Loan No.: 50750
Servicing No.: 880802067
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NATIONSBANK, N.A.,
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LOAN AGREEMENT
dated as of February 27, 1998
WELLSFORD SONTERRA LLC,
as Borrower
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . 13
Section 1.3 Incorporation by Reference of Commitment. . . 13
ARTICLE II THE LOAN . . . . . . . . . . . . . . . . . . . . . 13
Section 2.1 Loan Terms. . . . . . . . . . . . . . . . . . 14
Section 2.2 Interest. . . . . . . . . . . . . . . . . . . 14
Section 2.3 Term. . . . . . . . . . . . . . . . . . . . . 14
Section 2.4 Payments. . . . . . . . . . . . . . . . . . . 14
ARTICLE III CONDITIONS PRECEDENT TO LOAN . . . . . . . . . . . 14
Section 3.1 Loan Documents. . . . . . . . . . . . . . . . 14
Section 3.2 Brokerage Commissions . . . . . . . . . . . . 14
Section 3.3 Title Evidence. . . . . . . . . . . . . . . . 14
Section 3.4 Survey. . . . . . . . . . . . . . . . . . . . 15
Section 3.5 Insurance . . . . . . . . . . . . . . . . . . 15
Section 3.6 Authority Documents . . . . . . . . . . . . . 15
Section 3.7 Financial Statements and
Operating Statements. . . . . . . . . . . . . 15
Section 3.8 Opinion . . . . . . . . . . . . . . . . . . . 15
Section 3.9 Compliance with Laws. . . . . . . . . . . . . 15
Section 3.10 Agreements. . . . . . . . . . . . . . . . . . 16
Section 3.11 Taxes . . . . . . . . . . . . . . . . . . . . 16
Section 3.12 Utilities . . . . . . . . . . . . . . . . . . 16
Section 3.13 Reserve Accounts. . . . . . . . . . . . . . . 16
Section 3.14 Engineering Report. . . . . . . . . . . . . . 16
Section 3.15 Certificate of Occupancy and Other Permits. . 16
Section 3.16 Environmental Assessment and O&M Program. . . 16
Section 3.17 Appraisal . . . . . . . . . . . . . . . . . . 16
Section 3.18 Equity. . . . . . . . . . . . . . . . . . . . 16
Section 3.19 Management Agreement. . . . . . . . . . . . . 16
Section 3.20 Special Purpose Entity. . . . . . . . . . . . 17
Section 3.21 Miscellaneous . . . . . . . . . . . . . . . . 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . 17
Section 4.1 Existence; Compliance with Laws . . . . . . . 17
Section 4.2 Equity Interests. . . . . . . . . . . . . . . 17
Section 4.3 Power; Authorization;
Enforceable Obligations . . . . . . . . . . . 17
Section 4.4 No Legal Bar. . . . . . . . . . . . . . . . . 18
Section 4.5 No Litigation . . . . . . . . . . . . . . . . 18
Section 4.6 No Default. . . . . . . . . . . . . . . . . . 18
Section 4.7 Solvency; Fraudulent Conveyance . . . . . . . 18
Section 4.8 Special Purpose Entity. . . . . . . . . . . . 19
Section 4.9 Taxes . . . . . . . . . . . . . . . . . . . . 19
Section 4.10 No Burdensome Restrictions. . . . . . . . . . 19
Section 4.11 Investment Company Act; Other Regulations . . 19
Section 4.12 Subsidiaries. . . . . . . . . . . . . . . . . 19
Section 4.13 Title to Premises . . . . . . . . . . . . . . 19
Section 4.14 Ownership of Personalty . . . . . . . . . . . 20
Section 4.15 Financial Statements. . . . . . . . . . . . . 20
Section 4.16 No Changes. . . . . . . . . . . . . . . . . . 20
Section 4.17 Accuracy of Information . . . . . . . . . . . 20
Section 4.18 Principal Place of Business . . . . . . . . . 21
Section 4.19 Taxpayer Identification Number. . . . . . . . 21
Section 4.20 Insurance . . . . . . . . . . . . . . . . . . 21
Section 4.21 Mechanic's Liens, etc . . . . . . . . . . . . 21
Section 4.22 No Violation. . . . . . . . . . . . . . . . . 21
Section 4.23 ERISA . . . . . . . . . . . . . . . . . . . . 21
Section 4.24 O&M Program . . . . . . . . . . . . . . . . . 22
ARTICLE V COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . 22
Section 5.1 Affirmative Covenants of the Borrower . . . . 22
Section 5.2 Negative Covenants of the Borrower. . . . . . 28
Section 5.3 Environmental Covenants . . . . . . . . . . . 30
Section 5.4 Recourse Covenants. . . . . . . . . . . . . . 32
Section 5.5 Insurance . . . . . . . . . . . . . . . . . . 32
ARTICLE VI RESERVE ACCOUNTS. . . . . . . . . . . . . . . . . . . 34
Section 6.1 Establishment of Reserve Accounts . . . . . . 34
Section 6.2 Initial Reserve Deposits. . . . . . . . . . . 34
Section 6.3 Monthly Reserve Deposits. . . . . . . . . . . 34
Section 6.4 Adjustments to Monthly Reserve Deposit to
the Replacement Reserve Account . . . . . . 35
Section 6.5 Permitted Investments, Earnings, Charges
and Annual Accounting . . . . . . . . . . . 35
Section 6.6 Assignment to the Lender of Reserve
Accounts and Rights and Claims. . . . . . . 36
Section 6.7 Application of Reserve Accounts Upon an
Event of Default. . . . . . . . . . . . . . 36
Section 6.8 Disbursements from Tax and Insurance
Reserve Account . . . . . . . . . . . . . . 37
Section 6.9 Disbursements from Repair Escrow Account
and Replacement Reserve Account . . . . . . 37
Section 6.10 Indemnification . . . . . . . . . . . . . . . 37
ARTICLE VII EVENTS OF DEFAULT; REMEDIES. . . . . . . . . . . . . 38
Section 7.1 Events of Default . . . . . . . . . . . . . . 38
Section 7.2 Remedies. . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII CASUALTY LOSSES; EMINENT DOMAIN . . . . . . . . . . 40
Section 8.1 Repairs and Casualty Losses . . . . . . . . . 40
Section 8.2 Eminent Domain. . . . . . . . . . . . . . . . 40
Section 8.3 Application of Insurance Proceeds and
Condemnation Awards . . . . . . . . . . . . 41
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . 42
Section 9.1 Remedies Cumulative; Waivers. . . . . . . . . 42
Section 9.2 Benefit . . . . . . . . . . . . . . . . . . . 43
Section 9.3 Assignment and Assumption . . . . . . . . . . 43
Section 9.4 Information . . . . . . . . . . . . . . . . . 44
Section 9.5 Nonrecourse Loan; Exceptions. . . . . . . . . 45
Section 9.6 Amendments. . . . . . . . . . . . . . . . . . 45
Section 9.7 Governing Law and Jurisdictions . . . . . . . 45
Section 9.8 Savings Clause. . . . . . . . . . . . . . . . 45
Section 9.9 Execution in Counterparts . . . . . . . . . . 45
Section 9.10 Notices . . . . . . . . . . . . . . . . . . . 45
Section 9.11 Right of Set-Off. . . . . . . . . . . . . . . 46
Section 9.12 Written Agreement . . . . . . . . . . . . . . 46
Section 9.13 Waiver of Jury Trials . . . . . . . . . . . . 46
EXHIBITS
EXHIBIT A Equity Interests
EXHIBIT B Immediate Repairs, Replacements and Reserve Amounts
EXHIBIT C Addresses for Notice
EXHIBIT D Program Rider
LOAN AGREEMENT
LOAN AGREEMENT, dated as of February 27, 1998 (together with all
exhibits, schedules, riders and addenda hereto, which are hereby
incorporated herein, the "Loan Agreement" or "Agreement"), by and between
WELLSFORD SONTERRA LLC, an Arizona limited liability company (the
"Borrower"), with its principal place of business at 1623 Blake Street,
Suite 270, Denver, Colorado 80202; and NATIONSBANK, N.A., a national
banking association, with its principal offices in Charlotte, North
Carolina (together with its successors and assigns, the "Lender").
RECITALS:
The Borrower has applied to the Lender for a loan in the original
principal amount of $16,400,000.00 (the "Loan") to be made by the Lender
pursuant to the terms hereof.
The Loan will be secured by, among other things, a first priority lien
on the Land, Improvements, Personalty and Rents and Profits.
The Lender is willing to make the Loan based on the terms and
conditions set forth in this Loan Agreement and subject to the execution
and delivery of each of the Loan Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Lender
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
As used in this Agreement, the other Loan Documents, or any
certificate or other document made or delivered pursuant hereto, the
capitalized terms used herein shall, unless otherwise defined herein or
therein, have the following meanings:
Additional Repair(s) or Replacement(s). Any repairs, replacements or
improvements (other than Immediate Repairs or Replacements) (i) which are
advisable to keep the Premises in good order and repair and in good
marketable condition, or to prevent deterioration of the Premises, or (ii)
for an Immediate Repair or Replacement to the extent such Immediate Repair
or Replacement exceeds 125% of the estimated cost of such Immediate Repair
or Replacement as set forth in Exhibit B hereto.
Affiliate(s). As to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" or "controlled" have meanings correlative to the foregoing.
Appraisal. An appraisal of the Premises prepared at the Borrower's
expense by a qualified appraiser designated by and satisfactory to the
Lender, in accordance with written instructions from the Lender, dated as
of a date acceptable to the Lender and otherwise satisfactory in form and
substance to the Lender.
Approved Insurer. An insurer previously approved by the Lender with
an A.M. Best Company, Inc. rating of A- or better, and which is authorized
to issue insurance in the State.
Assignment of Management Agreement. The Assignment and Subordination
of Management Agreement, dated as of even date herewith, executed by the
Borrower, the Lender and the property manager for the Premises.
Bankruptcy Event. As to any Person, the occurrence of any of the
following with respect to such Person: (i) a court or governmental agency
having jurisdiction over the Premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any
applicable bankruptcy, insolvency, reorganization, moratorium,
sequestration, liquidation, consolidation or other similar law now or
hereafter in effect, or appoint a receiver, liquidator, assignee,
custodian, conservator, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its property or order the winding up
or liquidation of its affairs; (ii) an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect is commenced against a Person and such petition remains unstayed and
in effect for a period of sixty (60) consecutive days; (iii) such Person
shall commence a voluntary case under any applicable bankruptcy, insolvency
or similar law or make any general assignment for the benefit of creditors;
(iv) such Person shall admit in writing its inability to pay its debts
generally as they become due (otherwise than on a purely temporary basis),
or (v) such Person shall take any action in furtherance of any of the
aforesaid purposes.
Business Day. Any day other than a Saturday, a Sunday, a legal
holiday in Charlotte, North Carolina, or a day on which banking
institutions located in Charlotte, North Carolina are authorized by law or
other governmental action to close.
Certification. As to any specified report, Financial Statement,
Operating Statement, Rent Roll or other document, a written certification
by a Responsible Officer of the Person providing such report, Financial
Statement, Operating Statement, Rent Roll or other document that such
report, Financial Statement, Operating Statement, Rent Roll or other
document, as at the date thereof, (i) contains all of the information and
statements required to be set forth therein, (ii) that such information and
statements are true and correct in all material respects, (iii) that there
is no untrue statement of a material fact required to be stated therein,
(iv) that there is no failure to state therein any information or fact that
is necessary to make the information or statements contained therein, in
light of the circumstances under which they are made, not misleading, and
(v) that there is no fact known to such Responsible Officer that materially
adversely affects any of the information or statements set forth therein.
Closing Date. The date set forth in the first paragraph of this Loan
Agreement.
Commitment. The Lender's commitment letter with respect to the Loan
as accepted by the Borrower in accordance with the terms thereof.
Default Condition. The occurrence or existence of an event or
condition which, upon the giving of notice or the passage of time, or both,
would constitute an Event of Default.
Eligible Account. An account that is either (i) maintained with a
depository institution whose commercial or finance paper or other similar
obligations are rated A-1 or better by Standard & Poor's or P-1 or better
by Moody's, (ii) an account or accounts maintained with a depository
institution with a minimum long-term unsecured debt rating of BBB- or
better by Standard & Poor's or Baa3 or better by Moody's, provided that the
deposits in such account or accounts are fully insured by the Federal
Deposit Insurance Corporation, (iii) a segregated trust account maintained
with the corporate trust department of an institution with capital and
surplus of not less than $50,000,000 and with a minimum long-term unsecured
debt rating of BBB- or better by Standard & Poor's or Baa3 or better by
Moody's, or (iv) an account otherwise acceptable to the Lender.
Engineering Report. An engineering report of the Premises from an
engineer approved by the Lender and dated as of a date acceptable to the
Lender, which report shall, among other things, (a) conform to all
requirements of the Lender and (b) certify that the Premises is in
compliance with all applicable requirements of the Americans with
Disabilities Act of 1990.
Environmental Assessment. A report (including all drafts thereof) of
an environmental assessment of the Premises of such scope (including but
not limited to the taking of soil borings and air and groundwater samples
and other above and below ground testing) as the Lender may request, by a
consulting firm acceptable to the Lender, which shall, among other things,
be dated as of a date acceptable to the Lender and conform to (i) the
current minimum standards for the American Society of Testing and
Materials, and (ii) the Lender's then current requirements.
Environmental Covenant(s). Each of the covenants, agreements and/or
indemnities set forth in Section 5.3 of this Loan Agreement.
Equity Interests. Any and all shares, interests, participations and
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person not a corporation
(including, without limitation, general and limited partnership interests
in a limited partnership), and any and all warrants and options to purchase
any of the foregoing.
ERISA. The Employee Retirement Income Security Act of 1974.
Event of Default. The occurrence of any event or condition specified
in Section 7.1 of this Loan Agreement.
Financial Statement. As to any indicated Person, for any specified
period, financial statements of such Person, including, at a minimum, a
current balance sheet, a current income and expense statement, a statement
showing contingent liabilities and any other supporting schedules or
documentation that the Lender may from time to time require, and, in the
case of the Borrower, a detailed cash flow statement for each property
and/or entity in which the Borrower has an interest, prepared in accordance
with Required Accounting Standards. The cash flow statements provided
shall include, as applicable, the property and entity name, location, size
(including the number of rooms with respect to hotels and the number of
licensed beds with respect to healthcare facilities), and the percentage of
ownership therein, its leasing and occupancy status, its Operating Income
(including the sources of Operating Income), its Operating Expenses, its
Net Operating Income, any loan balance currently outstanding, the amount
and beneficiary of any cash distributions, the amount invested in and/or
received from such property or entity; and detailed cash flow projections
for the next twelve (12) month period therefor. Each Financial Statement
shall include a Certification thereto.
