EXHIBIT 10.1
LOAN AGREEMENT
Dated as of July 6, 2005
between
731 RETAIL ONE LLC,
as Borrower,
and
ARCHON FINANCIAL, L.P.,
as Lender
TABLE OF CONTENTS
Page
ARTICLE I
GENERAL TERMS
1.1 The Loan................................................................................ 26
1.2 Interest and Principal.................................................................. 27
1.3 Method and Place of Payment............................................................. 28
1.4 Taxes................................................................................... 29
1.5 Release................................................................................. 32
ARTICLE II
DEFEASANCE AND ASSUMPTION
2.1 Defeasance.............................................................................. 32
2.2 Assumption.............................................................................. 35
ARTICLE III
ACCOUNTS
3.1 Cash Management Account................................................................. 36
3.2 Distributions from Cash Management Account.............................................. 37
3.3 Loss Proceeds Account................................................................... 38
3.4 Tax and Insurance Escrow Account........................................................ 38
3.5 TI/LC Reserve Account................................................................... 40
3.6 Capital Expenditure Reserve Account..................................................... 41
3.7 Intentionally Omitted................................................................... 42
3.8 Unfunded Obligations Account............................................................ 42
3.9 Intentionally Omitted................................................................... 44
3.10 Account Collateral...................................................................... 44
3.11 Permitted Investments................................................................... 44
3.12 Bankruptcy.............................................................................. 45
ARTICLE IV
REPRESENTATIONS
4.1 Organization............................................................................ 45
4.2 Authorization........................................................................... 46
4.3 No Conflicts............................................................................ 46
4.4 Consents................................................................................ 46
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4.5 Enforceable Obligations................................................................. 46
4.6 No Default.............................................................................. 46
4.7 Payment of Taxes........................................................................ 46
4.8 Compliance with Law..................................................................... 46
4.9 ERISA................................................................................... 47
4.10 Government Regulation................................................................... 47
4.11 No Bankruptcy Filing.................................................................... 47
4.12 Other Debt.............................................................................. 47
4.13 Litigation.............................................................................. 47
4.14 Leases; Material Agreements............................................................. 48
4.15 Full and Accurate Disclosure............................................................ 48
4.16 Financial Condition..................................................................... 48
4.17 Single-Purpose Requirements............................................................. 49
4.18 Location of Chief Executive Offices..................................................... 49
4.19 Not Foreign Person...................................................................... 49
4.20 Labor Matters........................................................................... 49
4.21 Title................................................................................... 49
4.22 No Encroachments........................................................................ 49
4.23 Physical Condition...................................................................... 49
4.24 Fraudulent Conveyance................................................................... 50
4.25 Management.............................................................................. 50
4.26 Condemnation............................................................................ 50
4.27 Utilities and Public Access............................................................. 50
4.28 Environmental Matters................................................................... 51
4.29 Assessments............................................................................. 51
4.30 No Joint Assessment..................................................................... 52
4.31 Separate Lots........................................................................... 52
4.32 Permits; Certificate of Occupancy....................................................... 52
4.33 Flood Zone.............................................................................. 52
4.34 Security Deposits....................................................................... 52
4.35 Intentionally Omitted................................................................... 52
4.36 Insurance............................................................................... 52
4.37 Condominium............................................................................. 52
4.38 No Dealings............................................................................. 54
4.39 Estoppel Certificates................................................................... 54
4.40 Survival................................................................................ 54
ARTICLE V
AFFIRMATIVE COVENANTS
5.1 Existence............................................................................... 54
5.2 Maintenance of Property................................................................. 54
5.3 Compliance with Legal Requirements...................................................... 54
5.4 Impositions and Other Claims............................................................ 55
5.5 Access to Property...................................................................... 56
5.6 Cooperate in Legal Proceedings.......................................................... 56
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5.7 Leases.................................................................................. 56
5.8 Plan Assets, etc........................................................................ 58
5.9 Further Assurances...................................................................... 58
5.10 Management of Collateral................................................................ 58
5.11 Notice of Material Event................................................................ 59
5.12 Annual Financial Statements............................................................. 59
5.13 Quarterly Financial Statements.......................................................... 59
5.14 Monthly Financial Statements............................................................ 60
5.15 Insurance............................................................................... 60
5.16 Casualty and Condemnation............................................................... 64
5.17 Annual Budget........................................................................... 66
5.18 General Indemnity....................................................................... 67
5.19 Condominium and Anchor Tenant Covenants................................................. 67
5.20 Certificate of Occupancy................................................................ 68
ARTICLE VI
NEGATIVE COVENANTS
6.1 Liens on the Property................................................................... 68
6.2 Ownership............................................................................... 69
6.3 Transfer................................................................................ 69
6.4 Debt.................................................................................... 69
6.5 Dissolution; Merger or Consolidation.................................................... 69
6.6 Change in Business...................................................................... 69
6.7 Debt Cancellation....................................................................... 70
6.8 Affiliate Transactions.................................................................. 70
6.9 Misapplication of Funds................................................................. 70
6.10 Place of Business....................................................................... 70
6.11 Modifications and Waivers............................................................... 70
6.12 ERISA................................................................................... 70
6.13 Alterations and Expansions.............................................................. 71
6.14 Advances and Investments................................................................ 71
6.15 Single-Purpose Entity................................................................... 71
6.16 Zoning and Uses......................................................................... 71
6.17 Waste................................................................................... 72
ARTICLE VII
DEFAULTS
7.1 Event of Default........................................................................ 73
7.2 Remedies................................................................................ 75
7.3 No Waiver............................................................................... 76
7.4 Application of Payments after an Event of Default....................................... 76
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ARTICLE VIII
CONDITIONS PRECEDENT
8.1 Conditions Precedent to Closing......................................................... 77
ARTICLE IX
MISCELLANEOUS
9.1 Successors.............................................................................. 79
9.2 GOVERNING LAW........................................................................... 80
9.3 Modification, Waiver in Writing......................................................... 80
9.4 Notices................................................................................. 80
9.5 TRIAL BY JURY........................................................................... 82
9.6 Headings................................................................................ 82
9.7 Assignment and Participation............................................................ 82
9.8 Severability............................................................................ 83
9.9 Preferences............................................................................. 83
9.10 Remedies of Borrower.................................................................... 83
9.11 Offsets, Counterclaims and Defenses..................................................... 84
9.12 No Joint Venture........................................................................ 84
9.13 Conflict; Construction of Documents..................................................... 84
9.14 Brokers and Financial Advisors.......................................................... 84
9.15 Counterparts............................................................................ 84
9.16 Estoppel Certificates................................................................... 84
9.17 Payment of Expenses; Mortgage Recording Taxes........................................... 84
9.18 No Third-Party Beneficiaries............................................................ 85
9.19 Recourse................................................................................ 85
9.20 Right of Set-Off........................................................................ 87
9.21 Exculpation of Lender................................................................... 87
9.22 Servicer................................................................................ 88
9.23 Prior Agreements........................................................................ 88
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Exhibits
A Form of Cash Management Agreement
B-1 Form of New York Opinion
B-2 Form of Local Counsel Opinion
B-3 Form of Nonconsolidation Opinion
B-4 Form of Delaware Opinion
C Form of Tenant Notice
D Form of Section 1.4 Certificate
Schedules
A Property
B Exception Report
C Intentionally Omitted
D Unfunded Obligations
E Rent Roll
F Material Agreements
G Intentionally Omitted
H Organizational Chart
I Condominium Common Elements
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LOAN AGREEMENT
This Loan Agreement (this "Agreement") is dated July 6, 2005 and is
between ARCHON FINANCIAL, L.P., a Delaware limited partnership, as lender
(together with its successors and assigns, including any lawful holder of any
portion of the Indebtedness, as hereinafter defined, "Lender"), and 731 RETAIL
ONE LLC, a Delaware limited liability company, as borrower (together with its
permitted successors and assigns, "Borrower").
RECITALS
Borrower desires to obtain from Lender the Loan (as hereinafter
defined) in connection with the financing of the property known as Retail Unit 1
at the condominium currently known as Beacon Court Condominium at 151 East 58th
Street and 731 Lexington Avenue, New York, New York 10022.
Lender is willing to make the Loan on the terms and conditions set
forth in this Agreement if Borrower joins in the execution and delivery of this
Agreement, issues the Note and executes and delivers the other Loan Documents.
Lender and Borrower therefore agree as follows:
DEFINITIONS
(a) When used in this Agreement, the following capitalized terms
have the following meanings:
"Account Collateral" means, collectively, the Collateral Accounts
and all sums at any time held, deposited or invested therein, together with any
interest or other earnings thereon, and all proceeds thereof (including proceeds
of sales and other dispositions), whether accounts, general intangibles, chattel
paper, deposit accounts, instruments, documents or securities.
"Agreement" means this Loan Agreement, as the same may from time to
time hereafter be modified or replaced.
"Alteration" means any demolition, alteration, installation,
improvement or expansion of or to the Property or any portion thereof, other
than Tenant Improvements required under Leases and other than any of the
foregoing relating to a Casualty or Condemnation.
"Alteration Security" has the meaning set forth in Section 6.13.
"Alteration Threshold" means with respect to the Property, Sixteen
Million and No/100 Dollars ($16,000,000.00).
"Anchor Leases" means the (i) Agreement of Lease dated September 22,
2003 between 731 Commercial LLC, as landlord and Home Depot U.S.A., Inc., as
tenant, as amended; (ii) Agreement of Lease dated August 6, 1999 between 731
Commercial LLC (successor in
interest to Seven Thirty One Commercial Limited Partnership), as landlord, and
H&M Hennes & Mauritz L.P. (successor in interest to H&M Hennes & Mauritz Inc.),
as tenant, as amended and (iii) Lease dated September 21, 2004 between 731
Commercial LLC, as landlord, and The Container Store, Inc., as tenant, as
amended, in each case, as the same may be amended, modified or replaced from
time to time in accordance herewith.
"Annual Budget" means a capital and operating expenditure budget for
the Property prepared by Borrower, or Manager on behalf of Borrower, and
specifying Borrower's or Manager's (as applicable) good faith estimate of
amounts sufficient to operate and maintain the Property at a standard at least
equal to that maintained on the Closing Date.
"Appraisal" means an as-is appraisal of the Property that is
prepared by a member of the Appraisal Institute selected by Lender, meets the
minimum appraisal standards for national banks promulgated by the Comptroller of
the Currency pursuant to Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, as amended (FIRREA) and complies with the
Uniform Standards of Professional Appraisal Practice (USPAP).
"Approved Annual Budget" has the meaning set forth in Section 5.17.
"Approved Management Agreement" means that certain Property
Management Agreement, dated as of the Closing Date, between Borrower and
Alexander's Management LLC, as that agreement may be modified or replaced in
accordance herewith, and that certain Retail Unit One Sub-Management Agreement
dated as of the Closing Date between Alexander's Management LLC and Vornado
Office Inc., as such agreement may be modified or replaced in accordance
herewith and any other management agreement that has been approved by Lender,
such approval not to be unreasonably withheld.
"Approved Property Manager" means Alexander's, Inc., any affiliate
of Alexander's, Inc., Vornado, any affiliate of Vornado, or any other management
company with respect to which Lender receives Rating Confirmation, in each case
unless and until Lender requests the termination of that management company
pursuant to Section 5.10(d).
"Assignment" has the meaning set forth in Section 9.7(b).
"Association" means the "Condominium" as such term is defined in the
Declaration.
"Assumption" has the meaning set forth in Section 2.2.
"Bankruptcy Code" has the meaning set forth in Section 7.1(d).
"Bloomberg Lease" means that certain Agreement of Lease, dated as of
April 30, 2001, between Seven Thirty One Limited Partnership, as landlord, and
Bloomberg L.P., as tenant, as the same may be amended from time to time, so long
as such amendment does not have a Material Adverse Effect.
"Borrower" has the meaning set forth in the first paragraph of this
agreement.
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"Borrower Unit" means the Unit identified as Retail Unit 1 in the
Declaration.
"Budgeted Capital Expenditures" means, with respect to any calendar
month, (i) an amount equal to the Capital Expenditures for such calendar month
in the then-applicable Approved Annual Budget, or (ii) such greater amount as
shall equal Borrower's actual Capital Expenditures for such month, except that
during the continuance of a Cash Trap Period such greater amount may in no event
exceed 105% of the amount specified in clause (i), with no individual budget
line item exceeding 110% of the amount set forth in the then-applicable Approved
Annual Budget with respect to such line item for such month, in each case
without the prior written consent of Lender, not to be unreasonably withheld or
delayed, except that no such consent or limitation shall apply to Capital
Expenditures expended in connection with emergencies or risks to health or
safety at the Building.
"Budgeted Operating Expenses" means, with respect to any calendar
month, (i) an amount equal to the Operating Expenses for such calendar month in
the then-applicable Approved Annual Budget, or (ii) such greater amount as shall
equal Borrower's actual Operating Expenses for such month, except that during
the continuance of a Cash Trap Period such greater amount may in no event exceed
105% of the amount specified in clause (i), with no individual budget line item
exceeding 110% of the amount set forth in the then-applicable Approved Annual
Budget with respect to such line item for such month, in each case without the
prior written consent of Lender, not to be unreasonably withheld or delayed,
except no such consent or limitation shall apply to non-discretionary items such
as insurance, utilities and charges under the Declaration or By-Laws.
"Building" has the meaning set forth in the Declaration.
"Business Day" means any day other than (i) a Saturday and a Sunday
and (ii) a day on which federally insured depository institutions in the State
of New York or the state in which the offices of Lender, its trustee, its
Servicer or its Servicer's collection account are located are authorized or
obligated by law, governmental decree or executive order to be closed.
"By-Laws" means the by-laws governing the Condominium, as the same
may be amended, modified or replaced from time to time in accordance herewith.
"Capital Expenditure" means any expense incurred by Borrower for
capital items relating to the Property (including repairs to, and replacements
of, structural components, roofs, building systems, parking garages and parking
lots), in each case to the extent capitalized in accordance with GAAP.
"Capital Expenditure Reserve Account" has the meaning set forth in
Section 3.6(a).
"Cash Management Account" has the meaning set forth in Section
3.1(a).
"Cash Management Agreement" means a cash management agreement in
substantially the form of Exhibit A, as the same may from time to time be
modified or replaced in accordance herewith.
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"Cash Management Bank" means a depository institution selected by
Borrower and acceptable to Lender in which Eligible Accounts may be maintained.
The initial Cash Management Bank shall be Wachovia, so long as Eligible Accounts
may be maintained therein; provided, however, that if at any time Eligible
Accounts may no longer be maintained therein, Wachovia shall be replaced by a
depository institution selected by Borrower and acceptable to Lender in which
Eligible Accounts may be maintained.
"Cash Trap Period" means any period from (i) the conclusion of any
Test Period during which Net Operating Income is less than 85% of Closing Date
NOI, to (ii) the conclusion of the second of any two Test Periods ending in
consecutive Fiscal Quarters thereafter during each of which Test Periods Net
Operating Income is at least 85% of Closing Date NOI; provided, however, that if
at the conclusion of any Test Period, Net Operating Income is less than 85% of
Closing Date NOI, then Borrower may deliver to Lender a Qualified Guarantee or a
Qualified Letter of Credit in an amount equal to the difference between (a) 85%
of the Closing Date NOI and (b) Net Operating Income at the conclusion of such
Test Period, then a Cash Trap Period shall not be deemed to have commenced;
provided, further, however, that any such Qualified Guarantee or Qualified
Letter of Credit shall not be released unless and until the conclusion of the
second of any two Test Periods ending in consecutive Fiscal Quarters thereafter
during each of which Test Periods Net Operating Income is at least 85% of
Closing Date NOI.
"Casualty" means a fire, explosion, flood, collapse, earthquake or
other casualty affecting all or any portion of the Property.
"Certificates" means, collectively, any senior and/or subordinate
notes, debentures or pass-through certificates, or other evidence of
indebtedness, or debt or equity securities, or any combination of the foregoing,
representing a direct or beneficial interest, in whole or in part, in the Loan.
"Change of Control" means the occurrence of one or both of the
following: (i) except for Permitted Transfers, the failure of Borrower to be
Controlled by one or more Qualified Equityholders (individually or
collectively), or (ii) except for Permitted Transfers, the failure of the
Single-Purpose Equityholder (if any) to be Controlled by the same Qualified
Equityholders that Control Borrower.
"Closing Date" means the date of this Agreement.
"Closing Date NOI" means $19,800,000.
"Code" means the Internal Revenue Code of 1986, as amended, and as
it may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Collateral" means all assets owned from time to time by Borrower
including the Property, the Revenues and all other tangible and intangible
property (including any Defeasance Collateral) in respect of which Lender is
granted a Lien under the Loan Documents, and all proceeds thereof.
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"Collateral Accounts" means, collectively, the Lockbox Account, the
Cash Management Account, the Loss Proceeds Account, the Tax and Insurance Escrow
Account, the TI/LC Reserve Account, the Capital Expenditure Reserve Account and
the Unfunded Obligations Account.
"Commercial Board" has the meaning set forth in the Declaration.
"Commercial Common Elements" has the meaning set forth in the
Declaration.
"Common Charges" means all fees, assessments and charges assessed
pursuant to the Condominium Documents against Borrower and the Borrower Unit.
"Common Elements" has the meaning set forth in the Declaration.
"Condemnation" means a taking or voluntary conveyance of all or part
of the Property or any interest therein or right accruing thereto or use
thereof, as the result of, or in settlement of, any condemnation or other
eminent domain proceeding by any Governmental Authority.
"Condominium" means the condominium governed by the Declaration.
"Condominium Act" means the statutes governing condominiums in the
state in which the Property is located.
"Condominium Documents" means, collectively, the Declaration, the
By-Laws, any rules and regulations promulgated thereunder, and any and all other
documents and agreements binding upon, governing or otherwise pertaining to the
Condominium and/or the Association and any additions or amendments thereto made
in accordance herewith.
"Confidential" means that, prior to the occurrence of an Event of
Default or special servicing of the Loan for any reason whatsoever, such
information shall not be disseminated by Lender to any Person unless such
information is already in the public domain or unless Lender is otherwise
required by law, legal requirement or order, writ, subpoena or other directive
of any Governmental Authority. Notwithstanding the foregoing, Lender shall not
be restricted or prohibited in any manner whatsoever from providing such
information to its consultants, attorneys or accountants, the Servicer, any
Rating Agencies or any potential participants or assignees of all or any portion
of the Loan or in connection with a Securitization of all or any portion of the
Loan.
"Consumer Price Index Fraction" means, on the date of calculation, a
fraction whose numerator is the CPI as of the month immediately preceding such
date and whose denominator is the CPI Base.
"Contingent Obligation" means any obligation of Borrower directly or
indirectly guaranteeing any Debt of any other Person in any manner and any
contingent obligation to purchase, to provide funds for payment, to supply funds
to invest in any other Person or otherwise to assure a creditor against loss.
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"Control" of any entity means the ownership, directly or indirectly,
of at least 51% of the equity interests in, and the right to at least 51% of the
distributions from, such entity and the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of such
entity, whether through the ability to exercise voting power, by contract or
otherwise ("Controlled" and "Controlling" each have the meanings correlative
thereto).
"Cooperation Agreement" means that certain Mortgage Loan Cooperation
Agreement, dated as of the Closing Date, among Borrower, Lender and Sponsor, as
the same may from time to time be modified or replaced in accordance herewith.
"CPI" shall mean the "Consumer Price Index - All Urban Consumers -
New York, N.Y., Northeastern N.J. Metropolitan Area, all items" compiled by the
U.S. Department of Labor, Bureau of Labor Statistics, based on 1982-84 as 100
(the "1982-84 Base"). If the CPI hereafter ceases to use the 1982-84 Base as
100, or if a substantial change hereafter is made in the terms or number of
items contained in the CPI, then the CPI shall be adjusted to the figure that
would have been arrived at had such cessation or change not been made. If the
Bureau of Labor Statistics ceases to publish the CPI, then the successor or most
nearly comparable index (as selected by the Lender in good faith) shall be used
subject to such adjustments as may be appropriate to make such successor or most
nearly comparable index comparable to the CPI.
"CPI Base" shall mean the CPI for the calendar month in which this
Agreement is dated.
"Damages" to a party means any and all liabilities, obligations,
losses, damages, penalties, assessments, actions, judgments, suits, claims,
costs, expenses (including reasonable attorneys' fees whether or not suit is
brought), settlement costs and disbursements imposed on, incurred by or asserted
against such party.
"Debt" means, with respect to any Person, without duplication:
(i) all indebtedness of such Person to any other party (regardless
of whether such indebtedness is evidenced by a written instrument such as
a note, bond or debenture) for borrowed money or for the deferred purchase
price of property or services;
(ii) all letters of credit issued for the account of such Person
and all unreimbursed amounts drawn thereunder;
(iii) all indebtedness secured by a Lien on any property owned by
such Person (whether or not such indebtedness has been assumed) except
obligations for impositions which are not yet delinquent;
(iv) all Contingent Obligations of such Person;
(v) all payment obligations of such Person under any interest rate
protection agreement (including any interest rate swaps, floors, collars
or similar agreements) and similar agreements;
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(vi) all contractual indemnity obligations of such Person; and
(vii) any material actual or contingent liability to any Person or
Governmental Authority with respect to any employee benefit plan (within
the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA,
Section 302 of ERISA or Section 412 of the Code.
"Declaration" means that certain Amended and Restated Declaration of
Beacon Court Condominium, dated as of February 8, 2005, recorded on March 9,
2005 in the Office of the City Register of the City of New York, as the same may
be amended, modified or replaced from time to time in accordance herewith.
"Default" means the occurrence of any event which, but for the
giving of notice or the passage of time, or both, would be an Event of Default.
"Default Interest" means, during the continuance of an Event of
Default, the amount by which interest accrued on the Notes at their respective
Default Rates exceeds the amount of interest that would have accrued on the
Notes at their respective Interest Rates.
"Default Rate" means, with respect to any Note, the greater of (x)
5% per annum in excess of the interest rate otherwise applicable to such Note
hereunder and (y) 1% per annum in excess of the Prime Rate from time to time.
"Defeasance Borrower" has the meaning set forth in Section 2.1(b).
"Defeasance Collateral" means direct, non-callable obligations of
the United States of America.
"Defeasance Pledge Agreement" has the meaning set forth in Section
2.1(a)(iii).
"Defease" means to deliver Defeasance Collateral as substitute
Collateral for the Loan in accordance with Section 2.1; and the terms "Defeased"
and "Defeasance" have meanings correlative to the foregoing.
"Designated Purchaser" has the meaning set forth in Section 2.1(d).
"Easement Areas" has the meaning set forth in Section 4.27(ii).
"Eligible Account" means (i) a segregated account maintained with a
federal or state-chartered depository institution or trust company which
complies with the definition of Eligible Institution, or (ii) a segregated trust
account or accounts maintained with the corporate trust department of a federal
depository institution or state-chartered depository institution which has an
investment-grade rating and is subject to regulations regarding fiduciary funds
on deposit under, or similar to, Title 12 of the Code of Federal Regulations
Section 9.10(b) which, in either case, has corporate trust powers, acting in its
fiduciary capacity.
"Eligible Institution" means an institution (i) whose commercial
paper, short-term debt obligations or other short-term deposits are rated at
least A - 1, Prime-1 or F-1, as applicable,
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by each of the Rating Agencies that rate Certificates issued in a Securitization
and whose long-term senior unsecured debt obligations are rated at least A or
A2, as applicable, by each of the Rating Agencies that rate Certificates issued
in a Securitization, and whose deposits are insured by the FDIC or (ii) with
respect to which Lender shall have received Rating Confirmation.
"Engineering Report" means a structural and seismic engineering
report or reports with respect to the Property prepared by an independent
engineer approved by Lender and delivered to Lender in connection with the Loan,
and any amendments or supplements thereto delivered to Lender.
"Environmental Claim" means any written notice, claim, proceeding,
investigation or demand by any Person or Governmental Authority alleging or
asserting liability with respect to Borrower or the Property arising out of,
based on or resulting from (i) the alleged presence, Use or Release of any
Hazardous Substance, (ii) any alleged violation of any Environmental Law, or
(iii) any alleged injury or threat of injury to property, health or safety or to
the environment caused by Hazardous Substances.
"Environmental Indemnity" means that certain environmental indemnity
agreement executed by Borrower and the Sponsor as of the Closing Date, as the
same may from time to time be modified or replaced in accordance herewith.
"Environmental Laws" means any and all present and future federal,
state and local laws, statutes, ordinances, rules, regulations and the like, as
well as any judicial or administrative orders, decrees or judgments thereunder
binding on Borrower, and any permits, approvals, licenses, registrations,
filings and authorizations binding on Borrower, in each case as now or hereafter
in effect, relating to the pollution, protection or cleanup of the environment,
relating to the impact of Hazardous Substances on property, health or safety, or
the Use or Release of Hazardous Substances, or relating to the liability for or
costs of other actual or threatened danger to health or the environment. The
term "Environmental Law" includes, but is not limited to, the following
statutes, as amended, any successors thereto, and any regulations promulgated
pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act (including Subtitle I relating to
underground storage tanks); the Clean Water Act; the Clean Air Act; the Toxic
Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and
Health Act; the Federal Water Pollution Control Act; the Federal Insecticide,
Fungicide and Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors Appropriation Act. The term
"Environmental Law" also includes, but is not limited to, any present and future
federal state and local laws, statutes ordinances, rules, regulations and the
like, conditioning transfer of property upon a negative declaration or other
approval of a Governmental Authority of the environmental condition of a
property; or requiring notification or disclosure of Releases of Hazardous
Substances or other environmental conditions of a property to any Governmental
Authority or other Person, whether or not in connection with transfer of title
to or interest in property.
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"Environmental Reports" means a "Phase I Environmental Site
Assessment" as referred to in the ASTM Standards on Environmental Site
Assessments for Commercial Real Estate, E 1527-94 (and, if necessary, a "Phase
II Environmental Site Assessment"), prepared by an independent environmental
auditor approved by Lender and delivered to Lender and any amendments or
supplements thereto delivered to Lender, and shall also include any other
environmental reports delivered to Lender pursuant to this Agreement and the
Environmental Indemnity.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated thereunder.
"ERISA Affiliate," at any time, means each trade or business
(whether or not incorporated) that would, at the time, be treated together with
Borrower as a single employer under Title IV or Section 302 of ERISA or Section
412 of the Code.
"Event of Default" has the meaning set forth in Section 7.1.
"Exception Report" means the report prepared by Borrower and
attached to this Agreement as Schedule B, setting forth any exceptions to the
representations set forth in Article IV.
"Excess Alteration Amount" has the meaning set forth in Section
6.13.
"Excluded Taxes" has the meaning set forth in section 1.4(e).
"Fiscal Quarter" means the three-month period ending on March 31,
June 30, September 30 and December 31 of each year, or such other fiscal quarter
of Borrower as Borrower may select from time to time with the prior consent of
Lender, such consent not to be unreasonably withheld.
"Fiscal Year" means the 12-month period ending on December 31 of
each year, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior consent of Lender, not to be unreasonably withheld.
"Fitch" means Fitch, Inc. and its successors.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.
"General Common Elements" has the meaning set forth in the
Declaration.
"Governmental Authority" means any federal, state, county, regional,
local or municipal government, any bureau, department, agency or political
subdivision thereof and any Person with jurisdiction exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (including any court).
"Hazardous Substances" means any and all substances (whether solid,
liquid or gas) defined, listed, or otherwise classified as hazardous wastes,
hazardous substances,
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hazardous materials, extremely hazardous wastes, toxic substances, toxic
pollutants, contaminants, pollutants or words of similar meaning or regulatory
effect under any present or future Environmental Laws or the presence of which
on, in or under the Property is prohibited under Environmental Law, including
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead and radon, and compounds containing them
(including gasoline, diesel fuel, oil and lead-based paint), and radioactive
materials, flammables and explosives and compounds containing them.
