and expense, shall enter into a subordination, attornment and non-disturbance agreement with any Tenant entering into a commercial Lease after the Closing Date in the form required under the applicable commercial Lease so long as such form is on commercially reasonable terms, or if no such specific form is required, the form attached hereto as Exhibit B or in such other form that is reasonably satisfactory to Lender and such Tenant (provided in each case that Lender shall agree to modifications reasonably required by the applicable Tenant, and on commercially reasonable terms, including, but not limited to, modifications to reflect an obligation on behalf of Lender to release any casualty or condemnation proceeds in connection with any restoration required pursuant to a Lease) (a “Non-Disturbance Agreement”) (other than a Lease to (x) a Tenant which is a Controlled subsidiary of Sponsor, so long as Sponsor Controls Borrower or (y) if Sponsor does not Control Borrower, an Affiliate of Borrower) after the Closing Date. In addition, with respect to a request by a Tenant under a commercial Lease, a statement that following a foreclosure by Lender, Lender shall be subject to any offset, rent abatement or self-help rights which such Tenant may be entitled to assert against the prior landlord pursuant to the terms of the applicable Lease or required by law shall be deemed a commercially reasonable term for purposes of this Section 5.1.20(a), and Lender may not condition its approval or delivery of any Non-Disturbance Agreement, including with respect to any such offset, rent abatement or self-help rights, upon the receipt of any reserves, any free rent, tenant improvements or leasing commissions guaranty, Letters of Credit or any increases to the amounts guaranteed by any such guaranty, if any, or covered by any Letter of Credit previously delivered with respect to any free rent, tenant improvements or leasing commissions. Lender shall promptly respond, at Borrower’s sole cost and expense, to any request by a Tenant under a commercial Lease for an amendment to an existing Non-Disturbance Agreement. All actual and reasonable, out‑of‑pocket costs and expenses of Lender and Servicer in connection with the negotiation, preparation, execution and delivery by Lender and Servicer of any Non-Disturbance Agreement, including, without limitation, reasonable actually incurred attorneys’ fees and disbursements (provided such attorneys’ fees and expenses in connection with any Non-Disturbance Agreement and/or any review of any Lease related to such Non-Disturbance Agreement shall not exceed $5,000.00 in the aggregate) and the current fee being assessed by Servicer in connection therewith, shall be paid by Borrower.
(b) Borrower shall, subject to Force Majeure,
(i) observe and perform the obligations imposed upon the lessor under the Leases in a commercially reasonable manner (which may include rent deferrals and abatements) and (ii) except as otherwise provided in
Section 5.2.5 and
Section 5.2.14, enforce the terms, covenants and conditions contained in the Leases upon the part of the Tenant thereunder to be observed or performed in a commercially reasonable manner and in a manner not to impair the value of the Individual Property involved.
(c) At any time that Lender’s approval is required under this
Section 5.1.20, provided no Event of Default is continuing, Lender’s approval shall be deemed granted if the Deemed Approval Requirements have been satisfied with respect thereto.
(a) Borrower shall obtain Lender’s prior written consent to any alterations or improvements to (or demolitions of) any Improvements (“
Alterations”), including tenant improvements, which consent shall not be unreasonably withheld, conditioned, or delayed except with respect to Alterations that would reasonably be expected to result in an Individual Material Adverse Effect on the applicable Individual Property. Notwithstanding the foregoing, Lender’s consent shall not be required in connection with any
(i) repairs based on life safety or emergency conditions or which are required to comply with applicable Legal Requirements, (ii) Preapproved Alterations, (iii) non-structural or decorative work performed in the ordinary course of Borrower’s business, (iv) Alterations, the then remaining cost of which to complete, when taken in the aggregate with the then remaining cost to complete all other Alterations then ongoing that would otherwise require Lender’s prior written consent under this
Section 5.1.21 (other than Alterations described in the other subsections of this sentence), is less than the Alterations Threshold Amount; (v) Alterations made pursuant to an Approved Annual Budget; (vi) Alterations with respect to any existing Lease as of the Closing Date or any Lease entered into in accordance with the terms and conditions of
Section 5.1.20; (vii) Alterations and repairs arising out of a Casualty or Condemnation in accordance with the terms and conditions hereof; (viii) the Required Repairs, (ix) any installation or any other addition of antenna or solar panels or solar facilities at any Individual Property, (x) any repairs required by the Loan Documents, (xi) unit renovations, (xii) amenity upgrades, (xiii) Alterations made by a Tenant under a commercial Lease or (xiv) any Alterations made on or to any Undeveloped Land or any Pre-Identified Release Parcel
(
clauses (i) through
(xiv), the “
Approved Alterations”). At any time that Lender’s approval is required under this
Section 5.1.21(a), provided no Event of Default is continuing, Lender’s approval shall be deemed granted if the Deemed Approval Requirements have been satisfied with respect thereto.
(b) If the total unpaid amounts due and payable with respect to Alterations requiring Lender’s prior written consent at the Properties in the aggregate (other than such amounts (x) to be paid or reimbursed by Tenants under the Leases, (y) to be paid in respect of Approved Alterations with respect to such Properties and (z) on deposit in the Reserve Accounts and which are permitted to be used for such Alterations in accordance with this Agreement) shall at any time exceed the Alterations Threshold Amount, Borrower shall promptly deliver to Lender as security for the payment of such excess amounts and as additional security for Borrower’s obligations under the Loan Documents any of the following with respect to such Alteration exceeding the Alterations Threshold Amount (as applicable, the “
Alterations Deposit”):
(I) cash, (II) U.S. Obligations, (III) other securities having a rating reasonably acceptable to Lender and in respect of which, at Lender’s option following a Rated Securitization of the Loan, Borrower has obtained a Rating Agency Confirmation from the applicable Rating Agencies, (IV) a completion and performance bond or an irrevocable Letter of Credit (payable on sight draft only) issued by a financial institution having a rating by S&P of not less than “A‑1+” if the term of such bond or Letter
of Credit is no longer than three (3) months or, if such term is in excess of three (3) months, issued by a financial institution having a rating that is reasonably acceptable to Lender or
(V) a guaranty executed by Alterations Guarantor in favor of Lender in a form reasonably acceptable to Lender (an “
Alterations Guaranty”); provided, that in the event that Borrower elects to deliver an Alterations Guaranty pursuant to this
Section 5.1.21(b), if the Additional Insolvency Opinion Condition is satisfied, then Borrower shall deliver an Additional Insolvency Opinion reasonably acceptable to Lender which takes into account such Alterations Guaranty. Each such Alterations Deposit shall be
(A) in an aggregate amount equal to the excess of the total unpaid amounts with respect to the applicable Alterations on the applicable Individual Property (other than such amounts (x) to be paid or reimbursed by Tenants under the Leases, (y) to be paid in respect of Approved Alterations with respect to such Properties and (z) on deposit in the Reserve Accounts and which are permitted to be used for such Alterations in accordance with this Agreement) over the Alterations Threshold Amount and
(B) disbursed or released, as applicable, from time to time by Lender to Borrower for completion of the Alterations at the applicable Individual Property upon the satisfaction of the following conditions:
(1) Borrower shall submit a request for payment to Lender at least ten (10) days prior to the date on which Borrower requests that such payment be made, which request for payment shall specify the Alterations for which payment is requested,
(2) on the date such payment is to be made, no Event of Default shall be continuing, and (3) such request shall be accompanied by an Officer’s Certificate (x) stating that the applicable portion of the Alterations at the applicable Individual Property to be funded by the requested disbursement have been completed in good and workmanlike manner and in accordance with all applicable Legal Requirements, in all material respects, such Officer’s Certificate to be accompanied by copies of invoices paid (or to be paid) in excess of $250,000 and any material licenses, permits or other approvals by any Governmental Authority required in connection with the applicable portion of the Alterations,
(y) identifying each contractor to be paid by Borrower that supplied materials or labor in connection with the applicable portion of the Alterations to be funded by the requested disbursement and
(z) stating that each such contractor has been paid or will be paid the amounts then due and payable to such contractor in connection with the funds to be disbursed. Each Alterations Deposit shall (if held in cash) be held by Lender in an interest-bearing account and, until disbursed or released in accordance with the provisions of this
Section 5.1.21(b), shall constitute additional security for the Debt and other obligations under the Loan Documents. Upon the completion of the Alterations in respect of which any Alteration Deposit is being held, Lender shall promptly return to Borrower any remaining portion of the Alterations Deposit upon the request of Borrower, provided that
(1) on the date such disbursement is to be made, no Event of Default shall be continuing and (2) such request shall be accompanied by an Officer’s Certificate stating that the Alterations have been fully completed in good and workmanlike manner and in accordance with all applicable Legal Requirements, in all material respects, such Officer’s Certificate to be accompanied by copies of paid invoices or copies of invoices to be paid, as applicable, in each case, with respect to any invoices in excess of $250,000 and any material licenses, permits or other approvals by any Governmental Authority required in connection with Alterations and stating that each contractor providing services in connection with the Alterations has been paid in full or will have been paid in full upon
such disbursement, in each case, to the extent not received by Lender in connection with prior disbursement requests.
(c) Notwithstanding anything to the contrary herein, so long as funded out of cash flow of an Individual Property or equity contributions of Borrower, any obligations incurred by Borrower in connection with Approved Alterations shall not be deemed to be Indebtedness hereunder.
5.1.22
Operation of Property.
(a) Borrower shall cause the Properties to be operated, in all material respects, in accordance with the Management Agreement. In the event that the Management Agreement expires or is terminated (without limiting any obligation of Borrower to obtain Lender’s consent to any termination or modification of the Management Agreement in accordance with the terms and provisions of this Agreement), Borrower shall promptly enter into a Replacement Management Agreement with Manager or another Qualified Manager, as applicable.
(b) Borrower shall:
(i) promptly perform and/or observe, in all material respects, all of the covenants and agreements required to be performed and observed by it under the Management Agreement and do all things reasonably necessary (using its prudent business judgment) to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Lender of any material default under the Management Agreement of which it is aware; and (iii) enforce the performance and observance in all material respects of all of the covenants and agreements required to be performed and/or observed by Manager under the Management Agreement, in a commercially reasonable manner.
(a) Any Individual Borrower (in its capacity as lessee under the applicable PILOT Lease in accordance herewith, the “
PILOT Lessee”) shall have the right
, without the consent of Lender, to enter into a PILOT Lease with respect to the entirety of such fee interest to provide the applicable PILOT Property with the benefit of an arrangement for payments of lieu of taxes (any such arrangement, a “
Permitted PILOT Arrangement”), subject to the following terms and conditions:
(i) At the time the PILOT Lease is entered into, no Event of Default has occurred and is continuing;
(ii) The form of PILOT Lease shall be (x) substantially in the form of a PILOT Lease previously approved by Lender or (y) subject to Lender’s reasonable approval;
(iii) The PILOT Lessee shall enter into a leasehold Mortgage (each, a “
PILOT Leasehold Mortgage”) for the benefit of Lender encumbering its leasehold interest under the applicable PILOT Lease (which Mortgage shall also encumber the applicable PILOT Lessee’s fee interest in any property or collateral of the
applicable PILOT Lessee that was not deeded to the applicable PILOT Lessor and/or is not subject to the applicable PILOT Lease), which PILOT Leasehold Mortgage shall be (x) substantially in the form of a PILOT Leasehold Mortgage previously approved by Lender (with such modifications as are reasonably required for compliance with applicable law and/or local recording requirements) or (y) such other form of leasehold Mortgage as shall be reasonably acceptable to Lender;
(iv) If customarily provided (in Borrower’s reasonable determination) by the applicable PILOT Lessor or
expressly provided for in the
PILOT Lease, the proposed PILOT Lessor shall enter into a fee Mortgage or a joinder to the PILOT Leasehold Mortgage encumbering the PILOT Lessor’s fee interest under the PILOT Lease (each a “
PILOT Lessor Mortgage”), the form of which shall (x) substantially in the form of a PILOT Lessor Mortgage previously approved by Lender (with such modifications as are reasonably required for compliance with applicable law and/or local recording requirements) or (y) subject to Lender’s reasonable approval;
(v) If the Permitted PILOT Arrangement includes a bond financing, the form of any PILOT Bonds shall be (x) substantially in the form of a PILOT Bonds previously approved by Lender or (y) subject to Lender’s reasonable approval;
(vi) If the Permitted PILOT Arrangement includes a bond financing, all PILOT Bonds issued in connection with a Permitted PILOT Arrangement shall be held at all times by the applicable PILOT Lessee and shall be pledged to Lender pursuant to a pledge agreement (a “
PILOT Bond Pledge Agreement”), which proposed PILOT Bond Pledge Agreement shall be (x) substantially in the form of a PILOT Bond Pledge Agreement previously approved by Lender or (y) subject to Lender’s reasonable approval;
(vii) The applicable PILOT Lessee shall provide to Lender (1) a Title Insurance Policy in form and substance reasonably acceptable to Administrative Agent (or an endorsement to the Title Insurance Policy for such PILOT Property delivered to Lender on the Closing Date in form reasonably acceptable to Lender) in the amount of the Allocated Loan Amount for the applicable PILOT Property (provided such Title Insurance Policy shall be deemed reasonably acceptable to the extent (x) it contains endorsements substantially similar to those contained in Title Insurance Policy for such PILOT Property delivered to Lender on the Closing Date (to the extent such endorsements are applicable to such PILOT Property) and (y) does not contain any title exceptions which (i) are not Permitted Encumbrances, (ii) were not contained in Title Insurance Policy for such PILOT Property delivered to Lender on the Closing Date or (iii) are unrelated to the PILOT Documents) and (2) a legal opinion from Borrower’s counsel in the state where the PILOT Property is located and resolutions of Borrower with respect to the PILOT Leasehold Mortgage, in each case, in substantially the form delivered with respect to the Mortgage for the PILOT Property on the Closing Date (or such other forms as reasonably approved by Lender); and
(viii) Borrower shall pay any and all actual and reasonable out of pocket costs actually incurred in connection with this clause (a) (including, without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes).
Notwithstanding anything to the contrary
contained
in this Agreement or the other Loan Documents,
at any time, a PILOT Lessee shall be permitted, without the consent of Lender, to redeem, terminate or cancel any PILOT Lease and the related PILOT Documents in connection with the acquisition of the fee interest held by the applicable PILOT Lessor in accordance with the terms of the PILOT
Lease and the Loan Documents.
(b) Except in connection with a PILOT Lessee’s acquisition of fee title to the fee estate held by a PILOT Lessor
in accordance with the terms hereof,
such PILOT Lessee
shall not, without the prior
written consent of Lender,
which consent shall not be unreasonably
delayed or withheld,
surrender the leasehold estate created by the
applicable PILOT
Lease or terminate or cancel
such PILOT Lease or
modify, change, supplement, alter or amend
such PILOT Lease, in writing in any material respect. Any termination, cancellation, modification, change, supplement, alteration or amendment of any PILOT Document
in any material respect without the prior written consent of Lender
(to the extent required by this
Section 5.1.23) shall be void ab initio and of no force and effect; provided, notwithstanding anything to the contrary herein, Lender’s consent shall not be required in order for Borrower to assign and/or transfer any PILOT Documents to any transferee which acquires a PILOT Property in connection with a Permitted Assumption or an Approved Drop Down (provided that such transferee provides Lender collateral with respect to the applicable PILOT Documents that is substantially similar to the collateral provided by the related Borrower to Lender as of the Closing Date).
(c) If a PILOT Lessee shall default in the performance or observance of any material term, covenant or condition of the applicable PILOT Lease on the part of such PILOT Lessee to be performed or observed beyond all applicable cure and/or notice periods, then, without limiting the generality of the applicable Mortgage,
this Agreement and the other Loan Documents
, and without waiving or releasing such PILOT Lessee from any of its obligations hereunder, Lender shall have the right (upon written notice to such PILOT Lessee
and provided that Borrower shall not have notified Lender or does not notify Lender within ten (10) Business Days of receipt of such request of Lender,
that (i) such default has been cured (and provides Lender with reasonably satisfactory evidence of the same), (ii) Borrower intends to release the applicable PILOT
Property in accordance with
Section 2.6.1, or (iii) Borrower intends to acquire fee title to the fee estate held by a PILOT Lessor in accordance with the terms hereof and the terms of the applicable PILOT Lease) but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the material terms, covenants and conditions of the applicable PILOT Lease on the part of such PILOT Lessee to be performed or observed on behalf of such PILOT Lessee, to the end that the rights of such PILOT Lessee in, to and under the applicable PILOT Lease shall be kept unimpaired as a result thereof and free from default. If Lender shall make any payment or perform any act or take action in accordance with the preceding sentence, Lender will notify such PILOT Lessee of the making of any such payment, the performance of any such act or the taking of any such
action. In any such event, Lender and any Person designated as Lender’s agent by Lender shall have, and are hereby granted, subject to the rights of the applicable PILOT Lessor and the rights of Tenants, the right to enter upon the applicable PILOT Property at any reasonable time, on reasonable written notice and from time to time for the purpose of taking any such action. Lender may pay and expend such sums of money as Lender reasonably deems necessary for any such purpose and upon so doing shall be subrogated to
any and all rights of
such PILOT Lessor. All costs and expenses incurred by Lender to cure or attempt
to cure any such default
shall be paid by the applicable PILOT Lessee to Lender, within five (5) Business Days after demand, together with interest thereon from the day of such payment at the Interest Rate. If payment is not made within such five (5) Business Day period, such PILOT Lessee shall pay interest thereon from the day such payment is due at the Default Rate. Unless prohibited by applicable Legal Requirements, all sums so paid and expended by Lender and the interest thereon shall be secured by the legal operation and effect of the applicable Mortgage.
(d) If a PILOT Lessor shall deliver to Lender a copy of any notice of default under any PILOT Lease sent by such PILOT Lessor to the applicable PILOT Lessee, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender in accordance with this
Section 5.1.23, in good faith, in reliance thereon. Except with respect to the Mortgage, such PILOT Lessee will not subordinate or consent to the subordination of the applicable PILOT Lease to any mortgage, security deed, lease or other interest on or in such PILOT Lessor’s interest in all or any part of any fee interest in the applicable PILOT Property, unless, in each such case, the written consent of Lender shall have been first had and obtained.
(e) In connection with any purchase of the fee interest in any PILOT Property pursuant to the applicable PILOT Lease, such PILOT Lessee shall (i) pay all amounts due under the applicable PILOT Lease, including, without limitation, rent payments and attorneys’ fees, and (ii) request, and use diligent efforts to obtain a quitclaim deed and bill of sale, such that, upon such expiration or termination of the applicable PILOT Lease, such quitclaim deed in favor of such PILOT Lessee shall be recorded in the land records simultaneously therewith. In connection with the acquisition of the fee interest in the applicable PILOT Property by such PILOT Lessee, upon the written request of such PILOT Lessee, Lender agrees to promptly provide a release of all Liens relating to the applicable PILOT Lease.
(f) When a PILOT Lessee becomes the owner of fee title to the applicable PILOT Property upon termination of the PILOT Lease or otherwise, the lien of the applicable Mortgage shall spread to cover such fee title. If reasonably requested by Administrative Agent, such PILOT Lessee agrees, at its sole cost, including without limitation Lender’s
reasonable actually incurred attorneys’ fees
, to (i) execute all documents reasonably necessary to subject the fee title to the applicable PILOT Property to the lien of the Mortgage; (ii) to the extent the Title Insurance Policy did not the insure the same as of the Closing Date, provide to Lender a title insurance policy insuring that the lien of the Mortgage is a first lien on such fee title (or an endorsement to the Title Insurance Policies) and (iii) solely to the extent a new Loan Document is delivered pursuant to clause
(i), deliver a due authority, execution and enforceability opinion reasonably acceptable to Administrative Agent with respect to such Loan Document.
(g) Each PILOT Lessee shall: (i) subject to
Section 5.1.23(a), pay all sums required to be paid by such PILOT Lessee under and pursuant to the applicable PILOT Lease, as and when such payment is payable, (ii) perform and observe all of the terms, covenants and conditions of the applicable PILOT Lease on the part of such PILOT Lessee to be performed and observed in all material respects and (iii) promptly notify Lender of the receipt by any PILOT Lessee of any written notice
claiming the occurrence of any default
under any PILOT Lease and promptly upon receipt thereof, each PILOT Lessee shall
deliver to Lender a copy of any such written notice
(and such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender, in good faith, in reliance thereon and in accordance with this
Section 5.1.23) and (iv) enforce all of the obligations of each other party under the applicable PILOT Lease in a commercially reasonable manner and in a manner not to impair the value of the Individual Property involved.
Notwithstanding anything to the contrary contained herein,
Lender acknowledges that all payments under any PILOT Bond may be made by Borrower via ledger or book entry only.
(h) Notwithstanding anything to the contrary
contained
in this Agreement or the other Loan Documents, no Rating Agency Confirmation shall be required in connection with any Permitted PILOT Arrangement or any related PILOT Documents or any transaction contemplated by this Section 5.1.23.
5.1.24
Intentionally Omitted.
5.1.25
Updated Appraisals. During the continuance of an Event of Default, Lender may commission (or Lender may request that Borrower commission directly) an updated appraisal of one or more of the Properties then remaining subject to the Lien of a Mortgage. Borrower shall pay directly or promptly reimburse Lender for, as applicable, the reasonable and actual out-of-pocket costs and expenses of obtaining all such updated appraisals.
5.1.26
Principal Place of Business, State of Organization. Upon Lender’s request, Borrower shall, at Borrower’s sole cost and expense, execute and deliver additional financing statements (which financing statements may describe as the collateral covered thereby “all assets of the debtor, whether now owned or hereafter acquired” or words to that effect), security agreements and other instruments which may be necessary to effectively evidence or perfect Lender’s security interest in each Individual Property as a result of any change in its principal place of business or place of organization. Borrower shall cause its principal place of business and chief executive office, and the place where Borrower keeps its books and records, including recorded data of any kind or nature, regardless of the medium or recording, including software, writings, plans, specifications and schematics, to continue to be the address of Borrower set forth at the introductory paragraph of this Agreement (unless Borrower notifies Lender in writing at least thirty (30) days prior to the date of such change). Borrower shall promptly notify Lender of any change in its organizational identification number. If any Borrower does not now have an organizational identification number and later obtains one, such Borrower promptly shall
notify Lender of such organizational identification number. Borrower shall at all times remain (x) a Delaware single-member limited liability company or (y) a Delaware limited partnership or (z) a limited partnership formed in the United States outside of the State of Delaware, and in each case of (y) and (z), with at least one limited partner that is a Delaware limited partnership (an “Acceptable LP”) and at least one general partner that is (i) a Delaware limited liability company or (ii) an entity that is a Special Purpose Entity and which is directly Controlled by a Delaware limited liability company (in each case of (i) and (ii), an “Acceptable GP”), with both the Acceptable LP and the Acceptable GP having 100% direct or indirect common ownership.
5.1.27
Embargoed Person. Borrower shall perform reasonable due diligence to insure that at all times throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets of Borrower, any SPE Constituent Entity and Guarantor shall constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person, with the result that the investment in Borrower, any SPE Constituent Entity or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law; (b) no Embargoed Person shall have any interest of any nature whatsoever in Borrower, any SPE Constituent Entity or Guarantor, as applicable, with the result that the investment in Borrower, any SPE Constituent Entity or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law; and (c) none of the funds of Borrower, any SPE Constituent Entity or Guarantor, as applicable, shall be derived from, or are the proceeds of, any unlawful activity, including money laundering, terrorism or terrorism activities, with the result that the investment in Borrower, any SPE Constituent Entity or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law, or may cause any Individual Property to be subject to forfeiture or seizure.
5.1.28
Special Purpose Entity/Separateness. (a) Borrower shall not engage in any business other than (i) as set forth in
clause (i) of the definition of “Special Purpose Entity”, (ii) entering into financing and refinancing of the Properties as permitted by this Agreement and (iii) transacting any and all lawful business that is incident, necessary and appropriate to accomplish the foregoing. No SPE Constituent Entity shall engage in any business other than
(i) acting as general partner of the limited partnership that owns, any one or more Individual Properties or acting as a member of the limited liability company that owns any one or more Individual Properties, as applicable and (ii) transacting any and all lawful business that is incident, necessary and appropriate to accomplish the foregoing.
(b) Borrower shall not have any Indebtedness other than as set forth in clause (xxiii)(I) of the definition of “Special Purpose Entity”; provided, however, that this covenant shall not require any shareholder, owner, partner or member of Borrower to make capital contributions or loans to Borrower. Each SPE Constituent Entity shall have no Indebtedness other than (i) liabilities of such SPE Constituent Entity as a general partner and/or limited partner of a limited partnership including, with respect to the Previously-Owned Property Borrower, the Previously-Owned Property, in the capacity as such and (ii) liabilities incurred in the ordinary course of business relating to the ownership and operation of the Borrower in which it holds an interest in and routine administration of the
Borrower in which it holds an interest in, provided that (x) the outstanding liabilities at any time shall not exceed $25,000.00 and (y) such liabilities are normal and reasonable under the circumstances; provided, however, that this covenant shall not require any shareholder, owner, partner or member of an SPE Constituent Entity to make capital contributions or loans to any such entity. Without limiting the foregoing, Borrower shall not incur any PACE Debt without the prior written consent of Lender in its sole discretion.
(c) Neither Borrower nor any SPE Constituent Entity shall assume or guaranty or become obligated for the debts of any Person, pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person (other than with respect to any Borrower, another Borrower).
(d) Borrower and each SPE Constituent Entity shall each be and continue to be a Special Purpose Entity.
(e) Borrower and each SPE Constituent Entity will comply with all of the stated facts and assumptions made with respect to Borrower and each SPE Constituent Entity in the Insolvency Opinion. Borrower and each SPE Constituent Entity will comply with all of the stated facts and assumptions made with respect to Borrower in any Additional Insolvency Opinion. Each entity other than Borrower and each SPE Constituent Entity with respect to which an assumption is made or a fact stated in the Insolvency Opinion and any Additional Insolvency Opinion will comply with all of the assumptions made and facts stated with respect to it in the Insolvency Opinion and any such Additional Insolvency Opinion. Borrower covenants that, in connection with any Additional Insolvency Opinion, it shall provide an updated certification regarding compliance with the facts and assumptions made therein.
(f) Borrower shall provide Lender with five (5) Business Days’ prior written notice prior to the removal of an Independent Director or Independent Manager of Borrower or any SPE Constituent Entity and Borrower shall not remove any such Independent Director or Independent Manager without Cause (as defined in the organizational documents of Borrower or such SPE Constituent Entity, as applicable).
5.1.29
Access Laws. Borrower covenants and agrees to give prompt notice to Lender of the receipt by Borrower of any material violations or written allegations of alleged material violations of any Access Laws and of the commencement of any governmental or judicial proceedings or investigations which relate to compliance with any such Access Laws.
5.1.30
Required Repairs. Borrower shall use commercially reasonable efforts to perform (or cause the performance of) the immediate repairs at the Properties
as set forth on Schedule 5.1.30 (the “Required Repairs”). Upon Lender’s request, Borrower shall provide evidence reasonably acceptable to Lender of the completion of such Required Repairs, provided, that in no event shall Borrower be required to provide evidence of completion for any repair the estimated cost of which is less than $20,000 (as set forth in the applicable Property Condition Report).
5.1.31 Ground Lease.
(a) Borrower shall, at Borrower’s sole cost and expense, promptly and timely perform and observe in all material respects, all the material terms, covenants and conditions required to be performed and observed by Borrower as lessee under the Ground Lease (including, but not limited to, the payment of all rent, additional rent, percentage rent and other charges required to be paid under the Ground Lease). Borrower shall not provide any notice of non-renewal of the Ground Lease to the Ground Lessor. Borrower shall not, without the prior consent of Lender (which consent shall not be unreasonably withheld, conditioned or delayed), (i) surrender the leasehold estate created by the Ground Lease or terminate or cancel the Ground Lease or (ii) modify, change, supplement, alter or amend the Ground Lease in a manner that could reasonably be expected to result in an Individual Material Adverse Effect on the Ground Lease Property, provided, that Borrower shall promptly deliver a copy to Lender of any modification or amendment to a Ground Lease after the execution thereof by all parties thereto. Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, (including, without limitation, the other provisions of this Article V), Borrower may, without the consent of (or prior notice to) Lender, enter into a Mariner’s Cove Ground Lease Permitted Modification, provided that Borrower agrees to promptly deliver to Lender any Mariner’s Cove Ground Lease Permitted Modification after the execution thereof by all parties thereto. In connection with a Mariner’s Cove Ground Lease Permitted Modification or any other amendment or modification to the Mariner’s Cove Ground Lease otherwise permitted pursuant to the terms of this Agreement, if requested by Borrower, Lender shall execute and deliver any instrument necessary or reasonably appropriate and in the form reasonably acceptable to the Lender evidencing the subordination of the Lien of the Mortgage encumbering the Mariner’s Cove Property upon receipt by Lender of (and without satisfaction of any other condition) (x) ten (10) days’ prior written notice thereof and (y) and reimbursement of all of Lender’s reasonable, out-of-pocket third party costs and expenses incurred in connection with such grant, conveyance or encumbrance (and such consent, release of Lien or instrument of subordination), including reasonable attorneys’ fees and expenses and the current fee being assessed by the Servicer in an amount not to exceed $2,000.
(b) Upon written request from Lender and provided that Borrower shall not have notified Lender or does not notify Lender within ten (10) Business Days of receipt of such request of Lender, of its intent to release the Ground Leased Property in accordance with
Section 2.6.1(b), if Borrower shall be in default under the Ground Lease beyond any applicable notice and cure period contained therein, then, subject to the terms of the Ground Lease, Borrower shall grant Lender the right (but not the obligation), to cause the default or defaults under the Ground Lease to be remedied and otherwise exercise any and all rights of Borrower under the Ground Lease, as may be necessary to prevent or cure any default provided such actions are necessary to protect Lender’s interest in the Individual Property under the Loan Documents, and Lender shall, subject to the rights of the Ground Lessor, Tenants, Permitted Encumbrances and other occupants, have the right to enter all or any portion of the related Ground Leased Property at such times and in such manner as Lender deems necessary, to prevent or to cure any such default; provided that in each case, such actions are necessary to protect Lender’s interest under the Loan Documents.
(c) The actions or payments of Lender to cure any default by Borrower under the Ground Lease shall not remove or waive, as between Borrower and Lender, the default that occurred under this Agreement by virtue of the default by Borrower under the Ground Lease unless and until the Borrower shall have reimbursed Lender for all sums referenced in the immediately succeeding sentence and the applicable default shall have been cured. All sums expended by Lender to cure any such default shall be paid by Borrower to Lender, upon demand, with interest on such sum at the Default Rate from the date such sum is expended to and including the date the reimbursement payment is made to Lender. All such indebtedness shall be deemed to be secured by the related Mortgage.
(d) Borrower shall notify Lender promptly in writing of the occurrence of any material default by Ground Lessor under the Ground Lease or following the receipt by Borrower of any written notice from Ground Lessor under the Ground Lease noting or claiming the occurrence of any default by Borrower under the Ground Lease or the occurrence of any event that, with the passage of time or service of notice, or both, would constitute a default by Borrower under the Ground Lease. Borrower shall promptly deliver to Lender a copy of any such written notice of default.
(e) Upon written request from Lender, Borrower shall use commercially reasonable efforts to obtain from Ground Lessor under the Ground Lease and furnish to Lender the estoppel certificate of Ground Lessor stating the date through which rent has been paid and whether or not there are any defaults thereunder and specifying the nature of such claimed defaults, if any, but in no event (so long as no Event of Default has occurred and is continuing) more than one (1) time in any Fiscal Year.