Financing Statements. The UCC financing statements filed in order to
perfect the Lender's lien on certain personal property and fixtures as more
particularly described therein. The Financing Statements shall be on forms
approved for filing in the State and local filing offices of the State in
which any filings are necessary or, in the Lender's opinion desirable, to
be made to perfect the interests of the Lender granted under the Loan
Documents, together with the search results for such filing offices,
including copies of all reported financing statements.
GAAP. Generally accepted accounting principles, as from time-to-time
in effect in the United States of America, consistently applied.
Governmental Action. The issuance or threatened issuance of any
claim, citation, notice of any pending or threatened suit, proceeding,
order or governmental inquiry or opinion involving the Premises that
alleges the violation of any Requirement of Law or Hazardous Materials Law.
Governmental Authorities. Any governmental (including health and
environmental) agency, office, officer or official whose consent or
approval is required as a prerequisite to the commencement of the
construction, renovation or expansion of the Improvements or to the
operation and occupancy of the Improvements or the Premises or to the
performance of any act or obligation or the observance of any agreement,
provision or condition of whatsoever nature herein contained.
Ground Lease. Each ground lease, if any, pursuant to which the
Borrower acquires an interest as ground lessee of any portion of the
Premises.
Hazardous Materials. Includes petroleum and petroleum products,
flammable explosives, radioactive materials (excluding radioactive
materials in smoke detectors), polychlorinated biphenyls, lead, asbestos or
asbestos containing materials in any form that is or could become friable,
hazardous waste, toxic or hazardous substances or other related materials
whether in the form of a chemical, element, compound, solution, mixture or
otherwise including, but not limited to, those materials defined as
"hazardous substances," "extremely hazardous substances," "hazardous
chemicals," "hazardous materials," "toxic substances," "solid waste,"
"toxic chemicals," "air pollutants," "toxic pollutants," "hazardous
wastes," "extremely hazardous waste," or "restricted hazardous waste" by
Hazardous Materials Law or regulated by Hazardous Materials Law in any
manner whatsoever, and all other "Hazardous Materials", if any, identified
in the Program Rider.
Hazardous Materials Law. All federal, state, and local laws,
ordinances and regulations and standards, rules, policies and other
governmental requirements and any court judgments applicable to the
Borrower or to the Premises relating to industrial hygiene or to
environmental or unsafe conditions or to human health including, but not
limited to, those relating to the generation, manufacture, storage,
handling, transportation, disposal, release, emission or discharge of
Hazardous Materials, those in connection with the construction, fuel
supply, power generation and transmission, waste disposal or any other
operations or processes relating to the Premises, and those relating to the
atmosphere, soil, surface and ground water, wetlands, stream sediments and
vegetation on, under, in or about the Premises. "Hazardous Materials Law"
also shall include, but not be limited to, the following laws, as amended
as set forth herein and as subsequently amended: (1) the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986, 42 USCA 9601
et seq.; (2) the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, as amended by the Hazardous and
Solid Waste Amendments of 1984, 42 USCA 6901 et seq.; (3) the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USCA
1251 et seq.; (4) the Toxic Substances Control Act, 15 USCA 2601 et seq.;
(5) the Emergency Planning and Community Right-to-Know Act of 1986, 42 USCA
11001 et seq.; (6) the Clean Air Act, as amended by the Clean Air Act
Amendments, 42 USCA 7401 et seq.; (7) the National Environmental Policy Act
of 1969, 42 USCA 4321 et seq.; (8) the River and Harbor Act of 1899, 33
USCA 401 et seq.; (9) the Endangered Species Act of 1973, 16 USCA 1531 et
seq.; (10) the Occupational Safety and Health Act of 1970, 29 USCA 651 et
seq.; (11) the Safe Drinking Water Act, 42 USCA 300(f) et seq.; and (12)
the Hazardous Materials Transportation Act, 49 USCA 1801 et seq., and all
regulations from time to time adopted in respect to the foregoing laws.
Immediate Repair(s). Those repairs, replacements and improvements
listed as "Immediate Repairs" on Exhibit B hereto.
Improvements. As defined in the Security Instrument.
Initial Reserve Deposit(s). Any amount required to be deposited into
any Reserve Account on or before the Closing Date in accordance with the
terms of this Loan Agreement, including without limitation, any initial
deposit to any Reserve Account identified on Exhibit B hereto or in the
Program Rider.
Insurance. All of the following insurance coverages:
(i) Property Insurance. Insurance with respect to the
Improvements against any peril included within the classification "All
Risks of Physical Loss" with extended coverage in amounts at all times
sufficient to prevent it from becoming a co-insurer within the terms
of the applicable policies, but in any event such insurance shall be
maintained in an amount equal to the full insurable value of the
Premises and with deductibles acceptable to the Lender. The term
"full insurable value" as used herein shall mean the actual
replacement cost of the Premises (without taking into account any
depreciation, and exclusive of excavations, footings and foundations,
landscaping and paving). The policy must include an agreed value
clause, which must be updated annually.
(ii) Liability Insurance. Comprehensive general liability
insurance, including bodily injury, death and property damage
liability, dram shop coverage and umbrella liability insurance against
any and all claims, including all legal liability to the extent
insurable imposed upon the Lender and all court costs and attorneys'
fees and expenses, arising out of or connected with the possession,
use, leasing, operation, maintenance or condition of the Premises in
such amounts as the Lender may require but in no event for a combined
single limit of less than a $1,000,000.00 minimum (or a $3,000,000.00
minimum if the Premises contains one or more elevators) with a
$2,000,000.00 minimum (or a $6,000,000.00 minimum if the Premises
contains one or more elevators) general aggregate limit. In the event
that any payment of proceeds is made under any umbrella liability
insurance policy, the Borrower shall immediately purchase additional
liability insurance coverage so that at all times there shall be no
less than a $1,000,000.00 minimum (or a $3,000,000.00 minimum if the
Premises contains one or more elevators) of liability insurance
coverage per occurrence with a $2,000,000.00 minimum (or a
$6,000,000.00 minimum if the Premises contains one or more elevators)
general aggregate limit.
(iii) Workers' Compensation Insurance. Statutory workers'
compensation insurance (to the extent the risks to be covered thereby
are not already covered by other policies of insurance maintained by
it), with respect to any work on, about or regarding the Premises.
(iv) Business Interruption. Business interruption insurance
and/or insurance for loss of rental value (as determined by the
Lender) in an amount sufficient to avoid any co-insurance penalty and
to provide proceeds which will cover a period acceptable to the Lender
in its reasonable discretion.
(v) Boiler and Machinery Insurance. Broad form boiler and
machinery insurance covering all boilers and other pressure vessels,
machinery and equipment located in, on or about the Premises and
insurance against loss of occupancy or use arising from any such
breakdown in an amount equal to 100% of the actual replacement cost of
such machinery (without taking into account any depreciation) and
containing such deductibles as are acceptable to the Lender.
(vi) Flood Insurance. If all or any portion of the Premises is
located within a federally designated flood hazard zone, flood
insurance as is generally available and in such amounts and with such
deductibles as the Lender may reasonably require.
(vii) Other Insurance. Such other insurance (including, without
limitation, earthquake insurance, sinkhole insurance, law and
ordinance insurance, environmental insurance and malpractice
insurance) with respect to the Premises against loss or damage of the
kinds from time to time reasonably required by the Lender in
connection with loans secured by properties comparable to the
Premises.
Intangible Personalty. As defined in the Security Instrument.
Land. As defined in the Security Instrument.
Lien. Any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any financing lease having substantially the same economic effect as
any of the foregoing).
Loan Amount. The original principal amount of the Note.
Loan Document(s). This Loan Agreement, the Commitment, the Note, the
Security Instrument, the Financing Statements, the Assignment of Management
Agreement, and all other documents evidencing, securing or relating to the
Loan.
Local Tenant Lease(s). Any non-residential lease representing the
lesser of (i) an interest in 20% or less of the aggregate net rental square
footage of the Premises or (ii) any lease representing 5,000 sq. ft. or
less; provided however, as to one or more tenants that are Affiliates, all
leases of such affiliated tenant(s) shall be aggregated and treated as one
lease for purposes of determining whether such leases are individually
Local Tenant Leases, and if such leases, as aggregated, exceed either
limitation set forth above, then each such lease shall be deemed not to be
a Local Tenant Lease.
Management Agreement. The written management agreement for the
Premises, in form and substance satisfactory to the Lender, by and between
the Borrower, as owner, and a management company acceptable to the Lender,
as manager.
Monthly Reserve Deposits. Any other monthly payment or deposit
required in connection with any Reserve Account, including without
limitation, any monthly payments or deposits to any Reserve Account
identified in Exhibit B hereto or in the Program Rider.
Net Cash Flow. Net Operating Income, minus (A) fees, costs and
expenses related to tenant improvements required to be paid or reimbursed
under any lease or other agreement and (B) replacement reserves, each as
calculated for such period.
Net Operating Income. With respect to any specified period, (i)
Operating Income, minus (ii) Operating Expenses, each as calculated for
such period.
Note. The promissory note or notes of the Borrower in connection with
the Loan in favor of the Lender, together with all prior notes amended,
modified, renewed, extended, restated, supplemented, replaced or
substituted thereby.
Note Payment Amount. For any Payment Date, the total amount due and
owing under the Note on such Payment Date.
O&M Program. An operations and maintenance program (in form and
substance satisfactory to the Lender) relating to the use, handling and/or
abatement of one or more Hazardous Materials and which is accepted in
writing by the Borrower.
Obligations. As to any stated Person, the unpaid principal of and
interest on any promissory note or other indebtedness of such Person
(including, without limitation, interest accruing after the maturity of any
such promissory note or indebtedness and interest accruing thereon after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Person,
whether or not a claim for post-filing or post-petition interest is allowed
in such proceeding) and all other obligations and liabilities of such
Person, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements of
counsel) or otherwise.
Operating Expenses. Any expense paid or to be paid by the Borrower
(or any of its agents or by the Lender on account or on behalf of the
Borrower) at any time in connection with the operation of the Premises,
determined on an accrual basis, in accordance with GAAP, including, without
limitation, (i) all payments required to be made pursuant to any
management, franchise or other agreement, (ii) undistributed expenses,
including without limitation, general and administrative, marketing,
utilities, operations and maintenance and other expenses, as appropriate,
(iii) legal, accounting, appraisal and other professional fees, costs and
disbursements, including annual fees and other amounts (including indemnity
payments) payable annually or otherwise, (iv) taxes, insurance premiums and
impositions of any type, (v) any amount paid in connection with any
interest rate contract or similar hedge, cap, collar, floor or currency
swap, (vi) all items, if any, defined as an Operating Expense in the
Program Rider, and (vii) the cost of goods sold. Notwithstanding the
foregoing, Operating Expenses will not include (A) depreciation or
amortization, (B) any expenses that in accordance with GAAP should be
capitalized (other than current charges for any such expenses included in
the preceding sentence), (C) the principal of and interest on the Note and
(D) any item of expense that would otherwise be considered within Operating
Expenses pursuant to the provisions above but which is required to be paid
directly by any tenant or other Person under such tenant's or Person's
lease and/or other agreement.
Operating Income. All rents (net of concessions), charges, fees,
expense recovery, revenues and other income (including interest income)
paid or to be paid (other than security deposits from tenants or other
Persons under valid leases or other agreements and insurance, eminent
domain or similar proceeds and rewards paid directly to the Lender pursuant
to the provisions of the Loan Agreement) at any time to the Borrower (or to
any of its agents for the account of the Borrower) by any Person in
connection with the operation of the Premises, determined on a cash basis,
and all items, if any, defined as Operating Income in the Program Rider.
Operating Statement. As to the Premises, for any period indicated, a
statement of the Borrower, as reflecting, truly and accurately, the items
set forth therein as at the date thereof, showing the Operating Income and
Operating Expenses for the indicated period and including a statement as to
the amounts and sources of rent or other income collected and any other
information reasonably required by the Lender. Each Operating Statement
shall include a Certification.
Payment Date. Each date any payment of principal or interest on the
Note is due and payable thereunder.
Permitted Encumbrances. As defined in the Security Instrument,
together with any Liens which have been bonded over (i) within thirty (30)
days after the date of filing thereof, (ii) with a bonding company
satisfactory to the Lender, (iii) in an amount satisfactory to the Lender,
and (iv) otherwise in form and substance satisfactory to the Lender, in
each case, in the Lender's reasonable discretion.
Permitted Investments. Any (i) direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed by,
the full faith and credit of the United States of America (including
obligations issued or held in book-entry form on the books of the
Department of the Treasury of the United States of America); (ii)
commercial or finance paper or other similar obligations rated at the time
of purchase A-1 or better by Standard & Poor's or P-1 or better by Moody's;
(iii) interest-bearing demand or time deposits (including certificates of
deposit) in any issuing bank or trust company secured at all times, in the
manner and to the extent provided by law, by collateral security (described
in clause (i) of this definition) of a market value (valued at least
quarterly) of no less than the amount of money so invested; (iv) negotiable
or non-negotiable certificates of deposit, time deposits or other similar
banking arrangements issued by any bank or trust company with combined
equity and surplus of no less than $100,000,000, having a rating in either
of the two highest rating categories by either Moody's or Standard & Poor's
or fully insured by the Federal Deposit Insurance Corporation; (v) Eligible
Account; and (vi) account or fund that is invested only in any of the
above; provided that such Permitted Investments shall be redeemable on any
Business Day, including the Business Day after the date of acquisition.
Person. An individual, a general or limited partnership, a limited
liability company, a limited liability partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated
association, a joint venture, a Governmental Authority or other entity of
whatever nature.
Personalty. The Tangible Personalty and the Intangible Personalty.
Premises. The collective reference to the Land, the Improvements and
the Tangible Personalty.
Program Rider. The Program Rider attached as Exhibit D to this Loan
Agreement.
Prohibited Activities or Conditions. Causing or permitting, whether
directly or indirectly, (i) the presence, use, generation, manufacture,
production, processing, installation, release, discharge, storage
(including storage in above ground and underground storage tanks for
petroleum or petroleum products), treatment, handling, or disposal of any
Hazardous Materials (excluding the safe and lawful use and storage of
quantities of Hazardous Materials or petroleum products, customarily used
in the ordinary operations of the Borrower or customarily used in the
ordinary operations of any tenant previously approved by the Lender) on or
under the Premises, or in any way affecting the Premises or its value or
which may form the basis for any present or future claim, demand or action
seeking cleanup of the Premises, (ii) the transportation of any Hazardous
Materials to or from the Premises (excluding the safe and lawful use and
storage of quantities of Hazardous Materials or petroleum products,
customarily used in the ordinary operations of the Borrower or customarily
used in the ordinary operations of any tenant previously approved by the
Lender), or (iii) any occurrence or condition on the Premises (or
exacerbation of the same) that is or may be in violation of Hazardous
Materials Law.
