EXHIBIT 10.22
PROMISSORY NOTE SECURED BY MORTGAGE
Loan No. 31-0901388
New York, New York
$10,000,000.00 November 21,2003
1. PROMISE TO PAY. For value received, the undersigned STONEWATER DOX FUNDING
LLC ("Borrower"), promise(s) to pay to the order of WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Lender"), 1320 Willow Pass Road, Suite 205, Concord,
California 94520, or at such other place as may be designated in writing by
Lender, the principal sum of TEN MILLION AND NO/100THS DOLLARS
($10,000,000.00) ("Loan"), with interest thereon as specified herein. All
sums owing hereunder are payable in lawful money of the United States of
America, in immediately available funds, without offset, deduction or
counterclaim of any kind.
2. SECURED BY MORTGAGE. This Note is secured by, among other things, that
Mortgage and Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) ("Mortgage") of even date herewith, identifying this
Note as an obligation secured thereby and encumbering certain real property
described therein ("Property").
3. DEFINITIONS. For the purposes of this Note, the following terms shall have
the following meanings:
"Business Day" shall mean any day other than a Saturday, Sunday, legal
holiday or other day on which commercial banks in California are authorized
or required by law to close. All references in this Note to a "day" or a
"date" shall be to a calendar day unless specifically referenced as a
Business Day.
"Cash Flow" shall mean the actual rental payments (including, but not
limited to, payments for taxes or payments in lieu of taxes, insurance and
operating expenses) with respect to the Property actually received by
Borrower for the twelve (12) calendar month period ending on the date of
determination, minus (c) the actual operating expenses for such period, (d)
an amount for reasonable management expenses equal to the greater of three
percent (3%) or the actual management expenses for such period, and (e) the
amount of any normalized capital expenditures made in connection with the
Property during such period. Cash Flow shall be reasonably adjusted by
Lender, if necessary, to accurately reflect the amounts of any
extraordinary non-recurring maintenance items that were incurred during any
such twelve (12) calendar month period, and to reflect on a prorata basis
those expenses paid on an annual or semi-annual basis, including, but not
limited to, payments made with respect to property taxes and insurance.
"Debt Service" shall mean, with respect to any particular period of time,
scheduled payments due under this Note.
"Debt Service Coverage Ratio" shall mean the ratio of (a) the Cash Flow for
the Property determined as of the date of determination, to (b) an amount
equal to the Debt Service
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that would be due for the twelve (12) calendar month period immediately
preceding such calculation.
"Default" shall have the meaning set forth in the Mortgage.
"Disbursement Date" shall mean the date upon which the Loan proceeds are
funded into escrow in connection with the closing of the Loan.
"Effective Date" shall mean the earlier of (a) the date the Mortgage is
recorded in the Public Records of the county where the Property is located
and (b) the date Lender authorizes the Loan proceeds to be released to
Borrower.
"Governmental Authority" shall mean any court, board, agency, commission,
office or authority of any nature whatsoever or any governmental unit
(federal, state, county, district, municipal, city or otherwise) whether
now or here-after in existence.
"Interest Shortfall" shall mean, with respect to any prepayment, all
interest which would have accrued on the principal balance of the Note
after the date of prepayment to the next scheduled payment date.
"Legal Requirements" shall mean all federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting
Borrower or the Property or any part thereof or the construction, use,
alteration or operation thereof, or any part thereof, whether now or
hereafter enacted and in force, including, without limitation, the
Americans with Disabilities Act of 1990, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments,
either of record or actually known to Borrower, at any time in force
affecting the Property or any part thereof, including, without limitation,
any which may (i) require repairs, modifications or alterations in or to
the Property or any part thereof, or (ii) in any way limit the use and
enjoyment thereof.
"Loan Documents" shall mean the documents listed in Exhibit B attached
hereto and incorporated herein by this reference.
"Maturity Date" shall mean December 1, 2013.
"Officer's Certificate" shall mean a certificate delivered to Lender by
Borrower which is signed by an authorized senior officer of Borrower.
"Parking Parcel" shall mean a portion of the Property more particularly
described in Exhibit C.
"Release Price" shall mean $450,000.00 for the Parking Parcel.
4. INTEREST; PAYMENTS.
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4.1. DEFINITIONS. The following terms shall have the meanings indicated:
"Actual/360 Basis" shall mean on the basis of a 360-day year and
charged on the basis of actual days elapsed for any whole or partial
month in which interest is being calculated.
"30/360 Basis" shall mean on the basis of a 360-day year consisting of
12 months of 30 days each.
"Interest Rate" shall mean a fixed annual rate of 5.91%.
4.2. INTEREST ACCRUAL. Interest on the outstanding principal balance of
this Note shall accrue from the Disbursement Date at an annual rate
equal to the Interest Rate calculated on an Actual/360 Basis.
4.3. PAYMENTS. Monthly payments hereunder shall commence on the first day
of the calendar month following the Disbursement Date and continue on
the first day of each calendar month thereafter through the Maturity
Date. If the Disbursement Date is a date other than the first day of a
calendar month, the first monthly payment shall be interest only.
Subsequent monthly payments shall be calculated on the basis of an
equal-payment thirty (30) year amortization of principal and interest.
Notwithstanding that interest on this Note accrues on an Actual/360
Basis, the total amount of each such amortized monthly payment of
principal and interest shall be determined using a 30/360 Basis. On
the Maturity Date, all unpaid principal and accrued but unpaid
interest shall be due and owing in full. All interest shall be paid in
arrears. Except as otherwise specifically provided in this Note or the
other Loan Documents, all payments and deposits due under this Note or
the other Loan Documents shall be made to Lender not later than 12:00
noon, California time, on the day on which such payment or deposit is
due. Any funds received by Lender after such time shall, for all
purposes, be deemed to have been received on the next succeeding
Business Day.
4.4. ACKNOWLEDGMENTS. Borrower acknowledges that interest calculated on an
Actual/360 Basis exceeds interest calculated on a 30/360 Basis and,
therefore: (a) a greater portion of each monthly installment of
principal and interest will be applied to interest using the
Actual/360 Basis than would be the case if interest accrued on a
30/360 Basis; and (b) the unpaid principal balance of this Note on the
Maturity Date will be greater using the Actual/360 Basis than would be
the case if interest accrued on a 30/360 Basis.
4.5. APPLICATION OF PAYMENTS. In the absence of a specific determination by
Lender to the contrary, provided no Default has occurred, all payments
paid by Borrower to Lender in connection with the obligations of
Borrower under this Note and under the other Loan Documents shall be
applied in the following order of priority: (a) to amounts, other than
principal and interest, due to Lender pursuant to this Note or the
other Loan Documents; (b) to accrued but unpaid interest on this Note;
and (c) to the unpaid principal balance of this Note. Upon the
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occurrence of a Default, Borrower irrevocably waives the right to
direct the application of any and all payments at any time hereafter
received by Lender from or on behalf of Borrower, and Borrower
irrevocably agrees that, during the existence of a Default, Lender
shall have the continuing exclusive right to apply any and all such
payments against the then due and owing obligations of Borrower in
such order of priority as Lender may deem advisable.
5. LATE CHARGE; DEFAULT RATE.
5.1. LATE CHARGE. If all or any portion of any payment or deposit required
hereunder (other than the payment due on the Maturity Date) is not
paid or deposited on or before the fourth day following the day on
which such payment or deposit is due, Borrower shall pay a late or
collection charge, as liquidated damages, equal to 5% of the amount of
such unpaid payment or deposit. If all or any portion of the payment
due on the Maturity Date is paid after the Maturity Date and on a date
other than the first day of a month, Borrower shall pay a late or
collection charge, as liquidated damages, equal to the interest which
would have accrued on such amount during the period commencing on the
date payment of such amount is actually made and ending on the last
day of the month in which payment of such amount is actually made.
Borrower acknowledges that Lender will incur additional expenses as a
result of any late payments or deposits hereunder, which expenses
would be impracticable to quantify, and that Borrower's payments under
this Section 5.1 are a reasonable estimate of such expenses.
5.2. DEFAULT RATE. Commencing upon a Default and continuing until such
Default shall have been cured by Borrower, all sums owing on this Note
shall bear interest until paid in full at an annual rate equal to 5%
plus the Interest Rate, but not higher than the maximum rate of
interest permitted by applicable law ("Default Rate").
