EXHIBIT 10.2
SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
October 31, 2001
among
ENTERTAINMENT PROPERTIES TRUST
and
The SUBSIDIARY GUARANTORS Party Hereto
AND
SFT II, INC.
-------------------
$75,000,000
-------------------
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is attached but
is inserted for convenience of reference only.
Section 1. Definitions and Accounting Matters..................................................................2
1.01 Certain Defined Terms...............................................................................2
1.02 Accounting Terms and Determinations................................................................19
1.03 Terms Generally....................................................................................20
Section 2. The Loan, the Note and Prepayments.................................................................20
2.01 Loan...............................................................................................20
2.02 Borrowing..........................................................................................21
2.03 Tranche A..........................................................................................21
2.04A Tranche B..........................................................................................21
2.04B Tranche C..........................................................................................21
2.05 Loan Fees..........................................................................................23
2.06 Exit and Unused Commitment Fees....................................................................23
2.07 Business Day.......................................................................................23
2.08 Note...............................................................................................23
2.09 Optional Prepayment................................................................................24
2.10 Partial Prepayments in connection with Sale of Individual Pad Properties...........................24
Section 3. Payments of Principal and Interest.................................................................25
3.01 Repayment of Loan..................................................................................25
3.02 Interest...........................................................................................25
Section 4. Payments; Pro Rata Treatment; Computations; Etc....................................................26
4.01 Payments...........................................................................................26
4.02 Late Payment Charge................................................................................26
4.03 Computations.......................................................................................27
4.04 Minimum Amounts....................................................................................27
4.05 Certain Notices....................................................................................27
4.06 Selection of Interest Period.......................................................................27
4.07 Sharing of Payments, Etc...........................................................................27
Section 5. Yield Protection, Etc..............................................................................28
5.01 Limitation on Eurodollar Base Rate.................................................................28
5.02 Illegality.........................................................................................28
5.03 Compensation.......................................................................................28
Section 6. Guarantee..........................................................................................29
6.01 The Guarantee......................................................................................29
6.02 Obligations Unconditional..........................................................................29
6.03 Reinstatement......................................................................................30
6.04 Subrogation........................................................................................30
6.05 Remedies...........................................................................................30
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6.06 Instrument for the Payment of Money................................................................31
6.07 Continuing Guarantee...............................................................................31
6.08 Rights of Contribution.............................................................................31
6.09 General Limitation on Guarantee Obligations........................................................32
6.10 California Waivers.................................................................................32
Section 7. Conditions.........................................................................................34
7.01 Effective Date.....................................................................................34
7.02 Initial and Subsequent Extensions of Credit........................................................39
7.03 Addition of Eligible Properties....................................................................41
7.04 Cap Agreement and Assignment of Cap Agreement......................................................42
7.05 Oakview Ground Acquisition.........................................................................42
7.06 Westminster Acquisition............................................................................43
Section 8. Representations and Warranties.....................................................................44
8.01 Organization; Powers...............................................................................44
8.02 Authorization; Enforceability......................................................................45
8.03 Approvals..........................................................................................45
8.04 No Breach..........................................................................................45
8.05 Financial Condition; No Material Adverse Change....................................................46
8.06 Properties.........................................................................................46
8.07 Litigation.........................................................................................47
8.08 Environmental Matters..............................................................................47
8.09 Compliance with Laws and Agreements................................................................49
8.10 Investment Company Act.............................................................................49
8.11 Public Utility Holding Company Act.................................................................49
8.12 Taxes..............................................................................................49
8.13 ERISA..............................................................................................49
8.14 True and Complete Disclosure.......................................................................49
8.15 Use of Credit......................................................................................50
8.16 Material Agreements and Liens......................................................................50
8.17 Capitalization.....................................................................................50
8.18 Subsidiaries, Etc..................................................................................51
8.19 REIT Status........................................................................................51
8.20 Real Estate Investment Trust Structure.............................................................51
8.21 Ground Leases......................................................................................51
8.22 Leases.............................................................................................52
8.23 Westminster and Oakview Purchases..................................................................52
8.24 Defaults...........................................................................................52
8.25 Absence of Liens...................................................................................52
8.26 No Materially Adverse Contracts, Etc...............................................................52
8.27 No Material Obligation.............................................................................52
8.28 Title..............................................................................................53
8.29 Solvency...........................................................................................53
8.30 No Plan Assets.....................................................................................54
8.31 Financial Information..............................................................................54
8.32 Condemnation.......................................................................................54
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8.33 Utilities and Public Access........................................................................54
8.34 Not a Foreign Person...............................................................................55
8.35 Separate Lots......................................................................................55
8.36 Assessments........................................................................................55
8.37 Enforceability.....................................................................................55
8.38 No Prior Assignment................................................................................55
8.39 Insurance..........................................................................................55
8.40 Use of Property....................................................................................55
8.41 Certificate of Occupancy; Licenses.................................................................55
8.42 Flood Zone.........................................................................................56
8.43 Physical Condition.................................................................................56
8.44 Boundaries.........................................................................................56
8.45 Leases.............................................................................................56
8.46 Survey.............................................................................................57
8.47 No Broker..........................................................................................57
8.48 Filing and Recording Taxes.........................................................................57
8.49 Special Purpose Entity/Separateness................................................................57
8.50 Management of Properties...........................................................................61
8.51 Ground Leases......................................................................................61
8.52 Illegal Activity...................................................................................66
8.53 No Change in Facts or Circumstances; Disclosure....................................................66
8.54 Inventory..........................................................................................66
8.55 Survival of Representations........................................................................66
Section 9. Covenants of Borrower..............................................................................66
9.01 Financial Statements and Other Information.........................................................66
9.02 Existence; Compliance with Legal Requirements; Insurance...........................................70
9.03 Notices of Material Events.........................................................................71
9.04 Existence, Etc.....................................................................................72
9.05 Insurance..........................................................................................73
9.06 Prohibition of Fundamental Changes.................................................................75
9.07 Liens..............................................................................................76
9.08 Indebtedness.......................................................................................78
9.09 Investments........................................................................................78
9.10 Restricted Payments................................................................................79
9.11 Certain Financial Covenants........................................................................79
9.12 Tranche C Required Acquisitions....................................................................79
9.13 Lines of Business..................................................................................79
9.14 Transactions with Affiliates.......................................................................79
9.15 Restrictive Agreements.............................................................................79
9.16 Use of Proceeds....................................................................................80
9.17 Ownership of Subsidiaries..........................................................................80
9.18 Modifications of Certain Documents.................................................................80
9.19 Further Assurances.................................................................................81
9.20 Environmental Compliance...........................................................................81
9.21 Qualified Ground Leases............................................................................81
9.22 Qualified Leases...................................................................................82
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9.23 Manner of Making Payments; Cash Management.........................................................83
9.24 Additional Real Estate Acquisitions................................................................84
9.25 Taxes and Other Charges............................................................................84
9.26 Access to Individual Properties....................................................................85
9.27 Further Assurances.................................................................................85
9.28 Condemnation.......................................................................................86
9.29 Restoration........................................................................................86
9.30 Tax and Insurance Escrow Fund......................................................................91
9.31 Replacements and Replacement Reserve...............................................................93
9.32 Ground Lease Reserve Fund..........................................................................98
9.33 Intentionally Deleted..............................................................................99
9.34 Independent Directors..............................................................................99
9.35 Substitution Rights................................................................................99
9.36 Reserve Funds, Generally..........................................................................100
9.37 Archon Securitization Loan Documents..............................................................100
9.38 [Intentionally Deleted]...........................................................................100
9.39 [Intentionally Deleted]...........................................................................101
9.40 Required Repairs Fund.............................................................................101
Section 10. Events of Default.................................................................................102
Section 11. Current Balances..................................................................................105
Section 12. Miscellaneous.....................................................................................105
12.01 Notices...........................................................................................105
12.02 Waiver............................................................................................105
12.03 Amendments, Etc...................................................................................105
12.04 Expenses, Etc.....................................................................................105
12.05 Successors and Assigns............................................................................106
12.06 Assignments by Obligors...........................................................................106
12.07 Secondary Market Transaction in Loan and Note.....................................................106
12.08 Sale of Note and Securitization...................................................................109
12.09 Cooperation with Rating Agencies..................................................................110
12.10 Securitization Indemnification....................................................................110
12.11 Retention of Servicer.............................................................................113
12.12 Survival..........................................................................................113
12.13 Counterparts......................................................................................113
12.14 Governing Law; Submission to Jurisdiction.........................................................113
12.15 WAIVER OF JURY TRIAL..............................................................................114
12.16 Captions..........................................................................................114
12.17 Treatment of Certain Information; Confidentiality.................................................114
12.18 Interest Rate Limitation..........................................................................115
12.19 Construction of Documents.........................................................................115
12.20 Waiver and Release................................................................................115
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT ("AGREEMENT") dated as of
October 31, 2001, between ENTERTAINMENT PROPERTIES TRUST, a real estate
investment trust duly organized and validly existing under the laws of the State
of Maryland (the "BORROWER"); Megaplex Four, Inc., a Missouri corporation
("MEGAPLEX OWNER"); Theatre Sub, Inc., a Missouri corporation ("ARCHON SPE
HOLDINGS") (Megaplex Owner and Archon SPE Holdings and such other entities as
may execute a joinder to this Agreement to become a "SUBSIDIARY GUARANTOR" are
sometimes referred to individually as a "SUBSIDIARY GUARANTOR" and,
collectively, as the "SUBSIDIARY GUARANTORS" and, together with Borrower, the
"OBLIGORS"), and SFT II, INC., a Delaware corporation ("LENDER").
RECITALS
A. Borrower was a party to a certain Credit Agreement dated as of March
2, 1998 (as amended, the "BONY CREDIT AGREEMENT") with, among others, The Bank
of New York ("BONY"), as administrative agent pertaining to a $200,000,000
credit facility (the "BONY FACILITY"). The BONY Facility, the BONY Credit
Agreement and the documents evidencing, securing and/or governing the BONY
Facility were acquired by iSTAR FINANCIAL INC., a Maryland corporation
("ISTAR"). Borrower, the Subsidiary Guarantors and iStar then amended and
restated the BONY Credit Agreement to, among other things, reduce the size of
the credit facility to $50,000,000 and change the term of the BONY Facility, all
pursuant to the Amended and Restated Credit Agreement dated as of May 18, 2001
among Borrower, the Subsidiary Guarantors, and iStar ("ORIGINAL CREDIT
AGREEMENT").
B. Pursuant to that certain Assignment and Assumption of Note,
Mortgage, and Other Loan Documents made as of June 7, 2001 by iStar and Lender,
iStar assigned the Loan and all Loan Documents, including the Original Credit
Agreement to Lender.
C. Borrower and the Subsidiary Guarantors are engaged as an integrated
group in businesses related to the Permitted Uses (as hereinafter defined). The
integrated operation requires financing on such a basis that credit supplied to
Borrower be made available from time to time to the Subsidiary Guarantors, as
required for the continued successful operation of the Obligors, separately, and
the integrated operation as a whole. In that connection, the Obligors have
requested that Lender amend and restate the Original Credit Agreement to, among
other things, add a third borrowing tranche of $25,000,000, and continue to
extend credit to Borrower (to be made available by Borrower to the Subsidiary
Guarantors) in a new aggregate principal or face amount not exceeding
$75,000,000 to finance the operations of the Obligors for the Permitted Uses.
D. To induce Lender to so modify and extend such credit, Obligors and
Lender propose to enter into this Agreement, pursuant to which Lender will make
loans to Borrower, and each Subsidiary Guarantor will guarantee the credit so
extended to Borrower. Each of the Obligors expects to derive benefit, directly
or indirectly, from the credit so extended to Borrower, both in its separate
capacity and as a member of the integrated group, because the successful
operation of each of the Obligors is dependent on the continued successful
performance of the functions of the integrated group as a whole.
E. Lender is prepared to so modify and extend such credit upon the
terms and conditions hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Obligors and Lender hereby amend
and restate the Original Credit Agreement as set forth herein.
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
"1933 ACT" means the Securities Act of 1933, as amended.
"ADDITIONAL PROPERTIES" means Real Estate Properties acquired or deemed
acquired, directly or indirectly, with any proceeds of the Loan by any Obligor.
All Real Estate Properties acquired directly or indirectly by any Obligor within
60 days (before or after) of a draw or advance of Loan proceeds shall be deemed
acquired with the proceeds of the Loan, unless prior to such acquisition Lender
agrees and acknowledges in writing to Borrower that Real Estate Properties are
not being acquired in whole or in part with any Loan proceeds.
"ADJUSTED BORROWING BASE RECEIPTS" means (x) all revenues, receipts,
rents and income from the Megaplex Properties and the Pad Properties and (y) all
funds distributable pursuant to Section 3.3(a) of the Deposit Account Agreement
dated as of June 29, 1998 among Securitized Property Owner, Archon Financial,
L.P. and UMB Bank, N.A., as such agreement may be amended or replaced from time
to time with Lender's written approval or if Securitized Property Owner
refinances its financing with Archon Financial, L.P., then all funds
distributable to Securitized Property Owner from or in any way related to its
assets.
"AFFILIATE" means any Person that directly or indirectly controls, or
is under common control with, or is controlled by, Borrower and, if such Person
is an individual, any member of the immediate family (including parents, spouse,
children and siblings) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition, "CONTROL" (including, with its correlative meanings, "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH") means possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise), provided that, in any event, any Person that owns
directly or indirectly securities having 10% or more of the voting power for the
election of directors or other governing body of a corporation or 10% or more of
the partnership or other ownership interests of any other Person (other than as
a limited partner of such other Person) will be deemed to control such
corporation or other Person. Notwithstanding the foregoing, (a) no individual
shall be an Affiliate solely by reason of his or her being a director, officer
or employee of Borrower or any of its Subsidiaries or Affiliates and (b) none of
the Wholly Owned Subsidiaries of Borrower shall be Affiliates.
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"AGENT" means The Chase Manhattan Bank, or any successor Eligible
Institution acting as Agent under the Cash Management Agreement.
"APPLICABLE MARGIN" means (a) so long as a Dark Theater Condition does
not exist for each Tranche the applicable rate per annum set forth below under
the caption "MARGIN":
- -------------------------------------------------------
Tranche: Margin
- -------------------------------------------------------
Tranche A 3.50%
- -------------------------------------------------------
Tranche B 4.50%
- -------------------------------------------------------
Tranche C 4.00%
- -------------------------------------------------------
and (b) so long as a Dark Theater Condition exists, for each of Tranche A,
Tranche B and Tranche C, shall be 4.50%.
"ASSIGNMENT OF CAP AGREEMENT" means the Assignment of Cap Agreement by
Borrower to and for the benefit of Lender in a form acceptable to Lender which,
among other things, assigns the benefits of the Cap Agreement to Lender.
"ASSIGNMENT OF LEASES" shall mean, with respect to each Individual
Megaplex Property and, to the extent applicable, the Individual Pad Properties,
a first priority Assignment of Leases and Rents, from Borrower, as assignor, to
Lender, as assignee, assigning to Lender all of the assignor's interest in and
to the Leases and Rents of such Individual Property as security for the Loan, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
"AWARD" shall mean any compensation paid by any Governmental Authority
in connection with the Condemnation in respect of all or any portion of an
Individual Owned Property.
"ARCHON SECURITIZATION LOAN DOCUMENTS" means the documents, agreements,
and instruments listed on Exhibit B hereto, as amended from time to time with
Lender's prior written consent.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as amended
from time to time, together with any successor or replacement law.
"BASE RATE" means, as of any date of determination, the "prime rate"
(or "base rate") reported in the Money Rates column or section of The Wall
Street Journal published on the second full Business Day preceding the first day
of the month with respect to which interest is being determined, as having been
the rate in effect for corporate loans at large U.S. money center commercial
banks (whether or not such rate has actually been charged by any such bank) or,
if The Wall Street Journal ceases publication of, or does not otherwise publish,
such "prime rate" or "base rate," the annual rate of interest reasonably
selected by Lender as a substitute therefor.
"BUILDINGS" or "IMPROVEMENTS" means, individually and collectively, the
buildings, structures and improvements now or hereafter located on the Real
Estate Properties.
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"BUSINESS DAY" means any day other than (a) a Saturday or Sunday or (b)
a day on which commercial banks are authorized or required to close in New York
City.
"CAP AGREEMENT" means an agreement in form and substance satisfactory
to Lender, between a counterparty satisfactory to Lender and Borrower, pursuant
to which Borrower shall be protected against an increase in the Eurodollar Base
Rate, for any applicable Interest Period, in excess of the per annum rate of
seven percent (7%) on a notional amount as required by Section 7.04 (and subject
to increase as set forth in Section 7.04 below) for a period ending on the
Initial Maturity Date, and, if the Maturity Date is extended, then at the time
such extension is exercised, the Cap Agreement shall be similarly extended by
Borrower.
"CAPITAL LEASE OBLIGATIONS" means, for any Person, all obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"CASH" or "CASH EQUIVALENTS" means (a) unrestricted cash (excluding,
without limitation, until forfeited or otherwise entitled to be retained by
Borrower or any of its Subsidiaries, tenant security or other restricted
deposits) or (b) any unrestricted investment (valued at fair market value) which
qualifies as a Permitted Investment. For the purposes hereof, the term
"unrestricted" means the specified asset is not subject to any Liens in favor of
any Person.
"CASH MANAGEMENT AGREEMENT" means that certain Cash Management
Agreement by and among Obligors, Agent and Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time,
relating to funds deposited in the Lockbox Account.
"CASH TRAP EVENT" means any time the Megaplex Debt Service Coverage
Ratio does not equal or exceed the Cash Trap MDSCR.
"CASH TRAP MDSCR" means a Megaplex Debt Service Coverage Ratio of
1.25:1.0 for any calendar month.
"CASH TRAP PERIOD" shall mean, from time to time, any period commencing
on the date Lender gives Borrower notice that Lender has determined that a Cash
Trap Event has occurred and continuing until Lender gives Borrower notice of the
occurrence of a Cash Trap Termination Event.
"CASH TRAP TERMINATION EVENT" means and shall be deemed to occur upon
the first to occur of (i) at such time as the Megaplex Debt Service Coverage
Ratio equals or exceeds the Cash Trap MDSCR for each month, measured month by
month, for six (6) consecutive months, or (ii) the Cash Trap Account (as set
forth in the Cash Management Agreement) has an amount in it equal to one full
year's Interest Expense based upon the principal amount of the Loan outstanding
(as it exists from time to time) and assuming an interest rate equal to the
applicable
4
Eurodollar Base Rate plus Applicable Margin (or Post-Default Rate, if
applicable) in effect at such time and from time to time.
"CHANGE IN CONTROL" means, with respect to any Person, (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the SEC Rules and Regulations thereunder as in effect on the Original
Effective Date) of shares representing more than 50% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock (or
equivalent equity interest) of any such Person; (b) occupation of a majority of
the seats (other than vacant seats) on the board of directors or trustees (or
equivalent body) of such Person by Persons who were neither (i) nominated by the
board of directors or trustees (or equivalent body) of such Person nor (ii)
appointed by directors or trustees (or equivalent parties) so nominated; or (c)
the acquisition of direct or indirect Control of such Person by any Person or
group.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMISSION" means the Securities and Exchange Commission.
"CONDEMNATION" shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
any Individual Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting such
Individual Property or any part thereof.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"DARK THEATRE CONDITION" means when a Megaplex Property is not
operating on a full time basis showing new releases, first run movies pursuant
to either a Qualified Lease or Qualified Operating Agreement.
"DEBT SERVICE" means, for any period, the sum, for Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all regularly scheduled payments of
principal of Indebtedness (including, without limitation, the principal
component of any payments in respect of Capital Lease Obligations), but
excluding optional prepayments made during such period plus (b) all Interest
Expense for such period.
"DEFAULT" means an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.
"DOLLARS" and "$" means lawful money of the United States of America.
"EBITDA" means, for any period, the sum, for Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) Net Operating Income from Real
Estate Properties (calculated before income taxes, Interest Expense,
extraordinary, and unusual items) for such period, plus (b) depreciation
5
and amortization (to the extent deducted in determining net operating income)
for such period, minus (c) all gains (or plus all losses) attributable to the
sale or other disposition of Properties or debt restructurings in such period
and minus (d) selling, general and administrative expenses and other overhead
expenses.
"EFFECTIVE DATE" means the date on which all of the conditions
specified in Section 7.01 are satisfied or waived which is intended to be the
date of this Agreement.
"ELIGIBLE INSTITUTION" shall mean a depository institution or trust
company, the short term unsecured debt obligations or commercial paper of which
are rated at least P-1 by Moody's Investors Service, Inc. and in the case of
accounts in which funds are held for thirty (30) days or less (or, in the case
of accounts in which funds are held for more than thirty (30) days, the long
term unsecured debt obligations of which are rated at least and "Aa2" by
Moody's).
"ELIGIBLE PROPERTIES" means, as at any date, those Real Estate
Properties located in the United States of America that meet each of the
following criteria:
(a) Are wholly-owned by Borrower or another Obligor or leased by
Borrower or another Obligor pursuant to a Qualified Ground Lease to Borrower or
another Obligor;
(b) Are leased to a third party pursuant to a Qualified Lease or
operated under a Qualified Operating Agreement;
(c) Improvements required under the applicable Qualified Lease are
completed (as evidenced by a building certificate of occupancy) and operating
free of material construction or structural renovation;
(d) There are no associated title defects, Liens, springing Liens or
negative pledges, other than Permitted Liens;
(e) The property will be used for a Permitted Use;
(f) Are in compliance with all laws, regulations and orders of any
Governmental Authority or regulatory authority or agency applicable to it,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect;
(g) For which Borrower has provided the Lender with historical or, if
applicable, pro forma, operating information in form, scope and substance
reasonably satisfactory to Lender;
(h) For which Borrower has provided Lender with an Engineering Report
and Environmental Report; and
(i) Which has been approved by Lender in its sole discretion.
"ENGINEERING REPORT" means, a property condition report satisfactory to
Lender addressed to Lender prepared by a firm of licensed engineers satisfactory
to Lender addressing the engineering and structural condition of the Buildings
in question.
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"ENVIRONMENTAL CLAIM" means, with respect to any Person, any written
claim, demand or other communication (collectively, a "CLAIM") by any other
Person alleging or asserting such Person's liability for investigatory costs,
cleanup costs, governmental response costs, damages to natural resources or
other Property, personal injuries, fines or penalties arising out of, based on
or resulting from (i) the presence, or Release into the environment, of any
Hazardous Material at any location, whether or not owned by such Person, or (ii)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law. The term "Environmental Claim" shall include, without
limitation, any claim by any Governmental Authority for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL DEFECT" means (a) any Release or threatened Release, (b)
any material violation of Environmental Laws or (c) any Environmental Claim.