Recourse Covenant(s). Each of those covenants and/or agreements set
forth in Section 5.4 of this Loan Agreement.
Rent Roll. As to the Premises, a rent schedule in a form acceptable
to the Lender, including a Certification thereof, showing the legal and
trade name of each tenant, and for each tenant, the net rentable square
feet occupied, the lease expiration date, the rent payable (both base rent
and additional rent), right of first refusal, options, rights to move
tenants, security deposits and any other information requested by the
Lender and, as to any annual Rent Roll, copies of paid tax receipts for the
related fiscal year.
Rents and Profits. As defined in the Security Instrument.
Repair Escrow Account. Not Applicable.
Replacement Reserve Account. Not Applicable.
Replacements. Those repairs, replacements or improvements listed as
"Replacements" on Exhibit B hereto.
Required Accounting Standards. GAAP or such alternative accounting
standard as may be acceptable to the Lender, consistently applied.
Requirement(s) of Law. As to any Person, the organizational or
governing documents of such Person, and any statute, law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority (including, without limitation, all requirements
relating to zoning, parking, ingress and egress, building setbacks, or use
of the Premises, all Hazardous Materials Laws, the Architectural Barriers
Act of 1968, the Rehabilitation Act of 1973, the Americans with
Disabilities Act of 1990, erosion control ordinances, storm drainage
control laws and doing business and/or licensing laws), in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
Reserve Account(s). The Repair Escrow Account, the Tax and Insurance
Reserve Account, the Replacement Reserve Account, and all other reserve
and/or escrow accounts established or required pursuant to the provisions
of the Loan Documents, including, without limitation, pursuant to the
Program Rider.
Responsible Officer. As to any Person, the general partner (if the
general partner is not an individual, then the chief executive officer, the
chief financial officer or the president or similar individual of the
general partner), the chief executive officer, the chief financial officer
or the president or similar individual of such Person.
Security Instrument. The deed of trust, mortgage, deed to secure debt
or other instrument, dated as of even date herewith, executed by the
Borrower granting to the Lender a first priority lien or title priority on
the Premises, the Intangible Personalty and the Rents and Profits to secure
the obligations of the Borrower under the Loan Documents, together with all
prior instruments amended, modified, renewed, extended, restated,
supplemented, replaced or substituted thereby.
Special Purpose Entity. An entity whose structure and organizational
and governing documents are in form and substance acceptable to the Lender
and which satisfies all of the following requirements:
(i) it conducts its business solely in its own name through
its duly authorized officers or agents so as not to mislead others as
to the identity of the entity with which those others are concerned,
and particularly uses its best efforts to avoid the appearance of
conducting business on behalf of any Affiliate or that its assets are
available to pay the creditors of any Affiliate. Without limiting the
generality of the foregoing, all oral and written communications,
including, without limitation, letters, invoices, purchase orders,
contracts, statements and loan applications, are made solely in its
name;
(ii) it maintains its records and books of account separate
from those of its Affiliates;
(iii) it obtains proper authorization required by any
Requirement of Law of all action requiring such authorization;
(iv) it obtains proper authorization from its shareholders,
partners or members, as the case may be, of all action requiring such
approval;
(v) it pays its Operating Expenses and liabilities from its
own funds;
(vi) its Financial Statements disclose the effects of its
transactions in accordance with Required Accounting Standards, and
disclose that its assets are not available to pay creditors of any
Affiliate;
(vii) its resolutions, agreements and other instruments
authorizing and underlying the transactions described in this
Agreement and in the other Loan Documents are maintained by it as its
official records, separately identified and held apart from the
records of any Affiliate;
(viii) it maintains an arm's-length relationship with its
Affiliates and does not hold itself out as being liable for the debts
of any Affiliate;
(ix) it keeps its assets and its liabilities wholly separate
from those of all other entities, including, but not limited to its
Affiliates except, in each case, as contemplated by the Loan
Documents; and
(x) its sole assets are the Premises, the Intangible
Personalty and the Rents and Profits.
State. The state in which the Premises is located.
Subordination Agreement. A subordination, non-disturbance and
attornment agreement in form and substance acceptable to the Lender.
Survey. A survey of the Land and Improvements (as-built) made by a
civil engineer or surveyor, duly licensed or registered in the State, dated
as of a date acceptable to the Lender, containing a surveyor's
certification acceptable to the Lender for the benefit of the Borrower and
the Lender (which certification shall, among other things, indicate whether
or not any of the Land or Improvements are located within an area
identified as having "special flood hazards" as such term is used in the
Flood Disaster Protection Act of 1973), together with its successors and
assigns, as their interests may appear, and otherwise in form and substance
acceptable to the Lender.
Tangible Personalty. As defined in the Security Instrument.
Tax and Insurance Reserve Account. An Eligible Account established
and maintained pursuant to the terms of this Loan Agreement.
Tenant Estoppel Certificate. A tenant estoppel certificate in form
and substance acceptable to the Lender.
Section 1.2 Other Definitional Provisions.
(a) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. The word "including" when used in this Agreement is
intended to be illustrative and not exclusive. Section, subsection,
paragraph, clause, exhibit, schedule, addendum and rider references
contained in this Agreement are references to sections, subsections,
paragraphs, clauses, exhibits, schedules, addenda and riders in or to
this Agreement unless otherwise specified. The captions herein are
inserted only as a matter of convenience and for reference and in no
way define, limit or describe the scope of this Loan Agreement nor the
intent of any provision hereof. The terms set forth herein are
applicable to the singular as well as the plural forms of such terms
and to the masculine as well as the feminine and neuter genders of
such terms.
(b) All references in this Loan Agreement or any other Loan
Document to any Loan Document, agreement, contract, license, document
or instrument shall mean such Loan Document, agreement, contract,
license, document or instrument as amended, modified, renewed,
extended, restated, supplemented, reissued, and/or substituted from
time to time.
(c) All references or citations in this Loan Agreement or any
other Loan Document to any statute, law, treaty, rule, regulation or
other Requirement of Law shall mean such statute, law, treaty, rule,
regulation or other Requirement of Law as amended, modified,
supplemented, replaced or substituted from time to time.
Section 1.3 Incorporation by Reference of Commitment.
All of the terms and conditions of the Commitment are hereby
incorporated herein by reference, as if such terms and conditions were set
forth herein in their entirety, but in the event of any conflict or
discrepancy between the terms and/or conditions of this Loan Agreement and
those of the Commitment, the terms and conditions of this Loan Agreement
shall control.
ARTICLE II
THE LOAN
Section 2.1 Loan Terms.
Subject to the terms and conditions of this Loan Agreement and the
other Loan Documents, the Lender agrees to make the Loan to the Borrower in
the principal sum of the Loan Amount, such borrowing to be evidenced by the
Note and the other Loan Documents.
Section 2.2 Interest.
The outstanding principal balance of the Loan shall bear interest, and
principal and interest shall be repayable, in accordance with the terms of
the Note.
Section 2.3 Term.
The Loan shall be due and payable in full, unless accelerated sooner
pursuant to the terms of this Loan Agreement, on the maturity date set
forth in the Note.
Section 2.4 Payments.
All payments by the Borrower under the Loan shall be made in
accordance with the terms of the Note.
ARTICLE III
CONDITIONS PRECEDENT TO LOAN
The obligation of the Lender to make the Loan is subject to the
Lender's satisfaction, by proper evidence, execution and/or delivery to the
Lender of each of the following items, each in form and substance
satisfactory to the Lender and the Lender's counsel:
Section 3.1 Loan Documents.
Each of the Loan Documents.
Section 3.2 Brokerage Commissions.
All brokerage commissions, finder's fees or similar compensation in
connection with the purchase of the Premises (if all or any portion of the
Premises is being purchased with Loan proceeds), the making of the Loan, or
the transactions contemplated by the Loan Documents have been paid in full.
Section 3.3 Title Evidence.
An original signed title commitment in form and substance satisfactory
to the Lender, for a standard ALTA mortgagee policy as to the Premises from
a company or from companies approved by the Lender (including any
reinsurance agreements and endorsements required by the Lender), providing
coverage for the full principal amount of the Loan, containing such
coverages and endorsements as may be required by the Lender, together with
copies of all recorded documents creating exceptions to such policy.
Section 3.4 Survey.
Two (2) originals of the Survey.
Section 3.5 Insurance.
Each policy of insurance required by this Loan Agreement is in full
force and effect on the Closing Date.
Section 3.6 Authority Documents.
(a) Organizational Documents. As applicable, a certified copy
of each limited partnership agreement, limited partnership
certificate, partnership agreement, articles of incorporation, bylaws,
shareholder agreements, articles of organization and operating
agreement of the Borrower and each general partner, member or
shareholder of the Borrower, with all amendments, modifications,
supplements and restatements thereto.
(b) Assumed Name Certificate. A certified copy of each assumed
name certificate, if any, of the Borrower.
(c) Good Standing Certificates. Good standing certificates, or
their equivalent, issued by the Secretary of State and all other
appropriate offices of the state organization of the Borrower and
evidence satisfactory to the Lender of the Borrower's authorization to
do business in the State if the state of the Borrower's organization
is other than the State.
(d) Resolutions and Consents. Certified resolutions and/or
consents authorizing the Borrower to enter into the Loan Documents.
Section 3.7 Financial Statements and Operating Statements.
Financial Statements of the Borrower as of the end of the most recent
fiscal year, together with Operating Statements for the period from the
beginning of the current fiscal year and ending on a date not more than
forty-five (45) days prior to the Closing Date.
Section 3.8 Opinion.
An opinion of independent counsel to the Borrower in form and
substance acceptable to the Lender, dated as of the Closing Date.
Section 3.9 Compliance with Laws.
The Premises and the Intangible Personalty, and the intended uses
thereof, are in compliance with all Requirements of Law.
Section 3.10 Agreements.
Copies of all operating agreements, service contracts, labor
contracts, license agreements and equipment leases, if any, relating to the
Borrower's ownership and operation of the Premises. Copies, including a
Certification thereof, of all franchise agreements and purchase contracts,
if any, relating to the Premises.
Section 3.11 Taxes.
The Land and the Improvements are separately assessed for tax
purposes, together with tax parcel identification numbers, tax rates,
estimated tax values and the identities of the taxing authorities.
Section 3.12 Utilities.
The availability and suitability of the water, storm water, electric,
oil, natural gas, sewer and telephone utilities needed to properly service
the Premises in its intended use.
Section 3.13 Reserve Accounts.
The establishment of each Reserve Account with balances equal to any
Initial Reserve Deposit thereto required by this Loan Agreement (including
the Program Rider) or any of the other Loan Documents.
Section 3.14 Engineering Report.
An Engineering Report.
Section 3.15 Certificate of Occupancy and Other Permits.
Such certificates of occupancy, permits and licenses as the Lender may
require to evidence that the Premises is suitable for occupancy and use.
Section 3.16 Environmental Assessment and O&M Program.
An Environmental Assessment of the Premises. The Borrower shall
furnish and adopt an O&M Program with respect to all Hazardous Materials,
if any, identified in such Environmental Assessment or as otherwise
required by the Lender.
Section 3.17 Appraisal.
An Appraisal.
Section 3.18 Equity.
The Borrower's equity as of the Closing Date is acceptable to the
Lender.
Section 3.19 Management Agreement.
A copy of the Management Agreement for the Premises in form and
substance satisfactory to the Lender, including a Certification thereof.
The Management Agreement and all management fees thereunder shall be
subordinate to the Loan.
Section 3.20 Special Purpose Entity.
The Borrower is a Special Purpose Entity.
Section 3.21 Miscellaneous.
All other documents or items set forth in the Commitment (including
all supplemental and special conditions included in the Commitment) or
otherwise required by the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make the
Loan, the Borrower hereby represents and warrants to the Lender (for
itself, but not otherwise) on the Closing Date as follows:
Section 4.1 Existence; Compliance with Law.
The Borrower and each Borrower Principal (when not an individual) (a)
is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) has the power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessor and to conduct the business in which it is currently
engaged, (c) is duly qualified to do business in and is in good standing
under the laws of each jurisdiction where its ownership, lease or operation
of property or the conduct of its business requires such qualification and
(d) is in compliance with all Requirements of Law.
Section 4.2 Equity Interests.
The owners (beneficial and otherwise) of all of the Equity Interests
in the Borrower are as set forth in Exhibit A and have been duly
authorized, are validly issued and outstanding, fully paid and non-
assessable. There are no outstanding options or other rights pertaining to
the Equity Interests in the Borrower, and no voting trust or similar
agreement affecting either ownership of or the right to vote such Equity
Interests (except for those items detailed in the Borrower's partnership or
operating agreement or certificate of incorporation).
Section 4.3 Power; Authorization; Enforceable Obligations.
The Borrower has all requisite legal power and authority, and the
legal right, to make, deliver and perform each Loan Document to which it
is, or is to be, a party and to borrow hereunder, and has taken all
necessary corporate, partnership or company action (as the case may be) to
authorize the execution, delivery and performance of each Loan Document to
which it is, or is to be, a party and to authorize the borrowings on the
terms and conditions of this Agreement and the Note. No consent or
authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person is required in connection
with the borrowings hereunder or with the execution, delivery, performance,
validity or enforceability of any Loan Document, except to the extent
specified in any such Loan Document. Each Loan Document has been (or will
be) duly executed by, and delivered on behalf of the Borrower. Each Loan
Document constitutes (or when executed and delivered will constitute) the
legal, valid and binding obligation, enforceable against the Borrower, in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
sequestration, liquidation, consolidation or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
Section 4.4 No Legal Bar.
The execution, delivery and performance of the Loan Documents will not
violate any Requirement of Law applicable to the Borrower or any
contractual obligation, security, agreement, instrument, license or other
undertaking by which the Borrower is bound and will not result in, or
require, the creation or imposition of any Lien on any of their properties
or revenues pursuant to any such Requirement of Law or contractual
obligation, security, agreement, instrument, license or other undertaking.
Section 4.5 No Litigation.
No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of the Borrower,
threatened against any of them or any of their properties or revenues, or
with respect to any Loan Document or any of the transactions contemplated
thereby, and the Borrower is not a surety on any bond through which a Lien
might be created superior to the Security Instrument.
Section 4.6 No Default.
The Borrower is not in default, under or with respect to any
contractual obligation, security, agreement, instrument, license or other
undertaking by which the Borrower is bound which is in excess of $10,000.
No Default Condition or Event of Default has occurred and is continuing.
Section 4.7 Solvency; Fraudulent Conveyance.