6. MAXIMUM RATE PERMITTED BY LAW. Neither this Note nor any of the other Loan
Documents shall require the payment or permit the collection of any
interest or any late payment charge in excess of the maximum rate permitted
by law. If any such excess interest or late payment charge is provided for
under this Note or any of the other Loan Documents or if this Note or any
of the other Loan Documents shall be adjudicated to provide for such
excess, neither Borrower nor Borrower's successors or assigns shall be
obligated to pay such excess, and the right to demand the payment of any
such excess shall be and hereby is waived, and this provision shall control
any other provision of this Note or any of the other Loan Documents. If
Lender shall collect amounts which are deemed to constitute interest and
which would increase the effective interest rate to a rate in excess of the
maximum rate permitted by law, all such amounts deemed to constitute
interest in excess of the maximum legal rate shall, upon such
determination, at the option of Lender, be returned to Borrower or credited
against the outstanding principal balance of this Note.
7. ACCELERATION. If (a) Borrower shall fail to pay when due any sums payable
under this Note in accordance with Section 7.1(a)(i) of the Mortgage
(provided failure to pay
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when due is not as a result of Lender's failure to deposit the sums in a
timely manner pursuant to the Cash Management Agreement); (b) any other
Default shall occur; or (c) any other event or condition shall occur which,
under the terms of the Mortgage or any other Loan Document, gives rise to a
right of acceleration of sums owing under this Note, then Lender, at its
sole option, shall have the right to declare all sums owing under this Note
immediately due and payable; provided, however, that if the Mortgage or any
other Loan Document provides for the automatic acceleration of payment of
sums owing under this Note, all sums owing under this Note shall be
automatically due and payable in accordance with the terms of the Mortgage
or such other Loan Document.
8. BORROWER'S LIABILITY.
8.1. LIMITATION. Except as otherwise provided in this Section 8, Lender's
recovery against Borrower under this Note and the other Loan Documents
shall be limited solely to the Property and the "Collateral" (as
defined in the Mortgage).
8.2. EXCEPTIONS. Nothing contained in Section 8.1 or elsewhere in this Note
or the other Loan Documents, however, shall limit in any way the
personal liability of Borrower owed to Lender (a) for any actual
losses or damages incurred by Lender (including, without limitation,
any impairment of Lender's security for the Loan) with respect to any
of the following matters: (i) fraud or willful misrepresentation of
Borrower or parties under the Control (hereinafter defined) of
Borrower ("Control" shall mean the power to direct the management and
policies of a party, directly or indirectly, whether through the
ownership of voting securities or other beneficial interests, by
contract or otherwise); (ii) material physical waste of the Property
or the Collateral; (iii) failure to pay property or other taxes,
assessments or similar charges (other than amounts paid to Lender for
taxes, assessments or charges pursuant to Impounds as defined in
Exhibit A and where Lender elects not to apply such funds toward
payment of the taxes, assessments or similar charges owed) which may
create liens senior to the lien of the Mortgage on all or any portion
of the Property, provided, no liability shall be incurred if failure
to pay or escrow such funds is due to the failure of the Property to
generate income sufficient (after payment of debt service) to pay or
escrow such funds or for failure of Lender or servicer to apply funds
in accordance with the terms of the Loan Documents for the payment of
taxes, assessments, or other similar charges; (iv) failure to deliver
any insurance or condemnation proceeds or awards or any security
deposits actually received by Borrower to Lender or to otherwise apply
such sums as required under the terms of the Loan Documents or any
other instrument now or hereafter securing this Note; (v) failure to
apply or deliver to Lender for application any rents, royalties,
accounts, revenues, income, issues, profits and other benefits from
the Property which are actually received by Borrower during the period
of any Default or after acceleration of the indebtedness and other
sums owing under the Loan Documents to the payment of either (i) such
indebtedness or other sums or (ii) the normal and necessary operating
expenses of the Property; (vi) any breach by Borrower of any covenant
in this Note or in the Mortgage regarding Hazardous Materials (as
defined in the Mortgage) or any representation or warranty of Borrower
regarding Hazardous
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Materials proving to have been untrue when made; or (vii) in the event
of a Default resulting from a Prohibited Property Transfer (as defined
in the Mortgage) or a Prohibited Equity Transfer (as defined in the
Mortgage); or (b) in the event the Property or the Collateral shall
become an asset in (i) a voluntary bankruptcy or insolvency proceeding
or (ii) a collusive involuntary bankruptcy or insolvency proceeding
(other than one filed by Lender) which is not dismissed within 90 days
of filing.
8.3. No RELEASE OR IMPAIRMENT. Nothing contained in Section 8.1 shall be
deemed to release, affect or impair the indebtedness evidenced by this
Note or the obligations of Borrower under, or the liens and security
interests created by the Loan Documents, or Lender's rights to enforce
its remedies under this Note and the other Loan Documents, including,
without limitation, the right to pursue any remedy for injunctive or
other equitable relief, or any suit or action in connection with the
preservation, enforcement or foreclosure of the liens, mortgages,
assignments and security interests which are now or at any time
hereafter security for the payment and performance of all obligations
under this Note or the other Loan Documents.
8.4. PREVAIL AND CONTROL. The provisions of this Section 8 shall prevail
and control over any contrary provisions elsewhere in this Note or the
other Loan Documents.
9. NON-MORTGAGOR BORROWER. If any Borrower is not also a "Mortgagor" under the
Mortgage, such Borrower hereby makes all representations and warranties in
favor of Lender contained in Article 5 of the Mortgage, all covenants
contained in Section 6.15 of the Mortgage, and all indemnities of Lender
contained in Section 6.19 of the Mortgage, jointly and severally with the
"Mortgagor."
10. MISCELLANEOUS.
10.1. JOINT AND SEVERAL LIABILITY. If this Note is executed by more than
one person or entity as Borrower, the obligations of each such person
or entity shall be joint and several. No person or entity shall be a
mere accommodation maker, but each shall be primarily and directly
liable hereunder.
10.2. WAIVER OF PRESENTMENT. Except as otherwise provided herein or in any
other Loan Document, Borrower hereby waives presentment, demand,
notice of dishonor, notice of default or delinquency, notice of intent
to accelerate, notice of acceleration, notice of nonpayment, notice of
costs, expenses or losses and interest thereon, and notice of interest
on interest and late charges.
10.3. DELAY IN ENFORCEMENT. No previous waiver or failure or delay by
Lender in acting with respect to the terms of this Note or the
Mortgage shall constitute a waiver of any breach, default or failure
of condition under this Note, the Mortgage or the obligations secured
thereby. A waiver of any term of this Note, the Mortgage or of any of
the obligations secured thereby must be made in writing signed by
Lender, shall be limited to the express terms of such waiver, and
shall
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not constitute a waiver of any subsequent obligation of Borrower. The
acceptance at any time by Lender of any past-due amount shall not be
deemed to be a waiver of the right to require prompt payment when due
of any other amounts then or thereafter due and payable.
10.4. TIME OF THE ESSENCE. Time is of the essence with respect to every
provision hereof.
10.5. GOVERNING LAW. This Note was accepted by Lender in the state of New
York, which state the parties agree has a substantial relationship to
the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the
generality of the foregoing, matters of construction, validity,
enforceability and performance, this Note, the Mortgage and the other
Loan Documents and the obligations arising hereunder and thereunder
shall be governed by, and construed in accordance with, the laws of
the state of New York applicable to contracts made and performed in
such state and any applicable law of the United States of America,
except that at all times the provisions for the foreclosure of the
liens granted under the Mortgage securing this Note and the creation,
perfection and enforcement of the security interests created pursuant
thereto and pursuant to the other Loan Documents shall be governed by
and construed according to the law of the state where the Property is
located. Except as provided in the immediately preceding sentence,
Borrower hereby unconditionally and irrevocably waives, to the fullest
extent permitted by law, any claim to assert that the law of any
jurisdiction other than New York governs the Mortgage, this Note and
the other Loan Documents.