"ENVIRONMENTAL INDEMNITY" shall mean, with respect to each Individual
Property, that certain Environmental and Hazardous Substance Indemnification
Agreement executed by Borrower and the other Obligors in connection with the
Loan for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"ENVIRONMENTAL LAWS" means any and all present and future Federal,
state, local and foreign laws, rules or regulations, and any orders or decrees,
in each case as now or hereafter in effect, relating to the regulation or
protection of human health, safety or the environment in connection with
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes into the
indoor or outdoor environment, including, without limitation, ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or toxic
or hazardous substances or wastes.
"ENVIRONMENTAL REPORT" means, an environmental survey and assessment
addressed to Lender and satisfactory to Lender prepared by a firm of licensed
engineers (familiar with the identification of toxic and hazardous substances)
satisfactory to Lender, such environmental survey and assessment to be based
upon physical on-site inspections by such firm, as well as a historical review
of the uses of such sites and facilities.
"EQUITY RIGHTS" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including, without limitation, any shareholders' or voting trust agreements)
for the issuance, sale, registration or voting of, or securities convertible
into, any additional shares of capital stock of any class, or partnership or
other ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
7
"ERISA AFFILIATE" means any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which Borrower is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which Borrower is a
member.
"ERISA EVENT" means any of the following events or conditions:
(a) any reportable event, as defined in Section 4043(b) of ERISA and
the regulations issued thereunder, with respect to a Plan, as to which the PBGC
has not by regulation waived the requirement of Section 4043(a) of ERISA that it
be notified within 30 days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the Code); and any request
for a waiver under Section 412(d) of the Code for any Plan;
(b) the distribution under Section 4041 of ERISA of a notice of intent
to terminate any Plan or any action taken by Borrower or an ERISA Affiliate to
terminate any Plan;
(c) the institution by the PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by Borrower or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan;
(d) the complete or partial withdrawal from a Multiemployer Plan by
Borrower or any ERISA Affiliate that results in liability under Section 4201 or
4204 of ERISA (including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by Borrower or any ERISA Affiliate
of notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(e) the institution of a proceeding by a fiduciary of any Multiemployer
Plan against Borrower or any ERISA Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days; or
(f) the adoption of an amendment to any Plan that, pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a part if Borrower or an
ERISA Affiliate fails to timely provide security to the Plan in accordance with
the provisions of such Sections.
"EURODOLLAR BASE RATE" means a floating interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the rate for
U.S. dollar deposits with maturities equal to the applicable Interest Period as
reported in the Money Rates column or section of The Wall Street Journal
published on the second full Business Day preceding the first day the applicable
Interest Period is to commence, provided that if such rate does not appear in
such publication or such publication ceases, or if the information contained in
such publication, in the
8
reasonable judgment of Lender shall cease accurately to reflect the rate offered
by leading banks in the London interbank market as reported by any publicly
available source of similar market data selected by Lender, or it shall be
unlawful for Lender to charge interest utilizing rates dependent under Dollar
deposits in the London interbank market, the Eurodollar Base Rate means the Base
Rate per annum.
"EXIT FEE" is defined in Section 2.06.
"EXTENSION CONDITIONS" means the following: (a) Not less than 60 days
prior to the Initial Maturity Date or First Extended Maturity Date, as
applicable, Borrower shall have delivered to Lender an irrevocable written
notice requesting the extension and in order to extend to the First Extended
Maturity Date simultaneously therewith shall have paid to Lender a
non-refundable extension fee in the amount equal to 0.25% of the outstanding
principal balance of the Loan on the date of the request for the extension or
the Initial Maturity Date, whichever is greater (such payment shall initially be
made computed based upon the outstanding principal balance of the Loan on the
date such notice is given and, if the outstanding principal amount is then
greater on the Initial Maturity Date, the balance of such payment shall be due
on the Initial Maturity Date); (b) no Default or Event of Default shall exist
either at the time of the delivery of the notice to extend or at the time of the
effective date of the extension; (c) all representations and warranties herein
or in any of the other Loan Documents shall be true and correct in all material
respects both at the time of the delivery of the notice to extend and the
effective date of the extension; (d) the Megaplex Debt Service Coverage Ratio
equals or exceeds the Cash Trap MDSCR both at the time of the delivery of the
notice to extend and at the time of the effective date of the extension, in each
case as computed for the month immediately preceding such dates; and (e)
Borrower shall give to Lender a completed and executed certificate from the
Financial Officer that the covenants in Sections 9.07, 9.08, 9.09, 9.10, and
9.11 are true and correct accompanied by such evidence, including calculations,
to evidence the same, dated effective as of, as applicable, the Initial Maturity
Date or the First Extended Maturity Date.
"FFO" means, for Borrower and its Subsidiaries on a consolidated basis,
"funds from operations" as defined in accordance with resolutions adopted by the
Board of Governors of the National Association of Real Estate Investment Trusts
as in effect on the Original Effective Date and as amended from time to time,
subject, however, to the provisions of Section 1.02(b).
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer, controller, chief executive officer or general
counsel of the entity referenced in connection with such financial officer, and
if no such entity is referenced, then of Borrower.
"FINANCING STATEMENTS" means financing statements in form and substance
acceptable to Lender required to evidence and perfect Lender's interests in
collateral for the Loan.
"FIRST EXTENDED MATURITY DATE" means May 31, 2005.
"FIXED CHARGES RATIO" means, as at any date, the ratio of (a) EBITDA
for the fiscal quarter ending on or most recently ended prior to such date to
(b) Total Fixed Charges for such fiscal quarter.
9
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than that in which Borrower is located. For purposes of this
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
"FUNDS AVAILABLE FOR DISTRIBUTION" means, on a cash basis, FFO plus
amortization and minus the aggregate amount of capital expenditures and
principal payments on Indebtedness.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those that, in accordance with Section 1.02(a), are to be
used in making the calculations for purposes of determining compliance with this
Agreement.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" means a guarantee, an endorsement, a contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including,
without limitation, causing a bank or other financial institution to issue a
letter of credit or other similar instrument for the benefit of another Person,
but excluding endorsements for collection or deposit in the ordinary course of
business. The terms "Guarantee" and "Guaranteed" used as verbs have the
correlative meanings.
"HAZARDOUS MATERIAL" means, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls ("PCB's"), (b) any chemicals or other
materials or substances that are now or hereafter become defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," "contaminants," "pollutants" or words of
similar import under any Environmental Law and (c) any other chemical or other
material or substance, exposure to which is now or hereafter prohibited, limited
or regulated under any Environmental Law.
"HEDGING AGREEMENT" means the Cap Agreement and any other cap
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement. For purposes hereof, the "credit exposure" at any time of any
Person under an Hedging Agreement to which such Person is a party shall be
determined at such time in accordance with the standard methods of calculating
credit exposure under similar arrangements as reasonably prescribed from time to
10
time by the Lender, taking into account potential interest rate movements and
the respective termination provisions and notional principal amount and term of
such Hedging Agreement.
"INDEBTEDNESS" means, for any Person: (a) obligations created, issued
or incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business; (c) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective indebtedness so secured
has been assumed by such Person; (d) obligations of such Person in respect of
letters of credit or similar instruments issued or accepted by banks and other
financial institutions for the account of such Person; (e) Capital Lease
Obligations of such Person; (f) obligations of such Person in respect of
transactions which are treated as financings under the Code; (g) Indebtedness of
others Guaranteed by such Person; and (h) all obligations under or in respect of
Hedging Agreements. The indebtedness of any Person shall also include the
Indebtedness of any other Person (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"INDEMNIFIED PARTIES" means, collectively, the Lender, and the Lender's
respective predecessors, directors, officers, shareholders, members, managers,
trustees, employees, attorneys, agents, successors and assigns.
"INDEPENDENT DIRECTOR" shall mean an individual reasonably satisfactory
to Lender who shall not be during such individual's term as Independent
Director, shall not have been at the time of such individual's appointment, and
shall not have been at any time during the preceding five (5) years (i) other
than in its capacity as an Independent Director or other similar capacity, a
partner, member, shareholder of, or an officer or employee of, Borrower or any
of its Subsidiaries or Affiliates, (ii) other than employees of CT Corporation
and its successors, a customer of, or supplier to, Borrower, or any of its
Subsidiaries or Affiliates, (iii) an individual controlling any such supplier or
customer, or (iv) a member of the immediate family of any officer, employee,
supplier or customer of any other director of Borrower or any of its
Subsidiaries or Affiliates.
"INDIVIDUAL MEGAPLEX PROPERTY" means, each individual real estate site
comprising one of the Megaplex Properties, including the land and improvements
thereon together with the personal property owned by Megaplex Owner related to,
or located upon, or used in connection with, such real estate and together with
all rights pertaining to such real property, improvements and personal property.
"INDIVIDUAL OWNED PROPERTY" means any Individual Megaplex Property or
Individual Pad Property.
"INDIVIDUAL PAD PROPERTY" means, each individual real estate site
comprising one of the Pad Properties, including the land and improvements
thereon together with the personal property
11
owned by Borrower or Obligor related to, or located upon, or used in connection
with, such real estate and together with all rights pertaining to such real
property, improvements and personal property.
"INDIVIDUAL PROPERTY" means any Individual Megaplex Property,
Individual Pad Property or Individual Securitized Property.
"INDIVIDUAL SECURITIZED PROPERTY" means, each individual real estate
site comprising one of the Securitized Properties, including the land and
improvements thereon together with the personal property owned by Borrower or
Obligor related to, or located upon, or used in connection with, such real
estate and together with all rights pertaining to such real property,
improvements and personal property.
"INITIAL MATURITY DATE" means May 31, 2004.
"INITIAL MEGAPLEX PROPERTIES" means, collectively, the Real Estate
Properties listed on Exhibit C.
"INITIAL PAD PROPERTIES" means, collectively, the Real Estate
Properties listed on Exhibit D.
"INITIAL PROPERTIES" means, collectively, (a) the Initial Megaplex
Properties, (b) the Initial Pad Properties and (c) the Initial Securitized
Properties.
"INITIAL SECURITIZED PROPERTIES" means, collectively, the Real Estate
Properties listed on Exhibit E.
"INTEREST COVERAGE RATIO" means, as at any date, the ratio of (a)
EBITDA for the fiscal quarter ending on or most recently ended prior to such
date to (b) Interest Expense for such fiscal quarter.
"INTEREST EXPENSE" means, for any period, the sum, for Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest in respect of
Indebtedness related to the Loan (including, without limitation, the interest
component of any payments in respect of Capital Lease Obligations) accrued or
capitalized (excluding capitalized interest that is funded through a real estate
construction loan provided by a third party financing source) during such period
(whether or not actually paid during such period) plus (b) the net amount
payable (or minus the net amount receivable) under Hedging Agreements during
such period (whether or not actually paid or received during such period) minus
(c) interest income.
"INTEREST PERIOD" means, a period of one month or three months as
selected by Borrower, or Lender, as the case may be, pursuant to Section 4.06.
"INVESTMENT" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
12
when such securities are not owned by the Person entering into such sale); (b)
the making of any deposit with, or advance, loan or other extension of credit
to, any other Person (including the purchase of Property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such Property to such Person), but excluding any such advance, loan or extension
of credit having a term not exceeding 90 days arising in connection with the
sale of inventory or supplies by such Person in the ordinary course of business;
(c) the entering into of any Guarantee of, or other contingent obligation with
respect to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person; or (d) the entering into of any Hedging Agreement.
"LIEN" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Loan Documents, a Person
shall be deemed to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.
"LOAN" has the meaning assigned to such term in Section 2.01.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Note, the
Mortgages, the Assignments of Leases, the Cash Management Agreement, the Pledge
Agreement, the Assignment of Cap Agreement, Environmental Indemnity, the
Financing Statement and all other documents now or hereafter executed and
delivered in connection with the Loan, including all amendments to the foregoing
as required by this Agreement.
"MARGIN STOCK" means "MARGIN STOCK" within the meaning of Regulations
T, U and X.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
properties, business, operations, financial condition, prospects, liabilities or
capitalization of Borrower and its Subsidiaries taken as a whole, (b) the
ability of any Obligor to perform its obligations under any of the Loan
Documents, (c) the validity or enforceability of any of the Loan Documents to
which an Obligor is a party, (d) the rights and remedies of the Lender under any
of the Loan Documents or (e) the timely payment (following the expiration of any
applicable grace period) of the principal of or interest on the Loan or other
amounts payable in connection with the Loan Documents.
"MATURITY DATE" means the Initial Maturity Date, as extended if at all
in accordance with Section 3.01, when the outstanding principal balance of the
Loan, all accrued and unpaid interest thereon and all sums owing to Lender
pursuant to the Loan Documents shall be due and payable.
"MEGAPLEX CASH FLOW" means, for any period, the sum, for Megaplex Owner
(determined on a consolidated basis in accordance with GAAP), without
duplication, of the following: (a) Net Operating Income from the Megaplex
Properties owned directly by Megaplex Owner (calculated before income taxes,
Interest Expense, extraordinary and unusual items thereon) for such period, plus
(b) depreciation and amortization (to the extent deducted in determining Net
Operating Income) on such Megaplex Properties owned by Megaplex Owner for such
period, minus (c) all gains (or plus all losses) attributable to the sale or
other disposition
13
of Megaplex Properties or debt restructurings in such period and minus (d)
selling, general and administrative expenses and other overhead expenses
allocable to such Megaplex Properties owned by Megaplex Owner, minus, to the
extent not addressed in the calculation of Net Operating Income, deposits
required to be deposited with Lender pursuant to Sections 9.30, 9.31, 9.32 and
9.39. Notwithstanding the foregoing, upon Megaplex Owner's acquisition of
Oakview Ground, none of the Net Operating Income from Oakview Ground shall be
included in the definition of Megaplex Cash Flow, but for all other purposes
(which specifically excludes those involving the definition of Megaplex Cash
Flow) Oakview Ground shall be deemed to be a Megaplex Property.
"MEGAPLEX DEBT SERVICE" means, for any period, Interest Expenses
calculated solely with respect to Tranche A and Tranche B (and not Tranche C) of
the Loan for the period being measured.
"MEGAPLEX DEBT SERVICE COVERAGE RATIO" means, for any period, the ratio
of (a) Megaplex Cash Flow to (b) Megaplex Debt Service.
"MEGAPLEX NINE LOAN DOCUMENTS" means the documents, agreements, and
instruments listed on Exhibit F hereto, as amended from time to time with
Lender's prior written approval.
"MEGAPLEX OWNER" means Megaplex Four, Inc., a Missouri corporation.
"MEGAPLEX PROPERTIES" means, as of any date, collectively all of the
Initial Individual Megaplex Properties and any Individual Megaplex Property
substituted pursuant to Section 9.35 or added pursuant to Sections 7.03, 7.05,
7.06 or 9.24.
"MOODY'S" means Moody's Investors Services, Inc., and its successors.
"MORTGAGES" means, the mortgages or deeds of trust from time to time
securing the Loan encumbering the Megaplex Properties and, to the extent
applicable, the Pad Properties which are subject to a Qualified Lease.
"MULTIEMPLOYER PLAN" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by Borrower or any
ERISA Affiliate and that is covered by Title IV of ERISA.
"NET OPERATING INCOME" means, for any Real Estate Property, as of any
date (a) the aggregate rental income and other income from the operation of such
Real Estate Property for the most recently completed fiscal quarter, multiplied
by four minus (b) all expenses and other charges incurred in connection with the
operation of such Real Estate Property, including funding all Reserve Funds
applicable to such Real Estate Property for such quarter, multiplied by four;
provided, however, the Net Operating Income of any Real Estate Property which is
not wholly owned by Borrower shall be included only to the extent of Borrower's
ownership interest in the market value of such Real Estate Property on a fully
diluted basis in such Real Estate Property. In the absence of historical
financial information for any Real Estate Property, pro forma financial
information (determined based upon the terms of the applicable lease governing
the lease of such Real Estate Property) shall be used for the first quarter in
the first year of any applicable lease for such Real Estate Property.
14
"NET SALES PROCEEDS" means an amount equal to the gross sales price and
other consideration received or receivable in connection with the sale of an
Individual Pad Property minus the sum of: (a) the amount of any sales commission
actually paid to an independent broker which is not an Affiliate of Borrower
with respect to such sale and in no event in excess of market rate commissions
on similar transactions, (b) the amount of transfer taxes actually paid by the
seller in connection with such sale and (c) other reasonable expenses paid by
the seller in connection with such sale and customarily paid by sellers of
properties similar to the applicable Individual Pad Property in the local area
in which the applicable Individual Pad Property is located.
"NON-RECOURSE" means, with reference to any obligation or liability,
any obligations or liability for which Borrower or any of its Subsidiaries, as
obligor thereunder, is not liable or obligated other than as to Borrower's, or
any Subsidiary's, interest in a designated Real Estate Property or other
specifically identified asset only, subject to such limited exceptions to the
non-recourse nature of such obligation or liability, such as, but not limited
to, fraud, misappropriation, misapplication and environmental indemnities, as
are usual and customary in like transactions involving institutional lenders at
the time of the incurrence of such obligation or liability.
"NOTE" means the promissory note provided for in Section 2.08(a) and
all promissory notes delivered in substitution or exchange therefor, in each
case as the same shall be modified and supplemented and in effect from time to
time.
"NOTICE OF BORROWING" means the notice to be given by Borrower to
Lender in respect of each borrowing of the Loan meeting all of the requirements
of Section 4.05.
"OTHER CHARGES" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including vault charges and
license fees for the use of vaults, chutes and similar areas adjoining any
Individual Property, now or hereafter levied or assessed or imposed against such
Individual Property or any part thereof.
"ORIGINAL EFFECTIVE DATE" means May 18, 2001.
"PAD PROPERTIES" means, as of any date, collectively all of the Initial
Pad Properties and an Individual Pad Property acquired by Megaplex Owner after
the Effective Date, including Pad Properties acquired pursuant to Section 7.06.
"PARTIALLY-OWNED ENTITY" means any Person in which Borrower or its
Subsidiaries owns an equity interest, but which is not required in accordance
with GAAP to be consolidated with Borrower for financial reporting purposes.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED INVESTMENTS" shall have the meaning set forth in the Cash
Management Agreement.
"PERMITTED LIENS" has the meaning assigned to such term in Section
9.06.
15
"PERMITTED USE" shall mean (a) megaplex movie theaters with
predominantly stadium-style seating, (b) entertainment themed retail centers
incorporating megaplex theaters, restaurants, book and/or music superstores,
interactive game centers, live entertainment venues and/or other specialty
retail that is oriented to entertainment or leisure time activities, (c)
integrated movie-going, dining and retail shopping complexes, and (d) any
combination of the uses described in clauses (a), (b) and (c).
"PERSON" means any individual, corporation, company, voluntary
association, partnership, limited liability company, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"PLAN" means an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate and that is covered by Title IV of
ERISA, other than a Multiemployer Plan.
"PLEDGE AGREEMENT" means a pledge and grant of security interest in
Lender's favor by Borrower of all of the capital stock in Megaplex Owner.
"POST-DEFAULT RATE" means a rate per annum equal to 4% plus the
Applicable Margin plus the applicable Eurodollar Base Rate.
"PROPERTY" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"QUALIFIED GROUND LEASE" means a ground lease (as the same may be
amended, modified and supplemented in accordance with the terms of this
Agreement) which either (i) is identified on Exhibit G or (ii) is approved by
Lender in its sole discretion.
"QUALIFIED LEASE" means (i) a duly executed and delivered lease (as the
same may be amended, modified and supplemented in accordance with the terms of
this Agreement) from an Obligor (other than Borrower), as landlord, to a third
party, as tenant, which is not an Affiliate of any Obligor which tenant (or
lease guarantor) and lease is approved by the Lender in its reasonable
discretion, and (ii) a Qualified Operating Agreement.
"QUALIFIED OPERATING AGREEMENT" means an operating agreement between
Megaplex Owner or a subsidiary of Megaplex Owner and a theater operator, which
operating agreement and operator are acceptable to Lender, which provides for
the operation of a first class movie theater showing first run, new release
movies to the public.
"QUARTERLY DATES" means the last Business Day of March, June, September
and December in each year, the first of which shall be the first such day after
the date hereof.
"REAL ESTATE PROPERTIES" means the fixed and tangible properties
consisting of land, buildings and/or other improvements owned or ground-leased
by Megaplex Owner or a Subsidiary of Megaplex Owner.
"RECOURSE" means, with reference to any obligation or liability, any
liability or obligation that is not Non-Recourse to the obligor thereunder,
directly or indirectly. For
16
purposes hereof, a Person shall not be deemed to be "indirectly" liable for the
liabilities or obligations of an obligor solely by reason of the fact that such
Person has an ownership interest in such obligor, provided that such Person is
not otherwise legally liable, directly or indirectly, for such obligor's
liabilities or obligations (e.g., by reason of a guaranty or contribution
obligations, by operation of law or by reason of such Person being a general
partner of such obligor).
"REGULATIONS A, D, T, U AND X" means, respectively, Regulations A, D,
G, T, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"REGULATORY CHANGE" means, with respect to any Lender, any change after
the Original Effective Date in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to a class of
banks including such Lender of or under any Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any Governmental Authority or monetary
authority charged with the interpretation or administration thereof.
"REIT" means a "real estate investment trust," as such term is defined
in Section 856 of the Code.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"RELEASE PRICE" means an amount equal to 90% of Net Sales Proceeds
generated from the sale or transfer of an Individual Pad Property pursuant to
Section 2.10.
"REMEDIATION" shall mean, without limitation, any response, remedial,
removal, or corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Material, any actions to cure or
mitigate any Release of any Hazardous Material, including investigation, study,
site monitoring, sampling and testing, laboratory or other analysis, or
evaluation necessary to such actions.
"RENTS" shall mean, with respect to each Individual Property, all
rents, percentage rent, rent equivalents, moneys payable as damages 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, any other Obligor, or their agents or employees from any and all
sources arising from or attributable to the Individual Property, and proceeds,
if any, from business interruption or other loss of income insurance.
"RESTORATION" shall mean the repair and restoration of an Individual
Property after a casualty or Condemnation as nearly as possible to the condition
the Individual Property was in
17
immediately prior to such casualty or Condemnation, with such alterations as may
be reasonably approved by Lender.
"RESTRICTED PAYMENT" means dividends (in cash, Property or obligations)
on, or other payments or distributions on account of, or the setting apart of
money for a sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of stock of Borrower
or of any warrants, options or other rights to acquire the same (or to make any
payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market or equity value of
Borrower or any of its Subsidiaries), but excluding dividends payable solely in
shares of common stock of Borrower.
"SEC RULES AND REGULATIONS" means the rules and regulations of the
Commission.
"SECOND EXTENDED MATURITY DATE" means May 31, 2006.
"SECURITIZED PROPERTIES" means, collectively, each of the Individual
Securitized-Properties.
"SECURITIZED PROPERTY OWNER" means EPT DownREIT II, Inc., a Missouri
corporation.
"STRUCTURAL DEFECT" means any material structural defect to the
improvements located on the applicable Real Estate Property.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc., and its successors.