The Borrower is solvent and will not be rendered insolvent by the
transactions contemplated hereby and, after giving effect to such
transactions, will not be left with an unreasonably small amount of capital
with which to engage in its business. The Borrower does not intend to
incur, and does not believe that it has incurred, debts beyond its ability
to pay such debts as they mature. The Borrower has not commenced or filed
nor contemplates the commencement or filing of any bankruptcy, insolvency,
reorganization, moratorium, sequestration, liquidation, consolidation or
similar proceedings or the appointment of a receiver, liquidator, assignee,
conservator, trustee, sequestrator or similar official in respect of it or
any of its assets. The amount of the Loan constitutes reasonably
equivalent value and fair consideration for the transfer to the Lender of
the interest in the Premises represented by the Security Instrument. The
Borrower is not transferring any interest in the Premises with any intent
to hinder, delay or defraud any of its creditors.
Section 4.8 Special Purpose Entity.
The Borrower is a Special Purpose Entity.
Section 4.9 Taxes.
The Borrower has filed or caused to be filed all tax returns which are
required to be filed and has paid all taxes shown to be due and payable on
said returns and on any assessments made against it and any of its property
and, to its knowledge, all other taxes, fees and other charges imposed on
it and any of its property by any Governmental Authority (other than any
the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity
with the Required Accounting Standards have been provided on its books).
No tax Lien has been filed with respect to any such tax, fee or other
charge. To its knowledge, no claim is being asserted with respect to any
such tax, fee or other charge which, in either case, could reasonably be
expected to have a material adverse change with respect to the Borrower or
the Premises.
Section 4.10 No Burdensome Restrictions.
The Borrower is not a party to or subject to any contractual
obligation, security, agreement, instrument, license or other undertaking
by which the Borrower is bound (other than the Loan Documents) which could
have a material adverse change on the business, properties, assets,
operations or condition, financial or otherwise, of it, or on the ability
of it to carry out its obligations hereunder or under the other Loan
Documents.
Section 4.11 Investment Company Act; Other Regulations.
The Borrower is not an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment Company
Act of 1940, as amended. The Borrower is not subject to regulation under
any Requirement of Law which limits its ability to incur Obligations, other
than as set forth herein or in the other Loan Documents.
Section 4.12 Subsidiaries.
The Borrower has no Subsidiaries.
Section 4.13 Title to Premises.
The Borrower is seized of the Land and Improvements (and any fixtures)
in fee, or is the owner of a leasehold interest in the Land and
Improvements (and any fixtures) pursuant to a Ground Lease, and has
marketable title to any appurtenant easements and has the right to convey
the same, that title to such property is free and clear of all encumbrances
except for the Permitted Encumbrances, and that it will warrant and defend
the title to such property (except for the Permitted Encumbrances) against
the claims of all Persons. As to the balance of the Premises, the Rents
and Profits and the Intangible Personalty, the Borrower represents and
warrants that it has marketable title to such property, that it has the
right to convey such property and that it will warrant and defend such
property against the claims of all persons or parties.
Section 4.14 Ownership of Personalty.
The Borrower owns, subject to no Lien other than the Lien of the
Security Instrument and the other Loan Documents, as appropriate, all of
the Personalty.
Section 4.15 Financial Statements.
As of the date of the most recent Financial Statement furnished to the
Lender, the Borrower had no material (a) indebtedness for borrowed money or
for the deferred purchase price of property or services, as evidenced by
bonds, notes or other similar instruments or agreements, (b) obligations as
a lessee under leases which shall have been or should be, in accordance
with the Required Accounting Standards, recorded as capital leases, (c)
obligations under direct or indirect guaranties in respect of, or any
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
any obligations of another of the kind referred to in clause (a) or (b)
above, (d) contingent liability or liability for taxes, or (e) long-term
lease or unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or exchange
transaction, which is not, to the extent required by the Required
Accounting Standards, reflected in the foregoing statements or in the notes
thereto. No sale, transfer or other disposition by the Borrower of any
material part of its business or property has occurred since the date of
such party's most recent Financial Statement furnished to the Lender.
Section 4.16 No Change.
There has been no development or event which has had or could
reasonably be expected to have a material adverse change (a) with respect
to the Borrower since the date of such party's most recent Financial
Statement furnished to the Lender, or (b) with respect to the Premises or
any portion of the Intangible Personalty since the date of the most recent
Operating Statements furnished to the Lender.
Section 4.17 Accuracy of Information.
(a) Each exhibit, Financial Statement, Operating Statement, Rent Roll,
document, book, record, report and other item of written information
furnished by the Borrower to the Lender in connection with the Loan
Documents is accurate as of its date and as of the date so furnished and
(b) all financial projections contained therein are based on reasonable and
stated assumptions, and no such document contains any material misstatement
of fact or omits to state a material fact.
Section 4.18 Principal Place of Business.
The Borrower's principal place of business and chief executive office
is at the location set forth in the first paragraph of this Loan Agreement
and it has not operated under any name other than its own name at any time
from the date of its formation.
Section 4.19 Taxpayer Identification Number.
The Borrower's taxpayer identification number is as set forth in the
Note.
Section 4.20 Insurance.
The Borrower does not know of and has not received any written notice
of any violation of any insurance policy term that remains uncured and, to
its best knowledge, it and the Premises and the use thereof materially
comply with all insurance policy terms.
Section 4.21 Mechanic's Liens, etc.
Except as have been paid for in full by the Borrower on or before the
Closing Date or as shall be paid prior to delinquency in the ordinary
course of the Borrower's business, no improvements or repairs have been
made to the Premises during the one hundred twenty (120) days preceding the
date hereof; there are no contracts not fully performed, and no outstanding
bills incurred, for labor or materials used in making improvements or
repairs on the Premises, or for services of architects, surveyors or
engineers incurred in connection therewith. The Borrower has made no
contract or arrangement of any kind whatsoever, the performance of which by
the other party thereto could give rise to a Lien on the Premises superior
to that of the Security Instrument.
Section 4.22 No Violation.
The Borrower has not received any notice of, and, to the best of its
knowledge is not in violation of any Requirement of Law, any Hazardous
Materials Law or any Governmental Action.
Section 4.23 ERISA.
(a) The Borrower is not an "employee benefit plan" as defined in
Section 3(3) of ERISA, which is subject to Title I of ERISA, (b) the assets
of the Borrower do not constitute "plan assets" of one or more such plans
within the meaning of 29 C.F.R. Section2510.3-101, (c) neither the Borrower
nor any of its general partners, members or shareholders, as the case may
be, have any trust or custodial relationship with the Lender or any
affiliate of the Lender with respect to any ERISA plan, and (d) neither the
Borrower nor any general partner, member or shareholder of the Borrower is
a participant in any governmental plan that has a trust or custodial
relationship with the Lender or any affiliate of the Lender. The Borrower
(i) is not a "governmental plan" within the meaning of Section 3(32) of
ERISA and (ii) transactions by or with the Borrower are not subject to
Requirements of Law regulating investments of and fiduciary obligations
with respect to government plans.
Section 4.24 O&M Program.
Not Applicable.
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1 Affirmative Covenants of the Borrower.
During any period in which the Loan is outstanding, the Borrower
agrees that it will:
(a) Use of Loan Funds. Cause all Loan proceeds to be used for
the purposes set forth in a loan closing statement approved by the
Lender and use all excess Loan proceeds disbursed to the Borrower only
for lawful business purposes permitted under the Borrower's
organizational documents. No part of the proceeds of the Loan will be
used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of
the Board of Governors of the Federal Reserve System as now and from
time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of such Board of Governors. If
requested by the Lender, the Borrower will furnish to the Lender a
statement to the foregoing effect in conformity with the requirements
of FR Form U-1 referred to in said Regulation U. No part of the
proceeds of the Loan has been used in any manner that could result in
a violation of Regulations G, T, V or X of the Board of Governors of
the Federal Reserve System.
(b) Payment. Pay when due all sums owing to the Lender and
others in accordance with the terms of the Loan Documents.
(c) Fees, Costs and Expenses. Pay when due all fees, costs and
expenses required to be paid by the Borrower pursuant to the terms of
the Commitment or any of the other Loan Documents, including without
limitation, reasonable attorneys fees and other fees, costs and
expenses of the Lender in connection with the enforcement of the
Lender's rights under the Loan Documents. Any such amounts paid by
the Lender shall be due and payable upon demand.
(d) Condition of Premises. Keep and maintain the Premises in
good order, condition and repair and shall make, as and when the same
shall become necessary, all repairs and maintenance necessary or
appropriate in order to keep the Premises from deteriorating.
(e) Compliance. Comply with all (i) building, zoning, fire,
health, environmental, disability and use laws (including, but not
limited, to all state and local handicapped access laws, the
Architectural Barriers Act of 1968, the Fair Housing Amendments Act of
1988, the Rehabilitation Act of 1973, the Americans with Disabilities
Act of 1990 and similar laws and ordinances), codes, ordinances, rules
and regulations, to the extent required by applicable Governmental
Authorities, (ii) covenants and restrictions of record and (iii)
easements which are in any way applicable to the Premises or any part
thereof and the use or enjoyment thereof.
(f) Inspection. Subject to the rights of any tenants of the
Premises under their leases, permit the Lender and/or its authorized
agents to enter upon the Premises during normal working hours and as
often as the Lender desires, for the purpose of inspecting the
Improvements specifically and the condition and operation of the
Premises generally. In connection therewith, the Borrower shall
permit the Lender and the Lender's representatives (including an
independent Person such as an engineer, architect, or inspector) or
third parties making Immediate Repairs, Replacements or Additional
Repairs or Replacements to enter onto the Premises during normal
business hours (subject to the rights of any tenants of the Premises
under their leases) to inspect the progress of any Immediate Repairs,
Replacements or Additional Repairs or Replacements and all materials
being used in connection therewith, to examine all plans,
specifications and shop drawings relating to such Immediate Repairs,
Replacements or Additional Repairs or Replacements which are or may be
kept at the Premises, and to complete any Immediate Repairs,
Replacements or Additional Repairs or Replacements. The Borrower
agrees to use its best efforts to cause all contractors,
subcontractors, agents, architects and inspectors reasonably to
cooperate with the Lender and the Lender's representatives or such
other Persons described above in connection with inspections or the
completion of Immediate Repairs, Replacements or Additional Repairs or
Replacements.
(g) Reimbursement. The Borrower agrees that if it shall fail to
pay prior to delinquency any tax, assessment or charge levied or
assessed against the Premises (other than the amount or validity of
which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with the
Required Accounting Standards have been provided on its books) or any
utility charge, whether public or private, or any insurance premium or
if it shall fail to procure the Insurance required hereunder and cause
the delivery of the insurance certificates as required herein, or if
it shall fail to pay any other charge or fee described herein, then
the Lender, at its option, may pay, procure or cause the delivery of
the same. The Borrower will reimburse the Lender upon demand for any
sums of money paid by the Lender pursuant to this Section, together
with interest on each such payment at the default rate set forth in
the Note and all such sums and interest thereon shall be secured
hereby.
(h) Environmental Assessment. Provide to the Lender from time-
to-time, at the Borrower's sole fee, cost and expense, if the Lender
shall ever have reason to believe that any Hazardous Material affects
the Premises, or if any Governmental Action is made or threatened, or
if an Event of Default shall have occurred, an Environmental
Assessment, which Environmental Assessment shall have been ordered by
the Borrower within ten (10) days after the Lender's request and which
shall be delivered to the Lender promptly after the date of the
Lender's request. At all other times, the Lender may request an
Environmental Assessment to be provided by the Borrower at the
Lender's expense. The Borrower will cooperate with each consulting
firm making any Environmental Assessment and will promptly supply to
the consulting firm, from time to time upon request, all information
available to the Borrower to facilitate the completion of the
Environmental Assessment. If the Borrower fails to furnish the Lender
within ten (10) days after the Lender's request with a copy of an
agreement with an acceptable environmental consulting firm to provide
such Environmental Assessment, or if the Borrower fails to order such
Environmental Assessment within ten (10) days after the Lender's
request, the Lender may cause any such Environmental Assessment to be
made at the Borrower's fee, cost, expense and risk. The Lender may
disclose to interested parties any information the Lender ever has
about the environmental condition or compliance of the Premises, but
shall be under no duty to disclose any such information except as may
be required by law. The Lender shall be under no duty to make any
Environmental Assessment of the Premises, and in no event shall any
such Environmental Assessment by the Lender be or give rise to a
representation that any Hazardous Material is or is not present on the
Premises, or that there has been or shall be compliance with any
Hazardous Materials Law, nor shall the Borrower or any other Person be
entitled to rely on any Environmental Assessment made by the Lender or
at the Lender's request. The Lender owes no duty of care to protect
the Borrower or any other Person against, or to inform them of, any
Hazardous Material or other adverse condition affecting the Premises.
(i) Appraisal. At all times during the term of the Loan,
cooperate with the Lender and use its best efforts to assist the
Lender in obtaining an Appraisal of the Premises, and will promptly
supply to the Lender, from time to time upon request, all information
available to the Borrower to facilitate the completion of the
Appraisal. If any Event of Default occurs, or if a casualty loss or
governmental taking occurs and results in insurance or eminent domain
proceeds in excess of $50,000.00, the Lender may, in its reasonable
discretion, choose the appraiser, but the Borrower shall be
responsible for any fees payable to said appraiser in connection with
an Appraisal of the Premises. Under all other circumstances, the
appraiser performing any such Appraisal shall be engaged by the
Lender, and the Lender shall be responsible for any fees payable to
said appraiser in connection with an Appraisal of the Premises.
(j) Surveys. Following any change in the exterior configuration
of the Improvements or any rezoning affecting the Premises, provide
the Lender with such additional Surveys as requested by the Lender.
(k) Other Tests. Promptly submit to the Lender copies of
reports of all physical tests at any time made on the Land, the
Improvements or the materials to be incorporated into the Improvements
and shall, at the Borrower's expense, cause to be made such additional
tests from time to time as the Lender may reasonably require after any
change in the Premises or receipt by the Lender of any such report.
(l) Taxes and Fees. Except as otherwise provided herein, pay
prior to delinquency all taxes, general and special assessments (other
than the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which
reserves in conformity with the Required Accounting Standards have
been provided on its books), permit fees, inspection fees, license
fees, water and sewer charges, franchise fees and equipment rents
against it or the Premises, and the Borrower, upon request of the
Lender, will submit to the Lender receipts evidencing said payments.
(m) Financial Statements and Operating Statements. Furnish, or
cause to be furnished to the Lender, annual Financial Statements for
itself. Monthly Operating Statements shall be submitted to the Lender
when requested by the Lender and for any period during which any Event
of Default is continuing. Operating Statements shall be delivered to
the Lender within forty-five (45) days of the end of each of the
Borrower's fiscal quarters, and an annual Financial Statements shall
be submitted to the Lender within ninety (90) days (or one
hundred twenty (120) days if such annual Financial Statements are
audited) of the Borrower's fiscal year end in lieu of an Operating
Statement for the Borrower's fourth fiscal quarter. Without limiting
any other rights available to the Lender under this Loan Agreement or
any of the other Loan Documents, in the event the Borrower shall fail
to timely furnish the Lender any Financial Statement in accordance
with this subsection, the Borrower shall promptly pay to the Lender a
penalty in the amount of $1,000.00 for each such failure.