10.6. CONSENT TO JURISDICTION. Borrower irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state
of New York over any suit, action, or proceeding, brought by Borrower
against Lender, arising out of or relating to this Note or the Loan
evidenced hereby; (b) any state or federal court sitting in the state
where the Property is located or the state in which Borrower's
principal place of business is located over any suit, action or
proceeding, brought by Lender against Borrower, arising out of or
relating to this Note or the Loan evidenced hereby; and (c) any state
court sitting in the county of the state where the Property is located
over any suit, action, or proceeding, brought by Lender to exercise
its rights of foreclosure under the Mortgage or any action brought by
the Lender to enforce its rights with respect to the Collateral.
Borrower irrevocably waives, to the fullest extent permitted by law,
any objection that Borrower may now or hereafter have to the laying of
venue of any such suit, action, or proceeding brought in any such
court and any claim that any such suit, action, or proceeding brought
in any such court has been brought in an inconvenient forum.
10.7. COUNTERPARTS. This Note may be executed in any number of
counterparts, each of which when executed and delivered shall be
deemed an original and all of which taken together shall be deemed to
be one and the same Note.
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10.8. HEIRS, SUCCESSORS AND ASSIGNS. All of the terms, covenants,
conditions and indemnities contained in this Note and the other Loan
Documents shall be binding upon the heirs, successors and assigns of
Borrower and shall inure to the benefit of the successors and assigns
of Lender. The foregoing sentence shall not be construed to permit
Borrower to assign the Loan except as otherwise permitted in this Note
or the other Loan Documents.
10.9. SEVERABILITY. If any term of this Note, or the application thereof to
any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Note, or the application of such
term to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each term
of this Note shall be valid and enforceable to the fullest extent
permitted by law.
10.10. CONSENTS AND APPROVALS. Wherever Lender's consent, approval,
acceptance or satisfaction is required under any provision of this
Note or any of the other Loan Documents, such consent, approval,
acceptance or satisfaction shall not be unreasonably withheld,
conditioned or delayed by Lender unless such provision expressly so
provides.
11. NOTICES. All notices and other communications that are required or
permitted to be given to a party under this Note shall be in writing and
shall be sent to such party, either by personal delivery, by overnight
delivery service, by certified first class mail, return receipt requested,
or by facsimile transmission to the address or facsimile number below. All
such notices and communications shall be effective upon receipt of such
delivery or facsimile transmission. The addresses and facsimile numbers of
the parties shall be:
Borrower: Lender:
Stonewater DOX Funding LLC Wells Fargo Bank, N.A.
c/o Stonewater Partners 1320 Willow Pass Road, Suite 205
22 Deer Creek Lane Concord, CA 94520
MtKisco, NY 10549 Loan No. 31-0901388
FAX No.: (914) 470-4011 FAX No.: (925) 691-5947
and
Drawbridge Special Opportunities Fund LP
1251 Avenue of the Americas, 16th Floor
New York, New York 10020
Attention: Kevin Treacy
Fax No. (212)798-6099
with a copy to
Solomon and Weinberg LLP
685 Third Avenue, 30th Floor
New York, New York 10017
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Fax No. (212)605-1001
Attention: Craig H. Solomon, Esq.
12. ADDITIONAL TERMS AND CONDITIONS. The additional terms and conditions set
forth in Exhibit A attached hereto are incorporated herein by this
reference.
13. PREPAYMENT - DEFEASANCE ONLY. Borrower acknowledges that any prepayment of
this Note will cause Lender to lose its interest rate yield on this Note
and will possibly require that Lender reinvest any such prepayment amount
in loans of a lesser interest rate yield (including, without limitation, in
debt obligations other than first mortgage loans on commercial properties).
As a consequence, Borrower agrees as follows, as an integral part of the
consideration for Lender's making the Loan:
13.1 VOLUNTARY PREPAYMENT. Any voluntary prepayment of this Note: (a) is
prohibited except during the last three (3) months of the term, and
(b) is permitted in full only, and not in part, except as provided in
Section 6 of Exhibit A hereof.
13.2 PREPAYMENT CHARGE.
a. BASIC CHARGE. Except as provided below, if this Note is prepaid
prior to the last three months of the term, whether such
prepayment is involuntary or upon acceleration of the principal
amount of this Note by Lender following a Default, Borrower shall
pay to Lender on the prepayment date (in addition to all other
sums then due and owing to Lender under the Loan Documents) a
prepayment charge equal to the greater of the following two
amounts: (i) an amount equal to 1% of the amount prepaid; or (ii)
an amount equal to (a) the amount, if any, by which the sum of
the present values as of the prepayment date of all unpaid
principal and interest payments required under this Note,
calculated by discounting such payments from their respective
scheduled payment dates back to the prepayment date at a discount
rate equal to the Periodic Treasury Yield (defined below) exceeds
the outstanding principal balance of the Loan as of the
prepayment date, multiplied by (b) a fraction whose numerator is
the amount prepaid and whose denominator is the outstanding
principal balance of the Loan as of the prepayment date. For
purposes of the foregoing, "Periodic Treasury Yield" means (iii)
the annual yield to maturity of the actively traded non-callable
United States Treasury fixed interest rate security (other than
any such security which can be surrendered at the option of the
holder at face value in payment of federal estate tax or which
was issued at a substantial discount) that has a maturity closest
to (whether before, on or after) the Maturity Date (or if two or
more such securities have maturity dates equally close to the
Maturity Date, the average annual yield to maturity of all such
securities), as reported in The Wall Street Journal or other
authoritative publication or news retrieval service on the fifth
Business Day preceding the prepayment date, divided by (iv) 12,
if scheduled payment dates are monthly, or 4, if scheduled
payment dates are quarterly.
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b. ADDITIONAL CHARGE. If this Note is prepaid on any day other than
the first day of a month, whether such prepayment is voluntary,
involuntary or upon full acceleration of the principal amount of
this Note by Lender following a Default, Borrower shall pay to
Lender on the prepayment date (in addition to the basic
prepayment charge described in Section 13.2.a above and all other
sums then due and owing to Lender under this Note and the other
Loan Documents) an additional prepayment charge equal to the
interest which would otherwise have accrued on the amount prepaid
(had such prepayment not occurred) during the period commencing
on the prepayment date and ending on the last day of the month in
which the prepayment occurred.
c. EXCLUSION. Notwithstanding the foregoing, no prepayment charge of
any kind shall apply in respect to any prepayment resulting from
Lender's application of any insurance proceeds or condemnation
awards to the outstanding principal balance of the Loan.
13.3 EFFECT OF PREPAYMENT. No partial prepayment of this Note shall change
the dates or amounts of subsequent monthly installments of principal
and interest, unless Lender otherwise agrees in writing.
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13.4 WAIVER. Borrower waives any right to prepay this Note except under the
terms and conditions set forth in this Section 13 and agrees that if
this Note is prepaid, Borrower shall pay the prepayment charge set
forth above. Borrower hereby acknowledges that: (a) the inclusion of
this waiver of prepayment rights and agreement to pay the prepayment
charge for the right to prepay this Note was separately negotiated
with Lender; (b) the economic value of the various elements of this
waiver and agreement was discussed; and (c) the consideration given by
Borrower for the Loan was adjusted to reflect the specific waiver and
agreement negotiated between Borrower and Lender and contained herein.
Borrower's Initials /s/ Illegible
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14. DEFEASANCE-FULL.
14.1 DEFEASANCE DEFINITIONS. In addition to the terms defined elsewhere in
this Note or the other Loan Documents, the following terms shall have
the meanings indicated:
"Code" means the Internal Revenue Code of 1986, as amended to date and
as further amended from time to time, or any successor statutes
thereto, together with applicable regulations issued pursuant thereto
in temporary or final form.
"Defeasance" means the Borrower's substitution of collateral and
Lender's release of the lien of the Deed of Trust upon satisfaction of
all of the terms and conditions of this Section 14.
"Defeasance Collateral" means obligations or securities, not subject
to prepayment, call or early redemption, each of which qualifies as a
"Government security" as defined in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (15 U.S.C. Section 80a-1 et seq.),
together with all revenues and proceeds of such obligations or
securities.
"Defeasance Date" means the date upon which the Defeasance is
completed, which shall be a scheduled payment date.