"Indebtedness" means the Principal Indebtedness, together with
interest and all other obligations and liabilities of Borrower under the Loan
Documents, including all Transaction Costs, Yield Maintenance Premiums and other
amounts due or to become due to Lender pursuant to this Agreement, under the
Notes or in accordance with any of the other Loan Documents, and all other
amounts, sums and expenses reimbursable by Borrower to Lender hereunder or
pursuant to the Notes or any of the other Loan Documents.
"Indemnified Liabilities" has the meaning set forth in Section
9.19(b).
"Indemnified Parties" has the meaning set forth in Section 5.18.
"Independent Director" of any corporation or limited liability
company means a natural person who is not at the time of initial appointment as
a director or manager or at any time while serving as a director or manager and
has not been at any time during the five (5) years preceding such initial
appointment:
(a) a stockholder, director (with the exception of serving as an
Independent Director of the Borrower or any Single-Purpose Equityholder),
officer, trustee, employee, partner, member (with the exception of serving
as special member), attorney or counsel of Borrower, any Single-Purpose
Equityholder or any affiliate of either of them;
(b) a creditor, customer, supplier, or other person who derives any
of its purchases or revenues from its activities with the Borrower, any
Single-Purpose Equityholder or any affiliate of either of them;
(c) a Person Controlling or under common Control with any Person
excluded from serving as Independent Director under (a) or (b); or
(d) a member of the immediate family by blood or marriage of any
Person excluded from serving as Independent Director under (a) or (b).
A natural person who satisfies the foregoing definition other than
subparagraph (b) shall not be disqualified from serving as an Independent
Director of the Borrower or any Single-Purpose Equityholder if such individual
is an Independent Director provided by a nationally-recognized company that
provides professional independent directors (a "Professional Independent
Director") and other corporate services in the ordinary course of its business.
A natural person who otherwise satisfies the foregoing definition other than
subparagraph (a) by reason of being the independent director of a "special
purpose entity" affiliated with the Borrower or any Single-Purpose Equityholder
shall not be disqualified from serving as an Independent Director of the
Borrower or any Single-Purpose Equityholder if such individual is
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either (i) a Professional Independent Director or (ii) the fees that such
individual earns from serving as independent director of affiliates of the
Borrower or any Single-Purpose Equityholder in any given year constitute in the
aggregate less than five percent (5%) of such individual's annual income for
that year. Notwithstanding the immediately preceding sentence, an Independent
Director may not simultaneously serve as Independent Director of the Borrower
and independent director of a special purpose entity that owns a direct or
indirect equity interest in the Borrower or a direct or indirect equity interest
in any co-borrower with the Borrower. For purposes of this paragraph, a "special
purpose entity" is an entity, whose organizational documents contain
restrictions on its activities and impose requirements intended to preserve the
entity's separateness that are substantially similar to the Single-Purpose
Entity requirements of this Agreement.
"Initial Interest Rate" means 4.9325% per annum.
"Initial Payment Date" means the August 5, 2005.
"Insurance Requirements" means, collectively, (i) all material terms
of any insurance policy required pursuant to this Agreement and (ii) all
material regulations and then-current standards applicable to or affecting the
Property or any portion thereof or any use or condition thereof, which may, at
any time, be recommended by the board of fire underwriters, if any, having
jurisdiction over the Property, or any other body exercising similar functions.
"Interest Accrual Period" means, in connection with the calculation
of interest accrued with respect to any specified Payment Date, the period
commencing on and including the sixth (6th) day of any calendar month through
and including the fifth (5th) day of any subsequent calendar month; provided,
however, that the first Interest Accrual Period shall commence on and include
the Closing Date and shall end on but exclude the Initial Payment Date.
"Interest Rate" means (i) with respect to the initial Note, the
Initial Interest Rate, and (ii) with respect to each Note resulting from the
bifurcation of the initial Note into multiple Notes pursuant to Section 1.1(c),
the per annum interest rate of such Note as determined by Lender in accordance
with such Section.
"Lease" means any lease, license, letting, concession, occupancy
agreement, sublease to which Borrower is a party (either originally or by
assignment) or has a consent right, or other agreement (whether written or oral
and whether now or hereafter in effect) under which Borrower is a lessor,
existing as of the Closing Date or hereafter entered into by or on behalf of
Borrower, in each case pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in the
Property, and every modification or amendment thereof, and every guarantee of
the performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.
"Leasing Commissions" means leasing commissions required to be paid
by Borrower in connection with the leasing of space to Tenants at the Property
pursuant to Leases entered into by Borrower in accordance herewith and payable
in accordance with third-party/arm's-length brokerage agreements.
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"Legal Requirements" meansall governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities (including Environmental Laws) affecting either
Borrower or the Property or any portion thereof or the construction, ownership,
use, alteration or operation thereof, or any portion thereof (whether now or
hereafter enacted and in force), including, without limitation, the Condominium
Act, and all permits, licenses and authorizations and regulations relating
thereto.
"Lender" has the meaning set forth in the first paragraph of this
Agreement and in Section 9.7, and with respect to Section 1.4, its participants.
"Lien" means any mortgage, lien (statutory or other), pledge,
hypothecation, assignment, preference, priority, security interest, or any other
encumbrance or charge on or affecting any Collateral or any portion thereof, or
any interest therein (including any conditional sale or other title retention
agreement, any sale-leaseback, any financing lease or similar transaction having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement or similar instrument under the Uniform Commercial Code
or comparable law of any other jurisdiction, domestic or foreign, and
mechanics', materialmen's and other similar liens and encumbrances, as well as
any option to purchase, right of first refusal, right of first offer or similar
right).
"Limited Retail Common Elements" has the meaning set forth in the
Declaration.
"Loan" has the meaning set forth in Section 1.1(a).
"Loan Amount" means $320,000,000.00.
"Loan Documents" means this Agreement, the Note, the Mortgage (and
related financing statements), the Environmental Indemnity, the Subordination of
Property Management Agreement, the Cash Management Agreement, the Cooperation
Agreement, any Qualified Letter of Credit, any Qualified Guarantee, any
Defeasance Pledge Agreement and all other agreements, instruments, certificates
and documents necessary to effectuate the granting to Lender of first-priority
Liens on the Collateral or otherwise in satisfaction of the requirements of this
Agreement or the other documents listed above, as all of the aforesaid may be
modified or replaced from time to time in accordance herewith.
"Lockbox Account" shall have the meaning set forth in Section 1(e)
of the Cash Management Agreement.
"Lockout Period" means the period from the Closing Date to but
excluding the first Payment Date following the earlier to occur of (i) the third
anniversary of the Closing Date and (ii) the second anniversary of the date on
which the entire Loan has been securitized pursuant to a Securitization or
series of Securitizations.
"Loss Proceeds" means amounts, awards or payments payable to
Borrower or Lender in respect of all or any portion of the Property in
connection with a Casualty or Condemnation thereof (after the deduction
therefrom and payment to Borrower and Lender, respectively, of any and all
reasonable expenses incurred by Borrower and Lender in the recovery thereof,
including all attorneys' fees and disbursements, the fees of insurance experts
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and adjusters and the costs incurred in any litigation or arbitration with
respect to such Casualty or Condemnation).
"Loss Proceeds Account" has the meaning set forth in Section 3.3(a).
"Major Lease" means any Lease which (i) when aggregated with all
other Leases at the Property with the same Tenant, and assuming the exercise of
all expansion rights and all preferential rights to lease additional space
contained in such Lease, is expected to cover more than 25,000 rentable square
feet, (ii) contains an option or preferential right to purchase all or any
portion of the Property, (iii) is with an affiliate of Borrower as Tenant, or
(iv) is entered into during the continuance of an Event of Default.
"Material Adverse Effect" means a material adverse effect upon (i)
the ability of Borrower to perform, or of Lender to enforce, any material
provision of any Loan Document, (ii) the enforceability of any material
provision of any Loan Documents, or (iii) the value use or operation of the
Property.
"Material Agreements" means each contract and agreement (other than
Leases, the Condominium Documents and the Approved Management Agreement)
relating to the ownership, management, development, refinancing, use, operation,
leasing, maintenance, repair or improvement of the Property, or otherwise
imposing obligations on Borrower, under which Borrower would have the obligation
to pay more than $100,000 per annum or which cannot be terminated by Borrower
without cause upon 60 days' notice or less without payment of a termination fee
in excess of $100,000.
"Material Alteration" means any Alteration (other than decorative
work such as painting, wall papering and carpeting and the replacement of
fixtures, furnishings and equipment to the extent being of a routine and
recurring nature and performed in the ordinary course of business and Tenant
Improvements paid for by any Tenant) which, when aggregated with all related
Alterations constituting a single project, involves an estimated cost exceeding
$16,000,000 with respect to such Alteration or related Alterations (including
the Alteration in question) then being undertaken at the Property.
"Maturity Date" means the Payment Date first following the 10th
anniversary of the Closing Date, or such earlier date as may result from
acceleration of the Loan in accordance with this Agreement.
"Monthly Capital Expenditure Reserve Amount" means $3,131.84.
"Monthly TI/LC Amount" means $15,659.17.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Mortgage" means that certain amended, restated and consolidated
mortgage, security agreement, financing statement, fixture filing and assignment
of leases, rents and security deposits encumbering the Property executed by
Borrower as of the Closing Date, as the same may from time to time be modified
or replaced in accordance herewith.
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"Net Operating Income" means, with respect to any Test Period, the
excess of (i) Operating Income for the last Fiscal Quarter contained in such
Test Period, times four, minus (ii) Operating Expenses for such Test Period.
"Net Worth" means a Person's equity market capitalization.
"New Note" has the meaning set forth in Section 2.1(d)(ii).
"Non-Excluded Taxes" has the meaning set forth in Section 1.4(a).
"Non-Exempt Lender" has the meaning set forth in Section 1.4(e).
"Nonconsolidation Opinion" means the opinion letter, dated the
Closing Date, delivered by Borrower's counsel to Lender and addressing issues
relating to substantive consolidation in bankruptcy.
"Note" means that certain consolidated, amended and restated
promissory note, dated as of the Closing Date, made by Borrower to the order of
Lender to evidence the Loan, as such note may be replaced by multiple Notes in
accordance with Section 1.1(c) and as otherwise modified, assigned (in whole or
in part) and/or replaced from time to time in accordance herewith.
"Office Unit Owner" has the meaning set forth in the Declaration.
"Officer's Certificate" means a certificate delivered to Lender
which is signed by an authorized officer of Borrower or its managing member and
certifies the information therein to the best of such officer's knowledge.
"Operating Expenses" means, for any period, all operating, renting,
administrative, management, legal and other ordinary expenses of Borrower during
such period, determined in accordance with GAAP; provided, however, that such
expenses shall not include (i) depreciation, amortization or other noncash items
(other than expenses that are due and payable but not yet paid), (ii) interest,
principal or any other sums due and owing with respect to the Loan, (iii) income
taxes or other taxes in the nature of income taxes, (iv) Capital Expenditures,
(v) equity distributions, (vi) any expenses incurred in connection with the
making of the Loan or (vii) all amounts which would otherwise be considered
within Operating Expenses pursuant to the provisions above but are paid directly
by a Tenant.
"Operating Income" means, for any period, all operating income of
Borrower (including the amount of common area maintenance charges, tax
recoveries and rent that would have been received but which is otherwise abated
pursuant to a Lease which is in full force and effect as an inducement to the
Tenant thereunder to enter into such Lease) during such period, determined in
accordance with GAAP (but without straight-lining of rents), other than (i) Loss
Proceeds (but Operating Income will include rental loss insurance proceeds to
the extent allocable to such period), (ii) any revenue attributable to a Lease
to the extent it is paid more than 30 days prior to the due date (other than
common area maintenance and tax reimbursements which may be paid more than one
month in advance), (iii) any interest income from any source, (iv) any
repayments received from any third party of principal loaned or advanced to such
third
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party by Borrower, (v) any proceeds resulting from the Transfer of all or any
portion of the Property, (vi) sales, use and occupancy or other taxes on
receipts required to be accounted for by Borrower to any government or
governmental agency, (vii) Termination Fees, and (viii) any other extraordinary
or non-recurring items.
"Option" has the meaning set forth in the Bloomberg Lease.
"Other Taxes" has the meaning set forth in Section 1.4(b).
"Participation" has the meaning set forth in Section 9.7(b).
"Payment Date" means the Initial Payment Date and, thereafter, the
sixth (6th) day of each month (or, if such sixth (6th) day is not a Business
Day, the first preceding Business Day).
"Permits" means all licenses, permits, variances and certificates
used in connection with the ownership, operation, use or occupancy of the
Property (including certificates of occupancy, business licenses, state health
department licenses, licenses to conduct business and all such other permits,
licenses and rights, obtained from any Governmental Authority or private Person
concerning ownership, operation, use or occupancy of the Property).
"Permitted Debt" means:
(i) the Indebtedness; and
(ii) Trade Payables not represented by a note, customarily paid by
Borrower within 60 days of incurrence and in fact not more than 60 days
outstanding unless being contested in good faith by Borrower in accordance
herewith, which are incurred in the ordinary course of Borrower's
ownership and operation of the Property, in amounts not exceeding 5.0% of
the Loan Amount in the aggregate outstanding at any time and Leasing
Commissions.
"Permitted Encumbrances" means:
(i) the Liens created by the Loan Documents;
(ii) all Liens and other matters specifically disclosed on Schedule
B of the Qualified Title Insurance Policy;
(iii) Liens, if any, for Taxes not yet delinquent;
(iv) mechanics', materialmen's or similar Liens, if any, and Liens
for delinquent taxes or impositions, in each case only if being contested
in good faith in accordance with Section 5.4(ii) hereof;
(v) rights of existing and future Tenants as tenants only pursuant
to written Leases entered into in conformity with the provisions of this
Agreement;
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(vi) Liens filed in connection with equipment leases (excluding
material fixtures required and necessary for the use, operation and
maintenance of the Property); and
(vii) the Option (as defined in the Bloomberg Lease) in favor of the
tenant as set forth in Article 36 of the Bloomberg Lease.
"Permitted Investments" means the following, subject to
qualifications hereinafter set forth:
(i) obligations of, or obligations guaranteed as to principal and
interest by, the U.S. government or any agency or instrumentality thereof,
when such obligations are backed by the full faith and credit of the
United States of America;
(ii) federal funds, unsecured certificates of deposit, time
deposits, banker's acceptances, and repurchase agreements having
maturities of not more than 365 days of any bank, the short-term debt
obligations of which are rated A-1+ (or the equivalent) by each of the
Rating Agencies and, if it has a term in excess of three months, the
long-term debt obligations of which are rated AAA (or the equivalent) by
each of the Rating Agencies;
(iii) deposits that are fully insured by the Federal Deposit
Insurance Corp. (FDIC);
(iv) debt obligations that are rated AAA or higher (or the
equivalent) by each of the Rating Agencies;
(v) commercial paper rated A - 1+ (or the equivalent) by each of
the Rating Agencies;
(vi) investment in money market funds rated AAAm or AAAm - G (or
the equivalent) by each of the Rating Agencies; and
(vii) such other investments as to which Lender shall have received
Rating Confirmation.
Notwithstanding the foregoing, "Permitted Investments" (i) shall exclude any
security with the Standard & Poor's "r" symbol (or any other Rating Agency's
corresponding symbol) attached to the rating (indicating high volatility or
dramatic fluctuations in their expected returns because of market risk), as well
as any mortgage-backed securities and any security of the type commonly known as
"strips"; (ii) shall not have maturities in excess of one year; (iii) shall be
limited to those instruments that have a predetermined fixed dollar of principal
due at maturity that cannot vary or change; and (iv) shall exclude any
investment where the right to receive principal and interest derived from the
underlying investment provides a yield to maturity in excess of 120% of the
yield to maturity at par of such underlying investment. Interest may either be
fixed or variable, and any variable interest must be tied to a single interest
rate index plus a single fixed spread (if any), and move proportionately with
that index. No investment shall be made which requires a payment above par for
an obligation if the obligation may be prepaid at the option of
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the issuer thereof prior to its maturity. All investments shall mature or be
redeemable upon the option of the holder thereof on or prior to the earlier of
(x) three months from the date of their purchase or (y) the Business Day
preceding the day before the date such amounts are required to be applied
hereunder.
"Permitted Transfers" means:
(a) the direct or indirect issuance, redemption, repurchase,
conversion, sale, transfer, pledge or other disposition of publicly or
privately traded securities of Vornado Realty Trust (the "REIT") or the
direct or indirect issuance, redemption, repurchase, conversion, transfer,
pledge or other disposition of limited partnership interests in Vornado,
provided that the REIT (or any permitted successor by merger or
consolidation as hereinafter provided) shall at all times (i) be and
remain the general partner of Vornado (or any permitted successor by
merger or consolidation as hereinafter provided) and have the right and
power to direct the management, policies and day to day business and
affairs of Vornado (or any permitted successor by merger or consolidation
as hereinafter provided) and (ii) directly or indirectly own a minimum of
fifty one percent (51%) of the common equity interests in Vornado (or any
permitted successor by merger or consolidation as hereinafter provided);
(b) a merger or consolidation of the REIT or Vornado into or with
another Person, or the merger or consolidation of another Person into or
with the REIT or Vornado, provided that at all times thereafter either (i)
the senior management of Vornado shall continue to be the senior
management of the surviving entity with the power to direct management,
policies and day to day business and affairs of such surviving entity or
(ii) after giving effect to such merger or consolidation, the senior
management of Vornado or such successor entity shall have similar
experience and expertise in the operation and management of commercial
properties similar to the Property as that of the then current senior
management of Vornado immediately prior to such merger or consolidation;
and
(c) the direct or indirect issuance, sale, redemption, repurchase,
conversion, transfer, pledge or other disposition of publicly or privately
traded securities of Alexanders, Inc. or a merger or consolidation of
Alexanders, Inc. into or with another Person or a merger of another Person
into or with Alexanders, Inc. provided that (i) either (A) the senior
management of Alexanders, Inc. shall continue to be the senior management
of the surviving entity with the power to direct the management, policies
and day to day business and affairs of such surviving entity or (B) after
giving effect to such merger or consolidation, the senior management of
Alexander's, Inc. or such successor entity shall have similar experience
and expertise in the operation and management of commercial properties
similar to the Property as that of the then current senior management of
Alexander's, Inc. immediately prior to such merger or consolidation, and
(ii) an Approved Management Agreement for the Property continues in full
force and effect.
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"Person" means any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association
or Governmental Authority and any fiduciary acting in such capacity on behalf of
any of the foregoing.
"Plan Assets" means assets of any (i) employee benefit plan (as
defined in Section 3(3) of ERISA) subject to Title I of ERISA, (ii) plan (as
defined in Section 4975(e)(1) of the Code) subject to Section 4975 of the Code,
or (iii) governmental plan (as defined in Section 3(32) of ERISA) subject to
federal, state or local laws, rules or regulations substantially similar to
Title I of ERISA or Section 4975 of the Code.
"Policies" has the meaning set forth in Section 5.15(b).
"Prime Rate" means the "prime rate" published in the "Money Rates"
section of The Wall Street Journal. If The Wall Street Journal ceases to publish
the "prime rate," then Lender shall select an equivalent publication that
publishes such "prime rate," and if such "prime rate" is no longer generally
published or is limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall reasonably select a comparable
interest rate index.
"Principal Indebtedness" means the principal balance of the Loan
outstanding from time to time.
"Property" means the real property described on Schedule A, together
with all improvements thereon.
"Qualified Equityholder" means one or more of the following: (i)
Sponsor, the REIT or Vornado, (ii) a real estate company or investment trust,
bank, saving and loan association, investment bank, insurance company, trust
company, commercial credit corporation, pension plan, pension fund or pension
advisory firm, mutual fund, government entity or plan, (iii) an investment
company, money management firm or "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended, or an
institutional "accredited investor" within the meaning of Regulation D under the
Securities Act of 1933, as amended, (iv) an institution substantially similar to
any of the foregoing, (v) any entity Controlled (as defined below) by any of the
entities described in clauses (i), (ii), (iii) or (iv) above, (vi) an investment
fund, limited liability company, limited partnership or general partnership
where an entity that is otherwise a Qualified Equityholder under clauses (i),
(ii), (iii), (iv) or (v) above acts as the general partner, managing member or
fund manager and at least 50% of the equity interests in such investment fund
are owned, directly or indirectly, by one or more entities that are otherwise
Qualified Equityholders under clauses (i), (ii), (iii), (iv) or (v) above, or
(vii) any other entity approved by the Rating Agencies; in each case of clauses
(ii), (iii), or (iv) above of this definition, which (A) has total assets (in
name or under management) in excess of $2,000,000,000 and (except with respect
to a pension advisory firm or similar fiduciary) capital/statutory surplus or
shareholder's equity in excess of $1,000,000,000 and (B) is regularly engaged in
the business of owning and operating commercial real estate properties, and owns
other mixed use real estate comparable to the Property in at least one major
metropolitan area. For purposes of this definition only "Control" means the
ownership, directly or indirectly, in the aggregate of more than fifty percent
(50%) of the beneficial ownership interest of an entity and
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the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through the
ability to exercise voting power, by contract or otherwise; provided, however,
that in the event that a Qualified Equityholder Controls less than one hundred
percent (100%) of a Person which is not Borrower, then the percentage above for
purposes of this definition shall be one hundred percent (100%) and not fifty
percent (50%).
"Qualified Guarantee" means a guarantee from Sponsor or Vornado
Realty LP (at the election of Sponsor) in favor of Lender, in form and substance
reasonably satisfactory to Lender; provided that (1) the aggregate face amount
of all Qualified Guarantees and all Qualified Letters of Credit provided
pursuant to this Agreement shall not exceed 10% of the Loan Amount, (2) a
guarantee shall cease to be a Qualified Guarantee if at any time the Sponsor's
or Vornado Realty LP's, as applicable, Net Worth does not equal or exceed
$500,000,000.00 and (3) at the time of the delivery of each Qualified Guarantee,
Borrower shall deliver to Lender an opinion of counsel, in form and substance
reasonably satisfactory to Lender, to the effect that delivery of such Qualified
Guarantee does not alter the conclusion reached in the Nonconsolidation Opinion.
"Qualified Letter of Credit" means a clean, irrevocable,
unconditional, transferable letter of credit in form reasonably satisfactory to
Lender with respect to which Borrower has no reimbursement obligation, payable
on sight draft only, in favor of Lender and entitling Lender to draw thereon in
New York, New York, issued by a domestic bank or the U.S. agency or branch of a
foreign bank the long-term unsecured debt rating of which is not less than A+
(or the equivalent) from each of the Rating Agencies; provided that (1) the
aggregate amount of Qualified Letters of Credit and Qualified Guarantees
provided pursuant to this Agreement shall not exceed 10% of the Loan Amount, (2)
a letter of credit shall cease to be a Qualified Letter of Credit if at any time
the long-term unsecured debt rating of the issuing bank from any of the Rating
Agencies shall fall below A+ (or the equivalent), and (3) at the time of the
delivery of each Qualified Letter of Credit (if delivered subsequent to the
Closing Date), Borrower shall deliver to Lender an opinion of counsel, in form
and substance reasonably satisfactory to Lender, to the effect that delivery of
such Qualified Letter of Credit does not alter the conclusion reached in the
Nonconsolidation Opinion. The following terms and conditions shall apply to each
Qualified Letter of Credit:
(i) Each such Qualified Letter of Credit shall expressly provide
that partial draws are permitted thereunder.
(ii) Each such Qualified Letter of Credit shall expressly provide
that it is freely transferable to any successor or assign of Lender.
(iii) Lender shall be entitled to draw on any Qualified Letter of
Credit immediately and without further notice (a) upon the occurrence and
during the continuance of any Event of Default, (b) if Borrower shall not
have delivered to Lender, no less than 30 days prior to the expiration
date of such Qualified Letter of Credit (including any renewal or
extension thereof), a renewal or extension of such Qualified Letter of
Credit or a replacement Qualified Letter of Credit for a term of not less
than one year (or through the date that is 30 days beyond the Maturity
Date, whichever is earlier), or (c) if the credit rating or financial
condition of the issuing bank falls below the ratings
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set forth above in this definition and Borrower fails to satisfy its
obligations under Section 3.8(d).
"Qualified Successor Borrower" means a Single-Purpose Entity that is
Controlled by one or more Qualified Equityholders.
"Qualified Survey" means current title surveys of the Property,
certified to Borrower, the title company issuing the Qualified Title Insurance
Policy and Lender and their respective successors and assigns, in form and
substance reasonably satisfactory to Lender.
"Qualified Title Insurance Policy" means an ALTA extended coverage
mortgagee's title insurance policy in form and substance reasonably satisfactory
to Lender.
"Rating Agency" means (i) until a Securitization or series of
Securitizations has occurred, which, in the aggregate shall have securitized the
entire Loan, S&P, Moody's and Fitch, and (ii) from and after the occurrence of a
Securitization or series of Securitizations which, in the aggregate, shall have
securitized the entire Loan, those of S&P, Moody's and Fitch that rate the
Certificates issued in such Securitization or series of Securitizations.
"Rating Confirmation" means, with respect to any proposed action,
confirmation in writing from each of the Rating Agencies that such action shall
not result, in and of itself, in a downgrade, withdrawal or qualification of any
rating then assigned to any outstanding Certificates; except that if any portion
of the Loan shall not have been securitized pursuant to a Securitization rated
by the Rating Agencies, then "Rating Confirmation" shall instead mean that the
matter in question is subject to the prior written approval of both (x) the
applicable Rating Agencies (if and to the extent that any portion of the Loan
has been securitized pursuant to a Securitization or series of Securitizations
rated by such Rating Agencies), and (y) Lender in its reasonable discretion. For
the avoidance of doubt, prior to a Securitization of any portions of the Loan, a
Rating Confirmation shall only consist of the prior written approval of Lender,
in its reasonable discretion. No Rating Confirmation shall be regarded as having
been received unless and until any conditions imposed on its effectiveness by
any Rating Agency shall have been satisfied.
"REIT" has the meaning set forth in the definition "Permitted
Transfers."
"Release" with respect to any Hazardous Substance means any release,
deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Substances into the indoor or outdoor environment
(including the movement of Hazardous Substances through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata).
"Rent Roll" has the meaning set forth in Section 4.14(a).
"Residential Unit Owners" has the meaning set forth in the
Declaration.
"Restoration Adjustment Threshold" means Twelve Million and No/100
Dollars ($12,000,000.00).
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"Restoration Threshold" means Two Million and No/100 Dollars
($2,000,000.00).
"Retail Board" has the meaning set forth in the Declaration.
"Retail Common Elements" has the meaning set forth in the
Declaration.
"Retail Unit Owners" has the meaning set forth in the Declaration.
"Revenues" means all rents, rent equivalents, moneys payable as
damages pursuant to a Lease or in lieu of rent or rent equivalents, royalties
(including all oil and gas or other mineral royalties and bonuses), income,
receivables, receipts, revenues, deposits (including security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower from any and all sources including any
obligations now existing or hereafter arising or created out of the sale, lease,
sublease, license, concession or other grant of the right of the use and
occupancy of property or rendering of services by Borrower and proceeds, if any,
from business interruption or other loss of income insurance.
"S&P" means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc., and its successors.
"Section 1.4 Certificate" has the meaning set forth in Section
1.4(e).
"Section 1.4 Taxes" has the meaning set forth in Section 1.4(a).
"Securitization" means a transaction in which all or any portion of
the Loan is deposited into one or more trusts which issue Certificates to
investors, or a similar transaction.
"Securitization Vehicle" means the issuer of Certificates in a
Securitization of the Loan.
"Service" means the Internal Revenue Service or any successor agency
thereto.
"Servicer" means the entity or entities appointed by Lender from
time to time to serve as servicer and/or special servicer of the Loan. If at any
time no entity is so appointed, the term "Servicer" shall be deemed to refer to
Lender.