"SUBSIDIARY" means, with respect to any Person, any corporation,
limited liability company, partnership, down REIT or other entity of which at
least a majority of the securities or other ownership interests having by the
terms thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such corporation,
limited liability company, partnership or other entity (irrespective of whether
or not at the time securities or other ownership interests of any other class or
classes of such corporation, limited liability company, partnership or other
entity shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person. Unless otherwise specified, "Subsidiary" means
a subsidiary of Borrower.
"TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rates, now or hereafter levied or assessed or
imposed against any Individual Property or part thereof.
"TOTAL FIXED CHARGES" means, for any period, the sum, for Borrower and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) Debt Service for such period, (b)
the amount of any Capital Improvement Reserves during such period and (c) any
preferred dividends paid during such period.
18
"TOTAL INDEBTEDNESS" means, as at any date, the sum, for Borrower and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all Indebtedness (including,
without limitation, the aggregate amount of the Loan under this Agreement) and
(b) all other liabilities that should be classified as liabilities on a balance
sheet, including, without limitation, all reserves (other than general
contingency reserves) and all deferred taxes and other deferred items, but
excluding (i) dividends declared but not yet paid and (ii) trade payables in the
ordinary course of business so long as such trade payables are payable within 90
days of the date the respective goods are delivered or the respective services
are rendered.
"TRANCHE" means, either, any combination, or all, as the context may
require, Tranche A, Tranche B or Tranche C.
"TRANCHE A" means the portion of the Loan, in an amount not to exceed
$25,000,000 to be advanced pursuant to Section 2.03.
"TRANCHE B" means the portion of the Loan, in an amount not to exceed
$25,000,000 to be advanced pursuant to Section 2.04A.
"TRANCHE C" means the portion of the Loan, in an amount not to exceed
$25,000,000 to be advanced pursuant to Section 2.04B.
"U.S. PERSON" means a citizen or resident of the United States of
America, a corporation, limited liability company, partnership or other entity
created or organized in or under any laws of the United States of America or any
State thereof, or any estate or trust that is subject to Federal income taxation
regardless of the source of its income.
"U.S. TAXES" means any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof.
"VOTING STOCK" of any Person means outstanding securities of all
classes of such Person ordinarily (and apart from rights accruing under special
circumstances) having the right to elect directors.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, down REIT or other entity
of which all of the equity securities or other ownership interests (other than,
in the case of a corporation, directors' qualifying shares) are directly or
indirectly owned or controlled by such Person or one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.
1.02 Accounting Terms and Determinations.
(a) GAAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if
Borrower notifies Lender that Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after
the Original Effective Date in GAAP or in the application thereof on
the operation of
19
such provision (or if Lender notifies Borrower that Lender requests an
amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or
in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such
change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
(b) FFO. If Borrower notifies Lender that the definition of
FFO has been amended by the Board of Governors of the National
Association of Real Estate Investment Trusts after the Original
Effective Date and that Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the
Original Effective Date in FFO or in the application thereof on the
operation of such provision (or if Lender notifies Borrower that Lender
requests an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such
change in FFO or in the application thereof, then such provision shall
be interpreted on the basis of FFO as in effect and applied immediately
before such change shall have become effective until such notice shall
have been withdrawn or such provision amended in accordance herewith.
1.03 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "INCLUDE," "INCLUDES" and "INCLUDING" shall
be deemed to be followed by the phrase "without limitation." The word "WILL"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "HEREIN," "HEREOF' and "HEREUNDER," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"ASSET" and "PROPERTY" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
Section 2. The Loan, the Note and Prepayments.
2.01 Loan. Lender agrees, on the terms and conditions of this
Agreement, to lend to Borrower and Borrower agrees to borrow from Lender, a loan
(the "LOAN") in Dollars during the period ending on the applicable dates
specified in Sections 2.03, 2.04A and 2.04B, in an aggregate principal amount
not to exceed $75,000,000 in accordance with the terms and conditions of this
Agreement. The Loan is not a revolving credit loan and Borrower shall not
reborrow the amount of any amounts prepaid.
20
2.02 Borrowing. Borrower is irrevocably committed to borrow
and shall be obligated to borrow $75,000,000 in accordance with, as applicable,
Sections 2.03, 2.04A, and 2.04B; provided, however, that Borrower shall not be
required to borrow Tranche B if the sole reason for the failure to do so is
Borrower's failure to obtain the Archon Required Amendments after otherwise
complying with the terms of Section 9.37 below. Borrower shall give Lender a
Notice of Borrowing for each borrowing as provided in Section 4.05. Not later
than 1:00 p.m., New York City time, on the date specified for each borrowing,
Lender shall disburse the amount of the Loan to be made by it on such date to,
or upon the order of, Borrower. The Loan shall commence to bear interest on the
date funds are disbursed by the Lender, including disbursements into escrow
without regard to the date subsequently disbursed from such escrow. Loan
proceeds shall be used only for Permitted Uses.
2.03 Tranche A. As of the Effective Date, Borrower has
borrowed the entire amount of Tranche A.
2.04A Tranche B. Borrower shall not borrow Tranche B until
Borrower has obtained the Archon Required Amendments as required by Section 9.37
below. If Borrower has obtained the Archon Required Amendments as required by
Section 9.37, Borrower shall borrow the entire amount of Tranche B not later
than November 19, 2001 in not more than two (2) draws.
2.04B Tranche C. Borrower may borrow up to $16,000,000 of
Tranche C not later than 60 days after the Effective Date and the remaining
$9,000,000 (for a total of $25,000,000) within 180 days after the Effective
Date; provided, however, that if Megaplex Owner is unable to make the
acquisitions contemplated by Section 2.04B(b) below within 60 days after the
Effective Date and the provisions of Section 2.04B(e) below then control, then
Borrower shall only be obligated to borrow $4,000,000 of Tranche C not later
than 60 days after the Effective Date and may borrow the remaining $21,000,000
(for a total of $25,000,000) within 180 days after the Effective Date. Each of
the following apply to advances of Tranche C.
(a) Lender shall not be required to advance $4,000,000 of
Tranche C (which is separate and distinct from the other advances of
Tranche C covered by subsections (b) and (c) below) unless and until
Borrower causes Megaplex Owner to acquire (or contemporaneously with
Megaplex Owner's acquisition of) fee simple interest in the
approximately 20.6 acre property commonly known as the Oakview Megaplex
located in Omaha, Nebraska which is ground leased to Megaplex Nine,
Inc., a Missouri corporation, pursuant to the lease between George W.
Venteicher, Frank R. Krejci, Susan Venteicher and Vera Jane Krejci, as
landlord, and American Multi-Cinema, Inc., as tenant, dated as of June
11, 1996, as amended pursuant to that certain First Amendment to Ground
Lease dated as of May 13, 1997, between George W. Venteicher, Frank R.
Krejci, Susan Venteicher and Vera Jane Krejci and American Multi-
Cinema, Inc., as assigned by American Multi-Cinema, Inc. to Borrower
pursuant to that certain Assignment and Assumption Agreement dated as
of December 23, 1997, as further assigned by Borrower to Megaplex Nine,
Inc. pursuant to that certain Assignment and Assumption Agreement dated
as of February 14, 2001 ("OAKVIEW GROUND LEASE") which in turn is
leased to American Multi-Cinema, Inc., a Missouri corporation pursuant
to the Lease Agreement dated December 23, 1997, by and between
Borrower, as landlord, and American Multi-
21
Cinema, Inc., as tenant, as assigned by Borrower to Megaplex Nine, Inc.
pursuant to that certain Assignment of Lease dated February 12, 2001
("OAKVIEW OPERATING LEASE") (such site is herein called the "OAKVIEW
GROUND") upon the terms and subject to the conditions of this
Agreement.
(b) Lender shall not be required to advance $12,000,000 of
Tranche C (which is separate and distinct from the other advances of
Tranche C covered by subsections (a) above and (c) below) unless and
until Borrower causes Megaplex Owner to directly acquire (or
contemporaneously with Megaplex Owner's acquisition of) all of the
membership interests in WestCol Holdings, LLC, a Delaware limited
liability company ("WESTMINSTER HOLDINGS"), at a time when Westminster
Holdings owns only (i) all of the membership interests in WestCol
Center, LLC, a Delaware limited liability company ("WESTMINSTER
Retail"), which owns the retail commercial development of approximately
123,656 square feet ("WESTMINSTER RETAIL PROPERTY") for the property
commonly known as Westminster Promenade property located in Broomfield,
Colorado ("WESTMINSTER PROMENADE PROPERTY"), and (ii) all of the direct
or indirect membership interests in WestCol Theater, LLC, a Delaware
limited liability company ("WESTMINSTER Theatre"), which owns the
24-screen theater and parking for approximately 3,900 vehicles (
collectively, the "WESTMINSTER THEATRE PROPERTY") in the Westminster
Promenade Property, all upon the terms and subject to the conditions of
this Agreement.
(c) Lender shall not be required to advance $9,000,000 of
Tranche C (which is separate and distinct from the other advances of
Tranche C covered by subsections (a) and (b) above or (e) below) unless
and until (i) Lender has previously advanced $16,000,000 of Tranche C
upon Borrower's satisfaction of the requirements of subsections (a),
(b) or (e) of this Section 2.04B (and other related terms of this
Agreement), and (ii) Borrower provides Lender with additional security
for the Loan which provides cash flow coverage of at least two times
debt service on $9,000,000, which security may include an additional
Megaplex Theater, and which security must be reasonably satisfactory in
all respects to Lender, acting in its sole discretion, and (iii)
Borrower complies with and such additional security is obtained upon
the terms and subject to the conditions of this Agreement.
(d) Each advance of Tranche C must be in a minimum amount of
$4,000,000. The entire amount of Tranche C shall be made in not more
than four (4) draws or advances.
(e) If, for any reason, Megaplex Owner is unable to make the
acquisitions contemplated by Section 2.04B(b) above within 60 days
after the Effective Date, then the provisions of Section 2.04B(b) and
Section 7.06 shall no longer apply to the $12,000,000 advance of
Tranche C and the terms of this Section 2.04B(e) shall control the
$12,000,000 advance of Tranche C in place of Section 2.04B(b). If this
Section 2.04B(e) applies, Lender shall not be required to advance
$12,000,000 of Tranche C (which is separate and distinct from the other
advances of Tranche C covered by subsections (a) and (c) above) unless
and until (i) Lender has previously advanced $4,000,000 of Tranche C
upon Borrower's satisfaction of the requirements of subsection (a) of
this Section 2.04B (and the related terms of this Agreement), (ii)
Borrower provides Lender
22
with additional security for the Loan which provides cash flow coverage
of at least two times debt service on $12,000,000, which security may
include an additional Megaplex Theater, and which security must be
reasonably satisfactory in all respects to Lender, acting in its sole
discretion, and (iii) Borrower complies with and such additional
security is obtained upon the terms and subject to the conditions of
this Agreement.
2.05 Loan Fees. Borrower paid Lender a Loan fee in the amount
of $500,000 on the Original Effective Date. Borrower shall pay Lender a
commitment fee related to Tranche C in the amount of $250,000 on the first to
occur of (i) the date of the first disbursement of Tranche C and (ii) December
31, 2001.
2.06 Exit and Unused Commitment Fees. Borrower shall pay
Lender an exit fee ("EXIT FEE") as follows:
(a) In the event the Loan is paid in whole or, to the extent
permitted, in part, before the second anniversary of the Original
Effective Date, Borrower shall pay Lender an Exit Fee in an amount
equal to two percent (2%) of the outstanding principal being paid;
(b) In the event the Loan is paid in whole or, to the extent
permitted, in part, on or after the second anniversary of the Original
Effective Date, and including on the Maturity Date, Borrower shall pay
Lender an Exit Fee in an amount equal to three percent (3%) of the
outstanding principal being paid; and
(c) In the event an Event of Default occurs and the Loan is
accelerated, Borrower shall immediately pay Lender an Exit Fee in an
amount equal to two percent (2%) of the outstanding principal balance
if the Event of Default occurs prior to the second anniversary of the
Original Effective Date and three percent (3%) of the outstanding
principal balance if the Event of Default occurs on or after the second
anniversary of the Original Effective Date.
(d) If Borrower has not borrowed the full $25,000,000 of
Tranche C by the 180th day after the Effective Date, then Borrower
shall pay Lender an unused commitment fee equal to two percent (2%) of
the difference between $25,000,000 and the amount of Tranche C
theretofore advanced, which payment shall be made to Lender on or
before the 185th day following the Effective Date.
2.07 Business Day. Whenever any payment to be made hereunder
shall be stated to be due on a day that is not a Business Day, or any time
period relating to a payment to be made hereunder is stated to expire on a day
that is not a Business Day, the payment may be made on the next succeeding
Business Day and the period will not expire until the next succeeding Business
Day.
2.08 Note.
(a) Note. The Loan shall be evidenced by a single promissory
note of Borrower substantially in the form of Exhibit A, dated the date
hereof, payable to Lender in a principal amount equal to $75,000,000.
23
(b) Borrower's Loan Account. The balance on Lender's books and
records shall be presumptive evidence (absent manifest error) of the
amounts due and owing to Lender by Borrower; provided that any failure
to so record or any error in so recording shall not limit or otherwise
affect Borrower's obligation under the Loan Documents.
(c) Mutilated, Destroyed, Lost or Stolen Note. In case any
Note shall become mutilated or defaced, or be destroyed, lost or
stolen, Borrower shall, upon request from Lender, execute and deliver a
new Note of like principal amount in exchange and substitution for the
mutilated or defaced Note, or in lieu of and in substitution for the
destroyed, lost or stolen Note. In the case of a mutilated or defaced
Note, the mutilated or defaced Note shall be surrendered to Borrower
upon delivery to Lender of the new Note. In the case of any destroyed,
lost or stolen Note, Lender shall furnish to Borrower, upon delivery to
Lender of the new Note (i) evidence of the destruction, loss or theft
of such Note and (ii) such security or indemnity as may be reasonably
required by Borrower to hold Borrower harmless.
2.09 Optional Prepayment. Borrower shall not have the right to
prepay Loan in whole or in part, except that: (a) Borrower shall be permitted to
prepay the Loan in its entirety, subject to Section 4.04, upon not less than 30
days' prior irrevocable notice and payment of all accrued and unpaid interest,
(b) Borrower shall be permitted to prepay the Loan in part, subject to Section
4.04, upon not less than thirty (30) days prior irrevocable notice pursuant to
Section 2.10, (c) Borrower shall give Lender notice of any permitted prepayment,
as provided in Section 4.05 (and, upon the date specified for such prepayment in
any such notice of prepayment, the amount to be prepaid shall become due and
payable hereunder); and (d) each prepayment must be accompanied by payment of
the applicable Exit Fee as specified in Section 2.06 and the amounts, if any,
which may be required pursuant to Section 5.03.
2.10 Partial Prepayments in connection with Sale of Individual
Pad Properties.
(a) Subject to Sections 2.06, 2.09 and 5.03, Borrower will be
permitted to sell an Individual Pad Property and make a partial
prepayment of the Loan in connection with such sale upon the following
terms and conditions:
(i) No Default or Event of Default shall have
occurred and be continuing;
(ii) Borrower shall prepay the Loan in an amount
equal to the Release Price;
(iii) Borrower shall have paid all of Lender's costs
and expenses (including the reasonable fees and expenses of
all attorneys and other consultants retained by Lender)
incurred in connection with Lender's review of such request
for release (whether or not such request is approved) and in
connection with the preparation, negotiation, execution and
delivery of all documents, instruments and agreements relating
thereto;
(iv) Borrower shall pay Lender the Exit Fee required
to be paid and any other amounts payable pursuant to Section
5.03;
24
(v) The purchaser shall not be an Affiliate of
Borrower;
(vi) Borrower shall have given Lender not less than
30 days' notice of the sale in question together with a copy
of the proposed closing statement (and, at least 2 Business
Days before the closing of the sale in question, Borrower
shall deliver to Lender, a copy of the final closing
statement, purchase contract and title company disbursement
statement certified as true, correct and complete by an
authorized representative of Borrower with knowledge of the
sale in question);
(vii) Borrower shall pay all accrued and unpaid
interest allocable to the principal prepaid; and
(viii) Borrower shall provide Lender with a
certificate of a Financial Officer on the applicable closing
date that the sale and partial prepayment in question complied
with Section 2.10.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loan. Unless previously accelerated as
permitted by the Loan Documents, the outstanding principal balance of the Loan,
all accrued and unpaid interest thereon and all other sums owing to Lender
pursuant to the Loan Documents, shall be due and payable on the Initial Maturity
Date. Notwithstanding the foregoing, at Borrower's election if the Extension
Conditions are satisfied prior to the Initial Maturity Date, such maturity of
the Loan shall be extended for an additional one year period to the First
Extended Maturity Date, and, also at Borrower's election, if the Extension
Conditions are further satisfied prior to the First Extended Maturity Date, the
maturity of the Loan shall be further extended for an additional one year period
to the Second Extended Maturity Date.
3.02 Interest.
(a) Borrower hereby promises to pay Lender interest on the
unpaid principal amount of the Loan for the period from and including
the date of an advance of the Loan (including the date Loan proceeds
are disbursed to escrow regardless of the date subsequently disbursed)
to but excluding the date such Loan shall be paid in full, at the
applicable Eurodollar Base Rate plus the Applicable Margin except at
such times as the Post-Default Rate applies thereto as set forth in
subsection (b) below.
(b) Notwithstanding the foregoing, Borrower hereby promises to
pay to Lender interest at the Post-Default Rate
(x) on any principal of the Loan and on any
other amount payable by Borrower hereunder or under
the Note or other Loan Documents to or for the
account of Lender, that shall not be paid in full
when due (whether at stated maturity, by
acceleration, by mandatory prepayment or otherwise),
for the period from and including the due date
thereof to but excluding the date the same is paid in
full; and
25
(y) during any period when any Event of
Default shall have occurred and for so long as such
Event of Default shall be continuing.
(c) Accrued interest shall be payable in arrears (i) monthly
on the tenth (10th) day of each month and (ii) upon the payment or
prepayment but only on the principal amount so paid or prepaid, except
that if interest becomes payable at the Post-Default Rate, such
interest shall be payable from time to time on demand. Promptly after
the determination of any interest rate provided for herein or any
change therein Lender shall give notice thereof to Borrower.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Payments by Borrower. Except to the extent otherwise
provided herein, all payments of principal, interest, and other amounts
to be made by Borrower under this Agreement, the Note, and, except to
the extent otherwise provided therein, all payments to be made by the
Obligors under any Loan Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or
counterclaim, to Lender at an account maintained by Lender not later
than 11:00 A.M., New York City time, on the date on which such payment
shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business
Day).
(b) Lender May Set Off. Lender may debit the amount of any
such payment that is not made by such time to any account of Borrower
with Lender (with notice to Borrower), provided that Lender's failure
to give such notice shall not affect the validity thereof.
(c) Application of Payments. So long as no Event of Default
then exists, payments of principal and interest shall be allocated
between the Tranches pro rata in accordance with the principal balance
of each Tranche immediately prior to the making of the payment. If an
Event of Default has occurred and is continuing, Lender may apply such
payments in such manner as it may determine to be appropriate.
(d) Extension to Next Business Day. If the due date of any
payment under this Agreement or any Loan Document would otherwise fall
on a day that is not a Business Day, such date shall be extended to the
next succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.
4.02 Late Payment Charge. If any principal, interest or any
other sums due under the Loan Documents is not paid by Borrower on the date on
which it is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of five percent (5%) of such unpaid sum or the Maximum Legal Rate in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgages and the
other Loan Documents to the extent permitted by applicable law.
26
4.03 Computations. Interest shall be computed on the basis of
a year of 360 days and actual days elapsed (including the first day but,
excluding the last day) occurring in the period for which payable.
4.04 Minimum Amounts. Except for mandatory prepayments made
pursuant to Section 2.10, each borrowing and each prepayment shall be in an
aggregate amount equal to $5,000,000 or a larger integer multiples of
$1,000,000. The foregoing multiples shall not apply to any prepayment of 100% of
the outstanding Loan.
4.05 Certain Notices. Notices by Borrower to Lender of
borrowings, and prepayments, and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received in writing by Lender not
later than 10:30 a.m., New York City time, on the number of days prior to the
date of the relevant borrowing, prepayment, or first day of relevant Interest
Period specified below:
Number of
Notice for Days Prior
- ---------- ----------
Borrowing of Tranche B 60
Borrowing of Tranche C 5 Business Days
Changes in duration of Interest Period for
Eurodollar Base Rate 2 Business Days
Prepayment 30
Lender acknowledges that Borrower provided Lender with a Notice of
Borrowing for Tranche B that such Tranche B shall be borrowed on or before
November 19, 2001. Each such Notice of Borrowing or prepayment shall specify, as
applicable, the date on which amount to be borrowed or prepaid is to occur
(which shall be a Business Day). In the event that Borrower fails to timely
select the duration of any Interest Period, the Interest Period commencing
immediately after the end of the then current Interest Period shall be a
one-month Interest Period. Notwithstanding the foregoing, if an Event of Default
shall occur, then, the next Interest Period (and every Interest Period
thereafter, without implying a waiver of any Event of Default) shall, commencing
on the first day of the immediately following Interest Period, be a one-month
Interest Period.
4.06 Selection of Interest Period. Subject to Section 4.05,
Borrower shall be entitled to select the Interest Period except that the
Interest Period commencing on the Original Effective Date was a one-month
Interest Period. Each selection of an Interest Period must be timely received by
Lender as provided in Section 4.05.
4.07 Sharing of Payments, Etc.
(a) Right of Set-off. Each Obligor agrees that, in addition to
(and without limitation of) any right of set-off, banker's lien or
counterclaim Lender may otherwise have, Lender shall be entitled, at
Lender's option (to the fullest extent permitted by law),
27
to set off and apply any deposit (general or special, time or demand,
provisional or final), or other indebtedness, held by Lender for the
credit or account of such Obligor at any of its offices, in Dollars or
in any other currency, against any principal of or interest on any of
the Loan or any other amount payable to Lender hereunder, that is not
paid by the due date and the expiration of any applicable cure period
(regardless of whether such deposit or other indebtedness is then due
to such Obligor), in which case Lender shall promptly notify such
Obligor thereof, provided that Lender's failure to give such notice
shall not affect the validity thereof.
(b) Rights of Lender; Bankruptcy. Nothing contained herein
shall require Lender to exercise any such right or shall affect the
right of Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation of any
Obligor.
Section 5. Yield Protection, Etc.
5.01 Limitation on Eurodollar Base Rate. Anything herein to
the contrary notwithstanding, if:
(a) Lender determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the Eurodollar Base Rate as
provided herein; or
(b) Lender determines, which determination shall be
conclusive, that the relevant rates of interest referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 upon the basis of
which the rate of interest for Loan for such Interest Period is to be
determined are not likely adequately to cover the cost to Lender of
making or maintaining Loan for the applicable Interest Period at the
Eurodollar Base Rate;
then Lender shall give Borrower prompt notice thereof and, so long as such
condition remains in effect, the Loan shall bear interest with the Eurodollar
Base Rate being deemed to be the Base Rate.