"Defeasance Security Agreements" shall have the meaning specified in
Section 14.3(d)(ii)
"Lockout Period" means the period beginning on the Effective Date and
ending on the later of (a) the second anniversary of the Startup Day
of the REMIC, if any, that holds this Note on the Defeasance Date, and
(b) the third (3rd) anniversary of the Effective Date.
"Rating Agencies" means Fitch, Inc., Moody's Investors Service, Inc.,
Standard & Poor's Rating Services and any other nationally-recognized
statistical rating organization that, in connection with the
securitization of the Loan by a REMIC maintains a rating, on the
Defeasance Date, of the securities issued by the REMIC.
"REMIC" means a "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"Startup Day" means the "startup day" within the meaning of Section
860G(a)(9) of the Code.
"Successor Borrower" means an entity designated by Lender whose sole
purpose is to own the Defeasance Collateral delivered by Borrower
under this Section 14 and assume Borrower's obligations with respect
to the Loan either alone, or
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together with the Defeasance Collateral for other, previously defeased
loans or portions of loans assumed by Successor Borrower which are
also held by the REMIC that holds this Note. Successor Borrower shall,
in either case, be restricted from taking actions that could result in
its bankruptcy or dissolution.
14.2 BORROWER RIGHT TO DEFEASE. At any time after the Lockout Period,
Borrower may elect to effect a Defeasance of the Loan in accordance
with the provisions of this Section 14, at Borrower's sole cost and
expense.
14.3 CONDITIONS. Borrower shall only have the right to cause a Defeasance
if all of the following conditions have been satisfied:
a. NOTICE. Borrower shall give at least 45 days but not more than 90
days written notice to Lender specifying the Borrower's intended
Defeasance Date. Simultaneously with the delivery of such notice,
Borrower shall deposit with Lender an amount reasonably estimated
by Lender to be sufficient to reimburse Lender's anticipated
actual, out-of-pocket expenses in connection with the Defeasance,
for which Borrower shall be solely responsible whether or not the
Defeasance shall be completed. If any such notice shall have been
given by Borrower, Borrower shall be obligated to complete the
Defeasance of the Loan on the Defeasance Date, unless such notice
is revoked in writing by Borrower prior to the Defeasance Date.
Upon completion of the Defeasance or revocation by Borrower as
specified above, Lender shall promptly return any surplus deposit
to Borrower;
b. NO DEFAULT. No Default shall exist either on the date of receipt
of Borrower's notice under Section 14.3.a above or on the
Defeasance Date;
c. PAYMENTS. Borrower shall pay in full, on or before the Defeasance
Date (i) all unpaid interest accruing under this Note to and
including the Defeasance Date (or otherwise cause Successor
Borrower to assume liability for such interest), (ii) all other
sums due under this Note and the other Loan Documents on or
before the Defeasance Date, (iii) all escrow, closing, recording,
legal, appraisal, Rating Agency and other fees, costs and
expenses paid or incurred by Lender or its agents in connection
with the Defeasance, the release of the lien of the Deed of Trust
on the Property, the review of the proposed Defeasance Collateral
and the preparation of the Defeasance Security Agreements and
related documentation, (iv) a defeasance fee to Lender of 1% of
the outstanding principal balance of the Loan as of the
Defeasance Date but not more than $10,000, and (v) any revenue,
documentary stamp, intangible or other taxes, charges or similar
fees due in connection with the transfer or assumption of this
Note or the Defeasance;
d. DELIVERIES. Borrower shall, at Borrower's sole cost and expense,
deliver the following items to Lender on or before the Defeasance
Date:
13
(i) The Defeasance Collateral, as substitute collateral for the
Loan. The principal and interest payments under the
Defeasance Collateral (without regard to earnings from
reinvestment of proceeds) must be, in timing and amounts,
sufficient to provide for payment prior, but as close as
possible, to all successive scheduled payment dates
occurring after the Defeasance Date, with each such payment
being equal to or greater than the amount of the
corresponding installment of principal and interest required
to be paid under this Note (including, without limitation,
all amounts due on the Maturity Date) for the balance of the
term hereof. Borrower shall take such actions, enter such
agreements and issue such orders or directions (including
those specified below), as are necessary or appropriate and
in accordance with customary commercial standards to
effectuate book-entry transfers and pledges through the
book-entry facilities of the institution holding the
Defeasance Collateral or otherwise to create and perfect a
valid, enforceable, first priority security interest in the
Defeasance Collateral in favor of Lender;
(ii) A pledge and security agreement and an account control
agreement, each in form and substance customary in
commercial mortgage defeasance transactions (such
agreements, the "Defeasance Security Agreements"), creating,
attaching and perfecting a first priority security interest
in favor of Lender in the Defeasance Collateral under the
law of the jurisdiction selected by Lender, which agreements
shall provide, among other things, that all payments
generated by the Defeasance Collateral shall be paid
directly to Lender and applied by Lender to amounts then due
and payable under this Note;
(iii) A certificate of Borrower certifying that all of the
requirements of this Section 14 have been satisfied;
(iv) Opinions of counsel for Borrower, addressed to Lender and
all Rating Agencies and delivered by counsel reasonably
satisfactory to Lender, subject only to customary
assumptions, qualifications and exceptions, stating, among
other things, that (a) Lender has a perfected security
interest in the Defeasance Collateral, (b) the Defeasance
Security Agreements are enforceable against Borrower in
accordance with their terms and (c) any REMIC that holds
this Note immediately prior to the Defeasance Date will not,
as a result of the Defeasance, fail to maintain its status
as a "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code;
(v) A certificate, addressed to Lender and all Rating Agencies,
from a firm of independent certified public accountants
reasonably
14
acceptable to Lender, subject only to customary assumptions,
qualifications and exceptions, certifying that the
Defeasance Collateral satisfies the requirements of Section
14.3.d.(i) above and certifying that in no fiscal year of
Successor Borrower will the interest earned on the
Defeasance Collateral exceed the interest payable for the
same period on the Loan under this Note;
(vi) If this Note is held by a REMIC, written evidence from all
of the Rating Agencies that the Defeasance will not result
in a downgrading, withdrawal or qualification of the
respective ratings in effect immediately prior to the
Defeasance for any securities representing interests in such
REMIC which are then outstanding; and
(vii) Such other certificates, opinions, documents or instruments
as are necessary and customary in commercial mortgage
defeasance transactions to effect the Defeasance as
reasonably required by Lender.
e. RELEASE OF LIEN. Upon satisfaction of all conditions specified in
this Section 14, the Property shall be released from the lien of
the Deed of Trust and the other Loan Documents, and the
Defeasance Collateral and the proceeds thereof shall constitute
the only collateral securing the obligations of Borrower under
this Note and the other Loan Documents. Lender shall, at
Borrower's expense, prepare, execute and deliver any instruments
reasonably necessary to release the lien of the Deed of Trust
from the Property.
f. ASSIGNMENT AND ASSUMPTION. In connection with the Defeasance,
Borrower may and shall, at the request of Lender, assign all of
its right, title and interest in and to the pledged Defeasance
Collateral and all its obligations and rights under this Note and
the Defeasance Security Agreements to Successor Borrower.
Successor Borrower shall execute an assumption agreement in form
and substance customary in commercial mortgage defeasance
transactions, pursuant to which it shall assume Borrower's
obligations under this Note and the Defeasance Security
Agreements. As conditions to such assignment and assumption,
Borrower shall (x) deliver to Lender opinions of counsel
addressed to Lender and all Rating Agencies, in form and
substance customary in commercial defeasance transactions and
delivered by counsel reasonably satisfactory to Lender, and
subject only to customary assumptions, qualifications and
exceptions, stating, among other things, that such assumption
agreement is enforceable against Borrower and Successor Borrower
in accordance with its terms and that this Note and the
Defeasance Security Agreements, as so assumed, are enforceable
against Successor Borrower in accordance with their respective
terms, and that the bankruptcy of any affiliate of Successor
Borrower will not affect the assets of Successor Borrower; and
(y) pay all actual, out of pocket costs and expenses incurred by
Lender or its agents in connection with such assignment and
assumption (including, without limitation, the formation or
review of Successor Borrower and the preparation of the
assumption agreement and related documentation). Upon such
assumption by Successor Borrower, Borrower shall be relieved of
its obligations under this Note, the Defeasance Security
15
Agreements and the other Loan Documents other than (i)
representations and warranties made in connection with the
Defeasance, (ii) the obligation to effect the Defeasance in
accordance with this Section 14, and to provide further
assurances as necessary to do so, (iii) liability for actual
losses to Lender resulting from an avoidance, rescission or
set-aside of the Defeasance arising as a result of actions taken
or suffered by Borrower, and (iv) those obligations which are
specifically intended to survive the repayment of the Loan or
other termination, satisfaction or assignment of this Note, the
Defeasance Security Agreements or the other Loan Documents or
Lender's exercise of its rights and remedies under any of such
documents and instruments.