"Single Member LLC" means a limited liability company which either
(x) has only one member, or (y) has multiple members, none of which is a
Single-Purpose Equityholder.
"Single-Purpose Entity" means a Person which (a) was formed under
the laws of the State of Delaware solely for the purpose of acquiring and
holding (i) an ownership interest in the Property, or (ii) in the case of a
Single-Purpose Equityholder, an ownership interest in the Borrower , (b) does
not engage in any business unrelated to (i) the Property (or, if applicable,
Defeasance Collateral), or (ii) in the case of a Single-Purpose Equityholder,
its ownership interest in the Borrower (or, if applicable, Defeasance
Collateral), (c) does not have any assets other than those related to (i) its
interest in the Property (or, if applicable, Defeasance Collateral), or (ii) in
the case of a Single-Purpose Equityholder, its ownership interest in the
Borrower,
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(d) does not have any Debt other than, in the case of Borrower, Permitted Debt,
(e) maintains books, accounts, records, financial statements, stationery,
invoices and checks which are separate and apart from those of any other Person
(except that such Person's financial position, assets, results of operations and
cash flows may be included in the consolidated financial statements of an
affiliate of such Person in accordance with GAAP, provided that any such
consolidated financial statements shall contain a note indicating that such
Person and its affiliates are separate legal entities and maintain records,
books of account separate and apart from any other Person), (f) is subject to
and complies with all of the limitations on powers and separateness requirements
set forth in the organizational documentation of such Person as of the Closing
Date, (g) holds itself out as being a Person separate and apart from each other
Person and not as a division or part of another Person, (h) conducts its
business in its own name (except for services rendered under a management
agreement with an affiliate, so long as the manager, or equivalent thereof,
under such management agreement holds itself out as an agent of such Person),
(i) exercises reasonable efforts to correct any known misunderstanding actually
known to it regarding its separate identity and, except for capital
contributions and capital distributions permitted under its organizational
documents and properly reflected on its books and records, enters into
transactions with its affiliates only on terms similar to those of an
arm's-length transaction, (j) pays its own liabilities out of its own funds
(including the salaries of its own employees) and reasonably allocates any
overhead that is shared with an affiliate, including paying for shared office
space and services performed by any officer or employee of an affiliate, (k)
maintains a sufficient number of employees, if any, in light of its contemplated
business operations, (l) conducts its business so that the assumptions made with
respect to it which are contained in the Nonconsolidation Opinion shall at all
times be true and correct in all material respects, (m) in the case of (i) a
corporation, observes all applicable corporate formalities in all material
respects, (ii) a limited liability company, observes all applicable limited
liability company formalities in all material respects, and (iii) a limited
partnership, observes all applicable limited partnership formalities in all
material respects, (n) does not commingle its assets with those of any other
Person and holds such assets in its own name, (o) does not assume, guarantee or
become obligated for the debts of any other Person, and does not hold out its
credit as being available to satisfy the obligations or securities of others,
(p) does not acquire obligations or securities of its shareholders, members or
partners, (q) does not pledge its assets to secure the obligations of any other
Person and does not make any loans or advances to any Person, provided that
Borrower, from time to time in the ordinary course of business, may agree with
Tenants in Leases of portions of the Property to make certain tenant improvement
allowances available to such Tenants, (r) maintains adequate capital in light of
its contemplated business operations, (s) has two Independent Directors on its
board of directors or board of managers, or, in the case of limited partnership,
has a Single-Purpose Equityholder with two Independent Directors on such
Single-Purpose Equityholder's board of directors or board of managers, (t) has
by-laws or an operating agreement, or, in the case of a limited partnership, has
a Single-Purpose Equityholder with by-laws or an operating agreement, which
provides that, for so long as the Loan is outstanding, such Person shall not
take or consent to any of the following actions except to the extent expressly
permitted in this Agreement and the other Loan Documents:
(i) the dissolution, liquidation, consolidation, merger or sale of
all or substantially all of its assets (and, in the case of Single-Purpose
Equityholder, the assets of the Borrower);
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(ii) the engagement by such Person (and, in the case of a
Single-Purpose Equityholder, the engagement by the Borrower) in any
business other than the acquisition, development, management, leasing,
ownership, maintenance and operation of the Property (or, if applicable,
Defeasance Collateral) and activities incidental thereto (and, in the case
of a Single-Purpose Equityholder, activities incidental to the acquisition
and ownership of its interest in the Borrower);
(iii) the filing, or consent to the filing, of a bankruptcy or
insolvency petition, any general assignment for the benefit of creditors
or the institution of any other insolvency proceeding, or the seeking or
consenting to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian or any similar official in respect of
such Person without the affirmative vote of both of its Independent
Directors (and, in the case of a Single-Purpose Equityholder, in respect
of the Borrower without the affirmative vote of both of such
Single-Purpose Equityholder's Independent Directors); and
(iv) any amendment or modification of any provision of its (and, in
the case of a Single-Purpose Equityholder, the Borrower's) organizational
documents relating to qualification as a "Single-Purpose Entity".
and (u) if such entity is a Single Member LLC, has organizational documents
which provide that upon the occurrence of any event (other than a permitted
equity transfer) that causes its sole member to cease to be a member while the
Loan is outstanding, at least one of its Independent Directors shall
automatically be admitted as the sole member of the Single Member LLC and shall
preserve and continue the existence of the Single Member LLC without
dissolution.
"Single-Purpose Equityholder" means a Single-Purpose Entity that (x)
is a single member limited liability company formed under the laws of the State
of Delaware or a corporation, (y) owns at least a 1% direct equity interest in
Borrower, and (z) serves as the general partner or managing member of Borrower;
provided, however, that 731 Commercial LLC shall not be construed to be a
Single-Purpose Equityholder hereunder.
"Sponsor" means Alexander's, Inc., a Delaware corporation.
"Subordination of Property Management Agreement" means that certain
consent and agreement of manager and subordination of management agreement
executed by Borrower and the Approved Property Manager as of the Closing Date,
as the same may from time to time be modified or replaced in accordance
herewith.
"Tax and Insurance Escrow Account" has the meaning set forth in
Section 3.4(a).
"Taxes" means all real estate and personal property taxes,
assessments, fees, taxes on rents or rentals, water rates or sewer rents,
facilities and other governmental, municipal and utility district charges or
other similar taxes or assessments now or hereafter levied or assessed or
imposed against the Property or Borrower with respect to the Property or rents
therefrom or which may become Liens upon the Property, without deduction for any
amounts reimbursable to Borrower by third parties.
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"Tenant" means any Person liable by contract or otherwise to pay
monies (including a percentage of gross income, revenue or profits) pursuant to
a Lease.
"Tenant Improvements" means, collectively, (i) tenant improvements
to be undertaken for any Tenant which are required to be completed by or on
behalf of Borrower pursuant to the terms of such Tenant's Lease, and (ii) tenant
improvements paid or reimbursed through allowances to a Tenant pursuant to such
Tenant's Lease.
"Tenant Notice" has the meaning set forth in Section 3.1(b).
"Termination Fee" has the meaning set forth in Section 3.5(d).
"Terrorism Premium Threshold" means $1,000,000.00, which amount
shall be increased on each anniversary of the date hereof to an amount equal to
the product of (a) the Terrorism Threshold Amount on the date hereof and (b) the
Consumer Price Index Fraction.
"Test Period" means each 12-month period ending on the last day of a
Fiscal Quarter.
"TI/LC Reserve Account" has the meaning set forth in Section 3.5(a).
"Trade Payables" means unsecured amounts payable by or on behalf of
Borrower for or in respect of the operation of the Property in the ordinary
course and which would under GAAP be regarded as ordinary expenses, including
amounts payable to suppliers, vendors, contractors, mechanics, materialmen or
other Persons providing property or services to the Property or Borrower and the
capitalized amount of any ordinary-course financing leases.
"Transaction" means, collectively, the transactions contemplated by
the Loan Documents.
"Transaction Costs" means the costs and expenses described in
Section 9.17.
"Transfer" means the sale or other whole or partial conveyance of
all or any portion of the Property or any direct or indirect interest therein to
a third party, including granting of any purchase options, rights of first
refusal, rights of first offer or similar rights in respect of any portion of
the Property or the subjecting of any portion of the Property to restrictions on
transfer; except that the conveyance of a space lease at the Property in
accordance herewith shall not constitute a Transfer.
"Treasury Constant Yield" means the arithmetic mean of the rates
published as "Treasury Constant Maturities" as of 5:00 p.m., New York time, for
the five Business Days preceding the date on which acceleration has been
declared, as shown on the USD screen of the Moneyline Telerate Service (or such
other page as may replace that page on that service, or such other page or
replacement therefor on any successor service), or if such service is not
available, the Bloomberg Service (or any successor service), or if neither the
Moneyline Telerate Service nor the Bloomberg Service is available, under Section
504 in the weekly statistical release designated H.15(519) (or any successor
publication) published by the Board of Governors of the Federal Reserve System,
for "On the Run" U.S. Treasury obligations corresponding to the
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scheduled Maturity Date. If no such maturity shall so exactly correspond, yields
for the two most closely corresponding published maturities shall be calculated
pursuant to the foregoing sentence and the Treasury Constant Yield shall be
interpolated or extrapolated (as applicable) from such yields on a straight-line
basis (rounding, in the case of relevant periods, to the nearest month).
"Unfunded Existing Leasing Commissions Obligations" has the meaning
set forth in Section 3.8(f).
"Unfunded Free Rent Obligations" has the meaning set forth in
Section 3.8(f).
"Unfunded Obligations" means the items described in Schedule D.
"Unfunded Obligations Account" has the meaning set forth in Section
3.8(a).
"Unfunded Obligations Amount" means $22,884,380.00.
"Unfunded Tenant Allowance Obligations" has the meaning set forth in
Section 3.8(f).
"Unfunded Vacant Space Obligations" has the meaning set forth in
Section 3.8(f).
"Unit" means each individual unit in the Condominium (together with
all interests appurtenant thereto), and "Units" means all such Units,
collectively.
"Use" means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation of such
Hazardous Substance.
"Waste" means any material physical abuse or destructive use
(whether by action or inaction) of the Property by Borrower or any of its
affiliates.
"Vornado" means Vornado Realty L.P., a Delaware limited partnership.
"Yield Maintenance Premium" shall mean, with respect to any payment
of principal after the occurrence and during the continuance of an Event of
Default, the product of:
(A) a fraction whose numerator is the amount so paid and whose
denominator is the outstanding principal balance of the Loan before giving
effect to such payment, times
(B) the excess of (1) the sum of the respective present values,
computed as of the date of such prepayment, of the remaining scheduled
payments of principal and interest with respect to the Loan (assuming no
prepayments or acceleration of the Loan), determined by discounting such
payments to the date on which such payments are made at the Treasury
Constant Yield, over (2) the outstanding principal balance of the Loan on
such date immediately prior to such payment;
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provided that the Yield Maintenance Premium shall be not less than 3% of the
amount prepaid.
The calculation of the Yield Maintenance Premium shall be made by
Lender and shall, absent manifest error, be final, conclusive and binding upon
all parties.
(b) Rules of Construction. All references to sections, schedules
and exhibits are to sections, schedules and exhibits in or to this Agreement
unless otherwise specified. Unless otherwise specified: (i) all meanings
attributed to defined terms in this Agreement shall be equally applicable to
both the singular and plural forms of the terms so defined, (ii) "including"
means "including, but not limited to", and (iii) "mortgage" means a mortgage,
deed of trust, deed to secure debt or similar instrument, as applicable, and
"mortgagee" means the secured party under a mortgage, deed of trust, deed to
secure debt or similar instrument. All accounting terms not specifically defined
in this Agreement shall be construed in accordance with GAAP, as same may be
modified in this Agreement.
ARTICLE I
GENERAL TERMS
1.1. The Loan.
(a) On the Closing Date, subject to the terms and conditions of
this Agreement, Lender shall make a loan to Borrower (the "Loan") in an amount
equal to the Loan Amount. The Loan shall initially be represented by a single
Note which shall bear interest as described in this Agreement at a per annum
rate equal to the Initial Interest Rate.
(b) The Loan shall be secured by the Collateral.
(c) Archon Financial, L.P. or its affiliate, as applicable, shall
have the right at any time prior to a Securitization of the entire Loan, at
Lender's sole discretion, to replace the initial Note with two or more
replacement Notes, and the holder (if such holder is Archon Financial, L.P. or
any affiliate of Archon Financial, L.P.) of each replacement Note shall
similarly have the right at any time prior to a Securitization of the entire
Loan, at such holder's sole discretion, to replace its Note with two or more
replacement Notes. Each replacement Note shall be in the form of the Note so
replaced, but for its principal amount and Interest Rate. The principal amount
of each Note shall be determined by the applicable holder in its sole
discretion, provided that the initial sum of the principal amounts of the
replacement Notes shall equal the then-outstanding principal balance of the
Notes that are so replaced. The Interest Rate of each replacement Note shall be
determined by the applicable holder in its sole discretion, provided that the
initial weighted average of such Interest Rates, weighted on the basis of the
principal balances of the respective Notes, shall initially equal the Interest
Rate of the Note so replaced. Borrower shall execute and return to Archon
Financial, L.P. or its affiliate, as applicable, each such Note within three
Business Days after Borrower's receipt of an execution copy thereof, and
Borrower's failure to do so within such time period shall, at Lender's election,
constitute an immediate Event of Default hereunder. If requested by Lender,
Borrower shall deliver to Lender at Lender's sole cost and expense, together
with such replacement Notes, an opinion of counsel with respect to the due
authorization and enforceability of such replacement Notes and
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confirming that the delivery of such replacement Notes does not alter the
conclusions reached in the legal opinions delivered to Lender at Closing.
Notwithstanding anything contained herein to the contrary, the replacement Notes
shall provide that (a) during the continuance of an Event of Default any
prepayments made under the replacement Notes shall be applied sequentially to
reduce the principal balance of the replacement Note with the highest principal
balance first, and the Notes with the lowest principal balance last and (b) any
prepayments made in connection with a Casualty or Condemnation shall be applied
to reduce the principal balance of the replacement Notes on a pro rata, pari
passu basis. Notwithstanding anything to the contrary contained herein, Lender
agrees that regardless of any replacement of the Note with two or more
replacement Notes, Borrower shall only be required to deal with Lender or one
Servicer for any approvals, requests, deliveries or other matters set forth in
this Agreement or the other Loan Documents.
1.2. Interest and Principal.
(a) Commencing with the Initial Payment Date, and on each and
every Payment Date thereafter, Borrower shall pay to Lender interest on each
Note for the applicable Interest Accrual Period at the applicable Interest Rate
(except that in each case, interest shall be payable on the Indebtedness,
including due but unpaid interest, at the Default Rate with respect to any
portion of such Interest Accrual Period falling during the continuance of an
Event of Default, in which case the monthly payment shall be increased by the
amount of Default Interest accrued on the Notes during the applicable Interest
Accrual Period). On the Closing Date, Borrower shall pay interest from and
including the Closing Date through the end of the first Interest Accrual Period.
Interest payable hereunder shall be computed on the basis of a 360-day year and
the actual number of days elapsed in the related Interest Accrual Period.
(b) No prepayments of the Loan shall be permitted except for (i)
prepayments resulting from Casualty or Condemnation as described in Section
5.16(d), and (ii) a prepayment of the Loan in whole (but not in part) on any
Business Day that is not more than 120 days prior to the scheduled Maturity Date
and that is not less than 30 days following Lender's receipt of written notice
of Borrower's intent to prepay; provided that any prepayment under this clause
(ii) shall be accompanied by all interest accrued on the amount prepaid plus, if
such prepayment does not occur on a Payment Date, the amount of interest that
would have accrued thereon if the Loan had remained outstanding through the end
of the Interest Accrual Period in which such prepayment occurs, plus all other
amounts then due under the Loan Documents. Borrower's notice of prepayment shall
create an obligation of Borrower to prepay the Loan as set forth therein, but
may be rescinded with five days' written notice to Lender (subject to payment of
any reasonable out-of-pocket costs and expenses resulting from such rescission).
In addition, Defeasance shall be permitted after the expiration of the Lockout
Period as described in Section 2.1. The entire outstanding principal balance of
the Loan, together with interest through the end of the applicable Interest
Accrual Period and all other amounts then due under the Loan Documents, shall be
due and payable by Borrower to Lender on the Maturity Date.
(c) If all or any portion of the Principal Indebtedness is paid to
Lender following acceleration of the Loan, Borrower shall pay to Lender an
amount equal to the applicable Yield Maintenance Premium. Amounts received in
respect of the Indebtedness during the continuance of an Event of Default shall
be applied toward interest, principal and other
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components of the Indebtedness (in such order as Lender shall determine) before
any such amounts are applied toward payment of Yield Maintenance Premiums, with
the result that Yield Maintenance Premiums shall accrue as the Principal
Indebtedness is repaid but no amount received from Borrower shall constitute
payment of a Yield Maintenance Premium until the remainder of the Indebtedness
shall have been paid in full. Borrower acknowledges that (i) a prepayment will
cause damage to Lender; (ii) the Yield Maintenance Premium is intended to
compensate Lender for the loss of its investment and the expense incurred and
time and effort associated with making the Loan, which will not be fully repaid
if the Loan is prepaid; (iii) it will be extremely difficult and impractical to
ascertain the extent of Lender's damages caused by a prepayment after an
acceleration or any other prepayment not permitted by the Loan Documents; and
(iv) the Yield Maintenance Premium represents Lender's and Borrower's reasonable
estimate of Lender's damages for the prepayment and is not a penalty.
(d) Any payments of interest and/or principal not paid when due
hereunder shall bear interest at the applicable Default Rate and, with respect
to interest payments only, when paid, if paid more than three (3) days after
notice thereof, shall be accompanied by a late fee in an amount equal to 3%
times the amount of such late payment. Borrower acknowledges that (i) a
delinquent payment will cause damage to Lender; (ii) the late fee is intended to
compensate Lender for the loss of use of the delinquent payment and the expense
incurred and time and effort associated with recovering the delinquent payment;
(iii) it will be extremely difficult and impractical to ascertain the extent of
Lender's damages caused by the delinquency; and (iv) the late fee represents
Lender's and Borrower's reasonable estimate of Lender's damages from the
delinquency and is not a penalty. Notwithstanding anything contained herein to
the contrary in the event that Lender has delivered to Borrower the notice set
forth in this Section 1.2(d) more than five (5) times during the term of the
Loan, Lender shall no longer be required to provide the foregoing notice to
Borrower and thereupon any payments of interest not paid when due hereunder when
paid, shall be accompanied by a late fee in an amount equal to 3% times the
amount of such late payment.
1.3. Method and Place of Payment. Except as otherwise specifically
provided in this Agreement, all payments and prepayments under this Agreement
and the Notes (including any deposit into the Cash Management Account pursuant
to Section 3.2(c)) shall be made to Lender not later than 2:00 p.m., New York
City time, on the date when due and shall be made in lawful money of the United
States of America by wire transfer in federal or other immediately available
funds to the account specified from time to time by Lender. Any funds received
by Lender after such time shall be deemed to have been paid on the next
succeeding Business Day. Lender shall notify Borrower in writing of any changes
in the account to which payments are to be made. If the amount received from
Borrower (or from the Cash Management Account pursuant to Section 3.2(b)) is
less than the sum of all amounts then due and payable hereunder, such amount
shall be applied, at Lender's sole discretion, either toward the components of
the Indebtedness (e.g., interest, principal and other amounts payable hereunder)
and the Notes, in such sequence as Lender shall elect in its sole discretion, or
toward the payment of Taxes, Operating Expenses and Capital Expenditures.
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1.4. Taxes.
(a) Any and all payments by the Borrower under or in respect of
this Agreement or any other Loan Documents to which the Borrower is a party
shall be made free and clear of, and without deduction or withholding for or on
account of, any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities (including penalties, interest and
additions to tax) with respect thereto, whether now or hereafter imposed,
levied, collected, withheld or assessed by any taxation authority or other
Governmental Authority (collectively, "Section 1.4 Taxes") with respect to
payments made in respect of this Agreement, unless required by law. If the
Borrower shall be required under any applicable Legal Requirements to deduct or
withhold any Section 1.4 Taxes from or in respect of any sum payable under or in
respect of this Agreement or any of the other Loan Documents to the Lender, (i)
Borrower shall make all such deductions and withholdings in respect of Section
1.4 Taxes, (ii) Borrower shall pay the full amount deducted or withheld in
respect of Section 1.4 Taxes to the relevant taxation authority or other
Governmental Authority in accordance with any applicable Legal Requirements, and
(iii) the sum payable by Borrower shall be increased as may be necessary so that
after Borrower has made all required deductions and withholdings (including
deductions and withholdings applicable to additional amounts payable under this
Section 1.4) such Lender receives an amount equal to the sum it would have
received had no such deductions or withholdings been made in respect of
Non-Excluded Taxes (as defined below and as modified throughout this Section
1.4). For purposes of this Agreement the term "Non-Excluded Taxes" are Section
1.4 Taxes other than Excluded Taxes. For purposes of this Agreement, "Excluded
Taxes" are, in the case of a Lender, Section 1.4 Taxes that are imposed on its
overall net income (and franchise taxes imposed in lieu thereof) and branch
profits taxes by the jurisdiction under the laws of which such Lender is
organized or of its applicable lending office, or any political subdivision
thereof, unless such Section 1.4 Taxes are imposed as a result of such Lender
having executed, delivered or performed its obligations or received payments
under, or enforced, this Agreement or any of the other Loan Documents (in which
case such Section 1.4 Taxes will be treated as Non-Excluded Taxes).
(b) In addition, Borrower hereby agrees to pay any present or
future stamp, recording, documentary, excise, property or value-added taxes, or
similar taxes, charges or levies that arise from any payment made under or in
respect of this Agreement or any other Loan Document or from the execution,
delivery or registration of, any performance under, or otherwise with respect
to, this Agreement or any other Loan Document (collectively, "Other Taxes").
(c) Borrower hereby agrees to indemnify Lender for, and to hold it
harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the
full amount of Section 1.4 Taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 1.4 imposed on or paid by such Lender and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. The indemnity by Borrower provided for in
this Section 1.4(c) shall apply and be made whether or not the Non-Excluded
Taxes or Other Taxes for which indemnification hereunder is sought have been
correctly or legally asserted. Amounts payable by Borrower under the indemnity
set forth in this Section 1.4(c) shall be paid within thirty (30) days from the
date on which Lender makes written demand therefor and provides adequate
documentary evidence of payment thereof.
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(d) Within thirty (30) days after the date of any payment of
Section 1.4 Taxes, Borrower (or any Person making such payment on behalf of
Borrower) shall furnish to Lender for its own account a certified copy of the
original official receipt evidencing payment thereof. For purposes of Section
1.4(e), the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender (including for avoidance of doubt any assignee,
successor or participant) that either (i) is not incorporated under the laws of
the United States, any State thereof, or the District of Columbia or (ii) whose
name does not include "Incorporated," "Inc.," "Corporation," "Corp.," "P.C.,"
"insurance company," or "assurance company" (a "Non-Exempt Lender") shall
deliver or cause to be delivered to Borrower, on or before the date such Lender
becomes a party to this Agreement or upon obsolescence or invalidity of any form
previously delivered by such Lender, the following properly completed and duly
executed documents:
(i) in the case of a Non-Exempt Lender that is not a United States
person, a complete and executed (x) U.S. Internal Revenue Form W-8BEN with
Part II completed in which Lender claims the benefits of a tax treaty with
the United States providing for a zero or reduced rate of withholding (or
any successor forms thereto), including all appropriate attachments or (y)
a U.S. Internal Revenue Service Form W-8ECI (or any successor forms
thereto); or
(ii) in the case of a Non-Exempt Lender that is an individual, (x)
a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any
successor forms thereto) and a certificate substantially in the form of
Exhibit D (a "Section 1.4 Certificate") or (y) a complete and executed
U.S. Internal Revenue Service Form W-9 (or any successor forms thereto);
or
(iii) in the case of a Non-Exempt Lender that is organized under the
laws of the United States, any State thereof, or the District of Columbia,
a complete and executed U.S. Internal Revenue Service Form W-9 (or any
successor forms thereto), including all appropriate attachments; or
(iv) in the case of a Non-Exempt Lender that (x) is not organized
under the laws of the United States, any State thereof, or the District of
Columbia and (y) is treated as a corporation for U.S. federal income tax
purposes, a complete and executed U.S. Internal Revenue Service Form
W-8BEN claiming a zero rate of withholding (or any successor forms
thereto) and a Section 1.4 Certificate; or
(v) in the case of a Non-Exempt Lender that (A) is treated as a
partnership or other non-corporate entity, and (B) is not organized under
the laws of the United States, any State thereof, or the District of
Columbia, (x)(i) a complete and executed U.S. Internal Revenue Service
Form W-8IMY (or any successor forms thereto) (including all required
documents and attachments) and (ii) a Section 1.4 Certificate, and (y)
without duplication, with respect to each of its beneficial owners and the
beneficial owners of such beneficial owners looking through chains of
owners to individuals or entities that are treated as corporations for
U.S. federal income tax purposes (all such owners, "beneficial owners"),
the documents that would be required by clause (i), (ii), (iii), (iv),
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(vi), (vii) and/or this clause (v) with respect to each such beneficial
owner if such beneficial owner were Lender, provided, however, that no
such documents will be required with respect to a beneficial owner to the
extent the actual Lender is determined to be in compliance with the
requirements for certification on behalf of its beneficial owner as may be
provided in applicable U.S. Treasury regulations, or the requirements of
this clause (v) are otherwise determined to be unnecessary, all such
determinations under this clause (v) to be made in the sole discretion of
Borrower, provided, however, that Lender shall be provided an opportunity
to establish such compliance as reasonable; or
(vi) in the case of a Non-Exempt Lender that is disregarded for U.S.
federal income tax purposes, the document that would be required by clause
(i), (ii), (iii), (iv), (v), (vii) and/or this clause (vi) of this Section
1.4(e) with respect to its beneficial owner if such beneficial owner were
the Lender; or
(vii) in the case of a Non-Exempt Lender that (A) is not a United
States person and (B) is acting in the capacity as an "intermediary" (as
defined in U.S. Treasury Regulations), (x)(i) a U.S. Internal Revenue
Service Form W-8IMY (or any successor form thereto) (including all
required documents and attachments) and (ii) a Section 1.4 Certificate,
and (y) if the intermediary is a "non-qualified intermediary" (as defined
in U.S. Treasury Regulations), from each person upon whose behalf the
"non-qualified intermediary" is acting the documents that would be
required by clause (i), (ii), (iii), (iv), (v), (vi), and/or this clause
(vii) with respect to each such person if each such person were Lender.
Except as otherwise provided below, if at the time a Lender first
becomes a party to this Agreement or, with respect to a grant of a
participation, the effective date thereof, such party is subject to any
Non-Excluded Taxes on payments made under this Agreement, such Section 1.4 Taxes
shall not be treated as Excluded Taxes. If the forms referred to above in this
Section 1.4(e) that are provided by a Lender at the time such Lender first
becomes a party to this Agreement or, with respect to a grant of a
participation, the effective date thereof, indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
treated as Excluded Taxes and shall not qualify as Non-Excluded Taxes unless and
until such Lender provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate shall be considered
Excluded Taxes solely for the periods governed by such form. If, however, on the
date a Person becomes an assignee, successor or participant to this Agreement,
Lender transferor was entitled to payments under subsection (a) of this Section
1.4, then, to such extent (and only to such extent), the term "Non-Excluded
Taxes" shall include the Non-Excluded Taxes with respect to the Lender
transferor as of the date of the effective date of such assignment,
participation or succession, as well as any Non-Excluded Taxes that may be
imposed in the future with respect to the Lender assignee.