5.02 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Loan to bear interest
at the Eurodollar Base Rate, then Lender shall promptly notify Borrower thereof
and the Loan shall bear interest with the Eurodollar Base Rate being deemed to
be the Base Rate during such period of illegality.
5.03 Compensation. Borrower shall pay to Lender upon the
request of Lender, such amount or amounts as shall be sufficient (in the
reasonable opinion of Lender) to compensate it for any loss, cost or expense
that Lender determines is attributable to:
(a) any change in an Interest Period by reason of the
existence of an Event of Default, any prepayment or conversion from the
Eurodollar Base Rate to the Base Rate for any reason (including the
acceleration of the Loan pursuant to Section 10) on a date other than
the last day of the applicable Interest Period; or
28
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 7 to be satisfied) to borrow Loan proceeds on the date for such
borrowing specified in the relevant Notice of Borrowing given pursuant
to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any, of (i) the
amount of interest that otherwise would have accrued on the principal amount so
prepaid, converted or not borrowed for the period from the date of such
prepayment, conversion or failure to borrow to the last day of the then current
Interest Period at the applicable rate of interest for the Loan provided for
herein over (ii) the amount of interest that otherwise would have accrued on
such principal amount at a Eurodollar Base Rate per annum equal to the
Eurodollar Base Rate that would have been in effect for a one month Interest
Period commencing on the date of the prepayment, conversion or failure to borrow
in question. A certificate of Lender setting forth any amount or amounts that
Lender is entitled to receive pursuant to this Section shall be delivered to
Borrower and shall be conclusive absent manifest error.
Section 6. Guarantee.
6.01 The Guarantee. The Subsidiary Guarantors hereby jointly
and severally guarantee to Lender and its respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loan made by Lender to, and
the Note held by Lender of, Borrower and all other amounts from time to time
owing to Lender by Borrower or any other Obligor under this Agreement, the Note
and any of the other Loan Documents, in each case strictly in accordance with
the terms hereof or thereof (such obligations being herein collectively called
the "Guaranteed Obligations"). The Subsidiary Guarantors hereby further jointly
and severally agree that if Borrower shall fail to pay in full when due (whether
at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Subsidiary Guarantors will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
6.02 Obligations Unconditional. The obligations of the
Subsidiary Guarantors under Section 6.01 are absolute and unconditional, joint
and several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of Borrower under this Agreement, the Note or
any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 6.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder,
which shall remain absolute and unconditional as described above:
29
(i) at any time or from time to time, without notice
to the Subsidiary Guarantors, the time for any performance of
or compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of this Agreement or the Note or any other
agreement or instrument referred to herein or therein shall be
done or omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed
Obligations shall be modified, supplemented or amended in any
respect, or any right under this Agreement or the Note or any
other agreement or instrument referred to herein or therein
shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt
with; or
(iv) any lien or security interest granted to, or in
favor of, Lender as security for any of the Guaranteed
Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence,
presentment, demand of payment, protest and all notices whatsoever, and any
requirement that Lender exhaust any right, power or remedy or proceed against
Borrower under this Agreement or the Note or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
6.03 Reinstatement. The obligations of the Subsidiary
Guarantors under this Section 6 shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of Borrower in respect of
the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary
Guarantors jointly and severally agree that they will indemnify Lender on demand
for all reasonable costs and expenses (including fees of counsel) incurred by
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
6.04 Subrogation. The Subsidiary Guarantors hereby jointly and
severally agree that until the indefeasible payment and satisfaction in full of
all Guaranteed Obligations they shall not exercise any right or remedy arising
by reason of any performance by them of their guarantee in Section 6.01, whether
by subrogation or otherwise, against Borrower or any other guarantor of any of
the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
6.05 Remedies. The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and Lender, the obligations of
Borrower under this Agreement, the Note and the other Loan Documents may be
declared to be forthwith due and
30
payable as provided in Section 10 (and shall be deemed to have become
automatically due and payable in the circumstances provided in Section 10) for
purposes of Section 6.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by Borrower)
shall forthwith become due and payable by the Subsidiary Guarantors for purposes
of Section 6.01.
6.06 Instrument for the Payment of Money. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Section 6 constitutes
an instrument for the payment of money, and consents and agrees that Lender, at
its sole option, in the event of a dispute by such Subsidiary Guarantor in the
payment of any moneys due hereunder, shall have the right to bring motions
and/or actions under New York CPLR Section 3213.
6.07 Continuing Guarantee. The guarantee in this Section 6 is
a continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
6.08 Rights of Contribution. The Subsidiary Guarantors and
Borrower hereby agree, as between themselves, that if any Subsidiary Guarantor
shall become an Excess Funding Guarantor (as defined below) by reason of the
payment by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor and Borrower shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Subsidiary Guarantor's or Borrower's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the Properties, debts and liabilities of such Excess Funding Guarantor) of the
Excess Payment (as defined below) in respect of such Guaranteed Obligations. The
payment obligation of a Subsidiary Guarantor and Borrower to any Excess Funding
Guarantor under this Section 6.08 shall be subordinate and subject in right of
payment to the prior payment in full of the obligations of (a) such Subsidiary
Guarantor under the other provisions of this Section 6 and (b) Borrower under
the Loan Documents, and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations.
For purposes of this Section 6.08, (i) "EXCESS FUNDING GUARANTOR"
means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has
paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) "EXCESS PAYMENT" means, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations and (iii) "PRO RATA SHARE" means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate present fair saleable value of all Properties of such Subsidiary
Guarantor (excluding any shares of stock of any other Subsidiary Guarantor)
exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of such Subsidiary Guarantor hereunder and any
obligations of any other Subsidiary Guarantor that have been Guaranteed by such
Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable
value of all Properties of Borrower and all of the Subsidiary Guarantors exceeds
the amount of all the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of
Borrower and the Subsidiary Guarantors hereunder and under the
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other Loan Documents) of Borrower and all of the Subsidiary Guarantors,
determined (A) with respect to any Subsidiary Guarantor that is a party hereto
on the Closing Date, as of the Closing Date, and (B) with respect to any other
Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a
Subsidiary Guarantor hereunder.
6.09 General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 would otherwise, taking into account the provisions of Section
6.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 6.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, Lender, or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
6.10 California Waivers.
(a) Each Subsidiary Guarantor's liability hereunder is a
guaranty of payment and performance and is not conditioned or
contingent upon the genuineness, validity, regularity or enforceability
of any of the provisions of the Loan Documents, and each Subsidiary
Guarantor hereby waives any and all rights, defenses and benefits under
the California Code of Civil Procedure ("CC") Section 2810 and agrees
that by doing so such Subsidiary Guarantor is liable even if Borrower
had no liability at the time of execution of the Loan Documents or
thereafter ceases to be liable. Each Subsidiary Guarantor hereby waives
any and all rights, defenses and benefits under CC Section 2809 and
agrees that each Subsidiary Guarantor's obligations under this Guaranty
are independent of the obligations of Borrower. Each Subsidiary
Guarantor hereby waives any and all rights, defenses and benefits such
Subsidiary Guarantor may now or hereafter have, under CC Section 2815
or otherwise, to revoke this guaranty. Each Subsidiary Guarantor
further hereby waives any and all rights, defenses and benefits that
such Subsidiary Guarantor may now or hereafter have, under CC Section
2819, 2825 or otherwise, arising out of any release or discharge of
Borrower, in whole or in part, from Borrower's liabilities and/or
obligations under the Loan Documents.
(b) Each Subsidiary Guarantor hereby waives any and all
rights, defenses and benefits under CC Section 2845, 2849 and 2850,
including, without limitation, the right to require Lender to (a)
proceed against any other guarantor, (b) proceed against or exhaust any
security or collateral Lender may hold, or (c) pursue any other right
or remedy for such Subsidiary Guarantor's benefit, and agrees that
Lender may proceed against each Subsidiary Guarantor for the Guaranteed
Obligations without taking any action against any other guarantor and
without proceeding against or exhausting any security or collateral
Lender holds. Each Subsidiary Guarantor agrees that Lender may
unqualifiedly exercise in its sole discretion any or all rights and
remedies available to it against any other guarantor without impairing
Lender's rights and remedies in enforcing this guaranty, under which
each Subsidiary Guarantor's liabilities shall remain independent and
unconditional. Each Subsidiary Guarantor agrees that Lender's exercise
32
of certain of such rights or remedies may affect or eliminate such
Subsidiary Guarantor's right of subrogation or recovery against
Borrower and that each Subsidiary Guarantor may incur a partially or
totally nonreimbursable liability under this guaranty.
(c) Each Subsidiary Guarantor hereby waives all rights,
defenses and benefits under CC Sections 2847, 2848 and 2849 and agrees
that it shall have no right of subrogation or reimbursement against
Borrower, and no right of subrogation against any collateral or
security provided for in the Loan Documents and no right of
contribution against any other guarantor. To the extent each Subsidiary
Guarantor's waiver of these rights of subrogation, reimbursement or
contribution as set forth herein are found by a court of competent
jurisdiction to be void or voidable for any reason, each Subsidiary
Guarantor agrees that its rights of subrogation and reimbursement
against Borrower and such Subsidiary Guarantor's right of subrogation
against any collateral or security shall be junior and subordinate to
Lender's rights against Borrower and to Lender's right, title and
interest in such collateral or security, and each Subsidiary
Guarantor's right of contribution against any other guarantor shall be
junior and subordinate to Lender's rights against such other guarantor.
(d) Without limitation, each Subsidiary Guarantor hereby
waives any and all of its rights of subrogation, reimbursement,
indemnification, and contribution and any other rights and defenses
that are or may become available to each Subsidiary Guarantor by reason
of any of the following: Sections 2787 through 2855 of the California
Civil Code. Without limitation, each Subsidiary Guarantor waives all
rights and defenses that such Subsidiary Guarantor may have because the
Borrower's debt to Lender is secured by real property. This means,
among other things:
(i) Lender may collect from each Subsidiary Guarantor
without first foreclosing on any real or personal property
collateral pledged by the Borrower; and
(ii) If Lender forecloses on any real property
collateral pledged by Borrower:
(A) the amount of the debt of Borrower to Lender may
be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price; and
(B) Lender may collect from each Subsidiary Guarantor
even if Lender, by foreclosing on the real property collateral, has destroyed
any right any Subsidiary Guarantor may have to collect from Borrower.
This is an unconditional and irrevocable waiver of any rights and defenses each
Subsidiary Guarantor may have because the Borrower's debt to Lender is secured
by real property. These rights and defenses include, but are not limited to, any
rights or defenses based upon Section 580a, 580b, 580d or 726 of the Code of
Civil Procedure.
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Section 7. Conditions.
7.01 Effective Date. The obligation of Lender to make further
disbursements of the Loan in accordance with this Agreement, and as a condition
precedent to this Agreement becoming effective, is subject to (i) the
satisfaction, immediately prior to or concurrent with the Effective Date of the
following conditions precedent and (ii) Lender having received the following
documents, each of which shall be satisfactory to Lender in form and substance:
(a) Agreement. From each party to this Agreement, a duly
executed counterpart of this Agreement.
(b) Opinions of Counsel to the Obligors. Lender shall have
received opinions of Obligor's counsel with respect to due execution,
authority, enforceability of the Loan Documents and such other matters
as Lender may require, all such opinions in form, scope and substance
satisfactory to Lender and Lender's counsel in their sole discretion.
(c) Organizational Documents. With respect to each of the
Obligors and the Securitized Property Owner, its declaration of trust
or certificate of incorporation (or equivalent organizational
document), as applicable, as filed with the Secretary of State in the
respective jurisdiction of organization and in effect on the Effective
Date and certified to be true, correct and complete by the appropriate
Secretary of State as of a date not more than 10 days prior to the
Effective Date, or at Lender's option, the Original Effective Date,
together with a good standing certificate (or the equivalent thereof)
for (i) each such entity from the applicable Secretary of State for the
state in which it was organized, and (ii) with respect to the Obligors
and the Securitized Property Owner, each state in which the respective
Obligor or Securitized Property Owner owns or ground leases an Initial
Property.
(d) Certified Resolutions, etc. A certificate of the secretary
or assistant secretary of each Obligor dated the Effective Date,
certifying (i) the names and true signatures of its incumbent officers
authorized to sign the applicable Loan Documents or other documents
required by Lender, (ii) the declaration of trust, by-laws or
equivalent organizational documents, as the case may be, as in effect
on the Effective Date and (iii) the resolutions of the board of
trustees, directors or members, as the case may be, of each Obligor
approving and authorizing the execution, delivery and performance of
all Loan Documents or other documents required by Lender.
(e) Officer's Certificate. A certificate of the President or a
Financial Officer of Borrower, dated the Effective Date, confirming
compliance with the conditions set forth in the lettered clauses (a)
and (b) of the first sentence of Section 7.02.
(f) Note. The Note, duly completed and executed by Borrower.
(g) Insurance. Evidence of insurance issued on behalf of
Borrower, another Obligor, the tenant under any Qualified Lease,
evidencing the existence of all insurance required to be maintained by
Borrower pursuant to this Agreement, such evidence to be in such form
and contain such information as is specified in this Agreement. In
addition, Borrower shall have delivered a certificate of a Financial
Officer of Borrower setting
34
forth the insurance obtained by it in accordance with the requirements
of this Agreement and stating that such insurance is in full force and
effect and that all premiums then due and payable thereon have been
paid.
(h) Loan Documents. The following Loan Documents: (i)
amendments to all Mortgages on the Megaplex Properties and Pad
Properties; (ii) amendments to all Assignments of Leases on the
Megaplex Properties; (iii) an amendment to the Pledge Agreement; and
(iv) an amendment to the Cash Management Agreement.
(i) Financial Statements. Lender shall have received such
financial statements of Borrower (pro forma) as it shall deem
necessary, in each case satisfactory to Lender.
(j) Mortgages, Assignments of Leases. Lender shall have
received evidence that counterparts of the amendments to all Mortgages
and Assignments of Leases have been delivered to the title company for
recording, in the reasonable judgment of Lender, so as to effectively
create upon such recording a valid and enforceable Lien in the full
amount of the Loan upon each of the Initial Megaplex Properties, with
first priority, in favor of Lender (or such other trustee as may be
required or desired under local law), subject only to the Permitted
Encumbrances.
(k) Title Insurance. Lender shall have received title
insurance policies or date down endorsements issued by a title company
acceptable to Lender and dated as of the Effective Date, with
reinsurance and direct access agreements acceptable to Lender. Such
title insurance policies shall (i) provide coverage in amounts
satisfactory to Lender, (ii) insure Lender that the relevant Mortgages
create a valid first priority lien on the Individual Megaplex
Properties encumbered thereby, including on the fee (ground lessor's
fee interest) for the Woodridge, Illinois location, of the requisite
priority, free and clear of all exceptions from coverage other than
Permitted Encumbrances and standard exceptions and exclusions from
coverage (as modified by the terms of any endorsements), (iii) contain
such endorsements and affirmative coverages as Lender may reasonably
request, and (iv) name Lender as the insured. The title insurance
policies shall be assignable. Lender also shall have received evidence
that all premiums in respect of such title insurance policies have been
paid. Lender shall also receive (1) copies of EPT DownREIT Inc.'s
owner's title insurance policies insuring the Initial Pad Properties
certified true; complete, correct, and without notice of claim or
defense by a Financial Officer of Megaplex Owner, and (2) copies of
Securitized Property Owner's owner's title insurance policies insuring
the Initial Securitized Properties certified true, complete, correct,
and without notices of claim or defense by a Financial Officer of
Archon SPE Holdings.
(l) Survey. Lender shall have received a current title survey
for each Individual Megaplex Property, certified to the title company
and Lender and their successors and assigns, in form and content
satisfactory to Lender and prepared by a professional and properly
licensed land surveyor satisfactory to Lender. Additionally, Lender
shall have received copies of the most recently available survey for
each of the Initial Pad Properties. The foregoing requirements of this
subsection (l) shall be waived
35
by Lender for each of the Initial Properties to the extent Lender has
previously received the required survey information for such Initial
Property and Borrower certifies to Lender that (i) no improvements have
been constructed or demolished on such Initial Property, and (ii) no
additional restrictions or easements have encumbered such Initial
Property, in both cases since the Original Effective Date.
(m) Environmental Reports and Engineering Reports. Lender
shall have received a Phase I Environmental Report (and, if recommended
by the Phase I environmental report, a Phase II environmental report)
and Engineering Report in respect of each of the Initial Megaplex
Properties and, to the extent available, Initial Pad Properties, in
each case satisfactory in form and substance to Lender. Upon and to the
extent Lender receives Borrower's certification to Lender that Borrower
has not received any notices relating to, and that Borrower is
otherwise unaware of, any change in the environmental condition of such
Initial Megaplex Properties and Initial Pad Properties, including any
information typically included in a Phase I or Phase II Environmental
Report and any change in the Environmental Reports delivered to Lender
in connection with the Original Credit Agreement, Lender shall waive
the requirements of delivering environmental reports for such property
as required by the preceding sentence and Lender shall continue to rely
upon the environmental reports delivered to Lender in connection with
the Original Credit Agreement and Borrower's certification.
(n) Zoning. With respect to each Initial Megaplex Property,
Lender shall have received, at Lender's option, either (i) (A) letters
or other evidence with respect to each Megaplex Property from the
appropriate municipal authorities (or other Persons) concerning
applicable zoning and building laws, or (B) an ALTA 3.1 zoning
endorsement for the applicable Title Insurance Policy or (ii) a zoning
opinion letter, in each case in substance reasonably satisfactory to
Lender. Upon and to the extent Lender receives Borrower's certification
to Lender that Borrower has not received any notices relating to, and
that Borrower is otherwise unaware of, any change in the zoning and
building laws affecting any of the Megaplex Properties from the zoning
and building law compliance materials delivered to Lender in connection
with the Original Credit Agreement, Lender shall waive the requirements
of delivering the materials required by the preceding sentence and
Lender shall continue to rely upon the zoning and building law
compliance materials delivered to Lender in connection with the
Original Credit Agreement and Borrower's certification.
(o) Encumbrances. Borrower shall have taken or caused to be
taken such actions in such a manner so that Lender has a valid and
perfected first Lien in the full amount of the Loan as of the Effective
Date with respect to each Mortgage on the applicable Initial Megaplex
Properties, subject only to applicable Permitted Encumbrances and such
other liens as are permitted pursuant to the Loan Documents, and Lender
shall have received satisfactory evidence thereof.
(p) Related Documents. Each document relating to the
transactions contemplated herein, shall be in form and substance
satisfactory to Lender, and shall have been duly authorized, executed
and delivered by all parties thereto, and Lender shall have received
and approved certified copies thereof, as applicable or as required.
36
(q) Budgets. Borrower shall have delivered either (i) the
Annual Budget for the Initial Megaplex Properties and Initial Pad
Properties current Fiscal Year, or (ii) a certification from Borrower
to Lender of no change being made or required to be made to the Annual
Budget for the Initial Megaplex Properties and Initial Pad Properties
from that Annual Budget delivered to Lender by Borrower relating to the
Original Credit Agreement.
(r) Basic Carrying Costs. Borrower shall have paid, or shall
have caused the tenants of Qualified Leases to have paid, all (a)
insurance premiums for current periods relating to the Initial Megaplex
Properties and Initial Pad Properties, (b) currently due taxes
(including any in arrears) relating to the Initial Megaplex Properties
and Initial Pad Properties, and (c) currently due other charges
relating to the Initial Megaplex Properties and Initial Pad Properties.
(s) Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all
documents incidental thereto shall be satisfactory in form and
substance to Lender, and Lender shall have received all such
counterpart originals or certified copies of such documents as Lender
may reasonably request.
(t) Payments. All payments, deposits or escrows required to be
made or established by Borrower or the other Obligors under this
Agreement, the Note and the other Loan Documents on or before the
Closing Date shall have been paid, unless and to the extent expressly
permitted by the Loan Documents to be paid at a later date.
(u) Ground Lessor Estoppels. Lender shall have received an
executed ground lessor estoppel letter, which shall be in form and
substance satisfactory to the Lender, from each of the ground lessors
under the Qualified Ground Leases pertaining to the Initial Megaplex
Properties. Upon and to the extent Lender receives Borrower's
certification to Lender that Borrower has not received any notices
relating to, and that Borrower is otherwise unaware of any change in,
the information set forth in the estoppel letters received by Lender
from each of the ground lessors under the Qualified Ground Leases
pertaining to the Initial Megaplex Properties, Lender shall waive the
requirement of delivering new estoppel letters related thereto and
Lender shall continue to rely upon the estoppel letters relating to the
Qualified Ground Leases delivered to Lender in connection with the
Original Credit Agreement and Borrower's certification.
(v) Tenant Estoppels. Lender shall have received an executed
tenant estoppel letter, which shall be in form and substance
satisfactory to Lender, from each tenant under Qualified Leases of the
Initial Megaplex Properties (specifically excluding the tenant at the
Woodridge property) and all guarantors of such leases. Upon and to the
extent Lender receives Borrower's certification to Lender that Borrower
has not received any notices relating to, and that Borrower is
otherwise unaware of, any change in the information set forth in the
tenant estoppel letters delivered to Lender in connection with the
Original Credit Agreement from each tenant under Qualified Leases of
the Initial Megaplex Properties (specifically excluding the tenant at
the Woodridge property) and all guarantors of such leases, Lender shall
waive the requirement of delivering new tenant
37
estoppels as required by the preceding sentence and Lender shall
continue to rely upon the tenant estoppel letters from each tenant
under Qualified Leases delivered to Lender in connection with the
Original Credit Agreement and Borrower's certification.
(w) Transaction Costs. Borrower shall have paid or reimbursed
Lender for all title insurance premiums, recording and filing fees,
costs of environmental reports, Engineering Reports, Environmental
Reports, and other reports, the fees and costs of Lender's counsel and
all other third party out-of-pocket expenses incurred in connection
with the transactions contemplated by this Agreement; provided,
however, that upon Borrower's request and only to the extent approved
by Lender, Borrower shall be permitted to defer the payment of Lender's
counsel until the first draw of the Loan on or after the date of this
Agreement.
(x) Material Adverse Change. There shall have been no material
adverse change in the financial condition or business condition of any
Obligor, any tenant (specifically excluding the tenant at the Woodridge
property) under a Qualified Lease, any parent, principal or guarantor
of any tenant under a Qualified Lease since the date of the most recent
financial statements delivered to Lender. The income and expenses of
the Initial Properties, the occupancy leases thereof, and all other
features of the transaction shall be as represented to Lender without
material adverse change since the date of the most recent financial
statements delivered to Lender. None of Borrower, its constituent
Persons, or any Obligor shall be the subject of any bankruptcy,
reorganization, or insolvency proceeding.
(y) Leases and Rent Roll. Lender shall have received copies of
all tenant leases, certified copies of the leases of the Individual
Owned Properties and certified copies of all ground leases of the
Individual Owned Properties. Lender shall have received a current
certified rent roll of the Individual Owned Properties, reasonably
satisfactory in form and substance to Lender.