(f) Upon written request from Lender and provided that Borrower shall not have notified Lender or does not notify Lender within ten (10) Business Days of receipt of such request of Lender, of its intent to release the Ground Leased Property in accordance with
Section 2.6.1(b), Borrower shall promptly execute, acknowledge and deliver to Lender such instruments as may reasonably be required to permit Lender to cure any default under the Ground Lease or permit Lender to take such other action required to enable Lender to cure or remedy the matter in default and preserve the security interest of Lender under the Loan Documents with respect to the Ground Leased Property. Borrower irrevocably appoints Lender as its true and lawful attorney in fact to do, in its name or otherwise, unless Borrower has notified Lender of its intention to release the Ground Leased Property in accordance with
Section 2.6.1(b), during the continuance of an Event of Default, any and all acts and to execute any and all documents that are necessary to preserve any rights of Borrower under or with respect to the Ground Lease, including, without limitation, (i) the right to cure any default, (ii) the right to effectuate any extension or renewal of the Ground Lease, or (iii) to preserve any rights of Borrower whatsoever in respect of any part of the Ground Lease (and the above powers granted to Lender are coupled with an interest and shall be irrevocable).
(g) Notwithstanding anything to the contrary contained in this Agreement with respect to the Ground Lease, to the extent not prohibited by applicable law:
(i) The lien of the related Mortgage attaches to all of Borrower’s rights and remedies at any time arising under or pursuant to Subsection 365(h) of the Bankruptcy Code, 11 U.S.C. Sections 101 et seq., including, without limitation, all of Borrower’s rights, as debtor, to remain in possession of the related Ground Leased Property.
(ii) Borrower shall not, without Lender’s written consent, elect to treat the Ground Lease as terminated under Subsection 365(h)(l) of the Bankruptcy Code. Any such election made without Lender’s prior written consent shall be void.
(iii) As security for the Debt, Borrower unconditionally assigns, transfers and sets over to Lender all of Borrower’s claims and rights to the payment of damages arising from any rejection by the lessor under the Ground Lease under the Bankruptcy Code. Lender and Borrower shall proceed jointly or in the name of Borrower in respect of any claim, suit, action or proceeding relating to the rejection of the Ground Lease, including, without limitation, the right to file and prosecute any proofs of claim, complaints, motions, applications, notices and other documents in any case in respect of lessor under the Bankruptcy Code. This assignment constitutes a present, irrevocable and unconditional assignment of the foregoing claims, rights and remedies, and shall continue in effect until all of the Debt shall have been satisfied and discharged in full. Any amounts received by Lender or Borrower as damages arising out of the rejection of the Ground Lease as aforesaid shall be applied to all costs and expenses of Lender (including, without limitation, actually incurred attorneys’ fees and costs) incurred in connection with the exercise of any of its rights or remedies in accordance with the applicable provisions of this Agreement.
(iv) If, pursuant to Subsection 365(h) of the Bankruptcy Code, Borrower seeks to offset, against the rent reserved in the Ground Lease, the amount of any damages caused by the nonperformance by the lessor of any of its obligations thereunder after the rejection by lessor of the Ground Lease under the Bankruptcy Code, then Borrower shall not affect any offset of such amounts unless it shall have provided written notice to Lender of its intent to do so and Lender shall have consented thereto (provided Lender shall be deemed to have consented thereto if it shall fail to object to the same in written notice to Borrower within ten (10) Business Days after receipt of the aforementioned notice in which case Borrower may proceed to offset the amounts set forth in Borrower’s notice).
(v) If any action, proceeding, motion or notice shall be commenced or filed in respect of any lessor of all or any part of the Ground Leased Property in connection with any case under the Bankruptcy Code, Lender and Borrower shall cooperatively conduct and control any such litigation with counsel agreed upon between Borrower and Lender in connection with such litigation. Borrower shall, upon demand, pay to Lender all reasonable actual out of pocket costs and expenses (including reasonable actually incurred attorneys’ fees and costs) actually paid or actually incurred by Lender in connection with the cooperative prosecution or
conduct of any such proceedings. All such costs and expenses shall be secured by the lien of the related Mortgage.
(vi) Borrower shall promptly, after obtaining knowledge of such filing notify Lender orally of any filing by or against the lessor under the Ground Lease of a petition under the Bankruptcy Code, setting forth any information available to Borrower as to the date of such filing, the court in which such petition was filed, and the relief sought in such filing. Borrower shall promptly deliver to Lender any and all notices, summonses, pleadings, applications and other documents received by Borrower in connection with any such petition and any proceedings relating to such petition.
(h) If Lender, its nominee, designee, successor, or assignee acquires title and/or rights of Borrower under the Ground Lease by reason of foreclosure of the applicable Mortgage, deed in lieu of foreclosure or otherwise, such party shall (x) succeed to all of the rights of and benefits accruing to Borrower under the Ground Lease, and (y) be entitled to exercise all of the rights and benefits accruing to Borrower under the Ground Lease. At such time as Lender shall request, Borrower agrees to execute and deliver and use commercially reasonable efforts to cause any third party to execute and deliver to Lender such documents as Lender and its counsel may reasonably require in order to insure that the provisions of this Section will be validly and legally enforceable and effective against Borrower and all parties claiming by, through, under or against Borrower.
5.1.32
Fremont Ground Lease. Notwithstanding anything to the contrary in this Agreement or the other Loan Documents (including, without limitation, the other provisions of this Article V), Borrower may, without the consent of (or notice to) Lender amend, modify, supplement and/or terminate the Fremont Ground Lease (each, a “
Fremont Ground Lease Modification”).
5.1.33 Condominium. Borrower covenants and agrees that:
(a) it will comply (or vote to cause the Condominium to comply) in all material respects with all of the terms, covenants and conditions on its part to be complied with, pursuant to the Condominium Documents and any rules and regulations that may be adopted for any Condominium, as applicable, as the same shall be in force and effect from time to time except for violations or defaults that would not reasonably be expected to result in an Aggregate Material Adverse Effect or Individual Material Adverse Effect;
and
(b) it will not, without the prior written consent of the Agent, except as expressly permitted pursuant to this Agreement, take any action to terminate any Condominium or withdraw any Condominium from the applicable Condominium Law.
Section 5.2
Negative Covenants. From the Closing Date until payment and performance in full of all obligations of Borrower under the Loan Documents or the earlier release of the Lien of the Mortgages in accordance with the terms of this Agreement and the other Loan Documents, Borrower covenants and agrees with Lender that it will not do, directly or indirectly, any of the following:
5.2.1
Operation of Property. Borrower shall not, without Lender’s prior written consent (which consent shall not be unreasonably withheld) and except with respect to an Individual Property in connection with the release of such Individual Property in accordance with this Agreement:
(i) surrender, terminate or cancel the Management Agreement; provided, that Borrower may, without Lender’s consent, replace the Manager so long as
(A) the replacement manager is a Qualified Manager pursuant to a Replacement Management Agreement (provided that, in the event that such Qualified Manager is an Affiliate of Borrower or Guarantor, at the written request of Lender, Borrower shall deliver an acceptable Additional Insolvency Opinion covering such Qualified Manager if such Qualified Manager was not covered by the Insolvency Opinion) or
(B) the proposed replacement manager is a Person that is under common Control with Existing Manager; (ii) reduce or consent to the reduction of the term of the Management Agreement; (iii) increase or consent to the increase of the amount of any charges under the Management Agreement in a manner that would reasonably be expected to have an Individual Material Adverse Effect, (iv) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, the Management Agreement in a manner that would reasonably be expected to have an Individual Material Adverse Effect or (v) enter into an agreement or amendment that provides that the base management fee under any Management Agreement exceeds, with respect to each Individual Property, the greater of (x) three and one-half percent (3.5%) of the Gross Income from Operations attributable to such Individual Property or (y) the Individual Management Fee Cap. Notwithstanding anything to the contrary contained in the Loan Documents if (A) elected by Borrower (and subject to Borrower’s right to revoke or rescind such election by notice to Lender) and (B) the Capped Actual Management Fee Condition shall have been satisfied, such base management fee shall be subject to the Affiliate Management Fee Subordination Condition. In no instance shall Borrower pass-through any management fees to any Tenant in excess of the amount permitted under the related Lease. Notwithstanding anything to the contrary contained in the Loan Documents, Borrower may, without consent of Lender, modify, change, supplement, alter, amend or grant a waiver under a Management Agreement to the extent the Management Agreement after giving effect to such modification, change, supplement, alteration, amendment, waiver, or modification, as applicable, would qualify as a Replacement Management Agreement.
5.2.2
Liens; Utility and Other Easements. (a) Borrower shall not create, incur, assume or suffer to exist any Lien on any portion of any Individual Property or permit any such action to be taken, except Permitted Encumbrances.
(b) Notwithstanding anything to the contrary herein, Borrower may, without the consent of Lender,
(i) Transfer immaterial portions of any one or more Individual Properties, including, without limitation, to Governmental Authorities for dedication or public use or in connection with a Condemnation proceeding, or to third parties for private use as roadways or for access, parking, ingress or egress, or
(ii) grant (or release existing) easements, restrictions, covenants, reservations and rights of way in the ordinary course of business (or otherwise in connection with a Condemnation proceeding) including, without limitation, for use, access, parking, uses consistent with the Permitted Use, water and sewer lines, telephone and telegraph lines, gas or electric lines, telecommunications leases, fiberoptic lines and other utilities,
provided that no such grant, conveyance or encumbrance
shall materially impair the utility and operation of the affected Individual Property or have an Individual Material Adverse Effect on such Individual Property (an “
Immaterial Transfer/Release”). In connection with any Immaterial Transfer/Release, if requested by Borrower, Lender shall execute and deliver any instrument necessary or reasonably appropriate and in the form reasonably acceptable to the Lender evidencing its consent to such Immaterial Transfer/Release (and, in the case of any such Transfer as described in the preceding
subclause (i), a release of such portion of the Individual Property from the Lien of the applicable Mortgage and, in the case of any easement, covenant, reservation or right-of-way as described in the preceding
subclause (ii), the subordination of the Lien of the Mortgage encumbering the affected Individual Property to such easement, covenant, reservation or right-of-way) upon receipt by Lender of (and without satisfaction of any other condition):
(A) ten (10) days’ prior written notice thereof;
(B) a copy of the easement, covenant, reservation, right of way or other transfer document;
(C) an Officer’s Certificate stating
(I) with respect to any Transfer as described in the preceding
subclause (i) above, the consideration, if any, being paid for the Transfer and (II) that such Transfer, easement, covenant, reservation or right of way does not have an Individual Material Adverse Effect on the applicable Individual Property; and
(D) reimbursement of all of Lender’s reasonable, out-of-pocket third party costs and expenses incurred in connection with such grant, conveyance or encumbrance (and such consent, release of Lien or instrument of subordination), including reasonable attorneys’ fee and expenses and the current fee being assessed by the Servicer in an amount not to exceed $2,000.
(c) If Borrower shall receive any consideration in connection with an Immaterial Transfer/Release, Borrower shall have the right to use any such consideration in connection with any Alterations performed in connection with such Immaterial Transfer/Release,
provided that, to the extent any such consideration is not used in connection with such Alterations (or any such consideration exceeds the amount required to perform such Alterations), Borrower shall promptly deposit the consideration or such excess amount, as the case may be, into the Lockbox Account.
(d) Notwithstanding the foregoing provisions of this
Section 5.2.2, if the Loan is included in a REMIC Trust and if immediately after giving effect to a release of any portion of the Lien (on an Individual Property or any portion of an Individual Property) following a release in accordance with the terms and conditions of this
Section 5.2.2 (but taking into account any proposed Restoration on the remaining Individual Property), the Loan-to-Value Ratio is greater than 125%, the Borrower must pay down the principal balance of the Loan by an amount not less than the least of the following amounts:
(i) the Net Proceeds plus the net proceeds of any arm’s-length sale of the property to an unrelated
Person, (ii) the fair market value (as determined in accordance with the definition of “Loan-to-Value Ratio”) of the released property at the time of the release, or (iii) an amount such that the Loan-to-Value Ratio after giving effect to the release is not greater than the Loan-to-Value Ratio immediately prior to such release, unless the Lender receives an opinion of counsel that if such amount is not paid, the Securitization will not fail to maintain its status as a REMIC Trust as a result of the related release of such portion of the Lien.
5.2.3
Dissolution; Amendment of Organizational Documents. Borrower shall not, without obtaining the consent of Lender
(a) engage in any dissolution, liquidation, Division, consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership, development, improvement, leasing, financing, management, maintenance and operation of the Properties, except as set forth in
subsection (i) of the definition of “Special Purpose Entity” or the Permitted Uses,
(c) transfer, lease or sell, in one transaction or any combination of transactions, all or substantially all of the properties or assets of Borrower except to the extent permitted by the Loan Documents,
(d) modify, amend, waive or terminate its organizational documents if such modification or amendment (1) affects any of the “Special Purpose Provisions”, as defined in the related organizational documents, (2) affects any provision or definition on which any opinion of counsel delivered to Lender in connection with the Loan is based (or any assumption contained in such opinion of counsel) or (3) would reasonably be expected to result in an Aggregate Material Adverse Effect or Individual Material Adverse Effect or its qualification and good standing in any jurisdiction or change its state of organization from Delaware to any other state or (e) cause or permit any SPE Constituent Entity to
(i) dissolve, wind up or liquidate or take any action, or omit to take an action, as a result of which such SPE Constituent Entity would be dissolved, wound up or liquidated in whole or in part, or (ii) amend, modify, waive or terminate the organizational documents of such SPE Constituent Entity if such modification or amendment (1) affects any of the “Special Purpose Provisions”, as defined in the related organizational documents, (2) affects any provision or definition on which any opinion of counsel delivered to Lender in connection with the Loan is based (or any assumption contained in such opinion of counsel) or (3) would reasonably be expected to result in an Aggregate Material Adverse Effect or Individual Material Adverse Effect, in each case, without obtaining the prior written consent of Lender or Lender’s designee.
5.2.4
Change in Business. Borrower shall not enter into any line of business other than as set forth in
clause (i) of the definition of “Special Purpose Entity” (and any ancillary business related to such activities), or make any material change in the scope or nature of its business objectives, purposes or operations if such change would cause the use of the applicable Individual Property to no longer be a Permitted Use, or undertake or participate in activities other than the continuance of its present business or the Permitted Uses. Nothing contained in this
Section 5.2.4 shall be deemed to apply to any Transfers, and for the avoidance of doubt, the rights of Borrower to effectuate Transfers is governed solely by
Section 5.2.10 hereof.
5.2.5
Debt Cancellation. Borrower shall not cancel or otherwise forgive or release any claim or debt (other than termination of Leases in accordance with
Section 5.2.14 hereof or, provided that no Event of Default is then continuing, forgiveness in the ordinary
course of Borrower’s business of Rent in arrears or in connection with a settlement with a Tenant under a Lease) owed to Borrower by any Person, except for adequate consideration and in the ordinary course of Borrower’s business.
5.2.6
Zoning. Except as would not have an Individual Material Adverse Effect on an Individual Property or as permitted in connection with the release of any Release Parcel/Rights in accordance with the terms and conditions of
Section 2.6.2 hereof, Borrower shall not initiate or consent to any zoning reclassification of any portion of any Individual Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion of any Individual Property, in each case, if such action would be reasonably likely to result in an Individual Material Adverse Effect with respect to the applicable Individual Property, without the prior written consent of Lender. Lender shall use commercially reasonable efforts to respond within fifteen (15) Business Days to any request for consent from Borrower under this
Section 5.2.6, provided, however, if Lender shall fail to use such commercially reasonable efforts and/or shall fail to so respond within such fifteen (15) Business Day period, in no instance shall the same be deemed to constitute Lender’s consent to such request. Notwithstanding the provisions of this
Section 5.2.6 or
Section 2.6.2, Borrower shall have the right without consent of Lender to submit to any Governmental Authority an application for subdivision or lot split and to consummate such subdivision or lot split with respect to any Individual Property in anticipation of the release of any Release Parcel/Rights so long as, (i) Borrower shall not take any action that would reasonably be expected to result in the Individual Property which will remain collateral for the Loan becoming a non-conforming use under applicable Legal Requirements and (ii) any release of any Release Parcel/Rights shall be conditioned on Borrower’s compliance with
Section 2.6.2 and
Section 2.6.1(e). Notwithstanding anything in the contrary herein, Borrower may, without consent from or notice to Lender, enter into deed restrictions and agreements restricting the use of an Individual Property to its current use if and to the extent required by applicable Legal Requirements, provided that such restrictions and agreements are not reasonably expected to result an Individual Material Adverse Effect on the applicable Individual Property. Notwithstanding anything to the contrary, this
Section 5.2.6 shall not restrict any commencement of any zoning discussions, procedures or proceedings with respect to the use of any Individual Property, provided that such action does not result in a change to the use of such Individual Property or any zoning reclassification with respect to such Individual Property, in each case, that would result in such Individual Property no longer being operated as a Permitted Use for so long as it is collateral for the Loan.
5.2.7
No Joint Assessment. Borrower shall not suffer, permit or initiate the joint assessment of any Individual Property (a) with any other real property constituting a tax lot separate from such Individual Property and (b) which constitutes real property with any portion of such Individual Property which may be deemed to constitute personal property, or any other procedure whereby the Lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to such real property portion of such Individual Property.
5.2.8
Principal Place of Business and Organization. Borrower shall not change (or permit any other Person to change) its name, identity (including its trade name or
names), place of organization or formation (as set forth in
Section 4.1.28 hereof) or form of entity unless Borrower shall have first notified Lender in writing of such change at least thirty (30) days prior to the effective date of such change, and shall have first taken all action required by Lender for the purpose of perfecting or protecting the lien and security interests of Lender pursuant to this Agreement, and the other Loan Documents and, in the case of a change in Borrower’s form of entity, without first obtaining the prior written consent of Lender, which consent may be given or denied in Lender’s sole discretion. Borrower shall not change (or permit any Person to change) the place of its organization without the consent of Lender, which consent shall not be unreasonably withheld.
5.2.9
Intentionally Omitted.
5.2.10
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members and (if Borrower is a trust) beneficial owners, as applicable, and principals of Borrower in owning and operating properties such as the Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership of the Properties as a means of maintaining the value of the Properties as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Properties.
(b) Except
(i) to the extent otherwise set forth in this
Section 5.2.10, (ii) with respect to the release of one or more Individual Properties or any portion thereof (and related collateral) in accordance with this Agreement and (iii) to the extent such Transfer constitutes a Permitted Transfer or Permitted Debt, without the prior written consent of Lender, Borrower shall not and shall not permit any Restricted Party to do any of the following (collectively, a “
Transfer”): (x) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant purchase options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) any Individual Property or any part thereof or any legal or beneficial interest therein,
(y) permit a Sale or Pledge of an interest in any Restricted Party or
(z) Borrower entering into, or causing the Property to be subject to, any PACE Debt. Any Transfer made without Lender’s prior written consent (to the extent that such consent is required pursuant to this
Section 5.2.10) shall be null and void. Notwithstanding anything to the contrary contained herein, Lender’s receipt of a Rating Agency Confirmation shall not be required in connection with any Transfer that is permitted hereunder, including, without limitation, any Permitted Transfer, Permitted Assumption, Controlling Interest Transfer or Public Sale or the replacement of any Guarantor or Ancillary Guarantor in connection therewith that is consummated in accordance with the terms of this Agreement and the terms of the Guaranty or Ancillary Guaranty, as applicable.
(c) A Transfer shall include, but not be limited to,
(i) an installment sales agreement wherein Borrower agrees to sell an Individual Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or substantially
all of an Individual Property to a third party for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any Division, merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership, any Division, merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any Division, merger or consolidation or the change, removal, resignation or addition of a member or a non‑member manager (other than an Independent Director or Independent Manager that is a springing member in accordance with the terms and conditions hereof) or the Sale or Pledge of the membership interest of a member (other than an Independent Director or Independent Manager that is a springing member in accordance with the terms and conditions hereof) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of membership interests or the creation or issuance of new membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests.
(d) Notwithstanding the provisions of this
Section 5.2.10 the following Transfers shall not require any notice to Lender (unless Borrower is required to deliver any Additional Insolvency Opinion or satisfy any “know your customer” compliance screening as expressly required below) or the consent of Lender or the payment of any transfer fee:
(i) The Sale or Pledge, in one or a series of Transfers, of the direct or indirect equity interests in Borrower or direct or indirect interests in any Restricted Party; provided, that,
(A) after giving effect to such Sale or Pledge (and in the case of a Sale or Pledge that is a pledge for security purposes otherwise permitted hereunder, any subsequent foreclosure thereon (other than a Pledge Foreclosure)),
one or more Approved Control Party(ies)
(x) shall individually or collectively, directly or indirectly, own the applicable Required Ownership Interest, and
(y) shall individually or collectively, directly or indirectly, Control Borrower and Mezzanine Borrower,
(B) intentionally omitted,
(C) intentionally omitted, (D) no Individual Borrower or SPE Constituent Entity shall fail to be a Special Purpose Entity by reason of such Sale or Pledge, (E) for so long as the Loan or any Mezzanine Loan shall remain outstanding
(I) no pledge of any direct interests in any Restricted Pledge Party shall be permitted (other than pledges securing the Loan or a New Mezzanine Loan), except that a pledge of the direct ownership interests in any Restricted Pledge Party (other than pledges of the direct ownership interests in Borrower (or, if any Mezzanine Loan is outstanding, any Mezzanine Borrower)) shall be permitted if such pledge directly or indirectly secures indebtedness that is also directly or indirectly secured by substantial assets other than the Properties and (II) no Restricted Pledge Party shall issue preferred equity that is substantially similar to mezzanine debt (such as preferred equity which has a fixed maturity date,
pledged ownership interests as security and rights of the equity holder to demand repayment of its investment on such maturity date) and
(F) with respect to any transferee that, as a result of such Transfer, will hold a twenty percent (20%) or greater direct or indirect interest in, or Control, Borrower (and such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower or did not Control Borrower
immediately prior to such Transfer), Lender shall receive notice of such transfer (provided, however, the failure to provide such notice shall not constitute an Event of Default) and shall receive KYC Searches with respect to such transferee. Notwithstanding anything to the contrary contained in the Loan Documents, no notice to or consent of Lender shall be required in connection with
(i) any foreclosure of any pledge of an indir
ect equity interest in Borrower or (ii) the exercise of remedies or acquisition of Control by a provider of preferred equity or debt to an indirect owner of Borrower, in each case, that is permitted by this Agreement (a “
Pledge Foreclosure”) that may or may not result in a change of Control of Borrower and no assumption fee shall be payable in connection therewith; provided that (x) the foreclosing party
or the party acquiring Control of Borrower or exercising remedies is an Eligible Assignee that is able to remake the applicable representations set forth in
Section 4.1.35 and is able to comply with Borrowers’ covenants set forth in
Section 5.1.27 and
(y) Lender shall receive notice of such transfer (provided, however, the failure to provide such notice shall not constitute an Event of Default) and shall have the right to receive the KYC Searches with respect to any Person that holds a twenty percent (20%) or greater direct or indirect interest in, or Controls, Borrower following such Pledge Foreclosure (and such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower or did not Control Borrower immediately prior to such Pledge Foreclosure). If after giving effect to any such sale, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in Borrower and/or any SPE Constituent Entity are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in Borrower and/or such SPE Constituent Entity, as applicable, as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and, following a Rated Securitization, the Rating Agencies. Notwithstanding anything to the contrary contained in this Agreement,
(x) no notice to, or consent of, Lender shall be required in connection with any Sale or Pledge of direct or indirect interests in any Excluded Entity or by and among any Excluded Entity and
(y) subject to
sub-clause (I) above, no Restricted Pledge Party (other than Borrower or a New Mezzanine Borrower) shall be restricted from any Sale or Pledge of its direct or indirect assets; provided such direct or indirect assets are not encumbered (or required to be encumbered) by the Loan or the Mezzanine Loan. In connection with a Controlling Interest Transfer or any other Transfer (including, for the avoidance of doubt, without limitation, a Pledge Foreclosur
e), the result of which is that Guarantor or any Ancillary Guarantor, as applicable, no longer owns a direct or indirect interest in or is no longer an Affiliate of Borrower (individually or collectively as the context requires, the “
Exiting Guarantor”), Exiting Guarantor shall be released as a guarantor under the
(I) Guaranty for any acts occurring from and after such Transfer; provided that a Guaranty Assumption occurs with respect
to the Guaranty (the “
Non-Recourse Assumption”), (II) Rate Cap Reserve Guaranty (if any) provided that (x) Borrower shall pay to Lender an amount equal to all amounts guaranteed under the Rate Cap Reserve Guaranty as of such date which amounts shall be deposited by Lender into the Rate Cap Reserve Account or (y) a Guaranty Assumption occurs with respect to the Rate Cap Reserve Guaranty (the “
Rate Cap Guaranty Assumption”), (III) Alterations Guaranty (if any), provided that (x) Borrower shall pay to Lender an amount equal to all amounts guaranteed under the Alterations Guaranty as of such date which amounts shall be held by Lender as the Alterations Deposit or (y) a Guaranty Assumption occurs with respect to the Alterations Guaranty (the “
Alterations Guaranty Assumption”), (IV) Excess Cash Flow Guaranty (if any), provided that (x) Borrower shall pay to Lender an amount equal to all amounts guaranteed under the Excess Cash Flow Guaranty as of such date which amounts shall be deposited by Lender into the Excess Cash Flow Reserve Account or (y) a Guaranty Assumption occurs with respect to the Excess Cash Flow Guaranty (the “
Excess Cash Flow Guaranty Assumption”), (V) Debt Yield Trigger Cure Guaranty (if any), provided that, at the election of Borrower, (v) Borrower shall pay to Lender an amount equal to all amounts guaranteed under the Debt Yield Trigger Cure Guaranty as of such date (the “
DY Guaranty Amount”) to be applied as a prepayment of the Loan, (w) Borrower shall pay to Lender an amount equal to the DY Guaranty Amount to be held by Lender as Debt Yield Cure Collateral in accordance with the definition thereof, (x) Borrower delivers to Lender a Letter of Credit in an amount equal to the DY Guaranty Amount to be held by Lender as Debt Yield Cure Collateral in accordance with the definition thereof, (y) Borrower shall pay to Lender an amount equal to the DY Guaranty Amount which shall be deposited by Lender into the Cash Management Account at which point a Debt Yield Trigger Event shall be deemed to exist until a Debt Yield Trigger Event Cure has taken place or (z) a Guaranty Assumption occurs with respect to the Debt Yield Trigger Cure Guaranty (the “
Debt Yield Trigger Cure Guaranty Assumption”) and (VI) Reserve Guaranty (if any), provided that, at the election of Borrower, (x) Borrower shall pay to Lender an amount equal to the Reserve Guaranty Amount (as defined below) to be held by Lender in the MC Reserve Account for reimbursement of costs associated with the Minimum Capital Improvements in accordance with
Section 7.7.2 hereof, (y) Borrower delivers to Lender a Letter of Credit in an amount equal to the Reserve Guaranty Amount to be held by Lender in the MC Reserve Account for reimbursement of costs associated with the Minimum Capital Improvements in accordance with
Section 7.7.2 hereof, or (z) a Guaranty Assumption occurs with respect to the Reserve Guaranty (the “
Reserve Guaranty Assumption”) with the conditions set forth in
clauses (I) through
(VI) above shall be referred to herein as the “
Guaranty Release Conditions”, and the release of the applicable Guarantor or Ancillary Guarantor shall be referred to herein as the “
Guarantor Release”. Each Guarantor Release shall be effective automatically upon satisfaction of the applicable Guaranty Release Conditions, but Lender agrees to provide written evidence thereof, at Borrower’s sole cost and expense, if the same is reasonably requested by Borrower.
(ii) A Public Sale;
provided that (A) if after giving effect to any such Public Sale, more than forty-nine percent (49%) in the aggregate of the direct or indirect interests in Borrower and/or any SPE Constituent Entity are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) of the direct or indirect interest in Borrower and/or such SPE Constituent Entity, as applicable, as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and, to the extent a Rated Securitization has occurred, the Rating Agencies, (B) Borrower and any SPE Constituent Entity shall not fail to be a Special Purpose Entity by reason of such Public Sale and (C) with respect to any transferee that, as a result of such transfer, will hold a twenty percent (20%) or greater direct or indirect interest in, or Control, Borrower (and such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower or did not Control Borrower immediately prior to such Public Sale), Lender shall receive KYC Searches with respect to such transferee. Upon completion of any such Public Sale subject to and in accordance with the provisions of this
Section 5.2.10(d)(ii), Borrower shall have the right to cause the Non-Recourse Assumption, the Rate Cap Guaranty Assumption, the Alterations Guaranty Assumption, the Excess Cash Flow Guaranty Assumption and/or the Debt Yield Trigger Cure Guaranty Assumption and each Guarantor Release shall be effective automatically upon satisfaction of the applicable Guaranty Release Conditions and Lender agrees to provide written evidence of such Guarantor Release if the same is reasonably requested by Borrower. Following any Transfer in accordance with this
Section 5.2.10(d)(ii), the Qualified Public Company shall be deemed to be an Excluded Entity. For purposes of clarity, the provisions of
Section 5.2.3 and this
Section 5.2.10 shall not restrict the Qualified Public Company or Public Vehicle (or any direct or indirect owner of the Qualified Public Company or Public Vehicle, but excluding any Borrower, any New Mezzanine Borrower or any SPE Constituent Entity) from effectuating a restructuring and such Qualified Public Company or Public Vehicle (or any direct or indirect owner of the Qualified Public Company or Public Vehicle, but excluding any Borrower, any New Mezzanine Borrower or any SPE Constituent Entity) shall be permitted to effectuate a restructuring, including amending or modifying its organizational documents, intercompany commercial arrangements or governance including any amendments or modifications reasonably determined by such Qualified Public Company or Public Vehicle to be required to satisfy stock exchange, quotation system listing or trading requirements. Notwithstanding anything to the contrary contained herein, Lender’s receipt of a Rating Agency Confirmation shall not be required in connection with a Public Sale.
(iii) A pledge made by New Mezzanine Borrower to secure the New Mezzanine Loan in accordance with the related Mezzanine Loan Documents or any Foreclosure thereof and/or exercise of rights and/or remedies under the Mezzanine Loan Documents.
(iv) Permitted Transfers.