(f) For any period with respect to which any Lender has failed to
provide Borrower with the appropriate, complete, accurate and correct form,
certificate or other document described in Section 1.4(e), or any successor
thereto (other than (i) if such failure is due to a change in any applicable
Legal Requirements, or in the official interpretation or application thereof,
occurring after the date on which a form, certificate or other document
originally was required to be provided, or (ii) if such failure is due to a
material expansion in the
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information required by the applicable form, certificate or other document, or
any successor thereto, that would require material information that is not
currently required and which Lender solely views as confidential, such Lender
shall not be entitled to indemnification or additional amounts under subsection
(a) or (c) of this Section 1.4 with respect to Non-Excluded Taxes imposed by the
United States by reason of such failure and such Taxes shall be considered
Excluded Taxes and shall not qualify as Non-Excluded Taxes; provided, however,
that should a Lender become subject to otherwise Non-Excluded Taxes because of
its failure to deliver a form, certificate or other document required hereunder,
Borrower shall, at Lender's sole expense, take such steps (consistent with legal
and regulatory restrictions) as such Lender shall reasonably request, to assist
such Lender in recovering such Non-Excluded Taxes from the proper governmental
authority. However, Borrower will not be required to take any action that would
be illegal or require Borrower to disclose any tax returns or any other
information that, in the sole judgment of Borrower is confidential.
(g) Subject to Section 1.4(i), Lender hereby agrees that, upon the
occurrence of any circumstances entitling Lender to additional amounts or
indemnification pursuant to this Section 1.4, such Lender shall use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions), at the sole expense of the Borrower, to designate a different
lending office if the making of such a change would avoid the need for, or
materially reduce the amount of, any such additional amounts or indemnification
that may thereafter accrue. However, Lender will not be required to take any
action that would be legally inadvisable or commercially or otherwise
disadvantageous to Lender or require Lender to disclose any tax returns or any
other information that, in the sole judgment of Lender, is confidential.
1.5. Release. Upon payment of the Indebtedness in full when
permitted or required hereunder, Lender shall execute instruments prepared by
Borrower and reasonably satisfactory to Lender, which, at Borrower's election:
(a) release and discharge all Liens on all Collateral securing payment of the
Indebtedness (subject to Borrower's obligation to pay any associated fees and
expenses), including all balances in the Collateral Accounts; or (b) assign such
Liens (and the Loan Documents) to a new lender designated by Borrower.
ARTICLE II
DEFEASANCE AND ASSUMPTION
2.1. Defeasance.
(a) On any date after the expiration of the Lockout Period,
provided no Event of Default is then continuing and subject to the notice
requirement described in Section 2.1(c), Borrower may obtain the release of the
Collateral (other than the Defeasance Collateral) from the Liens created by the
Loan Documents upon the payment to Lender of all sums then due under the Loan
Documents and the delivery of the following to Lender:
(i) Defeasance Collateral sufficient to provide payments on or
prior to, and in any event as close as possible to, all successive Payment
Dates in an amount sufficient to make all payments of interest and
principal due hereunder (including the then outstanding
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Principal Indebtedness on the Maturity Date), taking into account any
income tax payable on any net annual income of Borrower or the Defeasance
Borrower, as applicable;
(ii) written confirmation from an independent certified public
accounting firm reasonably satisfactory to Lender that such Defeasance
Collateral is sufficient to provide the payments described in clause (i)
above;
(iii) a security agreement, in form and substance reasonably
satisfactory to Lender, creating in favor of Lender a first priority
perfected security interest in such Defeasance Collateral (a "Defeasance
Pledge Agreement");
(iv) an opinion of counsel for Borrower, in form and substance
reasonably satisfactory to Lender and delivered by counsel reasonably
satisfactory to Lender, opining (1) that the Defeasance Pledge Agreement
has been duly authorized and is enforceable against Borrower in accordance
with its terms and that Lender has a perfected first priority security
interest in such Defeasance Collateral; (2) that the Defeasance does not
constitute a "significant modification" of the Loan under Section 1001 of
the Code or cause a tax to be imposed on the Securitization Vehicle; and
(3) that the defeasance does not cause the Securitization Vehicle to be an
"investment company" required to be registered under the Investment
Company Act of 1940;
(v) if the Loan has been securitized, Rating Confirmation with
respect to such Defeasance;
(vi) instruments reasonably satisfactory to Lender releasing and
discharging or assigning to a third party Lender's Liens on the Collateral
(other than the Defeasance Collateral and other instruments described in
Section 2.1(d) below, if applicable);
(vii) such other customary certificates, opinions, documents or
instruments as Lender and the Rating Agencies may reasonably request; and
(viii) reimbursement for any reasonable costs and expenses incurred
by Lender in connection with this Section 2.1 (including customary Rating
Agency and Servicer fees and expenses, reasonable fees and expenses of
legal counsel and any revenue, documentary stamp or intangible taxes or
any other tax or charge due in connection herewith).
Lender shall reasonably cooperate with Borrower in connection with a Defeasance
to avoid the loss of mortgage recording taxes previously paid by Borrower (or
its predecessors in interest), including taking the steps set forth in Section
2.1(d) below at the request of Borrower.
(b) At the time of Defeasance, Borrower shall transfer and assign
all of its interest in the Property to a third party which may be an affiliate
of Borrower, unless (i) the Loan is assumed by a bankruptcy-remote entity
satisfactory to Lender and the Rating Agencies to which Borrower shall transfer
all of the Defeasance Collateral or the steps set forth in Section 2.1(d), or
other steps required by the last sentence of Section 2.1(a) have been taken (a
"Defeasance Borrower"), (ii) such Defeasance Borrower shall have executed and
delivered to Lender an assumption agreement in form and substance reasonably
satisfactory to Lender, such
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Uniform Commercial Code financing statements as may be reasonably requested by
Lender and legal opinions of counsel reasonably acceptable to Lender which are
substantially equivalent to the opinions delivered to Lender on the Closing
Date, including new nonconsolidation opinions reasonably satisfactory to Lender
and satisfactory to the Rating Agencies, and (iii) Borrower and the Defeasance
Borrower shall have delivered such other documents, certificates and legal
opinions as Lender shall reasonably request, in which event Borrower shall be
completely released and relieved of all of its obligations under the Loan
Documents except those obligations which by their terms survive the repayment of
the Loan.
(c) Borrower must give Lender and each Rating Agency at least 30
days' (and not more than 60 days') prior written notice of any Defeasance under
this Section 2.1, specifying the date on which the Defeasance is to occur. If
such Defeasance is not made on such date (x) Borrower's notice of Defeasance
will be deemed rescinded, and (y) Borrower shall on such date pay to Lender all
reasonable losses, costs and expenses suffered by Lender as a consequence of
such rescission.
(d) In connection with a total Defeasance of the Loan in
compliance with and subject to Section 2.1(a) of this Agreement and upon the
written request of Borrower, Lender shall assign and sell the Note and Mortgage
to any Person designated by the Borrower as the purchaser of the Note and
Mortgage (the "Designated Purchaser") according either (A) to the procedures set
forth in the Advisory Opinion from the Commissioner of Taxation and Finance of
the State of New York, dated February 25, 2000, in response to Petition No.
M991230A or (B) the following procedures:
(i) The notice required under Section 2.1(c) of this Agreement
shall request that the Note and Mortgage be sold and assigned to the
Designated Purchaser in exchange for the New Note;
(ii) Borrower shall procure a loan from another lender and execute
a new note to such lender evidencing such indebtedness (the "New Note").
The New Note shall have a principal balance equal to the outstanding
principal balance of the Note, shall be issued and dated as of the date of
the Defeasance and shall otherwise have identical terms as the Note,
including the Maturity Date, except that the New Note shall be secured by
the Defeasance Collateral;
(iii) In lieu of a termination, cancellation and release of the
Mortgage and the other Loan Documents, Borrower shall deliver to Lender an
allonge to the Note and an assignment of Mortgage (for execution by
Lender), each instrument to be made without any recourse or liability of
any nature with respect to the Lender and otherwise acceptable to Lender;
and
(iv) Upon complete satisfaction of the requirements set forth in
Section 2.1(a) of this Agreement, Lender shall sell and assign the Note
and Mortgage to the Designated Purchaser in exchange for the New Note
(endorsed over to Lender) and the Defeasance Collateral.
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(e) Upon satisfaction of the requirements contained in this
Section 2.1, Lender will execute and deliver to Borrower such instruments,
prepared by Borrower and reasonably approved by Lender, as shall be necessary to
release the Property from the Liens of the Loan Documents or necessary to comply
with the provisions set forth in Section 2.1(d) of this Agreement.
2.2. Assumption. The initial Borrower shall have the right to
contemporaneously Transfer all of the Collateral to a Qualified Successor
Borrower that will assume all of the obligations of Borrower hereunder (an
"Assumption"), provided no Event of Default or material monetary Default is then
continuing or would result therefrom and the following conditions are met to the
reasonable satisfaction of Lender:
(i) such Qualified Successor Borrower shall have executed and
delivered to Lender an assumption agreement, in form and substance
reasonably acceptable to Lender, evidencing its agreement to abide and be
bound by the terms of the Loan Documents and containing representations
substantially equivalent to those contained in Article IV, and such other
representations (and evidence of the accuracy of such representations) as
the Servicer shall reasonably request;
(ii) such Qualified Successor Borrower shall execute and deliver
such Uniform Commercial Code financing statements as may be reasonably
requested by Lender;
(iii) Sponsor shall have delivered to Lender an instrument
satisfactory to Lender acknowledging the Assumption and ratifying its
continued obligations under the Environmental Indemnity and Section 9.19,
except that if, upon the Assumption, Borrower delivers to Lender a new
environmental indemnity, cooperation agreement (if the entire Loan has not
been previously Securitized) and a guaranty of recourse carveouts, in each
case, in the form executed by Sponsor or otherwise in form and substance
reasonably satisfactory to Lender and executed by a substitute indemnitor
that meets the qualifications of a Qualified Equityholder or is otherwise
reasonably satisfactory to Lender, which in each case cover indemnified
matters first occurring after the date of the Assumption, then Sponsor
shall have no liability for indemnified matters first occurring after the
date of such Assumption;
(iv) such Qualified Successor Borrower shall have delivered to
Lender legal opinions of counsel reasonably acceptable to Lender which are
equivalent to the opinions delivered to Lender on the Closing Date,
including new nonconsolidation opinions which are reasonably satisfactory
to Lender and satisfactory to each of the Rating Agencies; and Borrower
and the Qualified Successor Borrower shall have delivered such other
documents, certificates and legal opinions as Lender shall reasonably
request;
(v) such Qualified Successor Borrower shall have delivered to
Lender all documents reasonably requested by it relating to the existence
of such Qualified Successor Borrower and the due authorization of the
Qualified Successor Borrower to assume the Loan and to execute and deliver
the documents described in this Section 2.2, each in form and substance
reasonably satisfactory to Lender, including a certified copy
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of the applicable resolutions from all appropriate persons, certified
copies of the organizational documents of the Qualified Successor
Borrower, together with all amendments thereto, and certificates of good
standing or existence for the Qualified Successor Borrower issued as of a
recent date by its state of organization and each other state where such
entity, by the nature of its business, is required to qualify or register;
(vi) the Qualified Title Insurance Policy shall have been properly
endorsed to reflect the Transfer of the Property to the Qualified
Successor Borrower;
(vii) Rating Confirmation shall have been received with respect to
the legal structure of the successor borrower, the documentation of the
Assumption and the related legal opinions; and
(viii) the Servicer shall have received upon request a $25,000
nonrefundable assumption fee and shall have received payment of all
reasonable out-of-pocket costs and expenses incurred by Lender and
Servicer, as applicable, in connection with such assumption (including
reasonable attorneys' fees and costs, the cost of an endorsement to the
Title Insurance Policy reflecting the conveyance of the Property to the
Qualified Successor Borrower, lien search and credit investigation
expenses and rating agency fees and expenses).
ARTICLE III
ACCOUNTS
3.1. Cash Management Account.
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank a cash management account into
which income (other than de minimis items of income which are not payable by
Tenants or which are not otherwise payable under Leases) from the Property will
be deposited (the "Cash Management Account"). As a condition precedent to the
closing of the Loan, Borrower shall cause the Cash Management Bank to execute
and deliver a Cash Management Agreement which provides, inter alia, that no
party other than Lender and Servicer shall have the right to withdraw funds from
the Cash Management Account. The fees and expenses of the Cash Management Bank
shall be paid by Borrower.
(b) Within five Business Days following the Closing Date, Borrower
shall deliver to each Tenant in the Property a written notice (a "Tenant
Notice") in the form of Exhibit C instructing that (i) all payments under the
Leases shall thereafter be transmitted by them directly to, and deposited
directly into, the Cash Management Account or a post office box maintained by
the Cash Management Bank and (ii) such instruction may not be rescinded unless
and until the earliest of (A) such Tenant receives from Borrower or Lender a
copy of Lender's written consent to such rescission and (B) the Maturity Date.
Borrower shall send a copy of each such written notice to Lender and shall
periodically redeliver such notices to each Tenant until such time as such
Tenant complies therewith. Borrower shall cause all cash Revenues relating to
the Property and all other money received by Borrower or the Approved Property
Manager with
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respect to the Property (other than tenant security deposits required to be held
in escrow accounts and de minimis items of income which are not payable by
Tenants or which are not otherwise payable under Leases) to be deposited in the
Cash Management Account by the end of the first Business Day following
Borrower's or the Approved Property Manager's receipt thereof; and Borrower
shall be permitted to deposit in the Cash Management Account such additional
amounts as Borrower may elect.
(c) During a Cash Trap Period, Lender shall have the right at any
time, upon not less than 30 days' prior written notice to Borrower, to replace
the Cash Management Bank with any other financial institution reasonably
satisfactory to Borrower in which Eligible Accounts may be maintained which will
promptly execute and deliver to Lender a Cash Management Agreement (and Borrower
shall cooperate with Lender in connection with such transfer, including delivery
of an updated Tenant Notice to each Tenant). Provided that no Cash Trap Period
is in effect, Borrower shall have the right at any time, upon not less than 30
days' prior written notice to Lender, to replace the Cash Management Bank with
any other Cash Management Bank selected by Borrower and acceptable to Lender in
which Eligible Accounts may be maintained. If a new Cash Management Bank is
selected, then Borrower, Lender and such new Cash Management Bank, as a
condition to such replacement, shall execute and deliver to Lender a new Cash
Management Agreement substantially in the form of the Cash Management Agreement
executed and delivered in connection herewith and an updated Tenant Notice shall
be delivered to each Tenant.
3.2. Distributions from Cash Management Account.
(a) The Cash Management Agreement shall provide that the Cash
Management Bank shall remit to an account specified by Borrower, at the end of
each Business Day (or, at Borrower's election, on a less frequent basis), all
amounts then contained in the Cash Management Account; provided, however, that
Lender shall terminate such remittances during the continuance of an Event of
Default or Cash Trap Period upon notice to the Cash Management Bank.
(b) During a Cash Trap Period, on each Payment Date, provided no
Event of Default has occurred and is continuing, Lender shall transfer amounts
from the Cash Management Account, to the extent available therein, to make the
following payments in the following order of priority:
(i) to the Tax and Insurance Reserve Account, the amounts then
required to be deposited therein pursuant to Section 3.4;
(ii) to Lender, the amount of all scheduled or delinquent interest
and principal on the Loan and all other amounts then due and payable under
the Loan Documents (with any amounts in respect of principal paid last);
(iii) to Borrower, an amount equal to the Budgeted Operating
Expenses for the month in which such Payment Date occurs, provided that
the amounts disbursed to Borrower pursuant to this clause (iii) shall be
used by Borrower solely to pay Budgeted Operating Expenses for such month
(Borrower agreeing that, in the event that such
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Budgeted Operating Expenses exceed the actual operating expenses for such
month, such excess amounts shall be remitted by Borrower to the Cash
Management Account prior to the next succeeding Payment Date) and provided
further that no amounts will be disbursed to Borrower in respect of the
fees of the Approved Property Manager to the extent such fees exceed 2.5%
of Operating Income;
(iv) to the Capital Expenditure Reserve Account, the amounts
required to be deposited therein pursuant to Section 3.6, any additional
amount required to cause the amount in the Capital Expenditure Reserve
Account to equal the Budgeted Capital Expenditures for the month in which
such Payment Date occurs, as well as any additional amount reasonably
requested by Borrower in writing at least 3 Business Days prior to such
Payment Date in respect of emergency Capital Expenditures, which written
request shall be accompanied by a reasonably detailed description of the
emergency;
(v) to the TI/LC Reserve Account, any amount required to be
deposited therein pursuant to Section 3.5; and
(vi) all remaining amounts to such accounts as Borrower may direct.
(c) During a Cash Trap Period, if on any Payment Date the amount
in the Cash Management Account shall be insufficient to make all of the
transfers described in Sections 3.2(b)(i) through (v), Borrower shall deposit
into the Cash Management Account on such Payment Date the amount of such
deficiency. If Borrower shall fail to make such deposit, the same shall
constitute an Event of Default and, in addition to all other rights and remedies
provided for under the Loan Documents, Lender may disburse and apply the amounts
in the Collateral Accounts in accordance with Section 3.10(c). During a Cash
Trap Period, if sufficient funds are on deposit in the Cash Management Account
to make all required payments hereunder, then no Event of Default shall occur
hereunder due to the failure to actually make all such required payments.
3.3. Loss Proceeds Account.
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
depositing any Loss Proceeds (the "Loss Proceeds Account"), subject to the terms
of the Condominium Documents.
(b) Provided no Event of Default is continuing, funds in the Loss
Proceeds account shall be applied in accordance with Section 5.16.
3.4. Tax and Insurance Escrow Account.
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving amounts payable by Borrower in respect of Taxes, insurance premiums
and Common Charges (the "Tax and Insurance Escrow Account").
(b) Upon the occurrence of a Cash Trap Period, the Tax and
Insurance Escrow Account shall be funded in an amount equal to the sum of (i) an
amount sufficient to pay all
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Taxes not otherwise payable directly by Tenants pursuant to their Leases by the
30th day prior to the date they come due, assuming subsequent monthly fundings
on Payment Dates of 1/12 of projected annual Taxes, plus (ii) an amount
sufficient to pay all insurance premiums payable by Borrower by the 30th day
prior to the date they come due, assuming subsequent monthly fundings on Payment
Dates of 1/12 of projected annual insurance premiums, plus (iii) $100,000.00
with respect to Common Charges, which amount shall be increased on each
anniversary of the date hereof to an amount equal to the product of (a)
$100,000.00 and (b) the Consumer Price Index Fraction.
(c) During a Cash Trap Period, on each subsequent Payment Date, an
additional deposit shall be made therein in an amount equal to the sum of:
(A) 1/12 of the Taxes that Lender reasonably estimates, based
on information provided by Borrower, will be payable by Borrower
during the next ensuing 12 months, plus
(B) 1/12 of the insurance premiums that Lender reasonably
estimates, based on information provided by Borrower, will be
payable by Borrower during the next ensuing 12 months; plus
(C) if and to the extent that such amount is not already being
maintained, then, on the first Payment Date subsequent to each
anniversary of the date hereof, an amount such that on such Payment
Date the amount specified in Section 3.3(b)(iii) above is maintained
with respect to Common Charges;
provided, however, that if at any time Lender reasonably determines that the
amount in the Tax and Insurance Escrow Account will not be sufficient to
accumulate (upon payment of subsequent monthly amounts in accordance with the
provisions of this Agreement) the full amount of all installments of Taxes,
insurance premiums and Common Charges payable by Borrower by the date on which
such amounts come due, then Lender shall notify Borrower of such determination
and on the next Payment Date Borrower shall increase its monthly payments to the
Tax and Insurance Escrow Account by the amount that Lender reasonably estimates
is sufficient to achieve such accumulation.
(d) Borrower shall provide Lender with copies of all tax,
insurance and Common Charges bills relating to the Property promptly after
Borrower's receipt thereof. Lender will apply amounts in the Tax and Insurance
Escrow Account toward the purposes for which such amounts are deposited therein.
In connection with the making of any payment from the Tax and Insurance Escrow
Account, Lender may cause such payment to be made according to any bill,
statement or estimate procured from the appropriate public office, insurance
carrier or the Association or any board thereof or pursuant to the Condominium
Documents, without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax, assessment, sale, forfeiture, tax lien or title
or claim thereof unless given written advance notice by Borrower of such
inaccuracy, invalidity or other contest.
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(e) Upon the termination of a Cash Trap Period, provided no Event
of Default is then continuing, Lender shall remit to Borrower the amount then
contained in the Tax and Insurance Escrow Account.
(f) Notwithstanding anything to the contrary contained herein, in
lieu of making deposits to the Tax and Insurance Escrow Account, Borrower shall
be permitted to deliver to Lender a Qualified Letter of Credit or a Qualified
Guarantee in such amount.
3.5. TI/LC Reserve Account.
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving amounts in respect of Tenant Improvements and Leasing Commissions (the
"TI/LC Reserve Account").
(b) On each Payment Date during the continuance of a Cash Trap
Period, there shall be deposited into the TI/LC Reserve Account an amount equal
to the Monthly TI/LC Amount.
(c) Upon the request of Borrower at any time that no Event of
Default is continuing (but not more often than once per calendar month), Lender
shall cause disbursements to Borrower from the TI/LC Reserve Account to
reimburse Borrower for Leasing Commissions and Tenant Improvement costs incurred
by Borrower in connection with a new Lease (or Lease extension, Lease renewals
or Lease amendments) entered into in accordance herewith, provided that:
(i) Borrower shall deliver to Lender invoices evidencing that the
costs for which such disbursements are requested are due and payable;
(ii) Borrower shall deliver to Lender an Officer's Certificate
confirming that all such costs have been previously paid by Borrower or
will be paid from the proceeds of the requested disbursement; and
(iii) Lender may condition the making of a requested disbursement on
(1) reasonable evidence establishing that Borrower has applied any amounts
previously received by it in accordance with this Section for the expenses
to which specific draws made hereunder relate, (2) a reasonably
satisfactory site inspection, and (3) receipt of lien releases and waivers
from any contractors, subcontractors and others with respect to such
amounts.
(d) During a Cash Trap Period, whenever a Lease is terminated,
whether by buy-out, cancellation, default or otherwise, and Borrower receives
any payment, fee or penalty in respect of such termination (a "Termination
Fee"), Borrower shall promptly cause such Termination Fee to be deposited into
the TI/LC Reserve Account. Provided no Event of Default has occurred and is
continuing, (i) Lender shall disburse such Termination Fee to Borrower at the
written request of Borrower in respect of Leasing Commissions and Tenant
Improvement costs incurred by Borrower in connection with a replacement Lease
entered into in accordance with the terms of this Agreement in respect of the
space covered by such terminated Lease and (ii) the remainder of such
Termination Fee, if any, shall be remitted to the Cash Management Account
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after the space covered by such terminated Lease has been relet, the replacement
Tenant is in occupancy and has commenced paying rent under the replacement Lease
and all Leasing Commissions and Tenant Improvement costs relating to the initial
lease term for such space have been paid.
(e) Upon the termination of a Cash Trap Period, provided no Event
of Default is then continuing, Lender shall remit to Borrower the amount then
contained in the TI/LC Reserve Account.
(f) Notwithstanding anything to the contrary contained herein, in
lieu of making deposits to the TI/LC Reserve Account, Borrower shall be
permitted to deliver to Lender a Qualified Letter of Credit or a Qualified
Guarantee in such amount.
3.6. Capital Expenditure Reserve Account.
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving amounts in respect of Capital Expenditures (the "Capital Expenditure
Reserve Account").
(b) On each Payment Date during the continuance of a Cash Trap
Period, there shall be deposited into the Capital Expenditure Reserve Account an
amount equal to the Monthly Capital Expenditure Reserve Amount.
(c) Upon the request of Borrower at any time that no Event of
Default is continuing (but not more often than once per calendar month), Lender
shall cause disbursements to Borrower from the Capital Expenditure Reserve
Account to reimburse Borrower for Capital Expenditures; provided that:
(i) Borrower shall deliver to Lender invoices evidencing that the
costs for which such disbursements are requested are due and payable;
(ii) Borrower shall deliver to Lender an Officer's Certificate
confirming that all such costs have been previously paid by Borrower or
will be paid from the proceeds of the requested disbursement; and
(iii) Lender may condition the making of a requested disbursement on
(1) reasonable evidence establishing that Borrower has applied any amounts
previously received by it in accordance with this Section for the expenses
to which specific draws made hereunder relate, (2) a reasonably
satisfactory site inspection, and (3) receipt of lien releases and waivers
from any contractors, subcontractors and others with respect to such
amounts.
(d) Upon the termination of a Cash Trap Period, provided no Event
of Default is then continuing, Lender shall remit to Borrower the amount then
contained in the Capital Expenditure Reserve Account.
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(e) Notwithstanding anything to the contrary contained herein, in
lieu of making deposits to the Capital Expenditure Reserve Account, Borrower
shall be permitted to deliver to Lender a Qualified Letter of Credit or a
Qualified Guarantee in such amount.
3.7. Intentionally Omitted.
3.8. Unfunded Obligations Account.
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving an amount in respect of Unfunded Obligations required to be funded by
Borrower (the "Unfunded Obligations Account").
(b) On the Closing Date, Borrower shall either (x) deposit into
the Unfunded Obligations Account, from the proceeds of the Loan, an amount equal
to the Unfunded Obligations Amount, or (y) deliver to Lender a Qualified Letter
of Credit or Qualified Guarantee in such amount.
(c) Borrower shall, as applicable (and excluding Unfunded
Obligations that constitute free rent), either pay for and/or perform the
Unfunded Obligations in a diligent and workmanlike manner. Upon the request of
Borrower at any time that no Event of Default is continuing (but not more often
than once per calendar month), Lender shall cause disbursements to Borrower from
the Unfunded Obligations Account to reimburse Borrower for reasonable costs and
expenses incurred in the performance of Unfunded Obligations (or, if applicable,
shall permit the reduction of the amount of the Qualified Letter of Credit or
Qualified Guarantee by the amount that would have been so disbursed), provided
that
(i) Borrower shall deliver to Lender invoices evidencing that the
costs for which such disbursements are requested are due and payable;
(ii) Borrower shall deliver to Lender an Officer's Certificate
confirming that all such costs have been previously paid by Borrower or
will be paid from the proceeds of the requested disbursement; and
(iii) Lender may condition the making of a requested disbursement on
(1) reasonable evidence establishing that Borrower has applied any amounts
previously received by it in accordance with this Section for the expenses
to which specific draws made hereunder relate, (2) a reasonably
satisfactory site inspection, and (3) receipt of lien releases and waivers
from any contractors, subcontractors and others with respect to such
amounts.
(d) If Borrower satisfies its obligation under Section 3.8(b) by
providing a letter of credit which at any time ceases to be a Qualified Letter
of Credit or a guarantee which at any time ceases to be a Qualified Guarantee,
Borrower shall, within 10 Business Days thereafter, either (x) deliver to
Lender, as applicable, a Qualified Letter of Credit or Qualified Guarantee in
the amount required under Section 3.8(b) or (y) deposit into the Unfunded
Obligations
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Account the amount that would be contained therein had Borrower deposited the
Unfunded Obligations Amount therein on the Closing Date and subsequently
withdrawn therefrom all amounts that would have been permitted to be withdrawn
therefrom pursuant to Section 3.8(c).
(e) Once any of the Unfunded Free Rent Obligations, Unfunded
Tenant Allowance Obligations, Unfunded Existing Lease Commission Obligations and
Unfunded Vacant Space Obligations have been reduced to zero, provided no Event
of Default is then continuing, the remainder of the portion of the Unfunded
Obligations Account held for such line item (as shown adjacent to such line item
on Schedule D) shall promptly be remitted to Borrower and once all such amounts
are remitted to Borrower, the Unfunded Obligations Account will no longer be
maintained.