(z) Subordination and Attornment. Lender shall have received
appropriate instruments acceptable to Lender subordinating all of the
Qualified Leases affecting the Megaplex Properties (specifically
excluding the tenant at the Woodridge property) to the Mortgages on the
Megaplex Properties. Lender shall have received an agreement to attorn
to Lender satisfactory to Lender from any tenant under a Qualified
Lease that does not provide for such attornment by its terms.
(aa) Tax Lot. Lender shall have received evidence that each
Individual Owned Property constitutes one (1) or more separate tax
lots, which evidence shall be reasonably satisfactory in form and
substance to Lender.
(bb) Engineering Reports. Lender shall have received
Engineering Reports with respect to each Individual Owned Property,
which reports shall be satisfactory in form and substance to Lender and
the Rating Agencies. Upon and to the extent Lender receives Borrower's
certification to Lender that Borrower has not received any notices
relating to, and that Borrower is otherwise unaware of, any change in
the Engineering Reports with respect to each Individual Owned Property
delivered to Lender in
38
connection with the Original Credit Agreement, Lender shall waive the
requirement of delivering new Engineering Reports for each Individual
Owned Property as required by the preceding sentence and Lender shall
continue to rely upon Engineering Reports delivered to Lender in
connection with the Original Credit Agreement and Borrower's
certification.
(cc) Inventory. Lender shall have received a complete
inventory, if any, of the fixtures and equipment present at each
Individual Megaplex Property or used in connection with each Individual
Megaplex Property, indicating the owner of each item and its location
(if other than on the site of the related Individual Megaplex
Property); provided, however, that such information with respect to
fixtures and equipment owned, leased or otherwise supplied by the
related tenant shall only be required to the extent such information
has been made available to Borrower or any of its Affiliates. Upon and
to the extent Lender receives Borrower's certification to Lender that
Borrower is unaware of any material change in any of the fixtures or
equipment present at each Individual Megaplex Property or used in
connection with each Individual Megaplex Property since the inventory
delivered to Lender in connection with the Original Credit Agreement,
Lender shall waive the requirement of delivering a revised inventory as
required in the preceding sentence and Lender shall continue to rely
upon the inventory delivered to Lender in connection with the Original
Credit Agreement and Borrower's certification.
(dd) Cash Management Agreement. Lender shall have received
evidence that all accounts have been set up as required by the Cash
Management Agreement.
(ee) Certificates of Occupancy. Copies of certificates of
occupancy (certified by a Financial Officer of Megaplex Owner) covering
each of the Initial Megaplex Properties and Initial Pad Properties.
Upon and to the extent Lender receives Borrower's certification to
Lender that Borrower has not received any notices relating to, and that
Borrower is otherwise unaware of, any change in the certificates of
occupancy covering each of the Initial Megaplex Properties and Initial
Pad Properties delivered to Lender in connection with the Original
Credit Agreement, Lender shall waive the requirement of delivering new
certificates of occupancy as required by the preceding sentence.
(ff) Solvency. A certificate of a Financial Officer of
Borrower, to the effect that after giving effect to the borrowings
hereunder, none of Borrower and its Subsidiaries (on a consolidated
basis) is insolvent or will be left with unreasonably small capital
with which to engage in its business or will have incurred debts beyond
its ability to pay such debts as they mature, together with a pro forma
balance sheet evidencing the same.
(gg) Checklist Items. All other deliveries, without
duplication, set forth on the closing checklist attached hereto as
Exhibit H.
7.02 Initial and Subsequent Extensions of Credit. The
obligation of Lender to advance any proceeds of the Loan, which advance, at
Lender's election, may be required to be made through an escrow with a title
insurance company, is subject to the further satisfaction of the following
conditions precedent (both immediately prior to the making of such advance and
39
also after giving effect thereto and to the intended use thereof), each of which
shall be satisfactory to Lender:
(a) the representations and warranties made by Borrower in the
Loan Documents and by each Obligor in each of the Loan Documents to
which it is a party shall be true and complete on and as of the date of
the making of such Loan with the same force and effect as if made on
and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date);
(b) no Default or Event of Default shall have occurred and be
continuing;
(c) Lender shall have received a Notice of Borrowing pursuant
to Section 4.05 in the case of a requested Loan disbursement;
(d) Lender shall have received a completed Borrowing
Certificate signed by a Financial Officer setting forth computations
evidencing compliance with the covenants contained in Sections 9.07,
9.08, 9.09, 9.10, and 9.11;
(e) Lender shall have received a certificate from the
Financial Officer that (i) there has been no material adverse change in
the financial condition or business condition of any Obligor, any
tenant (specifically excluding the tenant at the Woodridge property)
under a Qualified Lease, any parent, principal or guarantor of any
tenant under a Qualified Lease since the date of the most recent
financial statements delivered to Lender and (ii) after giving effect
to the advance of the Loan proceeds and transactions related thereto
shall not have a material adverse effect on any of the foregoing;
(f) On or before the second advance of any proceeds of the
Loan following the Effective Date, Borrower shall have presented a plan
acceptable to Lender in its reasonable discretion (a "WOODRIDGE FF&E
PLAN") as to how to have adequate furniture, fixtures and equipment to
operate the property at the Woodridge location (which was the property
under the Loews Lease) for a tenant or operator to enter into a
Qualified Lease to operate such property as a reasonably comparable
theater property and consistent with the other Megaplex Properties. The
parties acknowledge such plan may include or be based upon a settlement
relating to the Loews Lease or may require funds to be escrowed for
such expenses;
(g) On or before the advance of proceeds or draw of the Loan
relating to Tranche C pursuant to Section 2.04B(a) above, Borrower
shall have also complied with provisions of Section 7.03 and 7.05
below; and
(h) On or before the advance of proceeds or draw of the Loan
relating to Tranche C pursuant to Section 2.04B(b) above, Borrower
shall have also complied with provisions of Section 7.03 and 7.06
below.
Each Notice of Borrowing shall constitute a certification by Borrower
to the effect set forth in clauses (a) and (b) in the preceding sentence (both
as of the date of such notice or request
40
and, unless Borrower otherwise notifies Lender in writing prior to the date of
such borrowing, as of the date of such borrowing).
7.03 Addition of Eligible Properties. Borrower's right to
borrow Loan proceeds to fund costs of Megaplex Owner acquiring any additional
Real Estate Properties is subject to (i) the condition precedent that Lender has
received a Notice of Borrowing as required by Section 4.05 and Borrower classify
such Real Estate Property in a written notice to Lender as either a Pad Property
or Megaplex Property for purposes of this Agreement, which classification must
be acceptable to Lender (and following such acquisition such property shall
thereafter be included in the definition of Pad Property or Megaplex Property,
as approved by Lender), and (ii) the requirement that Lender receive the
following, as applicable, within the time periods below:
(a) If the Real Estate Property being acquired will be, upon
acquisition, or is thereafter intended to be subject to a loan secured
by a first priority mortgage or deed of trust (each such Real Estate
Property is herein called a "PRIOR ENCUMBERED PARCEL"), then:
(1) Borrower shall cause Megaplex Owner to form a new
wholly owned, single purpose subsidiary in form reasonably
satisfactory to Lender (each a "MEGAPLEX SPE"); and
(2) Borrower shall cause Megaplex Owner to pledge and
grant a security interest to Lender in and to all of the
outstanding stock, partnership interests, or membership
interests, as the case may be, which Megaplex Owner owns in
such single purpose subsidiary, which pledge and security
agreement and related documents shall be in form acceptable to
Lender and be fully executed and delivered prior to the
acquisition of such Prior Encumbered Parcel; and
(3) Once the conditions in (a)(1) and (a)(2) above
are satisfied, the applicable Megaplex SPE can acquire the
Prior Encumbered Parcel; and
(4) Within 30 days following the acquisition by such
Megaplex SPE of the Prior Encumbered Parcel, Borrower shall
cause Megaplex Owner to deliver to Lender a copy, certified by
a Financial Officer to be true, complete, and correct, of the
closing binder(s) relating to the acquisition, leasing, and
financing of such Prior Encumbered Parcel, such closing
binders to contain, at a minimum, copies of the owner's title
insurance policy, survey, applicable lease, financing
documents, and such other documents and instruments as Lender
may reasonably request.
(b) If the Real Estate Property being acquired will not be a
Prior Encumbered Parcel (each such Real Estate Property is herein
called an "UNENCUMBERED PARCEL") and such Unencumbered Parcel will not
be subject to a lease, then Borrower shall cause Megaplex Owner to
acquire such Unencumbered Parcel directly in Megaplex Owner's name and
deliver to Lender such information related thereto as Lender may
reasonably request.
41
(c) If the Real Estate Property being acquired is an
Unencumbered Parcel which will be subject to a lease, then (1) only if
the Real Estate Property is a Megaplex Property then such lease must be
a Qualified Lease, (2) such Unencumbered Parcel shall be acquired
directly in Megaplex Owner's name, and (3) upon such acquisition, or
within five (5) business days following such acquisition, Borrower
shall cause Megaplex Owner to grant a mortgage or deed of trust, in
form and amount acceptable to Lender, to be recorded in Lender's favor
against such Unencumbered Parcel and deliver evidence thereof, together
with a copy of the owner's title insurance policy and survey for such
Unencumbered Parcel to Lender (all within such five (5) business day
period), together with such other information relating thereto as
Lender may reasonably request.
7.04 Cap Agreement and Assignment of Cap Agreement.
(a) As used herein, an "ADVANCE DATE" means any date when
Lender advances proceeds of the Loan to or for the benefit of Borrower,
including the initial advance of Loan proceeds on the Original
Effective Date.
(b) Except to the extent provided pursuant to Section 7.04(c)
below, within 45 days following each Advance Date, Borrower shall
provide Lender with evidence that a Cap Agreement on a notional amount
equal to fifty percent (50.0%) of the principal amount of the Loan
outstanding (as of the Advance Date to which it relates) is in effect,
fully paid for and assigned by an Assignment of Cap Agreement in favor
of Lender.
(c) At any time throughout the term of the Loan, if Lender
provides Borrower with written notice that (i) Lender intends to enter
into a Securitization (as defined in Section 12.07) and (ii) demands
that Borrower provide Lender within such time period as Lender
requests, but in no event less than thirty (30) days following such
notice, with evidence that a Cap Agreement on a notional amount equal
to one hundred percent (100.0%) of the principal amount of Loan
outstanding (as of the date of such notice and thereafter increasing
either prior to or contemporaneously with any future Advance Date) is
in effect, fully paid for and assigned by an Assignment of Cap
Agreement in favor of Lender, Borrower shall comply with such demand,
in accordance with its terms and this Agreement.
(d) If Borrower fails to timely provide any Cap Agreement or
Assignment of Cap Agreement as required by this Agreement, Lender shall
have the right, but not the obligation, to purchase (in the name of
Borrower or Lender) the required Cap Agreement and cause it to be
assigned for Lender's benefit pursuant to an Assignment of Cap
Agreement, to the extent applicable, and pay for or be reimbursed, as
applicable, for the costs and expenses related thereto out of cash
otherwise distributable to Borrower under the Cash Management
Agreement, prior to any payments being made to Borrower thereunder.
Borrower hereby consents to and directs that such payments be made
prior to any distributions being made to Borrower.
7.05 Oakview Ground Acquisition. At such time as Borrower
causes Megaplex Owner to acquire Oakview Ground, Borrower shall cause Oakview
Ground to be acquired in accordance with Section 7.03(c) above and as follows:
(1) the Oakview Ground will be subject
42
to the Oakview Ground Lease and the Oakview Operating Lease, both of which
leases shall be in form and substance satisfactory to Lender, (2) upon Megaplex
Owner's acquisition of the Oakview Ground, Lender shall receive concurrent with
such acquisition (and not within 5 (five) Business Days following such
acquisition as otherwise provided in Section 7.03(c)(3) above) a Lien upon such
property pursuant to a Mortgage in form and amount approved by Lender, together
with a Lender's title insurance policy and survey for the Oakview Ground
together with appropriate tenant estoppels, tenant subordination non-disturbance
and attornment agreements, an irrevocable written direction to the tenant under
the Oakview Ground Lease to make and cause to be made all payments otherwise due
Megaplex Owner to be paid to the Lockbox Account, a revised annual budget (as
set forth in Section 9.01(m) below) including Oakview Ground, and such other
information relating to the Oakview Ground as Lender may reasonably request,
including a certified copy of the Oakview Ground Lease and Oakview Operating
Lease, all such deliveries to be in a form and, as applicable, an amount
approved by Lender. Upon such acquisition of Megaplex Owner of the Oakview
Ground, Oakview Ground shall be deemed to be a Megaplex Property and the Oakview
Ground Lease shall be included in the definition of Qualified Ground Lease under
the terms of this Agreement.
7.06 Westminster Acquisition. At such time, if ever, as
Borrower causes Megaplex Owner to acquire all of the membership interests in
Westminster Holdings, Borrower shall cause such acquisition to be made in
accordance with Section 7.03(a) above (other than the SPE requirements) and
cause each of the following to occur: (1) Borrower shall furnish Lender with
evidence satisfactory to Lender that (a) Westminster Holdings owns all of the
direct and indirect interests in Westminster Theatre based upon directly owning
(i) 99% of the membership interests in Westminster Theatre and (ii) 100% of the
issued and outstanding stock in WestCol Corp., a Delaware corporation
("WESTMINSTER CORPORATE GP"), (b) Westminster Corporate GP owns 1% of the
membership interests in Westminster Theatre, and (c) Westminster Holdings
directly owns all of the membership interests in Westminster Retail; (2)
Westminster Holdings and Westminster Retail execute and deliver to Lender the
Additional Subsidiary Guaranty Agreement, in the form of Exhibit K hereto with
such changes therein as are acceptable to Lender acting in its sole discretion
pursuant to which, among other things Westminster Holdings and Westminster
Retail become additional Subsidiary Guarantors under this Agreement, (3) Lender
shall be granted a Lien on the Westminster Retail Property pursuant to a
Mortgage in form and amount approved by Lender, together with a Lender's title
insurance policy and survey for the Westminster Retail Property providing Lender
with a first mortgage lien on such property subject to only such exceptions as
are acceptable to and approved by Lender; (4) provide Lender with a pledge of
and security interest in all of the membership interests in Westminster Holdings
together with applicable financing statements relating to such pledge and
security interest, granting Lender a first priority security interest in and to
all membership interests in Westminster Holdings as additional security for the
Loan; (5) provide Lender with tenant estoppels and subordination non-disturbance
and attornment agreements from each tenant in the Westminster Retail Property;
(6) provide Lender with certified copies and state authorization documents
(including certifications as to members and shareholders) relating to
Westminster Holdings, Westminster Corporate GP, Westminster Retail, and
Westminster Theatre as Lender requests; (7) provide Lender with a certified copy
of the lease with American Multi-Cinema, Inc. for the Westminster Theatre
Property; (8) provide Lender with a certified copy of the financing documents
encumbering the Westminster Theatre Property; (9) provide Lender with a fully
executed consent in the form of Exhibit L hereto with such changes thereon as
are acceptable to
43
Lender acting in its sole discretion pursuant to which, among other things,
appropriate consent is provided to permit Lender to receive and act upon the
pledge and security interest referenced in item (4) above; (10) Lender to
receive an opinion of counsel for Borrower and its Subsidiary Guarantors that
all of the documents and instruments executed by Borrower and its Subsidiary
Guarantors pursuant to this Section 7.06 are duly authorized, executed, and
delivered to Lender, and are enforceable and containing such other matters as
Lender may require, such opinion to be in form, scope and substance satisfactory
to Lender and Lender's counsel in their sole discretion; (11) Borrower shall
cause all net cash flow, after providing for the payment of operating expenses
and working capital, from the Westminster Retail Property to be paid directly to
the Lockbox Account and managed pursuant to the Cash Management Agreement; (12)
provide Lender with a pledge and security interest in all accounts containing
funds for operating expenses and working capital from the Westminster Retail
Property together with applicable financing statements relating to such pledge
and security interest, granting Lender a first priority security interest in and
to such accounts; (13) a revised annual budget (as required by Section 9.01(m)
below) including the Westminster Promenade Property (both Westminster Retail
Property and Westminster Theatre Property); (14) a Pledge Agreement and Consent
to Pledge Agreement pursuant to which, among other things, Lender shall receive
a collateral assignment of the property management agreement related to the
Westminster Retail Property, which property management agreement shall be in a
form acceptable to Lender; and (15) provide Lender with a certification from
Westminster Theatre as to the current status of the lease of the Westminster
Theatre Property with American Multi-Cinema, Inc., all of the foregoing
documents, instruments, agreements, and deliveries shall be in such form and, as
applicable, such amount, and contain such terms and conditions as are
satisfactory to Lender acting in its sole discretion. The deliveries required by
the preceding shall deem to satisfy the requirements of Section 7.03(a)(1) and
(2) only. Upon Megaplex Owner's acquisition of all of the membership interests
in Westminster Holdings and compliance with the foregoing, Westminster Retail
Property shall be deemed a Pad Property, all leases at the Westminster Retail
Property shall constitute Qualified Leases, and Westminster Theatre Property
shall be deemed a Megaplex Property.
Section 8. Representations and Warranties. Borrower represents and
warrants, and, as applicable, covenants, to the Lender that:
8.01 Organization; Powers.
(a) Borrower (i) is a real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland; (ii) has all requisite real estate investment trust
power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its
business as now being or as proposed to be conducted; and (iii) is
qualified to do business and is in good standing in all jurisdictions
in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could (either
individually or in the aggregate) have a Material Adverse Effect.
(b) Each of Borrower's Subsidiaries: (i) is a corporation,
partnership, limited liability company or other entity duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization; (ii) has all requisite corporate or
44
other power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted; and
(iii) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes
such qualification necessary and where failure so to qualify could
(either individually or in the aggregate) have a Material Adverse
Effect.
(c) Borrower's U.S. taxpayer identification number is
43-1790877. Megaplex Owner's U.S. taxpayer identification number is
43-192287. Archon SPE Holdings' U.S. taxpayer identification number is
43-1928793.
(d) Borrower's and each other Obligors' chief executive office
and principal place of business is Union Station, 30 Pershing Road,
Suite 201, Kansas City, Missouri 64108; and none of the Obligors has
had no other chief executive office or principal place of business
other than Union Station, 30 Pershing Road, Suite 201, Kansas City,
Missouri 64108.
(e) No Obligor has used, or uses, any trade name or fictitious
name.
(f) The organizational chart for Borrower and all Subsidiaries
attached hereto as Schedule 8.01(f) is true, complete and correct.
8.02 Authorization; Enforceability. Each Obligor has all
necessary real estate investment trust, corporate, partnership, limited
liability company or other organizational, as applicable, power, authority and
legal right, to execute, deliver and perform its obligations under each of the
Loan Documents to which it is a party; the execution, delivery and performance
by each Obligor of each of the Loan Documents to which it is a party have been
duly authorized by all necessary corporate or other organizational, as
applicable, action on its part (including any required shareholder approvals);
and this Agreement has been duly and validly executed and delivered by each
Obligor and constitutes, and each of the Loan Documents when executed and
delivered (in the case of the Note, for value) by such Obligor, as applicable,
will constitute, each of their legal, valid and binding obligation, enforceable
against each Obligor, as applicable, in accordance with its terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
8.03 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority or regulatory
authority or agency, or any securities exchange, are necessary for the
execution, delivery or performance by any Obligor of this Agreement or any of
the other Loan Documents to which each is a party or for the legality, validity
or enforceability hereof or thereof.
8.04 No Breach. None of the execution and delivery of this
Agreement and the other Loan Documents, the consummation of the transactions
herein and therein contemplated or compliance with the terms and provisions
hereof and thereof will conflict with or result in a
45
breach of, or require any consent under, the declaration of trust or by-laws (or
equivalent organizational documents) of any Obligor or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
Governmental Authority, or any agreement or instrument to which any Obligor is a
party or by which any of them or any of their Property is bound or to which any
of them is subject, or constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any
Property of any Obligor pursuant to the terms of any such agreement or
instrument.
8.05 Financial Condition; No Material Adverse Change.
(a) Financial Condition. Borrower has heretofore furnished to
Lender (i) Borrower's most recent audited consolidated financial
statements and (ii) a pro forma balance sheet, giving effect to the
transactions occurring on the Original Effective Date and subsequent
thereto. Such audited statements and pro forma balance sheet are
complete and correct and fairly present the actual, as the case may be,
consolidated financial condition of Borrower as of the dates thereof.
None of Borrower and its Subsidiaries has on the Effective Date any
material contingent liabilities, liabilities for taxes, unusual forward
or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided
for in such statements and balance sheet as at such date.
(b) No Material Adverse Change-Borrower. Since December 31,
2000, there has been no material adverse change in the consolidated
financial condition, operations, business or prospects taken as a whole
of Borrower and its Subsidiaries from that set forth in the balance
sheets and financial statements as at such date referred to in clause
(a) of this Section 8.05.
8.06 Properties.
(a) Property Generally. Each Obligor owns and has on the
Effective Date good and marketable title or leasehold title (subject
only to Permitted Liens) to its Properties, including good and
marketable fee simple title or leasehold title (pursuant to a Qualified
Ground Lease) to its respective Properties, subject in each case only
to Permitted Liens on the Effective Date. Megaplex Owner has good and
marketable title to the Initial Megaplex Properties and the Initial Pad
Properties. Borrower is the sole owner of all of the issued and
outstanding stock in Megaplex Owner. Securitized Property Owner has
good and marketable title to the Initial Securitized Properties. Archon
SPE Holdings is the sole owner of all of the issued and outstanding
stock in Securitized Property Owner. Megaplex Owner is the sole
shareholder in Archon SPE Holdings.
(b) Intellectual Property. Each of Borrower and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its
business, and the use thereof by Borrower and its Subsidiaries does not
infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
46
8.07 Litigation. Except as disclosed in Schedule 8.07 hereto
and with respect to the Lease Agreement originally between Catellus Development
Corporation, as landlord, and Loews Gurnee Mills Cinemas, Inc., as tenant dated
7-7-97 (as heretofore assigned and amended the "LOEWS LEASE"), there are no
legal or arbitral proceedings, or any proceedings by or before any Governmental
Authority or regulatory authority or agency, now pending or (to the knowledge of
Borrower) threatened against Borrower or any of its Subsidiaries that, if
adversely determined, could (either individually or in the aggregate) have a
Material Adverse Effect.