(n) Books and Records. Keep and maintain at all times at the
Premises, at the Borrower's address set forth herein, at the property
manager's address, or at such other place as the Lender may approve in
writing, complete and accurate books of accounts and records adequate
to reflect correctly the results of the operation of the Premises and
copies of all written contracts, leases and other instruments which
affect the Premises (including, but not limited to, all bills,
invoices and contracts for utilities, waste management service,
telephone service and management services, rent registrations and all
materials filed with any Governmental Authority where applicable).
Such books, records, contracts, leases and other instruments shall be
subject to examination and inspection at any time by the Lender upon
reasonable prior notice.
(o) Further Assurances. The Borrower shall furnish or cause to
be furnished such further documentation or information (including
without limitation, amendments, replacements, corrections, deletions
or additions to the Loan Documents or any other materials furnished to
the Lender in connection with the Loan) which is (i) reasonably
required to enable the Lender to sell the Loan, or (ii) deemed
necessary or appropriate by the Lender in the exercise of its rights
under any of the Loan Documents or to perfect, protect, maintain,
preserve, continue and/or extend any Lien granted to the Lender under
the Security Instrument or any other Loan Document, provided, however,
that the Borrower shall not be required to do anything that (A) has
the effect of (I) changing the essential economic terms of the Loan
set forth in the Loan Documents or (II) imposing greater liability
under the Loan Documents, or (B) results in any substantial fee, cost
or expense to the Borrower. In addition, the Borrower shall furnish
or cause to be furnished such further documentation and information
(including without limitation, amendments, replacements, corrections,
deletions and additions to the Loan Documents and other materials
furnished to the Lender in connection with the Loan) deemed necessary
or appropriate by the Lender to correct patent mistakes in the Loan
Documents, materials relating to title insurance policies and other
insurance required hereunder, and the funding of the Loan, provided
that any such further documentation or information shall be at the
sole fee, cost and expense of the Lender.
(p) Payment of Operating Expenses. Pay all Operating Expenses,
except to the extent that the Lender is obligated to pay any Operating
Expense on behalf of the Borrower from the Tax and Insurance Reserve
Account.
(q) Payment of Recurring Capital Expenditures. Pay all
expenditures with respect to the Premises related to capital repairs,
replacements and improvements (other than Replacements) performed from
time to time.
(r) ERISA. Deliver to the Lender such certifications or other
evidence from time to time throughout the term of the Loan, as
requested by the Lender in its reasonable discretion, that (i) the
Borrower is not an "employee benefit plan," a "governmental plan"
and/or subject to state statutes regulating investments and fiduciary
obligations with respect to governmental plans; and (ii) one or more
of the following circumstances is true:
(A) Less than twenty-five percent (25%) of all Equity
Interests in the Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); and/or
(B) The Borrower qualifies as an "operating company"
or a "real estate operating company" within the meaning of 29
C.F.R. Section 2510.3-101(c) or (e).
(s) Actions and Proceedings. Promptly notify the Lender in
writing of any action or proceeding relating to any condemnation or
other taking, whether direct or indirect, of the Premises or any
portion thereof, or purporting to affect the Premises, any Loan
Document or any right of the Lender hereunder or thereunder. In each
such action or proceeding, the Borrower shall, unless otherwise
directed by the Lender in writing, appear in and prosecute or defend
any such action or proceeding. The Borrower hereby further authorizes
the Lender to participate and appear in (at the Borrower's expense,
including without limitation, the Lender's reasonable attorney's fees)
any action or proceeding relating to any condemnation or other taking
of the Premises, whether direct or indirect, and, following an Event
of Default, to settle or compromise any claim in connection with such
condemnation or other taking.
(t) Completion of Immediate Repairs, Replacements and Additional
Repairs or Replacements.
(i) The Borrower shall commence the Immediate Repairs
immediately following the execution of this Agreement (or as soon
thereafter as weather reasonably shall permit) and shall at all times
thereafter diligently pursue the completion of all Immediate Repairs.
The Borrower shall complete all Immediate Repairs no later than twelve
(12) months after the date of this Agreement. The Borrower covenants
and agrees that each of the Immediate Repairs, Replacements and
Additional Repairs or Replacements and all materials, equipment,
fixtures, and any other item comprising a part of any Immediate
Repair, Replacement or Additional Repair or Replacement shall be
constructed, installed or completed, as applicable, free and clear of
all mechanic's, materialman's or other liens (except for those liens
existing on the date of this Agreement which have been approved in
writing by the Lender).
(ii) If the Lender determines, in its reasonable discretion,
that Additional Repairs or Replacements are advisable in order to keep
the Premises in good order and repair, the Lender may send the
Borrower written notice of the need for making such Additional Repairs
or Replacements. The Borrower shall promptly commence making such
Additional Repairs or Replacements. If the Borrower fails to commence
such Additional Repairs or Replacements within thirty (30) days after
such notice and diligently pursue completion of such Additional
Repairs or Replacements, such failure shall be an Event of Default
under this Loan Agreement, and, in addition to all other rights the
Lender may have under the Loan Documents upon an Event of Default, the
Lender may contract with third parties to make such Additional Repairs
or Replacements and may in its sole discretion demand payment for such
Additional Repairs or Replacements from the Borrower.
(iii) In the event the Lender determines in its reasonable
discretion that any Immediate Repair, Replacement or Additional Repair
or Replacement has not been completed in a workmanlike and timely
manner, the Lender shall have the option to proceed under existing
contracts or to contract with third parties to complete such Immediate
Repair, Replacement or Additional Repair or Replacement and to demand
payment for such Immediate Repair, Replacement or Additional Repair or
Replacement from the Borrower.
(iv) In order to facilitate the Lender's completion or making
of the Immediate Repairs, Replacements or Additional Repairs or
Replacements, the Lender is granted the irrevocable right to enter
onto the Premises and perform any and all work and labor necessary to
complete or make the Immediate Repairs, Replacements or Additional
Repairs or Replacements and employ watchmen to protect the Premises
from damage, loss and/or theft. All sums so expended by the Lender
shall be deemed to have been advanced to the Borrower and secured by
the Security Instrument and the other Loan Documents.
(v) All Immediate Repairs, Replacements and Additional Repairs
or Replacements shall comply with all Requirements of Law and
applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental
regulations, and requirements of insurance underwriters.
(u) Program Rider. Comply with all covenants and agreements set
forth in the Program Rider.
Section 5.2 Negative Covenants of the Borrower.
During any period in which the Loan is outstanding, the Borrower
agrees that it will not:
(a) Sale or Encumbrance of Personalty. Sell, encumber or
otherwise dispose of any of the Personalty except (i) to incorporate
Tangible Personalty into the Improvements or replace Tangible
Personalty with goods of quality and value at least equal to that
replaced, or (ii) for the sale, disposal or use of inventory, if any,
in the ordinary course of the Borrower's business at the Premises;
provided, however, in the event the Borrower sells or otherwise
disposes of any of the Personalty, the Lender's security interest in
the proceeds of the Personalty shall continue pursuant to the Security
Instrument and the other Loan Documents, as appropriate.
(b) Construction. Construct or permit the construction of any
improvements on the Premises other than Immediate Repairs or
Replacements or as otherwise required hereunder or previously
consented to in writing by the Lender, which consent shall not be
unreasonably withheld, conditioned or delayed.
(c) Change in Ownership; Identity of the Borrower. Permit any
sale, transfer, assignment or other disposition of, or grant or create
any Lien on, any of the following interests in the Borrower, except by
inheritance, devise, bequest or by operation of law upon the death of
a natural person:
(i) General Partnerships and Joint Ventures. If the Borrower
is a general partnership or a joint venture, (A) any partnership
interest in the Borrower, or (B) any interest of a joint venturer in
the Borrower;
(ii) Limited Partnerships. If the Borrower is a limited
partnership, (A) any limited partnership interest in the Borrower
which, together with all other limited partnership interests in the
Borrower sold, assigned, transferred, pledged, encumbered or otherwise
disposed of since the Closing Date exceeds 49% of all of the limited
partnership interests in the Borrower, or (B) any general partnership
interest in the Borrower;
(iii) Limited Liability Companies and Limited Liability
Partnerships. If the Borrower is a limited liability company or
limited liability partnership, (A) any membership interest which,
together with all other membership interests in the Borrower sold,
assigned, transferred, pledged, encumbered or otherwise disposed of
since the Closing Date exceeds 49% of all of the membership interests
in the Borrower, or (B) any managing membership interest in the
Borrower;
(iv) Corporations. If the Borrower is a corporation, any
voting stock in the Borrower which, together with all other voting
stock of the Borrower sold, assigned, transferred, pledged, encumbered
or otherwise disposed of since the Closing Date exceeds 49% of all of
the voting stock of the Borrower; and/or
(v) Trusts. If the Borrower is a trust, any beneficial
interest in such trust which, together with all other beneficial
interests in the trust sold, assigned, transferred, pledged,
encumbered or otherwise disposed of since the Closing Date exceeds 49%
of all of the beneficial interests in the trust.
The Borrower hereby acknowledges to the Lender that (i) the identity
of the Borrower and the expertise available to the Borrower were and
continue to be material circumstances upon which the Lender has relied
in connection with, and which constitute valuable consideration to the
Lender for, the extending to the Borrower of the indebtedness
evidenced by the Note and (ii) any change in such identity or
expertise could materially impair or jeopardize the security for the
payment of the Note granted to the Lender by the Security Instrument
and the other Loan Documents, as appropriate.
(d) Prepayment of Rent. Accept any prepayment of rent or
installments of rent for more than two (2) months in advance without
the prior written consent of the Lender.
(e) No Other Name. Change its name or operate under any name
other than its name as set forth herein.
(f) No Restricted Payments. Make any payment or take any other
action constituting (i) any direct or indirect purchase or other
acquisition by the Borrower of Equity Interests of any other Person,
or any direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and
expenditures in the ordinary course of business) or capital
contribution by the Borrower to any other Person, including all debt
and any Obligation of any sort, and/or (ii) a payment or prepayment on
account of, or the setting apart of assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement
or other acquisition of subordinated debt, either directly or
indirectly, whether in cash or in property or in obligations of any
Person.
(g) No Waste or Abandonment. Suffer, permit or commit waste,
permit impairment or deterioration of, or abandon, the Premises or any
portion thereof. The Borrower will not itself, or permit any tenant
or other Person to, remove, demolish or alter any improvement now
existing or hereafter erected on the Premises or any fixture,
equipment or machinery in or on the Premises except in connection with
any Repair or Replacement.
(h) Use of Premises. Except as required by applicable law, or
as otherwise permitted in writing by the Lender, allow any change in
the business use of all or any portion of Premises from the use
thereof as of the Closing Date.
Section 5.3 Environmental Covenants.
During any period in which the Loan is outstanding, the Borrower
agrees that it will:
(a) Not cause, permit or exacerbate any Prohibited Activities or
Conditions. The Borrower represents and warrants that it has not at
any time caused or permitted any Prohibited Activities or Conditions
except as set forth in the Environmental Assessment and that no
Prohibited Activities or Conditions exist or have existed on or under
the Premises. The Borrower shall take all appropriate steps to
prevent its employees, agents, and contractors, and any tenants from
causing, permitting, or exacerbating any Prohibited Activities or
Conditions. The Borrower shall not lease or allow the sublease or use
of all or any portion of the Premises to any tenant, subtenant or user
that, in the ordinary course of its business, would cause, permit, or
exacerbate any Prohibited Activities or Conditions, and all leases,
subleases and use agreements relating to the Premises shall contain
provisions sufficient to ensure that tenants, subtenants and users
shall not cause, permit or exacerbate any Prohibited Activities or
Conditions.
(b) Comply in a timely manner with, and cause all employees,
agents, and contractors of the Borrower and any other persons present
on the Premises to so comply with, (i) any O&M Program now or
hereafter in effect during the term of the Loan, and (ii) Hazardous
Materials Law, so as to minimize any economic loss to the Premises and
the Loan. The Borrower shall adopt an O&M Program with respect to any
Hazardous Materials identified in any Environmental Assessment or any
Governmental Action relating to the Premises, or as otherwise required
by the Lender with respect to the Premises. Any O&M Program shall be
performed by qualified contractors under the supervision of a
consulting engineer hired by the Borrower with the prior written
approval of the Lender which approval shall not be unreasonably
withheld, conditioned or delayed. All costs and expenses of any O&M
Program shall be paid by the Borrower, including without limitation
the charges of such contractors and consulting engineer and the
Lender's fees, costs and expenses incurred in connection with the
monitoring and review of the O&M Program and the Borrower's
performance thereunder.
(c) Promptly notify the Lender in writing of: (i) any
Governmental Action it becomes aware of (ii) any claim made or
threatened by any third party against the Borrower, the Lender, or the
Premises relating to loss or injury resulting from any occurrence or
condition on the Premises or any other real property that could
require the removal from the Premises of any Hazardous Materials or
cause any restrictions on the ownership, occupancy, transferability or
use of the Premises under Hazardous Materials Law or (iii) the
occurrence of any Prohibited Activities or Conditions. The Borrower
shall cooperate with any governmental inquiry, and shall comply with
any governmental or judicial order, request or directive which arises
from any alleged Prohibited Activities or Conditions; provided that
with respect to governmental requests or directives only, the Borrower
may contest or object to a good faith dispute regarding said request
or directive if the Borrower notifies the Lender in advance of said
contest or objection and as long as said contest or objection does not
result in a violation of law or fines assessed against the Premises.
(d) Pay promptly all costs and expenses incurred by the Lender
in connection with any Governmental Action, including but not limited
to costs of any environmental audits, studies, investigations or
remedial activities including but not limited to the removal of any
Hazardous Materials from the Premises. The Borrower also shall pay
promptly the costs of any environmental audits, studies,
investigations or the removal of any Hazardous Materials from the
Premises required by the Lender as a condition of its consent to any
sale or transfer of all or any part of the Premises or any interest
therein or required by the Lender following a reasonable determination
by the Lender that there may be Prohibited Activities or Conditions on
or under the Premises. Any such costs or expenses incurred by the
Lender (including but not limited to reasonable fees and expenses of
attorneys and consultants, whether incurred in connection with any
judicial or administrative process or otherwise) which the Borrower
fails to pay promptly shall become additional indebtedness secured by
the Security Instrument.