(e) In addition to Borrower’s other rights expressly permitted under this
Section 5.2.10,
(i) a Transfer of all of the Properties to a new borrower or borrowers (“
Transferee”), or
(ii) a Transfer of Controlling interests in the Mezzanine Borrower or, if no Mezzanine Loan is then outstanding, Borrower (a “
Controlling Interest Transfer”), and in each instance provided that the same do not otherwise constitute a Permitted Transfer or are otherwise permitted by
Section 5.2.10(d) shall each be permitted without Lender’s consent (each, a “
Permitted Assumption”); provided, (x) no Permitted Assumption shall occur until the earlier of
(I) sixty (60) days after the first Securitization of the Loan and (II) one hundred twenty (120) days after the Closing Date, (y) that Lender receives thirty (30) days’ prior written notice of such Permitted Assumption and (z) no Event of Default has occurred and is continuing at the time the Permitted Assumption is consummated. Notwithstanding anything to the contrary contained in the Loan Documents, Lender’s receipt of a Rating Agency Confirmation shall not be required in connection with a Permitted Assumption. In connection with any Permitted Assumption pursuant to this
Section 5.2.10(e), Borrower shall be required to satisfy the following:
(i) Borrower shall pay Lender a fee equal to Lender’s Allocation of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) at the time such Permitted Assumption is consummated; provided that such fee shall not be payable
(x) if such Permitted Assumption is to any entity comprising an Approved Sponsor Entity, to any Affiliate of an Approved Sponsor Entity, or any other entity directly or indirectly Controlled by any entity comprising an Approved Sponsor Entity or (y) if following such Permitted Assumption, one or more Approved Sponsor Entities will, individually or collectively with a Qualified Transferee, Control Borrower;
(ii) Borrower shall pay any and all reasonable out of pocket costs incurred by Lender in connection with such Permitted Assumption (including, without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes);
(iii) After giving effect to the Permitted Assumption, one or more Permitted Assumption Parties must, individually or collectively, (x) own, directly or indirectly, the applicable Required Ownership Interest, and (y) Control Borrower or Transferee;
(iv) With respect to a Transfer of the Properties, if applicable, Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner reasonably satisfactory to Lender in all material respects, including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(v) After giving effect to the Permitted Assumption, Transferee and Transferee’s SPE Constituent Entities or, in the case of a Controlling Interest Transfer, Borrower and each SPE Constituent Entity must be able to make all of the representations set forth in
Sections 4.1.30 and
4.1.35, and perform all of the covenants set forth in
Sections 5.1.27 and
5.1.28 of this Agreement, no Event of
Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s SPE Constituent Entities shall deliver
(A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender, and
(B) all certificates and agreements necessary to evidence the Permitted Assumption and any due formation, execution enforceability legal opinions reasonably required by Lender;
(vi) Intentionally omitted;
(vii) If the Permitted Assumption is accomplished by a deed or conveyance of the Properties, rather than an assignment of all of Guarantor’s or a Restricted Party’s interest in Borrower, Borrower shall deliver, at its sole cost and expense, an endorsement to each Title Insurance Policy, as modified by the assumption agreement, confirming the Lien of the Mortgages as a valid first lien on all of the Properties and naming the Transferee as owner of all of the Properties, which endorsements shall insure that, as of the date of the recording of the assumption agreement, the applicable Individual Property shall not be subject to any additional exceptions or Liens other than those contained in the applicable Title Insurance Policy issued on the Closing Date and the Permitted Encumbrances;
(viii) Each Individual Property shall be managed by Qualified Manager (and, if the Qualified Manager managing any one or more Individual Properties prior to the Transfer is being replaced, the replacement Qualified Manager shall manage such Individual Properties pursuant to a Replacement Management Agreement);
(ix) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion in respect of such Transfer in form and substance reasonably satisfactory to Lender which opinion may be relied upon by Lender and the Rating Agencies with respect to the proposed Transfer;
(x) Lender shall receive KYC Searches with respect to any Person that will as of the date of the Permitted Assumption hold a twenty percent (20%) or greater direct or indirect interest in, or Control, the Transferee or, in the case of a Controlling Interest Transfer, Borrower (and such Person owned less than twenty percent (20%) of the direct or indirect interest in Borrower or did not Control Borrower immediately prior to such Permitted Assumption); and
(xi) To the extent a Mezzanine Loan is outstanding, Mezzanine Borrower shall have complied with the requirements of
Section 5.2.10(e) of the Mezzanine Loan Agreement.
Immediately upon the consummation of a Permitted Assumption pursuant to this
Section 5.2.10(e), then (I) each Borrower (other than with respect to a Controlling Interest Transfer) shall be released from all liability under this Agreement, the Note, the Mortgages, the Guaranty and the other Loan Documents accruing from and after the date of such Permitted Assumption and (II) each Guarantor Release shall be effective automatically upon the satisfaction
of the applicable Guaranty Release Conditions (and Lender agrees to provide written notice thereof if the same is reasonably requested by Borrower).
(f) Notwithstanding anything in the Loan Documents to the contrary, in addition to Borrower’s other rights expressly permitted under this
Section 5.2.10, Borrower shall be permitted, without Lender’s consent or the payment of any fee, to Transfer one or more of the Properties to a newly-formed borrower or borrowers, each of which shall be a direct or indirect subsidiary of Borrower (an “
Approved Borrower Sub”), provided that
(i) Lender receives ten (10) Business Days’ prior written notice of such Transfer to an Approved Borrower Sub (an “
Approved Drop Down”), (ii) no Event of Default has occurred and is continuing at the time of the Approved Drop Down, (iii) the Approved Borrower Sub provides Lender collateral that is substantially similar to the collateral provided by the related Borrower to Lender as of the date immediately prior to such Approved Drop Down, and (iv) the conditions set forth in
Section 5.2.10(e)(ii),
(iv),
(v),
(vii),
(viii),
(ix) and
(xi) are satisfied.
(g) Lender 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 the consummation of a purported Transfer that results in an Event of Default pursuant to the terms of this
Section 5.2.10. This provision shall apply to every Transfer that results in an Event of Default pursuant to the terms of
Section 5.2.10 regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(h) In the event that
(A) any direct or indirect owner of Borrower, including in connection with a Public Sale or
(B) a corporation or other Person that is or elects to be a real estate investment trust (the “
REIT”) for federal income tax purposes (a “
REIT Election”) owns or acquires (pursuant to a Transfer that is permitted pursuant to this
Section 5.2.10 and which is made in accordance with and otherwise satisfies the applicable terms and conditions set forth herein) all or a portion of the equity interests in Borrower, Borrower shall have the right to permit a REIT Restructuring in accordance with and subject to satisfaction of, the terms and conditions set forth on
Schedule 5.2.10.
(i) Notwithstanding anything to the contrary contained in the Loan Documents, at any time, without the consent of Lender and without any requirement that the same occur in connection with a Transfer of ownership interests in Borrower or that Lender obtain a Rating Agency Confirmation, Borrower shall have the right to cause the Non-Recourse Assumption, the Rate Cap Guaranty Assumption, the Alterations Guaranty Assumption, the Excess Cash Flow Guaranty Assumption, Reserve Guaranty Assumption and/or the Debt Yield Trigger Cure Guaranty Assumption.
Notwithstanding anything to the contrary contained in this Agreement, with respect to any KYC Searches required by the terms of this
Section 5.2.10, (i) Lender agrees to use diligent and commercially reasonable efforts to receive such KYC Searches within fifteen (15) days after Lender receives the requested information necessary to receive such KYC Searches and (ii) the requirement of Borrower to deliver KYC Searches shall not be applicable with respect to any
acquisition of ownership interests or Control by any entity comprising Initial Sponsor, any Blackstone Fund Entity or any entity Controlled by a Blackstone Fund Entity.
5.2.11
Indebtedness.
Borrower shall not incur any Indebtedness other than Permitted Debt.
5.2.12
REA. Borrower agrees that without the prior consent of Lender, Borrower shall not execute modifications to any REA if such modifications are reasonably expected to have an Individual Material Adverse Effect on the affected Individual Property. Without limiting the generality of the foregoing, Borrower shall not, without the prior written consent of Lender, take (and hereby assigns to Lender any right it may have to take) any action to terminate, surrender, or accept any termination or surrender of, any REA. Borrower shall pay all charges and other sums to be paid by Borrower pursuant to the terms of any REA as the same shall become due and payable and prior to the expiration of any applicable grace period therein provided. Borrower shall comply, in all material respects, with all of the terms, covenants and conditions on Borrower’s part to be complied with pursuant to terms of any REA. Borrower shall take all actions as may be necessary from time to time to preserve and maintain the REAs in accordance with applicable laws, rules and regulations. Borrower shall enforce, in a commercially reasonable manner, the obligations to be performed by the parties to the REA (other than Borrower). Borrower shall promptly furnish to Lender any notice of default delivered to Borrower in connection with any REA by any party to any such REA or any third party. Borrower shall not assign (other than to Lender) or encumber its rights under any REA (other than pursuant to any Permitted Encumbrance).
5.2.13
ERISA Matters. Except as would not reasonably be expected to result in a Material Adverse Effect, neither Borrower nor Guarantor will, during the term of the Loan, be obligated to contribute to an “employee benefit plan” as defined in Section 3(3) of ERISA subject to Title IV of ERISA or Section 412 of the Code.
5.2.14
Leasing Matters. Except as set forth on
Schedule 5.2.14, Borrower shall not without Lender’s written consent, not to be unreasonably withheld, conditioned or delayed;
(i) collect any of the Rents more than one (1) month in advance (other than (x) security deposits and estimated additional rent amounts on account of operating expenses, tax and other escalations or pass‑throughs and (y) full or partial Rent prepayments for a term not exceeding more than one (1) year for up to five percent (5%) of the units at any Individual Property), or (ii) execute any other collateral assignments of lessor’s interest in the Leases, Excluded Leases, or the Rents (except as contemplated by the Loan Documents).
INSURANCE; CASUALTY; CONDEMNATION
(a) Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower and the Properties providing at least the following coverages:
(i) comprehensive “all risk” or special causes of loss form insurance, as is available in the insurance market as of the closing date, including, but not limited to, any type of windstorm or hail (including named storm) on the Improvements and the Personal Property,
(A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost”, which for purposes of this Agreement shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings);
provided, however, for the Individual Property located at 1500 Bay Road, Miami Beach, FL 33139, that in the case of insurance for the peril of wind/named storm, which may be sublimited under the terms of this Agreement, such sublimit is acceptable to Lender and the Rating Agencies subject to
Section 6.1(c) hereof as it relates to the requirement to furnish an appropriate PML report(s) and as applicable, regardless of whether the policy is a blanket or standalone insurance policy; (B) containing an agreed amount endorsement with respect to the Improvements and Personal Property waiving all co-insurance provisions or to be written on a no co-insurance form;
(C) providing for no deductible in excess of $250,000 for all such insurance coverage;
provided,
however, with respect to terrorism, providing for a deductible not to exceed $500,000 and with respect to flood, windstorm/named storm and earthquake coverage, providing for a deductible not to exceed five percent (5%) of the total insurable value of the applicable Individual Property, except that to the extent Guarantor provides a guaranty acceptable to Lender and the Ratings Agencies for the difference (such guaranty, a “
Deductible Guaranty”) and if the Additional Insolvency Opinion Condition is satisfied Borrower delivers an Additional Insolvency Opinion reasonably acceptable to Lender which takes into account such Deductible Guaranty, such deductible may be up to fifteen percent (15%) of the total insurable value of the Property, subject in each case to a $1,000,000 minimum; provided further that
(1) Borrower may utilize a $3,000,000 aggregate deductible subject to a $250,000 per occurrence deductible and a $250,000 maintenance deductible following the exhaustion of the aggregate and (2) the aggregate does not apply to any losses arising from named windstorm, earthquake or flood and
(D) if any of the Improvements on any Individual Property or the use of any Individual Property shall at any time constitute legal non-conforming structures or uses, coverage for loss due to operation of law and coverage for demolition costs and coverage for increased costs of construction in amounts reasonably acceptable to Lender. In addition, Borrower shall obtain: (x) if any portion of the Improvements is currently or at any time in the future located in a federally designated “special flood hazard area”, flood hazard insurance in an amount equal to the maximum amount of such insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended (collectively, the “
Flood Laws”), plus excess amounts as Lender shall reasonably require; provided, further that Borrower may obtain the flood coverage required hereunder from a private insurer (to the extent permitted under the Flood Laws) or from federally-backed flood insurance available under the National Flood Insurance Program;
(y) earthquake insurance for any Property located in seismic zone
3 or
4 with a probable maximum loss greater than 20% and
(z) sinkhole storm surge, and mudslide insurance in an
amount reasonably acceptable to Lender;
provided that the insurance pursuant to
subclauses (x), (y) and (z) hereof shall be on terms consistent with the comprehensive all risk insurance policy required under this
subsection (i)and
provided further that the insurance amounts for the coverages set forth in
subclause (y) hereof shall not be less than the 250 year annual aggregate probable maximum loss as indicated in a portfolio seismic risk analysis, including the Properties located in seismic zone
3 or
4, with a probable maximum loss (“PML”) / scenario expected loss (“SEL”) greater than 20%, covered by such earthquake limit, with a separate assessment for California to the extent there is a separate sublimit for California under the Policy (such analysis to be approved by Lender and Rating Agencies and secured by the applicable Borrower utilizing a third-party engineering firm qualified to perform such seismic risk analysis using the most current RMS software, or its equivalent, to include consideration of loss amplification, at the expense of the applicable Individual Borrower). Notwithstanding the above, Lender, at Borrower’s expense, shall obtain flood certificates annually for the Property;
(ii) business income or rental loss insurance, written for a period of at least eighteen (18) months after the date of the Casualty or on an Actual Loss Sustained Basis
(A) with loss payable to Lender;
(B) covering all risks required to be covered by the insurance provided for in
subsections (i),
(iii),
(iv),
(ix) and
(x) of this
Section 6.1(a);
(C) in an amount equal to one hundred percent (100%) of the projected gross revenues (less noncontinuing expenses) from the operation of the Properties (as reduced to reflect expenses not incurred during a period of Restoration) for eighteen (18) months; and
(D) containing an extended period of indemnity endorsement which provides that after the physical loss to the Improvements and Personal Property has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of twelve (12) months from the date that the applicable Individual Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period. The amount of such business income or rental loss insurance shall be determined prior to the Closing Date and at least once each year thereafter based on Borrower’s reasonable estimate of the gross revenues (less noncontinuing expenses) from each Individual Property for the succeeding twelve (12) month period. Notwithstanding the provisions of
Section 2.7.1 hereof, all proceeds payable to Lender pursuant to this subsection shall be held by Lender and shall be applied in Lender’s sole discretion to
(I) the obligations secured by the Loan Documents from time to time due and payable hereunder and under the Note or (II) Operating Expenses approved by Lender in its sole discretion;
provided,
however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured by the Loan Documents on the respective dates of payment provided for in this Agreement and the other Loan Documents except to the extent such amounts are actually paid out of the proceeds of such business income insurance;
(iii) at all times during which structural construction, repairs or Alterations are being made with respect to the Improvements, and only if each of the Individual Property coverage form and the liability insurance coverage form does not otherwise apply,
(A) commercial general liability insurance, covering claims not covered by or under the terms or provisions of the above mentioned commercial general liability insurance policy and
(B) the insurance provided for in
subsection (i) above written in a so-called builder’s risk completed value form including coverage for all insurable hard and soft costs of construction
(1) on a non-reporting basis,
(2) against all risks insured against pursuant to
subsections (i), (ii),
(iv) and
(x) of this
Section 6.1(a),
(3) including permission to occupy such Individual Property and (4) with an agreed amount endorsement waiving co-insurance provisions. In addition, Borrower shall cause the general contractor, architect and engineer to obtain and maintain commercial general liability, umbrella and excess liability, workers’ compensation and automobile liability with limits, terms and conditions acceptable to Lender;
(iv) if applicable, comprehensive boiler and machinery/equipment breakdown insurance, in amounts as shall be reasonably required by Lender on terms consistent with the commercial property insurance policy required under
subsection (i) above;
(v) commercial general liability, including terrorism, insurance against claims for personal injury, bodily injury, death or property damage occurring upon, in or about any Individual Property, such insurance
(A) to be on the so-called “occurrence” form with a combined limit of not less than Two Million and No/100 Dollars ($2,000,000.00) in the aggregate per location and One Million and No/100 Dollars ($1,000,000.00) per occurrence, with a self-insured retention of $750,000;
(B) to continue at not less than the aforesaid limit until required to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate and
(C) to cover at least the following hazards:
(1) premises and operations;
(2) products and completed operations on an “if any” basis;
(3) independent contractors;
(4) contractual liability for all insured contracts;
(vi) if applicable, motor vehicle/automobile liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence of One Million and No/100 Dollars ($1,000,000.00);
(vii) if applicable, worker’s compensation subject to the worker’s compensation laws of the applicable state, and employer’s liability in amounts reasonably acceptable to Lender;
(viii) umbrella and excess liability insurance in an amount not less than One Hundred Million and No/100 Dollars ($100,000,000.00) per occurrence and in the aggregate on terms consistent with the commercial general liability insurance policy required under
subsection (v) above;
(ix) the insurance required under
Section 6.1(a)(i),
(i),
(v) and
(viii) above shall cover perils of terrorism and acts of terrorism (or at least not specifically exclude same) and Borrower shall maintain insurance for loss resulting from perils and acts of terrorism on terms (including amounts and deductibles) consistent with those required under
Section 6.1(a)(i),
(i),
(v) and
(viii) above at all times during the term of the Loan.
For so long as Terrorism Risk Insurance Program Reauthorization Act of 2019 or a similar or subsequent statute (“
TRIPRA”) is
in effect and continues to cover both foreign and domestic acts, Lender shall accept terrorism insurance with coverage against acts which are “certified” within the meaning of TRIPRA. Notwithstanding anything to the contrary herein, if
(A) TRIPRA is not in effect,
(B) TRIPRA is modified which results in a material increase in terrorism insurance premiums, or
(C) there is a disruption in the terrorism insurance marketplace as the result of a terrorism event which results in a material increase in terrorism insurance premiums, then provided that terrorism insurance is commercially available, Borrower shall be required to carry terrorism insurance throughout the term of the Loan as required by the
first sentence
of this
subclause
(ix); provided, however, if any of the events in
clauses (A) through
(C) occurs, then Borrower shall not be required to
pay annual premiums in excess of the TC Cap (defined below) in order to obtain the required terrorism insurance (but Borrower shall be obligated to purchase the maximum amount of terrorism insurance available with funds equal to the TC Cap). As used above, “TC Cap” shall mean an amount equal to two
(2) times the then-current property insurance premium that is payable at such time in respect of the property, business interruption/rental loss and liability insurance required hereunder (without giving effect to the cost of the terrorism, flood, earthquake and windstorm components of such casualty and business interruption/rental loss insurance
at the
time that any
terrorism insurance is exc
luded
from any Policy).
Notwithstanding the foregoing insurance company rating requirements set forth in
Section 6.1(b), as long as TRIPRA is in effect providing the Applicable Federal Backstop Percentage (as defined below) of terrorism coverage, Borrower may obtain terrorism coverage as required by this
Section 6.1(a) written by Gryphon Core, LLC, through one of its protected cells,
a captive insurer, provided the following conditions are met and continue to be satisfied: (1) Gryphon Core, LLC and its protected cell(s) are and remain a licensed captive insurance company which is authorized to issue an insurance policy affording coverage to the Sponsor, and is operating in good standing within the applicable captive domicile and in compliance with all applicable state and federal laws, and (2) Borrower shall obtain reinsurance with a cut through endorsement acceptable to Lender from an insurance company meeting the foregoing rating requirements for the remaining portion of such coverage not subject to the Applicable Federal Backstop Percentage. As used herein, the “Applicable Federal Backstop Percentage” shall mean the then applicable federal share of compensation for insured losses of an insurer under TRIPRA;
(x) Environmental Liability Insurance Policy covering the Properties scheduled thereon for pollution remediation and legal liability resulting from existing and new pollution events (such policy, the “
PLL Policy”), with limits of Fifteen Million Dollars ($15,000,000) per incident and Twenty-Five Million
Dollars ($25,000,000) in the aggregate with a deductible or self-insured retention of no more than Fifty Thousand Dollars ($50,000) per incident. Such PLL Policy shall be for term of at least two (2) years past the latest possible extended Maturity Date (the “Required PLL Period”); provided, however, Borrower may obtain such PLL Policies for less than the Required PLL Period, so long as at least ten (10) Business Days prior to the expiration thereof, Borrower renews, replaces or extends such PLL Policies for a term not less than the Required PLL Period. Notwithstanding anything to the contrary in the Loan Documents, in the event Borrower fails to renew, replace or extend the PLL Policies for a term not less than the Required PLL Period, such failure should not be a Default or Event of Default, provided, however the terms of Section 9.2(a)(vii) shall apply. In the event the limits which are in place on any of the PLL Policies as of the Closing Date are eroded by fifty percent (50%) or more due to claims, Borrower shall reinstate the available environmental coverage limits within sixty (60) days to the limits in place as of the Closing Date. Solely with respect to coverage for the Properties, such PLL Policies (i) shall name the Lender(s) as an additional named insured with an automatic right of assignment in the event of default throughout the policy term(s); (ii) in the event the policy is cancelled by the insurers, a copy of such cancellation notice shall also be mailed to Lender; (iii) shall not be cancelled or materially modified where such modification would put the insurance out of compliance with this clause (x) by Borrower without prior written consent from Lender(s); and (iv) shall, throughout the policy term, include the same coverages, terms, conditions and endorsements as the PLL Policies approved on the Closing Date;
(xi) intentionally omitted; and
(xii) upon sixty (60) days’ written notice, such other reasonable insurance, including, but not limited to, sinkhole or land subsidence insurance, and in such reasonable amounts as Lender from time to time may reasonably request against such other insurable hazards which at the time are commonly insured against for property similar to the Individual Property located in or around the region in which such Individual Property is located.
(b) All insurance provided for in
Section 6.1(a) hereof, shall be obtained under valid and enforceable policies (collectively, the “
Policies” or in the singular, the “
Policy”), and shall satisfy the requirements set forth herein.
The Policies shall be issued by financially sound and responsible insurance companies authorized to do business in the State and having a rating of “A-” or better by S&P and “A” or better by Fitch (to the extent Fitch rates the applicable insurance carrier and the Securities or any class thereof in any Rated Securitization of the Loan);
provided,
however, that if Borrower elects to have its insurance coverage provided by a syndicate of insurers, then, if such syndicate consists of five (5) or more members, (A) with respect to sixty percent (60%) of such insurance coverage (or seventy-five percent (75%) if such syndicate consists of four (4) or fewer members), Borrower shall use commercially reasonable efforts to have such insurance provided by insurance companies having a claims paying ability rating of “A-” or better by S&P and “A” or better by Fitch (to the extent Fitch rates the applicable insurance carrier and the Securities or any class thereof in any Rated Securitization of the Loan) and (B)
with respect to the remaining forty percent (40%) of the insurance coverage (or the remaining twenty-five percent (25%) if such syndicate consists of four (4) or fewer members), Borrower shall use commercially reasonable efforts to have such insurance provided by insurance companies having a claims paying ability rating of “BBB+” or better by S&P and “BBB+” or better by Fitch (to the extent Fitch rates the applicable insurance carrier and the Securities or any class thereof in any Rated Securitization of the Loan) (the “
40% Standard”);
provided, if after using commercially reasonable efforts, Borrower is unable to obtain any or all of such forty percent (40%) of insurance coverage from insurance companies meeting the 40% Standard (the amount of such insurance Borrower is unable to obtain, the “
40% Gap”), the 40% Gap shall be provided by insurance companies having a claims paying ability rating of “A-:VIII” or better in the current Best’s Insurance Reports.
Provided further, Borrower shall be permitted to maintain a portion of the insurance coverage required hereunder with insurance companies which do not meet the foregoing requirements (“
Otherwise Rated Insurers”) in their current participation amounts and positions within the syndicate provided that if the current AM Best rating of any such Otherwise Rated Insurer is withdrawn or downgraded below the rating as of the date hereof, Borrower shall replace any Otherwise Rated Insurer with an insurance company meeting the rating requirements set forth hereinabove. Notwithstanding anything to the contrary, Borrower shall be permitted without Lender’s consent to replace any insurer under a policy required hereunder so long as the new insurer satisfies the ratings requirements set forth herein and such replacement policies and insurers otherwise satisfy the requirements set forth in
Section 6.1(a) through
Section 6.1(e) hereof. Borrower shall deliver to Lender
(1) upon the expiration dates of the Policies theretofore furnished to Lender, certificates of insurance evidencing the Policies and (2) within five (5) Business Days of Lender’s request, any other documentation evidencing the Policies (including without limitation certified copies of the Policies or binders if the Policies have not yet been issued) and of the payment of the premiums then due thereunder (the “
Insurance Premiums”) as may be reasonably requested by Lender from time to time.
(c) Any blanket insurance Policy shall be subject to Lender’s prior approval (such approval not to be unreasonably withheld) and shall provide the same protection as would a separate Policy insuring only each Individual Property in compliance with the provisions of
Section 6.1(a) hereof (any such blanket policy, an “
Acceptable Blanket Policy”), subject to review and approval by Lender based on the (i) schedule of locations and values and (ii) the Portfolio PML Reports for catastrophic perils (the “
Portfolio PML Reports”), both to be provided on an annual basis, and such other documentation required by Lender. Further, to the extent the Policies are maintained pursuant to an Acceptable Blanket Policy that covers more than one location within a one thousand (1,000) foot radius of the Property (the “
Radius”), the limits of such Acceptable Blanket Policy must be sufficient to maintain property and terrorism coverage as set forth in this
Section 6.1 for the Property and any and all other locations combined within the Radius that are covered by such Acceptable Blanket Policy calculated on a total insured value basis.
(d) All Policies of insurance provided for or contemplated by
Section 6.1(a) shall name Borrower as a named insured and, in the case of liability coverages (other than the PLL Policy, as to which Lender is the named insured), shall name Lender as the additional insured on a form acceptable to the Lender, as its interests may appear, and all
property insurance Policies described in
Section 6.1(a) shall name Lender as a mortgagee and lender loss payee (which mortgagee and loss payee rights shall remain expressly subject to the terms and conditions of
Section 6.4(a)), and shall contain a standard non‑contributing mortgagee clause in favor of Lender providing that the loss thereunder shall be payable to Lender and guaranteeing thirty (30) days’ notice of cancellation to Lender except ten (10) days’ notice for non-payment of premium.
(e) Each Policy shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for Borrower, or of any Tenant or other occupant, or failure to comply with the provisions of any Policy, which might otherwise result in a forfeiture of the insurance or any part thereof, or exercise of Lender’s rights or remedies hereunder or any other Loan Document, shall in any way affect the validity or enforceability of the insurance insofar as Lender is concerned;
(ii) such Policy shall not be canceled without at least thirty (30) days written notice to Lender and any other party named therein as an additional insured or, if issuer will not or cannot provide the notices required herein, Borrower shall be obligated to provide such notice;
(iii) the issuer thereof shall give ten (10) days’ written notice to Lender if the issuers of such Policy elect not to renew the Policy prior to its expiration or, if issuer will not or cannot provide the notices required herein, Borrower shall be obligated to provide such notice; and
(iv) Lender shall not be liable for any Insurance Premiums thereon or subject to any assessments thereunder.
(f) Borrower shall deliver to Lender, within ten (10) days of Lender’s written request, certificates of insurance and Portfolio PML Reports, in a form acceptable to the Lender, setting forth the particulars as to all Policies required hereunder, that all premiums due thereon have been paid and that the same are in full force and effect. Upon the expiration date of each of the Policies required hereunder, Borrower shall deliver to Lender a certificate of insurance, evidencing renewal of coverage as required herein or binders of all such renewal Policies, if available, and Portfolio PML Reports provided that if the forgoing are not available as of such date, then Borrower shall deliver to Lender upon the expiration date of each of the Policies required hereunder, evidence reasonably satisfactory to Lender that the coverages required herein shall have been timely renewed, and shall promptly deliver to Lender such certificates and/or binders once they are available. Within thirty (30) days of written request by the Lender, Borrower shall provide declaration pages of all Policies required hereunder. Lender shall not be deemed by reason of the custody of any Policies, certificates or binders or copies thereof to have knowledge of the contents thereof. If Borrower fails to maintain any Policy as required pursuant to this
Section 6.1, Lender may, at its option, obtain such Policy using such carriers and agencies as Lender shall elect from year to year (until Borrower shall have obtained such Policy in accordance with this
Section 6.1) and pay the premiums therefor, and Borrower shall reimburse Lender
on demand for any premium so paid, with interest thereon at the Default Rate from the time such premiums are paid by Lender until the same are reimbursed by Borrower, and the amount so owing to Lender shall constitute a portion of the Debt. The insurance obtained by Lender pursuant to the foregoing may, but need not, protect Borrower’s interest, and the same may not pay any claim that Borrower makes or any claim that is made against Borrower in connection with any Individual Property.
(g) In the event of foreclosure of any Mortgage or other transfer of title to any Individual Property in extinguishment in whole or in part of the Debt, all right, title and interest of Borrower in and to the Policies then in force concerning such Individual Property and all proceeds payable thereunder with respect to such Individual Property shall thereupon vest in the purchaser of such foreclosure or Lender or other transferee in the event of such other transfer of title.
(h) Borrower and Lender acknowledge that the Condominium Board for the Individual Property located at 1500 Bay Road, Miami Beach, FL 33139 maintains one or more insurance policies that provide for some of the insurance coverage required under Section 6.1 (with respect to the core and shell of the Building and the Common Elements as defined in the applicable Condominium Documents) (the “FS Condominium Board Policies”). If at any time during the term of this Agreement, the FS Condominium Board Policies do not comply with one or more applicable requirements of Section 6.1, then Borrower shall, at its sole cost and expense, either (i) cause the Condominium Board to modify the FS Condominium Board Policies, or to procure and maintain additional “primary” insurance coverage, as shall be necessary to bring the applicable insurance coverage into full compliance with all of the applicable terms and conditions of Section 6.1 or (ii) procure and maintain (or cause the Condominium Board to procure and maintain) “excess and contingent” insurance coverage over and above any other valid and collectible coverage then in existence, as shall be necessary to bring the applicable insurance coverage into full compliance with all of the applicable terms and conditions of Section 6.1.
Section 6.2
Casualty. If an Individual Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (a “
Casualty”) and the cost to restore the Individual Property is reasonably expected to exceed $250,000, Borrower shall (x) solely if the cost to restore the Individual Property is reasonably expected to exceed the Casualty/Condemnation Threshold Amount, give prompt written notice of such damage to Lender and
(y) promptly commence and diligently prosecute the completion of the Restoration of the Individual Property pursuant to
Section 6.4 hereof as nearly as possible to the condition the Individual Property was in immediately prior to such Casualty, with such Alterations as may be reasonably approved by Lender (to the extent approval thereof is required pursuant to
Section 5.1.21) and otherwise in accordance with
Section 6.4 hereof. Borrower shall pay all costs of such Restoration whether or not such costs are covered by insurance. Lender may, but shall not be obligated to, make proof of loss if not made promptly by Borrower. In addition, Lender may participate in any settlement discussions with any insurance companies with respect to any Casualty in which the Net Proceeds or the costs of completing the Restoration are equal to or greater than the Casualty/Condemnation Threshold Amount, and Borrower shall deliver to Lender all instruments reasonably required by Lender to permit such participation.
Section 6.3
Condemnation. Borrower shall, other than with respect to (x) any proposed or threatened Condemnation which
(i) results or would reasonably be expected to result in an Award that is less than Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) and (ii) does not and would not be reasonably expected to have an Individual Material Adverse Effect with respect to the applicable Individual Property or
(y) an immaterial temporary taking, promptly give Lender notice of any actual or threatened commencement of any proceeding for the Condemnation (other than an immaterial or temporary taking) of any Individual Property of which Borrower has knowledge and shall deliver to Lender copies of any and all papers served in connection with such proceedings. Lender may participate in any such proceedings that relate to a Condemnation of a material portion of an Individual Property, and Borrower shall from time to time deliver to Lender all instruments reasonably requested by it to permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and in the case of such proceedings that relate to a Condemnation of a material portion of an Individual Property, shall consult with Lender, its attorneys and experts, and cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any taking by any public or quasi-public authority through Condemnation or otherwise (including, but not limited to, any transfer made in lieu of or in anticipation of the exercise of such taking), Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement and the Debt shall not be reduced until any Award shall have been actually received and applied by Lender, after the deduction of out-of-pocket expenses of collection, to the reduction or discharge of the Debt. Lender shall not be limited to the interest paid on the Award by the condemning authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Note. Subject to
Section 6.4(a), if any Individual Property or any portion thereof is taken by a condemning authority,
(a) if Restoration of such Individual Property would be deemed feasible by a prudent Lender acting reasonably based upon the nature of the Condemnation, Borrower shall promptly commence and diligently prosecute the Restoration of the applicable Individual Property pursuant to
Section 6.4 hereof and otherwise comply with the provisions of
Section 6.4 hereof; provided, that, Borrower shall not be obligated to pursue completion of the Restoration if Lender is obligated to disburse Net Proceeds pursuant to
Section 6.4 hereof with respect thereto (and Borrower has satisfied all applicable conditions to such disbursement) and Lender fails to disburse such proceeds and
(b) if Restoration of such Individual Property is not considered feasible by a prudent Lender acting reasonably based upon the nature of the Condemnation, then Lender shall apply the Net Proceeds of such Condemnation to the principal of the Loan in accordance with
Section 2.4.2 hereof. If any Individual Property is sold, through foreclosure or otherwise through the exercise of other remedies available to Lender under the Loan Documents, prior to the receipt by Lender of the Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Debt, which amount shall be applied toward payment of the Debt (and any remaining amount shall be remitted by Lender to Borrower).