8.08 Environmental Matters. Each of Borrower and its
Subsidiaries or, as applicable, the tenant under a Qualified Lease, has obtained
all environmental, health and safety permits, licenses and other authorizations
required under all Environmental Laws to carry on its business as now being or
as proposed to be conducted, except to the extent failure to have any such
permit, license or authorization would not (either individually or in the
aggregate) have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of Borrower, its
Subsidiaries and (to the best of Borrower's knowledge) the Properties are in
compliance with the terms and conditions thereof, and is also in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply therewith would not (either
individually or in the aggregate) have a Material Adverse Effect. In addition,
except as set forth in Schedule 8.08:
(a) No Pending Environmental Matters. No notice, notification,
demand, request for information, citation, summons or order has been
issued, no complaint has been filed, no penalty has been assessed and
no investigation or review is pending or threatened by any Governmental
Authority or other entity with respect to any alleged failure by
Borrower, any of its Subsidiaries or, to the best of Borrower's
knowledge, any lessee of a Real Estate Property to have any
environmental permit, license or other authorization required under any
Environmental Law in connection with the conduct of the business of
Borrower or any of its Subsidiaries or the Real Estate Properties
leased by any such lessee, or with respect to any generation,
treatment, storage, recycling, transportation, discharge or disposal,
or any Release of any Hazardous Materials generated by Borrower, any of
its Subsidiaries or, to Borrower's best knowledge, any such lessee in
connection with any Real Estate Property.
(b) No Permits Required; Certain Specific Representations.
None of Borrower, any of its Subsidiaries or, to the best of Borrower's
knowledge, any lessee of a Real Estate Property (in the case of such
lessee with respect to such Real Estate Property only) owns, operates
or leases a treatment, storage or disposal facility requiring a permit
under the Resource Conservation and Recovery Act of 1976, as amended,
or under any comparable state or local statute, and to the best of
Borrower's knowledge:
(i) no polychlorinated biphenyls (PCB's) are or have
been present at any site or facility now or previously owned,
operated or leased by Borrower or any of its Subsidiaries;
47
(ii) no asbestos or asbestos-containing materials is
or has been present at any site or facility now or previously
owned, operated or leased by Borrower or any of its
Subsidiaries;
(iii) there are no underground storage tanks or
surface impoundments for Hazardous Materials, active or
abandoned, at any site or facility now or previously owned,
operated or leased by Borrower or any of its Subsidiaries;
(iv) no Hazardous Materials have been Released by
Borrower, or to the best of Borrower's knowledge, any other
Person at, on or under any site or facility owned, operated or
leased by Borrower or any of its Subsidiaries in a reportable
quantity established by statute, ordinance, rule, regulation
or order; and
(v) no Hazardous Materials have been otherwise
Released by Borrower or, to the best of Borrower's knowledge,
any other Person at, on or under any site or facility owned,
operated or leased by Borrower or any of its Subsidiaries that
would (either individually or in the aggregate) have a
Material Adverse Effect.
(c) No Hazardous Material Transported to NPL Sites. Neither
Borrower nor any of its Subsidiaries has transported or arranged for
the transportation of any Hazardous Material to any location that is
listed on the National Priorities List ("NPL") under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion on the NPL by the
Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R.
Section 300.5 ("CERCLIS"), or on any similar state or local list or
that is the subject of Federal, state or local enforcement actions or
other investigations that may lead to Environmental Claims against
Borrower or any of its Subsidiaries.
(d) No Other Locations. No Hazardous Material generated by
Borrower or any of its Subsidiaries has been recycled, treated, stored,
disposed of or Released by Borrower or any of its Subsidiaries at any
location.
(e) No Notifications or Listings. No written notification of a
Release of a Hazardous Material has been filed by or on behalf of
Borrower or any of its Subsidiaries and, to the best of Borrower's
knowledge, no site or facility now or previously owned, operated or
leased by Borrower or any of its Subsidiaries is listed or proposed for
listing on the NPL, CERCLIS or any similar state list of sites
requiring investigation or cleanup.
(f) No Liens or Restrictions. To the best of Borrower's
knowledge, no Liens have arisen under or pursuant to any Environmental
Laws on any site or facility owned, operated or leased by Borrower or
any of its Subsidiaries and no Governmental Authority action has been
taken or is in process that could subject any such site or facility to
such Liens and none of Borrower or any of its Subsidiaries has been
required to place any notice or restriction relating to the presence of
Hazardous Materials at any site or facility owned by it in any deed to
the real property on which such site or facility is located.
48
(g) Full Disclosure. All environmental investigations,
studies, audits, tests, reviews or other analyses that are in the
possession of Borrower, any of its Subsidiaries or any of its
Partially-Owned Entities in relation to facts, circumstances or
conditions at or affecting any site or facility now or previously
owned, operated or leased by Borrower or any of its Subsidiaries have
been made available to Lender.
8.09 Compliance with Laws and Agreements. Each of Borrower,
its Subsidiaries and, to Borrower's best knowledge, the Properties is in
compliance with all laws, regulations and orders of any Governmental Authority
or regulatory authority or agency applicable to it or its Property and all
indentures, agreements and other instruments binding upon it or its Property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
8.10 Investment Company Act. Neither Borrower nor any of its
Subsidiaries is an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
8.11 Public Utility Holding Company Act. Neither Borrower nor
any of its Subsidiaries is a "holding company," or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company," within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
8.12 Taxes. Borrower and its Subsidiaries have filed all
Federal income tax returns and all other tax returns that are required to be
filed by them and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by Borrower or any of its Subsidiaries. The charges,
accruals and reserves on the books of Borrower and its Subsidiaries in respect
of taxes and other governmental charges are, in the opinion of Borrower,
adequate. Borrower has not given or been requested to give a waiver of the
statute of limitations relating to the payment of any Federal, state, local and
foreign taxes or other impositions. All of the Borrower's Subsidiaries are
qualified REIT subsidiaries (as defined in the Code) and are not subject to
state or federal income or analogous taxes.
8.13 ERISA. Each Plan, and, to the knowledge of Borrower, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no ERISA
Event has occurred and is continuing as to which Borrower would be under an
obligation to furnish a report to Lender under Section 9.02(c).
8.14 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules, furnished in writing by or on
behalf of Obligors to Lender in connection with the negotiation, preparation or
delivery of the Original Credit Agreement, this Agreement and the other Loan
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. Lender acknowledges that Borrower has relied on information
furnished by tenants under Qualified Leases ("TENANT INFORMATION") for which
Borrower does not represent the accuracy of such Tenant Information
49
and Borrower has no knowledge that such Tenant Information is incorrect. All
written information furnished after the Original Effective Date by Borrower and
its Subsidiaries to Lender in connection with this Agreement and the other Loan
Documents and the transactions contemplated hereby and thereby will be true,
complete and accurate in every material respect, or (in the case of projections)
based on reasonable estimates, on the date as of which such information is
stated or certified. With respect to any projections furnished to Lender,
Borrower represents and warrants only that the assumptions relating to such
projections are reasonable. There is no fact known to Borrower that could have a
Material Adverse Effect that has not been disclosed herein, in the other Loan
Documents or in a report, financial statement, exhibit, schedule, disclosure
letter or other writing furnished to the Lender for use in connection with the
transactions contemplated hereby or thereby.
8.15 Use of Credit. Neither Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.
8.16 Material Agreements and Liens.
(a) Material Agreements. Except for the transactions
contemplated by this Agreement, Schedule 8.16(a) is a complete and
correct list of each credit agreement, loan agreement, indenture,
purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or
guaranteed by, Borrower or any of its Subsidiaries outstanding on the
date hereof, or that (after giving effect to the transactions
contemplated to occur on or before the Original Effective Date) will be
outstanding on the Original Effective Date or the Effective Date, the
aggregate principal or face amount of which equals or exceeds (or may
equal or exceed) $1,000,000, and the aggregate principal or face amount
outstanding or that may become outstanding under each such arrangement
is correctly described in Schedule 8.16(a).
(b) Liens. Schedule 8.16(b) is a complete and correct list of
each Lien securing Indebtedness of Borrower or any of its Subsidiaries
outstanding on the date hereof, or that will be outstanding, the
aggregate principal or face amount of which equals or exceeds (or may
equal or exceed) $500,000 and covering any Property of Borrower or any
of its Subsidiaries, and the aggregate Indebtedness secured (or that
may be secured) by each such Lien and the Property covered by each such
Lien is correctly described in Schedule 8.16(b).
8.17 Capitalization. The authorized capital stock of Borrower
consists, on the Effective Date of an aggregate of 55,000,000 shares consisting
of (i) 50,000,000 shares of common stock, par value $0.01 per share, of which,
14,723,254 shares were duly and validly issued and outstanding as of March 9,
2001, each of which shares are fully paid and nonassessable and (ii) 5,000,000
shares of preferred stock, with terms to be established by the board of trustees
of Borrower, of which, after giving effect to the transactions contemplated to
occur on the Effective Date, no shares will be issued and outstanding. As of the
Effective Date
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(with the exception of incentive stock options or other options granted or to be
granted to trustees, officers and employees of Borrower), (x) there will be no
outstanding Equity Rights with respect to Borrower and (y) there will be no
outstanding obligations of Borrower or any of its Subsidiaries to repurchase,
redeem, or otherwise acquire any shares of capital stock of Borrower nor will
there be any outstanding obligations of Borrower or any of its Subsidiaries to
make payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or equity value of
Borrower or any of its Subsidiaries.
8.18 Subsidiaries, Etc.
(a) Subsidiaries. Set forth in Schedule 8.18(a) is a complete
and correct list of all of the Subsidiaries of Borrower as of the date
hereof, and as of the Effective Date together with, for each such
Subsidiary, (i) the jurisdiction of organization of such Subsidiary,
(ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person
and the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Part A of Schedule 8.18(a),
(x) each of Borrower and its Subsidiaries owns, or will own on the
Effective Date, free and clear of Liens (other than Permitted Liens),
and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Part A of Schedule
8.18(a), (y) all of the issued and outstanding capital stock of each
such Person organized as a corporation is validly issued, fully paid
and nonassessable and (z) there are no outstanding Equity Rights with
respect to such Person not otherwise shown on Part A of Schedule
8.18(a).
(b) Investments. Set forth in Schedule 8.18(b) is a complete
and correct list of all Investments (other than Investments disclosed
in Schedule 8.18(b)) held by Borrower or any of its Subsidiaries in any
Person on the date hereof or that will be held on the Effective Date
and, for each such Investment, (x) the identity of the Person or
Persons holding such Investment and (y) the nature of such Investment.
Except as disclosed in Schedule 8.18(b), each of Borrower and its
Subsidiaries owns, free and clear of all Liens, all such Investments.
(c) Subsidiaries Not Subject to Certain Restrictions. None of
the Subsidiaries of Borrower is, on the date hereof, subject to any
indenture, agreement, instrument or other arrangement of the type
described in Section 9.15.
8.19 REIT Status. Borrower has not taken any action that would
prevent it from maintaining its qualification as a REIT for its tax year ended
December 31, 2001 or as of the Effective Date, from maintaining such
qualification at all times during the term of the Loan.
8.20 Real Estate Investment Trust Structure. Borrower has
heretofore delivered to Lender true and complete copies of its declaration of
trust and by-laws.
8.21 Ground Leases. Borrower has heretofore delivered to
Lender a true and complete copy of each Qualified Ground Lease which applies to
any Megaplex Property and such Qualified Ground Lease has not been further
amended, modified or terminated. Each
51
Qualified Ground Lease is in full force and effect and Borrower is not in
default thereunder. To the best of Borrower's knowledge, no ground lessor under
a Qualified Ground Lease is in default under any material covenant or obligation
set forth in any Qualified Ground Lease.
8.22 Leases. Each Megaplex Property and some Pad Properties
are subject to a Qualified Lease. Except for the Loews Lease, each Qualified
Lease (including each applicable third party guaranty) applicable to an
Individual Property is in full force and effect and there exists no default by
Borrower. No lessee under a Qualified Lease has exercised any termination option
under a Qualified Lease.
8.23 Westminster and Oakview Purchases. Prior to the Effective
Date, Borrower, Megaplex Owner or an affiliate of Borrower was and is a party to
valid, existing agreements, or in negotiations to enter into agreements, to
acquire (i) fee title to the Oakview Ground and (ii) the membership interests in
Westminster Holdings. Borrower has given Lender true and complete copies of said
agreements or the current draft of such agreements, as applicable, and all
instruments and modifications related thereto and, with respect to binding
agreements, there exists no default by Borrower or its Subsidiaries in
connection with their respective obligations thereunder, nor any condition
which, given notice or the passage of time, or both, would constitute a default
or event of default by any of Borrower or any of its Subsidiaries in connection
with their respective obligations thereunder. Neither Borrower nor any
Subsidiary has assigned any of its rights or interest in said agreements to any
party which is not Borrower or a Subsidiary.
8.24 Defaults. There is no Default by any Obligor of any of
the Loan Documents.
8.25 Absence of Liens. Except for Permitted Liens, the
Properties are not subject to any Liens.
8.26 No Materially Adverse Contracts, Etc. Neither Borrower
nor any of its Subsidiaries is subject to any declaration of trust, charter,
corporate, partnership or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is reasonably expected in the future to
have a Material Adverse Effect on the respective businesses, assets or financial
conditions of Borrower or any of its Subsidiaries. Obligors and the other
Subsidiaries of Borrower are not a party to any agreement, or otherwise bound by
any agreement which preclude or limits their ability to pay dividends, except as
set forth in the Archon Securitization Loan Documents and Megaplex Nine Loan
Documents. Neither Borrower nor any of its Subsidiaries is a party to any
contract or agreement that has or is expected, in the judgment of their
respective officers, to have any Material Adverse Effect on the respective
businesses of Borrower or any of its Subsidiaries.
8.27 No Material Obligation. Neither Megaplex Owner nor Archon
SPE Holdings have any material financial obligation under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Person is a party or by which such Person or its Properties is
otherwise bound, other than (a) obligations incurred in the ordinary course of
the operation of such Person's Properties and (b) obligations identified on
Schedule 8.16(a).
52
8.28 Title. Borrower (or its Subsidiaries) has good,
marketable and insurable fee simple title or leasehold title, as applicable, to
the real property comprising each Individual Property and good title to the
balance of such Individual Property, free and clear of all Liens whatsoever
except the Permitted Encumbrances, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. The Permitted
Encumbrances in the aggregate do not materially and adversely affect the value,
operation or use of the applicable Individual Property (as currently used) or
Borrower's ability to repay the Loan. Each Mortgage, when properly recorded in
the appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (a) a
valid, perfected first priority lien on the applicable Individual Property,
subject only to Permitted Encumbrances and the Liens created by the Loan
Documents and (b) perfected security interests in and to, and perfected
collateral assignments of, all personality (including the Leases), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. To the best of Borrower's
knowledge, there are no claims for payment for work, labor or materials
affecting the Properties which are or may become a lien prior to, or of equal
priority with, the Liens created by the Loan Documents, other than those claims
with respect to which insurance coverage is provided pursuant to the related
Title Insurance Policy. Except for Lender's interest under the Pledge Agreement,
Borrower is the holder, free and clear, of 100% of the issued and outstanding
common stock of Megaplex Owner. Megaplex Owner is the owner, free and clear, of
100% of the issued and outstanding stock in Archon SPE Holdings. Archon SPE
Holdings is the owner, free and clear, of 100% of the issued and outstanding
stock in Securitization Property Owner. Except for such stock owned in
Securitization Property Owner, Archon SPE Holdings does not own, and will not
own, any other asset or Property. The Pledge Agreement, with delivery of the
appropriate common stock, will create (a) a valid, perfected first priority lien
on the issued and outstanding stock of Megaplex Owner, and (b) perfected
security interests in and to such stock all in accordance with the terms of the
Pledge Agreement.
8.29 Solvency. Borrower (a) has not entered into the
transaction or executed the Note, this Agreement or any other Loan Documents
with the actual intent to hinder, delay or defraud any creditor and (b) received
reasonably equivalent value in exchange for its obligations under such Loan
Documents. Giving effect to the Loan, the fair saleable value of Borrower's
assets exceeds and will, immediately following the making of the Loan, exceed
Borrower's total liabilities, including subordinated, unliquidated, disputed and
contingent liabilities. The fair saleable value of Borrower's assets is and
will, immediately following the making of the Loan, be greater than Borrower's
probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Borrower's assets do not
and, immediately following the making of the Loan 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 debt and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such debt and liabilities as they mature
(taking into account the timing and amounts of cash to be received by Borrower
and the amounts to be payable on or in respect of obligations of Borrower).
Except as expressly disclosed to Lender in writing, no petition in bankruptcy
has been filed against Borrower or any Subsidiary in the last seven (7) years,
and neither Borrower nor any constituent Person in the last seven (7) years has
ever made an assignment for the benefit of creditors or taken advantage of any
insolvency act for
53
the benefit of debtors. Neither Borrower nor any of its Subsidiaries are
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
Borrower's assets or property, and Borrower has no knowledge of any Subsidiary
contemplating the filing of any such petition against it or Obligor or any
Subsidiary.
8.30 No Plan Assets. Borrower is not an "employee benefit
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of Borrower constitutes or will constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (a) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Code currently in effect, which prohibit or otherwise
restrict the transactions contemplated by this Loan Agreement.
8.31 Financial Information. All financial data, including any
statements of cash flow and income and operating expense, that have been
prepared by Borrower or any of its Affiliates or, to the best of knowledge of
Borrower, on behalf of Borrower and delivered to Lender in respect of the
Properties (i) are true, complete and correct in all material respects, (ii)
accurately represent the financial condition of the Properties as of the date of
such reports, and (iii) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with GAAP
throughout the periods covered, except as disclosed therein. Except for
Permitted Encumbrances, Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on any Individual
Property or the operation thereof as a megaplex movie theater, except as
referred to or reflected in said financial statements. Since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operations or business of Borrower from that set forth in
said financial statements. Borrower has no reason to believe or suspect that any
financial data provided by or on behalf of any tenant in respect of any of the
Properties and delivered to Lender is not true, complete and correct in all
material respects or does not accurately represent the financial condition of
the related Individual Property as of the date thereof.
8.32 Condemnation. No Condemnation or other proceeding has
been commenced or, to Borrower's best knowledge, is threatened or contemplated
with respect to all or any portion of any Individual Property or for the
relocation of roadways providing access to any Individual Property.
8.33 Utilities and Public Access. Each Individual Property has
rights of access to public ways and is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service such Individual Property for its
respective intended uses. All public utilities necessary or convenient to the
full use and enjoyment of each Individual Property are located either in the
public right-of-way abutting such Individual Property (which are connected so as
to serve such Individual Property without passing over other property) or in
recorded easements serving such Individual Property and such easements are set
forth in and insured by the Title Insurance
54
Policies. All roads necessary for the use of each Individual Property for their
current respective purposes have been completed and dedicated to public use and
accepted by all Governmental Authorities.
8.34 Not a Foreign Person. No Obligor or any other Subsidiary
of Borrower is a "foreign person" within the meaning of ss.1445(f)(3) of the
Code.
8.35 Separate Lots. Each Individual Property is comprised of
one (1) or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of such Individual
Property.
8.36 Assessments. To the best knowledge of Borrower, there are
no pending or proposed special or other assessments for public improvements or
otherwise affecting any Individual Property, nor are there any contemplated
improvements to any Individual Property that may result in such special or other
assessments.
8.37 Enforceability. The Loan Documents are not subject to any
right of rescission, set-off, counterclaim or defense by any Obligor, including
the defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable (subject to principles of equity and bankruptcy, insolvency and
other laws generally affecting creditors' rights and the enforcement of debtors'
obligations), and Obligors have not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.
8.38 No Prior Assignment. There are no prior assignments of
the Leases or any portion of the Rents due and payable or to become due and
payable which are presently outstanding.
8.39 Insurance. Borrower or the tenant under a Qualified Lease
has obtained and Borrower has delivered to Lender evidence of insurance
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. No claims have been made under any insurance policy evidenced by
such certificates and Borrower has not and, to Borrower's best of knowledge, no
other Person, has done, by act or omission, anything which would impair the
coverage of any such policy.
8.40 Use of Property. Each Megaplex Property is used
exclusively as a movie theater and for other appurtenant and related uses.
8.41 Certificate of Occupancy; Licenses. All certificates of
completion and occupancy permits and, to the best knowledge of Borrower, all
other certifications, permits, licenses and approvals, including any applicable
liquor license required for the legal use, occupancy and operation of each
Individual Property as a megaplex movie theater and all appurtenant and related
uses (collectively, the "Licenses"), have been obtained and are in full force
and effect. Borrower shall keep and maintain, or cause the applicable tenants to
keep and maintain, all licenses necessary for the operation of each Individual
Property as a megaplex movie theater and all appurtenant and related uses. The
use being made of each Individual Property is in conformity with the certificate
of occupancy issued for such Individual Property.
55
8.42 Flood Zone. None of the Improvements on any Individual
Property are located in an area as identified by the Federal Emergency
Management Agency as an area having special flood hazards and, if so located,
the flood insurance required pursuant to Section 9.05 is in full force and
effect with respect to each such Individual Property.
8.43 Physical Condition. To the best knowledge of Borrower,
each Individual Property, including all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects;
there exists no structural or other material defects or damages in any
Individual Property, whether latent or otherwise. Borrower has not received
notice from any insurance company or bonding company of any defects or
inadequacies in any Individual Property, or any part thereof, which would
adversely affect 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.
8.44 Boundaries. All the improvements located on an Individual
Property lie wholly within the boundaries and building restriction lines of such
Individual Property, and no improvements on adjoining properties encroach upon
such Individual Property, and no easements or other encumbrances upon the
applicable Individual Property encroach upon any of the improvements, so as to
affect the value or marketability of the applicable Individual Property except
those which are insured against by title insurance.
8.45 Leases. The Individual Properties are not subject to any
leases, licenses, or other possessory interests other than the Qualified Leases.
Borrower or the relevant Obligor is the owner and lessor of landlord's interest
in the Qualified Leases. No Person has any possessory interest in any Individual
Property or right to occupy the same except under and pursuant to the provisions
of the Qualified Leases. The Qualified Leases are in full force and effect and
there are no material defaults thereunder by either party and there are no
conditions that, with the passage of time or the giving of notice, or both,
would constitute defaults thereunder. No Rent (including security deposits) has
been paid more than one (1) month in advance of its due date. All work to be
performed by Borrower under each Qualified Lease has been performed as required
and has been accepted by the applicable tenant, and any payments, free rent,
partial rent, rebate of rent or other payments, credits, allowances or
abatements required to be given by Borrower to any tenant has already been
received by such tenant. There has been no prior sale, transfer or assignment,
hypothecation or pledge of any Qualified Lease or of the Rents received therein.
No tenant under a Qualified Lease has assigned its Lease or sublet all or any
portion of the premises demised thereby, no tenant under a Qualified Lease or
such other tenant holds its leased premises under assignment or sublease, nor
does anyone except the related tenant under a Qualified Lease or such other
tenant and its employees occupy such leased premises. No tenant under any
Qualified Lease has a right or option pursuant to such lease or otherwise to
purchase all or any part of the leased premises or the building of which the
leased premises are a part. No tenant under any Qualified Lease has any right or
option for additional space in the Improvements. To the best knowledge of
Borrower, no hazardous wastes or toxic substances, as defined by applicable
federal, state or local statutes, rules and regulations, have been disposed,
stored or treated by any tenant under any Lease on or about the leased premises
56
nor does Borrower have any knowledge of any tenant's intention to use its leased
premises for any activity which, directly or indirectly, involves the use,
generation, treatment, storage, disposal or transportation of any petroleum
product or any toxic or hazardous chemical, material, substance or waste.