(e) HOLD HARMLESS, DEFEND AND INDEMNIFY THE LENDER AND ITS
OFFICERS, DIRECTORS, TRUSTEES, EMPLOYEES, AGENTS, AFFILIATES
(INCLUDING ANY PARENT CORPORATION), SUCCESSORS AND ASSIGNS, FROM AND
AGAINST ALL PROCEEDINGS, CLAIMS, DAMAGES, PENALTIES, FEES, COSTS AND
EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE FEES AND EXPENSES OF
ATTORNEYS AND EXPERT WITNESSES, INVESTIGATORY FEES, AND CLEANUP AND
REMEDIATION EXPENSES, WHETHER INCURRED IN CONNECTION WITH ANY JUDICIAL
OR ADMINISTRATIVE PROCESS OR OTHERWISE), ARISING DIRECTLY OR
INDIRECTLY FROM (i) ANY BREACH OF ANY REPRESENTATION, WARRANTY, OR
OBLIGATION OF THE BORROWER CONTAINED IN THIS SECTION 5.3 OR (ii) THE
PRESENCE OF HAZARDOUS MATERIALS ON OR UNDER THE PREMISES OR ANY
PROPERTY PROXIMATE TO THE PREMISES OR ANY GOVERNMENTAL ACTION ALLEGING
ANY SUCH PRESENCE, EXCEPT TO THE EXTENT THAT THE BORROWER CAN
CONCLUSIVELY PROVE BOTH THAT SUCH PRESENCE OR GOVERNMENTAL ACTION
ALLEGING SUCH PRESENCE WAS CAUSED SOLELY BY ACTIONS, CONDITIONS, OR
EVENTS THAT OCCURRED AFTER THE DATE THAT THE LENDER (OR ANY PURCHASER
AT A FORECLOSURE SALE) ACTUALLY ACQUIRED TITLE TO THE PREMISES AND
THAT SUCH PRESENCE OR GOVERNMENTAL ACTION ALLEGING SUCH PRESENCE WAS
NOT CAUSED BY THE DIRECT OR INDIRECT ACTIONS OF THE BORROWER OR ANY
PARTNER, MEMBER, PRINCIPAL, OFFICER, DIRECTOR, TRUSTEE OR MANAGER OF
THE BORROWER OR ANY EMPLOYEE, AGENT, CONTRACTOR OR AFFILIATE OF THE
BORROWER. THE OBLIGATIONS AND LIABILITIES OF THE BORROWER UNDER THIS
SECTION 5.3(e) SHALL SURVIVE ANY TERMINATION, SATISFACTION,
ASSIGNMENT, ENTRY OF A JUDGMENT OF FORECLOSURE OR DELIVERY OF A DEED
IN LIEU OF FORECLOSURE OF THE SECURITY INSTRUMENT.
Section 5.4 Recourse Covenants.
Except as otherwise expressly permitted by the Loan Documents, during
any period in which the Loan is outstanding, the Borrower agrees that it
will not, without the prior written consent of the Lender:
(a) Sale, Transfer, Conveyance or Disposal. Permit any sale,
transfer, conveyance or other disposal of the Premises, the Rents and
Profits or the Intangible Personalty.
(b) Other Financing and Liens. Engage in any other financing
with respect to the Borrower (except payables incurred in the ordinary
course of business and paid prior to delinquency), the Premises, the
Rents and Profits or the Intangible Personalty or grant any consensual
Liens against the Premises, the Rents and Profits or the Intangible
Personalty.
(c) Special Purpose Entity. Fail to be a Special Purpose
Entity.
Section 5.5 Insurance.
(a) Maintenance of Insurance. The Borrower shall, at its sole
cost and expense, keep in full force and effect all Insurance. The
Borrower shall furnish the Lender evidence acceptable to the Lender of
payment of all Insurance premiums at least thirty (30) days prior to
the due date thereof. If the Borrower fails to maintain any Insurance
required by this Agreement, the Lender may, at its option, procure
such Insurance, and the Borrower shall reimburse the Lender for the
amount of all premiums paid by the Lender thereon promptly upon demand
by the Lender, with interest thereon at the rate then provided by the
Note from the date paid by the Lender to the date of repayment, and
such sum shall be a part of the indebtedness secured by the Security
Instrument. The Lender shall not by the fact of approving, disap-
proving, accepting, preventing, obtaining or failing to obtain any
Insurance, incur any liability for or with respect to the amount of
Insurance carried, the form or legal sufficiency of insurance
contracts, solvency of insurance companies, or payment or defense of
lawsuits, and the Borrower, for itself, hereby expressly assumes full
responsibility therefor and all liability, if any, with respect
thereto.
(b) Insurance with Respect to Immediate Repairs, Replacements
and Additional Repairs or Replacements. In addition to and to the
extent not covered by any Insurance required under the Loan Documents,
the Borrower shall provide or cause to be provided worker's
compensation insurance, builder's risk, and public liability insurance
and other insurance to the extent required under applicable law in
connection with a particular Immediate Repair, Replacement or
Additional Repair or Replacement reasonably required by the Lender.
(c) Approved Insurers. Each of the Borrower's insurers shall be
an Approved Insurer. If any of the Borrower's insurers shall at any
time cease to be an Approved Insurer, then within thirty (30) days
after notice from the Lender to the Borrower, the Borrower will obtain
replacement Insurance or additional Insurance issued by one or more
other Approved Insurers.
(d) Form of Insurance Policies; Endorsements. All policies for
Insurance shall be in such form and with such endorsements as are
comparable to the forms of and endorsements to the Borrower's
insurance policies in effect on the date hereof or otherwise in
accordance with commercially reasonable standards applied by prudent
owners of similar businesses in the general vicinity of the Premises
and generally acceptable to institutional lenders for comparable
properties and risks. All such policies shall name the Lender, and
its successors and assigns, as additional insureds, mortgagees and/or
loss payees, as deemed appropriate by the Lender, and shall provide
that all proceeds are payable to the Lender and shall contain: (i) a
standard "non-contributory mortgagee" endorsement or its equivalent
relating, inter alia, to recovery by the Lender notwithstanding the
negligent or willful acts or omissions of the named Borrower; (ii) to
the extent available at commercially reasonable rates, a waiver of
subrogation endorsement as to the Lender; (iii) an endorsement
providing that no policy shall be impaired or invalidated by virtue of
any act, failure to act, negligence of, or violation of declarations,
warranties or conditions contained in such policy by the Borrower, the
Lender or any other named insured, additional insured, mortgagee or
loss payee, except for the willful misconduct of the Lender knowingly
in violation of the conditions of such policy; (iv) an endorsement
providing for a deductible per loss of an amount not more than that
which is customarily maintained by prudent owners of similar
businesses in the general vicinity of the Premises; (v) a provision
that such policies shall not be canceled or amended, including,
without limitation, any amendment reducing the scope or limits of
coverage, without at least thirty (30) days prior written notice to
the Lender in each instance, and (vi) effective waivers by the insurer
of all claims for insurance premiums against any loss payees,
additional insureds, mortgagees and named insureds (other than the
Borrower). Any insurance coverage relating to the Premises that is
carried by the Borrower in excess of the Insurance required hereunder
shall name the Lender, and its successors and assigns, as additional
insureds, mortgagees and/or loss payees, as appropriate, as provided
herein. A certificate executed by the Borrower's insurance consultant
and other evidence of Insurance required by the Lender shall be
delivered to the Lender not less than ten (10) days prior to the
expiration date of any of the policies for Insurance required to be
maintained hereunder which certificate and other evidence shall
certify payment of applicable premiums for renewal and replacement
policies. The Borrower may effect any Insurance required hereunder
through blanket insurance policies. The Borrower shall deliver to the
Lender certified copies of all policies for Insurance which shall be
taken out upon the Premises while any part of the Loan shall remain
unpaid.
(e) Compliance with Insurance Policy Terms. The Borrower shall
comply with all terms of policies for Insurance and shall not bring or
keep or permit to be brought or kept any article upon the Premises or
cause or permit any condition to exist thereon which would be
prohibited by or could invalidate any Insurance required hereunder.
ARTICLE VI
RESERVE ACCOUNTS
Section 6.1 Establishment of Reserve Accounts.
On or before the Closing Date, the Lender shall establish each Reserve
Account. Each Reserve Account shall be under the sole dominion and control
of the Lender.
Section 6.2 Initial Reserve Deposits.
On the Closing Date, the Borrower shall pay to the Lender for deposit
into each Reserve Account any Initial Reserve Deposit applicable to such
Reserve Account.
Section 6.3 Monthly Reserve Deposits.
On each Payment Date, the Borrower shall pay to the Lender for deposit
into each Reserve Account any Monthly Reserve Deposit applicable to such
Reserve Account. The Lender may, upon written request from the Borrower,
waive any requirement for the payment of a Monthly Reserve Deposit,
provided however, that any such waiver by the Lender of a requirement that
the Borrower pay such Monthly Reserve Deposit may be revoked by the Lender,
in the Lender's sole discretion, at any time upon notice in writing to the
Borrower.
Section 6.4 Adjustments to Monthly Reserve Deposit to the Replacement
Reserve Account.
Not Applicable.
Section 6.5 Permitted Investments, Earnings, Charges and Annual
Accounting.
(a) Permitted Investments. The Lender may invest and reinvest,
or cause to be invested or reinvested, all or any portion of any funds
on deposit in any Reserve Account in Permitted Investments. The
maturities of the Permitted Investments on deposit in any Reserve
Account shall be selected and coordinated to become due not later than
the day before any disbursements from any Reserve Account must be
made. All such Permitted Investments shall be held in the name and be
under the sole dominion and control of the Lender, to the extent
permitted by applicable laws, and no Permitted Investment shall be
made unless the Lender shall perfect its first priority Lien in such
Permitted Investment and, to the extent permitted by applicable laws,
the Lender shall have sole possession and control over each such
Permitted Investment and the income thereon, and any certificate or
other instrument or document evidencing any such investment shall be
delivered directly to the Lender, together with any document of
transfer necessary to transfer title to such investment to the Lender.
The Lender shall not have any liability (other than for the Lender's
gross negligence or willful misconduct) for any loss in investments of
funds in any Reserve Account that are invested in Permitted
Investments and no such loss shall affect the Borrower's obligation to
(i) make any payment hereunder, under the Security Instrument, the
Note or any other Loan Document, or (ii) fund, or have liability for
funding, any Reserve Account. The Borrower agrees that it shall
include all interest, earnings or profits on Permitted Investments of
funds on deposit in any Reserve Account as its income (and, if the
Borrower is a partnership or other pass-through entity, the partners,
members or beneficiaries of the Borrower, as the case may be), and
shall be the owner of such accounts for federal and applicable state
and local tax purposes, except to the extent the Lender retains such
interest, earnings or profits for its own account in accordance with
the provisions of Section 6.5(b) of this Loan Agreement. The Borrower
shall have no right whatsoever to direct the investment of the pro-
ceeds in any Reserve Account.
(b) Earnings. All interest, earnings or profits on the
Permitted Investments of funds in any of the Reserve Accounts shall be
deposited into the applicable Reserve Account, provided that the
Lender may, at its election, retain for its own account any such
interest, earnings or profits (i) on the Tax and Insurance Reserve
Account, and (ii) on any or all of the Reserve Accounts during the
occurrence and continuance of an Event of Default.
(c) Charges. Except as prohibited by applicable laws, the
Lender may charge the Borrower for holding, maintaining and applying
funds in any of the Reserve Accounts to the extent funds on deposit in
such Reserve Account are invested or reinvested in Permitted
Investments and the Lender does not retain for its own account any
interest, earnings or profits on such Reserve Account in accordance
with the provisions of Section 6.5(b) of this Loan Agreement.
(d) Annual Accounting. The Lender shall furnish or cause to be
furnished to the Borrower, without charge, an annual accounting of
each Reserve Account in the normal format of the Lender or its agent,
showing credits and debits to such Reserve Account and the purpose for
which each debit to such Reserve Account was made.
Section 6.6 Assignment to the Lender of Reserve Accounts and Rights
and Claims.
(a) The Borrower hereby assigns to the Lender the Reserve
Accounts as additional security for all of the Borrower's Obligations
to the Lender, under the Note and under the other Loan Documents;
provided, however, the Lender shall make disbursements from the
Reserve Accounts in accordance with the terms of this Agreement,
including without limitation, the Program Rider.
(b) The Borrower assigns to the Lender all rights and claims the
Borrower may have against (i) all persons or entities claiming amounts
due for taxes, utilities, rent or insurance, or (ii) all persons or
entities supplying labor or materials in connection with the Immediate
Repairs, Replacements or Additional Repairs or Replacements; provided,
however, that the Lender may not pursue any such right or claim unless
an Event of Default exists under this Agreement or the Loan Documents.
Section 6.7 Application of Reserve Accounts Upon an Event of Default.
If any Event of Default occurs, then the Borrower shall
immediately lose all of its rights to receive disbursements from the
Reserve Accounts unless and until the earlier to occur of or
concurrently with (a) the date on which such Event of Default is fully
cured, and (b) the date on which all amounts secured by the Security
Instrument and the other Loan Documents have been paid in full and the
lien of the Security Instrument and the other Loan Documents, as
appropriate, have been released by the Lender. Upon any Event of
Default, the Lender may in its sole discretion, use the Reserve
Accounts (or any portion thereof) for any purpose, including but not
limited to (i) repayment of any indebtedness secured by the Security
Instrument and the other Loan Documents, including but not limited to
principal prepayments and the prepayment premium applicable to such
full or partial prepayment (as applicable); provided, however, that
such application of funds shall not cure or be deemed to cure any
Event of Default, (ii) reimbursement of the Lender for all losses,
fees, costs and expenses (including, without limitation, reasonable
legal fees) suffered or incurred by the Lender as a result of such
Event of Default, (iii) payment of any amount expended in exercising
all rights and remedies available to the Lender at law or in equity or
under this Agreement or under any of the other Loan Documents, or (iv)
to the payment of any item for which payment is required or permitted
from any of the Reserve Accounts pursuant to the terms of this Loan
Agreement. Nothing in this Loan Agreement shall obligate the Lender
to apply all or any portion of the Reserve Accounts on account of any
Event of Default by the Borrower or to pay the indebtedness secured by
the Security Instrument or any of the other Loan Documents or in any
specific order of priority.
Section 6.8 Disbursements from Tax and Insurance Reserve Account.
(a) The Lender shall disburse, to the extent of amounts on
deposit in the Tax and Insurance Reserve Account, directly to each
Person owed any portion of the water and sewer assessments and
frontage charges, taxes, assessments and insurance premiums, the total
sum owed to such Person. Such disbursements shall be made by the
Lender (i) so as to coincide in frequency with the regular billing
cycle of such Person, and (ii) on or before the date that each such
payment is due.
(b) The Lender may require the Borrower to pay to the Lender in
advance, additional amounts for taxes, charges, premiums, assessments,
and impositions in connection with the Borrower or the Premises which
the Lender shall reasonably deem necessary. Unless otherwise provided
by applicable law, the Lender may require payments for such other
amounts to be paid by the Borrower in a lump sum or periodic
installments, at the Lender's option.