Section 6.4
Restoration. The following provisions shall apply in connection with the Restoration of any Individual Property:
(a) If the Net Proceeds shall be less than the Casualty/Condemnation Threshold Amount and the estimated costs of completing the Restoration shall be less than the Casualty/Condemnation Threshold Amount, the Net Proceeds
(i) if the same are paid by the insurance company or the condemnation authority directly to Borrower may be retained
by Borrower or (ii) if the same are paid by the insurance company or the condemnation authority to Lender, will be disbursed by Lender to Borrower upon receipt,
provided that, in each case, no Event of Default shall have occurred and be continuing at the time of the disbursement and, provided further that, with respect to subclause (ii) above, and to the extent the Net Proceeds exceeds $250,000, Borrower delivers to Lender an Officer’s Certificate to expeditiously commence and to satisfactorily complete with due diligence the Restoration in accordance with the terms of
Section 6.4(b)(i)(D),
(E),
(G) and
(H); except that, with respect to any Casualty or Condemnation of a non-income producing portion of an Individual Property that is not (x) necessary for the Permitted Uses at the Individual Property impacted by such Casualty or Condemnation prior to such Casualty or Condemnation or
(y) required for such Individual Property to comply with Legal Requirements in all material respects (in each case, unless such Individual Property can be reconfigured to provide for Permitted Uses or to comply with Legal Requirements in all material respects, as applicable, without
(A) incurring any material cost and
(B) materially disrupting the operation of Permitted Uses at the Individual Property following the Casualty or Condemnation), for which the Net Proceeds are less than the Casualty/Condemnation Threshold Amount and the estimated costs of completing the Restoration are less than the Casualty/Condemnation Threshold Amount, Borrower shall have no obligation to pursue completion of the Restoration of such Individual Property, provided that any Net Proceeds received by Borrower in connection with such Condemnation are deposited into the Lockbox Account to be disbursed in accordance with the terms of this Agreement.
(b) If the Net Proceeds are equal to or greater than the Casualty/Condemnation Threshold Amount or the costs of completing the Restoration is equal to or greater than the Casualty/Condemnation Threshold Amount, the Net Proceeds will be held by Lender and Lender shall make the Net Proceeds available for the Restoration in accordance with the provisions of this
Section 6.4. The term “
Net Proceeds” for purposes of this
Section 6.4 shall mean:
(i) the net amount of all insurance proceeds received by Lender pursuant to
Section 6.1(a)(i),
Section 6.1(a)(ix) and
Section 6.1(a)(x) as a result of such damage or destruction, after deduction of Lender’s and Borrower’s reasonable costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting same (“
Insurance Proceeds”) provided, that such costs and expenses of Borrower shall only be reimbursed if Lender is reasonably certain that there will be sufficient Net Proceeds to complete the Restoration (it being understood that to the extent Net Proceeds are not being made available for Restoration, the foregoing provision shall not apply, or if such Net Proceeds exceed the Release Amount for the applicable Individual Property, the foregoing proviso shall not apply as to the excess Net Proceeds above such Release Amount), or (ii) the net amount of the Award, after deduction of Lender’s and Borrower’s reasonable costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting same (“
Condemnation Proceeds”), provided, that such costs and expenses of Borrower shall only be reimbursed if Lender is reasonably certain that there will be sufficient Net Proceeds to complete the Restoration (it being understood that to the extent Net Proceeds are not being made available for Restoration, the foregoing provision shall not apply, or if such Net Proceeds exceed the Release Amount for the applicable Individual Property, the foregoing proviso shall not apply as to the excess Net Proceeds above such Release Amount), whichever the case may be.
(i) The Net Proceeds shall be made available to Borrower for Restoration
(1) if required pursuant to the terms of a Non-Disturbance Agreement entered into with a Tenant with the approval of Lender or satisfaction of the conditions set forth below but subject to
Section 6.4(f) or
(2) upon the satisfaction of the following conditions:
(A) no Event of Default shall have occurred and be continuing as of the date the Net Proceeds are to be made available to Borrower;
(B) (1) in the event the Net Proceeds are Insurance Proceeds, less than thirty percent (30%) of the Aggregate Square Footage of the Improvements on the Individual Property has been damaged, destroyed or rendered unusable as a result of such Casualty or
(2) in the event the Net Proceeds are Condemnation Proceeds,
(w) subject to
Section 6.4(a), less than thirty percent (30%) of the land constituting the Individual Property is taken, (x) such land is located along the perimeter or periphery of the Individual Property,
(y) no portion of the Improvements is located on such land and
(z) the Individual Property continues to comply in all material respects with all Legal Requirements applicable thereto, including, without limitation, building and zoning ordinances and codes and certificates of occupancy;
(C) Leases demising in the aggregate a percentage amount equal to or greater than fifty-one percent (51%) of the total rentable space in such Individual Property under executed and delivered Leases in effect as of the date of the occurrence of such Casualty or Condemnation shall remain in full force and effect during and after the completion of the Restoration (other than Leases that expire by their terms), notwithstanding the occurrence of any such Casualty or Condemnation, whichever the case may be, and Borrower and/or Tenant, as applicable under the respective Lease, will make all necessary repairs and restorations thereto at their sole cost and expense;
(D) Borrower shall, subject to Force Majeure and any delay caused by Lender’s failure to approve the Restoration budget required by
Section 6.4(b)(i)(J) hereof, commence the Restoration as soon as reasonably practicable (but, provided a Force Majeure delay has not occurred, in no event later than one hundred twenty (120) days after such Casualty or Condemnation, whichever the case may be, occurs; provided, that such one hundred twenty (120) day period shall be extended until up to one hundred eighty (180) days after the occurrence of the Casualty or Condemnation if Borrower is working in good faith to commence the Restoration) and shall diligently pursue the same to satisfactory completion in compliance with all applicable Legal Requirements in any material respect;
provided that for the purposes of this clause the filing of an application for a building permit for the Restoration work shall be deemed to be commencement of the
Restoration provided Borrower promptly commences work thereafter and diligently proceeds to the completion of such Restoration;
(E) Lender shall be reasonably satisfied that any operating deficits, including all
scheduled payments of principal and interest under the Note, which will be incurred with respect to the Individual Property as a result of the occurrence of any such Casualty or Condemnation, whichever the case may be, will be covered out of
(1) the Net Proceeds,
(2) the insurance coverage referred to in
Section 6.1(a)(i) hereof, if applicable,
(3) any unabated rent payable under Leases with respect to the applicable Individual Property, or
(4) by other funds of Borrower (including cash flows of the Properties and any Excess Cash Flow Reserve Funds permitted to be disbursed to Borrower to pay such costs and expenses pursuant to
Section 7.5.2 hereof);
(F) Lender shall be reasonably satisfied that, subject to Force Majeure and any delay caused by Lender’s failure to approve the Restoration budget required by
Section 6.4(b)(i)(J) hereof, the Restoration will be completed on or before the earliest to occur of
(1) six (6) months prior to the Maturity Date (after assuming the exercise of all remaining Extension Options),
(2) the date required for such completion under the terms of the applicable Ground Lease,
(3) such time as may be required under all applicable Legal Requirements in order to repair and restore the affected Individual Property as nearly as possible to the condition it was in immediately prior to such Casualty or Condemnation, as applicable, or
(4) the expiration of the insurance coverage referred to in
Section 6.1(a)(i) hereof;
(G) the Individual Property and the use thereof after the Restoration will be in compliance in all material respects with and permitted under all applicable Legal Requirements (including, as a legal non-conforming use);
(H) such Casualty or Condemnation, as applicable, does not result in a permanent loss of access to the Individual Property or the related Improvements;
(I) the Net Operating Income with respect to the applicable Individual Property after giving effect to the Restoration, and calculated on a pro forma “as stabilized” basis, shall be equal to or greater than seventy-five percent (75%) of the Net Operating Income with respect to such Individual Property as of the Closing Date;
(J) Borrower shall deliver, or cause to be delivered, to Lender a detailed budget approved in writing by Borrower’s architect or engineer stating the estimated cost of completing the Restoration, which budget shall be subject to Lender’s approval in the same manner as each Annual Budget
is to be approved by Lender during the continuance of a Cash Sweep Period as provided in
Section 5.1.11(f), provided that, for purposes of clarity, all “deemed approval” provisions shall apply with respect to any Lender approval of the Restoration budget; and
(K) the Net Proceeds together with any cash or cash equivalent deposited by Borrower with Lender, Letter of Credit delivered to Lender and any Excess Cash Flow Reserve Funds permitted to be disbursed to Borrower to pay such costs and expenses pursuant to
Section 7.5.2 hereof are sufficient in Lender’s reasonable discretion to cover the cost of the Restoration.
(ii) The Net Proceeds shall be held by Lender in an interest-bearing Eligible Account and, until disbursed in accordance with the provisions of this
Section 6.4(b), shall constitute additional security for the Debt and the Other Obligations. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to time during the course of the Restoration, upon receipt of evidence reasonably satisfactory to Lender that
(A) all materials installed and work and labor performed (except to the extent that they are to be paid for out of the requested disbursement) in connection with the Restoration have been paid for in full, and
(B) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liens or encumbrances of any nature whatsoever on the applicable Individual Property arising out of the Restoration which have not either been fully bonded to the reasonable satisfaction of Lender and discharged of record or in the alternative fully insured to the reasonable satisfaction of Lender by the Title Company.
(iii) All plans and specifications required in connection with the Restoration shall be subject to prior review and acceptance in all respects by Lender and by an independent consulting engineer selected by Lender (the “
Casualty Consultant”). Lender shall have the use of the plans and specifications and all permits, licenses and approvals required or obtained in connection with the Restoration. The identity of the contractors, subcontractors and materialmen engaged in the Restoration, as well as the contracts under which they have been engaged, shall be subject to prior review and reasonable approval by Lender and the Casualty Consultant. All actual, reasonable out-of-pocket costs and expenses incurred by Lender in connection with making the Net Proceeds available for the Restoration including, without limitation, reasonable counsel fees and disbursements and the Casualty Consultant’s fees, shall be paid by Borrower. At any time that Lender’s approval is required under this
clause (iii), provided no Event of Default is continuing, Lender’s approval shall be deemed granted if the Deemed Approval Requirements have been satisfied with respect thereto.
(iv) In no event shall Lender be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as certified by the Casualty Consultant,
minus the Casualty Retainage. The term “
Casualty Retainage” shall
mean an amount equal to
(i) ten percent (10%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has been fifty percent (50%) completed and (ii) thereafter, five percent (5%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has been completed. The Casualty Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this
Section 6.4(b), be less than the amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in the Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this
Section 6.4(b) and that all approvals necessary for the re-occupancy and use of the Individual Property have been obtained from all appropriate governmental and quasi-governmental authorities, and Lender receives evidence satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty Retainage;
provided,
however, that Lender will release the portion of the Casualty Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which the Casualty Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily completed all work and has supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or materialman’s contract, the contractor, subcontractor or materialman delivers the lien waivers (except that lien waivers from subcontractors who have performed work in the amount of $250,000 or less shall not be required) and evidence of payment in full of all sums due to the contractor, subcontractor or materialman as may be reasonably requested by Lender or by the Title Company, and Lender receives an endorsement to such Title Insurance Policy insuring the continued priority of the Lien of the related Mortgage and evidence of payment of any premium payable for such endorsement. If reasonably required by Lender, the release of any such portion of the Casualty Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect to the contractor, subcontractor or materialman.
(v) Lender shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the reasonable opinion of Lender in consultation with the Casualty Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of the Restoration, Borrower shall, before any further disbursement of the Net Proceeds is made either
(A) deposit the deficiency (the “
Net Proceeds Deficiency”) with Lender or
(B) deliver a Letter of Credit in an amount equal to the Net Proceeds Deficiency. The Net Proceeds Deficiency deposited with Lender, or a Letter of Credit delivered to Lender, shall be held by Lender and shall be disbursed, or drawn upon, as applicable, 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, or drawn upon, as applicable, pursuant to this
Section 6.4(b) shall constitute additional security for the Debt and the Other Obligations.
(vii) The excess, if any, of the Net Proceeds and the remaining balance, if any, of the Net Proceeds Deficiency deposited with Lender after the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this
Section 6.4(b) (the “
Excess Net Proceeds”) and Lender has received evidence reasonably satisfactory to Lender that all costs incurred in connection with the Restoration have been paid in full, shall be
(A) if a Cash Sweep Period is then in effect, deposited in the Cash Management Account and applied in accordance with the Cash Management Agreement (or, at any time that a Cash Sweep Period is not in effect, remitted by Lender to Borrower and applied or distributed by Borrower subject to its compliance with the terms of this Agreement) or
(B) if such Excess Net Proceeds are the result of a Condemnation, or if Borrower shall otherwise elect or if an Event of Default shall have occurred and shall be continuing at the time that Excess Net Proceeds become available, applied as a Net Proceeds Prepayment.
(c) In the event of foreclosure of the Mortgage with respect to an Individual Property, or other transfer of title to an Individual Property in extinguishment in whole or in part of the Debt all right, title and interest of Borrower in and to the Policies that are not blanket Policies then in force concerning such Individual Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Lender or other transferee in the event of such other transfer of title.
(d) Intentionally Omitted.
(e) Lender shall, with reasonable promptness following any Casualty or Condemnation, notify Borrower whether or not Net Proceeds are required to be made available to Borrower for a Restoration pursuant to this
Section 6.4 (or, if the same are not required to be made available to Borrower for Restoration pursuant to this
Section 6.4, whether Lender will nevertheless make the same available, which election Lender may make in its sole discretion). All Net Proceeds and the Net Proceeds Deficiency not required to be made available for a Restoration pursuant to this
Section 6.4 and any Excess Net Proceeds required to be applied in accordance with
subclause (B) of
Section 6.4(b)(vii) hereof (as applicable, a “
Net Proceeds Prepayment”) shall be applied by Lender to the payment of the Debt in accordance with
Section 2.4.2 hereof.
(f) In addition to the foregoing, in connection with any Casualty or Condemnation, if
(i) such Casualty or Condemnation shall be equal to or greater than twenty-five percent (25%) of the Aggregate Square Footage of the applicable Individual Property or (ii) the Net Proceeds are equal to or greater than the Casualty/Condemnation Threshold Amount and after Borrower shall have used commercially reasonable efforts to satisfy each of the conditions set forth in
Section 6.4(b)(i) Borrower is unable to satisfy all such conditions (which shall not require any capital contributions to be made to Borrower or include any obligations of Borrower, Mezzanine Borrower or Guarantor to use any operating income or Rents from any Property other than the Individual Property that is the
subject of such Casualty or Condemnation) and Lender does not disburse the Net Proceeds to Borrower for Restoration, then Borrower shall have the right (but not the obligation), regardless of any restrictions contained in
Section 2.4.1 hereof, to prepay the Release Amount of the applicable Individual Property (a “
Casualty/Condemnation Prepayment”) utilizing the Net Proceeds (together with other funds of the Borrower if such Net Proceeds are less than the Release Amount) and obtain the release of the applicable Individual Property from the Lien of the Mortgage thereon and related Loan Documents,
provided that
(i) Borrower shall have satisfied the requirements of
Section 2.6.1(a)(i),
(iv),
(vi), (viii) and
(ix), and
Section 2.6.1(e) hereof (if applicable), (ii) Borrower shall make the Casualty/Condemnation Prepayment on or before the second Payment Date occurring following the date the Net Proceeds shall be made available to Borrower for such intended Casualty/Condemnation Prepayment and (iii) Borrower pays to Lender, concurrently with making such Casualty/Condemnation Prepayment, the amounts required pursuant to
Section 2.4.2(b) hereof. Notwithstanding anything in
Section 6.2 or
Section 6.3 to the contrary, Borrower shall not have any obligation to commence Restoration of an Individual Property upon delivery of the written notice required pursuant to
Section 2.6.1(a)(i) hereof unless Borrower shall subsequently fail to pay to Lender the amounts required to be paid pursuant to
Section 2.4.2(b) hereof. For the avoidance of doubt, no Spread Maintenance Premium or other premium or penalty or charge shall be due with respect to a Casualty/Condemnation Prepayment and such Casualty/Condemnation Prepayment shall not count towards the Free Prepayment Amount.
(g) Notwithstanding anything to the contrary contained in the Loan Documents (except
Section 6.4(h) of this Agreement) with respect to the disbursement of Insurance Proceeds or Condemnation Proceeds in respect of any Ground Lease Property or PILOT Property, as applicable, the express provisions set forth in any Ground Lease or PILOT Lease, as applicable, shall govern; provided, however, to the extent the compliance by Borrower with the terms and conditions of this
Section 6.4 do not create a default under the terms and provisions of any Ground Lease or any PILOT Lease, as applicable, Borrower shall comply with the terms and provisions of this
Section 6.4; provided, further, that Borrower shall not grant its consent, approval or waiver with respect to any disbursement of Insurance Proceeds or Condemnation Proceeds in respect of any Ground Lease Property or any PILOT Property, as applicable, if such disbursement would violate the terms and provisions of this
Section 6.4 as may be requested or required in connection with the terms and provisions of such Ground Lease or PILOT Lease, as applicable, without first obtaining the written consent, approval, or waiver of Lender. Lender shall respond to any request for consent subject to the standards for consent set forth in any Ground Lease or PILOT Lease, as applicable; provided that any request for consent or approval shall either be sent (A) by the Ground Lessor or PILOT Lessor, as applicable, simultaneously to Lender or (B) by Borrower promptly following Borrower’s receipt of such request for consent or approval from the Ground Lessor or PILOT Lessor, as applicable.
(h) Notwithstanding the foregoing provisions of this
Section 6.4, if the Loan is included in a REMIC Trust and if immediately after giving effect to a release of any portion of the Lien (on an Individual Property or any portion of an Individual Property) following a Casualty or Condemnation (but taking into account any proposed Restoration on the
remaining Individual Property), the Loan-to-Value Ratio is greater than 125%, Borrower must prepay the principal balance of the Loan by an amount not less than the least of one of the following amounts:
(i) the Net Proceeds plus the net proceeds of any arm’s length sale of the released Individual Property to an unrelated Person, (ii) the fair market value of the released Individual Property at the time of the release (as determined in accordance with the definition of “Loan-to-Value Ratio”), or (iii) an amount such that the Loan-to-Value Ratio after giving effect to the release is not greater than the Loan-to-Value Ratio immediately prior to such release, unless the Lender receives an opinion of counsel that, if such amount is not paid, the Securitization will not fail to maintain its status as a REMIC Trust as a result of the related release of the Lien, provided, notwithstanding anything to the contrary contained herein, no Spread Maintenance Premium shall be due in connection with any such prepayment and any such prepayment shall not count towards the Free Prepayment Amount.
Section 7.1
Ground Lease Reserve Funds.
7.1.1
Deposits to Ground Lease Reserve Fund. Subject to the last sentence of
Section 7.1.2, on each Payment Date during a Cash Sweep Period, Borrower shall pay to Lender one-twelfth of the rents (including both base rent and additional rents (excluding any Taxes otherwise reserved for hereunder)) (collectively, the “
Ground Rent”) due from Borrower under the Ground Lease during the next ensuing twelve (12) months in order to accumulate with Lender sufficient funds to pay all such Ground Rent at least thirty (30) days prior to the respective due dates
. Amounts so deposited shall hereinafter be referred to as the “
Ground Lease Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as the “
Ground Lease Reserve Account”
. Upon a Cash Sweep Cure Date and provided that a Cash Sweep Period shall not then exist, amounts in the Ground Lease Reserve Funds shall be released to the Borrower on the next Payment Date.
7.1.2
Release of Ground Lease Reserve Fund. Lender shall apply amounts in the Ground Lease Reserve Fund to the payment of the Ground Rent on or prior to the date such payments are due and, upon written request, shall provide to Borrower evidence of such payment. In making any payment relating to the Ground Rent, Lender may do so according to any bill, statement or estimate procured from the Ground Lessor under the Ground Lease, without inquiry into the accuracy of such bill, statement or estimate
. If the amount of Ground Lease Reserve Funds shall exceed the amounts due for the Ground Rent under the Ground Lease for the immediately succeeding twelve (12) months as determined by Lender, Lender shall return any excess to Borrower
. Any amounts remaining in the Ground Lease Reserve Fund after the Debt has been paid in full shall be returned
to Borrower. Any amounts remaining in the Ground Lease Reserve Fund after a Ground Leased Property has been released from the Lien of the related Mortgage in accordance with
Section 2.6 hereof and which are allocated for Ground Rent with respect to such released Ground Lease Property shall be returned to Borrower. If at any time Lender reasonably determines that
the Ground Lease Reserve Fund is not or will not be sufficient to pay the Ground Rent by the dates set forth above, Lender shall provide written notice to Borrower of such determination and Borrower, commencing with the first Payment Date occurring not less than five (5) days following receipt of such notice, shall increase its monthly payments to Lender by the amount that Lender estimates is sufficient to make up the deficiency at least thirty (30) days prior to the due date of the Ground Rent.
Section 7.2
Tax and Insurance Reserve Funds.
7.2.1
Tax and Insurance Reserve Funds. During the continuance of any Cash Sweep Period, Borrower shall pay or cause to be paid to Lender, on each Payment Date,
(A) one-twelfth (1/12) of the Taxes that Lender reasonably estimates will be payable during the next ensuing twelve (12) months (exclusive of any Taxes payable by Tenants under Leases in effect on the date hereof or which are entered into after the date hereof in accordance with this Agreement), in each case, in order to accumulate with Lender sufficient funds to pay all such Taxes at least thirty (30) days prior to their respective due dates (the “
Tax Reserve Funds”) and
(B) one-twelfth (1/12) of the Insurance Premiums that Lender reasonably estimates will be payable for the renewal of the coverage afforded by the Policies upon the expiration thereof in order to accumulate with Lender sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the Policies (the “
Insurance Reserve Funds,” and collectively with the Tax Reserve Funds, the “
Tax and Insurance Reserve Funds”), provided, that so long as no Event of Default is continuing, to the extent any of the insurance required to be maintained by Borrower under this Agreement or any other Loan Document is effected under one or more blanket insurance policies reasonably acceptable to Lender (which blanket insurance policy insures significant other real property not subject to the Lien of the Mortgage and owned, directly or indirectly, by Guarantor, Sponsor, a Permitted Assumption Party or an Affiliate of the foregoing, in an amount reasonably acceptable to Lender), Borrower shall not be required to make deposits to the Insurance Reserve Funds with respect to the Insurance Premiums applicable to such blanket policy. The account in which the Tax and Insurance Reserve Funds are held shall hereinafter be referred to as the “
Tax and Insurance Reserve Account”. Lender will apply any Insurance Reserve Funds on deposit in the Tax and Insurance Reserve Account to payments of Insurance Premiums and will apply any Tax Reserve Funds on deposit in the Tax and Insurance Reserve Account to payments of Taxes, in each case, on or prior to the date such payments are due and, upon written request, shall provide to Borrower evidence of such payment; provided that if sufficient amounts are on deposit in the Tax and Insurance Reserve Account and Borrower continues to be an Affiliate of an Approved Sponsor Entity or a Public Vehicle, Lender shall within five (5) Business Days after receipt of Borrower’s written request, release to Borrower the Tax Reserve Funds to timely pay all Taxes payable by Borrower, or to reimburse Borrower for Taxes actually paid by Borrower so long Borrower’s written request is submitted prior to Lender having already paid such Taxes. Any such request for disbursement shall include an Officer’s Certificate setting forth the tax payments and jurisdictions in which such payments will be made by such disbursement. Upon the written request of Lender, Borrower shall deliver to Lender receipts for payment or other evidence reasonably satisfactory to Lender that such Taxes have been paid. In making any payment from the Tax and Insurance Reserve Account, Lender may do so according to any bill, statement or estimate procured from the
appropriate public office (each, a “
Tax Bill”) (with respect to Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. If at any time during which Borrower is required to make payments of Tax and Insurance Reserve Funds pursuant to this
Section 7.2.1, the amount on deposit in the Tax and Insurance Reserve Account shall exceed the amounts due for Taxes and/or Insurance Premiums, as applicable, Lender shall, in its sole discretion, either
(1) return any excess to Borrower or
(2) credit such excess against future payments required to be made by Borrower to the Tax and Insurance Reserve Account pursuant to the provisions of this
Section 7.2.1. If at the time that Borrower ceases to have an obligation to deposit Tax and Insurance Reserve Funds into the Tax and Insurance Reserve Account pursuant to this
Section 7.2.1, there shall remain any amount on deposit in the Tax and Insurance Reserve Account, Lender shall promptly upon receipt of the written request of Borrower, return such remaining amount to Borrower. If, at any time during which Borrower is required to make payments of Tax and Insurance Reserve Funds pursuant to this
Section 7.2.1, Lender reasonably determines that the amount on deposit in the Tax and Insurance Reserve Account is not or will not be sufficient to pay Taxes and Insurance Premiums, as applicable, by the required payment dates set forth above in this
Section 7.2.1, Lender shall notify Borrower in writing of such determination and, commencing with the first Payment Date following the date of Borrower’s receipt of such written notice, Borrower shall increase its monthly payments to Lender by the amount that Lender reasonably estimates is sufficient to fund the deficiency. Any Tax and Insurance Reserve Funds remaining on deposit in the Tax and Insurance Reserve Account after the Debt has been paid in full shall be paid to Borrower. Upon the occurrence of a Cash Sweep Cure Date and provided that a Cash Sweep Period shall not then otherwise exist, amounts in the Tax and Insurance Reserve Account shall be released to Borrower on the next Payment Date.
Section 7.3
Intentionally Omitted.
Section 7.4
Replacement Reserve Account.
7.4.1
Deposits to Replacement Reserve Fund. During the continuance of any Cash Sweep Period, on each Payment Date, if and to the extent the amount then on deposit in the Replacement Reserve Account is less than the Replacement Reserve Cap, Borrower shall pay to Lender the Replacement Reserve Monthly Deposit (or such lesser amount which would cause the amounts on deposit in the Replacement Reserve Account to equal the Replacement Reserve Cap), if any, which amounts shall be held by Lender in accordance with
Section 7.11 hereof and disbursed to Borrower in accordance with
Section 7.4.2 in respect of the costs reasonably estimated by Lender in its sole discretion to be due for replacements, and repairs required to be made to the Properties during the calendar year (collectively, the “
Replacements”). Amounts so deposited shall hereinafter be referred to as the “
Replacement Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as the “
Replacement Reserve Account”. Any amount held in the Replacement Reserve Account and allocated for an Individual Property shall be retained by Lender and credited toward the future Replacement Reserve Monthly Deposits required by Lender hereunder in the event such Individual Property is released from the Lien of the related Mortgage in accordance with
Section 2.6 hereof. Upon a Cash Sweep Cure Date
and provided that a Cash Sweep Period shall not then otherwise exist, amounts in the Replacement Reserve Account shall be released to Borrower on the next Payment Date.
7.4.2 Withdrawals from Replacement Reserve Fund. Lender shall disburse to Borrower the Replacement Reserve Funds (or any portion thereof) upon satisfaction by Borrower of each of the following conditions: (i) Borrower shall submit a request for payment to Lender at least ten (10) days prior to the date on which Borrower requests such payment be made, which request for payment shall specify the Replacements for which payment is requested and that such request is not duplicative of any request made for disbursement from the Excess Cash Flow Reserve Fund in accordance with the terms and conditions hereof; (ii) on the date such payment is to be made, no Event of Default shall be continuing; (iii) such request shall be accompanied by (A) an Officer’s Certificate (1) stating that all Replacements at the applicable Individual Property to be funded by the requested disbursement have been (or will be) completed in good and workmanlike manner and in accordance with all applicable Legal Requirements in all material respects, such certificate to be accompanied by a copy, of any material license, permit or other approval by any Governmental Authority required in connection with the tenant improvements, (2) identifying each Person to be paid by Borrower that supplied materials or labor in connection with the tenant improvements to be funded by the requested disbursement, and (3) stating that each such Person to be paid by Borrower has been paid or will have been paid the amounts then due and payable to such Person in connection with the funds to be disbursed; (iv) with respect to any request for payment relating to Replacements in excess of the Reserve Release Threshold, such request is accompanied by (X) lien waivers (except that lien waivers from subcontractors who have performed work in the amount of $250,000 or less shall not be required) or other evidence of payment reasonably satisfactory to Lender and (Y) at Lender’s option, a title search for the applicable Individual Property indicating that such Individual Property is free from all Liens not previously approved by Lender (other than Permitted Encumbrances); (v) intentionally omitted; and (vi) such request is accompanied by such other evidence as Lender shall reasonably request that the Replacements at the applicable Individual Property to be funded by the requested disbursement have been completed and are paid for or will be paid upon such disbursement to Borrower. Lender shall not be required to make disbursements from the Replacement Reserve Account with respect to the Properties (i) more than twice in each calendar month and (ii) unless such requested disbursement is in an amount greater than the Minimum Disbursement Amount (or a lesser amount if the total amount on deposit in the Replacement Reserve Account on the date of the requested disbursement is less than the Minimum Disbursement Amount), in which case only one disbursement of the amount remaining in the Replacement Reserve Account shall be made. Any Replacement Reserve Funds remaining on deposit in the Replacement Reserve Account after the Debt has been paid in full shall be paid to Borrower.
Section 7.5 Excess Cash Flow Reserve Fund.
7.5.1 Deposits to Excess Cash Flow Reserve Fund. During the continuance of any Cash Sweep Period, all Excess Cash Flow shall be held by Lender as additional security for the Loan, all as more particularly provided in the Cash Management Agreement; provided, notwithstanding anything in the Loan Documents to the contrary herein, (i) the
amount of Excess Cash Flow required to be held in the Cash Management Account pursuant to this Section 7.5.1 and Section 3(k) of the Cash Management Agreement shall in no event exceed the Debt Yield Trigger Cure Prepayment Amount (such cap, the “Excess Cash Flow Deposit Cap” and the amount reserved in the Excess Cash Flow Reserve Account, the “Reserved Excess Cash Flow”); provided, that the amount of the Excess Cash Flow Deposit Cap shall be recalculated on a quarterly basis on each Debt Yield Determination Date and (ii) Lender shall disburse any Free Excess Cash Flow to an account designated by Borrower and such Free Excess Cash Flow shall not be additional security for the Loan or otherwise subject to any restrictions or limitations set forth in the Loan Documents. The Reserved Excess Cash Flow so held by Lender shall be hereinafter referred to as the “Excess Cash Flow Reserve Funds” and the account in which such amounts are held shall hereinafter be referred to as the “Excess Cash Flow Reserve Account”.