(f) Notwithstanding anything to the contrary in this Section 3.8,
(i) with respect to the portion of the Unfunded Obligations that are identified
on Schedule D as obligations for free rent under the Container Store Lease (the
"Unfunded Free Rent Obligations"), such Unfunded Free Rent Obligations shall be
reduced each month by an amount equal to $376,280 and such Unfunded Free Rent
Obligations shall be reduced to $0 upon the earlier of (x) March 1, 2006 and (y)
the date that the Container Store, Inc. first occupies any portion of the leased
premises for conduct of business, but (in the case of this clause (y), not
earlier than 180 days after the Possession Date (as defined in the Container
Store Lease);
(ii) with respect to the portion of the Unfunded Obligations that
are identified on Schedule D as unpaid tenant allowances (the "Unfunded Tenant
Allowance Obligations"), such Unfunded Tenant Allowance Obligations shall be
reduced as and when Borrower delivers evidence reasonably satisfactory to Lender
that such amounts have been paid by or on behalf of the Borrower or as and when
the Borrower delivers evidence reasonably satisfactory to Lender that Borrower
is otherwise released from its obligations to pay such amounts;
(iii) with respect to the portion of the Unfunded Obligations that
are identified on Schedule D as unpaid leasing commissions for existing leases
(the "Unfunded Existing Leasing Commission Obligations"), such Unfunded Existing
Leasing Commission Obligations shall be reduced as and when Borrower delivers
evidence reasonably satisfactory to Lender that such amounts have been paid by
or on behalf of Borrower or as and when the Borrower delivers evidence
reasonably satisfactory to Lender that Borrower is otherwise released from its
obligations to pay such amounts; and
(iv) with respect to the portion of the Unfunded Obligations that
are identified on Schedule D as future tenant leasing costs for currently vacant
space (the "Unfunded Vacant Space Obligations"), such Unfunded Vacant Space
Obligations shall be reduced as and when Borrower delivers evidence reasonably
satisfactory to Lender that Borrower has paid the cost of any tenant allowances
or improvements or leasing commissions or as and when any free rent period
granted to a tenant expires (such reduction to be made on a monthly basis) all
with respect to any of the rentable space that is vacant in the Borrower Unit as
of the date hereof and shall be reduced to zero when Borrower delivers evidence
reasonably satisfactory to Lender that all such vacant space has been leased and
no further obligations for tenant allowances or improvements, Leasing
Commissions or free rent exist.
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Upon any reduction of any of the Unfunded Free Rent Obligations,
Unfunded Tenant Allowance Obligations, Unfunded Existing Leasing Commission
Obligations or Unfunded Vacant Space Obligations, the amount of any Qualified
Letter of Credit or Qualified Guaranty given in respect thereof shall be
commensurately reduced. Once all Unfunded Free Rent Obligations, Unfunded Tenant
Allowance Obligations, Unfunded Existing Leasing Commission Obligations and
Unfunded Vacant Space Obligations have been reduced to zero, any Qualified
Letter of Credit or Qualified Guaranty given in respect thereof shall be
returned or released.
3.9. Intentionally Omitted.
3.10. Account Collateral.
(a) Borrower hereby grants a perfected first-priority security
interest in favor of Lender in and to the Account Collateral as security for the
Indebtedness, together with all rights of a secured party with respect thereto.
Each Collateral Account shall be an Eligible Account under the sole dominion and
control of Lender and shall be in the name of Borrower subject to Lender's Lien
on the Collateral Accounts. Borrower shall have no right to make withdrawals
from any of the Collateral Accounts. Funds in the Collateral Accounts shall not
be commingled with any other monies at any time. Borrower shall execute any
additional documents that Lender in its reasonable discretion may require and
shall provide all other evidence reasonably requested by Lender to evidence or
perfect its first-priority security interest in the Account Collateral.
(b) The insufficiency of amounts contained in the Collateral
Accounts shall not relieve Borrower from its obligation to fulfill all covenants
contained in the Loan Documents.
(c) During the continuance of an Event of Default, Lender may, in
its sole discretion, apply funds in the Collateral Accounts, and funds resulting
from the liquidation of Permitted Investments contained in the Collateral
Accounts, either toward the components of the Indebtedness (e.g., interest,
principal and other amounts payable hereunder), the Loan and the Notes in such
sequence as Lender shall elect in its sole discretion, and/or toward the payment
of Taxes, Operating Expenses and Capital Expenditures.
3.11. Permitted Investments.
(a) So long as no Event of Default shall be continuing, Borrower
shall be permitted to direct the investment of the funds from time to time held
in the Collateral Accounts in Permitted Investments and to sell or liquidate
such Permitted Investments and reinvest proceeds from such sale or liquidation
in other Permitted Investments (but Lender shall have no liability whatsoever in
respect of any failure by the Cash Management Bank to do so), with all such
proceeds and reinvestments to be held in the applicable Collateral Account;
provided, however, that the maturity of an adequate portion of the Permitted
Investments on deposit in the Collateral Accounts shall be no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn therefrom pursuant to this Agreement, and provided further that
Borrower shall remit into the applicable Collateral Account an amount
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equal to any losses realized on Permitted Investments contained therein. No
Permitted Investment shall be liquidated at a loss at the direction of Borrower
except to the extent necessary to make a required payment to Lender on a Payment
Date.
(b) All income and gains from the investment of funds in the
Collateral Accounts shall be retained in the Collateral Accounts from which they
were derived and shall belong to Borrower, subject to Lender's Lien thereon. As
between Borrower and Lender, Borrower shall treat all income, gains and losses
from the investment of amounts in the Collateral Accounts as its income or loss
for federal, state and local income tax purposes.
(c) After the Loan and all other Indebtedness have been paid in
full, the Collateral Accounts shall be closed and the balances therein, if any,
shall be paid to Borrower.
3.12. Bankruptcy. Borrower and Lender acknowledge and agree that
upon the filing of a bankruptcy petition by or against Borrower under the
Bankruptcy Code, the Account Collateral and the Revenues (whether then already
in the Collateral Accounts, or then due or becoming due thereafter) shall be
deemed not to be property of Borrower's bankruptcy estate within the meaning of
Section 541 of the Bankruptcy Code. If, however, a court of competent
jurisdiction determines that, notwithstanding the foregoing characterization of
the Account Collateral and the Revenues by Borrower and Lender, the Account
Collateral and/or the Revenues do constitute property of Borrower's bankruptcy
estate, then Borrower and Lender further acknowledge and agree that all such
Revenues, whether due and payable before or after the filing of the petition,
are and shall be cash collateral of Lender. Borrower acknowledges that Lender
does not consent to Borrower's use of such cash collateral and that, in the
event Lender elects (in its sole discretion) to give such consent, such consent
shall only be effective if given in writing signed by Lender. Except as provided
in the immediately preceding sentence, Borrower shall not have the right to use
or apply or require the use or application of such cash collateral (i) unless
Borrower shall have received a court order authorizing the use of the same, and
(ii) Borrower shall have provided such adequate protection to Lender as shall be
required by the bankruptcy court in accordance with the Bankruptcy Code.
ARTICLE IV
REPRESENTATIONS
Borrower represents to Lender that, as of the Closing Date, except
as set forth in the Exception Report:
4.1. Organization.
(a) Borrower is a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and is in good standing as a foreign limited liability company in each other
jurisdiction where ownership of its properties or the conduct of its business
requires it to be so, and Borrower has all power and authority under such laws
and its organizational documents and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
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(b) Borrower has no subsidiaries and does not own any equity
interest in any other Person.
(c) The organizational chart contained in Schedule H is true and
correct as of the date hereof.
4.2. Authorization. Borrower has the power and authority to enter
into this Agreement and the other Loan Documents, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated by the
Loan Documents and has by proper action duly authorized the execution and
delivery of the Loan Documents.
4.3. No Conflicts. Neither the execution and delivery of the Loan
Documents, nor the consummation of the transactions contemplated therein, nor
performance of and compliance with the terms and provisions thereof will (i)
violate or conflict with any provision of its operating agreement, certificate
of formation or other governance document, (ii) violate any law, regulation
(including Regulation U, Regulation X or Regulation T), order, writ, judgment,
injunction, decree or permit applicable to it, (iii) violate or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, contract or other Material Agreement to which Borrower
or Sponsor is a party or by which Borrower or Sponsor may be bound, or (iv)
result in or require the creation of any Lien or other charge or encumbrance
upon or with respect to the Collateral in favor of any party other than Lender.
4.4. Consents. No consent, approval, authorization or order of, or
qualification with, any court or Governmental Authority is required in
connection with the execution, delivery or performance by Borrower of this
Agreement or the other Loan Documents, except for any of the foregoing which
have already been obtained.
4.5. Enforceable Obligations. This Agreement and the other Loan
Documents have been duly executed and delivered by Borrower and constitute
Borrower's legal, valid and binding obligations, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles. The Loan Documents are not subject to any right of
rescission, set-off, counterclaim or defense by Borrower, including the defense
of usury.
4.6. No Default. No Default or Event of Default will exist
immediately following the making of the Loan.
4.7. Payment of Taxes. Borrower has filed (or has obtained
extensions for filing), or caused to be filed, all tax returns (federal, state,
local and foreign) required to be filed and timely paid all amounts of taxes
stated to be due on such returns (including interest and penalties) except for
taxes which are not yet delinquent and has paid all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangible taxes) owing by it necessary to preserve
the Liens in favor of Lender.
4.8. Compliance with Law. Borrower, the Property and the use thereof
comply in all respects with all applicable Insurance Requirements and Legal
Requirements, including building and zoning ordinances and codes except where
the failure to so comply would not result in a Material Adverse Effect. The
Property conforms to current zoning requirements (including
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requirements relating to parking) and is neither an illegal nor a legal
nonconforming use. Borrower is not in default or violation of any order, writ,
injunction, decree or demand of any Governmental Authority the violation of
which could result in a Material Adverse Effect. There has not been committed by
or on behalf of Borrower or, to the best of Borrower's knowledge, any other
person in occupancy of or involved with the operation or use of the Property,
any act or omission affording any federal Governmental Authority or any state or
local Governmental Authority the right of forfeiture as against the Property or
any portion thereof or any monies paid in performance of its obligations under
any of the Loan Documents. Neither Borrower nor Sponsor has purchased any
portion of the Property with proceeds of any illegal activity.
4.9. ERISA. Neither Borrower nor any ERISA Affiliate of Borrower
has incurred or could be subjected to any liability under Title IV or Section
302 of ERISA or Section 412 of the Code or maintains or contributes to, or is or
has been required to maintain or contribute to, any employee benefit plan (as
defined in Section 3(3) of ERISA) subject to Title IV or Section 302 of ERISA or
Section 412 of the Code. The consummation of the transactions contemplated by
this Agreement will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA, Section 4975 of the Code or
substantially similar provisions under federal, state or local laws, rules or
regulations.
4.10. Government Regulation. Borrower is not an "investment
company", or a company "controlled" by an "investment company", registered or
required to be registered under the Investment Company Act of 1940, as amended.
Borrower is not a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" or either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
4.11. No Bankruptcy Filing. Borrower is not contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of its assets or property.
Borrower does not have knowledge of any Person contemplating the filing of any
such petition against it.
4.12. Other Debt. Borrower does not have outstanding any Debt other
than Permitted Debt.
4.13. Litigation. To the best of Borrower's knowledge, there are no
actions, suits, proceedings, arbitrations or governmental investigations by or
before any Governmental Authority or other agency now pending, or threatened
against or affecting Borrower or the Property, in each case, except as listed in
the Exception Report, and to the best of Borrower's knowledge, there are no
actions, suits, proceedings, arbitrations or governmental investigations by or
before any Governmental Authority or other agency now pending, or threatened,
against or affecting Borrower or the Property, in each case, whether or not
listed in the Exception Report, which alone or in the aggregate, if determined
against Borrower or the Property, could result in a Material Adverse Effect.
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4.14. Leases; Material Agreements.
(a) Borrower has delivered to Lender true and complete copies of
all Leases. No person has any possessory interest in the Property or right to
occupy the same except under and pursuant to the provisions of the Leases. The
rent roll attached to this Agreement as Schedule E (the "Rent Roll") is true and
correct as of the Closing Date. Except as indicated on the Rent Roll, no
security deposits are being held by Borrower, no Tenant has any extension,
renewal or termination options, no Tenant or other party has any option (except
for the expansion option set forth in Article 36 of the Bloomberg Lease), right
of first refusal or similar preferential right to purchase or lease all or any
portion of the Property, no fixed rent has been paid more than 30 days in
advance of its due date and no payments of rent are more than 30 days
delinquent.
(b) Except as indicated in Schedule D, all work to be performed by
the landlord under the Leases has been substantially performed, all
contributions to be made by the landlord to the Tenants thereunder have been
made, all other conditions to each Tenant's obligations thereunder have been
satisfied, no Tenant has the right to require Borrower to perform or finance
Tenant Improvements or Material Alterations and no Leasing Commissions are owed
or would be owed upon the exercise of any Tenant's existing renewal or expansion
options.
(c) There are no Material Agreements except as listed on Schedule
F. Borrower has made available to Lender true and complete copies of all
Material Agreements. Each Material Agreement has been entered into at arm's
length in the ordinary course of business by or on behalf of Borrower.
(d) The Leases and the Material Agreements are in full force and
effect and there are no defaults thereunder by Borrower or, to Borrower's best
knowledge, any other party thereto. Borrower is not in default in any material
respect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Permitted Encumbrance or any other
material agreement or instrument to which it is a party or by which it or the
Property is bound.
4.15. Full and Accurate Disclosure. To Borrower's knowledge, no
statement of fact heretofore delivered by Borrower to Lender in writing in
respect of the Property or the Borrower contains any untrue statement of a
material fact or omits to state any material fact necessary to make statements
contained therein not misleading unless subsequently corrected. There is no fact
presently actually known to Borrower which has not been disclosed to Lender
which is reasonably likely to result in a Material Adverse Effect.
4.16. Financial Condition. All financial data concerning Borrower
and the Property heretofore provided to Lender fairly presents in accordance
with GAAP the financial position of Borrower in all material respects, as of the
date on which it was made, and does not omit to state any fact necessary to make
statements contained herein or therein not misleading. Since the delivery of
such data, except as otherwise disclosed in writing to Lender, there have
occurred no changes or circumstances presently known to Borrower and relating to
Borrower or the Property which have had or are reasonably likely to result in a
Material Adverse Effect.
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4.17. Single-Purpose Requirements. Borrower is now, and has always
been since its formation, a Single-Purpose Entity.
4.18. Location of Chief Executive Offices. The location of
Borrower's principal place of business and chief executive office is the address
listed in Section 9.4.
4.19. Not Foreign Person. Borrower is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
4.20. Labor Matters. Borrower is not a party to any collective
bargaining agreements.
4.21. Title. Borrower owns good and insurable title in fee to the
Property and good title to the related personal property to the extent not owned
by Tenants, to the Collateral Accounts and to any other Collateral, in each case
free and clear of all Liens whatsoever except the Permitted Encumbrances. The
Mortgage and the Assignment of Leases, when properly recorded in the appropriate
records, together with any Uniform Commercial Code financing statements required
to be filed in connection therewith, will create (i) a valid, perfected first
priority Lien on the Property and the rents therefrom, enforceable as such
against creditors of and purchasers from Borrower and subject only to Permitted
Encumbrances, and (ii) perfected Liens (pursuant to the Uniform Commercial Code
of the State of Delaware) in and to all personalty owned by Borrower, all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances. The Permitted Encumbrances do not and will not
materially and adversely affect or interfere with the value, or current use or
operation, of the Property, or the security intended to be provided by the
Mortgage or Borrower's ability to repay the Indebtedness in accordance with the
terms of the Loan Documents. Except as insured over by a Qualified Title
Insurance Policy, there are no claims for payment for work, labor or materials
affecting the Property which are or may become a Lien prior to, or of equal
priority with, the Liens created by the Loan Documents. No creditor of Borrower
other than Lender has in its possession any goods that constitute or evidence
the Collateral.
4.22. No Encroachments. Except as shown on the Qualified Survey, all
of the improvements on the Property lie wholly within the boundaries and
building restriction lines of the Property, and no improvements on adjoining
property encroach upon the Property, and no easements or other encumbrances upon
the Property encroach upon any of the improvements, so as, in either case, to
adversely affect the value or marketability of the Property, except those which
are insured against by a Qualified Title Insurance Policy.
4.23. Physical Condition.
(a) To Borrower's knowledge, except for matters set forth in the
Engineering Reports, the Property (including sidewalks, storm drainage system,
roof, plumbing system, HVAC system, fire protection system, electrical system,
equipment, elevators, exterior sidings and doors, irrigation system and all
structural components) is in good condition, order and repair in all respects
material to its use, operation or value.
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(b) Except for matters set forth in the Engineering Report,
Borrower is not aware of any material structural or other material defect or
damages in the Property, whether latent or otherwise.
(c) Borrower has not received and is not aware of any other
party's receipt of notice from any insurance company or bonding company of any
defects or inadequacies in the Property which would, alone or in the aggregate,
adversely affect in any material respect the insurability of the same or cause
the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.
4.24. Fraudulent Conveyance. Borrower has not entered into the
Transaction or any of the Loan Documents with the actual intent to hinder, delay
or defraud any creditor. Borrower has received reasonably equivalent value in
exchange for its obligations under the Loan Documents. On the Closing Date, the
fair salable value of Borrower's aggregate assets is and will, immediately
following the making of the Loan and the use and disbursement of the proceeds
thereof, be greater than Borrower's probable aggregate liabilities (including
subordinated, unliquidated, disputed and Contingent Obligations). Borrower's
aggregate assets do not and, immediately following the making of the Loan and
the use and disbursement of the proceeds thereof will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Borrower does not intend to, and does not believe that it will,
incur debts and liabilities (including Contingent Obligations and other
commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of
Borrower).
4.25. Management. Except for any Approved Management Agreement,
Borrower is not a party to any property management agreement that is in effect
with respect to the Property.
4.26. Condemnation. No Condemnation has been commenced or, to
Borrower's knowledge, is contemplated with respect to all or any material
portion of the Property or for the relocation of roadways providing access to
the Property.
4.27. Utilities and Public Access. The following statements are
accurate in all material respects:
(i) The Property has adequate rights of access to dedicated public
ways (and makes no material use of any means of access or egress that is
not pursuant to such dedicated public ways or recorded, irrevocable
rights-of-way or easements) and is adequately served by all public
utilities necessary to the continued use and enjoyment of the Property as
presently used and enjoyed.
(ii) All such utilities are located in the public right-of-way
abutting the premises or in areas ("Easement Areas") that are the subject
of recorded irrevocable easement agreements which benefit the Property and
which are listed in Schedule A of the Qualified Title Insurance Policy so
as to be included in the coverage thereof.
(iii) All such utilities are connected so as to serve the Property
without passing over other property other than Easement Areas.
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(iv) All roads necessary for the full utilization of the Property
for its current purpose have been completed and are either part of the
Property (by way of deed, easement or ground lease) or dedicated to public
use and accepted by all Governmental Authorities.
4.28. Environmental Matters. Except as disclosed in the
Environmental Reports:
(i) The Property is in compliance in all material respects with all
Environmental Laws applicable to the Property (which compliance includes,
but is not limited to, the possession of, and compliance with, all
environmental, health and safety permits, approvals, licenses,
registrations and other governmental authorizations required in connection
with the ownership and operation of the Property under all Environmental
Laws).
(ii) No Environmental Claim is pending with respect to the Property,
nor, to Borrower's knowledge, is any threatened, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to Borrower or the Property.
(iii) Without limiting the generality of the foregoing, there is not
present at, on, in or under the Property, any Hazardous Substances,
PCB-containing equipment, asbestos or asbestos containing materials,
underground storage tanks or surface impoundments for any Hazardous
Substance, lead in drinking water (except in concentrations that comply
with all Environmental Laws), or lead-based paint.
(iv) There have not been and are no past, present or threatened
Releases of any Hazardous Substance from or at the Property that are
reasonably likely to form the basis of any Environmental Claim, and, to
Borrower's knowledge, there is no threat of any Release of any Hazardous
Substance migrating to the Property.
(v) No Liens are presently recorded with the appropriate land
records under or pursuant to any Environmental Law with respect to the
Property and, to Borrower's best knowledge, no Governmental Authority has
been taking any action to subject the Property to Liens under any
Environmental Law.
(vi) There have been no material environmental investigations,
studies, audits, reviews or other analyses conducted by or that are in the
possession of Borrower in relation to the Property which have not been
made available to Lender.
4.29. Assessments. There are no pending or, to Borrower's knowledge,
proposed special or other assessments for public improvements or otherwise
affecting the Property, nor are there any contemplated improvements to the
Property that may result in such special or other assessments. No extension of
time for assessment or payment by Borrower of any federal, state or local tax is
in effect.
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4.30. No Joint Assessment. Borrower has not suffered, permitted or
initiated the joint assessment of the Property (i) with any other real property
constituting a separate tax lot, or (ii) with any personal property, or any
other procedure whereby the Lien of any Taxes which may be levied against such
other real property or personal property shall be assessed or levied or charged
to the Property as a single Lien.
4.31. Separate Lots. No portion of the Property is part of a tax lot
that also includes any real property that is not Collateral.
4.32. Permits; Certificate of Occupancy. Borrower has obtained all
Permits necessary for the present and contemplated use and operation of the
Property, except to the extent that failure to obtain or maintain such Permits
would not result in a Material Adverse Effect. The uses being made of the
Property are in conformity in all material respects with the certificate of
occupancy and/or Permits for the Property and any other restrictions, covenants
or conditions affecting the Property.
4.33. Flood Zone. None of the Improvements on the Property is
located in an area identified by the Federal Emergency Management Agency or the
Federal Insurance Administration as a "100 year flood plain" or as having
special flood hazards (including Zones A, B, C, V and X and Shaded X areas), or,
to the extent that any portion of the Property is located in such an area, the
Property is covered by flood insurance meeting the requirements set forth in
Section 5.15(a)(ii).
4.34. Security Deposits. Borrower is in compliance in all material
respects with all Legal Requirements relating to security deposits.
4.35. Intentionally Omitted.
4.36. Insurance. Borrower has obtained or caused to be obtained
insurance policies reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement. All premiums on such insurance
policies required to be paid as of the Closing Date have been paid for the
current policy period. To Borrower's knowledge, no Person, including Borrower,
has done, by act or omission, anything which would impair the coverage of any
such policy.
4.37. Condominium. (a) Borrower has a 12.5492% aggregate percentage
interest in the General Common Elements of the Condominium. Borrower has a
proportionate interest in the Retail Common Elements, the Retail Limited Common
Elements, the Commercial Limited Common Elements and the Commercial Common
Elements as specified in the Condominium Documents. The remaining 87.4508%
aggregate percentage interest in the General Common Elements of the Condominium
is owned as specified on Schedule I. The Borrower Unit and the Units owned by
the other parties described in this paragraph (a) are the only Units in the
Condominium.
(b) Each Condominium Document is in full force and effect and
constitutes the binding obligation of Borrower and, to Borrower's knowledge,
each other party thereto.
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(c) Except as expressly set forth in the Exception Report or which
has previously been delivered to Lender, Borrower has not consented to any
amendment or modification (oral or written) of any of the Condominium Documents,
nor, to Borrower's knowledge, does any such amendment or modification (oral or
written) of any of the Condominium Documents exist.
(d) No events exist which, now or after the passage of time, or
both, would constitute a default by Borrower under any of the Condominium
Documents (unless such default would not cause a Material Adverse Effect). In
addition, to Borrower's knowledge, no events exist which, now or after the
passage of time, or both, would constitute a default by any party other than
Borrower under any of the Condominium Documents (unless such default would not
cause a Material Adverse Effect).
(e) Except as set forth in the Exception Report, there are no sums
which are due and payable by Borrower under any of the Condominium Documents to
either the Association or the owners of the Units other than the Borrower Unit,
which sums remain unpaid. In addition, except as set forth in the Exception
Report, to Borrower's knowledge, there are no sums due and payable by the
Association or the owners of the Units other than the Borrower Unit and other
than the residential Units under any of the Condominium Documents to Borrower,
which sums remain unpaid.
(f) The current budgeted annual Common Charges for the Borrower Unit
are $1,830,580.
(g) To Borrower's knowledge, there are no currently outstanding
special assessments under the Condominium Documents, and, to Borrower's
knowledge, none are presently contemplated.
(h) As of the date hereof, the sole members of the board of
directors of the Association are Sandeep Mathrani, who was appointed by
Borrower, David Greenbaum, Joe Macnow and Steven Roth, who were appointed by the
Office Unit Owners, and Michael Fascitelli, who represents the Residential Unit
Owners. As of the date hereof, the Commercial Board is comprised of the Retail
Board and the Office Board.
(i) To Borrower's knowledge, the Association has not encumbered the
Common Elements or any other property of the Condominium; provided, however,
that the Units other than the Borrower Units and the Common Elements appurtenant
thereto may be encumbered by separate mortgage debt.
(j) No disputes between Borrower and the owners of the Units other
than the Borrower Unit and/or the Association, and, to Borrower's knowledge, no
dispute between the owners of the Units other than the Borrower Unit and the
Association have been submitted to the board of directors of the Association or
any other Person for resolution in accordance with the provisions of the
Declaration.
(k) To Borrower's knowledge, there are no actions, whether voluntary
or otherwise, pending against the owners of the Units other than
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the residential Units and other than the Borrower Unit or the Association
pursuant to the bankruptcy or insolvency laws of the United States or any state
thereof, and none has been threatened.
(l) Neither the Association nor the owners of the Units other than
the Borrower Unit have any purchase, lease or other options or rights of first
refusal with respect to the Property pursuant to the Condominium Documents or
otherwise.
4.38. No Dealings. Neither Borrower nor the Sponsor is aware of any
unlawful influence on the assessed value of the Property.
4.39. Estoppel Certificates. Borrower has delivered to Lender true
and complete copies of each estoppel certificate received back from any such
Tenant prior to the Closing Date.
4.40. Survival. Borrower agrees that all of the representations of
Borrower set forth in this Agreement and in the other Loan Documents shall
survive for so long as any portion of the Indebtedness is outstanding. All
representations, covenants and agreements made by Borrower in this Agreement or
in the other Loan Documents shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf. On or prior to one (1) year from the date hereof, on not less than
three days' prior written notice, Borrower shall deliver to Lender a
certification (x) confirming that all of the representations contained in this
Agreement are true and correct as of the date of such certification, or (y)
otherwise specifying any changes in or qualifications to such representations as
of such date as may be necessary to make such representations consistent with
the facts as they exist on such date.
ARTICLE V
AFFIRMATIVE COVENANTS
5.1. Existence. Borrower and, if applicable, each Single-Purpose
Equityholder shall do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence as a limited liability
company and all rights, licenses, Permits, franchises and other agreements
necessary for the continued use and operation of its business except to the
extent that failure to so do any of the foregoing would not result in a Material
Adverse Effect. Borrower and, if applicable, each Single-Purpose Equityholder
shall deliver to Lender a copy of each amendment or other modification to any of
its organizational documents promptly after the execution thereof.
5.2. Maintenance of Property. Borrower will keep the Property in
good working order and repair, reasonable wear and tear excepted. Subject to
Section 6.13, Borrower shall from time to time make, or cause to be made, all
reasonably necessary and desirable repairs, renewals, replacements, betterments
and improvements thereto.
5.3. Compliance with Legal Requirements. Subject to Section 5.4(ii),
Borrower shall comply with and be operated, maintained, repaired and improved in
compliance with, all Legal Requirements, Insurance Requirements and all material
contractual obligations by
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which Borrower is legally bound, except to the extent that failure to so do any
of the foregoing would not result in a Material Adverse Effect.