8.46 Survey. The Survey for each Individual Property delivered
to Lender in connection with this Agreement has been prepared in accordance with
the provisions of Section 7.01(l) hereof, and does not fail to reflect any
material matter affecting such Individual Property or the title thereto.
8.47 No Broker. No broker's or finder's fees, commission or
similar compensation will be payable with respect to the Loan, the issuance of
the Note or any of the other transactions contemplated hereby or by any of the
Loan Documents based upon any broker or lender engaged by Borrower, any
Subsidiary Guarantor or any other Affiliate of Borrower. No other similar fees
or commissions will be payable by Borrower, or any other Affiliate of Borrower
for any other services rendered to Borrower, or any other Affiliate of Borrower
relating to the Loan transaction contemplated hereby.
8.48 Filing and Recording Taxes. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the transfer of the Properties to Borrower have
been paid. All mortgage, mortgage recording, stamp, intangible or other similar
tax required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Mortgages, been paid, and, under current
Legal Requirements, each of the Mortgages is enforceable in accordance with
their respective terms by Lender (or any subsequent holder thereof), subject to
principles of equity and bankruptcy, insolvency, fraudulent conveyance and other
laws generally applicable to creditors' rights and the enforcement of debtors'
obligations.
8.49 Special Purpose Entity/Separateness.
(a) Until the Loan and all other obligations of Borrower to
Lender under the Loan Documents have been paid in full, Borrower hereby
represents, warrants and covenants that both Megaplex Owner and Archon
SPE Holdings are, and Borrower shall cause both Megaplex Owner and
Archon SPE Holdings to be and shall continue to be, a Special Purpose
Entity. As used herein "Special Purpose Entity" means a corporation
which:
(i) is organized solely for the purpose of acquiring,
developing, owning, holding, selling, leasing, transferring,
exchanging, managing and operating the Properties owned by it
(directly or indirectly), entering into this Agreement with
Lender, refinancing the Properties owned by it (directly or
indirectly) in connection with a permitted repayment of the
Loan, and transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing;
57
(ii) is not engaged and will not engage in any
business unrelated to the acquisition, development, ownership,
management or operation of the Properties owned by it
(directly or indirectly);
(iii) does not have and will not have any assets
other than those related to the Properties owned by it
(directly or indirectly);
(iv) has not engaged, sought or consented to and will
not engage in, seek or consent to any dissolution, winding up,
liquidation, consolidation, merger, sale of all or
substantially all of its assets or amend its articles of
incorporation, certificate of formation with respect to the
matters set forth in this definition;
(v) has a certificate of incorporation or articles
that provide that such entity will not: (1) dissolve, merge,
liquidate, consolidate; (2) sell all or substantially all of
its assets; (3) engage in any other business activity, or
amend its organizational documents with respect to the matters
set forth in this definition without the consent of Lender; or
(4) without the affirmative vote of one (or two, if and when
required by Section 9.34 below) Independent Directors and of
all other directors of the corporation file a bankruptcy or
insolvency petition or otherwise institute insolvency
proceedings with respect to itself or to any other entity in
which it has a direct or indirect legal or beneficial
ownership interest;
(vi) is and will remain solvent and pay its debts and
liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become
due, and is maintaining and will maintain adequate capital for
the normal obligations reasonably foreseeable in a business of
its size and character and in light of its contemplated
business operations;
(vii) has not failed and will not fail to correct any
known misunderstanding regarding the separate identity of such
entity;
(viii) has maintained and will maintain its accounts;
books and records separate from any other Person and will file
its own tax returns, except to the extent that it is required
to file consolidated tax returns by law;
(ix) has maintained and will maintain its own
records, books, resolutions and agreements;
(x) other than as provided in the Cash Management
Agreement, (a) has not commingled and will not commingle its
funds or assets with those of any other Person and (b) has not
participated and will not participate in any cash management
system with any other Person;
(xi) has held and will hold its assets in its own
name;
(xii) has conducted and will conduct its business in
its own name;
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(xiii) has maintained and will maintain its financial
statements, accounting records and other entity documents
separate from any other Person and has not permitted and will
not permit its assets to be listed as assets on the financial
statement of any other entity except as required by GAAP;
provided, however, that any such consolidated financial
statement shall contain a note indicating that its separate
assets and liabilities are neither available to pay the debts
of the consolidated entity nor constitute obligations of the
consolidated entity;
(xiv) has paid and will pay its own liabilities and
expenses, including the salaries of its own employees, out of
its own funds and assets, and has maintained and will maintain
a sufficient number of employees in light of its contemplated
business operations;
(xv) has observed and will observe all corporate
formalities;
(xvi) has and will have no Indebtedness other than
(i) related to the Loan, (ii) liabilities incurred in the
ordinary course of business relating to the ownership and
operation of the Properties and the routine administration of
such corporation, in amounts not to exceed $250,000 which
liabilities are not more than sixty (60) days past the date
incurred, are not evidenced by a note and are paid when due,
and which amounts are normal and reasonable under the
circumstances, and (iii) such other liabilities that are
permitted pursuant to this Agreement;
(xvii) has not and will not assume or guarantee or
become obligated for the debts of any other Person or hold out
its credit as being available to satisfy the obligations of
any other Person except as existing or permitted pursuant to
this Agreement;
(xviii) has not and will not acquire obligations or
securities of its shareholders or any other Affiliate, except
as otherwise permitted by this Agreement;
(xix) has allocated and will allocate fairly and
reasonably any overhead expenses that are shared with any
Affiliate, including paying for shared office space and
services performed by any employee of an Affiliate;
(xx) maintains and uses and will maintain and use
separate stationery, invoices and checks bearing its name. The
stationery, invoices, and checks utilized by the Special
Purpose Entity or utilized to collect its funds or pay its
expenses shall bear its own name and shall not bear the name
of any other entity unless such entity is clearly designated
as being the Special Purpose Entity's agent;
(xxi) has not pledged and will not pledge its assets
for the benefit of any other Person except in favor of Lender
under the Loan Documents;
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(xxii) has held itself out and identified itself and
will hold itself out and identify itself as a separate and
distinct entity under its own name;
(xxiii) has maintained and will maintain its assets
in such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from
those of any other Person;
(xxiv) has not made and will not make loans to any
Person or hold evidence of indebtedness issued by any other
Person or entity (other than cash and investment-grade
securities issued by an entity that is not an Affiliate of or
subject to common ownership with such entity);
(xxv) has not identified and will not identify its
partners, members or shareholders, or any Affiliate of any of
them, as a division or part of it, and has not identified
itself and shall not identify itself as a division of any
other Person;
(xxvi) has not entered into or been a party to, and
will not enter into or be a party to, any transaction with its
shareholders or Affiliates except (A) in the ordinary course
of its business and on terms which are intrinsically fair,
commercially reasonable and are no less favorable to it than
would be obtained in a comparable arm's-length transaction
with an unrelated third party and (B) in connection with this
Agreement;
(xxvii) has not and will not have any obligation to,
and will not, indemnify its officers, directors or
shareholders, as the case may be, unless such an obligation is
fully subordinated to the Loan and will not constitute a claim
against it in the event that cash flow in excess of the amount
required to pay the Loan is insufficient to pay such
obligation;
(xxviii) shall consider the interests of its
creditors in connection with all corporate actions;
(xxix) does not and will not have its obligations
guaranteed by any Affiliate;
(xxx) has complied and will comply with all of the
terms and provisions contained in its organizational
documents. The statement of facts contained in its
organizational documents are true and correct and will remain
true and correct; and
(xxxi) has and shall maintain at least 1 Independent
Director and caused the articles of incorporation for such
Person to require at least 1 Independent Director.
(b) The representations, warranties and covenants set forth in
Section 8.49 shall survive for so long as any amount remains payable to
Lender under this Agreement or any other Loan Document.
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(c) All of the factual assumptions made in any insolvency
opinion, including any exhibits attached thereto, are true and correct
in all respects and any factual assumptions made in any subsequent
non-consolidation opinion delivered in connection with the Loan
Documents (an "Additional Insolvency Opinion"), including any exhibits
attached thereto, will have been and shall be true and correct in all
respects. Borrower has complied and will comply with all of the factual
assumptions made with respect to it in the Insolvency Opinion. Borrower
will have complied and will comply with all of the factual assumptions
made with respect to it in any Additional Insolvency Opinion. Each
entity other than Borrower with respect to which a factual assumption
shall be made in any Additional Insolvency Opinion will have complied
and will comply with all of the factual assumptions made with respect
to it in any Additional Insolvency Opinion.
8.50 Management of Properties. With the exception of the
Westminster Retail Property once acquired, each Individual Property is
self-managed by the Obligor which owns it (or by a subsidiary of such Obligor)
in so far as each Individual Property is leased to a tenant which is required to
perform typical property management functions (other than collection of Rents
under Qualified Leases) pursuant to the related Qualified Lease and no third
party property manager has been retained with respect to any Individual
Property.
8.51 Ground Leases. Borrower covenants, represents and
warrants to Lender with respect to the Qualified Ground Leases, if any, as
follows:
(a) Except as previously disclosed to Lender, no default has
occurred and is continuing under the terms of any Qualified Ground
Lease, and no event has occurred that, with the passage of time or
service of notice, or both, would constitute an event of default under
any Qualified Ground Lease.
(b) Each Qualified Ground Lease is in full force and effect.
(c) All rents, additional rents, percentage rents and all
other charges due and payable under each Qualified Ground Lease have
been fully paid.
(d) Subject to the Permitted Encumbrances, Megaplex Owner is
the owner of the entire lessee's interest in and under each Qualified
Ground Lease and has the right and authority under each Qualified
Ground Lease to execute this Agreement, the related Mortgage and other
related Loan Documents, and to encumber Megaplex Owner's interest in
the Qualified Ground Leases.
(e) Borrower shall, at its sole cost and expense, promptly and
timely perform and observe, or cause Megaplex Owner or the applicable
tenant under a Qualified Lease to promptly and timely perform and
observe, all the material terms, covenants and conditions required to
be performed and observed by Megaplex Owner as lessee under each
Qualified Ground Lease (including the payment of all rent, additional
rent, percentage rent and other charges required to be paid under such
Qualified Ground Lease).
(f) If Borrower or Megaplex Owner shall violate any of the
covenants specified above, then, subject to the applicable Qualified
Ground Lease terms, Borrower
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and Megaplex Owner each grant Lender the right (but not the obligation)
to cause the default or defaults under any Qualified Ground Lease to be
remedied and otherwise exercise any and all rights of Borrower or
Megaplex Owner under each Qualified Ground Lease, as may be necessary
to prevent or cure any default, provided such actions are necessary to
protect Lender's interest under this instrument, and Lender shall have
the right subject to the terms of the Qualified Ground Lease to enter
all or any portion of the Megaplex Property at such times and in such
manner as Lender deems necessary, to prevent or to cure any such
default.
(g) The actions or payments of Lender to cure any default by
Borrower under any Qualified Ground Lease shall not remove or waive, as
between any Obligor and Lender, the default that occurred under this
Agreement by virtue of the default by Borrower or Megaplex Owner under
any Qualified Ground Lease. All sums expended by Lender to cure any
such default shall be paid by Borrower to Lender, upon demand, with
interest on such sum at the rate set forth in the Note from the date
such sum is expended to and including the date the reimbursement
payment is made to the Lender. All such indebtedness shall be deemed to
be secured by the Mortgages and other Loan Documents.
(h) Borrower shall notify Lender promptly in writing after any
Obligor receives notice of the occurrence of any material default by
the lessor under any Qualified Ground Lease or the occurrence of any
event that, with the passage of time or service of notice, or both,
would constitute a material default by the lessor under any Qualified
Ground Lease, and the receipt by Borrower of any notice (written or
otherwise) from the lessor under any Qualified Ground Lease noting or
claiming the occurrence of any default by any Obligor under any
Qualified Ground Lease or the occurrence of any event that, with the
passage of time or service of notice, or both, would constitute a
default by any Obligor under any Qualified Ground Lease. Borrower shall
promptly deliver to Lender a copy of any such written notice of
default.
(i) Within thirty (30) days after written demand by Lender,
Borrower shall use reasonable efforts (other than payments to the
lessor) to obtain from the lessor under any Qualified Ground Lease and
furnish to Lender the estoppel certificate of such lessor stating the
date through which rent has been paid and whether or not there are any
defaults thereunder and specifying the nature of such claimed defaults,
if any.
(j) Subject to the applicable Qualified Ground Lease terms,
Borrower shall, and shall cause Megaplex Owner to, promptly execute,
acknowledge and deliver to Lender such instruments as may reasonably be
required to permit Lender to cure any default under any Qualified
Ground Lease or permit Lender to take such other action required to
enable Lender to cure or remedy the matter in default and preserve the
security interest of Lender under the Loan Documents with respect to
any Property which is the subject of a Qualified Ground Lease. Borrower
and Megaplex Owner each irrevocably appoint Lender as its true and
lawful attorney-in-fact to do, in its name or otherwise, any and all
acts and to execute any and all documents that are necessary to
preserve any rights of Borrower or Megaplex Owner under or with respect
to the Qualified Ground Leases, including the right to effectuate any
extension or renewal of any Qualified Ground Lease, or to preserve any
rights of Borrower whatsoever in respect
62
of any part of any Qualified Ground Lease (and the above powers granted
to Lender are coupled with an interest and shall be irrevocable).
(k) The generality of the provisions of this section relating
to the Qualified Ground Leases shall not be limited by other provisions
of this Agreement or the other Loan Documents setting forth particular
obligations of any Obligor that are also required of Borrower with
respect to the Qualified Ground Leases or the related Properties
subject to such Qualified Ground Lease.
(l) Borrower shall not, and shall not permit Megaplex Owner
to, without Lender's prior written consent, surrender, terminate,
forfeit, or suffer or permit the surrender, termination or forfeiture
of, or change, modify or amend in a material or adverse manner, any
Qualified Ground Lease. Consent to one amendment, change, agreement or
modification shall not be deemed to be a waiver of the right to require
consent to other, future or successive amendments, changes, agreements
or modifications. Any acquisition of any lessor's interest in any
Qualified Ground Lease by Borrower or any affiliate of Borrower shall
be accomplished by Borrower in such a manner so as to avoid a merger of
the interests of lessor and lessee in such Qualified Ground Lease,
unless consent to such merger is granted by Lender.
(m) Notwithstanding anything to the contrary contained in this
Agreement with respect to the Qualified Ground Leases:
(i) The lien of the related Mortgage attaches to all
of Megaplex Owner's rights and remedies at any time arising
under or pursuant to Subsection 365(h) of the Bankruptcy Code,
11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code"),
including all of Megaplex Owner's rights, as debtor, to remain
in possession of the related Property subject to such
Qualified Ground Lease.
(ii) Neither Borrower nor Megaplex Owner shall,
without Lender's written consent, elect to treat any Qualified
Ground Lease as terminated under subsection 365(h)(1) of the
Bankruptcy Code. Any such election made without Lender's prior
written consent shall be void.
(iii) As security for the Loan, Borrower and Megaplex
Owner unconditionally assign, transfer and set over to Lender
all of Borrower's claims and rights to the payment of damages
arising from any rejection by the lessor under any Qualified
Ground Lease under the Bankruptcy Code. Lender and Borrower
and Megaplex Owner shall proceed jointly or in the name of
Borrower or Megaplex Owner in respect of any claim, suit,
action or proceeding relating to the rejection of any
Qualified Ground Lease, including the right to file and
prosecute any proofs of claim, complaints, motions,
applications, notices and other documents in any case in
respect of lessor under the Bankruptcy Code. This assignment
constitutes a present, irrevocable and unconditional
assignment of the foregoing claims, rights and remedies, and
shall continue in effect until all of the Loan and other
obligations of Borrower to Lender under the Loan Documents
shall have been satisfied and discharged in full. Any amounts
received by Lender
63
or Borrower or Megaplex Owner as damages arising out of the
rejection of any Qualified Ground Lease as aforesaid shall be
applied first to all costs and expenses of Lender (including
attorneys' fees and costs) incurred in connection with the
exercise of any of its rights or remedies under this Section
8.51(m) and then in accordance with the other applicable
provisions of this Agreement.
(iv) If, pursuant to subsection 365(h) of the
Bankruptcy Code, Borrower or Megaplex Owner seeks to offset,
against the rent reserved in any Qualified Ground Lease, the
amount of any damages caused by the nonperformance by the
lessor of any of its obligations thereunder after the
rejection by lessor of any Qualified Ground Lease under the
Bankruptcy Code, then Borrower or Megaplex Owner shall not
effect any offset of the amounts so objected to by Lender. If
Lender has failed to object as aforesaid within ten (10) days
after notice from Borrower or Megaplex Owner in accordance
with the first sentence of this subsection, Borrower or
Megaplex Owner may proceed to offset the amounts set forth in
such notice.
(v) If any action, proceeding, motion or notice shall
be commenced or filed in respect of any lessor of all or any
part of the leasehold property in connection with any case
under the Bankruptcy Code, Lender, Borrower and Megaplex Owner
shall cooperatively conduct and control any such litigation
with counsel agreed upon between Borrower, Lender and Megaplex
Owner in connection with such litigation. Borrower and
Megaplex Owner shall, upon demand, pay to Lender all costs and
expenses (including reasonable attorneys' fees and costs)
actually paid or actually incurred by Lender in connection
with the cooperative prosecution or conduct of any such
proceedings. All such costs and expenses shall be secured by
the lien of the Mortgages and other Loan Documents.
(vi) Borrower and Megaplex Owner shall promptly,
after obtaining knowledge of such filing notify Lender orally
of any filing by or against any lessor under a Qualified
Ground Lease of a petition under the Bankruptcy Code. Borrower
and Megaplex Owner shall thereafter promptly give written
notice of such filing to Lender, setting forth any information
available to Borrower and Megaplex Owner as to the date of
such filing, the court in which such petition was filed, and
the relief sought in such filing. Borrower shall promptly
deliver to Lender any and all notices, summonses, pleadings,
applications and other documents received by Borrower in
connection with any such petition and any proceedings relating
to such petition.
(n) In addition to those events otherwise set forth in this
Agreement, the occurrence of any of the following events shall, at
Lender's option, constitute an Event of Default, as such term is
defined in Section 10 hereof and, upon the occurrence of an Event of
Default, Lender shall have all of the rights and remedies available to
it under this Agreement and the other Loan Documents:
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(i) A breach or default by Borrower under any
condition or obligation contained in any Qualified Ground
Lease that is not cured within any applicable cure period
provided therein;
(ii) The occurrence of any event or condition that
gives the lessor under any Qualified Ground Lease a right to
terminate or cancel such Qualified Ground Lease unless cured
by Borrower or Megaplex Owner (in case of nonpayment by a
tenant under the applicable Qualified Lease); or
(iii) Borrower's or Megaplex Owner's failure to
permit Lender and/or its representatives at all reasonable
times upon reasonable prior written notice, but subject to the
applicable Qualified Ground Lease and Qualified Lease
respective terms, to make investigation or examination
concerning Borrower's or Megaplex Owner's performance and
observance of the terms, covenants and conditions of any
Qualified Ground Lease.
(o) Borrower shall not, without Lender's written consent, fail
to exercise or cause Megaplex Owner to exercise any option or right to
renew or extend the term of any Qualified Ground Lease at least six (6)
months prior to the date of termination of any such option or right,
and shall give immediate written notice to Lender and shall execute,
acknowledge, deliver and record any document requested by Lender to
evidence the lien of the applicable Mortgage on such extended or
renewed lease term; provided, however, Borrower shall not be required
to exercise any particular such option or right to renew or extend to
the extent Borrower shall have received the prior written consent of
Lender (which consent may be withheld by Lender in its sole and
absolute discretion) allowing Borrower to forego exercising such option
or right to renew or extend. If Borrower shall fail to exercise or
cause Megaplex Owner to exercise any such option or right as aforesaid,
Lender may exercise the option or right as Megaplex Owner's and
Borrower's agent and attorney-in-fact as provided above in Lender's own
name or in the name of and on behalf of a nominee of Lender, as Lender
may determine in the exercise of its sole and absolute discretion.
(p) Upon the request of Lender, Borrower shall deposit with
Lender a copy of each fully executed Qualified Ground Lease certified
by Borrower as true and correct, as further security to Lender, until
all of the obligations are fully paid and performed.
(q) Neither Borrower nor Megaplex Owner shall waive, excuse,
condone or in any way release or discharge the lessor under any
Qualified Ground Lease of or from such lessor's material obligations,
covenant and/or conditions under such Qualified Ground Lease without
the prior written consent of Lender.
(r) To the best of Borrower's knowledge, as of the Effective
Date, there has been no event which would materially alter information
contained in those ground lessor estoppels delivered by Borrower to
Lender with respect to the Qualified Ground Leases prior to the date
hereof.
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8.52 Illegal Activity. No portion of any Individual Property
has been or will be purchased by Borrower or any of its Affiliates with proceeds
of any illegal activity.
8.53 No Change in Facts or Circumstances; Disclosure. All
information submitted by Borrower to Lender and to the best of knowledge of
Borrower, submitted on behalf of Borrower to Lender, including all financial
statements, rent rolls, reports, certificates and other documents submitted in
connection with the Loan or in satisfaction of the terms thereof and all
statements of fact made by Borrower in this Agreement or in any other Loan
Document, are accurate, complete and correct in all material respects. Lender
acknowledges Borrower has relied on Tenant Information, which Borrower
represents and warrants that Borrower has no knowledge that such Tenant
Information is incorrect. Except for the Loews Lease, there has been no material
adverse change in any condition, fact, circumstance or event that would make any
such information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially adversely affects or might materially
adversely affect the use, operation or value of any Individual Property or the
business operations or the financial condition of Borrower unless such change
has been fully disclosed in writing to Lender. Borrower has disclosed to Lender
all material facts and has not failed to disclose any material fact that could
cause any provided information or representation or warranty made herein to be
materially misleading.
8.54 Inventory. Borrower is the owner of all of the equipment
and assets at the Individual Properties or used in connection with the
Individual Properties, other than those owned by the tenant under a Qualified
Lease and Borrower shall not lease any equipment or assets other than as
permitted hereunder.
8.55 Survival of Representations. Borrower agrees that all of
the representations and warranties of Borrower set forth in this Agreement and
in the other Loan Documents shall survive for so long as any amount remains
owing to Lender under this Agreement or any of the other Loan Documents by
Borrower. All representations, warranties, covenants and agreements made in this
Agreement or in the other Loan Documents by Borrower shall be deemed to have
been relied upon by Lender notwithstanding any investigation heretofore or
hereafter made by Lender or on its behalf.