7.5.2 Release of Excess Cash Flow Reserve Fund.
(a) So long as no Event of Default has occurred and is continuing, Borrower will have access to the Excess Cash Flow Reserve Account and Excess Cash Flow Reserve Funds shall be disbursed by Lender to Borrower within three (3) Business Days of Borrower’s written request to pay for cost and expenses in connection with the ownership, management and/or operation of the Properties, including, without limitation for (i) payment of shortfalls in the payment of Debt Service and/or Mezzanine Debt Service; (ii) payment of shortfalls in the required deposits into the Reserve Accounts (in each case, to the extent required in this Agreement and the Cash Management Agreement); (iii) at Borrower’s option, principal prepayments of the Loan, together with the payment of any Spread Maintenance Premium, if applicable and the Mezzanine Loan, if any, together with the payment of any Spread Maintenance Premium (as defined in the Mezzanine Loan Agreement), if applicable; (iv) at Borrower’s option, prepayments of the Loan and Mezzanine Loan which are required to satisfy any Debt Yield test hereunder or under the Mezzanine Loan Agreement (which prepayment shall be applied pro rata between the Loan and the Mezzanine Loan (which portion of such prepayment applicable to the Loan shall be applied to any Components in accordance with Section 2.4.4 hereof)); (v) payment of any Operating Expenses (including any Capital Expenditures); (vi) payment of management fees due and payable under the Management Agreement; (vii) payment of emergency repairs and/or life-safety items, including any such repairs or items which are Capital Expenditures, Lender hereby acknowledging that it shall endeavor to fund (or cause its Servicer to fund) such requests within one (1) Business Day of request by Borrower, provided further that any failure to fund such request within one (1) Business Day shall in no event create any liability for Lender hereunder; (viii) payment of tenant improvement costs, tenant allowances, tenant relocation costs, tenant reimbursements, tenant inducement payments and leasing commission obligations or other expenditures required under Leases entered into in accordance with the terms of Section 5.1.20 hereof or existing as of the Closing Date; (ix) costs associated with Interest Rate Protection Agreements with respect to the Loan or a Mezzanine Loan (if any), including Replacement Interest Rate Protection Agreements, Substitute Interest Rate Protection Agreements and Converted Interest Rate Protection Agreements; (x) vacant space preparation costs and marketing costs with respect to potential leasing at the Properties; (xi) payment of any shortfall of Net Proceeds with
respect to the costs and expenses of Restoration of an Individual Property after a Casualty or Condemnation incurred by, or on behalf of, the Borrower in connection therewith; (xii) payment of any fees and costs payable pursuant to the Loan Documents or the New Mezzanine Lender pursuant to the Mezzanine Loan Documents, including costs to extend the PLL Policy; (xiii) legal, audit and accounting costs (including actual costs incurred by Sponsor (directly or indirectly) and its service providers for back office accounting and for costs associated with the Properties or Borrower), provided, that such funds shall not be used for the legal fees incurred in connection with the enforcement of Borrower’s or any Affiliates of Borrower’s rights pursuant to the Loan Documents or Mezzanine Borrower’s rights under the Mezzanine Loan Documents, respectively; (xiv) any Required REIT Distributions; (xv) Approved Alterations or Required Repairs; (xvi) costs and expenses payable pursuant to any PILOT Lease; (xvii) rent or other costs or expenses payable pursuant to the Ground Lease or any PILOT Lease (other than payments that are made by book entry and do not require any out-of-pocket expenses to be incurred by Borrower); (xviii) payment of condominium common charges, association fees or other expenses and charges of condominiums (if any) to the extent not paid as association fees out of the Lockbox Account; (xix) so long as Sponsor is an Approved Sponsor Entity and Borrower is Controlled by an Approved Sponsor Entity in accordance with the terms and conditions hereof and without duplication of any amounts distributed pursuant to the other sub-clauses of this clause (a), distributions in an amount not to exceed any capital contributions made by Sponsor or any other direct and/or indirect owner of Borrower during the continuance of the then current Cash Sweep Period (a “Permitted Return”) provided, that (A) after giving effect to such release of Excess Cash Flow Reserve Funds pursuant to this clause (xix), (1) no Event of Default shall result from such distribution and (2) in respect to any distribution of cash received since the last Payment Date or any Permitted Return, after making such distribution, an amount equal to the Debt Service due at the next Payment Date remains on deposit in the Excess Cash Flow Reserve Account, (B) to the extent that Borrower has delivered an Excess Cash Flow Guaranty in accordance with Section 7.5.2(c) hereof, any amounts paid by Borrower with respect to amounts due with regard to the Loan and/or the Properties shall not be deemed to be capital contributions made by Sponsor or any other direct and/or indirect owner of Borrower and (C) a Permitted Return shall not apply to prepayments of a Mezzanine Loan that is repaid in reverse sequential order, (xx) any corporate overhead reasonably allocated by Sponsor to the Properties and (xxi) such other items as may be approved in writing by the Lender, as determined in Lender’s reasonable discretion provided that, for purposes of clarity, no Mezzanine Lender shall be able to approve items for disbursement from the Excess Cash Flow Reserve Account pursuant to this clause (xxi).
(b) Any Excess Cash Flow Reserve Funds remaining on deposit in the Excess Cash Flow Reserve Account upon a Cash Sweep Cure Date or the date Borrower delivers an Excess Cash Flow Guaranty pursuant to Section 7.5.2(c) hereof shall be paid (i) provided a Cash Sweep Period under a Mezzanine Loan (if any) is then continuing or any amounts are then due and payable to Mezzanine Lender, to the Mezzanine Lender to be held by Mezzanine Lender pursuant to the Mezzanine Loan Agreement for the purposes described therein, or (ii) if no Mezzanine Loan is then outstanding or if there does not then exist a Cash Sweep Period under the Mezzanine Loan and all amounts due and payable to the Mezzanine Lender have been paid, to Borrower. Any Excess Cash Flow Reserve Funds
remaining on deposit in the Excess Cash Flow Reserve Account after the Debt and all amounts due to Lender have been paid in full shall be paid to (y) to the most senior Mezzanine Lender to be held by such Mezzanine Lender pursuant to the related Mezzanine Loan Agreement for the same purposes as those described therein or (z) if the Mezzanine Loans are no longer outstanding, Borrower.
(c) In lieu of Agent depositing all Reserved Excess Cash Flow into the Excess Cash Flow Reserve Account in accordance with Section 7.5 hereof and Section 3(k) of the Cash Management Agreement and for so long as no Event of Default has occurred and is continuing, Borrower shall have the right to cause Excess Cash Flow Guarantor to deliver to Lender the Excess Cash Flow Guaranty, provided, that as a condition precedent to the delivery of such Excess Cash Flow Guaranty to Lender, (i) Borrower shall deliver to Lender, at Borrower’s sole cost and expense, a legal opinion that the Excess Cash Flow Guaranty has been duly authorized, executed and delivered by Excess Cash Flow Guarantor, and that the Excess Cash Flow Guaranty is valid, binding and enforceable against Excess Cash Flow Guarantor in accordance with its terms, which opinions shall be in form and substance substantially similar to the opinions delivered by Borrower’s counsel upon the closing of the Loan with respect to validity, authority, execution and enforceability, and which may be relied upon by Lender and, following a Rated Securitization, the Rating Agencies and (ii) if the Additional Insolvency Opinion Condition is satisfied, then Borrower shall deliver an Additional Insolvency Opinion reasonably acceptable to Lender, which takes into account such Excess Cash Flow Guaranty. In no instance shall Borrower be entitled to request, nor shall Lender be obligated to disburse, Reserved Excess Cash Flow to Borrower pursuant to this Section 7.5.2(c) in lieu of depositing the same into the Excess Cash Flow Reserve Account if (I) an Event of Default has occurred and is continuing, (II) such Reserved Excess Cash Flow is not guaranteed pursuant to the Excess Cash Flow Guaranty, and/or (III) such disbursement of such amounts would cause the Additional Insolvency Opinion Condition to be satisfied unless Borrower shall provide an Additional Insolvency Opinion in form and substance reasonably acceptable to Lender. For the avoidance of doubt, during the continuance of a Cash Sweep Period, (x) any Reserved Excess Cash Flow that is in excess of the amount of Excess Cash Flow guaranteed pursuant to the Excess Cash Flow Guaranty shall be deposited into the Excess Cash Flow Reserve Account and (y) all Free Excess Cash Flow shall be disbursed to a Non-Pledged Account designated by Borrower.
Section 7.6 Rate Cap Reserve Funds. In the event that Borrower elects, in its sole and absolute discretion, to satisfy the Alternate Strike Price Condition, Borrower shall either (i) deposit cash in the Rate Cap Reserve Account, (ii) deliver a Letter of Credit and/or (iii) cause Rate Cap Reserve Guarantor to deliver a guaranty in the form attached hereto as Exhibit H (the “Rate Cap Reserve Guaranty”), in an aggregate amount equal to the applicable Rate Cap Reserve Amount (provided, that, in the event the Additional Insolvency Opinion Condition is satisfied as a result of the delivery of the Rate Cap Reserve Guaranty and/or a Letter of Credit, Lender has received an Additional Insolvency Opinion reasonably acceptable to Lender with respect to the same), in each case, which shall be held for disbursement pursuant to this Section 7.6. Amounts so deposited in cash to the Rate Cap Reserve Account shall hereinafter be referred to as Borrower’s “Rate Cap Reserve Funds”, and the account in which such Rate Cap Reserve Funds are held shall be referred to as Borrower’s “Rate Cap Reserve Account”. Provided no Event of Default is then
continuing, and provided that the balance of the Rate Cap Reserve Account (together with all amounts guaranteed under the Rate Cap Reserve Guaranty, if any) is greater than zero, all Rate Cap Reserve Funds shall be applied on each Payment Date as follows: (a) with respect to any Interest Period in which the Applicable Index Rate as of the related Determination Date is less than the Required Strike Price, the Monthly Rate Cap Reserve Reduction Amount shall be distributed to Borrower; (b) with respect to any Interest Period in which the Applicable Index Rate as of the related Determination Date is greater than or equal to the Alternate Strike Price, (x) the Monthly Rate Cap Reserve Amount shall be held by Lender and shall be applied by Lender to the Debt Service that is due and payable on the Payment Date related to such Interest Period and (y) an amount equal to the Monthly Rate Cap Reserve Reduction Amount minus the amount retained by Lender pursuant to clause (x) above shall be distributed to Borrower; and (c) with respect to any Interest Period in which the Applicable Index Rate as of the related Determination Date is greater than or equal to the Required Strike Price, but less than the Alternate Strike Price, (x) an amount equal to the Monthly Strike Price Differential Amount shall be held by Lender and shall be applied by Lender to the payment of the Debt Service that is due and payable on the Payment Date related to such Interest Period and (y) an amount equal to the Monthly Rate Cap Reserve Reduction Amount minus the amount retained by Lender pursuant to clause (x) above shall be distributed to Borrower. Any amount remaining in the Rate Cap Reserve Account after the Debt has been paid in full shall be paid to Borrower. In the event that a Letter of Credit is delivered pursuant to this Section 7.6, the ability of the Lender to draw on such Letter of Credit shall be correspondingly reduced on a pro rata basis by any distributions made to Borrower from the Rate Cap Reserve Funds pursuant to this Section 7.6. So long as no Priority Payment Cessation Event has occurred, notwithstanding the foregoing or anything contained herein to the contrary, (i) in no event shall Lender apply any portion of the Rate Cap Reserve Amount to the payment of any Debt Service owed due to Term SOFR exceeding the Alternate Strike Price and (ii) the Rate Cap Reserve Amount shall be treated as if the same were an Interest Rate Protection Agreement under the Loan Documents. So long as a Priority Payment Cessation Event has not occurred, upon the earliest of (i) Borrower’s entrance into an Interest Rate Protection Agreement in connection with an Extension Option pursuant to Section 2.8 hereof, (ii) Borrower’s entrance into an Interest Rate Protection Agreement or Replacement Interest Rate Protection Agreement in accordance with the terms hereof with a Strike Price equal to the Required Strike Price and (iii) the repayment of the Loan in full, (x) all amounts outstanding in cash in the Rate Cap Reserve Account with respect to the Interest Rate Protection Agreement so replaced or extended shall (1) so long as no Cash Sweep Period has occurred and is continuing, be disbursed to Borrower and (2) to the extent a Cash Sweep Period has occurred and is continuing, be deposited by Lender into the Cash Management Account and (y) any Letter of Credit and/or Rate Cap Reserve Guaranty with respect to the Interest Rate Protection Agreement so replaced or extended shall be returned to Borrower or released, as applicable. In addition to the foregoing, (A) each Letter of Credit delivered with respect to the Alternate Strike Price Condition shall be released upon Borrower’s deposit of cash in the Rate Cap Reserve Account and/or Rate Cap Reserve Guarantor’s delivery of a Rate Cap Reserve Guaranty in an aggregate amount equal to the then‑current Rate Cap Reserve Amount, (B) each Rate Cap Reserve Guaranty shall be released upon Borrower’s delivery of a Letter of Credit and/or Borrower’s deposit of cash in the Rate Cap Reserve Account in an aggregate amount equal to the then-current Rate Cap Reserve Amount and (C) all amounts on deposit in the Rate Cap Reserve Account shall be disbursed as set forth in clause (x) above upon Borrower’s delivery of a Letter of
Credit and/or a Rate Cap Reserve Guaranty in an aggregate amount equal to the then-current Rate Cap Reserve Amount.
Section 7.7 Reserve Funds.
7.7.1 Borrower shall have the option to either (a) deposit cash in the MC Reserve Account (as defined below) or (b) deliver a Letter of Credit in accordance with Section 7.10 below, in each case, for all or any portion of the then applicable Guaranteed Obligations Cap (as defined in the Reserve Guaranty), if any (the “Reserve Guaranty Amount”), in which event, the Guaranteed Obligations Cap (as defined in the Reserve Guaranty) shall be reduced pursuant to Section 1.2 of the Reserve Guaranty. Amounts so deposited in cash to the MC Reserve Account shall hereinafter be referred to as Borrower’s “MC Reserve Funds”, and the account in which such MC Reserve Funds are held shall be referred to as the “MC Reserve Account”.
7.7.2 Lender shall within three (3) Business Days after receipt of Borrower’s written request, release to Borrower the MC Reserve Funds (or any portion thereof) to pay (or reimburse Borrower) for the costs of any Required CapEx (as defined in the Reserve Guaranty). Any such request for disbursement shall include an Officer’s Certificate setting forth the Required CapEx which shall be paid (or reimbursed to Borrower) with such release of funds. So long as a Priority Payment Cessation Event has not occurred, upon the earliest of (i) the repayment of the Loan in full, (ii) the reduction of the Guaranteed Obligations Cap (as defined in the Reserve Guaranty) to zero in accordance with the terms of the Reserve Guaranty, (iii) the full satisfaction or waiver of the Required CapEx (as defined in the Reserve Guaranty) pursuant to the Mariner’s Cove Ground Lease and (iv) the release of the Ground Leased Property owned by the Mariner’s Cove Ground Lease Borrower from the Lien of the Mortgage pursuant to Section 2.6 hereof, any MC Reserve Funds and/or Letter of Credit delivered hereunder shall be returned to Borrower or released, as applicable. In addition to the foregoing, (A) any Letter of Credit delivered hereunder shall be released upon Borrower’s deposit of cash in the amount of such Letter or Credit with Lender to be deposited into the MC Reserve Account and (B) all amounts on deposit in the MC Reserve Account shall be disbursed upon Borrower’s delivery of a Letter of Credit hereunder in an amount equal to the then-current Reserve Guaranty Amount.
Section 7.8 Intentionally Omitted.
Section 7.9 Intentionally Omitted.
Section 7.10 Letter of Credit.
(a) In addition to or in lieu of making the payments to the Replacement Reserve Account as set forth in Section 7.4.1 or the Rate Cap Reserve Account as set forth in Section 7.6.1, Borrower may from time to time deliver to Lender a Letter of Credit in accordance with the provisions of this Section 7.10. any Letter of Credit from time to time delivered in lieu of payments to the Replacement Reserve Account or the Rate Cap Reserve Account shall be for not less than the amount of deposits required to be made by Borrower
to such Replacement Reserve Account or the Rate Cap Reserve Account for the twelve (12) calendar months following the date such Letter of Credit is delivered to Lender in the Replacement Reserve Account or the Rate Cap Reserve Account (the “Reserve Cap Period”). If during the term of any Letter of Credit delivered by Borrower pursuant to this Section 7.10, the amount of deposits required to be made by Borrower to the Replacement Reserve Account or the Rate Cap Reserve Account for the Reserve Cap Period following such date shall increase to an amount exceeding the amount of such Letter of Credit, Borrower shall, at its option (A) deliver to Lender an amendment to such Letter of Credit or a replacement Letter of Credit which shall be in an amount not less than the aggregate amount of such deposits required to be made during the Reserve Cap Period or (B) make such excess deposits required to be made in the amounts and frequency set forth in Section 7.4.1 or Section 7.6.1. In no event shall Borrower be an account party to, or have or incur any reimbursement obligations in connection with, any Letter of Credit.
(b) Borrower shall give Lender no less than ten (10) days’ revocable notice of Borrower’s election to deliver a Letter of Credit on account of the Replacement Reserve Account, the Rate Cap Reserve Account, or the MC Reserve Account and Borrower shall pay to Lender all of Lender’s reasonable out-of-pocket costs and expenses in connection therewith, if any. Borrower shall not be entitled to draw from any such Letter of Credit. Borrower may replace any Letter of Credit delivered on account of the Replacement Reserve Account, the MC Reserve Account or Rate Cap Reserve Account, as applicable, with a cash deposit to the Replacement Reserve Account, the MC Reserve Account or Rate Cap Reserve Account pursuant to Section 7.4, Section 7.6 or Section 7.7, as applicable. Prior to the return of such a Letter of Credit, Borrower shall deposit an amount equal to the amount that would be on deposit in the Replacement Reserve Account, the MC Reserve Account or Rate Cap Reserve Account (excluding any interest that may have accrued) if such Letter of Credit had not been delivered.
(c) Each Letter of Credit delivered under this Agreement shall be additional security for the payment of the Debt. During the continuance of an Event of Default, Lender 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 items for which such Letter of Credit was established or to apply each such Letter of Credit to payment of the Debt in such order, proportion or priority as Lender may determine, provided, however, notwithstanding anything to the contrary contained in the Loan Documents, Lender shall not draw on (i) any Letter of Credit delivered to satisfy the Alternate Strike Price Condition (other than in accordance with Section 7.6) unless and until the earlier to occur of (x) an Event of Default continuing with respect to Borrower’s failure to pay the Monthly Debt Service Payment Amount or (y) a Priority Payment Cessation Event or (ii) any Letter of Credit provided pursuant to Section 7.7 hereof unless and until the occurrence of a Priority Payment Cessation Event.
(d) In addition to any other right Lender may have to draw upon a Letter of Credit pursuant to the terms and conditions of this Agreement, Lender shall have the additional rights to draw in full any Letter of Credit: (i) with respect to any evergreen Letter of Credit, if Lender has received a notice from the issuing bank that the Letter of Credit will not be renewed and a substitute Letter of Credit is not provided at least twenty (20) days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (ii)
with respect to any Letter of Credit with a stated expiration date, if a substitute Letter of Credit is not provided at least twenty (20) days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (iii) upon receipt of notice from the issuing bank that the Letter of Credit will be terminated (except if the termination of such Letter of Credit is permitted pursuant to the terms and conditions of this Agreement or a substitute Letter of Credit is provided); or (iv) if Lender has received notice that the bank issuing the Letter of Credit shall cease to be an Eligible Institution (except, in each case, Lender shall not have the right to draw in full any Letter of Credit delivered on account of the Replacement Reserve Account, the MC Reserve Account or Rate Cap Reserve Account, as applicable, if Borrower shall deposit an amount equal to the amount that would be on deposit in the Replacement Reserve Account, the MC Reserve Account or Rate Cap Reserve Account, as applicable (excluding any interest that may have accrued) if such Letter of Credit had not been delivered); provided, however, that in the event Lender receives any notice referred to in subclause (iv) hereof and Lender, in its reasonable discretion, determines that the security intended to be provided to Lender by the related Letter of Credit is not thereby materially jeopardized, Borrower shall have ten (10) Business Days following receipt of notice from Lender in which to deliver to Lender a replacement Letter of Credit issued by an Eligible Institution; provided, further, that in the event Lender draws on any Letter of Credit upon the happening of an event specified in subclause (i), (ii), (iii) or (iv) above (but specifically excluding any draw related to the occurrence of an Event of Default), Lender shall return to Borrower the funds so drawn in the event Borrower provides Lender with a replacement Letter of Credit issued by an Eligible Institution within thirty (30) days following such draw. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw any Letter of Credit upon the happening of an event specified in subclause (i), (ii), (iii) or (iv) above and shall not be liable for any losses sustained by Borrower due to the insolvency of the bank issuing the Letter of Credit if Lender has not drawn the Letter of Credit.
(e) In the event that Borrower elects to deliver a Letter of Credit pursuant to this Section 7.10 for which an Insolvency Opinion Affiliate provides collateral, and if as a result of the delivery of such Letter of Credit, the Additional Insolvency Opinion Condition is satisfied, then Borrower shall deliver an Additional Insolvency Opinion reasonably acceptable to Lender which takes into account such Letters of Credit.
Section 7.11 Reserve Accounts Generally.
(a) Borrower grants to Lender a perfected security interest in each of the Reserve Accounts and any and all monies now or hereafter deposited in each Reserve Account as additional security for payment of the Debt. Until expended, released or applied in accordance herewith, the Reserve Accounts shall constitute additional security for the Debt.
(b) Subject to making Priority Waterfall Payments to the extent of funds available therefore in the Reserve Accounts prior to the occurrence of a Priority Payment Cessation Event, during the continuance of an Event of Default, Lender may, in addition to any and all other rights and remedies available to Lender, apply any sums then present in any or all of the Reserve Accounts to the payment of the Debt in any order in its sole
discretion; provided, however, notwithstanding anything to the contrary contained in the Loan Documents, Lender shall not apply any amounts in the Rate Cap Reserve Fund (other than in accordance with Section 7.6) unless and until the earlier to occur of (x) an Event of Default continuing with respect to Borrower’s failure to pay the Monthly Debt Service Payment Amount or (y) a Priority Payment Cessation Event.
(c) All interest or other earnings on Reserve Funds shall be added to and become a part of such Reserve Funds and shall be disbursed in the same manner as other monies deposited in the applicable Reserve Account. The Reserve Funds shall be held in an Eligible Account and shall bear interest at a money market rate selected by Lender, provided that Borrower shall have the right to direct Lender to invest sums on deposit in the Eligible Account in Permitted Investments if (a) such investments are then regularly offered by Lender for accounts of this size, category and type, (b) such investments are permitted by applicable Legal Requirements, (c) the maturity date of the Permitted Investment is not later than the date on which the applicable Reserve Funds are required for payment of an obligation for which the applicable Reserve Account was created, and (d) no Event of Default shall have occurred and be continuing. Borrower shall be responsible for payment of any federal, state or local income or other tax applicable to the interest earned on the Reserve Funds credited or paid to Borrower, provided that, so long as no Event of Default is continuing, such taxes may be paid from the applicable Reserve Funds. No other investments of the sums on deposit in the Reserve Accounts shall be permitted except as set forth in this Section 7.11(c). All interest on Reserve Funds (i) shall be added to and become a part of such Reserve Fund, (ii) shall accrue to the benefit of Borrower and (iii) shall be disbursed in the same manner as other monies deposited in such Reserve Fund. Such costs shall be deducted from the income or earnings on such investment, if any, and to the extent such income or earnings shall not be sufficient to pay such costs, such costs shall be paid by Borrower promptly on demand by Lender.
(d) Lender shall hold each Reserve Account in trust and for the benefit of Lender and Borrower as provided in the Loan Documents, and each Reserve Account shall be under the sole dominion and control of Lender. Lender shall have the sole right to make withdrawals from each Reserve Account.
(e) Lender and Servicer shall not be liable for any loss sustained on the investment of any funds constituting the Reserve Funds provided such Reserve Funds are held in an Eligible Account and invested only in Permitted Investments in accordance with the terms of the Loan Documents. Borrower shall indemnify Lender and Servicer and hold Lender and Servicer harmless from and against any and all Losses arising from or in any way connected with the Reserve Accounts or the performance of the obligations for which the Reserve Accounts were established. Borrower shall assign to Lender all rights and claims Borrower may have against all persons or entities supplying labor, materials or other services which are to be paid from or secured by the Reserve Accounts; provided, however, that Lender may not pursue any such right or claim unless an Event of Default is continuing.
Section 7.12 Distributions to Mezzanine Lenders.
(a) Notwithstanding anything to the contrary contained herein, any amount remaining in the Reserve Funds after the Debt has been paid in full shall be returned (A) if any portion of the Mezzanine Loan Debt is then outstanding, to Mezzanine Lender to be held by the Mezzanine Lender pursuant to the Mezzanine Loan Agreement for the purposes described therein and (B) if no portion of the Mezzanine Loan Debt is then outstanding, to Borrower.
(b) Notwithstanding anything to the contrary contained herein, any portions of the Reserve Funds that are to be paid, returned or delivered to Mezzanine Lender shall be in the case paid, returned or delivered to the Mezzanine Lender, deemed to be disbursed to the Mezzanine Borrower for payment to the Mezzanine Lender.
ARTICLE VIII
DEFAULTS
Section 8.1 Event of Default. (a) Each of the following events shall constitute an event of default hereunder (an “Event of Default”):
(i) if (A) any Monthly Debt Service Payment Amount is not paid on or before the date when due, (B) the Debt is not paid in full on the Maturity Date, or (C) during a Cash Sweep Period, the monthly deposit (if any) to the Ground Lease Reserve Account is not paid in full on or before the date when due or (D) any other portion of the Debt not specified in the foregoing subclause (A), subclause (B) or subclause (C) is not paid on or prior to the date when the same is due with such failure continuing for five (5) Business Days after Lender delivers written notice thereof to Borrower, (provided, it shall not be an Event of Default if there are sufficient funds in the Cash Management Account or the Excess Cash Flow Reserve Account to pay any such amounts prior to the date upon which such payment becomes delinquent and Lender is required to use such amounts for the payment of such amount hereunder and Servicer or Lender fails to make such payment in accordance with the Loan Documents);
(ii) if any of the (A) real property Taxes are not paid when the same become delinquent, subject to Borrower’s rights to contest same as provided herein (provided, it shall not be an Event of Default if there are sufficient funds in the Tax and Insurance Reserve Account to pay such Taxes prior to the date upon which such payment becomes delinquent and Lender is required to use such amounts for the payment of such Taxes hereunder and Servicer or Lender fails to make such payment in accordance with the Loan Documents) or (B) material Other Charges are not paid on or prior to the date when the same become delinquent with such failure continuing for five (5) Business Days after Lender delivers written notice thereof to Borrower;
(iii) if the Policies are not kept in full force and effect to the extent required by, and subject to, Section 6.1 hereof; provided, it shall not be an Event of
Default if there are sufficient funds in the Tax and Insurance Reserve Account or the Excess Cash Flow Reserve Account to pay for such Policies and Lender is required to use such amounts for the payment of such Policies hereunder and Servicer or Lender fails to make such payment in accordance with the Loan Documents;
(iv) if Borrower shall fail to deliver to Lender certificates of insurance evidencing the Policies and such other documentation as reasonably requested by Lender in respect of the Policies within the applicable time periods set forth in Section 6.1(b). hereof and such failure is not cured within ten (10) Business Days of receipt of notice from Lender to Borrower; provided, it shall not be an Event of Default if Borrower is unable to deliver such certificates of insurance and/or other documentation as a result of (1) the Policies no longer being in effect, (2) there are or were sufficient funds in the Tax and Insurance Reserve Account or the Excess Cash Flow Reserve Account to pay for such Policies and (3) Lender is required to use such amounts for the payment of such Policies hereunder and Servicer or Lender fails to make such payment in accordance with the Loan Documents;
(v) if any Transfer is consummated in violation of the provisions of Section 5.2.10 hereof; provided, however, that if such violation arises solely from a failure to provide any required notice or information (other than KYC Searches) pursuant to the applicable provisions of the Loan Documents with respect to a Transfer that is otherwise permitted in accordance with the terms of this Agreement (including, without limitation, a Permitted Transfer), then, without limiting clause (xiv) below, such violation shall not constitute an Event of Default pursuant to this clause (v);
(vi) if any representation or warranty made by Borrower herein or by Borrower or Guarantor in any other Loan Document, or in any certificate or other instrument or agreement made by Borrower or Guarantor in favor of Lender in connection with the Loan shall have been false or misleading in any material adverse respect as of the date the representation or warranty was made, provided (x) that if such untrue representation or warranty is susceptible of being cured or corrected, Borrower or Guarantor, as applicable, shall have the right to cure such representation or warranty within thirty (30) days of receipt of notice from Lender to Borrower and (y) with respect to any representation or warranty made by Guarantor which shall have been false or misleading in any material adverse respect as of the date the representation or warranty was made (a “Guarantor Misrepresentation”), it shall not be an Event of Default under this Section 8.1(a)(vi) if any other Guarantor and/or one or more Replacement Sponsor Guarantors, Replacement Affiliate Guarantors and/or Replacement Guarantors shall have assumed or otherwise agreed to become liable for all of the liabilities and obligations of the Guarantor who made such Guarantor Misrepresentation under the Loan Documents executed by such Guarantor, in each instance, in accordance with the terms hereunder and the terms of the Guaranty and such other Guarantor, Replacement Sponsor Guarantor, Replacement Affiliate Guarantor or Replacement
Guarantor is able to make the representation or warranty that was the subject of the Guarantor Misrepresentation;
(vii) if Borrower or any SPE Constituent Entity shall make an assignment for the benefit of creditors;
(viii) if a receiver, liquidator or trustee shall be appointed for Borrower or any SPE Constituent Entity or if Borrower or any SPE Constituent Entity shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to the Bankruptcy Code shall be filed by or against or consented to by Borrower or any SPE Constituent Entity, or if any proceeding for the dissolution or liquidation of Borrower or any SPE Constituent Entity shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower or any SPE Constituent Entity it shall only be an Event of Default upon the same not being discharged, stayed or dismissed within ninety (90) days;
(ix) only upon the declaration by Lender that the same constitutes an Event of Default (which declaration may be made by Lender in its sole discretion) if (A) any Guarantor shall make an assignment for the benefit of creditors or if, (B) a receiver, liquidator or trustee shall be appointed for any Guarantor or if any Guarantor shall be adjudicated a bankrupt or insolvent, or if (C) any petition for bankruptcy, reorganization or arrangement pursuant to the Bankruptcy Code shall be filed by or against or consented to by any Guarantor, or if (D) any proceeding for the dissolution or liquidation of any Guarantor shall be instituted (a “Guarantor Bankruptcy Event”); provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by such Guarantor, upon the same not being discharged, stayed or dismissed within ninety (90) days; and provided, further, it shall not be an Event of Default under this Section 8.1(a)(ix) if any other Guarantor and/or any one or more Replacement Sponsor Guarantors, Replacement Affiliate Guarantors and/or Replacement Guarantors shall have assumed or otherwise agreed to become liable for all of the liabilities and obligations of the Guarantor subject to such Guarantor Bankruptcy Event under the Loan Documents executed by such Guarantor, in each instance, in accordance with the terms hereunder, and the terms of the Guaranty;
(x) if Borrower or Guarantor voluntarily assigns in writing its rights under this Agreement or any of the other Loan Documents or any interest herein or therein in violation of the Loan Documents, provided, it shall not be an Event of Default under this Section 8.1(a)(x) if with respect to such an assignment by Guarantor, any other Guarantor and/or any one or more Replacement Sponsor Guarantors, Replacement Affiliate Guarantors and/or Replacement Guarantors shall have assumed or otherwise agreed to become liable for all of the liabilities and obligations of the Guarantor subject to such assignment under the Loan Documents executed by such Guarantor, in each instance, in accordance with the terms hereunder, and the terms of the Guaranty;
(xi) if Borrower breaches any covenant contained in Section 5.1.28 hereof, provided, however, that any such breach shall not constitute an Event of Default (A) if such breach is inadvertent and non-recurring, (B) if such breach is curable, if Borrower shall promptly cure such breach within thirty (30) days after Borrower obtains knowledge of such breach, and (C) upon the written request of Lender, if Borrower promptly delivers to Lender an Additional Insolvency Opinion or a modification of the Insolvency Opinion to the effect that such breach shall not alter the conclusions set forth in the opinions rendered in the Insolvency Opinion, which opinion or modification and the counsel delivering such opinion and modification shall be acceptable to Lender in its sole discretion;
(xii) with respect to any term, covenant or provision set forth herein or in any other Loan Document which specifically contains a notice requirement or grace period, if Borrower shall be in default under such term, covenant or condition after the giving of such notice or the expiration of such grace period, provided, however, if such provision does not specifically provide that Borrower’s default under such term, covenant or condition beyond such notice requirement and/or grace period constitutes an immediate Event of Default, clause (xvi) of this Section 8.1(a) shall apply;
(xiii) if any of the factual assumptions related to Borrower contained in the Insolvency Opinion delivered to Lender in connection with the Loan, or in any Additional Insolvency Opinion delivered subsequent to the closing of the Loan, is or shall become untrue in any material respect, provided, however, that any such breach shall not constitute an Event of Default (A) (i) if such breach is inadvertent and nonrecurring or (ii) if such breach is curable, if Borrower shall promptly cure such breach within thirty (30) days after Borrower obtains knowledge of such breach, and (B) upon the written request of Lender, if Borrower promptly delivers to Lender an Additional Insolvency Opinion or a modification of the Insolvency Opinion to the effect that such breach shall not alter the conclusions set forth in the opinions rendered in the Insolvency Opinion, which opinion or modification and the counsel delivering such opinion and modification shall be acceptable to Lender in its sole discretion;
(xiv) if a material default by Borrower has occurred and continues beyond any applicable notice or cure period under the Management Agreement (or any Replacement Management Agreement) that permits the Manager thereunder to terminate or cancel the Management Agreement (or any Replacement Management Agreement) or the term of the Management Agreement (or any Replacement Management Agreement) expires and Lender delivers a written notice of Event of Default in connection therewith to Borrower (a “Management Default Election Notice”) (unless, within forty-five (45) days after receipt of such Management Default Election Notice, (I) Borrower and a new Qualified Manager enter into a Replacement Management Agreement in accordance with Section 5.1.22, (II) Borrower has elected to release the applicable Individual Property released in accordance with Section 2.6.1(c) hereof and releases the Individual Property in
accordance with the provisions thereof or (III) the applicable Manager waives such material default);
(xv) if a material default by Borrower has occurred and continues beyond any applicable notice or cure period under any REA that permits any other party to such REA to enforce the REA against Borrower in a manner that is reasonably expected to have an Individual Material Adverse Effect with respect to any Individual Property or an Aggregate Material Adverse Effect, and Lender delivers a written notice of Event of Default in connection therewith to Borrower (a “REA Default Election Notice”) (unless, within forty-five (45) days after receipt of such REA Default Election Notice, (I) Borrower has cured such material default under the REA, (II) Borrower has elected to release the applicable Individual Property released in accordance with Section 2.6.1(c) hereof and releases the Individual Property in accordance with the provisions thereof or (III) the applicable counterparty waives such material default);
(xvi) if Borrower continues to be in Default under any of the other terms, covenants or conditions of this Agreement or the other Loan Documents not specified in clauses (i) to (xv) above or (xvii) to (xix) below, and such Default shall continue for ten (10) days (or such longer period as expressly provided for in this Agreement or in the Loan Documents) after written notice to Borrower from Lender, in the case of any such Default which can be cured by the payment of a sum of money, or for thirty (30) days after written notice to Borrower from Lender in the case of any other Default; provided, however, that if such non‑monetary Default is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided further that Borrower shall have commenced to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional period not to exceed ninety (90) days; provided, with respect to any such default hereunder or under any of the other Loan Documents which is caused solely by actions or omissions of Guarantor (a “Guarantor Default”), it shall not be an Event of Default under this Section 8.1(a)(xvii) if any other Guarantor and/or any one or more Replacement Sponsor Guarantors, Replacement Affiliate Guarantors and/or Replacement Guarantors shall have assumed or otherwise agreed to become liable for all of the liabilities and obligations of the Guarantor who caused such Guarantor Default hereunder or under the Loan Documents executed by such Guarantor, in each instance, in accordance with the terms hereunder and the terms of the Guaranty; and
(xvii) if Borrower shall fail to obtain and/or maintain the Interest Rate Protection Agreement or Replacement Interest Rate Protection Agreement, as applicable, as required pursuant to Section 2.2.7 hereof.