(c) If the amount held in the Tax and Insurance Reserve Account
at the time of the annual accounting thereof shall exceed the amount
deemed necessary by the Lender to provide for the payment of water and
sewer assessments and frontage charges, taxes, assessments,
impositions and insurance premiums, as they fall due, such excess
shall be credited against future Monthly Reserve Deposits to the Tax
and Insurance Reserve Account. If at any time the amount held in the
Tax and Insurance Reserve Account shall be less than the amount deemed
necessary by the Lender to pay water and sewer assessments and
frontage charges, taxes, assessments, impositions and insurance
premiums, the Borrower shall pay to the Lender any amount necessary to
make up the deficiency within thirty (30) days after notice from the
Lender to the Borrower requesting payment thereof.
(d) Upon payment in full of all amounts owed by the Borrower
under or otherwise secured by any of the Loan Documents, all remaining
amounts on deposit, if any, in the Tax and Insurance Reserve Account
shall be distributed to the Borrower.
Section 6.9 Disbursements from Repair Escrow Account and Replacement
Reserve Account.
Not Applicable.
Section 6.10 Indemnification.
The Borrower agrees to indemnify the Lender and to hold the Lender
harmless from and against any and all actions, suits, claims, demands,
counterclaims, cross-claims, liabilities, losses, damages, obligations,
fees and costs and expenses (including litigation costs, reasonable
attorneys' fees and expenses) arising from or in any way connected with (a)
the performance of the Immediate Repairs, Replacements or Additional
Repairs or Replacements, (b) unpaid taxes, utility bills, rent or insurance
premiums owed by the Borrower, and/or (c) the holding or investment of the
Reserve Accounts, except to the extent any of the foregoing is the direct
result of the gross negligence or willful misconduct of the Lender.
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
Section 7.1 Events of Default.
An Event of Default shall occur if any of the following has occurred
and is continuing:
(a) Payments. The Borrower fails to make any payment hereunder,
under the Note or under any other Loan Document, when due and payable,
and such payment is not received prior to the 10th day after the same
is due (or such greater period, if any, required by applicable law).
(b) Bankruptcy, etc. The occurrence of any Bankruptcy Event
with respect to the Borrower or any general partner or member thereof.
(c) Judgments. One or more judgments or decrees shall be
entered against the Borrower (not paid or fully covered by insurance
provided by a carrier who has acknowledged coverage), and any such
judgments or decrees shall not have been vacated, discharged, stayed
or bonded (through appeal or otherwise) within thirty (30) calendar
days from the entry thereof.
(d) Recourse Covenants. The Borrower violates any of the
Recourse Covenants.
(e) Compliance with Sections 5.1(o) and (p). The Borrower fails
to comply with any or all of the provisions of either Section 5.1(o)
or 5.1(p) and such failure continues for a period of thirty (30)
calendar days following (i) in the case of Section 5.1(o), the date of
written demand by the Lender is made upon the Borrower for the
execution of any agreement or document in accordance with the
provisions of Section 5.1(o) or (ii) in the case of Section 5.1(p),
the date on which any Operating Expense becomes due and payable in
accordance with the terms thereof, without regard to any extension,
modification or waiver relating thereto; provided that if any
Operating Expense is the subject of a bona fide dispute and is less
than 1% of the outstanding balance of the Loan as of the date on which
the particular Operating Expense in dispute became due and payable,
then the Borrower shall have ninety (90) days from the date the same
becomes due and payable to pay such Operating Expense or to furnish
the Lender a bond or other collateral acceptable to the Lender in the
Lender's reasonable discretion.
(f) Representations and Warranties. Any representation,
warranty, acknowledgment or statement made by the Borrower herein, in
any other Loan Document or in any written statement or certificate
delivered or required to be delivered pursuant hereto shall prove
untrue in any material respect on the date as of which it was deemed
to have been made or any representation, warranty acknowledgment or
statement submitted to the Lender concerning the financial condition
or credit standing of the Borrower, any general partner or member
thereof proves to be false or misleading.
(g) Compliance with Covenants and Agreements. The Borrower
shall fail to comply with, observe or perform any covenant or
agreement made by it herein or in any other Loan Document, which
failure continues for thirty (30) days following written notice
thereof to the Borrower; provided that if such failure is of a type
which can not feasibly be cured within such thirty (30) day period and
the Borrower is diligently and in good faith pursuing such cure, then
the Borrower shall have a reasonable period of time (but in no event
more than ninety (90) days following such written notice) to cure such
failure without the same becoming an Event of Default hereunder.
Nothing in this Section 7.1(g) shall be deemed or construed to entitle
the Borrower to any notice and opportunity to cure with respect to any
failure to comply with, observe or perform any covenant or agreement
which constitutes an Event of Default under any other subsection of
this Section 7.1 or to extend any notice and/or opportunity to cure
otherwise provided for in any other subsection of this Section 7.1.
(h) Events of Default under the Program Rider or other Loan
Documents. The occurrence of any Event of Default or similar event
under any of the Program Rider or the other Loan Documents, after
giving effect to any period of time provided for the cure of any such
event or occurrence in the Program Rider or any such Loan Document.
Section 7.2 Remedies.
Upon the occurrence of an Event of Default, the Lender may, at its
option:
(a) Acceleration. Accelerate the entire unpaid principal
balance of the Loan and all accrued interest thereon without advance
notice to the Borrower, the same becoming immediately due and payable.
In addition, upon acceleration, any and all other Obligations of the
Borrower to the Lender shall be immediately due and payable.
(b) Replacement of Property Manager. Upon written notice to the
Borrower, require the replacement of any property manager or managing
agent for the Premises with a property manager or managing agent
acceptable to the Lender.
(c) Other Remedies. Invoke any other remedies set forth herein
or in any of the other Loan Documents, including without limitation,
foreclosure of the Lien granted in the Security Instrument and
enforcement of the assignment to the Lender of the Rents and Profits
in accordance with the terms of the Security Instrument.
ARTICLE VIII
CASUALTY LOSSES; EMINENT DOMAIN
Section 8.1 Repairs and Casualty Losses.
(a) Restoration of Premises. Except as otherwise provided in
this Section 8.1, the Borrower shall, at its expense, promptly repair,
restore, replace or rebuild any part of the Premises which is damaged
or destroyed by any casualty or as the result of any taking under the
power of eminent domain, provided the Lender has made available
insurance proceeds or eminent domain proceeds or awards available to
the Borrower for such repair, restoration, replacement or rebuilding.
The Borrower shall cause all repairs, rebuilding, replacements or
restorations to be (in the reasonable opinion of the Lender) of
substantially equivalent quality to the Premises as of the date
hereof, ordinary wear and tear excepted.
(b) Proof of Loss; Claims Settlement. In the event of loss, the
Borrower shall give prompt written notice thereof to the insurance
carrier and the Lender, and the Lender may make proof of loss if not
made promptly by the Borrower. During the existence of any Event of
Default, the Lender is hereby authorized, in its reasonable
discretion, to adjust, compromise and collect the proceeds of any
insurance claims.
(c) Application of Insurance Proceeds. The Borrower hereby
assigns the proceeds of any such insurance policies to the Lender and
hereby directs and authorizes each insurance company to make payment
for such loss directly to the Lender. The proceeds of any insurance
or any part thereof shall be applied by the Lender in accordance with
the provisions of Section 8.3 of this Loan Agreement.
Section 8.2 Eminent Domain.
(a) Participation in Proceedings. The Borrower shall promptly
notify the Lender of any actual or threatened initiation of any
eminent domain proceeding or other taking for public use as to the
whole or any part of the Premises and/or any rights incident or
appurtenant thereto and shall deliver to the Lender copies of any and
all papers served or received in connection with such proceedings, and
the Lender shall have the right, at its option, to participate in such
proceedings at the expense of the Borrower (including, without
limitation, the Lender's reasonable attorneys' fees) and the Borrower
will execute such documents and take such other steps as required to
permit such participation.
(b) Right to Settle Claims. During the existence of any Event
of Default, the Lender is hereby authorized to adjust, compromise and
collect the proceeds of any eminent domain or similar award or settle
a claim for damages and to apply the same (or any part thereof) to the
then outstanding balance of the Loan.
(c) Use of Proceeds. The Borrower assigns to the Lender any
proceeds or awards which may become due by reason of any condemnation
or other taking for public use of the whole or any part of the
Premises and any rights incident or appurtenant thereto. The proceeds
of any such condemnation award or proceeds of any part thereof shall
be applied by the Lender in accordance with the provisions of Section
8.3 of this Loan Agreement.
(d) Further Assignments; Acceleration. The Borrower agrees to
execute such further assignments and agreements as may be reasonably
required by the Lender to assure the effectiveness of this Section
8.2. In the event any governmental agency or authority shall require
or commence any proceedings for the seizing or demolishing of any part
of the Premises, or shall commence any proceedings to condemn or
otherwise take pursuant to the power of eminent domain (or other
power) a material portion of the Premises, the Lender may, at its
option, declare the Loan to be immediately due and payable in full and
apply all or any portion of the eminent domain (or similar) awards or
proceeds to the then outstanding balance of the Loan.
Section 8.3 Application of Insurance Proceeds and Condemnation Awards.
(a) All proceeds of insurance assigned to the Lender pursuant to
Section 8.1 of this Loan Agreement, and all proceeds or awards which
may become due by reason of any condemnation or other taking for
public use of the whole or any part of the Premises or any rights
incident or appurtenant thereto and that have been assigned to the
Lender pursuant to Section 8.2 of this Loan Agreement shall be
eligible to be applied by the Lender in its sole discretion to the
repayment of the Loan; provided, however, that subject to the
provisions of this Section 8.3, such proceeds shall be held in an
Eligible Account and applied to the repair or restoration of the
Premises if all of the following conditions are met:
(i) there exists no Default Condition or Event of Default;
(ii) the Borrower presents sufficient evidence to the Lender
that (A) with respect to any casualty loss, there are sufficient funds
from the insurance proceeds and from equity funds, if needed, to
completely restore or repair the damaged Premises, (B) with respect to
any condemnation award, there are sufficient funds from the
condemnation award or proceeds and from equity funds, if needed, to
completely restore the Premises to an architectural whole and to pay
Operating Expenses, and (C) the insurance proceeds or condemnation
award is less than 20% of the original Loan Amount;
(iii) as applicable, all affected non-Local Tenants and 75% of
all affected Local Tenants (as determined by square footage) agree in
a manner reasonably satisfactory to the Lender that they will continue
or extend their interests and arrangements for the contract terms then
in effect following the repair, restoration, replacement or
rebuilding;
(iv) all parties having material operating, management and/or
franchise interests in, and arrangements concerning, the Premises
agree that they will continue their interests and arrangements for the
contract terms then in effect following the repair, restoration,
replacement or rebuilding;
(v) the Borrower presents sufficient evidence to the Lender
that the Premises will be repaired or restored to an architectural
whole two (2) years prior to the maturity date of the Loan;
(vi) the Lender will not incur any liability to any other
Person as a result of such use or release of proceeds; and
(vii) (A) as to any casualty loss, the insurance proceeds shall
be held by the Lender and disbursed as repair, restoration,
replacement or rebuilding progresses substantially in accordance with
the procedures set forth in this Loan Agreement for disbursement from
the Replacement Reserve Account; provided, however that insurance
proceeds of $50,000.00 or less will be disbursed directly to the
Borrower for repair, restoration, replacement or rebuilding and (B) as
to any condemnation award, the condemnation award or proceeds shall be
held by the Lender and disbursed as repair, restoration, replacement
or rebuilding progresses substantially in accordance with the
procedures set forth in this Loan Agreement for disbursement from the
Replacement Reserve Account.
(b) If the above-stated conditions are not satisfied within
ninety (90) days of loss, then the Lender may, at its option, apply
any proceeds in repayment of the amount then outstanding under the
Note.
(c) Upon the completion of any repair, restoration, replacement
or rebuilding any remaining proceeds shall be paid to the Lender in
repayment of the amount then outstanding under the Note in accordance
with the provisions of the Note.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Remedies Cumulative; Waivers.
All remedies of the Lender provided for herein and/or in the other
Loan Documents are cumulative and shall be in addition to any and all other
rights and remedies provided for or available under the other Loan
Documents, at law and/or in equity. The exercise of any right or remedy by
the Lender hereunder shall not in any way constitute a cure or waiver of
any Default Condition or Event of Default hereunder or under any other Loan
Document, or invalidate any act done pursuant to any notice of the
occurrence of any Default Condition or Event of Default, or prejudice the
Lender in the exercise of any of its rights hereunder or under or any other
Loan Document, unless, in the exercise of said rights, the Lender realizes
all amounts owed to it under the Loan Documents. No waiver of any Default
Condition or Event of Default hereunder shall be implied from any delay or
omission by the Lender to take action on account of such Default Condition
or Event of Default, and no express waiver shall affect any Default
Condition or Event of Default other than the Default Condition or Event of
Default specified in the waiver and it shall be operative only for the time
and to the extent therein stated. Waivers of any covenants, terms or
conditions contained herein must be in writing and shall not be construed
as a waiver of any subsequent failure to observe or comply with the same
covenant, term or condition. The consent or approval by the Lender to or
of any act by the Borrower requiring further consent or approval shall not
be deemed to waive or render unnecessary the consent or approval to or of
any subsequent or similar act.
Section 9.2 Benefit.
This Loan Agreement is made and entered into for the sole protection
and benefit of the Lender and the Borrower, their successors and permitted
assigns, and no other Person or Persons shall have any right to action
hereon or rights to the Loan proceeds at any time, nor shall the Lender owe
any duty whatsoever to any claimant for labor performed or material
furnished in connection with the construction of the Improvements, or to
apply any undisbursed portion of the Loan to the payment of any such claim,
or to exercise any right or power of the Lender hereunder or arising from
any Default Condition or Event of Default by the Borrower.
Section 9.3 Assignment and Assumption.
(a) The terms hereof shall be binding upon and inure to the
benefit of the heirs, successors, assigns, and personal
representatives of the parties hereto.