15. WAIVER OF JURY TRIAL. LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS NOTE OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF
LENDER OR BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO
MAKE THE LOAN TO BORROWER.
16
"BORROWER"
STONEWATER DOX FUNDING LLC,
a Delaware limited liability company
By: /s/ Marc K. Furstein
------------------------------------
Name: Marc K. Furstein
Title: Chief Operating Officer
17
Loan No. 31-0901388
EXHIBIT A TO PROMISSORY NOTE
ADDITIONAL TERMS AND CONDITIONS
This Exhibit A is attached to and forms a part of that Promissory Note ("Note")
executed by STONEWATER DOX FUNDING LLC ("Borrower") in favor of WELLS FARGO
BANK, NATIONAL ASSOCIATION ("Lender").
1. DISBURSEMENT OF LOAN PROCEEDS; LIMITATION OF LIABILITY.
Borrower hereby authorizes Lender to disburse the proceeds of the Loan,
after deducting any and all fees owed by Borrower to Lender in connection
with the Loan, to Chicago Title Insurance Company. With respect to such
disbursement, Borrower understands and agrees that Lender does not accept
responsibility for errors, acts or omissions of others, including, without
limitation, the escrow company, other banks, communications carriers or
clearinghouses through which the transfer of Loan proceeds may be made or
through which Lender receives or transmits information, and no such entity
shall be deemed Lender's agent. As a consequence, Lender shall not be
liable to Borrower for any actual (whether direct or indirect),
consequential or punitive damages which may arise with respect to the
disbursement of Loan proceeds, whether or not (a) any claim for such
damages is based on tort or contract, or (b) either Lender or Borrower knew
or should have known of the likelihood of such damages in any situation
other than actual losses arising from Lender's gross negligence or willful
misconduct.
2. FINANCIAL STATEMENTS.
2.1 STATEMENTS REQUIRED. During the term of the Loan and while any
liabilities of Borrower to Lender under any of the Loan Documents
remain outstanding and unless Lender otherwise consents in writing,
Borrower shall provide to Lender the following:
a. OPERATING STATEMENT. Not later than 10 days after and as of each
calendar month during the period prior to any sale of the Loan,
and thereafter not later than 30 days after and as of the end of
each calendar quarter, an operating statement, signed and dated
by Borrower in a form reasonably acceptable to Lender, showing
all revenues and expenses during such month or quarter and
year-to-date, relating to the Property, including, without
limitation, all information requested under any of the Loan
Documents;
b. RENT ROLL. Not later than 10 days after and as of each calendar
month during the period prior to any sale of the Loan, and
thereafter not later than 30 days after and as of the end of each
calendar quarter, a rent roll signed and dated by Borrower in a
form reasonably acceptable to Lender, showing the following lease
information with regard to each tenant: the
EXHIBIT A
1
name of the tenant, monthly or other periodic rental amount,
dates of commencement and expiration of the lease, and payment
status;
c. BALANCE SHEET. If requested by Lender, not later than 90 days
after and as of the end of each fiscal year, a balance sheet,
signed and dated by Borrower in a form reasonably acceptable to
Lender (or audited financial statements if Borrower obtains
them), showing all assets and liabilities of Borrower; and
d. OTHER INFORMATION. From time to time, upon Lender's delivery to
Borrower of at least 10 days' prior written notice, such other
information with regard to Borrower, principals of Borrower,
guarantors or the Property as Lender may reasonably request in
writing.
2.2 FORM; WARRANTY. Borrower agrees that all financial statements to be
delivered to Lender pursuant to Section 2.1 shall: (a) be complete and
correct in all material respects; (b) present fairly the financial
condition of the party; (c) disclose all liabilities that are required
to be reflected or reserved against; and (d) be prepared in accordance
with the same accounting standard used by Borrower to prepare the
financial statements delivered to and approved by Lender in connection
with the making of the Loan or other accounting standards reasonably
acceptable to Lender. Borrower shall be deemed to warrant and
represent that, as of the date of delivery of any such financial
statement, there has been no material adverse change in financial
condition, nor have any assets or properties been sold, transferred,
assigned, mortgaged, pledged or encumbered since the date of such
financial statement except as disclosed by Borrower in a writing
delivered to Lender. Borrower agrees that all rent rolls and other
information to be delivered to Lender pursuant to Section 2.1 shall
not contain any misrepresentation or omission of a material fact.
2.3 LATE CHARGE. If any financial statement, leasing schedule or other
item required to be delivered to Lender pursuant to Section 2.1 is not
timely delivered, Borrower shall promptly pay to Lender, as a late
charge, the sum of $500 per item. In addition, Borrower shall promptly
pay to Lender an additional late charge of $500 per item for each full
month during which such item remains undelivered following written
notice from Lender. Borrower acknowledges that Lender will incur
additional expenses as a result of any such late deliveries, which
expenses would be impracticable to quantify, and that Borrower's
payments under this Section 2.3 are a reasonable estimate of such
expenses.
3. IMPOUNDS AND CASH MANAGEMENT.
3.1 AMOUNTS. Borrower shall deposit with Lender, the amounts ("Impounds")
stated below on the dates stated below, for the purpose of paying the
costs stated below:
a. TAXES. (i) $75,776.00 on the Disbursement Date, and (ii) on the
first payment date on which both principal and interest under the
Loan are
EXHIBIT A
2
payable and on each payment date thereafter, an amount reasonably
estimated from time to time by Lender in its sole discretion to
be sufficient to pay for real estate taxes and assessments
payable by Borrower under Section 6.9 of the Mortgage. The
initial estimated monthly amount to be deposited by Borrower on
each payment date is $18,944.00.
b. INSURANCE. (i) $2,228.00 on the Disbursement Date, and (ii) on
the first payment date on which both principal and interest under
the Loan are payable and on each payment date thereafter, an
amount reasonably estimated from time to time by Lender in its
sole discretion to be sufficient to pay for premiums for
insurance payable by Borrower under Section 6.10 of the Mortgage.
The initial estimated monthly amount to be deposited by Borrower
on each payment date is $1,114.00.
c. INTENTIONALLY DELETED.
d. INTENTIONALLY DELETED.
e. INTENTIONALLY DELETED.
f. INTENTIONALLY DELETED.
g. INTENTIONALLY DELETED.
h. INTENTIONALLY DELETED.
i. INTENTIONALLY DELETED.
j. INTENTIONALLY DELETED.
k. INTENTIONALLY DELETED.
l. CAPITAL EXPENDITURES. $1,747.00 on the first payment date on
which both principal and interest under the Loan are payable and
on each payment date thereafter for payment or reimbursement of
Capital Expenditures (defined below).
m. WAIVER OF CERTAIN IMPOUNDS. Notwithstanding the foregoing or
anything to the contrary contained herein, Borrower shall not be
required to make the monthly deposits for the Impounds referenced
in Section 3.1(1) above ("Trigger Impounds") until a Default (a
"Trigger Event").
n. LETTER OF CREDIT IN LIEU OF CASH FLOW SWEEP. In the event that a
Cash Flow Sweep Trigger Event (defined below) has occurred
pursuant to the terms of the Cash Management Agreement dated the
date hereof, in lieu of all Gross Income delivered from the
Property being deposited into the Excess Cash Flow Subaccount
after applying all funds in the Restricted Account (as defined in
the Cash Management Agreement) to the amounts
EXHIBIT A
3
due under this Note on each scheduled payment date as provided
for in the Cash Management Agreement, Borrower may deposit with
Lender a Letter of Credit (defined below) in the principal amount
of $2,000,000. The Letter of Credit (defined below) will be held
as additional collateral for the Loan. The Letter of Credit shall
be released to Borrower upon the occurrence of a Cash Flow Sweep
Event Cure (as defined in the Cash Management Agreement dated the
date hereof).