(xviii) if the applicable Individual Borrower materially breaches or materially defaults in the performance of any condition or obligation of such Individual Borrower contained in the Ground Lease and such material breach or
material default is not cured within any applicable cure period provided for in the Ground Lease, including, without limitation, the occurrence of a material breach or material default by Individual Borrower that permits the Ground Lessor under the Ground Lease to terminate or cancel the Ground Lease, provided, however, that prior to declaring an Event of Default under this clause (xviii), Lender shall permit Borrower to release the Ground Leased Property creating such default situation within forty-five (45) days of receipt by the applicable Individual Borrower of a notice from the Ground Lessor of such default or breach upon satisfaction of the conditions set forth in Section 2.6.1(b) and Section 2.6.1(e) (if applicable) hereof; and
(xix) if the leasehold estate created by any PILOT Lease shall be surrendered or any PILOT Lease shall be terminated or cancelled for any reason or circumstance in violation of this Agreement (except if, in connection with such surrender or termination, Borrower acquires the fee estate from the applicable PILOT Lessor in accordance with the terms of the PILOT Lease), provided, however, that prior to declaring an Event of Default under this clause (xix), Lender shall permit PILOT Lessee, at any time within sixty (60) days of receipt by PILOT Lessee of a notice from PILOT Lessor of such surrender, termination or cancellation, to (i) cause a Default Release with respect to the applicable PILOT Property and (ii) acquire fee title to the fee estate held by PILOT Lessor in accordance with the terms hereof and the terms of the PILOT Lease (if applicable) hereof.
(b) During the continuance of an Event of Default (other than an Event of Default described in clauses (vii), (viii), or (x) above), in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan Documents or at law or in equity, Lender may take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and in and to all or any Individual Property, including, without limitation, declaring the Debt to be immediately due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and any or all of the Properties, including, without limitation, all rights or remedies available at law or in equity; and upon any Event of Default described in clauses (vii), (viii) or (x) above, the Debt and the Other Obligations shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding.
Section 8.2 Remedies. (a) During the continuance of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under this Agreement or any of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, to the extent permitted by applicable law, whether or not all or any of the Debt shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to all or any part of any Individual Property. Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents. Without limiting the generality of the foregoing, Borrower agrees that if an Event of Default is continuing (i) Lender is not subject to any “one action” or “election of remedies” law or rule, and (ii) all liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Properties and the Mortgages have been foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full.
(b) With respect to Borrower and the Properties, nothing contained herein or in any other Loan Document shall be construed as requiring Lender to resort to any Individual Property for the satisfaction of any of the Debt in any preference or priority to any other Individual Property, and Lender may seek satisfaction out of all of the Properties or any part thereof, in its absolute discretion in respect of the Debt. In addition, during the continuance of an Event of Default, Lender shall have the right from time to time to partially foreclose any or all of the Mortgages in any manner and for any amounts secured by the Mortgages then due and payable as determined by Lender in its sole discretion. During the continuance of any Event of Default pursuant to clause (i) of Section 8.1 or any other monetary Event of Default, Lender may foreclose any or all of the Mortgages to recover the applicable delinquent payments. If, pursuant to its rights set forth in Section 8.1(b), Lender elects to accelerate less than the entire Outstanding Loan Amount, during the continuance of an Event of Default, Lender may foreclose any or all of the Mortgages to recover so much of the principal balance of the Loan as Lender may accelerate and such other portions of the Debt as Lender may elect. Notwithstanding any partial foreclosures, the Properties shall remain subject to the Mortgages to secure payment of sums secured by the Mortgages and not previously recovered.
(c) During the continuance of an Event of Default, Lender shall have the right from time to time to sever the Note and the other Loan Documents into one or more separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such denominations as Lender shall determine in its sole discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder. Borrower shall execute and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and such other documents as Lender shall request in order to effect the severance described in the preceding sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to, during the continuance of an Event of Default, execute the Severed Loan Documents (Borrower ratifying all that its said attorney shall do by virtue thereof); provided, however, that Lender shall not make or execute any such Severed Loan Documents under such power until the expiration of three (3) days after written notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under the aforesaid power. Borrower shall be obligated to pay any costs or expenses incurred in connection with the preparation, execution, recording or filing of the Severed Loan Documents. The Severed Loan Documents shall not contain any representations, warranties or covenants not contained in the Loan
Documents, and any such representations and warranties contained in the Severed Loan Documents will be given by Borrower only as of the Closing Date.
(d) Any amounts recovered by Lender in connection with the exercise of its remedies under this Section 8.2 may be applied by Lender toward the payment of Debt in such order and priority as Lender shall determine in its sole and absolute discretion.
(e) As used in this Section 8.2, a “foreclosure” shall include, without limitation, any sale by power of sale.
Section 8.3 Remedies Cumulative; Waivers. The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the other Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued singularly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s sole discretion. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of one Default or Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.
Section 8.4 Simultaneous Foreclosure. Notwithstanding anything herein to the contrary, in no event shall Lender foreclose (whether judicially, by power of sale or otherwise) on or exercise any other rights or remedies with respect to any one or more of the PILOT Documents in any manner, or have any right or power to do any one or more of the foregoing, without also and simultaneously therewith foreclosing (whether judicially, by power of sale or otherwise) and exercising all other rights and remedies with respect to Borrower’s rights and interests under any PILOT Lease, so that the rights and interests under the PILOT Documents are not separated from the interest of the lessee or tenant under any PILOT Lease in connection with, due to or as a result of any such foreclosure or exercise of remedies by or for the benefit of Lender.
ARTICLE IX
SPECIAL PROVISIONS
Section 9.1 Securitization.
9.1.1 Sale of Notes and Securitization. (a) Each of Borrower and Lender acknowledge and agree that Lender may (i) sell or otherwise transfer the Loan as an entire loan or sell or otherwise transfer or syndicate, or sell participations in, all or any portion of the Loan and the Loan Documents (but for the avoidance of doubt, not bifurcate into one or more mezzanine loans), except that any such sale, transfer, syndication or participation (but not a Securitization, as defined below) shall only be to an Eligible Assignee or (ii) consummate one or more private or public securitizations of rated or unrated single-class or multi-class securities (the “Securities”) secured by or evidencing ownership interests in all or any portion of the Loan and the Loan Documents or a pool of assets that include the
Loan and the Loan Documents (the transactions referred to in clause (i) are each herein referred to as a “Syndication” and the transactions referred to in clause (ii) shall hereinafter be referred to as a “Securitization”) provided, (x) any Syndication of all or any portion of the Loan shall only be to an Eligible Assignee, (y) in no instance shall the restriction on the sale, assignment, syndication or participation of the Loan or any portion thereof to an Eligible Assignee apply to any Securitization or to any Securities issued in connection therewith and (z) Lender shall structure any Securitization with a REMIC Trust, unless the collateral for the Loan does not satisfy the applicable REMIC requirements, in which event (and which event only), Lender shall be permitted to the structure the Securitization with a Grantor Trust (and in the event Lender elects to structure the Securitization with a Grantor Trust in accordance with this Section 9.1.1, it shall promptly provide notice thereof to Borrower). Notwithstanding anything to the contrary in this Agreement, Lender shall have no right to create any mezzanine loan(s) without Borrower’s consent and in the event Lender obtains Borrower’s consent to create any mezzanine loan(s), Borrower shall have a consultation right with respect to each mezzanine lender. For the avoidance of doubt, under no circumstances shall Borrower be responsible for any costs or expenses incurred by any transferee of the Loan in connection with any Syndication, bifurcation or assignment of the Loan, whether such costs are incurred before or after the Closing.
(b) At the request of Lender prior to a Securitization of the entire Loan, and to the extent not already required to be provided by or on behalf of Borrower under this Agreement, Borrower shall use commercially reasonable efforts to (i) provide information in the possession or control of, or reasonably available to, Borrower or its Affiliates and not in the possession of Lender or which may be reasonably required by Lender or (ii) take other actions reasonably required by Lender, in each case, in order to (A) comply with disclosure laws applicable to any such Securitization, (B) satisfy inquiries from one or more Rating Agencies relating to any such Securitization, (C) satisfy requests relating to any Securitization or Syndication from actual or potential investors or other interested parties (including any loan subordinate to the Loan created or entered into in connection with any structural changes to the Loan contemplated by this Section 9.1) in any such Securitization or Syndication, or (D) satisfy the market standards to which Lender customarily adheres or which may be reasonably required by prospective investors and/or the Rating Agencies in connection with any such Securitization and/or Syndication. Provided that Lender shall not provide (without the prior written consent of Borrower) to any other Person information regarding the identity of the direct or indirect partners, members, shareholders or other owners of Sponsor (provided that Lender may provide to such Persons the organizational chart attached hereto as Schedule 4.1.1), Lender shall have the right to provide to prospective investors in any Securitization and the Rating Agencies (whether or not such Rating Agencies have been engaged by or on behalf of Lender or its designee to rate the Loan to assign a rating to the Loan or the Securities) any information in its possession (including, without limitation, financial statements) relating to Borrower, any SPE Constituent Entity, Manager, Guarantor, the Management Agreements, the Ground Leases, the Properties and any Tenant. Borrower acknowledges that certain information regarding the Loan and the parties thereto and the Properties may be included in Disclosure Documents. Borrower agrees that, subject to the terms of this Section 9.1, Borrower and its officers and representatives, shall, at Lender’s request, reasonably cooperate with Lender’s efforts to arrange for a Securitization in accordance with the
market standards to which Lender customarily adheres and/or which may be required by prospective investors and/or the Rating Agencies in connection with any such Securitization. If requested by Lender, Borrower shall deliver, in connection with any Securitization, certificates of the relevant Governmental Authorities in all relevant jurisdictions indicating the good standing and qualification of Borrower, each SPE Constituent Entity and Guarantor as of the date that is within sixty (60) days of such Securitization.
(c) In connection with a Rated Securitization, Lender shall cause to be delivered to Borrower the Disclosure Documents highlighting those sections which Lender proposes to include in the Covered Disclosure Information (which such highlighting shall be limited to the Covered Sections) for review and comment by Borrower not less than five (5) Business Days prior to the date upon which Borrower is otherwise required to confirm such Disclosure Documents. Borrower agrees to provide, in connection with the Securitization, an indemnification agreement (i) certifying that (A) Borrower has, at Lender’s request in connection with each Securitization, reviewed the following portions of the Disclosure Documents to the extent highlighted and provided to Borrower in accordance with this Section 9.1.1(c): (x) with respect to the offering circular, the sections titled “Executive Summary”, “Description of the Mortgaged Properties”, “Description of the Borrower, the Guarantor and Related Parties”, “Description of the Property Manager” (if the Manager is an Affiliate Manager), “Description of the Ground Leases”, “Description of the Management Agreement”, “Risk Factors” (to the extent of the highlighting and for such items that are otherwise covered in the other sections identified in this Section 9.1.1(c)(x)), Annex A, Annex G – Borrower Organizational Chart and Annex H – Borrower Names (or sections similarly titled or covering similar subject matters) (the “Covered Sections”) and (y) with respect to the term sheet (other than a pre-marketing term sheet), all highlighted sections provided to Borrower in accordance with this Section 9.1.1(c), solely to the extent the foregoing in (x) and (y) relate to Borrower, each SPE Constituent Entity, Sponsor, Guarantor, Manager (if the Manager is an Affiliate Manager) and the Properties (and, for the avoidance of doubt, excluding any sections relating to the Loan, Loan Documents or the terms of this Agreement) (the “Reviewed Materials”), excluding (I) any underwritten financial information (except to the extent such underwritten financial information is included in the Provided Information), (II) any information (including financial information or forecasted information) that is solely obtained from any third party report, including, without limitation, zoning reports, appraisals, property condition reports or environmental reports, (III) any electronic media (except those portions of Annex A that are not otherwise excluded pursuant to this clause (A)), (IV) any financial projections or reforecasts relating to the performance of the Properties and the other collateral for the Loan (except to the extent such projections or reforecasts are included in the Provided Information), (V) in the event Lender does not incorporate any comment provided in writing (including via e-mail) by or on behalf of Borrower (including comments provided by Borrower’s legal counsel) into the Reviewed Materials, any such portion of the Reviewed Materials to which such comment related and (VI) any statements and information relating to the cities and regions in which the Properties are located (other than the Property addresses), including local market information and local market performance data (collectively with the Covered Provided Information, the “Covered Disclosure Information”), and (B) the Covered Disclosure Information contained in such Reviewed
Materials do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in such Covered Disclosure Information, in the light of the circumstances under which they were made, not misleading (but only to the extent that such fact, if it was not omitted, would have constituted Covered Disclosure Information), (ii) jointly and severally indemnifying Lender and any Affiliate of Lender that has filed any registration statement relating to the Securitization or has acted as the sponsor or depositor in connection with the Securitization, any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in the Securitization, any other co‑underwriters, co‑placement agents or co‑initial purchasers of Securities issued in the Securitization, and each of their respective officers, directors, partners, employees, representatives, agents and Affiliates and each Person or entity who controls any such Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Indemnified Persons”), for any Losses to which any such Indemnified Person may become subject (whether or not arising from any third-party claim) insofar as the Losses arise out of or are based upon (A) any untrue statement or alleged untrue statement of any material fact contained in the Covered Disclosure Information or (B) arise out of or are based upon the omission or alleged omission to state in the Covered Disclosure Information in the Reviewed Materials a material fact required to be stated therein or necessary in order to make the statements in such Covered Disclosure Information, in light of the circumstances under which they were made, not misleading (but only to the extent that such fact, if it was not omitted, would have constituted Covered Disclosure Information), in each case, to the extent highlighted by Lender and provided to Borrower in accordance with this Section 9.1.1(c), and (iii) agreeing to reimburse each Indemnified Person for any reasonable legal or other expenses incurred by such Indemnified Person, as they are incurred, in connection with investigating or defending the Losses. This indemnity agreement will be in addition to any liability which Borrower may otherwise have. Moreover, the indemnification provided for in clauses (ii) and (iii) above shall be effective whether or not an indemnification agreement described in clause (i) above is provided. Notwithstanding the foregoing, the indemnification agreement shall not require, with respect to any financial projections or reforecasts that are included in the Covered Disclosure Information or in the Disclosure Documents (to the extent such projections or reforecasts are included in the Covered Disclosure Information), that the Borrower be liable for any Losses resulting from the actual results being different from such projections or reforecasts so long as (i) the Borrower had no reason to believe that such projections or reforecasts were materially inaccurate and (ii) the Borrower has disclosed to Lender all facts known to them and have not failed to disclose any fact known to them, in each case that could be reasonably expected to cause any such projections or reforecasts made herein to be materially misleading. Notwithstanding anything to the contrary contained herein, (A) the Borrower shall not be responsible for (x) any liabilities relating to untrue statements or omissions in any Covered Disclosure Information of which Borrower provided notice to Lender in writing, or (y) any liabilities relating to any information contained in the Covered Disclosure Information that Borrower is not first provided a reasonable opportunity to review (other than Covered Provided Information); and (B) Borrower shall not be liable for any misstatements or omissions in the Covered Disclosure Information resulting from (x) Lender’s failure to accurately transcribe written information by or on behalf of the Borrower to Lender unless Borrower was provided a
reasonable opportunity and time period within which to review such Covered Disclosure Information (or the applicable portions thereof) and failed to notify Lender of such misstatements or omissions or (y) Lender’s failure to incorporate into the Covered Disclosure Information any comment provided by Borrower prior to the date specified by the Lender in writing by which Borrower must deliver such comments.
(d) In connection with filings under the Exchange Act, in connection with a Rated Securitization, Borrower jointly and severally agrees to indemnify (i) the Indemnified Persons for Losses to which any such Indemnified Person may become subject insofar as the Losses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact in the Covered Disclosure Information in the Reviewed Materials, or the omission or alleged omission to state in such Covered Disclosure Information a material fact required to be stated therein or necessary in order to make the statements in such Covered Disclosure Information, in light of the circumstances under which they were made, not misleading (but only to the extent that such fact, if it was not omitted, would have constituted Covered Disclosure Information) and (ii) reimburse each Indemnified Person for any reasonable legal or other expenses incurred by such Indemnified Persons, as they are incurred, in connection with defending or investigating the Losses; provided, that, notwithstanding anything to the contrary contained herein, (A) the Borrower shall not be responsible for (x) any liabilities relating to untrue statements or omissions in any Covered Disclosure Information of which Borrower provided notice to Lender in writing prior to the applicable filings under the Exchange Act (for the purposes of this sentence, such notice shall be deemed to have been provided if sent via email with the bold subject “URGENT EXCHANGE ACT NOTICE” and receipt is confirmed), or (y) any liabilities relating to any filings under the Exchange Act (or the applicable provisions thereof) that Borrower is not first provided a reasonable opportunity to review; and (B) with respect to any filings under the Exchange Act, the Borrower shall not be liable for any misstatements or omissions in the applicable filings under the Exchange Act relating to such information resulting from (x) Lender’s failure to accurately transcribe written information by or on behalf of the Borrower to Lender unless Borrower was provided a reasonable opportunity and time period within which to review such filings under the Exchange Act of such materials (or the applicable portions thereof) and failed to notify Lender of such misstatements or omissions or (y) Lender’s failure to incorporate into the Covered Disclosure Information any comment provided by Borrower prior to the later of the filing or the date specified by the Lender in writing by which Borrower must deliver such comments.
(e) In connection with a Rated Securitization, promptly after receipt by an Indemnified Person of notice of any claim or the commencement of any action, the Indemnified Person shall, if a claim in respect thereof is to be made against any Borrower, notify such Borrower in writing of the claim or the commencement of that action; provided, however, that the failure to notify such Borrower shall not relieve it from any liability which it may have under the indemnification provisions of this Section 9.1 except to the extent that it has been materially prejudiced by such failure and, provided further that the failure to notify such Borrower shall not relieve it from any liability which it may have to an Indemnified Person otherwise than under the provisions of this Section 9.1. If any such claim or action shall be brought against an Indemnified Person, and it shall notify any
Borrower thereof, such Borrower shall be entitled to participate therein and, to the extent that it wishes, assume the defense thereof with counsel reasonably satisfactory to the Indemnified Person. After notice from any Borrower to the Indemnified Person of its election to assume the defense of such claim or action, such Borrower shall not be liable to the Indemnified Person for any legal or other expenses subsequently incurred by the Indemnified Person in connection with the defense thereof except as provided in the following sentence; provided, however, if the defendants in any such action include both the Borrower, on the one hand, and one or more Indemnified Persons on the other hand, and an Indemnified Person shall have reasonably concluded that there are any legal defenses available to it and/or other Indemnified Persons that are different or in addition to those available to the Borrower, the Indemnified Person or Persons shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified Person or Persons. The Indemnified Person shall instruct its counsel to maintain reasonably detailed billing records for fees and disbursements for which such Indemnified Person is seeking reimbursement hereunder and shall submit copies of such detailed billing records to substantiate that such counsel’s fees and disbursements are solely related to the defense of a claim for which the Borrower is required hereunder to indemnify such Indemnified Person. The Borrower shall not be liable for the expenses of more than one (1) such separate counsel unless such Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to another Indemnified Person.
(f) Without the prior consent of Lender (which consent shall not be unreasonably withheld), no Borrower shall settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such claim, action, suit or proceeding) unless such Borrower shall have given Lender reasonable prior notice thereof and shall have obtained an unconditional release of each Indemnified Person hereunder from all liability arising out of such claim, action, suit or proceedings. As long as Borrower has complied with its obligations to defend and indemnify hereunder, such Borrower shall not be liable for any settlement made by any Indemnified Person without the consent of such Borrower (which consent shall not be unreasonably withheld).
(g) Borrower agrees that if any indemnification or reimbursement sought pursuant to this Section 9.1 is finally judicially determined to be unavailable for any reason or is insufficient to hold any Indemnified Person harmless (with respect only to the Losses that are the subject of this Section 9.1), then Borrower, on the one hand, and such Indemnified Person, on the other hand, shall contribute to the Losses for which such indemnification or reimbursement is held unavailable or is insufficient: (x) in such proportion as is appropriate to reflect the relative benefits to Borrower, on the one hand, and such Indemnified Person, on the other hand, from the transactions to which such indemnification or reimbursement relates; or (y) if the allocation provided by clause (x) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (x) but also the relative faults of Borrower, on the one hand, and all Indemnified Persons, on the other hand, as well as any other equitable considerations. Notwithstanding the provisions of this Section 9.1, no party found
liable for a fraudulent misrepresentation shall be entitled to contribution from any other party who is not also found liable for such fraudulent misrepresentation. Notwithstanding the provisions of this Section 9.1, (A) no party found liable for a fraudulent misrepresentation shall be entitled to contribution from any other party who is not also found liable for such fraudulent misrepresentation, and (B) the Borrower agrees that in no event shall the amount to be contributed by the Indemnified Persons collectively pursuant to this paragraph exceed the amount of the fees (by purchase discount or otherwise) actually received by the Indemnified Persons in connection with the closing of the Loan and Securitization.
(h) Borrower agrees that the indemnification, contribution and reimbursement obligations set forth in this Section 9.1 shall apply whether or not any Indemnified Person is a formal party to any lawsuits, claims or other proceedings. Borrower further agrees that the Indemnified Persons are intended third party beneficiaries under this Section 9.1.
(i) The liabilities and obligations of the Indemnified Persons and Borrower under this Section 9.1 shall survive the termination of this Agreement and the satisfaction and discharge of the Debt.
(j) Notwithstanding anything to the contrary contained herein, Borrower shall have no obligation to act as depositor with respect to the Loan or an issuer or registrant with respect to the Securities issued in any Securitization.
(k) Borrower covenants and agrees that prior to a Securitization of the Loan, upon Lender’s request, Borrower shall (at Lender’s sole cost and expense, except for Borrower’s legal fees (except as set forth in Section 9.1.4 hereto)) reasonably cooperate with Lender in order to (i) bifurcate the Loan into one or more (A) participations or (B) components or other notes, such as B-Notes, or (ii) reallocate the outstanding principal amount of the Loan and interest rate of the Loan among one or more components or notes evidencing the Loan, including, without limitation, by delivering one or more new notes substantially in the form of the Note to replace the original note or modify the original note and other loan documents, as reasonably required, to reflect additional components of the Loan or allocate spread or principal among any new or existing components in Lender’s sole discretion, provided, (1) such new or modified notes, participations, loans and/or components, in the aggregate, shall equal the Outstanding Loan Amount immediately prior to the creation thereof, (2) such loans, participations, components or notes shall at all times have a weighted average spread equal to the Weighted Average Spread (except in connection with a Permitted Adjustment Event), (3) no amortization of principal of the Loan will be required, (4) such new or modified notes shall not change the stated maturity of the Loan(s), (5) such new or modified notes shall not change any other economic or other material terms of the Loan (including the ability of Borrower and/or Mezzanine Borrower to elect to have a voluntary prepayment applied to the Mezzanine Loan (or any component of the Mezzanine Loan) on a reverse sequential basis without a corresponding payment of the Loan in accordance with the terms and conditions hereof), (6) such new or modified notes shall not decrease any of the periods during with Borrower or Guarantor is permitted to perform its obligations under the Loan Documents, and (7) there shall be no modifications to the Loan Documents (including any decrease of rights or increase of
obligations of Borrower or Guarantor under the Loan Documents) except to reflect the creation of such new or modified notes and such new or modified notes shall be in substantially the same form of the Note, and (iii) reasonably cooperate with Lender to modify the Cash Management Agreement to reflect such new components; and further provided, that none of the foregoing actions shall have a material adverse effect on Borrower, Guarantor, Sponsor or affect any of the rights or obligations of Borrower, Guarantor or Sponsor under the Loan Documents in any materially adverse respect. Notwithstanding anything to the contrary contained herein, no reallocation or creation of new components pursuant to this Section 9.1.1(k), shall (x) reduce the Free Prepayment Amount, (y) reduce the percentage of the Loan permitted to be voluntarily prepaid without a Spread Maintenance Premium prior to the Open Prepayment Date or (z) result in a Spread Maintenance Premium that would not otherwise have been due as of the Closing Date based upon the definition of Spread Maintenance Premium.
(l) Intentionally Omitted.
(m) If requested by Lender, Borrower shall provide Lender, promptly upon request, with any financial statements, or financial, statistical or operating information, as Lender shall determine to be required pursuant to Regulation AB under the Securities Act of 1933, as amended (as applicable, the “Securities Act”), or the Securities Exchange Act of 1934, as amended (as applicable, the “Exchange Act”), or any amendment, modification or replacement thereto or other legal requirements in connection with any Disclosure Documents or any filing pursuant to the Exchange Act in connection with a Securitization.
(n) In connection with the securitization, syndication or participation of the Loan or sale of all or a portion of the Loan, or any Lender’s underwriting of the Loan, but without limiting any Lender’s ability to consummate any of the foregoing, Lender shall use commercially reasonable efforts to minimize site visits for each Individual Property for the benefit of any Lender, appraisers, rating agencies and any other third parties who request site visits in connection with the performance of due diligence or completion of third party reports in connection with the Loan, including, without limitation, using commercially reasonable efforts to coordinate one combined site visit for each Individual Property for all Lenders. Any site visits shall be subject to reasonable prior notice to Borrower and any applicable requirements or limitations (i) under the Leases applicable to each Individual Property and any Ground Lease, if applicable, and (ii) imposed by state, local or other governmental authorities or the current property manager in connection with any government-mandated restrictions.
(o) Lender shall promptly provide written notice to Borrower of any assignment, syndication or participation of the Loan or sale of all or any portion of the Loan but the failure to so notify shall not be a default by Lender hereunder.
9.1.2 Splitting the Loan; Uncross of Properties. (a) Without limitation to Section 9.1.1(b) hereof, at any time prior to a Securitization, Lender and Borrower agree that the Loan may be split and severed into additional loans (any such splitting and severing, a “Loan Splitting” and any such severed and split loan, a “Split Loan”). Upon the written request of Lender in connection with any Loan Splitting, Borrower shall deliver to Lender,
at Lender’s expense, (i) the Loan Split Documents, (ii) updates of the opinions of counsel delivered on the Closing Date with respect to due authorization, execution and non-consolidation, (iii) endorsements and/or updates to the Title Insurance Policies, and (iv) such other certificates, instruments and documentation as Lender may reasonably determine are necessary or appropriate to effect the Loan Splitting (the items described in subclauses (i) through (iv) collectively hereinafter shall be referred to as the “Splitting Documentation”), which Splitting Documentation shall be in form and substance reasonably acceptable to Lender (subject to Section 9.1.2(b) hereof) and Borrower.
(b) In furtherance of any Loan Splitting, Lender shall have the right to elect to (i) sever or divide the Note and the other Loan Documents in order to allocate the Split Loan to the applicable Individual Properties (the “Affected Properties”) and to evidence the same with a new note having an original principal amount equal to the New Note Amount (the “New Note”) and other necessary loan documents (such loan documents, collectively with the New Note and the Note and other Loan Documents, as severed and divided, the “Loan Split Documents”), (ii) segregate the applicable portion of each of the Reserve Accounts relating to the Affected Properties and (iii) take such additional action as is reasonably necessary to effect the Loan Splitting; provided, that (A) the Loan Split Documents, together with the Loan Documents secured by the remaining Individual Properties, shall not (1) modify (w) the initial weighted average interest rate payable under the Note (except in connection with a Permitted Adjustment Event), (x) the stated maturity of the Note, (y) the aggregate amortization of principal of the Note, or (z) any other material term of the Loan, as any of the foregoing existed prior to the Loan Splitting, (2) decrease the time periods during which Borrower or Guarantor is permitted to perform its obligations under the Loan Documents, or (3) otherwise modify any provisions of the Loan Documents or the Loan Split Documents other than to effectuate such Loan Splitting and as otherwise necessary to accurately reflect the Loan Split Documents, (B) the Loan Split Documents shall be substantially in the form of the applicable Loan Documents and (C) the Loan Split Documents shall not decrease the rights, or increase the obligations, of Borrower or Guarantor under the Loan Documents. The Loan Split Documents may, at Lender’s option, contain provisions that cross-default and/or cross-collateralize the Split Loan with the Loan and/or one or more other Split Loans. Upon a Loan Splitting, the principal amount of the Loan shall be reduced by an amount equal to the aggregate Allocated Loan Amounts of the Affected Properties (the “New Note Amount”), and the original principal amount of the Split Loan, as evidenced by the New Note, shall be equal to the New Note Amount.