(b) The Borrower shall not assign or permit any assumption of
this Loan Agreement, any of the other Loan Documents or any of its
rights, interests, duties or obligations hereunder or thereunder or
any Loan proceeds or other sums to be advanced hereunder in whole or
in part without the prior written consent of the Lender (which consent
shall not be unreasonably withheld or delayed) and the payment to the
Lender of all reasonable and customary expenses incurred by the Lender
in connection with any such assignment and/or assumption and of a
processing fee (i) with respect to any assignment and/or assumption
requested or occurring during the first twelve (12) months of the term
of the Loan, in an amount equal to $25,000.00, provided, however, that
in the event the assignee or purchaser of the Premises is Equity
Residential Properties Trust or an affiliate thereof, the processing
fee shall be in an amount equal to $10,000.00, and (ii) with respect
to any such assignment and/or assumption thereafter, in an amount
equal to $10,000.00; any assignment or assumption (whether voluntary
or by operation of law) without said consent shall be void. Without
in any way limiting the foregoing, in no event shall the Lender
consent to any assignment or assumption requested or occurring during
the first twelve (12) months of the term of the Loan, if the
consideration paid or to be paid by the assignee or purchaser of the
Premises in connection therewith, as determined by the Lender in its
reasonable judgment, is less than the appraised value of the Premises
used by the Lender in underwriting the Loan. The Borrower shall
furnish the Lender at the Borrower's sole cost and expense such
information as the Lender shall request in connection with any
assignment or assumption, including without limitation, an Appraisal
or other evidence satisfactory to the Lender in its reasonable
discretion of the value of the Premises as of the date of the
assignment and/or assumption. In addition, the assignee or purchaser
of the Premises shall be required to assume the Borrower's duties and
obligations under this Loan Agreement and shall be required to execute
and deliver to the Lender such documents, opinions, certificates and
information as the Lender reasonably requires to effectuate such
assumption of duties and obligations. No sale, assignment or
assumption shall relieve the Borrower of its Obligations under this
Loan Agreement or any of the other Loan Documents, unless the Borrower
has obtained the prior written consent of the Lender, which consent
shall not be unreasonably withheld or delayed.
(c) It is expressly recognized and agreed that the Lender may,
in its sole discretion, sell, assign, transfer, participate or
otherwise convey this Loan Agreement, the Note, the Security
Instrument and any other Loan Documents, in whole or in part, to any
other Person provided that all of the provisions hereof shall continue
in full force and effect and, in the event of such assignment, the
Lender shall thereafter be relieved of all liability hereunder and any
Loan disbursements made by any assignee shall be deemed made in
pursuance and not in modification hereof and shall be evidenced by the
Note and secured by the Security Instrument and any other Loan
Documents. It is further expressly recognized that the Lender intends
to sell, transfer, deliver and assign the Loan in the secondary
mortgage market. By its execution of this Loan Agreement and the
other Loan Documents, the Borrower understands and agrees that any
Financial Statement, Operating Statement, Rent Roll and other
information delivered to the Lender may be delivered to any secondary
mortgage market participant in connection with the sale or assignment
of the Loan or any security backed by the Loan. In the event of such
assignment, the Lender shall thereafter be relieved of all liability
hereunder and any Loan disbursements made by any assignee shall be
deemed made in pursuance and not in modification hereof and shall be
evidenced by the Note and secured by the Security Instrument and the
other Loan Documents.
Section 9.4 Information.
The Borrower hereby gives permission to the Lender to release
publicity articles concerning the existence, structure and the terms of the
Loan and the Borrower and principals involved in the financing of the
Premises. It is also expressly recognized and agreed that the Lender may
share any information pertaining to the Loan Documents, the transactions
contemplated thereby and the records maintained by the Lender in connection
therewith with NationsBank Corporation, including its bank subsidiaries and
NationsBanc Montgomery Securities LLC and any of the other Affiliates of
the foregoing and any other Persons which require such information in
connection with the sale of the Loan in the secondary mortgage market.
Section 9.5 Nonrecourse Loan; Exceptions.
The liability of the Borrower hereunder shall be limited to the same
extent set forth in the Note.
Section 9.6 Amendments.
This Loan Agreement shall not be amended except by a written
instrument signed by all parties hereto.
Section 9.7 Governing Law and Jurisdiction.
This Loan Agreement and the other Loan Documents and all matters
relating thereto shall be governed by and construed and interpreted in
accordance with the laws of the State. The Borrower and all of its general
partners/members hereby submit to the jurisdiction of the state and federal
courts located in the State and agree that the Lender may, at its option,
enforce its rights under the Loan Documents in such courts.
Section 9.8 Savings Clause.
Invalidation of any one or more of the provisions of this Loan
Agreement shall in no way affect any of the other provisions hereof, which
shall remain in full force and effect.
Section 9.9 Execution in Counterparts.
This Loan Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument, and in making proof of this Loan
Agreement, it shall not be necessary to produce or account for more than
one such counterpart.
Section 9.10 Notices.
All notices and other communications shall have been duly given and
shall be effective (a) when delivered, (b) when transmitted via telecopy
(or other facsimile device) to the number set forth in Exhibit C hereto,
(c) the day following the day on which the same has been delivered prepaid
to a reputable national overnight air courier service, or (d) the third
Business Day following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case to the respective party at
the address set forth in Exhibit C hereto, or at such other address as such
party may specify by written notice to the other party hereto. No notice
of change of address shall be effective except upon actual receipt. This
Section 9.10 shall not be construed in any way to affect or impair any
waiver of notice or demand provided in any Loan Document or to require
giving of notice or demand to or upon any Person in any situation or for
any reason. In addition to the foregoing, the Lender may, from time to
time, specify to the Borrower additional notice parties by providing to the
Borrower written notice of the name, address, telephone number and telecopy
number of any such additional notice party. Each such additional notice
party shall be entitled to receive and/or give any notice required or
permitted to be given under this Loan Agreement or any other Loan Document.
Section 9.11 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, the Lender is authorized at any time
and from time to time, without presentment, demand, protest or other notice
of any kind (all of which rights being hereby expressly waived), to set-off
and to appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held by or owing to the Lender
(including, without limitation branches, agencies or Affiliates of the
Lender wherever located) to or for the credit or the account of the
Borrower against the obligations and liabilities of the Borrower to the
Lender hereunder, under the Note or otherwise, irrespective of whether the
Lender shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured, and
any such set-off shall be deemed to have been made immediately upon the
occurrence of an Event of Default even though such charge is made or
entered on the books of the Lender subsequent thereto. The Lender agrees
to notify the Borrower subsequent to any such set-off or application.
Section 9.12 Written Agreement.
(a) THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND THE LENDER,
AS APPROPRIATE, SHALL BE DETERMINED SOLELY FROM THIS WRITTEN LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND ANY PRIOR OR
CONTEMPORANEOUS ORAL OR WRITTEN AGREEMENTS BETWEEN THE LENDER AND THE
BORROWER CONCERNING THE SUBJECT MATTER HEREOF AND OF THE OTHER LOAN
DOCUMENTS ARE SUPERSEDED BY AND MERGED INTO THIS LOAN AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
(b) THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY NOT BE
VARIED BY ANY ORAL AGREEMENTS OR DISCUSSIONS THAT OCCUR BEFORE,
CONTEMPORANEOUSLY WITH, OR SUBSEQUENT TO THE EXECUTION OF THIS LOAN
AGREEMENT OR THE OTHER LOAN DOCUMENTS.
(c) THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
Section 9.13 Waiver of Jury Trial.
THE LENDER AND THE BORROWER HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS LOAN
AGREEMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE
BY THE LENDER AND THE BORROWER, AND THE LENDER AND THE BORROWER ACKNOWLEDGE
THAT NO PERSON ACTING ON BEHALF OF ANOTHER PARTY TO THIS LOAN AGREEMENT HAS
MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE LENDER AND THE BORROWER
FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE
OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS LOAN AGREEMENT AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR
OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS
WAIVER WITH COUNSEL.
IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Loan Agreement as of the above-written date.
BORROWER:
WELLSFORD SONTERRA LLC, an
Arizona limited liability company
By: Wellsford/Sonterra Manager,
LLC,
an Arizona limited liability
company, its sole Manager
By: Wellsford Real Properties,
Inc., a Maryland corporation,
its sole Member
By:/s/ David M. Strong
--------------------------------
Name: David M. Strong
Title: Vice President
LENDER:
NATIONSBANK, N.A., a national
banking association
By:/s/ Rhonda David
-------------------------------
Name: Rhonda David
Title: Vice President
EXHIBIT A
EQUITY INTERESTS
Borrower:
Wellsford Real Properties, Inc. 100%
EXHIBIT B
IMMEDIATE REPAIRS, REPLACEMENTS, INITIAL RESERVE DEPOSITS
AND MONTHLY RESERVE DEPOSITS
Immediate Repairs Estimated Cost
None
Replacements Estimated Cost
Not Applicable
Initial Reserve Deposits
Initial Reserve Deposit to the Tax and Insurance Reserve Account:
$104,628.00
Monthly Reserve Deposits
Monthly Reserve Deposits to the Tax and Insurance Reserve Account
shall be in an amount equal to (a) the sum of (i) following the
occurrence of any Event of Default or failure of the Borrower to
furnish the Lender evidence of payment of Insurance premiums at least
thirty (30) days prior to the due date thereof in accordance with
Section 5.5(a) hereof, the aggregate anticipated annual premiums for
all insurance policies required to be maintained pursuant to this Loan
Agreement due in the coming year, (ii) the sum of the anticipated
annual real property taxes, personal property taxes, intangibles taxes
and assessment for the Premises due in the coming year, (iii) the sum
of anticipated annual water and sewer assessments and frontage charges
for the Premises due in the coming year, and (iv) the sum of all other
anticipated assessments and charges against the Premises due in the
coming year, divided by (b) twelve (12).
EXHIBIT C
ADDRESSES FOR NOTICE
if to the Borrower: Wellsford Sonterra LLC
c/o Wellsford Real Properties, Inc.
1623 Blake Street, Suite 270
Denver, Colorado 80202
Attn: David M. Strong
Telephone: (303) 534-4396
Telecopy: (303) 534-4398
if to the Lender: NationsBank, N.A.
c/o Midland Loan Services, L.P.
210 W. 10th Street, 6th Floor
Kansas City, Missouri 64105
Attn: Servicing Manager
Telephone: (800) 894-9205
Telecopy: (816) 843-5522
with copies to: Moore & Van Allen, PLLC (EKO)
NationsBank Corporate Center
100 North Tryon Street, Floor 47
Charlotte, North Carolina 28202-4003
Telephone: (704) 331-1000
Telecopy: (704) 331-1159
EXHIBIT D
PROGRAM RIDER
(Multifamily)
1. Conditions Precedent. The obligation of the Lender to make the
Loan provided for in this Loan Agreement is subject to the satisfaction, by
proper evidence, execution and/or delivery to the Lender of each of the
following items, each in form and substance satisfactory to the Lender and
the Lender's counsel:
(a) Rent Roll. A Rent Roll dated as of a date not more than
forty-five (45) days prior to the Closing Date.
(b) Standard Lease Form. The standard form of lease currently
in use and to be used in future leasing with respect to the Premises.
All leases, assignments of lease, subleases and lease amendments and
other agreements with respect to the Premises (hereinafter "leases")
shall be subordinate to the Security Instrument.
(c) Tenant Estoppel Certificates. Current Tenant Estoppel
Certificates from all commercial tenants and other users (hereinafter
"tenants") of any non-residential portion of the Premises.
(d) Subordination Agreements. Subordination Agreements with all
commercial tenants of any portion of the Premises designated by the
Lender.
(e) Licenses. Copies (including a Certification) of all
licenses, permits, certificates and/or privileges necessary or
desirable for the ownership or operation of the Premises as currently
constructed and operated.
2. Representations and Warranties of the Borrower. To induce the
Lender to enter into this Loan Agreement and to make the Loan, the Borrower
hereby represents and warrants to the Lender on the Closing Date as
follows:
(a) Rent Roll. The Rent Roll provided to the Lender pursuant to
Section 1 of this Program Rider is complete and correct as at the date
thereof.
(b) Leases. All residential leases with respect to the Premises
are for terms of one (1) year or less. Not more than 20% of the net
rentable space at the Premises is being used for non-residential
purposes. Neither the Borrower, nor any general partner or member of
the Borrower, nor any individual having a 10% or greater interest in
the Borrower is an affiliate or otherwise related to the tenant under
any leases for laundry equipment, telecommunications, television or
similar systems at the Premises.
(c) Tenant Estoppel Certificates and Subordination Agreements.
The Borrower has delivered to the Lender an original executed Tenant
Estoppel Certificate for each commercial tenant of any portion of the
Premises and a Subordination Agreement for each commercial tenant of
any portion of the Premises designated by the Lender.
(d) Licenses. The Borrower has all licenses, permits,
certificates and/or privileges necessary or desirable for the
ownership or operation of the Premises as currently constructed and
operated.
3. Affirmative Covenants of the Borrower. During any period in
which the Loan is outstanding, the Borrower agrees that it will:
(a) Lessee Information. Submit to the Lender when requested by
the Lender, all information on all tenant leases otherwise required to
be included in a Rent Roll, which information shall include a
Certification thereof.
(b) Appraisal. In addition to the items required to be
furnished by the Borrower pursuant to Section 5.1(i) of the Loan
Agreement, provide to the Lender or the Lender's appraiser a current
Rent Roll, in form and substance satisfactory to the Lender, in
connection with an Appraisal.
(c) Rent Rolls. Furnish, or cause to be furnished, Rent Rolls
to the Lender within forty-five (45) days of the end of each of the
Borrower's fiscal quarters.
(d) Licenses. Maintain in full force and effect all licenses,
permits, certificates and/or privileges necessary or desirable for the
ownership or operation of the Premises as currently or hereafter
constructed and operated.
4. Negative Covenants of the Borrower. During any period in which
the Loan is outstanding, the Borrower agrees that it will not:
(a) Other Agreements, Licenses and Permits. Allow any default
under or a breach, withdrawal, cancellation, revocation, rescission,
termination, alteration, amendment, extension or modification of the
standard form of lease, or any sales contract, management contract,
construction contract, technical service agreement or other contract
or agreement, or any license, permit, certificate or privilege
affecting the ownership or operation of the Premises.
(b) Management Fees. Pay or allow to be paid incentive
management fees more frequently than annually.
(c) Leases. The Borrower shall not enter into, default under,
breach, withdraw, cancel, rescind, terminate, alter or modify any non-
residential lease of, or other agreement regarding, any portion of the
Premises without the Lender's prior written approval, unless such
lease or other agreement (i) is on a form previously approved by the
Lender, (ii) provides for terms in conformity with local conditions,
(iii) conforms with applicable laws and all recorded restrictive
covenants affecting the Premises, if any, and with the covenants and
agreements set forth in the Loan Documents, including but not limited
to those relating to Hazardous Materials and specifically references
such covenants relating to Hazardous Materials, and (iv) does not
provide for any purchase option, right of first offer or refusal or
similar right relating to all or any portion of the Premises.
5. Hazardous Materials. In addition to all Hazardous Materials
described in the definitions to this Loan Agreement, the term "Hazardous
Materials" shall also include radon and lead based paint.
6. No Low Income Housing Tax Credit. The Borrower has not claimed,
nor does the Borrower intend to claim a low income housing tax credit for
the Premises under Section 42 of the Internal Revenue Code of 1986, or any
successor Section thereto. Should the Borrower later decide to pursue
claiming such a tax credit, the Borrower will not proceed without obtaining
the Lender's prior written consent.