"Cash Flow Sweep Trigger Event" shall mean the occurrence of any
one of the following events: (i) Amdocs gives notice to Borrower
that it will not exercise any option to extend contained in any
Amdocs Leases pursuant to the terms of the applicable Amdocs
Lease or (ii) Amdocs fails to (A) deliver evidence reasonably
satisfactory to Lender that it has exercised each of the options
to extend contained in each of the Amdocs Leases in accordance
with each of their terms on or before that date that is
twenty-four (24) months prior to the current expiration date of
the applicable Amdocs Lease or (B) deliver to Lender extensions
of each of the Amdocs Leases covering all of the Amdocs Space
containing the following terms (reasonably satisfactory to Lender
in all respects), (1) a term no less than five (5) years beyond
the Maturity Date of the Loan, (2) then current market rates for
the office submarket where the Property is located (after any
rate abatement is calculated into the rate, if applicable) but in
no event less than the rental rates currently provided for in
each of the Amdocs Leases, and (3) such other terms and
conditions shall be reasonably satisfactory to Lender.
"Letter of Credit" shall mean an irrevocable, auto-renewing,
unconditional, transferable, clean sight draft letter of credit
having an initial term of not less than one (1) year and with
automatic renewals for one (1) year periods, for which Borrower
shall have no reimbursement obligation and which reimbursement
obligation is not secured by the Property or any other property
pledged to secure the Note, in favor of Lender and entitling
Lender to draw thereon in New York, New York, based solely on a
statement that Lender has the right to draw thereon executed by
an officer or authorized signatory of Lender. A Letter of Credit
must be issued by an Approved Bank (defined below). If at any
time the institution issuing any such Letter of Credit shall
cease to be an Approved Bank (defined below), Lender shall have
the right to draw down the same in full and hold the proceeds
thereof in accordance with the provisions of the Loan Documents,
unless Borrower shall deliver a replacement Letter of Credit from
an Approved Bank (defined below) within (i) as to (a) above,
twenty (20) days after Lender delivers written notice to Borrower
that the institution issuing the Letter of Credit has ceased to
be an Approved Bank (defined below) or (ii) as to (b) above,
within twenty (20) days prior to the expiration date of said
Letter of Credit.
EXHIBIT A
4
"Approved Bank" shall mean (a) a bank or other financial
institution which has the Required Rating (defined below), (b) if
a securitization has not occurred, a bank or other reasonably
financial institution acceptable to Lender or (c) if a
securitization has occurred, a bank or other financial
institution which the rating agencies have confirmed in writing
will not, in and of itself, result in a downgrade, withdrawal or
qualification of the then current ratings assigned in connection
with such securitization.
"Required Rating" shall mean a rating by S&P of not less than
A-1+ if the term of such Letter of Credit, bond or other
instrument is no longer than three (3) months or if the term of
such Letter of Credit, bond or other instrument is in excess of
three (3) months, a rating by the applicable rating agencies of
not lower than "AA", "AA" and "Aa2" by S&P, Fitch and/or Moody's,
respectively, or, if a securitization has not occurred, such
other rating that is reasonably acceptable to Lender or, if a
securitization shall have occurred, such other rating that the
rating agencies shall have confirmed in writing will not, in and
of itself, result in a downgrade, withdrawal or qualification of
the then current ratings assigned in connection with such
securitization.
o. AMDOCS GO-DARK RESERVE. In the event that any portion of the
Amdocs Space is not operated and occupied by Amdocs pursuant to
the terms of the Amdocs Lease for a continuous period of 30 days
or more (the "Dark Space"), or if Amdocs offers any portion of
the Amdocs Space for sublease (the "Sublet Space"), Borrower
shall be required to make monthly deposits with Lender for the
ensuing 12-month period in an amount equal to the quotient
obtained by dividing (i) the product of (A) $15.00 multiplied by
(B) the number of square feet in the Improvements covered by the
Dark Space or the Sublet Space (the "Amdocs Go-Dark Reserve") and
(ii) twelve (12) (the "Go-Dark Deposits"). The Amdocs Go-Dark
Reserve shall be held by Lender as additional collateral for the
Loan. In lieu of Amdocs Go-Dark Reserve, Borrower may deposit
with Lender a Letter of Credit in the amount of the Amdocs
Go-Dark Reserve to be required to be deposited over the 12-month
period referenced above.
The Borrower shall no longer be obligated to fund the Go-Dark
Deposits upon Borrower's delivery of evidence satisfactory to
Lender that (a) the Sublet Space has been sublet to a subtenant
reasonably satisfactory to Lender pursuant to a sublease
reasonably satisfactory to Lender and such subtenant has taken
possession of the Sublet Space and commenced paying rent, (b) the
Dark Space is re-occupied by Amdocs and is operating pursuant to
the terms of the Amdocs Lease or (c) the Dark Space is re-let to
a replacement tenant, reasonably satisfactory to Lender, pursuant
to a replacement lease, reasonably satisfactory to Lender, and
such replacement tenant has taken possession of the Dark Space
and commenced paying rent. Notwithstanding the foregoing or
anything
EXHIBIT A
5
herein to the contrary, if only a portion of the Dark Space or
the Sublet Space is sublet, re-occupied or re-let, as applicable,
Borrower must continue to fund the Go-Dark Deposits with Lender
until there is on deposit with Lender an amount no less than the
product of (i) $15.00, and (ii) the number of square feet
representing the portion of the Dark Space or the Sublet Space,
as applicable ("the Required Minimum Go Dark Reserve Balance").
Lender agrees that in the event that Borrower is no longer
obligated to fund the Go Dark Deposits, Lender shall refund to
Borrower all amounts in the Amdocs Go Dark Reserve in excess of
the Required Minimum Go Dark Reserve Balance.
3.2 APPLICATION.
a. TAXES. If no Default exists, Lender shall apply the Impounds to
the payment of the taxes and other liabilities stated above.
b. INSURANCE. If no Default exists, Lender shall apply the Impounds
to the payment of the insurance premiums stated above.
c. INTENTIONALLY DELETED.
d. INTENTIONALLY DELETED.
e. INTENTIONALLY DELETED.
f. INTENTIONALLY DELETED.
g. CAPITAL EXPENDITURES. If no Default exists, Lender shall release
the Impounds to Borrower as necessary, in increments of no more
than $20,000 per release, to pay or reimburse Borrower for the
Capital Expenditures; provided, however, that Lender shall have
received and approved each of the following:
(i) Borrower's written request for such release, including a
description of the Capital Expenditures and Borrower's
certification that all Capital Expenditures for which
payment or reimbursement is sought have been paid or
incurred by Borrower for work completed lien-free and in a
workmanlike manner subject to Borrower's right to contest
liens as provided for in the Mortgage;
(ii) copies of invoices supporting the request for such release;
and
(iii) an inspection report if reasonably required by Lender,
signed by an inspector selected by Borrower and reasonably
approved by Lender, whose fees and expenses shall be paid by
Borrower and deducted from requested release of Impounds,
and such other evidence as Lender shall require, confirming
Borrower's certification.
EXHIBIT A
6
3.3 GENERAL. Subject to the terms of the Cash Management Agreement (as
defined below), any portion of the Impounds that exceeds the amount
required for payment of the foregoing costs shall be promptly repaid
to Borrower upon Borrower's compliance with the foregoing. Reference
is made to Section 6.12(b) of the Mortgage for a description of the
account into which the Impounds shall be deposited and for a
description of certain rights and remedies of Lender with respect to
amounts in such account. Notwithstanding anything to the contrary in
the Mortgage, all accounts containing Impounds for tenant
improvements, deferred maintenance work, and capital expenditures
shall bear interest at a rate established by Lender or its servicing
agent, which may or may not yield the highest rate then available of
the type customarily maintained.