(c) Upon the written request of Lender in connection with any Loan Splitting, Borrower shall deliver to Lender evidence that would be reasonably satisfactory to a prudent lender that the Special Purpose Entity nature and bankruptcy remoteness of Borrower following such Loan Splitting have not been adversely affected and are in accordance with the terms and provisions of this Agreement (which evidence may include a “bring-down” of the Insolvency Opinion or delivery of an Additional Insolvency Opinion, if the same would be reasonably required by a prudent lender in such circumstances).
(d) Notwithstanding the foregoing, in the event that Lender shall be required to repurchase any portion of the Loan under the operative documents for any Securitization (a “Repurchase”), Lender may effect a Loan Splitting in connection therewith pursuant to, and subject to the terms and provisions of, the foregoing subsections of this Section 9.1.2. In connection with any such Repurchase, Borrower shall reasonably cooperate with Lender to satisfy all requirements necessary in order to (A) following a Rated Securitization, obtain a Rating Agency Confirmation with respect to such Loan Splitting in connection with such Repurchase and (B) obtain an opinion of a nationally-recognized tax counsel that such Loan Splitting does not cause a tax to be imposed on a Securitization Vehicle and (i) if the Loan is included in a REMIC Trust, does not constitute a “significant modification” of the Loan under Treasury Regulations Section 1.860G-2(b)(2) nor cause a Securitization Vehicle to fail to qualify as a REMIC Trust under Treasury Regulations Section 1.860G-2(b)(2) or (ii) if the Loan is included in a Grantor Trust, does not constitute a “significant modification” of the Loan under Section 1001 of the Code, nor cause a Securitization Vehicle to fail to qualify as a Grantor Trust, as applicable. In the event that (and only in the event that) a Repurchase is required due to any misrepresentation made by Borrower in connection with the Disclosure Documents or indirectly due to a material breach of any representation made by Borrower in this Agreement or the other Loan Documents, Borrower shall pay all third-party expenses incurred in connection with the preparation and delivery of Splitting Documentation and the effectuation of the Repurchase and the related Loan Splitting, notwithstanding the provisions of Section 9.1.4 to the contrary, except that in no event shall Borrower be responsible for the costs or expenses (including any premiums) of any title endorsements, updates or policies obtained by or on behalf of Lender in connection with any Loan Splitting or Repurchase unless such endorsements, updates or policies are required due to the inability of any Individual Property or Properties to meet the customary standard for a Securitization of the Properties as a whole.
9.1.3 Intentionally Omitted.
9.1.4 Securitization/Syndication Costs. All reasonable out-of-pocket third-party costs and expenses incurred by Borrower and Guarantor in connection with Borrower’s and Guarantor’s compliance with requests made under this Section 9.1 (including any documentary stamp, intangible or other mortgage taxes and any fees and expenses of the Rating Agencies) incurred in connection with a Loan Splitting, Syndication of the Loan and/or Securitization shall be paid by Lender including any AUP costs incurred before or after the Closing Date; provided, that Borrower and Guarantor shall be responsible for the payment of all of Borrower’s and Guarantor’s respective attorneys’ fees and expenses with respect thereto. Notwithstanding the foregoing, from and after the Closing Date, Lender shall be responsible for attorneys’ fees and expenses incurred by Borrower and Guarantor in connection with a Loan Splitting or bifurcation of the Loan into one or more mezzanine loans or the creation of an A/B or senior/subordinate note structure. For the avoidance of doubt, Lender shall not have the right to bifurcate the Loan into one or more mezzanine loans without Borrower’s consent.
Section 9.2 Exculpation.
(a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the obligations contained in the Note, this Agreement, the Mortgages or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgages and the other Loan Documents, or in the Properties, the Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Properties, in the Rents and in any other collateral given to Lender pursuant to the Loan Documents, and Lender, by accepting the Note, this Agreement, the Mortgages and the other Loan Documents, agrees that it shall not sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under, or by reason of, or in connection with, the Note, this Agreement, the Mortgages or the other Loan Documents. The provisions of this Section shall not, however, (A) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (B) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under any of the Mortgages; (C) affect the validity or enforceability of the Guaranty or the Environmental Indemnity or any of the rights and remedies of Lender thereunder; (D) impair the right of Lender to obtain the appointment of a receiver; (E) impair the enforcement of the collateral assignment of leases and rents contained in the Mortgage; (F) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by each of the Mortgages or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against all of the Properties; or (G) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, to the extent of any Losses to the extent actually incurred by Lender and arising out of or in connection with the following:
(i) fraud or material and willful misrepresentation by Borrower or any SPE Constituent Entity or any of their respective Affiliates that are Controlled by Guarantor (each, a “Recourse Party”) in connection with the Loan;
(ii) willful misconduct of any Recourse Party which results in physical damage or waste to the Property (provided, there shall be no liability for any physical damage or waste to the extent caused by (x) a failure to pay expenses due to insufficient funds having been generated from the Property for Borrower’s business operations or (y) if reserve funds held by Lender (or Administrative Agent) and specifically allocated for such amount or Excess Cash Flow Reserve Funds permitted to be used for such purpose under this Agreement have not been made available to Borrower by Lender (or Administrative Agent) to pay such outstanding amounts and Borrower fails to pay such outstanding amounts);
(iii) other than in connection with Approved Alterations, including, without limitation, after a Casualty or Condemnation, the intentional and wrongful removal or disposal by or on behalf of any Recourse Party of any portion of any
Individual Property in violation of the Loan Documents during the continuance of an Event of Default;
(iv) the misappropriation or conversion by any Recourse Party of any of the following in violation of the Loan Documents (A) any Insurance Proceeds received by any Recourse Party with respect to the Property paid by reason of any Casualty or proceeds of the PLL Policy in connection with the Property, (B) any Awards or other amounts received by any Recourse Party with respect to the Property from a Governmental Authority in connection with a Condemnation, (C) any Rents received by any Recourse Party with respect to the Property during the continuance of an Event of Default, or (D) any Rents received by any Recourse Party with respect to the Property paid more than one (1) month in advance, provided that, in no event will it be deemed misappropriation by a Recourse Party to the extent any of the foregoing are applied to pay costs and expenses incurred in connection with the ownership, operation or management of the Properties in accordance with the terms of this Agreement or applied to pay other obligations required to be paid pursuant to the Loan Documents, or otherwise delivered to Lender;
(v) a material breach by Borrower or any SPE Constituent Entity or material failure by Borrower or any SPE Constituent Entity to comply with the covenants set forth in Section 5.1.28(b) hereof (provided, however that (1) there shall be no liability hereunder (x) for trade payables or other operational Debt incurred in the ordinary course of business or as may otherwise be permitted in accordance with this Agreement or for the failure to pay such trade payables or operational debt as a result of insufficient funds having been generated from the Property or (y) if reserve funds held by Lender (or Administrative Agent) and specifically allocated for such amount or Excess Cash Flow Reserve Funds permitted to be used for such purpose under this Agreement have not been made available to Borrower by Lender (or Administrative Agent) to pay such outstanding amounts, and (2) the foregoing shall not require Borrower’s equityholders, Guarantor or Sponsor to make any additional capital contributions to Borrower);
(vi) except as permitted by the Loan Documents, if Borrower voluntarily encumbers any Individual Property by any Lien securing indebtedness for borrowed money (other than (i) a Permitted Encumbrance or (ii) a Lien arising out of indebtedness that was Permitted Debt when incurred but which subsequently became prohibited because of a failure to repay the same as required by this Agreement solely as the result of insufficient funds having been generated by the Property) without Lender’s prior written consent; or if Borrower, any SPE Constituent Entity, Guarantor or any of their respective Affiliates fail to obtain Lender’s prior written consent to any voluntary Transfer of title to an Individual Property (or any material portion thereof constituting real property) or any direct or indirect interest in Borrower in any case in which such consent is required to be obtained pursuant to Section 5.2.10 hereof, provided, however, that if such violation or breach arises solely from a failure to provide any required notice or information pursuant to the applicable provisions of the Loan Documents with
respect to a Transfer that is otherwise permitted in accordance with the terms of this Agreement (including, without limitation, a Permitted Transfer), there shall be no liability hereunder. For the avoidance of doubt, a Transfer resulting from the exercise of Lender’s rights under the Loan Documents, Mezzanine Lender’s rights under the Mezzanine Loan Documents, the consummation of any remedial or enforcement action by the Lender or the holder of the Mezzanine Loan of the collateral for the Loan or the Mezzanine Loan, including, without limitation, any foreclosure, power of sale, deed-in-lieu or assignment-in-lieu of foreclosure and the exercise of any rights of Lender under the Mortgages or a New Mezzanine Lender under any Pledge Agreement, including, without limitation, the appointment of a receiver, custodian, trustee or examiner by Lender or a New Mezzanine Lender, any right to vote any pledged securities or any right to replace officers and directors of any Person (collectively, a “Foreclosure”), shall not be a Transfer in violation of Section 5.2.10 hereof;
(vii) subject to a cap equal to the PLL Policy Limit, to the extent that Borrower obtains PLL Policies that do not run through the Required PLL Period and Borrower fails to renew, replace or extend such PLL Policy through the Required PLL Period as required under Section 6.1(a)(x), any liability pursuant to Section 4 (other than Section 4(a)(l)) of the Environmental Indemnity) that first arises after the expiration of such PLL Policy and that would have otherwise been covered by the PLL Policy had it been renewed, replaced or extended through the Required PLL Period, except, in each case, to the extent such loss is caused by or results from the gross negligence or willful misconduct of the Lender;
(viii) any voluntary termination of a Ground Lease by Borrower, or any voluntary material modification or voluntary material amendment by Borrower of the terms or provisions of a Ground Lease, in each case, in violation of the Loan Documents and without Lender’s prior written consent, provided that any liability arising under this clause (viii) shall be no greater than the Allocated Loan Amount for the applicable Ground Leased Property.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt secured by the Mortgages or to require that all collateral shall continue to secure all of the Debt owing to Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower in the event of: (i) Borrower or any SPE Constituent Entity filing a voluntary petition under the Bankruptcy Code (other than at the request or direction of Lender); (ii) the filing by any Person (other than Lender) of an involuntary petition against Borrower or any SPE Constituent Entity under the Bankruptcy Code in which any Recourse Party affirmatively colludes in writing with the petitioning Person (other than Lender) filing such involuntary petition against Borrower or any SPE Constituent Entity; (iii) any Recourse Party filing an answer consenting to or otherwise joining in any involuntary petition filed against Borrower or any SPE Constituent Entity, by any other Person under the Bankruptcy Code (other than Lender); or (iv) any Recourse Party consenting in writing to or joining in
an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any SPE Constituent Entity, any Individual Property (or any portion thereof) other than with the prior written consent of Lender; provided, that with respect to the foregoing clauses (iii) and (iv), there shall be no liability for (x) failing to file an objection to any such filing or (y) providing a response in any such proceeding if such response is required by applicable law, rule or court order.
Section 9.3 Matters Concerning Manager. If (a) an Event of Default occurs and is continuing or (b) a Bankruptcy Action with respect to Manager has occurred and is continuing (and Borrower has not otherwise replaced the Manager), then, in the case of any of the foregoing, Borrower shall, at the request of Lender (such request being made no less than thirty (30) days in advance if there is an Event of Default continuing), terminate the Management Agreement and replace the Manager with a Qualified Manager (other than the Existing Manager that is subject to the Bankruptcy Action or any Person that is under common Control with the Existing Manager that is subject to the Bankruptcy Action) pursuant to a Replacement Management Agreement, it being understood and agreed that the base management fee for such Qualified Manager shall not exceed then-prevailing market rates (and in no event shall such base management fee exceed, with respect to each Individual Property, the greater of (x) three and one-half percent (3.5%) of the Gross Income from Operations attributable to such Individual Property to which such Replacement Management Agreement relates, or (y) the Individual Management Fee Cap).
Section 9.4 Servicer. At the option of Lender, the Loan may be serviced by a master servicer, primary servicer, special servicer and/or trustee (any such master servicer, primary servicer, special servicer, and trustee, together with its agents, nominees or designees, are collectively referred to as “Servicer”) selected by Lender after consultation with Borrower with respect to the initial master servicer and initial special servicer, subject to the last sentence of this Section 9.4, and Lender may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to Servicer pursuant to a pooling and servicing agreement, trust and servicing agreement, servicing agreement, special servicing agreement or other agreement providing for the servicing of one or more mortgage loans (collectively, the “Servicing Agreement”) between Lender and Servicer. Prior to the execution of any Servicing Agreement, Lender shall provide Borrower with a copy of such proposed Servicing Agreement for Borrower’s review; provided that Borrower’s approval shall not be required in connection with Lender’s entry into any such Servicing Agreement. Borrower shall not be responsible for any cost or expenses relating to the Servicing Agreement or the services provided by Servicer thereunder, including, without limitation, any set-up fees or other initial costs, the regular monthly master servicing fee or trustee fee due to Servicer under the Servicing Agreement or any other fees or expenses required to be borne by, and not reimbursable to, Servicer, provided that, notwithstanding the foregoing, Borrower shall promptly reimburse Lender on demand for (a) interest payable on advances made by Servicer with respect to delinquent debt service payments (to the extent charges pursuant to Section 2.3.4 and interest at the Default Rate actually paid by Borrower in respect of such payments are insufficient to pay the same) or expenses paid by Servicer in curing any Event of Default hereunder and which are provided for under the Servicing Agreement or actual, out-of-pocket expenses paid by Servicer in respect of the protection and preservation of the Properties (including, without limitation, payments of Taxes and Insurance Premiums), (b) following a Rated Securitization, the following costs and expenses payable by Lender to Servicer as a result of the Loan becoming specially serviced (to the extent charges pursuant to Section 2.3.4 and interest at
the Default Rate actually paid by Borrower in respect of such payments are insufficient to pay the same): (i) any liquidation fees that are due and payable to Servicer under the Servicing Agreement in connection with the exercise of any or all remedies permitted under this Agreement, provided, that, in no instance shall such liquidation fees exceed 0.25% of liquidation proceeds, (ii) any workout fees and special servicing fees that are due and payable to Servicer under the Servicing Agreement, which fees may be due and payable under the Servicing Agreement on a periodic or continuing basis, provided, that, in no instance shall (1) the annual special servicing fees exceed 0.15% of the outstanding amount of the Loan per annum and (2) any work-out fees exceed 0.25% of each collection of interest and principal of the Loan, and (iii) during the continuance of an Event of Default, the costs of all property inspections and/or appraisals of the Properties (or any updates to any existing inspection or appraisal) that Servicer may be required to obtain (other than the cost of regular annual inspections required to be borne by Servicer under the Servicing Agreement), and (c) customary and reasonable servicing fees in connection with any special requests made by Borrower to Servicer during the term of the Loan, provided that servicing fees, excluding any reasonable out-of-pocket third party attorneys’ fees and expenses, in connection with the routine and customary lease consent request or other leasing matter shall not exceed $5,000.00 in the aggregate. Borrower hereby acknowledges that Wells Fargo Bank, National Association has been approved as the initial master servicer and KeyBank, National Association has been approved as the initial special servicer.
ARTICLE X
MISCELLANEOUS
Section 10.1 Survival. This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect so long as all or any of the Debt is outstanding and unpaid unless a longer period is expressly set forth herein or in the other Loan Documents. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the legal representatives, successors and assigns of such party. All covenants, promises and agreements in this Agreement, by or on behalf of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of Lender.
Section 10.2 Lender’s Discretion. Subject to Section 10.30, whenever pursuant to this Agreement, Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be in the sole discretion of Lender and shall be final and conclusive other than to the extent expressly set forth in this Agreement or the Loan Documents. Whenever this Agreement expressly provides that Lender is required to be reasonable in its determination of whether or not to consent to or approve a certain matter, such provisions shall also be deemed to require that Lender not unreasonably delay or condition such consent or approval.
Section 10.3 Governing Law. (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY
BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED (OTHER THAN WITH RESPECT TO THE CREATION, PERFECTION, PRIORITY, ENFORCEMENT AND FORECLOSURE OF THE SECURITY INTERESTS IN (I) THE LOCKBOX ACCOUNT, (II) THE CASH MANAGEMENT AGREEMENT, AND (III) THE CAP COLLATERAL (AS DEFINED IN THE INTEREST RATE PROTECTION AGREEMENT), WHICH, IN EACH CASE, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK), IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5‑1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER, BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:
c/o Blackstone Real Estate Advisors, L.P.
345 Park Avenue
New York, New York 10154
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 MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER 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 10.4 Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement, or of the Note, or of any other Loan Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances.
Section 10.5 Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under the Note or under any other Loan Document, or any other instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount.
Section 10.6 Notices.
(a) 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 (a) hand delivered, (b) sent by certified or registered United States mail, postage prepaid, return receipt requested, (c) sent by expedited prepaid
delivery service, either commercial or United States Postal Service, with proof of attempted delivery or (d) sent by electronic mail (provided that, (x) in connection with any notice sent pursuant to clauses (a) through (c) above, a copy of such notice shall also be delivered by electronic mail as set forth in clause (d), and (y) if sent by electronic mail such delivery must be accompanied or followed by a delivery method specified in clauses (a) through (c) hereof, addressed as follows (or at such other address and Person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section 10.6)):
If to Lender:
Wells Fargo Bank, National Association
401 S. Tryon Street, 8th Floor
Charlotte, North Carolina 28202
Attention: Wells Fargo Commercial Mortgage Servicing
Facsimile No.: [***]
JPMorgan Chase Bank, National Association
383 Madison Avenue
New York, New York 10179
Attention: Simon B. Bruce
JPMorgan Chase Bank, National Association
SPG Middle Office/CIB
383 Madison Avenue, 8th Floor
New York, New York 10179-0001
Attention: Gisella Leonardis
Goldman Sachs Bank USA
2001 Ross Avenue, 30th Floor
Dallas, Texas 75201
Attention: Mortgages Legal (REFG)
Email: [***]
Morgan Stanley Mortgage Capital Holdings LLC
1585 Broadway, 25th Floor
New York, New York 10036
Attention: John Maurer
and by email to: [***]
and by email to: [***]
Bank of America, N.A.
c/o Capital Markets Servicing Group
900 West Trade Street, Suite 650
Mail Code: NC1‑026‑06‑01
Charlotte, North Carolina 28255
Attention: Servicing Manager
Societe Generale Financial Corporation
245 Park Avenue
New York, New York 10167
Attention: COO – CM Loan Origination
Email: [***]
Societe Generale Financial Corporation
245 Park Avenue
New York, New York 10167
Attention: Legal Department
Email: [***]
Barclays Bank plc
745 7th Avenue
New York, New York 10019
Attention: Adam Scotto
German American Capital Corporation
1 Columbus Circle, 15th Floor
New York, New York 10019
Attention: Stephen Choe
Bank of Montreal
c/o BMO Capital Markets Corp.
151 West 42nd Street
New York, New York 10036
Attention: Michael Birajiclian
Email: [***]
Bank of Montreal
c/o BMO Capital Markets Corp.
151 West 42nd Street
New York, New York 10036
Attention: Legal Department
Email: [***]
with a copy to:
Cadwalader, Wickersham & Taft LLP
650 South Tryon Street
Charlotte, North Carolina 28202
Attention: Holly M. Chamberlain
Facsimile No.: [***]
If to Borrowers:
c/o Blackstone Real Estate Advisors, L.P.
345 Park Avenue
New York, New York 10154
Attention: Capital Markets Group
Email: [***]
With a copy to:
c/o Blackstone Real Estate Advisors, L.P.
345 Park Avenue
New York, New York 10154
Attention: General Counsel
Email: [***]
With a copy to:
Simpson Thacher & Bartlett, LLP
425 Lexington Avenue
New York, New York 10017
Attention: Whitney Salinas
Email: [***]
A notice shall be deemed to have been given: (i) in the case of hand delivery, when delivered; (ii) in the case of registered or certified mail, when delivered or upon the first attempted delivery on a Business Day; (iii) in the case of expedited prepaid delivery service, when delivered or upon the first attempted delivery on a Business Day; and (iv) in the case of electronic mail, upon satisfaction of the foregoing clauses (i) through (iii), as applicable, with respect to such delivery method which accompanied such email.
(b) Borrower hereby appoints MCZ/Centrum Flamingo III, L.L.C. (the “Representative Borrower”) to serve as agent on behalf of all Individual Borrowers to receive any notices required to be delivered to any or all of the Individual Borrowers hereunder or under the other Loan Documents and to be the sole party authorized to deliver notices on behalf of the Individual Borrowers hereunder. Any notice delivered to the Representative Borrower shall be deemed to have been delivered to all Individual Borrowers, and any notice received from the Representative Borrower shall be deemed to have been received from all Individual Borrowers. The Individual Borrowers shall be entitled from time to time to appoint a replacement Representative Borrower by written notice delivered to Lender and signed by both the new Representative Borrower and the Representative Borrower being so replaced.
Section 10.7 Trial by Jury. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
Section 10.8 Headings. The Article and/or Section headings and the Table of Contents in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
Section 10.9 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
Section 10.10 Preferences. Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder in accordance with the Loan Documents. To the extent Borrower makes a payment or payments to Lender, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.
Section 10.11 Waiver of Notice. Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which this Agreement or the other Loan Documents do not specifically and expressly provide for the giving of notice by Lender to Borrower.
Section 10.12 Remedies of Borrower. In the event that a claim or adjudication is made that Lender or its agents have acted unreasonably or unreasonably delayed acting in any case where by law or under this Agreement or the other Loan Documents, Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, Borrower agrees that neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s sole remedies shall be limited to commencing an action seeking injunctive relief or declaratory judgment. The parties hereto agree that any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.
Section 10.13 Expenses; Indemnity.
(a) Other than as expressly provided in this Agreement or any other Loan Document, Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse,
Lender within five (5) Business Days following Borrower’s receipt of written notice to Borrower from Lender for all reasonable out-of-pocket costs and expenses (including reasonable actually incurred attorneys’ fees, disbursements and expenses) actually incurred by Lender (provided that, other than as expressly provided for herein, such costs and expenses shall not include any fee charged by Servicer or any special servicer in connection therewith) in connection with (i) the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower required under this Agreement or the other Loan Documents with respect to the Properties; (ii) Borrower’s ongoing performance of and compliance with Borrower’s respective agreements and covenants contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date, including, without limitation, confirming compliance with environmental and insurance requirements; (iii) Lender’s ongoing performance and compliance with all agreements and conditions contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date; (iv) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any other documents or matters requested by Borrower or Lender; (v) securing Borrower’s compliance with any requests made pursuant to the provisions of this Agreement; (vi) the filing and recording fees and expenses, the premiums and other costs and expenses associated with the Title Insurance Policy and reasonable fees and expenses of counsel for providing to Lender all required legal opinions, and other similar expenses incurred in creating and perfecting the Liens in favor of Lender pursuant to this Agreement and the other Loan Documents; (vii) enforcing or preserving any rights, either in response to third-party claims or in prosecuting or defending any action or proceeding or other litigation, in each case against, under or affecting Borrower, this Agreement, the other Loan Documents, the Properties or any other security given for the Loan; and (viii) subject to Section 9.4, enforcing any obligations of or collecting any payments due from Borrower or Guarantor under this Agreement, the other Loan Documents or with respect to the Properties (including, without limitation, any fees incurred by a Servicer that is a master servicer in connection with the transfer of the Loan to a Servicer that is a special servicer prior to or following a Default or an Event of Default) or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work‑out” or of any insolvency or bankruptcy proceedings; provided, however, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender or any Indemnified Party; provided, further, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of any Lender requests with respect to the Loan Agreement. During the continuance of an Event of Default, any cost and expenses due and payable to Lender may be paid from any amounts in the Lockbox Account or the Cash Management Account, as applicable. Notwithstanding anything to the contrary contained herein or in the Loan Documents, in connection with the closing of the Loan, Borrower shall not be liable on the Closing Date or thereafter for (i) the AUP, (ii) third party underwriting costs of any Lender (other than those incurred by Wells), (iii) costs associated with consultants reviewing third party reports (including, but not limited to,
Phase One environmental reports, property condition reports, seismic reports or appraisals) for any Lender, except for those expenses incurred by Wells, and (iv) costs associated with entity searches ordered by or on behalf of any Lender (other than those ordered by or on behalf of Wells).
(b) Borrower shall indemnify, defend and hold harmless the Indemnified Parties from and against any and all other Losses that may be imposed on, incurred by, or asserted against any Indemnified Party in any manner (whether or not arising from a third-party claim) relating to or arising out of (i) any breach by Borrower of its obligations under, or any material misrepresentation by Borrower contained in, this Agreement or the other Loan Documents (including, without limitation, any material misstatement or omission in any report, certificate, financial statement or other instrument, agreement or document or other materials or information furnished by or on behalf of Borrower pursuant to this Agreement or any other Loan Document), or (ii) the use or intended use of the proceeds of the Loan (collectively, the “Indemnified Liabilities”); provided, however, that Borrower shall not have any obligation to any Indemnified Party hereunder to the extent that such Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or willful misconduct of such Indemnified Party. To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or public policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by the Indemnified Parties. Paragraph (b) of this Section shall not apply with respect to Section 2.9 Taxes other than any Section 2.9 Taxes that represent losses, claims, damages, etc. arising from any non-Section 2.9 Tax claim.
(c) Other than as provided in Section 9.1.4 and Section 9.4, Borrower covenants and agrees to pay for or, if Borrower fails to pay, to reimburse Lender for, any fees and expenses incurred by any Rating Agency in connection with any Rating Agency review of the Loan, the Loan Documents or any transaction contemplated thereby or any consent, approval, waiver or confirmation obtained from such Rating Agency pursuant to the terms and conditions of this Agreement or any other Loan Document, and Lender shall be entitled to require payment of such fees and expenses as a condition precedent to the obtaining of any such consent, approval, waiver or confirmation.
Section 10.14 Schedules Incorporated. The Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.
Section 10.15 Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to this Agreement, the Note and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.
Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries.
(a) Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to create a joint venture, partnership, tenancy‑in‑common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in the Properties other than that of mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for the benefit of Lender and Borrower and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower any right to insist upon or to enforce the performance or observance of any of the obligations contained herein or therein. All conditions to the obligations of Lender to make the Loan hereunder are imposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan in the absence of strict compliance with any or all thereof and no other Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable to do so.
Section 10.17 Publicity. All news releases, publicity or advertising by Borrower or its Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender or to any of its Affiliates shall be subject to the prior written approval of Lender in its sole discretion (but subject to the Deemed Approval Requirements); provided, this Section 10.17 shall not restrict Borrower or its Affiliates from disclosing any information relating to the foregoing in connection with any investor communication, statutory reporting requirements or other Legal Requirements applicable to Borrower or its Affiliates.
Section 10.18 Cross-Collateralization; Waiver of Marshalling of Assets. (a) Borrower acknowledges that Lender has made the Loan to Borrower upon the security of its collective interest in the Properties and in reliance upon the aggregate of the Properties taken together being of greater value as collateral security than the sum of each Individual Property taken separately. Subject to Section 9.1.2, Borrower agrees that the Mortgages are and will be cross-collateralized and cross-defaulted with each other so that (i) upon the occurrence of any Event of Default, an event of default shall be deemed to have occurred under each of the Mortgages regardless of whether the event constituting such Event of Default related to any particular Individual Property; (ii) each Mortgage shall constitute security for the Note as if a single blanket lien were placed on all of the Properties as security for the Note; and (iii) such cross-collateralization shall in no event be deemed to constitute a fraudulent conveyance.
(b) To the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s partners and others with interests in Borrower, and of the Properties, or to a sale in inverse order of alienation in the event of foreclosure of any Mortgage, and agrees not to assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order of
alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of the Properties for the collection of the Debt without any prior or different resort for collection or of the right of Lender to the payment of the Debt out of the net proceeds of the Properties in preference to every other claimant whatsoever. In addition, Borrower, for itself and its successors and assigns, waives in the event of foreclosure of any or all of the Mortgages, any equitable right otherwise available to Borrower which would require the separate sale of the Properties or require Lender to exhaust its remedies against any Individual Property or any combination of the Properties before proceeding against any other Individual Property or combination of Properties; and further in the event of such foreclosure Borrower does hereby expressly consent to and authorize, at the option of Lender, the foreclosure and sale either separately or together of any combination of the Properties.
Section 10.19 Waiver of Counterclaim. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents.
Section 10.20 Conflict; Construction of Documents; Reliance. In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies. Borrower acknowledges that Lender engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.
Section 10.21 Brokers and Financial Advisors. Borrower hereby represents that it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement. Borrower hereby agrees to indemnify, defend and hold Lender harmless from and against any and all Losses in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated herein. The provisions of this Section 10.21 shall survive the expiration and termination of this Agreement and the payment of the Debt.
Section 10.22 Prior Agreements; Notice to Borrower. Borrower is hereby notified that this Agreement and the other Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written, are superseded by the terms of this Agreement and the other Loan Documents. This Agreement and the other Loan Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties hereto or thereto.
Section 10.23 Joint and Several Liability. If Borrower consists of more than one (1) Person the obligations and liabilities of each Person comprising Borrower shall be joint and several. The parties hereto acknowledge that the defined term “Borrower” (as well as the defined term “Collective Group”) has been defined to collectively include each Borrower (and in the case of the Collective Group, defined to collectively include each Borrower and each SPE Constituent Entity). It is the intent of the parties hereto in determining whether there has occurred an event which (i) constitutes a Default or Event of Default or (ii) creates recourse obligations under Section 9.2 hereof, that any such event with respect to any Borrower (or, where applicable, with respect to any single member of the Collective Group) shall be deemed to be such a Default, Event of Default or event creating recourse obligations under Section 9.2 hereof, as applicable, with respect to every Borrower and that every Borrower need not have been involved with the event causing the same in order for such event to be deemed such a Default, Event of Default or event creating recourse obligations under Section 9.2 hereof, as applicable, with respect to every Borrower (and likewise, where applicable, that each member of the Collective Group need not have been involved with such event for the same to be deemed such a Default, Event of Default or event creating recourse obligations under Section 9.2 hereof, as applicable).
Section 10.24 Register. The initial Lender or the Servicer (or in the case of participants, the applicable Lender), as non-fiduciary agent of Borrower, shall maintain a record within the meaning of U.S. Treasury Regulation 5f.103-1(c) that identifies each owner (including successors, assignees and participants) of an interest in the Loan, including the name and address of the owner, and each owner’s rights to principal and stated interest (the “Register”) and shall record all transfers of an interest in the Loan, including each assignment and participation, in the Register. The initial Lender or Servicer (or in the case of participants, the applicable Lender) as a non-fiduciary agent of Borrower, shall approve transfers of interests in the Loan (including assignments and participations) and will update the Register to reflect the transfer. Notwithstanding anything in this Agreement to the contrary, the entries in the Register shall be conclusive absent manifest error, and the Borrower, the Lenders and the Servicer may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender (or participant) hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. No transfer is effective until the transferee (or participant) is reflected as such on the Register pursuant to this Section 10.24. The parties intend for the Loan to be in registered form for tax purposes and to the extent of any conflict with this Section 10.24, this Section 10.24 shall be construed in accordance with that intent.
Section 10.25 Certain Additional Rights of Lender (VCOC). Notwithstanding anything to the contrary contained in this Agreement, to the extent Lender or any Person who Controls Lender is a “venture capital operating company” within the meaning of 29 C.F.R. Section 2510.3-101, Lender shall have:
(a) upon not less than fifteen (15) Business Days’ prior written notice to Borrower, the right to request and to hold a meeting at mutually agreeable times, and not
more than four (4) times during any calendar year to consult with an officer of Borrower that is familiar with the financial condition of each Borrower and the operation of the Individual Properties and is otherwise reasonably acceptable to Lender regarding such significant business activities and business and financial developments of Borrower as are specified by Lender in writing in the request for such meeting; provided, however, that such consultations shall not include discussions of environmental compliance programs or disposal of hazardous substances and provided further that neither the Borrower nor its designated representative shall be under any obligation to follow or implement any advice or recommendations of the Lender. The rights of the Lender provided in this Agreement are expressly limited to consultation, and shall not include any other rights or obligations, including without limitation, any right or obligation to supervise or conduct any aspect of the Borrower’s business or operations; and
(b) the right, in accordance with the terms of Section 5.1.11(a) of this Agreement, to examine the books and records of Borrower at any reasonable times upon reasonable notice, provided that any such examination shall be conducted so as not to unreasonably interfere with the business of Borrower or any Tenants or other occupants of any Individual Property.