5.4. Impositions and Other Claims. (i) Subject to Section 5.4(ii)
hereof, Borrower shall pay and discharge all taxes, assessments and governmental
charges levied upon it, its income and its assets prior to the time when such
taxes, assessments and charges become delinquent, as well as all lawful claims
for labor, materials and supplies or otherwise, subject to any rights to contest
contained in Section 5.4(ii) hereof. Borrower shall timely file all federal,
state and local tax returns and other reports that it is required by law to
file. If any law or regulation applicable to Lender, any Note, the Property or
the Mortgage is enacted that deducts from the value of property for the purpose
of taxation any Lien thereon, or imposes upon Lender the payment of the whole or
any portion of the taxes or assessments or charges or Liens required by this
Agreement to be paid by Borrower, or changes in any way the laws or regulations
relating to the taxation of mortgages or security agreements or debts secured by
mortgages or security agreements or the interest of the mortgagee or secured
party in the property covered thereby, or the manner of collection of such
taxes, so as to affect the Mortgage, the Indebtedness or Lender, then Borrower,
upon demand by Lender, shall pay such taxes, assessments, charges or Liens, or
reimburse Lender for any amounts paid by Lender.
(ii) Nothing contained herein shall be deemed to require Borrower to
pay, or cause to be paid, any taxes, assessments or governmental charges,
to satisfy any Lien, or to comply with any Legal Requirement, Insurance
Requirement or material contractual obligation, so long as Borrower is in
good faith, and by proper legal proceedings, where appropriate, diligently
contesting the validity, amount or application thereof, provided that in
each case, at the time of the commencement of any such action or
proceeding, and during the pendency of such action or proceeding (i) no
Event of Default shall exist and be continuing hereunder, (ii) Borrower
shall keep Lender informed of such contest at reasonable intervals, (iii)
if Borrower is not providing security as provided in clause (v) below,
adequate reserves with respect thereto are maintained on Borrower's books
or in the Tax and Insurance Escrow Account, (iv) such contest operates to
suspend collection or enforcement as the case may be, of the contested
tax, assessment, governmental charge, Lien or Legal Requirement and such
contest is maintained and prosecuted continuously and with diligence or
the tax, assessment, governmental charge or Lien is bonded, (v) in the
case of taxes, assessments, governmental charges and Liens in excess of
$5,000,000 individually, or in the aggregate, which are not bonded, during
such contest, Borrower, shall deposit with or deliver to Lender either
cash and cash equivalents or a Letter or Letters of Credit or Qualified
Guarantee in an amount equal to 110% of (A) the amount of Borrower's
obligations being contested plus (B) any additional interest, charge, or
penalty arising from such contest; provided, however, Borrower shall not
be required to deliver such additional collateral if in Lender's sole but
reasonable discretion provision is made to Lender for protection of
Lender's interest in the Property, (vi) in the case of Insurance
Requirements or material contractual obligations, such right to contest
does not result in a termination of the insurance coverage or the
termination of the material contract, respectively. Notwithstanding the
foregoing, the creation of any such reserves or the furnishing of any bond
or other security, Borrower promptly shall comply with any contested Legal
Requirement or Insurance Requirement or material contractual obligation
shall pay any contested tax,
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assessment, governmental charge or Lien, and compliance therewith or
payment thereof shall not be deferred, if, at any time the Property or any
portion thereof shall be, in Lender's reasonable judgment, in imminent
danger of being forfeited or lost, any insurance coverage or material
contract is in imminent danger of being terminated or Lender is likely to
be subject to civil or criminal damages as a result thereof. If such
action or proceeding is terminated or discontinued adversely to Borrower,
Borrower shall deliver to Lender reasonable evidence of Borrower's
compliance with such contested tax, assessment, governmental charge, Lien
or Legal Requirements, Insurance Requirements or material contractual
obligations, as the case may be.
5.5. Access to Property. Borrower shall permit agents,
representatives and employees of Lender and the Servicer (who shall be
accompanied by a representative of Borrower) to inspect the Property or any
portion thereof, and/or the books and records of Borrower, at such reasonable
times on Business Days as may be requested by Lender upon reasonable advance
notice subject to the terms of the Leases.
5.6. Cooperate in Legal Proceedings. Except with respect to any
claim by Borrower against Lender, Borrower shall cooperate fully with Lender
with respect to any proceedings before any Governmental Authority which may in
any way affect the rights of Lender hereunder or under any of the Loan Documents
and, in connection therewith, Lender may, at its election, participate or
designate a representative to participate in any such proceedings.
5.7. Leases.
(a) Borrower shall furnish Lender with executed copies of all
Leases, together with a detailed breakdown of income and cost associated
therewith. All new Leases and renewals or amendments of Leases must be entered
into on an arms-length basis with Tenants whose identity and creditworthiness is
appropriate for tenancy in a property of comparable quality, must provide for
rental rates and other economic terms which, taken as a whole, are at least
equivalent to then-existing market rates, based on the applicable market, and
must contain terms and conditions that are commercially reasonable (in each
case, unless Lender consents to such Lease in its sole discretion). All new
Leases must provide that they are subject and subordinate to any current or
future mortgage financing on the Property and that the Tenant agrees to attorn
to any foreclosing mortgagee at such mortgagee's request, provided such
mortgagee provides a nondisturbance agreement to the Tenant in form and
substance contained in Exhibit D to the Mortgage or another form requested by a
Tenant which form is reasonably acceptable to such mortgagee.
(b) All new Leases which are Major Leases, and all terminations
(other than as a result of a material default by the Tenant thereunder),
renewals (other than at Tenant's option as contained in the Lease) and material
amendments of Major Leases, and any surrender of landlord's material rights
under any Major Lease, shall be subject to the prior written consent of Lender,
which consent shall not be unreasonably withheld or delayed. With regard to any
action described in this Section 5.7(b) for which Lender's consent is required,
Lender shall not withhold its consent or disapproval to any such action for more
than ten (10) Business Days after request for approval thereof has been made by
Borrower, accompanied by a detailed description
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of the request for which approval is sought, provided that Borrower submits such
request for Lender's approval in an envelope labeled "Priority" and delivered to
Lender by overnight delivery and otherwise in accordance with the provisions of
Section 9.4 and which request shall state at the top of the first page in bold
lettering "LENDER'S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF
RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE
UNDERSIGNED AND LENDER." In the event that Lender fails to either approve such
request or disapprove such request for more than ten (10) Business Days after
receipt thereof, the action that was the subject of said request shall be deemed
approved.
(c) Borrower shall (i) observe and perform all the material
obligations imposed upon the lessor under the Leases; (ii) enforce all of the
material terms, covenants and conditions contained in the Leases on the part of
the lessee thereunder to be observed or performed, short of termination thereof,
except that Borrower may terminate any Lease following a material default
thereunder by the respective Tenant; (iii) not collect any of the rents
thereunder more than one month in advance; (iv) not execute any assignment of
lessor's interest in the Leases or associated rents other than the assignment of
rents and leases under the Mortgage; and (v) not cancel or terminate any
guarantee of any of the Major Leases without the prior written consent of Lender
which consent shall not be unreasonably withheld or delayed. With regard to any
action described in this Section 5.7(c) for which Lender's consent is required,
Lender shall not withhold its consent or disapproval to any such action for more
than ten (10) Business Days after request for approval thereof has been made by
Borrower, accompanied by a detailed description of the request for which
approval is sought, provided that Borrower submits such request for Lender's
approval in an envelope labeled "Priority" and delivered to Lender by overnight
delivery and otherwise in accordance with the provisions of Section 9.4 and
which request shall state at the top of the first page in bold lettering
"LENDER'S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS
NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND
LENDER." In the event that Lender fails to either approve such request or
disapprove such request for more than ten (10) Business Days after receipt
thereof, the action that was the subject of said request shall be deemed
approved. Borrower shall deliver to each new Tenant a Tenant Notice upon
execution of such Tenant's Lease, and promptly thereafter deliver to Lender a
copy thereof and evidence of such Tenant's receipt thereof.
(d) Security deposits of Tenants under all Leases, whether held in
cash or any other form, shall not be commingled with any other funds of Borrower
and, if cash, shall be deposited by Borrower at such commercial or savings bank
or banks as may be reasonably satisfactory to Lender and pledged to Lender. Any
bond or other instrument which Borrower is permitted to hold in lieu of cash
security deposits under any applicable Legal Requirements shall be maintained in
full force and effect unless replaced by cash deposits as described above, shall
(if not prohibited by any Legal Requirements) name Lender as payee or mortgagee
thereunder (or at Lender's option, be fully assignable to Lender) or may name
Borrower as payee thereunder so long as such bond or other instrument is pledged
to Lender as security for the Indebtedness and shall, in all material respects,
comply with any applicable Legal Requirements. Borrower shall, upon Lender's
request, provide Lender with evidence reasonably satisfactory to Lender of
Borrower's compliance with the foregoing. During the continuance of any Event of
Default, Borrower shall, upon Lender's request, deposit with Lender in a
segregated Eligible Account
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pledged to Lender the aggregate cash security deposits of the Tenants (and any
interest theretofore earned on such security deposits and actually received by
Borrower) which Borrower had not returned to the applicable Tenants or applied
in accordance with the terms of the applicable Lease, and Lender shall hold such
security deposits in a segregated account in accordance with the applicable
Lease.
5.8. Plan Assets, etc. Borrower will do, or cause to be done, all
things necessary to ensure that it will not be deemed to hold Plan Assets at any
time.
5.9. Further Assurances. Borrower shall, at Borrower's sole cost and
expense, from time to time as reasonably requested by Lender, execute,
acknowledge, record, register, file and/or deliver to Lender such other
instruments, agreements, certificates and documents (including Uniform
Commercial Code financing statements and amended or replacement mortgages) as
Lender may reasonably request to evidence, confirm, perfect and maintain the
Liens securing or intended to secure the obligations of Borrower under the Loan
Documents or to facilitate a replacement of the Cash Management Bank pursuant to
Section 3.1(c) or a bifurcation of the Notes pursuant to, and subject to any
conditions, terms and limitations specified in, Sections 1.1(c) and/or 9.7(a)
(including, without limitation, the party bearing the cost thereof), in each
case if requested by Lender, and do and execute all such further lawful and
reasonable acts, conveyances and assurances necessary for the carrying out of
the intents and purposes of this Agreement and the other Loan Documents as
Lender shall reasonably request from time to time. Borrower hereby authorizes
and appoints Lender as its attorney-in-fact during the continuance of an Event
of Default to execute, acknowledge, record, register and/or file such
instruments, agreements, certificates and documents, and to do and execute such
acts, conveyances and assurances, should Borrower fail to do so itself in
violation of this Agreement following written request from Lender, in each case
without the signature of Borrower. The foregoing grant of authority is a power
of attorney coupled with an interest and such appointment shall be irrevocable
for the term of this Agreement. Borrower hereby ratifies all actions that such
attorney shall lawfully take or cause to be taken in accordance with this
Section 5.9.
5.10. Management of Collateral.
(a) The Property shall be managed at all times by an Approved
Property Manager pursuant to an Approved Management Agreement. Pursuant to the
Subordination of Property Management Agreement or Agreements, each Approved
Property Manager shall agree that its Approved Management Agreement, and all
fees thereunder (including any incentive fees) are subject and subordinate to
the Indebtedness. Borrower may from time to time appoint a successor manager,
which successor manager shall be an Approved Property Manager, to manage the
Property pursuant to an Approved Management Agreement, and such successor
manager shall execute for Lender's benefit a Subordination of Property
Management Agreement in form and substance reasonably satisfactory to Lender.
The per annum fees of the Approved Property Manager (including any incentive
fees) shall not, at any time, exceed 2.5% of the gross revenues of the Property
for the then most recently concluded Test Period.
(b) Borrower shall cause each Approved Property Manager (including
any successor Approved Property Manager) to maintain at all times worker's
compensation insurance as required by Governmental Authorities.
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(c) Borrower shall notify Lender in writing of any material default
of Borrower or the Approved Property Manager under the Approved Management
Agreement, after the expiration of any applicable cure periods, of which
Borrower has actual knowledge. Lender shall have the right, after reasonable
notice to Borrower and in accordance with the Subordination of Management
Agreement, to cure defaults of Borrower under the Approved Management Agreement.
Any reasonable out-of-pocket expenses incurred by Lender to cure any such
default shall constitute a part of the Indebtedness and shall be due from
Borrower upon demand by Lender.
(d) If, after Borrower shall have entered into a Management
Agreement in accordance with the terms hereof, (a) a monetary Event of Default
has occurred and is continuing, (b) with respect to any property manager that is
not an affiliate of Borrower, a material default on the part of such property
manager (as determined by Lender in its sole and absolute discretion) occurs and
is continuing under the terms of any Management Agreement or (c) the Manager
shall become insolvent, Borrower shall, at the request of Lender, terminate the
Management Agreement and replace the Manager with an Approved Property Manager
in accordance with this Section 5.10.
5.11. Notice of Material Event. Borrower shall give Lender prompt
notice (containing reasonable detail) of (x) any material adverse change in the
financial or physical condition of the Property, as reasonably determined by
Borrower, including the termination or cancellation of any Major Lease and the
termination or cancellation of terrorism or other insurance required by this
Agreement, or (y) any litigation or governmental proceedings pending or
threatened in writing against Borrower which is reasonably likely to have a
Material Adverse Effect.
5.12. Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each Fiscal Year, Borrower shall furnish
to Lender, in hard copy and electronic format, a balance sheet of Borrower as of
the end of such year, together with related statements of income and
equityholders' capital for such Fiscal Year, audited by a "Big Four" accounting
firm whose opinion shall be to the effect that such financial statements have
been prepared in accordance with GAAP applied on a consistent basis and shall
not be qualified as to the scope of the audit or as to the status of Borrower as
a going concern. Together with Borrower's annual financial statements, Borrower
shall furnish to Lender, in hard copy and electronic format:
(i) a statement of cash flows;
(ii) then current rent roll and occupancy and sales reports;
(iii) an annual report for the most recently completed fiscal year,
describing Capital Expenditures (stated separately with respect to any project
costing in excess of $100,000), Tenant Improvements and Leasing Commissions; and
(iv) such other information as Lender shall reasonably request.
5.13. Quarterly Financial Statements. As soon as available, and in
any event within 45 days after the end of each Fiscal Quarter (including
year-end), Borrower shall furnish
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to Lender, in hard copy and electronic format, quarterly and year-to-date
unaudited financial statements prepared for such fiscal quarter with respect to
Borrower, including a balance sheet and operating statement as of the end of
such Fiscal Quarter, together with related statements of income, equityholders'
capital and cash flows for such Fiscal Quarter and for the portion of the Fiscal
Year ending with such Fiscal Quarter, which statements shall be accompanied by
an Officer's Certificate certifying that the same are true and correct and were
prepared in accordance with GAAP applied on a consistent basis, subject to
changes resulting from audit and normal year-end audit adjustments. Each such
quarterly report shall be accompanied by the following, in hard copy and
electronic format:
(i) a statement in reasonable detail which calculates Net Operating
Income for each of the Fiscal Quarters in the Test Period ending in such
Fiscal Quarter, in the case of each such Fiscal Quarter, ending at the end
thereof;
(ii) copies of each of the Leases signed during such quarter,
together with a summary thereof which shall include the Tenant's name,
lease term, base rent, Tenant Improvements, leasing commissions paid, free
rent and other material tenant concessions;
(iii) then current rent roll and occupancy and sales reports; and
(iv) such other information as Lender shall reasonably request.
5.14. Monthly Financial Statements. Until the occurrence of a
Securitization and during the continuance of a Cash Trap Period or an Event of
Default, Borrower shall furnish within 30 days after the end of each calendar
month (other than the calendar month immediately following the final calendar
month of any Fiscal Year or Fiscal Quarter), in hard copy and electronic format,
monthly and year-to-date unaudited financial statements prepared for the
applicable month with respect to Borrower, including a balance sheet as of the
end of such month, together with related statements of income for such month and
for the portion of the Fiscal Year ending with such month, which statements
shall be accompanied by an Officer's Certificate certifying that the same are
true and correct and were prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from audit and normal year-end
audit adjustments. Each such monthly report shall be accompanied by the
following:
(i) a summary of Leases signed during such month, which summary
shall include the Tenant's name, lease term, base rent, escalations,
Tenant Improvements, leasing commissions paid, free rent and other
concessions; and
(ii) the then current rent roll.
5.15. Insurance.
(a) Borrower shall obtain and maintain or cause to be obtained and
maintained with respect to the Building (other than the improvements within the
Units), except for clauses (iii) and (iv) which shall be obtained and maintained
for the Borrower Unit, for the mutual benefit of Borrower and Lender at all
times, the following policies of insurance:
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(i) insurance against loss or damage by standard perils included
within the classification "All Risks Special Form Cause of Loss"
(including coverage for damage caused by windstorm and hail). Such
insurance shall (A) be in an aggregate amount equal to the lesser of (I)
the Loan Amount and (II) the full replacement cost of the Property and
fixtures (without deduction for physical depreciation); (B) have
deductibles acceptable to Lender (but in any event not in excess of
$500,000); (C) be paid annually in accordance with an installment plan
negotiated with the insurance carrier, in which event such policy shall
provide for notice to Lender at least 30 days prior to cancellation or
termination as a result of non-payment of premium; (D) contain a
"Replacement Cost Clause" and an "Agreed Amount Clause" with a waiver of
depreciation; (E) include an ordinance or law coverage clause containing
Coverage A: "Loss Due to Operation of Law" (with a minimum liability equal
to replacement cost), Coverage B: "Demolition Cost" and Coverage C:
"Increased Cost of Construction" coverages; (F) permit that the
improvements and other property covered by such insurance be rebuilt at
another location in the event that such improvements and other property
cannot be rebuilt at the location on which they are situated as of the
date hereof;
(ii) Flood insurance if the Property is located in a "100 Year Flood
Plain" or "special hazard area" (including Zones A, B, C, V, X and Shaded
X Areas) in an amount equal to the maximum limit of coverage available
from FEMA/FIA, plus such excess limits reasonably requested by Lender,
with a deductible not in excess of $25,000;
(iii) commercial general liability insurance, including broad form
coverage of property damage, blanket contractual liability and personal
injury (including death resulting therefrom), containing minimum limits
per occurrence of not less than $1,000,000 with not less than a $2,000,000
general aggregate for any policy year. In addition, at least $50,000,000
excess and/or umbrella liability insurance shall be obtained and
maintained for any and all claims, including all legal liability imposed
upon Borrower and all related court costs and attorneys' fees and
disbursements;
(iv) rental loss and/or business interruption insurance (which shall
include coverages for lost rents (including real estate tax reimbursements
payable pursuant to Leases) for the actual period of restoration covering
the 36 month period, commencing on the date of any Casualty or
Condemnation, and containing an extended period of indemnity covering the
24 month period commencing on the date on which the Property has been
restored. In addition, such insurance shall provide that the proceeds will
be available for the period it would have taken to restore and shall
thereby be payable in full upon notice by Borrower that the Property will
not be restored, based upon a claim settlement in an amount that
represents the rental loss and/or business interruption from the time of
notice to the assumed restoration date had notice not been given. In no
event will the amount of insurance payable under this clause (iv) exceed
the policy limit on an actual loss sustained basis. The amount of such
insurance shall be increased from time to time as and when the gross
revenues from the Property increase;
(v) insurance against loss or damage from (A) leakage of sprinkler
systems and (B) explosion of steam boilers, air conditioning equipment,
high pressure piping, machinery and equipment, pressure vessels or similar
apparatus now or hereafter installed
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in any of the Improvements (without exclusion for explosions) and
insurance against loss of occupancy or use arising from any breakdown, in
such amounts as are generally available and are generally required by
institutional lenders for properties comparable to the Property;
(vi) worker's compensation insurance with respect to all employees
of Borrower as and to the extent required by any Governmental Authority or
Legal Requirement and employer's liability coverage of at least
$1,000,000;
(vii) during any period of repair or restoration, "All Risk"
builders insurance or "Course of Construction" insurance in non-reporting
form, (A) covering any improvements under construction, being renovated or
otherwise being altered, and (B) in an amount equal to not less than the
full insurable value of the Property against such risks (including fire
and extended coverage and collapse of the Improvements to agreed limits)
as Lender may request, in form and substance acceptable to Lender;
(viii) coverage to fully compensate for the cost of demolition and
the increased cost of construction, renovation or alteration for the
Property;
(ix) intentionally omitted;
(x) coverage for terrorism (either as part of Borrower's "All Risks"
policy or as a separate policy), providing casualty insurance in an amount
no less than the full replacement cost of the Property and business
interruption and liability coverage consistent with the requirements set
forth above, if and to the extent that such coverage is commercially
available for an annual premium that is less than or equal to the
Terrorism Premium Threshold If the preceding sentence is not satisfied,
then Borrower shall obtain terrorism coverage (at a premium that does not
exceed the Terrorism Premium Threshold) from such insurers, and with such
coverage, as shall be acceptable to Lender in its reasonable discretion;
and
(xi) such other insurance as may from time to time be reasonably
requested by Lender.
(b) All policies of insurance (the "Policies") required pursuant to
this Section 5.15 shall be issued by one or more primary insurers having a
claims-paying ability of at least "A" or "A2" by each of the Rating Agencies, or
by a syndicate of insurers through which at least 75% of the coverage (if there
are 4 or fewer members of the syndicate) or at least 60% of the coverage (if
there are 5 or more members of the syndicate) is with carriers having such
claims-paying ability ratings (provided that the first layers of coverage are
from carriers rated at least "A" or "A2" and all such carriers shall have
claims-paying ability ratings of not less than "BBB+" or "Baal").
Notwithstanding anything to the contrary herein, for purposes of determining
whether the insurer ratings requirements set forth above have been satisfied,
(1) any insurer that is not rated by Fitch will be regarded as having a Fitch
rating that is the equivalent of the rating given to such insurer by any of
Moody's and S&P that does rate such insurer (or, if both such rating agencies
rate such insurer, the lower of the two ratings), and (2) any insurer that is
not rated by Moody's will be regarded as having a Moody's rating of "Baal" or
better if it is
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rated "A-" or better by S&P and will be regarded as having a Moody's rating of
"A2" or better if it is rated "A+" or better by S&P.
(c) All Policies required pursuant to this Section 5.15:
(i) shall be maintained throughout the term of the Loan without cost
to Lender;
(ii) with respect to casualty policies, shall contain a standard
noncontributory mortgagee clause naming Lender and its successors and
assigns as first mortgagee and loss payee as their interests shall appear;
(iii) with respect to liability policies, shall name Lender and its
successors and assigns as additional insureds;
(iv) with respect to rental or business interruption insurance
policies, shall name Lender and its successors and/or assigns as loss
payee as their interests shall appear;
(v) shall contain a clause providing that neither Borrower nor
Lender nor any other party shall be a co-insurer under said Policies;
(vi) shall contain a clause providing that Lender shall receive at
least 30 days' prior written notice of any material modification,
reduction or cancellation thereof;
(vii) shall contain an endorsement providing that no unintentional
act or negligence of Borrower or of a Tenant or other occupant shall
affect the validity or enforceability of the insurance insofar as a
mortgagee is concerned;
(viii) shall contain a waiver of subrogation against Lender;
(ix) shall contain deductibles which, in addition to complying with
any other requirements expressly set forth in Section 5.15(a), are
acceptable to Lender and are no larger than is customary for similar
policies covering similar properties in the geographic market in which the
Property is located and in any event no larger than $250,000;
(x) may be in the form of a blanket policy, provided that Borrower
shall provide evidence satisfactory to Lender that the insurance premiums
for the Building are separately allocated under such Policy to the
Building and that (i) payment of such allocated amount shall maintain the
effectiveness of such Policy as to the Building notwithstanding the
failure of payment of any other portion of premiums, and (ii) overall
insurance limits will under no circumstance limit the amount that will be
paid in respect of the Building, and provided further that any such
blanket policy shall contain an amendment setting forth that (A) the
aggregate limit under such policy shall apply separately to each property
covered thereunder, and (B) unless otherwise agreed to by Lender, the
limit of such policy shall be a "true blanket limit" and not limited by a
schedule of values for the properties covered thereby.
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Any policies of insurance maintained by Borrower but not required hereunder
shall comply with clauses (ii), (iii), (v), (vii) and (viii) above.
(d) Borrower shall pay or cause to be paid the premiums for all
Policies as the same become due and payable; provided, however, that if payable
other than annually in advance, such Policies shall provide for notice to Lender
at least 30 days prior to cancellation or termination as a result of non-payment
of premium. Copies of such Policies, certified as true and correct by Borrower,
shall be delivered to Lender promptly upon request. Not later than 5 days prior
to the expiration date of each Policy, Borrower shall deliver to Lender
evidence, reasonably satisfactory to Lender, of its renewal.
5.16. Casualty and Condemnation.
(a) Borrower shall give prompt notice to Lender of any Casualty or
Condemnation. In the event of a Casualty or Condemnation where the loss does not
exceed the Restoration Adjustment Threshold, Borrower may settle and adjust such
claim; provided that (i) no Event of Default has occurred and is continuing and
(ii) such adjustment is carried out in a commercially reasonable and timely
manner. In the event of a Casualty or Condemnation where the loss exceeds the
Restoration Adjustment Threshold or if an Event of Default then exists, Borrower
may settle and adjust such claim only with the consent of Lender (which consent
shall not be unreasonably withheld or delayed) and Lender shall have the
opportunity to participate, at Borrower's cost, in any such adjustments. Lender
shall be entitled to collect and receive any and all Loss Proceeds where the
Loss Proceeds exceed the Restoration Adjustment Threshold. The reasonable
expenses incurred by Lender in the adjustment and collection of Loss Proceeds
shall become part of the Indebtedness and shall be reimbursed by Borrower to
Lender upon demand therefor.
(b) Except as otherwise required under the Condominium Documents,
all Loss Proceeds from any Casualty or Condemnation which exceed the Restoration
Threshold shall be immediately deposited into the Loss Proceeds Account (monthly
rental loss/business interruption proceeds to be initially deposited into the
Loss Proceeds Account and subsequently deposited into the Cash Management
Account in installments as and when the lost rental income covered by such
proceeds would have been payable). Notwithstanding the foregoing, if the Loss
Proceeds are less than the Restoration Threshold, then, provided no Event of
Default has occurred and is continuing, and subject to the terms of the
Condominium Documents, the Loss Proceeds shall be paid to Borrower and shall be
used to repair and restore the Property in accordance with the terms of this
Agreement. If any Condemnation or Casualty occurs as to which, in the reasonable
judgment of Lender:
(i) in the case of a Casualty, the cost of restoration would not
exceed 30% of the fair market value of the Property and the Casualty does
not render untenantable, or result in the cancellation of Leases covering,
more than 30% of the gross rentable area of the Property, or result in
cancellation of Leases covering more than 30% of the base contractual
rental revenue;
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(ii) in the case of a Condemnation, the Condemnation does not render
untenantable, or result in the cancellation of Leases covering, more than
15% of the gross rentable area of the Property;
(iii) restoration of the Property is reasonably expected to be
completed prior to the expiration of rental interruption insurance and at
least six months prior to the Maturity Date, unless on or prior to such
date the Borrower (x) shall deliver to the Lender and there shall remain
in effect a binding written offer, subject only to customary conditions,
of an Eligible Institution or such other financial institution or
investment bank reasonably satisfactory to Lender duly authorized to
originate loans secured by real property located in the State of New York
for a loan from such Eligible Institution or such other financial
institution or investment bank to the Borrower in a principal amount of
not less than the then Principal Indebtedness and which shall, in the
Lender's reasonable judgment, enable the Borrower to refinance the Loan
prior to the Maturity Date and (y) if a Securitization shall have
occurred, shall obtain a Rating Agency Confirmation; and
(iv) after such restoration, the fair market value of the Property
is reasonably expected to equal at least the fair market value of the
Property immediately prior to such Condemnation or Casualty (assuming the
affected portion of the Property is relet);
or if Lender otherwise elects to allow Borrower to restore the Property, then
the Loss Proceeds after receipt thereof by Lender and reimbursement of any
reasonable expenses incurred by Lender in connection therewith shall be applied
to the cost of restoring, repairing, replacing or rebuilding the Property or
part thereof subject to the Casualty or Condemnation, in the manner set forth
below (and Borrower shall commence, as promptly and diligently as practicable,
to prosecute such restoring, repairing, replacing or rebuilding of the Property
in a workmanlike fashion and in accordance with applicable law to a status at
least equivalent to the quality and character of the Property immediately prior
to the Condemnation or Casualty). Provided that no Event of Default shall have
occurred and be then continuing, Lender shall disburse such Loss Proceeds to
Borrower upon Lender's being furnished with (i) evidence reasonably satisfactory
to it of the estimated cost of completion of the restoration, (ii) funds, or
assurances reasonably satisfactory to Lender that such funds are available and
sufficient in addition to any remaining Loss Proceeds, to complete the proposed
restoration, and (iii) such architect's certificates, waivers of lien,
contractor's sworn statements, title insurance endorsements, bonds, plats of
survey and such other evidences of cost, payment and performance as Lender may
reasonably request; and Lender may, in any event, require that all plans and
specifications for restoration reasonably estimated by Lender to exceed the
Restoration Adjustment Threshold be submitted to and approved by Lender prior to
commencement of work (which approval shall not be unreasonably withheld). If
Lender reasonably estimates that the cost to restore will exceed the Restoration
Adjustment Threshold, Lender may retain a local construction consultant to
inspect such work and review Borrower's request for payments and Borrower shall,
on demand by Lender, reimburse Lender for the reasonable fees and expenses of
such consultant (which fees and expenses shall constitute Indebtedness). No
payment shall exceed 90% of the value of the work performed from time to time
until such time as 50% of the restoration (calculated based on the anticipated
aggregate cost of the work) has been completed, and amounts retained prior to
completion of 50% of the restoration shall not be paid prior to the final
completion of the restoration. Funds other than Loss Proceeds shall be disbursed
prior to disbursement of such
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Loss Proceeds, and at all times the undisbursed balance of such proceeds
remaining in the Loss Proceeds Account, together with any additional funds
irrevocably and unconditionally deposited therein or irrevocably and
unconditionally committed for that purpose, shall be at least sufficient in the
reasonable judgment of Lender to pay for the cost of completion of the
restoration free and clear of all Liens or claims for Lien.