3.4 MAINTENANCE AND CONSTRUCTION.
a. TENANT IMPROVEMENTS. Borrower shall construct or cause to be
constructed all tenant improvements in a workmanlike manner and
in accordance with all applicable laws, ordinances, rules and
regulations.
b. INTENTIONALLY DELETED.
c. INTENTIONALLY DELETED.
d. CAPITAL EXPENDITURES. Borrower shall complete or cause to be
completed the lien-free performance (subject to Borrower's right
to contest liens as provided for in the Mortgage) or installation
of the Capital Expenditures (as defined below) from time to time
as necessary, in a workmanlike manner and in accordance with all
applicable laws, ordinances, rules and regulations. "Capital
Expenditures" shall mean major repairs and replacements to
maintain or improve the Property, including, without limitation,
structural repairs, roof replacements, HVAC repairs and
replacements, mechanical and plumbing repairs and replacements
and boiler repair and replacements.
e. RIGHT OF INSPECTION. Lender shall have the right to enter upon
the Property at all reasonable times during normal business hours
upon reasonable notice to inspect all work for the purpose of
verifying information disclosed or required pursuant to this
Note. Notwithstanding the foregoing, Lender shall not be
obligated to supervise or inspect any work or to inform Borrower
or any third party regarding any aspect of any work.
3.5 RELEASE. Lender shall release any Impounds to Borrower through a funds
transfer of such Impounds initiated by Lender to the following account
or such other account as Borrower specifies in a notice to Lender:
EXHIBIT A
7
Bank Name: LaSalle National Bank
ABA Routing No.: 071000505
Account Name: Stonewater DOX Funding LLC
Reference: Amdocs
Advise: John Reinsma, Ext. 4-0282
Lender shall determine the funds transfer system and other means to be
used in making each such release. Borrower agrees that each such funds
transfer initiated by Lender shall be deemed to be a funds transfer
properly authorized by Borrower, even if the transfer is not actually
properly authorized by Borrower. Borrower acknowledges that Lender
shall rely on the account number and ABA routing number set forth
above or specified in a notice from Borrower to Lender, even if such
account number identifies an account with a name different from the
name so specified, or the routing number identifies a bank different
from the bank so specified. If Borrower learns of any error in the
transfer of any Impounds or of any transfer which was not properly
authorized, Borrower shall notify Lender as soon as possible in
writing but in no case more than 14 days after Lender's first
confirmation to Borrower of such transfer.
3.6. CASH MANAGEMENT. Borrower shall enter into that certain Cash
Management Agreement (In-Place Hard) dated as of even date herewith
among Borrower, Lender, as "Lender", and Lender, as "Depository" (the
"Cash Management Agreement") which shall govern the collection and
disbursement of all Gross Income (as defined in the Cash Management
Agreement) during the term of the Loan.
4. ONE-TIME RIGHT OF TRANSFER OF PROPERTY. Notwithstanding anything to the
contrary contained in Section 6.15 of the Mortgage, Lender shall, one time
only, consent to the voluntary sale or exchange of all of the Property to a
bona-fide third party purchaser, without any modification of the terms of
this Note or the other Loan Documents, if no Default has occurred and is
continuing and all of the following conditions have been satisfied:
4.1 Lender's reasonable determination that the proposed purchaser, the
proposed guarantor, if any, and the Property all reasonably satisfy
Lender's then applicable credit review and underwriting standards,
taking into consideration, among other things, (a) any material
decrease in the Property's cash flow which would result from any
increase in real property taxes due to any anticipated reassessment of
the Property for tax purposes and (b) any requirement of Lender that
the proposed borrowing entity satisfy Lender's then applicable
criteria for a single purpose bankruptcy remote entity;
4.2 Lender's reasonable determination that the proposed purchaser
possesses satisfactory recent experience in the ownership and
operation of properties comparable to the Property;
EXHIBIT A
8
4.3 the execution and delivery to Lender of such documents and instruments
as Lender shall reasonably require, in form and content reasonably
satisfactory to Lender, including, without limitation, (i) an
assumption agreement under which the purchaser assumes all obligations
and liabilities of Borrower under this Note and the other Loan
Documents and agrees to periodically pay such new or additional
Impounds to Lender as Lender may reasonably require, and (ii) a
consent to the transfer by any existing guarantor and a reaffirmation
of such guarantor's obligations and liabilities under any guaranty
made in connection with the Loan or a new guaranty executed by a new
guarantor reasonably satisfactory to Lender;
4.4 the purchaser shall furnish an opinion of counsel reasonably
satisfactory to Lender and its counsel (A) that the assumption of the
Loan has been duly authorized, executed and delivered, and that the
Note, the assumption agreement and the other Loan Documents are valid,
binding and enforceable against the purchaser in accordance with their
terms, (B) that purchaser, any entity which is a controlling
stockholder, member or general partner of the purchaser, and any
additional signatory of the purchaser have been duly organized, and
are in existence and good standing, and (C) with respect to such other
matters as Lender may reasonably request;
4.5 if required by Lender, delivery to Lender of evidence of title
insurance reasonably satisfactory to Lender insuring Lender that the
lien of the Mortgage and the priority thereof will not be impaired or
affected by reason of such transfer or exchange of the Property;
4.6 payment to Lender of an assumption fee equal to 1% of the then
outstanding principal balance of this Note (but not less than
$15,000);
4.7 if reasonably required by Lender, deposit with Lender of any new or
additional Impounds;
4.8 reimbursement to Lender of any and all actual out of pocket costs and
expenses paid or incurred by Lender in connection with such transfer
or exchange, including, without limitation, all reasonable in-house or
outside counsel attorneys' fees, title insurance fees, appraisal fees,
inspection fees, environmental consultant's fees and any fees or
charges of the applicable rating agencies; and
4.9 if required by Lender, delivery to Lender of written evidence from the
applicable rating agencies that such transfer or exchange will not
result in a downgrading, withdrawal or qualification of the respective
ratings in effect immediately prior to the transfer or exchange for
any securities issued in connection with the securitization of the
Loan which are then outstanding (a "Rating Agency Confirmation").
Lender shall fully release Borrower and any existing guarantor from any
further obligation or liability to Lender under this Note and the other
Loan Documents upon the
EXHIBIT A
9
assumption by the purchaser and any new guarantor of all such obligations
and liabilities and the satisfaction of all other conditions precedent to a
transfer or exchange in accordance with the provisions of this Section.