The rights described above in this Section 10.25 may be exercised by Lender on behalf of any Person which Controls Lender. The Lender and each such Person agrees to hold in confidence any confidential information provided to or learned by the Lender or the Person or its designated representative in connection with the rights under this Agreement; provided that nothing herein shall prevent any Lender from disclosing any such information (a) to any loan participant, provided that such participants use such information solely in connection with their ownership of their interest in the Loan, (b) subject to an agreement to comply with the provisions of this Section 10.25, to any prospective participant or transferee of an interest in the Loan, (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its Affiliates, (d) upon the request or demand of any Governmental Authority or as may otherwise be required pursuant to any Legal Requirement, (e) if requested or required to do so in connection with any litigation or similar proceeding, (f) that has been publicly disclosed, or (g) in connection with the exercise of any remedy hereunder or under any other Loan Document.
Section 10.26 Intentionally Omitted.
Section 10.27 Use of Borrower Provided Information. Lender agrees to (i) use all Provided Information solely for purposes of its ownership of its interest in the Loan and shall not use such information obtained in its capacity as lender in a manner to compete with Borrower in the business of the ownership and operation of properties similar to the Properties and (ii) keep confidential all Provided Information that is designated by Borrower or Borrower’s Affiliates as confidential; provided that nothing herein shall prevent any Lender from disclosing any such information (a) to any loan participant, provided that such participants use such information solely in connection with their ownership of their interest in the Loan, (b) subject to an agreement to comply with the provisions of this Section 10.27, to any prospective participant or transferee of an interest in the Loan, (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its Affiliates, (d) upon the request or demand of any Governmental Authority or as may otherwise be required pursuant to any Legal Requirement, (e)
if requested or required to do so in connection with any litigation or similar proceeding, (f) that has been publicly disclosed, or (g) in connection with the exercise of any remedy hereunder or under any other Loan Document.
Section 10.28 Borrower Affiliate Lender. Lender agrees that the Lender Documents to which it is a party shall not (a) prohibit or restrict Affiliates of Borrower from purchasing or otherwise acquiring and owning any direct or indirect interest in the Loan and/or any Mezzanine Loan (in such capacity, an “Affiliate Lender”), including, with respect to the Loan, any single or multi-class Securities in respect of any private or public securitization of the Loan or (b) create any additional conditions to any such acquisition or ownership, provided, however, that the Lender Documents may include restrictions on the exercise of the rights and remedies of Lender under the Loan and/or any Mezzanine Loan by such Affiliate Lender (but not the exercise of rights and remedies by any Lender that is (x) not a Borrower Restricted Party (as defined in the Lender Documents with respect to the Loan, any single or multi-class Securities in respect of any private of public securitization of the Loan) and (y) not a Broad Affiliate (as defined in the Lender Documents related to any Mezzanine Loan)) including, without limitation, (i) restrictions on any such Affiliate Lender having the right to, or exercising, directly or indirectly, any control, decision-making power, voting rights, notice and cure rights, or other rights that would otherwise benefit a holder by virtue of its ownership or control of any interest with respect to the Loan and/or any Mezzanine Loan, (ii) restrictions on any such Affiliate Lender’s approval and consent rights under any intercreditor agreement, (iii) restrictions on the making of protective advances and (iv) restrictions on such Affiliate Lender from making or bringing any claim, in its capacity as a holder of any direct or indirect interest in the Loan and/or any Mezzanine Loan, against Lender, any Mezzanine Lender or any agent of Lender and/or any Mezzanine Lender with respect to the duties and obligations of such Person in servicing the Loan and/or any Mezzanine Loan to a specified standard under the Lender Documents; provided further, (x) if an Affiliate Lender acquires an interest in the Loan and/or any Mezzanine Loan, such Affiliate Lender shall retain approval or consent rights under the Lender Documents or the Loan or any Mezzanine Loan, respectively, with respect to any action which would disproportionally and adversely affect the interests in the Loan and/or any Mezzanine Loan, as applicable, held by Affiliate Lenders in an economic manner which is (1) different than the effect of any such action on holders of interests in the Loan or any Mezzanine Loan, as applicable, of the same class or priority (if such holder is not an Affiliate Lender), or (2) more adverse than if such interests were held by a Person who/that is not an Affiliate Lender, and (y) notwithstanding anything to the contrary contained herein, the Lender Documents shall not restrict Affiliate Lenders that acquire an interest in the Loan and/or any Mezzanine Loan from (1) collecting any default interest, late payment charges or other fees and expenses in connection with the Loan or any Mezzanine Loan, as applicable, (2) contributing its pro rata share of any cure payment, protective advance or purchase price in the event that the unaffiliated holder(s) of the Loan or any Mezzanine Loan elect to exercise any cure rights, protective advance rights or purchase options, (3) being a party to or participating in any enforcement action commenced or consummated by the unaffiliated holder(s) of the Loan or any Mezzanine Loan, as applicable, (4) agreeing to or being party to any Loan modification that is initiated or consented to by the unaffiliated holder(s) of the Loan or any Mezzanine Loan, as applicable, (5) transferring all or any portion of its interest in the Loan (or any interest therein) or any Mezzanine Loan in accordance with the terms of the applicable Lender Documents or (6) accessing any electronic platform for distribution of material information (the rights of an Affiliate Lender pursuant to (x) and (y), the “Retained Affiliate Lender Rights”). Notwithstanding anything
to the contrary contained herein, (A) the Retained Affiliate Lender Rights shall not apply to any Servicing Agreement or similar document governing the rights of holders of Securities in a public or private Securitization of the Loan and (B) the rights and remedies of holders of any portion of the Loan that is (x) not a Borrower Restricted Party (as defined in the Lender Documents with respect to the Loan, any single or multi-class Securities in respect of any private or public securitization of the Loan) and (y) not a Broad Affiliate (as defined in the Lender Documents related to any Mezzanine Loan)) shall not be impaired or limited. In the event of any conflict between the Lender Documents and this Section 10.28, then the provisions of this Section 10.28 shall govern and control.
Section 10.29 TRS Transfer. At Borrower’s option, without Lender’s consent, Borrower may cause an Individual Property to be transferred to a newly formed, subsidiary of Sponsor (as applicable, a “New TRS Borrower”) provided that the following conditions are satisfied:
(a) No Event of Default shall have occurred and be continuing;
(b) The New TRS Borrower shall have organizational documents in a form reasonably approved by Lender and Borrower and New TRS Borrower shall otherwise comply with the provisions of Section 4.1.30 and Section 5.2.10 hereof;
(c) The New TRS Borrower shall execute and deliver such documents reasonably requested by Lender to evidence that the New TRS Borrower shall be bound to the Loan Documents as a Borrower thereunder;
(d) The Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender from Borrower’s counsel with respect to the New TRS Borrower, resolutions authorizing such New TRS Borrower to enter into the documents referenced in Section 10.29(c) and an enforceability and execution opinion covering the enforceability of such documents referenced in Section 10.29(c) in the same form and substance as the enforceability opinion delivered to Lender on the Closing Date;
(e) The New TRS Borrower shall have the same direct and indirect ownership interest as the Borrower; and
(f) Borrower shall reimburse Lender for any actual costs and expenses it reasonably incurs arising from the transactions contemplated by this Section (including, without limitation, reasonable actually incurred attorneys’ fees and expenses).
Section 10.30 Approvals and Consents. Notwithstanding anything to the contrary herein, Section 10.30(d) and Section 10.30(f) shall be of no further force and effect following the Securitization of the controlling Note and Lender acknowledges and agrees, and shall cause the Lender Documents and any Servicing Agreement to provide, that, following the initial Securitization of the Loan, other than in connection with any Major Decision (as defined in the Servicing Agreement and which definition shall be consistent with the definition of “Major Decision” contained in any offering circular approved by Borrower with respect to the initial Securitization of the Loan), any consent or approval required or permitted by this Agreement or in any Loan Document to be given by Lender which is an Administrative Agent Decision or an
Additional Administrative Agent Decision may be given or waived with the written consent of the master servicer and without the consultation, consent or approval of any special servicer (unless the Loan has been transferred to special servicing in accordance with such Lender Documents or Servicing Agreement). With respect to requests for waivers or consents from the Borrower, the controlling class representative shall only have consent and/or consultation rights with respect to the Major Decisions. For the avoidance of doubt, any consents and approvals arising under the Loan and the Loan Documents not expressly requiring the consent of Lender pursuant to Section 10.30(c) hereof shall require the consent of the Administrative Agent only.
(a) Administrative Agent Decisions. Notwithstanding anything to the contrary contained in this Agreement, but subject to the first sentence of this Section 10.30 and Section 10.30(c) hereof, any consent or approval required or permitted by this Agreement or in any Loan Document to be given by Lender with respect to (i) administrative functions with respect to the Loan, including all determinations relating to the distribution of funds, including, without limitation, the distribution of funds to Borrower from the Reserve Accounts held by Lender (subject to compliance with the terms and conditions set forth in Article VII hereof); (ii) all insurance matters including settlement of Casualty and Condemnation proceeds and determinations regarding restoration and release of proceeds pursuant to Section 6.4 hereof and any changes to insurance requirements that are not otherwise contemplated under the Loan Documents; (iii) confirmation (or determinations) of economic calculations under the Loan Documents (including the Debt Yield and Debt Service Coverage Ratio); (iv) Additional Administrative Agent Decisions; (v) property level consent and approvals (or deemed approvals) including approvals of easements, zoning matters, subordination non-disturbance agreements and reciprocal easement agreements, ground lease matters (other than matters which are governed by Section 10.30(c)(xiv) below), condominium matters, property managers and property management agreements (including Replacement Management Subordinations); (vi) budget approvals for any life safety or health matters during the continuance of an Event of Default; (vii) waiver of any non-monetary Event of Default under the Loan, (viii) consent and approvals (or deemed approvals) under Section 5.1.23 or with respect to any PILOT Documents or any Permitted PILOT Arrangement; (ix) review and confirmation of the satisfaction of the conditions to the release of any Release Parcel/Rights or any Immaterial Transfer/Release; (x) review and confirmation of any Replacement Guarantor pursuant to clause (3) of the definition thereof and review and confirmation of a Person’s satisfaction of the requirements set forth herein for a Replacement Guarantor or Qualified Public Company and review and confirmation of the qualifications of a Qualified Transferee that is not a Qualified Public Company (but, subject to Section 5.2.10(d)(i)(F), Section 5.2.10(d)(ii)(C) and Section 5.2.10(e)(x), the “know your customer” requirements of each Lender must be satisfied); (xi) the waiver or granting of any extensions with respect to deadlines set forth in the Loan Documents regarding financial reporting or Required Repairs; (xii) approvals of Extraordinary Expenses or other budget approvals during the continuance of a Cash Sweep Period (provided that so long as no Event of Default has occurred and is continuing, no approvals shall be required for non-budgeted expenditures relating to life safety or health matters); (xiii) Alterations other than Approved Alterations, for which Lender’s approval is required under Section 5.1.21(a); (xiv) termination of the Management Agreement or replacement of Manager with any Person pursuant to clause (c)(II) of the definition of Qualified Manager; (xv) consent to or waiver of any non-monetary
encumbrance of any Individual Property which is not permitted pursuant to the terms and conditions of the Loan Documents; and (xvi) leasing matters related to Leases for which Administrative Agent’s or Lender’s approval is required pursuant to Section 5.1.20 hereof and (xvii) approvals of the Approved Annual Budget during the continuance of a Cash Sweep Period, for which Lender’s approval is required under Section 5.1.11(b) hereof (collectively, the “Administrative Agent Decisions”) may be given or may be waived with the written consent of Administrative Agent only and without the consultation, consent or approval of any of the other Lenders or any Mezzanine Lender. At any time that Administrative Agent’s approval is required under this Section 10.30(a), provided no Event of Default is continuing, Administrative Agent’s approval shall be deemed granted if the Deemed Approval Requirements have been satisfied with respect thereto. Any consent or approval required or permitted by this Agreement or the other Loan Documents that is not (A) an Administrative Agent Decision pursuant to this Section 10.30(a) or (B) a Unanimous Decision pursuant to Section 10.30(c) (each such consent or approval, an “Additional Administrative Agent Decision”) may be given or waived with the written consent of the Administrative Agent, only and without consultation, consent or approval of any other Lenders or any Mezzanine Lender.
(b) Intentionally Omitted.
(c) Unanimous Decisions. Notwithstanding the foregoing, any consent or approval required or permitted by this Agreement or in any Loan Document to be given by Lender to (i) increase the commitment of any Lender; (ii) change the principal of, or Spread that has accrued or that will be charged on the Outstanding Loan Amount; (iii) reduce the amount of any fees payable to Lender in any material respect; (iv) postpone any date fixed for any payment of principal or, or interest on, the Loan (including, the Maturity Date) or for the payment of fees or any other obligations of Borrower or Guarantor; (v) [intentionally omitted]; (vi) amend the sections of the Loan Agreement governing waivers under and amendments to the Loan Documents; (vii) release any Guarantor of its obligations under the Loan Documents in any material respect except as permitted by the Loan Documents; (viii) consent to any Transfer that is prohibited by the Loan Documents without consent and which is not an Administrative Agent Decision or an Additional Administrative Agent Decision (it being agreed that with respect to any Transfer to a Qualified Public Company or Transfer to a Qualified Transferee, any determinations to be made under this Agreement relating to the satisfaction of the “Qualified Public Company” and/or “Qualified Transferee” requirements hereunder shall be governed by Section 10.30(a)); (ix) waive any monetary Event of Default; (x) decide not to accelerate the Loan during the continuance of an Event of Default; (xi) consent to or waiver of any further monetary encumbrance of the Property or pledge of the direct or indirect interest in Borrower, in each case, to the extent not otherwise expressly permitted by the Loan Documents or permitted with the approval of the Administrative Agent only pursuant to Section 10.30(a) hereof and the approval of the Administrative Agent has been obtained; (xii) enter into any agreement providing for the subordination of the Loan to any other interest which would constitute a Lien against the Property (provided, however, that approval of the Administrative Agent only (and not the unanimous approval of the applicable Lenders) shall be required for subordination of the Mortgage to a non-monetary encumbrance pursuant to Section 10.30(a) hereof); (xiii) amend this Section 10.30 or any
other co-lender provision in this Agreement or the other Loan Documents; or (xiv) consent to any voluntary termination or voluntary material modification of the Ground Lease which requires Lender’s consent under the Loan Documents (the “Unanimous Decisions”) may only be given or waived, with the written consent of Administrative Agent at the written direction of all Lenders.
(d) Replacement Administrative Agent. Prior to a Securitization of the controlling Note, there shall be an Administrative Agent for the Loan at all times when the Loan is held by more than one Lender, Wells or an affiliate thereof that owns a portion of the Loan shall be the Administrative Agent, provided that at any time (i) neither Wells nor any affiliate thereof owns a portion of the Loan, (ii) during the continuance of an Event of Default with respect to which Administrative Agent has provided written notice thereof to Borrower, (iii) Wells has been replaced as Administrative Agent in accordance with the Lender Documents or (iv) following a default by the Administrative Agent of its obligations under this Agreement or any Lender Documents, the Administrative Agent may resign or be replaced with a single Lender that is either then the sole Lender or is a Lender that (A) has otherwise been designated as the replacement Administrative Agent under the Lender Documents and (B) except in the case of clause (ii) above, has been approved by Borrower in its reasonable discretion. Upon the appointment of any successor Administrative Agent hereunder, such successor Administrative Agent shall succeed to and become the Administrative Agent hereunder and any further resignation or replacement of any successor Administrative Agent shall be subject to the terms and conditions of this Section 10.30(d). Notwithstanding the foregoing, Borrower acknowledges and agrees that if the Loan is sold by Wells such that the Loan is held by a single Lender, then automatically, and without any further action by Wells or such Lender, all references to Administrative Agent hereunder shall be deemed to refer to such single Lender that holds the Loan.
(e) Lenders. The Lender Documents shall, at all times, provide for the approval standards set forth in this Section 10.30 (the “Approval Standards”) and in the event of any conflict between any Lender Documents or any co-lender arrangement and this Section 10.30, then this Section 10.30 shall govern and control. Except as otherwise provided herein, at all times when the Loan is held by more than one Lender, Borrower shall have no obligation to recognize or deal directly with any Lender. Borrower may direct all notices, financial reporting, and requests for consent or approvals and any other relayed documentation or information to Administrative Agent and may conclusively rely upon the actions of Administrative Agent to bind the Lenders, notwithstanding that any particular action in question may, pursuant to this Agreement or any Lender Document, be subject to the consent or approval of some or all of the Lenders in accordance with this Section 10.30 in accordance with the Approval Standards. The Lenders, including Administrative Agent, and each of their affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with Borrower (subject to the terms hereof) or any affiliate of Borrower, or any Person who may do business with or own securities in Borrower or any affiliate of Borrower, all as if they were not serving in such capacities hereunder and without any duty to account therefor to each other.
(f) Non-Consenting Lenders. If any Lender declines to consent to any amendment, waiver or consent that shall have been requested in a writing by Borrower to Administrative Agent, which amendment, waiver or consent is a Unanimous Decision (a “Non-Consenting Lender”) and such amendment, waiver or consent is not approved (i.e., all other Lenders have consented to such amendment, waiver or consent and such consent is insufficient in accordance with this Agreement to approve such amendment, waiver or consent), then Borrower, upon three (3) Business Days’ written notice to Administrative Agent and such Non-Consenting Lender (the “Consent Request Date”) may, at its sole expense and effort require such Non-Consenting Lender to assign and delegate all of its interests, rights and obligations under this Agreement and the Loan Documents to an Eligible Assignee, or another lender identified by Borrower and reasonably approved by Administrative Agent that shall assume such obligations and such Non-Consenting Lender shall promptly execute and deliver an assignment agreement evidencing the same; provided that (i) as of such Consent Request Date, no Event of Default shall have occurred and be continuing other than an Event of Default which results solely from the subject matter of the amendment, waiver or consent that such Non-Consenting Lender disapproved, (ii) such Non-Consenting Lender shall have received from the assignee Lender or Borrower payment of an amount equal to the portion of the Outstanding Loan Amount owed to such Non-Consenting Lender as of the date such Non-Consenting Lender is replaced, together with accrued and unpaid interest thereon, and any other amounts due and payable to the Non-Consenting Lender hereunder and under the other Loan Documents in respect of its interest in the Loan had the Loan been repaid in full at such time, including Breakage Costs (but excluding any Spread Maintenance Premium), (iii) such assignment does not conflict with applicable law and (iv) such assignee Lender consents to the proposed amendment, waiver or consent on account of which Borrower shall have exercised its rights pursuant to this paragraph. A Non-Consenting Lender shall not be required to make any such assignment and delegation if prior thereto, such Non-Consenting Lender consents to the applicable amendment, waiver or consent. Each Non-Consenting Lender required to make such assignment shall promptly execute and deliver an assignment and acceptance with the applicable Replacement Lender. Such Replacement Lender shall thereafter be a “Lender” for all purposes hereunder.
(g) Each Lender hereby designates and appoints the Administrative Agent, as its respective agent with respect to each Lockbox Account, as applicable, and each Lender hereby authorizes the Administrative Agent to take any actions on its behalf under the provisions of the Lockbox Agreements. Each Lender hereby authorizes the Administrative Agent to execute, deliver and perform the Lockbox Agreements on its behalf, and the Administrative Agent acknowledges and agrees to take any such action on behalf of the Lender under such the Lockbox Agreements.
(h) Controlling Note. Lender acknowledges that nothing contained in any Lender Document or any other intercreditor or co-lender arrangement among Lender and/or Mezzanine Lender shall provide for more than one controlling Note at any one time.
Section 10.31 Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges
that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(i) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(ii) the effects of any Bail-In Action on any such liability, including, if applicable:
(A) a reduction in full or in part or cancellation of any such liability;
(B) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(C) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.
Section 10.32 Pre-Negotiation Agreement. Notwithstanding anything to the contrary contained in the Loan Documents or the Lender Documents, in connection with any request, modification or other negotiation relating to the Loan between Borrower and any Lender (or any agent thereof, including any Servicer, special servicer or controlling class representative), Lender acknowledges and agrees that any pre-negotiation agreement or similar agreement to the extent required by such Lender (or agent thereof, including any Servicer, special servicer or controlling class representative) or requested by Borrower shall be in the form attached here to as Exhibit I. Notwithstanding anything to the contrary contained in the Lender Documents, to the extent that a Mezzanine Lender (if any) or its affiliates, partners, members, officers, directors, employees, legal counsel, co-lenders, participants, agents (including administrative agents), servicers, special servicers, insurers, existing financing sources, investors, accountants, regulators, or financial or other professional advisors (including, without limitation, appraisers and brokers), rating agencies, trustees, depositors, certificate administrators, controlling class representatives, certificateholders, operating advisors and bondholders (collectively, “Related Parties”) discloses to Lender, or Lender’s Related Parties, any communications, discussions or negotiations relating to possible compromises, modifications, waivers, consents or deferrals of certain terms of the Loan Documents and/or the Mezzanine Loan Documents, but only to the extent such communications, discussions or negotiations are not otherwise specifically required to be disclosed to Lender pursuant to the requirements of the Loan Documents or Lender Documents (“Confidential Information”), such Confidential Information shall constitute settlement negotiations, and therefore, (i) may not be used for any other purpose (including, without limitation, proof of
admissions of liability or for other evidentiary purposes) and (ii) shall be inadmissible for all purposes and shall not be subject to discovery in any judicial or similar proceeding.
Section 10.33 Discounted Payoff. (a) Notwithstanding anything to the contrary contained in this Agreement or any Lender Documents and without any obligation on the part of Borrower, or any other Loan Party or any Mezzanine Borrower to make, or any Lender or any Mezzanine Lender to accept, a Discounted Payoff under this Agreement or any Mezzanine Loan Agreement, any Mezzanine Borrower and its Affiliates shall be permitted to make a Discounted Payoff of any Mezzanine Loan; provided that, no Event of Default is continuing (solely under the Loan and not any Mezzanine Loan) and, provided, further, that any Mezzanine Lender (or any individual co-lender or participant) receiving such Discounted Payoff has consented to such prepayment. Notwithstanding anything to the contrary contained in this Agreement or any Lender Documents, any prepayments made by any Mezzanine Borrower or its Affiliates in connection with a Discounted Payoff shall be applied solely to reduce such portion of any Mezzanine Loan held by any Mezzanine Lender or participant in any Mezzanine Loan by an amount equal to the Face Amount of such Discounted Payoff. For purposes of calculating the Debt Yield, any portion of any Mezzanine Loan deemed outstanding after giving effect to such Discounted Payoff shall be reduced by the Face Amount of any Mezzanine Loan retired in connection with such Discounted Payoff.
(b) Each of Borrower and the other Loan Parties acknowledges and agrees that any Discounted Payoff of any Mezzanine Loan shall in no event be characterized by Borrower or any other Loan Party as a purchase of an interest in any Mezzanine Loan.
(c) Lender acknowledges that nothing contained in any Lender Documents or any other intercreditor or co-lender or participation arrangements among the Lender and/or any Mezzanine Lender shall restrict Discounted Payoffs of all or any portion of any Mezzanine Loan (or any participation thereof) and shall permit Discounted Payoffs of any Mezzanine Loan (in whole or part) without requiring the consent of Lender or any Mezzanine Lender (or participants) and in the event of any conflict between such Lender Documents or other intercreditor, co-lender or participation arrangements and this Section 10.33, then this Section 10.33 shall govern and control.
(d) Following any Discounted Payoff, the then-existing Release Amount (as defined in any Mezzanine Loan) for each Individual Property with respect to any Mezzanine Loan shall be reduced by a percentage expressed as a fraction (x) the numerator of which is the Face Amount of any Mezzanine Loan that is being retired and (y) the denominator of which is the Face Amount of any Mezzanine Loan as of the date immediately prior to such Discounted Payoff.
Section 10.34 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument, and the words “executed,” “signed,” “signature,” and words of like import as used above and elsewhere in this Agreement or in any other certificate, agreement or document related to this transaction shall include, in addition to manually executed signatures, images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or
“jpg”) and other electronic signatures (including, without limitation, any electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.
| BORROWER: |
|
|
| MCZ/CENTRUM FLAMINGO II, L.L.C., |
| MCZ/CENTRUM FLAMINGO III, L.L.C., |
| NORTH PARK AVENUE, LLC, |
| RESERVE AT COCONUT POINT, LLC, |
| FLAMINGO SOUTH ACQUISITIONS, LLC, |
| MB FLORIDA INVESTORS, LLC, |
| FLAMINGO SOUTH INVESTORS, LLC, |
| SB CONDO INVESTMENTS, LLC, |
| MB CONDO INVESTMENTS, LLC, |
| 4701 WILLARD AVE., LLC, |
| AIR 159 FIRST STREET, LLC, |
| AIR 270 THIRD STREET, LLC, |
| AIR 50 ROGERS STREET, LLC, |
| AIR EASTPOINTE, LLC, |
| AIR FITZSIMONS 3A LESSEE, LLC, |
| AIR FITZSIMONS 3A LESSOR, LLC, |
| AIR LEAHY SQUARE APARTMENTS, LLC, |
| AIR WATERWAYS VILLAGE, LLC, |
| AIR/BLUFFS, L.L.C., |
| VILLAGES AT SUNNYBROOK, LLC, |
| each a Delaware limited liability company |
| | |
| By: | /s/ Brian Lin |
| Name:
| Brian Lin |
| Title:
| Managing Director and Vice President |
|
|
|
| AIR PROPERTIES FINANCE PARTNERSHIP, L.P., a Delaware limited partnership |
| | |
| By:
| AIR Properties Finance GP, LLC, a Delaware limited liability company, its general partner |
| | |
| Name:
| Brian Lin |
| Title:
| Managing Director and Vice President |
| LA LAKES LP, a Delaware limited partnership |
| | |
| By:
| LA Lakes GP LLC, a Delaware limited liability company, its general partner |
| | |
| Name: | Richard Reyes |
| Title: | Managing Director and Vice President |
| | | |
| | LINCOLN MARINERS ASSOCIATES LIMITED, a California limited partnership |
|
|
|
| By: | LAC Properties GP II LIMITED Partnership, a Delaware limited partnership, its OPERATING general partner |
|
|
|
| By: | LAC Properties QRS II LLC, a Delaware limited liability company, its general partner |
| |
| Name: | Richard Reyes |
| |
| Title: | Managing Director and Vice President |
| | | |
| | CCIP Sterling, L.P., a Delaware limited partnership |
| | | |
| | By: | CCIP Sterling GP L.L.C., a Delaware limited liability company, its general partner |
| | | |
| | Name: | Richard Reyes |
| Title: | Managing Director and Vice President |
| AIR PLEASANT STREET, LLC, |
| 2150 N BAYSHORE, LLC, |
| AIR MEZZO, LLC, |
| AIR NORTH ANDOVER, L.L.C., |
| AIR TREMONT, LLC, |
| FLAGLER VILLAGE OWNER, LLC, |
| LA HILLCRESTE APARTMENTS LLC, |
| each a Delaware limited liability company |
| |
| By:
| /s/ Brian Lin |
| Name:
| Brian Lin |
| Title:
| Managing Director and Vice President |
| AIR/BRANDYWINE, L.P., a Delaware limited partnership |
| | |
| By: | AIR Brandywine GP, LLC, a Delaware limited liability company, its general partner |
| | |
| |
| By: | /s/ Brian Lin |
|
| Name: | Brian Lin |
|
| Title: | Managing Director and Vice President |
| | |
| AIR SCOTCHOLLOW APARTMENTS, L.P., a Delaware limited partnership |
|
| |
| By: | AIR Scotchollow Apartments GP, LLC, a Delaware limited liability company, its general partner |
| | |
|
| By: | /s/ Brian Lin |
|
| Name:
| Brian Lin |
|
| Title: | Managing Director and Vice President |
| | AIR BEACH LLC, |
| | a Delaware limited liability company |
| | |
| | By: | /s/ Brian Lin |
| | Name:
| Brian Lin |
| | Title:
| Managing Director and Vice President |
| LENDER: |
|
|
| WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association |
|
|
| By: | /s/ John G. Nicol |
|
| Name: | John G. Nicol |
|
| Title: | Managing Director |
| MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability company |
|
|
| By: | /s/ Jane Lam |
|
| Name: | Jane Lam |
|
| Title: | Vice President |
| SOCIÉTÉ GÉNÉRALE FINANCIAL CORPORATION, a Delaware corporation |
|
|
| By: | /s/ Kevin Kelley |
|
| Name: | Kevin Kelley |
|
| Title: | Vice President |
| BANK OF MONTREAL, a Canadian Chartered Bank acting through its Chicago Branch |
|
|
| By: | /s/ Michael Birajiclian
|
|
| Name: | Michael Birajiclian |
|
| Title: | Authorized Signatory |
| JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of the United States of America |
|
|
| By: | /s/ Jessica Wong |
|
| Name: | Jessica Wong |
|
| Title: | Authorized Signatory |
| BARCLAYS CAPITAL REAL ESTATE INC., a Delaware corporation |
|
|
| By: | /s/ Adam Scotto |
|
| Name: | Adam Scotto |
|
| Title: | Authorized Signatory |
| GOLDMAN SACHS BANK USA, a New York State-Chartered Bank |
|
|
| By: | /s/ Siddharth Shrivastava |
|
| Name: | Siddharth Shrivastava |
|
| Title: | Authorized Person |
| BANK OF AMERICA, N.A., a national banking association |
|
|
| By:
| /s/ Steven Wasser |
|
| Name: | Steven Wasser |
|
| Title: | Managing Director |
| GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation |
|
|
| By: | /s/ Stephen H. Choe |
|
| Name: | Stephen H. Choe |
|
| Title: | Managing Director |
|
|
| By: | /s/ Peter Castro |
|
| Name: | Peter Castro |
|
| Title: | Director |
EXHIBIT A
Borrower
1. LA LAKES LP
2. AIR Leahy Square Apartments, LLC
3. AIR 159 FIRST STREET, LLC
4. AIR/BLUFFS, L.L.C.
5. MCZ/Centrum Flamingo III, L.L.C.
6. MCZ Centrum Flamingo II, L.L.C.
7. Flamingo South Acquisitions, LLC
8. MB Florida Investors, LLC
9. Flamingo South Investors, LLC
10. SB Condo Investments, LLC
11. MB Condo Investments, LLC
12. Lincoln Mariners Associates Limited
13. NORTH PARK AVENUE, LLC
14. AIR EASTPOINTE, LLC
15. AIR PROPERTIES FINANCE PARTNERSHIP, L.P.
16. AIR 50 Rogers Street, LLC
17. CCIP Sterling, L.P.
18. AIR FITZSIMONS 3A LESSEE, LLC
19. AIR FITZSIMONS 3A LESSOR, LLC
20. Reserve at Coconut Point, LLC
21. Villages at Sunnybrook LLC
22. AIR 270 THIRD STREET, LLC
23. AIR WATERWAYS VILLAGE, LLC
24. 4701 Willard Ave., LLC
25. AIR BEACH, LLC
26. AIR PLEASANT STREET, LLC
27. LA Hillcreste Apartments LLC
28. AIR SCOTCHOLLOW APARTMENTS, L.P.
29. AIR/BRANDYWINE, L.P.
30. AIR MEZZO, LLC
31. Flagler Village Owner, LLC
32. AIR NORTH ANDOVER, L.L.C.
33. AIR TREMONT, LLC
34. 2150 N Bayshore, LLC