(c) Borrower shall cooperate with Lender in obtaining for Lender the
benefits of any Loss Proceeds lawfully or equitably payable to Lender in
connection with the Property. Lender shall be reimbursed for any expenses
reasonably incurred in connection therewith (including reasonable attorneys'
fees and disbursements, and, if reasonably necessary to collect such proceeds,
the expense of an Appraisal on behalf of Lender) out of such Loss Proceeds or,
if insufficient for such purpose, by Borrower.
(d) If Borrower is not entitled to apply Loss Proceeds toward the
restoration of the Property pursuant to Section 5.16(b) and Lender elects not to
permit such Loss Proceeds to be so applied, such Loss Proceeds shall be applied
on the first Payment Date following such election to the prepayment of the Loan
and shall be accompanied by interest through the end of the applicable Interest
Accrual Period (calculated as if the amount prepaid were outstanding for the
entire Interest Accrual Period). If the Note has been bifurcated into multiple
Notes pursuant to Section 1.1(c), all prepayments of the Loan made by Borrower
in accordance with this Section 5.16(d) shall be applied to the Notes on a pro
rata, pari passu basis.
(e) If Borrower is entitled to apply Loss Proceeds toward the
restoration of the Property pursuant to Section 5.16(b), then, after the
completion of such restoration in accordance herewith, including, without
limitation, delivery of all temporary certificates of occupancy, lien waivers
and other evidence Lender may reasonably require to evidence the lien free
completion of such restoration in compliance with all Legal Requirements, as
long as no Event of Default has occurred which is continuing, Lender shall
disburse to Borrower, or during a Cash Trap Period, deposit in the Cash
Management Account, any undisbursed portion of the Loss Proceeds.
(f) Notwithstanding anything contained herein to the contrary, the
provisions of Section 5.16 are subject to the provisions of the Condominium
Documents.
(g) Notwithstanding anything to the contrary contained herein, in
the event of a Casualty that destroys or substantially damages 75% or more of
the Building whereby the Unit Owners (whether directly, indirectly, by proxy
otherwise) fail to elect to rebuild and restore the Building pursuant to Section
6.3.4 of the By Laws, Lender shall be entitled to treat all amounts Borrower
otherwise is entitled to receive pursuant to Section 6.3.4 of the By-Laws upon a
sale of the Property (or the land thereunder) or otherwise or pursuant to
Section 339-cc of the Real Property Law of the State of New York as Loss
Proceeds.
5.17. Annual Budget. Borrower has previously delivered to Lender the
Annual Budget for the Property for the 2005 Fiscal Year. At least 45 days prior
to the commencement of each subsequent Fiscal Year during the term of the Loan,
Borrower shall deliver to Lender for informational purposes only an Annual
Budget for the Property for the ensuing Fiscal Year and, promptly after
preparation thereof, any subsequent revisions to the Annual Budget. During the
continuance of any Cash Trap Period or Event of Default, such Annual Budget and
any such
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revisions shall be subject to Lender's approval, which approval shall not be
unreasonably withheld. Lender shall not withhold its consent or disapproval to
any such Annual Budget or any subsequent revisions thereto for more than ten
(10) Business Days after request for approval thereof has been made by Borrower,
accompanied by a detailed description of the request for which approval is
sought, provided that Borrower submits such request for Lender's approval in an
envelope labeled "Priority" and delivered to Lender by overnight delivery and
otherwise in accordance with the provisions of Section 9.4 and which request
shall state at the top of the first page in bold lettering "LENDER'S RESPONSE IS
REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE
TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER." In the event that
Lender fails to either approve such Annual Budget (or any subsequent revisions
thereto) or disapprove such Annual Budget (or any subsequent revisions thereto)
for more than ten (10) Business Days after receipt thereof, the Annual Budget
(or any subsequent revisions thereto) shall be deemed approved (the Annual
Budget, as so approved, the "Approved Annual Budget"); provided, however, that
Borrower shall not amend any Annual Budget more than once in any 60-day period.
5.18. General Indemnity. Borrower shall indemnify, reimburse, defend
and hold harmless Lender and its officers, directors, employees and agents
(collectively, the "Indemnified Parties") for, from and against any and all
Damages of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against the Indemnified Parties, in any way relating to or arising
out of the making or holding or enforcement of the Loan by Lender or the
administration of the Transaction to the extent resulting, directly or
indirectly, from any claim (including any Environmental Claim) made (whether or
not in connection with any legal action, suit, or proceeding) by or on behalf of
any Person; provided, however, that no Indemnified Party shall have the right to
be indemnified hereunder for its own fraud, bad faith, gross negligence or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this Section 5.18 shall survive the satisfaction and payment in full of
the Indebtedness and termination of this Agreement.
5.19. Condominium and Anchor Tenant Covenants.
(a) Borrower covenants and agrees as follows:
(i) Borrower shall comply with all material terms, conditions and
covenants of the Condominium Documents and Anchor Leases;
(ii) Borrower shall promptly deliver to Lender a true and complete
copy of each and every (A) notice of default received by Borrower with
respect to any obligation of Borrower under the provisions of the
Condominium Documents and Anchor Leases and (B) any material special
assessments relating to the Condominium;
(iii) Borrower shall deliver to Lender copies of any written notices
of default or event of default relating to the Condominium Documents and
Anchor Leases served by Borrower;
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(iv) after the occurrence of and continuance of an Event of Default,
so long as the Loan is outstanding, Borrower shall not cast its vote(s) in
the Association or any board of managers pursuant to the Condominium
Documents, shall not make any rules and regulations for the Condominium
and shall not grant or withhold any consent, approval or waiver under the
Condominium Documents or any Anchor Lease, in each case, without the prior
written consent of Lender; and
(v) Borrower shall deliver to the Association and any board of
managers pursuant to the Condominium Documents, written notice of the
identity of Lender and each assignee of Lender of which Borrower is aware.
(b) Subject to Section 5.4(ii) hereof, Borrower shall pay all Common
Charges and all fees, assessments and charges assessed pursuant to the Anchor
Leases against Borrower and the Borrower Unit as and when the same become due
and payable. Upon request of Lender, Borrower shall deliver to Lender evidence
reasonably satisfactory to Lender that all such Common Charges and fees,
assessments, charges and other amounts assessed pursuant to the Anchor Leases
against Borrower and the Borrower Unit, which are then due and payable, have
been paid by Borrower.
(c) In the event proceeds of a Casualty or Condemnation with respect
to the Property or any common areas of the Condominium are required to be
deposited into an account pursuant to the Condominium Documents or Anchor
Leases, Borrower shall cause such amounts to be deposited into an Eligible
Account to the extent Borrower has the authority to do so under the Condominium
Documents or the Lease, as applicable, and any amounts released therefrom to
Borrower shall be deposited into the Loss Proceeds Account to the extent
required in accordance herewith.
5.20. Certificate of Occupancy. Until a permanent certificate of
occupancy is issued for the Property, Borrower shall cause the existing
temporary certificate of occupancy for the Property or a new or amended
temporary certificate of occupancy to be and remain in full force and effect
such that all portions of the Borrower Unit which are occupied by Borrower or a
Tenant may continue to be occupied by Borrower or a Tenant in compliance with
all Legal Requirements.
ARTICLE VI
NEGATIVE COVENANTS
6.1. Liens on the Property. Subject to Section 5.4(ii) hereof,
neither Borrower nor, if applicable, any Single-Purpose Equityholder shall
permit or suffer the existence of any Lien on any of its assets, other than
Permitted Encumbrances. Lender agrees that (x) the lien of the Mortgage is,
subject to the terms of the Condominium Declaration, subordinate to the
Declaration (as amended from time to time in accordance with the terms of this
Agreement), and (y) Lender will confirm such subordination in a written
instrument (in recordable form) in favor of the board of the Condominium that is
in form reasonably satisfactory to Lender from time to time (at the reasonable
request of Borrower) within ten (10) Business Days after Borrower's written
request.
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6.2. Ownership. Borrower shall not own any assets other than the
Property and related personal property and fixtures located therein or used in
connection therewith.
6.3. Transfer. Borrower shall not Transfer any Collateral other than
(a) in compliance with Article II, (b) Permitted Transfers, (c) indirect
Transfers in a manner that would not result in a Change of Control, other than
to Vornado, the REIT or any affiliate of either of them (provided that upon any
such Permitted Transfer or Change of Control such Qualified Successor Borrower
shall comply with Section 2.2(iv)) and (d) the replacement or other disposition
of obsolete or non-useful personal property and fixtures in the ordinary course
of business. Borrower may, without the consent of Lender, (i) make immaterial
Transfers of portions of the Property to Governmental Authorities for dedication
or public use or, immaterial portions of the Property to third parties for the
purpose of erecting and operating additional structures whose use is integrated
with the use of the Property, and (ii) grant easements, restrictions, covenants,
reservations and rights of way in the ordinary course of business for access,
water and sewer lines, cable, telephone and telegraph lines, electric lines or
other utilities or for other similar purposes, provided that no such Transfer,
conveyance or encumbrance set forth in the foregoing clauses (i) and (ii) shall
materially impair the utility and operation of the Property or have a Material
Adverse Effect on the value of the Property taken as a whole. In connection with
any Transfer permitted pursuant to this Section 6.3, Lender shall execute and
deliver any instrument reasonably necessary or appropriate, in the case of the
Transfers referred to in clause (i) above, to release the portion of the
Property affected by such taking or such Transfer from the Lien of the Mortgage
or, in the case of clause (ii) above, to subordinate the Lien of the Mortgage to
such easements, restrictions, covenants, reservations and rights of way or other
similar grants upon receipt by Lender of:
(a) thirty (30) days prior written notice thereof;
(b) a copy of the instrument or instruments of Transfer;
(c) an Officer's Certificate stating (x) with respect to any
Transfer, the consideration, if any, being paid for the Transfer and (y) that
such Transfer does not materially impair the utility and operation of the
Property, materially reduce the value of the Property or have a Material Adverse
Effect; and
(d) reimbursement of all of Lender's reasonable costs and expenses
(including, reasonable attorneys' fees) incurred in connection with such
Transfer.
6.4. Debt. Borrower shall not have any Debt, other than Permitted
Debt.
6.5. Dissolution; Merger or Consolidation. Neither Borrower nor, if
applicable, any Single-Purpose Equityholder shall dissolve, terminate,
liquidate, merge with or consolidate into another Person without first causing
the Loan to be assumed by a Qualified Successor Borrower pursuant to
Section 2.2.
6.6. Change in Business. Borrower shall not make any material change
in the scope or nature of its business objectives, purposes or operations or
undertake or participate in activities other than the continuance of its present
business.
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6.7. Debt Cancellation. Borrower shall not cancel or otherwise
forgive or release any material claim or Debt owed to it by any Person, except
for adequate consideration or in the ordinary course of its business.
6.8. Affiliate Transactions. Borrower shall not enter into, or be a
party to, any transaction with any affiliate of Borrower, except on terms which
are no less favorable to Borrower than would be obtained in a comparable arm's
length transaction with an unrelated third party.
6.9. Misapplication of Funds. Borrower shall not (a) distribute any
Revenue or Loss Proceeds in violation of the provisions of this Agreement (and
shall promptly cause the reversal of any such distributions made in error of
which Borrower becomes aware), (b) fail to remit amounts to the Cash Management
Account as required by Section 3.1, or (c) misappropriate any security deposit
or portion thereof.
6.10. Place of Business. Borrower shall not change its chief
executive office or its principal place of business without giving Lender at
least 30 days' prior written notice thereof and promptly providing Lender such
information and replacement Uniform Commercial Code financing statements as
Lender may reasonably request in connection therewith.
6.11. Modifications and Waivers. Unless otherwise consented to in
writing by Lender:
(i) Neither Borrower nor, if applicable, any Single-Purpose
Equityholder shall terminate, amend or modify, in a manner adverse to the
Lender or in a manner that would violate the definition of a
Single-Purpose Entity contained herein, its organization documents
(including, without limitation, any operating agreement, limited
partnership agreement, by-laws, certificate of formation, certificate of
limited partnership or certificate of incorporation);
(ii) Borrower shall not terminate, amend or modify the Approved
Management Agreement in a manner adverse to Lender; and
(iii) Borrower shall not amend, modify, surrender or waive any
material rights or remedies under, or enter into or terminate, or default
in its obligations under, any Material Agreement.
6.12. ERISA.
(a) Borrower shall not maintain or contribute to, or agree to
maintain or contribute to, or permit any ERISA Affiliate of Borrower to maintain
or contribute to or agree to maintain or contribute to, any employee benefit
plan (as defined in Section 3(3) of ERISA) subject to Title IV or Section 302 of
ERISA or Section 412 of the Code.
(b) Borrower shall not engage in a non-exempt prohibited transaction
under Section 406 of ERISA, Section 4975 of the Code, or substantially similar
provisions under federal, state or local laws, rules or regulations or in any
transaction that would cause any obligation or action taken or to be taken
hereunder (or the exercise by Lender of any of its rights
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under the Notes, this Agreement, the Mortgage or any other Loan Document) to be
a non-exempt prohibited transaction under such provisions.
6.13. Alterations and Expansions. During the continuance of a Cash
Trap Period or Event of Default, Borrower shall not perform or contract to
perform any Capital Expenditures that are not consistent with the Approved
Annual Budget. Borrower shall not perform or contract to perform any Material
Alteration without the prior written consent of Lender, which consent (in the
absence of an Event of Default) shall not be unreasonably withheld, provided
that Borrower shall promptly deliver to Lender, at Borrower's option, any one or
more of the following as security for the payment of such Material Alterations
and as additional security for Borrower's obligations under the Loan Documents
any of the following: (A) cash, (B) Qualified Letters of Credit, (C) other
securities acceptable to Lender, provided that Lender shall have received a
Rating Agency Confirmation as to the form and issuer of same, (D) a completion
bond, provided that Lender shall have received a Rating Agency Confirmation as
to the form and issuer of same or (E) a Qualified Guarantee (any of the
foregoing, "Alteration Security"). The amount of the Alteration Security shall
be in an amount (the "Excess Alteration Amount") equal to the excess of the
total unpaid amounts to be incurred with respect to such Material Alterations
(other than such amounts to be paid or reimbursed by Tenants under the Leases)
over the Alteration Threshold, which required amount shall be reduced as such
Material Alteration progresses in an amount which is commensurate with the
amount expended in connection with such Material Alteration. If Lender's consent
is requested hereunder with respect to a Material Alteration, Lender may retain
a construction consultant to review such request and, if such request is
granted, Lender may retain a construction consultant to inspect the work from
time to time. Borrower shall, on demand by Lender, reimburse Lender for the
reasonable fees and disbursements of such consultant. Notwithstanding anything
contained herein to the contrary, so long as no Event of Default has occurred
and is continuing, Borrower, without Lender's prior consent, may perform any
Alteration (other than a Material Alteration) so long as the Alteration will not
have a Material Adverse Effect on the value, use or operation of the Property.
Any and all Alterations shall be performed in compliance with all Legal
Requirements in a manner that does not significantly disrupt the business
conducted at the Property. The Association and the Tenants shall be permitted to
perform Alterations pursuant to the terms of the Condominium Documents and the
Leases, respectively.
6.14. Advances and Investments. Borrower shall not lend money or
make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, except for Permitted Investments.
6.15. Single-Purpose Entity. Borrower shall not cease to be a
Single-Purpose Entity.
6.16. Zoning and Uses. Borrower shall not do any of the following:
(i) initiate or support any material limiting change in the
permitted uses of the Property (or to the extent applicable, zoning
reclassification of the Property) or any portion thereof, seek any
variance under existing land use restrictions, laws, rules or regulations
(or, to the extent applicable, zoning ordinances) applicable to the
Property, or
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use or permit the use of the Property in a manner that would result in the
use of the Property becoming a nonconforming use under applicable land-use
restrictions or zoning ordinances or that would violate the terms of any
Lease, the Condominium Documents, Legal Requirement or Permitted
Encumbrance in a manner that would have an Material Adverse Effect;
(ii) consent to any modification, amendment or supplement to any of
the terms of, or materially default in its obligations under, any
Permitted Encumbrance in a manner that would have a Material Adverse
Effect;
(iii) impose or consent to the imposition of any restrictive
covenants, easements or encumbrances upon the Property in any manner that
would have a Material Adverse Effect;
(iv) execute or file any subdivision plat affecting the Property, or
institute, or permit the institution of, proceedings to alter any tax lot
comprising the Property;
(v) permit or consent to the Property's being used by the public or
any Person in such manner as might make possible a claim of adverse usage
or possession or of any implied dedication or easement; or
(vi) amend or cause to be amended (x) any of the Condominium
Documents in any manner that would (a) have a Material Adverse Effect, (b)
materially impair or otherwise materially diminish Lender's rights
hereunder or under the Condominium Documents, (c) materially increase
Borrower's obligations or liabilities under the Condominium Documents, or
(d) materially impair or otherwise materially diminish Borrower's rights
under the Condominium Documents, or terminate any of the Condominium
Documents for any reason or purpose whatsoever, in each case, without the
prior written consent of Lender which consent shall not be unreasonably
withheld or delayed. With regard to any action described in this Section
6.16(vi) for which Lender's consent is required, Lender shall not withhold
its consent or disapproval to any such action for more than ten (10)
Business Days after request for approval thereof has been made by
Borrower, accompanied by a detailed description of the request for which
approval is sought, provided that Borrower submits such request for
Lender's approval in an envelope labeled "Priority" and delivered to
Lender by overnight delivery and otherwise in accordance with the
provisions of Section 9.4 and which request shall state at the top of the
first page in bold lettering "LENDER'S RESPONSE IS REQUIRED WITHIN TEN
(10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A
LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER." In the event that
Lender fails to either approve such request or disapprove such request for
more than ten (10) Business Days after receipt thereof, the action that
was the subject of said request shall be deemed approved.
6.17. Waste. Borrower shall not commit or permit any Waste on the
Property, nor take any actions that might invalidate any insurance carried on
the Property (and Borrower shall promptly correct any such actions of which
Borrower becomes aware).
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ARTICLE VII
DEFAULTS
7.1. Event of Default. The occurrence of any one or more of the
following events shall be, and shall constitute the commencement of, an "Event
of Default" hereunder (any Event of Default which has occurred shall continue
unless and until waived by Lender in its sole discretion):
(a) Payment.
(i) Borrower shall default in the payment when due of any principal
or interest owing hereunder or under the Notes (including any mandatory
prepayment required hereunder); or
(ii) Borrower shall default, and such default shall continue for at
least five Business Days after notice to Borrower that such amounts are
owing, in the payment when due of fees, expenses or other amounts owing
hereunder, under the Notes or under any of the other Loan Documents (other
than principal and interest owing hereunder or under the Note).
(b) Representations. Any representation made by Borrower in any of
the Loan Documents, or in any certificate or other instrument, agreement or
document furnished to Lender shall have been false or misleading in any material
respect (or, with respect to any representation which itself contains a
materiality qualifier, in any respect) as of the date such representation was
made; provided, however, that if such Default referred to in this subsection (b)
is susceptible of being cured, such Default shall not constitute an Event of
Default unless and until it shall remain uncured for thirty (30) days after
Borrower receives written notice thereof and if such Default cannot reasonably
be cured within such thirty (30) day period, and Borrower commences to cure such
Default within such thirty (30) day period and thereafter diligently and
expeditiously proceeds to cure the same, Borrower shall have such additional
time as is reasonably necessary to effect such cure, but in no event in excess
of one hundred twenty (120) days from the original notice from Lender.
(c) Other Loan Documents. Any Loan Document shall fail to be in full
force and effect in all material respects or to convey the material Liens,
rights, powers and privileges purported to be created thereby (including any
such failure that results from a change in any provision of the Condominium Act
or the interpretation thereof); or a default by Borrower shall occur under any
of the other Loan Documents or the Condominium Documents or any of the Anchor
Leases, in each case, beyond the expiration of any applicable cure period ;
provided, however, that if such Default referred to in this subsection (c) is
susceptible of being cured, such default shall not constitute an Event of
Default unless and until it shall remain uncured for thirty (30) days after
Borrower receives written notice thereof and if such default cannot reasonably
be cured within such thirty (30) day period, and Borrower commences to cure such
default within such thirty (30) day period and thereafter diligently and
expeditiously proceeds to cure the same, Borrower shall have such additional
time as is reasonably necessary to effect such cure, but in no event in excess
of one hundred twenty (120) days from the original notice from Lender.
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(d) Bankruptcy, etc.
(i) Borrower or, if applicable, any Single-Purpose Equityholder
shall commence a voluntary case concerning itself under Title 11 of the
United States Code (as amended, modified, succeeded or replaced, from time
to time, the "Bankruptcy Code");
(ii) Borrower or, if applicable, any Single-Purpose Equityholder
shall commence any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of creditors, dissolution, insolvency or
similar law of any jurisdiction whether now or hereafter in effect
relating to Borrower or such Single-Purpose Equityholder, or shall
dissolve or otherwise cease to exist;
(iii) there is commenced against Borrower or, if applicable, any
Single-Purpose Equityholder an involuntary case under the Bankruptcy Code,
or any such other proceeding, which remains undismissed for a period of 60
days after commencement;
(iv) Borrower or, if applicable, any Single-Purpose Equityholder is
adjudicated insolvent or bankrupt;
(v) Borrower or, if applicable, any Single-Purpose Equityholder
suffers appointment of any custodian or the like for it or for any
substantial portion of its property and such appointment continues
unchanged or unstayed for a period of 60 days after commencement of such
appointment;
(vi) Borrower or, if applicable, any Single-Purpose Equityholder
makes a general assignment for the benefit of creditors; or
(vii) any action is taken by Borrower or, if applicable, any
Single-Purpose Equityholder for the purpose of effecting any of the
foregoing.
(e) Change of Control.
(i) A Change of Control shall occur; or
(ii) any party shall acquire more than 49% of the direct or indirect
equity interest in Borrower or a Single-Purpose Equityholder (even if not
constituting a Change of Control) and Borrower shall fail to deliver to
Lender with respect to such new equityholder a new non-consolidation
opinion satisfactory to (A) prior to the occurrence of any Securitization
of the Loan, Lender (Lender's approval of any such non-consolidation
opinion which is in substantially the form of the Nonconsolidation Opinion
not to be unreasonably withheld), and (B) at any time following any
Securitization or series of Securitizations of the Loan, each of the
Rating Agencies rating such Securitization or Securitizations.
(f) Equity Pledge; Preferred Equity. Any direct or indirect equity
interest in or right to distributions from Borrower shall be subject to a Lien
in favor of any Person, or Borrower or any holder of a direct or indirect
interest in Borrower shall issue preferred equity (or
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debt granting the holder thereof rights substantially similar to those generally
associated with preferred equity); except that the following shall be permitted:
(i) any pledge of direct and indirect equity interests in and rights
to distributions from a Qualified Equityholder;
(ii) the issuance of preferred equity interests in a Qualified
Equityholder;
(iii) any pledge of the direct or indirect equity interests in and
right to distributions from Borrower in favor of Vornado, the REIT or any
of their affiliates to secure a loan to Sponsor that is recourse to
Sponsor and is secured by a substantial portion of Sponsor's assets; and
(iv) any pledge of a direct or indirect interest in Borrower by
Sponsor to secure a loan to Sponsor that is recourse to Sponsor and is
secured by a substantial portion of Sponsor's assets.
(g) Insurance. Borrower shall fail to maintain in full force and
effect all Policies required hereunder unless the sole reason therefor is
Lender's failure to disburse funds from the Tax and Insurance Escrow Account.
(h) ERISA; Negative Covenants. A default shall occur in the due
performance or observance by Borrower of any term, covenant or agreement
contained in Section 5.8 or in Article VI.
(i) Other Covenants. A default shall occur in the due performance or
observance by Borrower of any term, covenant or agreement (other than those
referred to in subsections (a) through (h), inclusive, of this Section 7.1)
contained in this Agreement or in any of the other Loan Documents, except that
if such default referred to in this subsection (i) is susceptible of being
cured, such default shall not constitute an Event of Default unless and until it
shall remain uncured for thirty (30) days after Borrower receives written notice
thereof from Lender; and if a default is susceptible of being cured and cannot
reasonably be cured within such 30-day period, and Borrower commences to cure
such default within such 30-day period and thereafter diligently and
expeditiously proceeds to cure the same, Borrower shall have such additional
time as is reasonably necessary to effect such cure, but in no event in excess
of one hundred twenty (120) days from the original notice from Lender.
7.2. Remedies.
(a) During the continuance of an Event of Default, Lender may by
written notice to Borrower, in addition to any other rights or remedies
available pursuant to this Agreement, the Notes, the Mortgage and the other Loan
Documents, at law or in equity, declare by written notice to Borrower all or any
portion of the Indebtedness to be immediately due and payable, whereupon all or
such portion of the Indebtedness shall so become due and payable, and Lender may
enforce or avail itself of any or all rights or remedies provided in the Loan
Documents against Borrower and the Property (including all rights or remedies
available at law or in equity); provided, however, that, notwithstanding the
foregoing, if an Event of Default specified in paragraph 7.1(d) shall occur,
then the Indebtedness shall immediately become due
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and payable without the giving of any notice or other action by Lender. Any
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth in this
Agreement or in the other Loan Documents.
(b) If Lender forecloses on the Property, Lender shall apply all net
proceeds of such foreclosure to repay the Indebtedness, the Indebtedness shall
be reduced to the extent of such net proceeds and the remaining portion of the
Indebtedness shall remain outstanding and secured by the Property and the other
Loan Documents, it being understood and agreed by Borrower that Borrower is
liable for the repayment of all the Indebtedness; provided, however, that at the
election of Lender, the Notes shall be deemed to have been accelerated only to
the extent of the net proceeds actually received by Lender with respect to the
Property and applied in reduction of the Indebtedness.