5. PREPAYMENT.
5.1 The Note contains provisions which permit: Full Defeasance Only.
6. RELEASE OF PARKING PARCEL - EXPANSION
6.1 Notwithstanding anything to the contrary contained herein or in other
Loan Documents, provided no Default has occurred and is continuing,
Borrower may obtain the release of the Parking Parcel (a "Partial
Release") from the lien of the Mortgage (and this Note and other Loan
Documents) and the release of Borrower's obligations under this Note
and other Loan Documents with respect to such Parking Parcel (other
than those expressly stated to survive), but only upon the
satisfaction of each of the following conditions:
a. Borrower shall provide Lender with at least sixty (60) days but
no more than ninety (90) days prior written notice of its request
to obtain a release of the Parking Parcel;
b. A wire transfer to Lender of immediately available federal funds
in an amount equal to the Release Price for the Parking Parcel,
together with (i) all accrued and unpaid interest on the amount
of principal being prepaid on the date of such prepayment, (ii)
if such payment is not made on a scheduled payment date, the
Interest Shortfall with respect to the amount prepaid, (iii) any
applicable prepayment premium in accordance with Section 13.2
hereof, and (iv) all other sums due under this Note or the other
Loan Documents in connection with a partial prepayment;
c. Borrower shall submit to Lender, not less than ten (10) days
prior to the date of such release, a release of the lien (and
other Loan Documents) for such Parking Parcel for execution by
Lender. Such release shall be in a form appropriate in Illinois
and shall contain standard provisions, if any, protecting the
rights of Lender. In addition, Borrower shall provide all other
documentation Lender customarily requires in Illinois to be
delivered by Borrower in connection with such release;
d. After giving effect to the release of the lien of the Mortgage
encumbering the Parking Parcel proposed by Borrower to be
released and paydown of the Note, Lender shall have determined,
based on criteria that would be satisfactory to a prudent
institutional mortgage loan lender, that the Debt Service
Coverage Ratio with respect to the remaining Property shall be no
less than the greater of (i) the Debt Service Coverage Ratio of
the Property
EXHIBIT A
10
as of the date hereof or (ii) the Debt Service Coverage Ratio of
the Property immediately prior to the Partial Release;
e. After giving effect to the release of the lien of the Mortgage
encumbering the Parking Parcel proposed by Borrower to be
released and paydown of the Note, Lender shall have determined,
based on criteria that would be satisfactory to a prudent
institutional mortgage loan lender, that the loan to value ratio
with respect to the remaining Property shall be no greater than
the lesser of (i) the loan to value ratio of the Property as of
the date hereof or (ii) the loan to value ratio of the Property
immediately prior to the Partial Release based on updated
appraisals at the time of the Partial Release;
f. Lender shall have received evidence that the Parking Parcel to be
released shall be conveyed to a person or entity other than
Borrower or any of its affiliates;
g. Lender shall have received payment of all Lender's actual
out-of-pocket costs and expenses, including due diligence review
costs and reasonable counsel fees and disbursements incurred in
connection with the release of the Parking Parcel from the lien
of the Mortgage and the review and approval of the documents and
information required to be delivered in connection therewith;
h. Borrower shall deliver evidence reasonably satisfactory to Lender
that (i) following the Partial Release, the Property remaining
encumbered by the lien of the Mortgage shall comply with all
Legal Requirements, including, without limitation, all zoning and
building codes, rules and regulations (and specifically, parking
requirements), (ii) the Property remaining encumbered by the lien
of the Mortgage shall constitute a separate lot for tax and
assessment purposes by no later than the earlier of (1) the
earliest date permitted under applicable Legal Requirements, or
(2) the first Business Day of the next calendar year, (iii) such
release shall not adversely affect ingress or egress to or from
the Property, (iv) the documents with respect to such release
shall not impose any obligations or otherwise burden the Property
in any way (subject to subsection (1) below), and (v) Borrower
has obtained or caused to be obtained all necessary approvals,
consents or permits with respect to such release;
i. Borrower shall deliver to Lender a new lease with Amdocs
Champaign, Inc., which shall cover all of the space in the
improvements to be constructed on the Parking Parcel, reasonably
acceptable to Lender;
j. Lender shall have received an Officer's Certificate (A) as to
the proposed use of the Parking Parcel, its compatibility with an
office park and its effects on the operation and use of the
remainder of the Property and (B)
EXHIBIT A
11
indicating the gross revenue and operating expenses for the
Property both immediately before and immediately after the
proposed release after taking into account the proposed use of
the Parking Parcel and its effects on income and expense at the
Property, together with evidence in support of such conclusions;
k. Borrower shall have delivered to Lender evidence that Borrower
has complied with all requirements of and obtained all approvals
required under any leases and the operating agreements, if any,
applicable to the release of the Parking Parcel, if any, and that
the release of the Partial Release does not violate any of the
provisions of the leases and the operating agreements including,
without limitation, provisions relating to the availability of
parking at the Property;
l. Borrower shall have delivered a copy of any reciprocal easement
agreement amendment to be executed on or prior to the date of the
release which may contain cross-easements for the benefit of the
Parking Parcel and the remainder of the Property in respect of
access, driveways, parking, utilities, drainage flows, storm and
sanitary sewers, and other customary purposes. The reciprocal
easement agreement amendment will contain only those provisions
which (x) are necessary or desirable to accommodate the proposed
development of the Parking Parcel, and (y) are consistent with
Borrower's obligations under the Loan Documents;
m. Borrower shall have delivered a certificate from an architect or
engineer (licensed to practice in Illinois and reasonably
acceptable to Lender) to the effect that any improvements
proposed to be built on the Parking Parcel will not adversely
affect the ability to operate and maintain the remainder of the
Property (after giving effect to any easements reserved or
granted for the benefit of such remainder or the Parking Parcel)
and will not result in a loss of any rentable square feet on the
remainder of the Property;
n. Borrower shall have delivered to Lender an architect's
certificate certifying that the plans and drawings for the
improvements to be built on the Parking Parcel and the
improvements to be constructed pursuant thereto will comply with
all Legal Requirements;
o. Borrower shall have delivered a metes and bounds description of
the Parking Parcel and a survey of the Parking Parcel and the
remainder of the Property which would be standard in commercial
lending transactions;
p. Borrower shall have delivered to Lender on the date of the
release an endorsement to the policy or policies of title
insurance insuring the Mortgage reflecting the release and (i)
insuring Lender's interest in any easements created in connection
with the release, (ii) extending the effective date of the policy
or policies to the effective date of the release,
EXHIBIT A
12
and (iii) confirming no change in the priority of the Mortgage on
the remainder of the Property or in the amount of the insurance
or the coverage under the policy or policies;
q. If required by Lender, Borrower shall deliver to Lender a Rating
Agency Confirmation as to the Partial Release and the anticipated
improvements to be placed on the Parking Parcel and Lender
agrees, upon request, to use commercially reasonable efforts to
cooperate with Borrower and to facilitate Borrower's efforts to
obtain any such rating confirmation as required hereunder, which
cooperation shall include supplying the Rating Agencies with
copies of reports, documents and other information and materials
provided to Lender by Borrower, provided however, that in no
event shall (1) Lender be required to incur any costs or expenses
(other than de minimus costs or expenses) in connection with such
cooperation and (2) Lender's agreement hereunder to cooperate
with Borrower in obtaining a rating confirmation obligate Lender
to institute (or threaten to institute) or participate in (or
threaten to participate in) any litigation, suits, or proceedings
at law or in equity against any Rating Agency in connection with
Borrower's efforts to obtain such rating confirmation; and
s. If the Loan is part of a Securitization, Borrower shall provide
an opinion of counsel acceptable to the Rating Agencies that the
release does not constitute a "significant modification" under
Section 1001 of the Internal Revenue Code of 1986 or otherwise
cause a tax to be imposed on a "prohibited transaction" by any
REMIC Trust.
EXHIBIT A
13
Loan No. 31-0901388
EXHIBIT B TO PROMISSORY NOTE
LOAN DOCUMENTS AND OTHER RELATED DOCUMENTS
This Exhibit B is attached to and forms a part of that Promissory Note ("Note")
executed by STONEWATER DOX FUNDING LLC ("Borrower") in favor of WELLS FARGO
BANK, NATIONAL ASSOCIATION ("Lender").
1. LOAN DOCUMENTS. The documents numbered 1.1 through 1.20 below of even date
herewith (unless otherwise specified) and any amendments, modifications and
supplements thereto which have received the prior written approval of
Lender and any documents executed in the future that are approved by Lender
and that recite that they are "Loan Documents" for purposes of this Note
are collectively referred to as the "Loan Documents".
1.1 This Note;
1.2 Mortgage;
1.3 State of Illinois Commercial Code - Financing Statements - Form UCC-1;
1.4 State of Delaware Uniform Commercial Code - Financing Statements -
Form UCC-1;
1.5 Intentionally Deleted;
1.6 Intentionally Deleted;
1.7 Limited Liability Company Borrowing Certificate;
1.8 Intentionally Deleted;
1.9 Limited Liability Company Certificates Authorizing Limited Liability
Company Activity;
1.10 Limited Liability Company Certificate Authorizing LLC Activity;
1.11 Corporate Resolutions Authorizing Corporate Activity;
1.12 Partnership Certificate Authorizing Partnership Activity;
1.13 Intentionally Deleted;
1.14 One (1) Estoppel Certificate as of November 21, 2003;
EXHIBIT B
1
1.15 One (1) Subordination Agreements and Non-Disturbance and Attornment
Agreements as of November 21, 2003;
1.16 Assignment of Management Contracts;
1.17 Intentionally Deleted;
1.18 Cash Management Agreement;
1.19 Agreement Regarding Required Insurance.
2. OTHER RELATED DOCUMENTS WHICH ARE NOT LOAN DOCUMENTS.
2.1 Flood Hazard Notice;
2.2 Limited Guaranty by Stonewater Funding LLC;
2.3 Limited Guaranty by Drawbridge Special Opportunities Fund LP;
2.4 Limited Guaranty by Stonewater Partners Inc.
EXHIBIT B
2
EXHIBIT C
LEGAL DESCRIPTION OF PARKING PARCEL
Lot 5 of Final Plat of Lots 5, 6 and 7 of Par 3 Development Subdivision, a
Subdivision in the City of Champaign, Champaign County, Illinois, as per plat
recorded July 10, 1996 in Plat Book "CC" at page 185 as Document 96R 17100.