(c) During the continuance of any Event of Default, Lender may, but
without any obligation to do so and without notice to or demand on Borrower and
without releasing Borrower from any obligation hereunder, take any action to
cure such Event of Default. Lender may, subject to the terms of the Condominium
Documents and the Leases, enter upon any or all of the Property upon reasonable
notice to Borrower for such purposes or appear in, defend, or bring any action
or proceeding to protect its interest in the Property or to foreclose the
Mortgage or collect the Indebtedness. The costs and expenses incurred by Lender
in exercising rights under this paragraph (including reasonable attorneys'
fees), with interest at the Default Rate for the period after notice from Lender
that such costs or expenses were incurred to the date of payment to Lender,
shall constitute a portion of the Indebtedness, shall be secured by the Mortgage
and other Loan Documents and shall be due and payable to Lender upon demand
therefor.
(d) Interest shall accrue on any judgment obtained by Lender in
connection with its enforcement of the Loan at a rate of interest equal to the
Default Rate.
7.3. No Waiver. No delay or omission to exercise any remedy, right
or power accruing upon an Event of Default shall impair any such remedy, right
or power or shall be construed as a waiver thereof, but any such remedy, right
or power may be exercised from time to time and as often as may be deemed by
Lender to be expedient. A waiver of any Default or Event of Default shall not be
construed to be a waiver of any subsequent Default or Event of Default or to
impair any remedy, right or power consequent thereon.
7.4. Application of Payments after an Event of Default.
Notwithstanding anything to the contrary contained herein, during the
continuance of an Event of Default, all amounts received by Lender in respect of
the Loan shall be applied at Lender's sole discretion either toward the
components of the Indebtedness (e.g., Lender's expenses in enforcing the Loan,
interest, principal and other amounts payable hereunder), and the Notes in such
sequence as Lender shall elect in its sole discretion, or toward the payment of
Taxes, Operating Expenses and Capital Expenditures.
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ARTICLE VIII
CONDITIONS PRECEDENT
8.1. Conditions Precedent to Closing. This Agreement shall become
effective on the date that all of the following conditions shall have been
satisfied (or waived in accordance with Section 9.3):
(a) Loan Documents. Lender shall have received a duly executed copy
of each Loan Document. Each Loan Document which is to be recorded in the public
records shall be in form suitable for recording.
(b) Collateral Accounts. Each of the Collateral Accounts shall have
been established with the Cash Management Bank and funded to the extent required
under Article III.
(c) Opinions of Counsel. Lender shall have received (i) a New York
legal opinion in substantially the form of Exhibit B-1, (ii) a legal opinion
with respect to the laws of the state in which the Property is located, in
substantially the form of Exhibit B-2, and (iii) a bankruptcy nonconsolidation
opinion in substantially the form of Exhibit B-3 with respect to each Person
owning at least a 49% direct or indirect equity interest in Borrower, if
applicable, any Single-Purpose Equityholder and any affiliated property manager,
and (iv) a Delaware legal opinion in substantially the form of Exhibit B-4.
(d) Organizational Documents. Lender shall have received all
documents reasonably requested by Lender relating to the existence of Borrower,
the validity of the Loan Documents and other matters relating thereto, in form
and substance satisfactory to Lender, including:
(i) Authorizing Resolutions. A certified copy of the resolutions of
its board of managers approving and adopting the Loan Documents to be
executed by Borrower and authorizing the execution and delivery thereof.
(ii) Organizational Documents. Certified copies of the
organizational documents of Borrower and, if applicable, any
Single-Purpose Equityholder (including any certificate of formation,
certificate of limited partnership, certificate of incorporation,
operating agreement, limited partnership agreement or by-laws), in each
case together with all amendments thereto.
(iii) Certificates of Good Standing or Existence. Certificates of
good standing or existence for Borrower and, if applicable, any
Single-Purpose Equityholder issued as of a recent date by its state of
organization and by the state in which the Property is located.
(e) Lease; Material Agreements. Lender shall have received true and
complete copies of all Leases and all Material Agreements.
(f) Lien Search Reports. Lender shall have received satisfactory
reports of Uniform Commercial Code, tax lien, bankruptcy and judgment searches
conducted by a search firm acceptable to Lender with respect to the Property and
Borrower (including Borrower's
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immediate predecessor, if any), such searches to be conducted in such locations
as Lender shall have requested.
(g) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date either before or after the
execution and delivery of this Agreement.
(h) No Injunction. No Legal Requirement shall exist, and no
litigation shall be pending or threatened, which in the good faith judgment of
Lender would enjoin, prohibit or restrain, or impose or result in the imposition
of any material adverse condition upon, the making or repayment of the Loan or
the consummation of the Transaction.
(i) Representations. The representations in this Agreement and in
the other Loan Documents shall be true and correct in all respects on and as of
the Closing Date with the same effect as if made on such date.
(j) Estoppel Letters.
(i) Lender shall have received estoppel letters in form and
substance satisfactory to Lender from Tenants occupying, in the aggregate,
not less than 90% of the aggregate occupied rentable square feet in the
Property, which estoppel letters shall include estoppel letters from the
Tenants under each Major Lease.
(ii) Borrower shall have received an estoppel certificate or
certificates relating to the Condominium Documents, from such parties and
in such form and substance as shall be satisfactory to Lender.
(k) No Material Adverse Effect. No event or series of events shall
have occurred which Lender reasonably believes has had or is reasonably likely
to have a Material Adverse Effect.
(l) Transaction Costs. Borrower shall have paid all Transaction
Costs (or provided for the direct payment of such Transaction Costs by Lender
from the proceeds of the Loan).
(m) Insurance. Lender shall have received certificates of insurance
on ACORD Form 28, demonstrating insurance coverage in respect of the Property of
types, in amounts, with insurers and otherwise in compliance with the terms,
provisions and conditions set forth in this Agreement. Such certificates shall
indicate that Lender and its successors and assigns are named as additional
insured on each liability policy, and that each casualty policy and rental
interruption policy contains a loss payee and mortgagee endorsement in favor of
Lender, its successors and assigns.
(n) Title. Lender shall have received a marked, signed commitment to
issue, or a pro-forma version of, a Qualified Title Insurance Policy in respect
of the Property, listing only such exceptions as are reasonably satisfactory to
Lender.
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(o) Permits; Certificate of Occupancy. Lender shall have received a
copy of all Permits necessary for the use and operation of the Property and the
certificate(s) of occupancy, if required, for the Property, all of which shall
be in form and substance reasonably satisfactory to Lender.
(p) Engineering Report. Lender shall have received a current
Engineering Report with respect to the Property, which report shall be in form
and substance reasonably satisfactory to Lender.
(q) Environmental Report. Lender shall have received an
Environmental Report (not more than six months old) with respect to the Property
which discloses no material environmental contingencies with respect to the
Property.
(r) Qualified Survey. Lender shall have received a Qualified Survey
with respect to the Property in form and substance reasonably satisfactory to
Lender.
(s) Appraisal. Lender shall have obtained an Appraisal of the
Property satisfactory to Lender.
(t) Consents, Licenses, Approvals, etc. Lender shall have received
copies of all consents, licenses and approvals, if any, required in connection
with the execution, delivery and performance by Borrower, and the validity and
enforceability, of the Loan Documents, and such consents, licenses and approvals
shall be in full force and effect.
(u) Financial Information. Lender shall have received financial
information relating to the Sponsor, Borrower and the Property which is
satisfactory to Lender.
(v) Annual Budget. Lender shall have received the 2005 Annual Budget
with respect to the Property.
(w) Additional Matters. Lender shall have received such other
certificates, opinions, documents and instruments relating to the Loan as may
have been reasonably requested by Lender. All corporate and other proceedings,
all other documents (including all documents referred to in this Agreement and
not appearing as exhibits to this Agreement) and all legal matters in connection
with the Loan shall be reasonably satisfactory in form and substance to Lender.
ARTICLE IX
MISCELLANEOUS
9.1. Successors. Except as otherwise provided in this Agreement,
whenever in this Agreement any of the parties to this Agreement is referred to,
such reference shall be deemed to include the successors and permitted assigns
of such party. All covenants, promises and agreements in this Agreement
contained, by or on behalf of Borrower, shall inure to the benefit of Lender and
its successors and assigns.
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9.2. GOVERNING LAW.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST BORROWER OR THE
SPONSOR ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS (OTHER THAN ANY ACTION IN RESPECT OF THE CREATION, PERFECTION OR
ENFORCEMENT OF A LIEN OR SECURITY INTEREST CREATED PURSUANT TO ANY LOAN
DOCUMENTS NOT GOVERNED BY THE LAWS OF THE STATE OF NEW YORK) MAY BE INSTITUTED
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK. BORROWER AND THE SPONSOR
HEREBY (i) IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, AND (ii) IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH SUIT, ACTION OR PROCEEDING.
9.3. Modification, Waiver in Writing. Neither this Agreement nor any
other Loan Document may be amended, changed, waived, discharged or terminated,
nor shall any consent or approval of Lender be granted hereunder, unless such
amendment, change, waiver, discharge, termination, consent or approval is in
writing signed by Lender.
9.4. Notices. All notices, consents, approvals and requests required
or permitted hereunder or under any other Loan Document shall be given in
writing and shall be effective for all purposes if hand delivered or sent by (a)
certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, or (c) by telecopier
(with answer back acknowledged), addressed as follows (or at such other address
and Person as shall be designated from time to time by any party hereto, as the
case may be, in a written notice to the other parties hereto in the manner
provided for in this Section and given at least twenty (20) days prior to the
effective date of such change of address):
If to Lender:
Archon Financial, L.P.
600 East Las Colinas Boulevard, Suite 800
Irving, TX 75039
Attention: Michael Forbes
Facsimile No.: (972) 368-3499
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with copies to:
Goldman Sachs Mortgage Company
85 Broad Street, 11th Floor
New York, New York 10004
Attention: Brodi Jackson
Facsimile No.: (212) 346-3594
and:
Goldman Sachs Mortgage Company
85 Broad Street
New York, New York 10004
Attention: Leo Huang
Facsimile No.: (212) 902-1691
and
Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, New York 10281
Attention: Steven M. Herman, Esq.
Facsimile No.: (212) 504-6666
If to Borrower:
731 Retail One LLC
c/o Alexander's, Inc.
888 Seventh Avenue
New York, New York 10019
Attention: Wendy Silverstein
Facsimile No.: (212) 899-7073
with a copy to:
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Attention: Gary Israel, Esq.
Facsimile No.: (212) 558-3588
All notices, elections, requests and demands under this Agreement shall be
effective and deemed received upon the earliest of (i) the actual receipt of the
same by personal delivery or otherwise, (ii) one (1) Business Day after being
deposited with a nationally recognized overnight courier service as required
above, (iii) three (3) Business Days after being deposited in the United States
mail as required above, or (iv) on the day sent if sent by facsimile with
confirmation on or before 5:00 p.m. New York time on any Business Day or on the
next Business Day if so delivered after
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5:00 p.m. New York time or on any day other than a Business Day. Rejection or
other refusal to accept or the inability to deliver because of changed address
of which no notice was given as herein required shall be deemed to be receipt of
the notice, election, request, or demand sent.
9.5. TRIAL BY JURY. LENDER, BORROWER AND THE SPONSOR, TO THE FULLEST
EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY AGREE NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD
TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY LENDER, BORROWER AND THE SPONSOR AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY LENDER,
BORROWER AND THE SPONSOR.
9.6. Headings. The Article and Section headings in this Agreement
are included in this Agreement for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
9.7. Assignment and Participation.
(a) Except as explicitly set forth in Sections 2.1 and 2.2, Borrower
may not sell, assign or transfer any interest in the Loan Documents or any
portion thereof (including Borrower's rights, title, interests, remedies, powers
and duties hereunder and thereunder).
(b) Lender and each assignee of all or a portion of the Loan shall
have the right from time to time in its discretion to sell one or more of the
Notes or any interest therein (an "Assignment") and/or sell a participation
interest in one or more of the Notes (a "Participation"). Borrower agrees
reasonably to cooperate with Lender, at Lender's request and expense, in order
to effectuate any such Assignment or Participation. In the case of an
Assignment, (i) each assignee shall have, to the extent of such Assignment, the
rights, benefits and obligations of the assigning Lender as a "Lender" hereunder
and under the other Loan Documents, (ii) the assigning Lender shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to an Assignment, relinquish its rights and be released from its obligations
under this Agreement, and (iii) one Lender shall serve as agent for all Lenders
and shall be the sole Lender to whom notices, requests and other communications
shall be addressed and the sole party authorized to grant or withhold consents
hereunder on behalf of the Lenders (subject, in each case, to appointment of a
Servicer, pursuant to Section 9.22, to receive such notices, requests and other
communications and/or to grant or withhold consents, as the case may be) and to
be the sole Lender to designate the account to which payments shall be made by
Borrower to the Lenders hereunder. Goldman Sachs Mortgage Company shall
maintain, or cause to be maintained, as agent for Borrower, a register at 85
Broad Street, New York, New York or such other address as it shall notify
Borrower in writing, on which it shall enter the name or names of the registered
owner or owners from time to time of the Notes. Borrower agrees that upon
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effectiveness of any Assignment of any Note in part, Borrower will promptly
provide to the assignor and the assignee separate promissory notes in the amount
of their respective interests (but, if applicable, with a notation thereon that
it is given in substitution for and replacement of an original Note or any
replacement thereof), and otherwise in the form of such Note, upon return of the
Note then being replaced. The assigning Lender shall notify in writing each of
the other Lenders of any Assignment. Each potential or actual assignee,
participant or investor in a Securitization, and each Rating Agency, shall be
entitled to receive all information received by Lender under this Agreement,
subject to such assignee, participant or investor in a Securitization keeping
all such information Confidential. After the effectiveness of any Assignment,
the party conveying the Assignment shall provide notice to Borrower and each
Lender of the identity and address of the assignee. Notwithstanding anything in
this Agreement to the contrary, after an Assignment, the assigning Lender (in
addition to the assignee) shall continue to have the benefits of any
indemnifications contained in this Agreement which such assigning Lender had
prior to such assignment with respect to matters occurring prior to the date of
such assignment. Notwithstanding anything to the contrary contained herein,
Lender agrees that regardless of any replacement of the Note with two or more
replacement Notes, Borrower shall only be required to deal with Lender or one
Servicer for any approvals, requests, deliveries or other matters set forth in
this Agreement or the other Loan Documents.
9.8. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
9.9. Preferences. Lender shall have no obligation to marshal any
assets in favor of Borrower or any other party or against or in payment of any
or all of the obligations of Borrower pursuant to this Agreement, the Notes or
any other Loan Document. Lender shall have the continuing and exclusive right to
apply or reverse and reapply any and all payments by Borrower to any portion of
the obligations of Borrower hereunder and under the Loan Documents. To the
extent Borrower makes a payment or payments to Lender, which payment or proceeds
or any portion thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds received, the
obligations hereunder or portion thereof intended to be satisfied shall be
revived and continue in full force and effect, as if such payment or proceeds
had not been received by Lender.
9.10. Remedies of Borrower. If a claim is made that Lender or its
agents have unreasonably delayed acting or acted unreasonably in any case where
by law or under this Agreement, the Notes, the Mortgage or the other Loan
Documents, any of such Persons has an obligation to act promptly or reasonably,
Borrower agrees that no such Person shall be liable for any monetary damages
(except if, pursuant to a final judgment, it is determined that such Person
acted in bad faith or willful malfeasance), and Borrower's sole remedy shall be
limited to commencing an action seeking specific performance, injunctive relief
and/or declaratory judgment.
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9.11. Offsets, Counterclaims and Defenses. All payments made by
Borrower hereunder or under the other Loan Documents shall be made irrespective
of, and without any deduction for, any setoffs or counterclaims. Borrower waives
the right to assert a counterclaim, other than a mandatory or compulsory
counterclaim, in any action or proceeding brought against it by Lender arising
out of or in any way connected with the Notes, this Agreement, the other Loan
Documents or the Indebtedness, but Borrower may bring a separate claim against
Lender. Any assignee of Lender's interest in the Loan shall take the same free
and clear of all offsets, counterclaims or defenses which are unrelated to the
Loan.
9.12. No Joint Venture. Nothing in this Agreement is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender, nor to grant Lender any interest in
the Property other than that of mortgagee or lender.
9.13. Conflict; Construction of Documents. In the event of any
conflict between the provisions of this Agreement and the provisions of the
Notes, the Mortgage or any of the other Loan Documents, the provisions of this
Agreement shall prevail.
9.14. Brokers and Financial Advisors. Borrower and Sponsor each
represent that they have dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Borrower and Sponsor each agree,
jointly and severally, to indemnify and hold Lender harmless from and against
any and all claims, liabilities, costs and expenses of any kind in any way
relating to or arising from a claim by any Person that such Person acted on
behalf of Borrower in connection with the transactions contemplated in this
Agreement. The provisions of this Section 9.14 shall survive the expiration and
termination of this Agreement and the repayment of the Indebtedness.
9.15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
9.16. Estoppel Certificates. Borrower agrees at any time and from
time to time, to execute, acknowledge and deliver to Lender, within ten Business
Days after receipt of Lender's written request therefor, a statement in writing
setting forth (A) the Principal Indebtedness, (B) the date on which installments
of interest and/or principal were last paid, (C) any offsets or defenses to the
payment of the Indebtedness, (D) that the Notes, this Agreement, the Mortgage
and the other Loan Documents are valid, legal and binding obligations and have
not been modified or if modified, giving particulars of such modification, (E)
that neither Borrower nor, to Borrower's knowledge, Lender, is in default under
the Loan Documents (or specifying any such default), and (F) such other matters
as Lender may reasonably request. Any prospective purchaser of any interest in a
Loan shall be permitted to rely on such certificate.
9.17. Payment of Expenses; Mortgage Recording Taxes. Borrower shall
reimburse Lender upon receipt of written notice from Lender for (i) all
reasonable out-of-pocket costs and expenses incurred by Lender (or any of its
affiliates) in connection with the origination of the Loan, including legal fees
and disbursements, accounting fees, and the costs of the Appraisal, the
Engineering Report, the Qualified Title Insurance Policy, the Qualified Survey,
the Environmental Report and any other third-party diligence materials; (ii) all
reasonable out-of-
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pocket costs and expenses incurred by Lender (or any of its affiliates) in
connection with (A) monitoring Borrower's ongoing performance of and compliance
with Borrower's agreements and covenants contained in this Agreement and the
other Loan Documents on its part to be performed or complied with after the
Closing Date, including confirming compliance with environmental and insurance
requirements, (B) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Loan Documents and any other documents or matters
requested by Borrower or by Lender, (C) filing and recording fees and expenses
and other similar expenses incurred in creating and perfecting the Liens in
favor of Lender pursuant to this Agreement and the other Loan Documents, (D)
enforcing or preserving any rights, in response to third party claims or the
prosecuting or defending of any action or proceeding or other litigation, in
each case against, under or affecting Borrower, this Agreement, the other Loan
Documents or any Collateral, and (E) obtaining any Rating Confirmation required
or requested by Borrower hereunder; and (iii) all actual out-of-pocket costs and
expenses (including, if the Loan has been securitized, special servicing fees)
incurred by Lender (or any of its affiliates) in connection with the enforcement
of any obligations of Borrower, or a Default by Borrower, under the Loan
Documents, including any actual or attempted foreclosure, deed-in-lieu of
foreclosure, refinancing, restructuring or workout and any insolvency or
bankruptcy proceedings.
9.18. No Third-Party Beneficiaries. This Agreement and the other
Loan Documents are solely for the benefit of Lender and Borrower, and nothing
contained in this Agreement or the other Loan Documents shall be deemed to
confer upon anyone other than Lender and Borrower any right to insist upon or to
enforce the performance or observance of any of the obligations contained herein
or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender, and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof, and
no other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender's sole discretion, Lender deems it advisable or desirable
to do so.
9.19. Recourse.
(a) Except as set forth in Section 9.19(b), in the Environmental
Indemnity, in the Cooperation Agreement, in Section 9.14, no recourse shall be
had for the Indebtedness against any affiliate of Borrower or any officer,
director, partner or equityholder of Borrower or any such affiliate and recourse
to Borrower shall be limited to the Liens of Lender on the Property and the
other Collateral.
(b) Borrower and the Sponsor (as evidenced by the Sponsor's
signature below) agree to jointly and severally indemnify Lender and hold Lender
harmless from and against any and all Damages to Lender (including the legal and
other expenses of enforcing the obligations of the Borrower and the Sponsor
under this Section 9.19) resulting from or arising out of any of the following
(the "Indemnified Liabilities"):
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(i) any intentional physical Waste with respect to the Property
committed by Borrower, the Sponsor or any of their respective affiliates;
(ii) any fraud or intentional misrepresentation committed by
Borrower, the Sponsor or any of their respective affiliates;
(iii) the misappropriation or misapplication by Borrower, the
Sponsor or any of their respective affiliates of any funds (including
misappropriation or misapplication of Revenues, security deposits and/or
Loss Proceeds and the violation of the last sentence of Section 5.7(d));
(iv) any Transfer of Collateral, voluntary or collusive Lien on
Collateral, or Change of Control which is prohibited hereunder;
(v) any breach by Borrower or the Sponsor of any representation or
covenant regarding environmental matters contained in this Agreement or in
the Environmental Indemnity Agreement;
(vi) the intentional failure (whether by act or omission) of
Borrower, at any time, to be a Single-Purpose Entity; and
(vii) the occurrence of any filing by Borrower under the Bankruptcy
Code or any joining or colluding by Borrower or any of its affiliates
(including Sponsor) in the filing of an involuntary case in respect of
Borrower under the Bankruptcy Code.
(c) The liability of the Sponsor and Borrower under Section 9.19(b)
shall be direct and immediate and not conditional or contingent upon the pursuit
of any remedies against Borrower or any other Person, nor against the
Collateral, and shall not be impaired or limited by any event, including,
without limitation, the following events, in each case whether occurring with or
without notice to the Sponsor or with or without consideration:
(i) any extensions of time for performance required by any of the
Loan Documents or any extension or renewal of the Notes;
(ii) any sale, assignment or foreclosure of the Notes, the Mortgage
or any of the other Loan Documents or any sale or transfer of any or all
of the Property;
(iii) any Assumption or any other change in the composition of
Borrower including the withdrawal or removal of the Sponsor from any
current or future position of ownership, management or control of
Borrower, except as provided in Section 2.2(iii);
(iv) the accuracy or inaccuracy of the representations made by
Borrower in any of the Loan Documents;
(v) the release of Borrower or of any other Person from performance
or observance of any of the agreements, covenants, terms or conditions
contained in any of the Loan Documents by operation of law, Lender's
voluntary act or otherwise; or
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(vi) the modification of the terms of any one or more of the Loan
Documents.
The Sponsor acknowledges that Lender would not make the Loan but for the
personal liability undertaken by the Sponsor in this Agreement. The Sponsor
agrees that it shall not demand or accept any payment from Borrower in respect
of any amounts owing or paid by the Sponsor hereunder until one year and one day
after such time as the Indebtedness shall have been paid in full.
(d) The foregoing limitations on personal liability shall in no way
impair or constitute a waiver of the validity of the Notes, the Indebtedness
secured by the Collateral, or the Liens on the Collateral, or the right of
Lender, as mortgagee or secured party, to foreclose and/or enforce its rights
with respect to the Collateral after an Event of Default. Nothing in this
Agreement shall be deemed to be a waiver of any right which Lender may have
under the United States Bankruptcy Code to file a claim for the full amount of
the debt owing to Lender by Borrower or to require that all Collateral shall
continue to secure all of the Indebtedness owing to Lender in accordance with
the Loan Documents. Lender may seek a judgment on the Note (and, if necessary,
name Borrower in such suit) as part of judicial proceedings to foreclose under
the Mortgage or to foreclose pursuant to any other Loan Documents, or as a
prerequisite to any such foreclosure or to confirm any foreclosure or sale
pursuant to power of sale thereunder, and in the event any suit is brought on
the Notes, or with respect to any Indebtedness or any judgment rendered in such
judicial proceedings, such judgment shall constitute a Lien on and will be and
can be enforced on and against the Collateral and the rents, profits, issues,
products and proceeds thereof. Nothing in this Agreement shall impair the right
of Lender to accelerate the maturity of the Note upon the occurrence of an Event
of Default, nor shall anything in this Agreement impair or be construed to
impair the right of Lender to seek personal judgments, and to enforce all rights
and remedies under applicable law, jointly and severally against any guarantors
to the extent allowed by any applicable guarantees. The provisions set forth in
this Section 9.19 are not intended as a release or discharge of the obligations
due under the Note or under any Collateral Documents, but are intended as a
limitation, to the extent provided in this Section, on Lender's right to sue for
a deficiency or seek a personal judgment against Borrower or Sponsors.
9.20. 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 and during the continuance of an Event of
Default, Lender may from time to time, without presentment, demand, protest or
other notice of any kind (all of such rights being hereby expressly waived),
set-off and appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by Lender (including branches,
agencies or affiliates of Lender wherever located) to or for the credit or the
account of Borrower against the obligations and liabilities of Borrower to
Lender hereunder, under the Notes, the other Loan Documents or otherwise,
irrespective of whether 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 Lender subsequent thereto.
9.21. Exculpation of Lender. Lender neither undertakes nor assumes
any responsibility or duty to Borrower or any other party to select, review,
inspect, examine,
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supervise, pass judgment upon or inform Borrower or any third party of (a) the
existence, quality, adequacy or suitability of Appraisals of the Property or
other Collateral, (b) any environmental report, or (c) any other matters or
items, including engineering, soils and seismic reports which are contemplated
in the Loan Documents. Any such selection, review, inspection, examination and
the like, and any other due diligence conducted by Lender, is solely for the
purpose of protecting Lender's rights under the Loan Documents, and shall not
render Lender liable to Borrower or any third party for the existence,
sufficiency, accuracy, completeness or legality thereof.
9.22. Servicer. Lender may delegate any and all rights and
obligations of Lender hereunder and under the other Loan Documents to the
Servicer upon notice by Lender to Borrower, whereupon any notice or consent from
the Servicer to Borrower, and any action by Servicer on Lender's behalf, shall
have the same force and effect as if Servicer were Lender.
9.23. Prior Agreements. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONTAIN THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND THERETO IN RESPECT OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND ALL PRIOR AGREEMENTS AMONG OR
BETWEEN SUCH PARTIES, WHETHER ORAL OR WRITTEN, INCLUDING ANY TERM SHEETS,
CONFIDENTIALITY AGREEMENTS AND COMMITMENT LETTERS, ARE SUPERSEDED BY THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
[NO FURTHER TEXT ON THIS PAGE]
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Lender and Borrower are executing this Agreement as of the date
first above written.
LENDER:
ARCHON FINANCIAL, L.P.,
a Delaware limited partnership
By: ARCHON Financial, L.L.C.,
a Delaware limited liability company,
its general partner
By: /s/ Mark Buono
--------------------------------
Name: Mark Buono
Title: Vice President
BORROWER:
731 RETAIL ONE LLC,
a Delaware limited liability company
By: 731 Commercial LLC,
a Delaware limited liability company,
its sole member
By: 731 Commercial Holding LLC,
a Delaware limited liability company,
its sole member
By: Alexander's, Inc.,
a Delaware corporation,
its sole member
By: /s/ Joseph Macnow
---------------------------------
Name: Joseph Macnow
Title: Executive Vice President
Finance and Administration
FOR PURPOSES OF SECTION 9.14 AND 9.19 ONLY.
SPONSOR:
ALEXANDERS, INC.,
a Delaware corporation
By: /s/ Joseph Macnow
----------------------------------
Name: Joseph Macnow
Title: Executive Vice President
Finance and Administration