Section 9. Covenants of Borrower. Borrower covenants and agrees with
Lender that, so long as the Loan is outstanding and until payment in full of all
amounts payable by Borrower hereunder:
9.01 Financial Statements and Other Information. Borrower
shall deliver to Lender:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of Borrower, consolidated and consolidating
statements of income, retained earnings and cash flows of Borrower and
its Subsidiaries for such fiscal year and the related consolidated and
consolidating balance sheets of Borrower and its Subsidiaries as at the
end of such fiscal year, setting forth in each case in comparative form
the corresponding consolidated and consolidating figures for the
preceding fiscal year, and accompanied (i) in the case of such
consolidated statements and balance sheet of
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Borrower, by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that such consolidated financial statements fairly present the
consolidated financial condition and results of operations of Borrower
and its Subsidiaries as at the end of, and for, such fiscal year in
accordance with generally accepted accounting principles, and a
statement of such accountants to the effect that, in making the
examination necessary for their opinion, nothing came to their
attention that caused them to believe that Borrower was not in
compliance with Section 9.11, insofar as such Section relates to
accounting matters, and (ii) in the case of such consolidating
statements and balance sheets, by a certificate of a Financial Officer
of Borrower, which certificate shall state that such consolidating
financial statements fairly present the respective individual
unconsolidated financial condition and results of operations of
Borrower and of each of its Subsidiaries, in each case in accordance
with generally accepted accounting principles, consistently applied, as
at the end of, and for, such fiscal year;
(b) as soon as available and in any event within ninety (90)
days after the end of each fiscal year of Megaplex Owner, Archon SPE
Holdings and Securitized Property Owner unaudited statements of income,
retained earnings and cash flows for each of such Person for such year
and each of the Megaplex Properties, Pad Properties, and, collectively,
for the Securitized Properties for such year and unaudited balance
sheets for each of such Persons and such Individual Properties as of
the end of such year setting forth in each case the corresponding
figures for the preceding fiscal year accompanied by a certificate of a
financial officer of Borrower, stating that such statements and balance
sheet fairly present the financial conditions and results of operations
of the Properties in accordance with generally accepted accounting
principles consistently applied.
(c) as soon as available and in any event within 45 days after
the end of each quarterly fiscal period of each fiscal year of
Borrower, unaudited consolidated and consolidating statements of
income, retained earnings and cash flows of Borrower and its
Subsidiaries and separately for each of the Subsidiary Guarantors for
such period and for the period from the beginning of the respective
fiscal year to the end of such period, and the related consolidated and
consolidating balance sheets of Borrower and its Subsidiaries and
separately for each of the Subsidiary Guarantors as at the end of such
period, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the
corresponding periods in the preceding fiscal year (except that, in the
case of balance sheets, such comparison shall be to the last day of the
prior fiscal year), accompanied by a certificate of a Financial Officer
of Borrower or other Obligor, as applicable, which certificate shall
state that such consolidated financial statements fairly present the
consolidated financial condition and results of operations of the
respective Person(s), and such consolidating financial statements
fairly present the respective individual unconsolidated financial
condition and results of operations of Borrower and its Subsidiaries
and each of the Subsidiary Guarantors, in each case in accordance with
generally accepted accounting principles, consistently applied, as at
the end of, and for, such period (subject to normal year-end audit
adjustments);
(d) as soon as available and in any event within 90 days after
the end of each fiscal year of Borrower, statements of Net Operating
Income and outstanding
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Indebtedness as at the end of such fiscal year and for the fiscal year
then ended for Borrower, each of the Subsidiary Guarantors and each
Individual Property, in each case certified by a Financial Officer as
true and correct in all material respects;
(e) as soon as available and in any event within 45 days after
the end of each fiscal quarter of Borrower, unaudited statements of Net
Operating Income and outstanding Indebtedness as at the end of such
fiscal quarter and for the portion of the fiscal year then elapsed for
Borrower, each of the Subsidiary Guarantors and each Individual
Property, in each case certified by a Financial Officer as true and
correct in all material respects;
(f) concurrently with any delivery of financial statements
under clause (a) or (c) of this Section 9.01, and, in any event within
45 days of the end of each quarterly fiscal period of Borrower's fiscal
year, a certificate of a Financial Officer of Borrower (i) to the
effect that no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that Borrower has taken or
proposes to take with respect thereto) and (ii) setting forth in
reasonable detail the computations necessary to determine whether
Borrower is in compliance with Sections 9.07, 9.08, 9.09, 9.10 and 9.11
as of the end of the respective quarterly fiscal period or fiscal year;
(g) Borrower will furnish, or cause to be furnished, to Lender
on or before twenty (20) days after the end of each calendar month the
following items, accompanied by a certificate of Financial Officer of
Borrower stating that such items are true, correct, accurate, and
complete and fairly present the financial condition and results of the
operations of Borrower and, to the extent Borrower receives such
information from the tenants under Qualified Leases, the Individual
Properties on a combined basis as well as each Individual Property
(subject to normal year-end adjustments) as applicable: a rent
collection report and reports on theater ticket and other sales for the
calculation of percentage rents under the Qualified Leases to the
extent such information is available to Borrower pursuant to the terms
and provisions of the Qualified Leases. In addition, within 20 days of
the end of each month, Borrower shall provide Lender the Megaplex Debt
Service Coverage Ratio and the calculation thereof for each of the
immediately preceding months since the Original Effective Date (up to a
maximum of the most recent twelve (12) months) as of the last day of
each such month accompanied by an Officer's Certificate with respect
thereto. In addition, such certificate shall also be accompanied by a
certificate of Financial Officer of Borrower stating that the
representations and warranties of Borrower set forth in Section 8.49
are true and correct as of the date of such certificate and that there
are no trade payables for any Obligor outstanding for more than sixty
(60) days.
(h) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that
Borrower shall have filed with the Commission (or any Governmental
Authority substituted therefor) or any national securities exchange,
including each Form 8-K, Form 10-K and Form 10-Q filed with the
Commission;
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(i) promptly upon the mailing thereof to the shareholders of
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(j) contemporaneously with (or promptly after) the filing or
mailing thereof, copies of all material of a financial nature sent to
the holders of any Indebtedness of Borrower or any Subsidiary of
Borrower (other than the Loan) for borrowed money, to the extent that
the information or disclosure contained in such material refers to or
could reasonably be expected to have a Material Adverse Effect;
(k) from time to time such other information regarding the
financial condition, operations, business or prospects of Borrower, any
of its Subsidiaries, including any Obligor, the Real Estate Properties
and any unconsolidated subordinary or minority in interests (including
any Plan or Multiemployer Plan and any reports or other information
required to be filed under ERISA), or compliance with the terms of this
Agreement and the other Loan Documents, as Lender may reasonably
request; provided, however, Borrower's obligation to deliver any
information with respect to a lessee of any Real Estate Property shall
be limited to the information which Borrower or any other Obligor
actually has in its possession; and
(l) Promptly after receipt, or giving, as applicable, of each
notice, demand, request, certificate, report, financial statement or
other material correspondence given to, or received by, Borrower or any
of its subsidiaries, from any tenant or any Lender or any ground
lessors.
(m) Throughout the term of the Loan and until the Loan and all
obligations of Borrower to Lender have been paid in full, Borrower
shall operate and cause Megaplex Owner and all of its direct and
indirect subsidiaries to operate in accordance with an annual budget
which has been approved by Borrower and delivered to Lender (each, an
"APPROVED ANNUAL BUDGET"), except as permitted by subsection (n) below.
The Approved Annual Budget shall be revised (only with Lender's
approval) to include any new acquisitions by Megaplex Owner or its
Subsidiaries. For the partial year commencing on the date hereof, the
Approved Annual Budget is attached hereto as Exhibit I. For each
calendar year thereafter, Borrower shall deliver to Lender the Annual
Budget not later than sixty (60) days prior to the commencement of such
calendar year in form reasonably satisfactory to Lender. Until such
time as a new Approved Annual Budget is delivered to Lender, the most
recently Approved Annual Budget delivered to Lender shall apply.
Notwithstanding the foregoing, at such times and from time to time
while an Event of Default exists, (i) Lender shall have the right to
approve the then applicable Approved Annual Budget, and (ii) any
portion of the then applicable Approved Annual Budget disapproved by
Lender shall not be deemed a part of the Approved Annual Budget. Lender
shall give Borrower notice of any such disapproval.
(n) In the event that, Borrower or Megaplex Owner must incur
an extraordinary operating expense or capital expense not set forth in
the Approved Annual Budget (each an "EXTRAORDINARY EXPENSE"), then
Borrower shall promptly deliver to Lender a reasonably detailed
explanation of such Extraordinary Expense; provided that if such
Extraordinary Expense occurs during the occurrence of an Event of
Default such
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Extraordinary Expense must be approved in writing by Lender prior to
being paid or incurred.
(o) If requested by Lender, Borrower shall provide Lender,
promptly upon request, with any other or additional financial
statements, or financial, statistical or operating information, as
shall be reasonably requested by the Lender (to the extent any such
information regarding the operation of any Individual Property by a
tenant under a Qualified Lease is available to Borrower).
(p) Any reports, statements or other information required to
be delivered under this Agreement shall be delivered (i) in paper form,
(ii) on a diskette, and (iii) if requested by Lender and within the
capabilities of Borrower's data systems without change or modification
thereto, in electronic form and prepared using a Microsoft Word for
Windows or WordPerfect for Windows files (which files may be prepared
using a spreadsheet program and saved as word processing files).
Obligors agree that Lender may disclose information regarding the
Individual Properties and such Obligor that is provided to Lender
pursuant to this Section in connection with the Securitization to such
parties requesting such information in connection with such
Securitization.
(q) Notwithstanding the foregoing, provisions of Sections
9.01(a), (b), (c), (d) and (e) shall be suspended and waived by Lender
for so long as and to the extent Borrower is a reporting company under
the Securities Exchange Act of 1934, as amended, and copies of
Borrower's form 10-K, 10-Q and annual reports are delivered to Lender
promptly (and in any event within 10 business days) following their
filing with the Securities and Exchange Commission.
9.02 Existence; Compliance with Legal Requirements; Insurance.
Borrower shall do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its existence, rights, licenses, permits and
franchises and comply, or cause applicable tenants to comply, with all Legal
Requirements applicable to it and the Individual Properties. There shall never
be committed by Borrower (or any other Obligor) and, if known to Borrower,
Borrower shall not suffer or permit to be committed by any other Person in
occupancy of or involved with the operation or use of any of the Individual
Properties, any act or omission affording the federal government or any state or
local government the right of forfeiture as against any Individual Property or
any part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. Obligors shall at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of its property used
or useful in the conduct of its business and shall, or shall cause the tenants
under Qualified Leases to, keep the Individual Properties in good working order
and repair, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto,
subject to the terms of any applicable Qualified Lease, all as more fully
provided in any applicable mortgage. Borrower shall, or shall cause the
applicable tenant under Qualified Leases to, keep each Individual Property
insured at all times by financially sound and reputable insurers, to such extent
and against such risks, and Borrower shall, or shall cause the applicable tenant
under a Qualified Lease to, maintain liability and such other insurance, as is
more fully provided in this
70
Agreement. After prior written notice to Lender and subject to the terms of a
Qualified Lease (other than and specifically excluding the Loews Lease),
Borrower or the tenant under a Qualified Lease, at its own expense, may contest
by appropriate legal proceeding promptly initiated and conducted in good faith
and with due diligence, the validity of any Legal Requirement, the applicability
of any Legal Requirement to Borrower, the applicable tenant under a Qualified
Lease or any Individual Property or any alleged violation of any Legal
Requirement, provided that (i) no Default or Event of Default has occurred and
remains uncured; (ii) such contest is permitted under the provisions of any
mortgage or deed of trust applicable thereto; (iii) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any
instrument to which Borrower or any Obligor is subject and shall not constitute
a default thereunder and such proceeding shall be conducted in accordance with
all applicable statutes, laws and ordinances; (iv) no Individual Property nor
any part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (v) promptly upon final determination thereof,
Borrower shall, or shall cause the applicable Subsidiary Guarantor or tenant
under a Qualified Lease to, comply with any such Legal Requirement determined to
be valid or applicable or cure any violation of any Legal Requirement; (vi) such
proceeding shall suspend the enforcement of the contested Legal Requirement
against Borrower, the Subsidiary Guarantor, the applicable tenant, and any
Individual Property, as applicable; and (vii) Borrower shall furnish, or shall
cause the applicable tenant under a Qualified Lease to furnish, such security as
may be required in the proceeding, or as may be requested by Lender, to ensure
compliance with such Legal Requirement, together with all interest and penalties
payable in connection therewith. Lender may apply any such security, as
necessary to cause compliance with such Legal Requirement at any time when, in
the reasonable judgment of Lender, the validity, applicability or violation of
such Legal Requirement is finally established or any Individual Property (or any
part thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost.
9.03 Notices of Material Events. Borrower will furnish the
following to Lender in writing:
(a) promptly after Borrower knows or has reason to believe
that any Default has occurred, notice of such Default;
(b) prompt notice of all legal or arbitral proceedings, and of
all proceedings by or before any Governmental Authority or regulatory
authority or agency, and of any material development in respect of such
legal or other proceedings, affecting Borrower, any of its Subsidiaries
or the Individual Properties, except proceedings that, if adversely
determined, would not (either individually or in the aggregate) have a
Material Adverse Effect;
(c) as soon as possible, and in any event within ten days
after Borrower knows or has reason to believe that any ERISA Event has
occurred or exists with respect to any Plan of Borrower, notice of the
occurrence of such ERISA Event and a copy of any report or notice
required to be filed with or given to the PBGC by Borrower or an ERISA
Affiliate with respect to such ERISA Event;
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(d) prompt notice of (i) any Environmental Defect with respect
to an Individual Property, (ii) the assertion of any Environmental
Claim by any Person against, or with respect to the activities of,
Borrower, any of its Subsidiaries or any Individual Property and (iii)
any alleged violation of or non-compliance with any Environmental Laws
or any permits, licenses or authorizations, other than, in the case of
clause (ii) or (iii), any Environmental Claim or alleged violation
that, if adversely determined, would not (either individually or in the
aggregate) have a Material Adverse Effect, including copies of any
related Environmental Report;
(e) prompt notice of any default under any Qualified Lease or
Qualified Ground Lease;
(f) prompt notice of any other development that results in, or
could reasonably be expected to result in, a Material Adverse Effect;
and
(g) notice of any acquisition of a Real Estate Property by
Borrower or any of its Subsidiaries within 15 days after such
acquisition; and, at Lender's request, Borrower shall deliver to
Lender, with respect to such Real Estate Property, a brief description
and recent photograph, a rent roll summary, a pro forma and historic
(if available) income statement and a summary of the key business terms
of such acquisition.
Each notice delivered under this Section 9.03 shall be accompanied by a
statement of a Financial Officer or other executive officer of Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
9.04 Existence, Etc.
(a) Borrower will, and will cause each of its Subsidiaries to:
(i) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(provided that nothing in this Section 9.04 shall prohibit any
transaction expressly permitted under Section 9.06);
(ii) comply with the requirements of all applicable
laws, rules, regulations and orders of any Governmental
Authority or regulatory authorities if failure to comply with
such requirements could (either individually or in the
aggregate) have a Material Adverse Effect;
(iii) subject to the applicable Qualified Lease
(other than and specifically excluding the Loews Lease), pay
and discharge, or cause to be paid or discharged by the
tenant, all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of
its Property prior to the date on which interest or penalties
attach thereto, except for any such tax, assessment, charge or
levy the payment of which is being contested in good faith and
by proper proceedings and against which adequate reserves are
being maintained; provided that Borrower shall pay, or cause
the tenant under a Qualified Lease to pay, all such taxes,
assessments, charges and levies being
72
contested prior to the consummation of any proceedings to
foreclose any Lien that may have attached as security
therefor;
(iv) maintain, or cause to be maintained, all of its
Individual Properties used or useful in its business in good
working order and condition, ordinary wear and tear excepted;
(v) keep adequate records and books of account, in
which complete entries will be made in accordance with
generally accepted accounting principles consistently applied;
and
(vi) subject to the terms of any applicable Qualified
Lease, permit representatives of Lender, during normal
business hours, to examine, copy and make extracts from its
books and records, to inspect any of the Individual
Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by Lender.
(b) Borrower shall give Lender notice in the event it does not
maintain its status as a REIT or takes any action which could lead to
its disqualification as a REIT.
(c) Borrower shall give Lender notice in the event it does not
continue to be listed on one of the major United States stock
exchanges, including NASDAQ.
9.05 Insurance.
(a) Without limitation of the provisions of Section 9.05(b),
Borrower will, and will cause each of its Subsidiaries to, maintain
insurance with insurance companies rated A- or better, with respect to
risks of a character usually maintained by corporations engaged in the
same or similar business similarly situated, against loss, damage and
liability of the kinds and in the amounts customarily maintained by
such corporations. Borrower shall, prior to the expiration of any
insurance required hereunder, deliver to the Lender evidence of
insurance evidencing the existence of all such insurance, such
certificates to be in form and substance reasonably satisfactory to
Lender, it being agreed that such insurance and certificates may be
maintained by the tenant under its applicable Qualified Lease.
(b) Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Individual Owned Properties
providing at least the following coverages:
(i) property insurance for each Individual Property,
will be maintained by the tenant under each Qualified Lease,
at Tenant's sole cost and expense, for the mutual benefit of
such tenant, Borrower and Lender. The requirements as
specified in the Qualified Leases will be the required
coverage under this Agreement for the property to which such
Qualified Lease relates. Borrower and Lender agree that the
coverage in place as of the Original Effective Date for
Qualified Leases on the Megaplex Properties are acceptable to
Lender and meet the requirements of this Agreement.
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(ii) at all times during which structural
construction, repairs or alterations are being made with
respect to the Improvements, and only if the Individual
Property coverage form does not otherwise apply, (A) owner's
contingent or protective liability insurance, otherwise known
as Owner Contractors Protective Liability covering claims not
covered by or under the terms or provisions of the above
mentioned commercial general liability insurance policy; and
(B) the insurance provided for in subsection (i) above written
in a so-called builder's risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against
pursuant to subsection (i) above, (3) including permission to
occupy the Individual Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
(iii) commercial general liability insurance against
claims for personal injury, bodily injury, death or property
damage occurring upon, in or about the Individual Property,
such insurance (A) to be on the so-called "occurrence" form
with a combined limit of not less than Two Million Dollars
($2,000,000) in the aggregate and One Million Dollars
($1,000,000) per occurrence; (B) to continue at not less than
the aforesaid limit until required to be changed by Lender in
writing by reason of changed economic conditions making such
protection inadequate; and (C) to cover at least the following
hazards: (1) premises and operations; (2) products and
completed operations on an "if any" basis; (3) independent
contractors; (4) blanket contractual liability for all legal
contracts; and (5) contractual liability covering the
indemnities contained in Article 9 of the Mortgages to the
extent the same is available;
(iv) automobile liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles
containing minimum limits per occurrence of One Million
Dollars ($1,000,000);
(v) worker's compensation and employee's liability
insurance subject to the worker's compensation laws of the
applicable state;
(vi) umbrella liability insurance in an amount not
less than Fifty Million Dollars ($50,000,000) per occurrence
on terms consistent with the commercial general liability
insurance policy required under subsection (iii) above
including supplemental coverage for commercial general
liability, employer's liability, and automobile liability.
(c) All insurance provided for in Section 9.05(b) shall be
obtained under valid and enforceable policies (collectively, the
"Policies" or in the singular, the "Policy"), and shall be subject to
the approval of Lender as to insurance companies, amounts, deductibles,
loss payees and insureds. The Policies shall be issued by financially
sound and responsible insurance companies authorized to do business in
the State and having a financial strength rating of not less than the
better of the rating specified in Section 9.04(a) and "A2" or better by
the rating agencies selected by Lender. The Policies described in
Section 9.04(b) shall designate Lender as additional insured on all
policies of liability insurance, and shall include a loss payable
clause and standard non-contributing
74
mortgagee clause in favor of Lender providing that any loss thereunder
shall be payable to Lender. Not less than ten (10) days prior to the
expiration dates of the Policies theretofore furnished to Lender,
Borrower shall cause certificates of insurance evidencing the Policies
specified in Section 9.05(b) accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the "Insurance
Premiums"), to be delivered by Borrower to Lender.
(d) Any blanket insurance Policy shall specifically allocate
to the Individual Property the amount of coverage from time to time
required hereunder and shall otherwise provide the same protection as
would a separate Policy insuring only the Properties in compliance with
the provisions of Section 9.05(b).
(e) All Policies provided for in Section 9.05(b) shall contain
clauses or endorsements to the effect that:
(i) no act or negligence of any Obligor, or anyone
acting for Obligor, or of any tenant or occupant, or failure
to comply with the provisions of any Policy, which might
otherwise result in a forfeiture of the insurance or any part
thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is
concerned;
(ii) the Policy shall not be materially changed
(other than to increase the coverage provided thereby) or
canceled without at least thirty (30) days' written notice to
Lender and any other party named therein as an additional
insured;
(iii) the issuers thereof shall give written notice
to Lender if the Policy has not been renewed thirty (30) days
prior to its expiration; and
(iv) Lender shall not be liable for any Insurance
Premiums thereon or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and
effect, Lender shall have the right, without notice to any Obligor, to
take such action as Lender deems necessary to protect its interest in
the Individual Properties, including the obtaining of such insurance
coverage as Lender in its sole discretion deems appropriate. All
premiums incurred by Lender in connection with such action or in
obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and, until paid, shall be secured by the
Mortgages and shall bear interest at the Default Rate.
9.06 Prohibition of Fundamental Changes.
(a) Borrower will not, nor will it permit any Subsidiary
Guarantor or the Securitization Property Owner to, enter into any
transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution).
Notwithstanding the foregoing provisions of this Section 9.06:
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(i) any Subsidiary of Borrower (other than any
Subsidiary Guarantor or Securitized Property Owner) may be
merged or consolidated with or into: (i) Borrower if Borrower
shall be the continuing or surviving entity or (ii) any other
such Subsidiary; provided that if any such transaction shall
be between a Subsidiary and a Wholly Owned Subsidiary, the
Wholly Owned Subsidiary shall be the continuing or surviving
entity;
(ii) any Subsidiary (other than any Subsidiary
Guarantor or Securitized Property Owner) of Borrower may sell,
lease, transfer or otherwise dispose of any or all of its
Property (upon voluntary liquidation or otherwise) to
Borrower; and
(iii) Borrower may merge or consolidate with any
other Person in connection with the acquisition of Real Estate
Properties if (i) Borrower is the surviving entity and, (ii)
after giving effect thereto no Default would exist hereunder,
provided that prior to such merger or consolidation, Borrower
shall provide to Lender a certificate signed by a Financial
Officer setting forth in reasonable detail computations
evidencing compliance with the covenants contained in Sections
9.07, 9.08, 9.09, 9.10 and 9.11 and certifying that no Default
has occurred and is continuing, or would occur and be
continuing after giving effect to such merger or consolidation
and all liabilities, fixed or contingent, pursuant thereto.
(b) Borrower will not, nor will it permit any of its
Subsidiary Guarantors or Securitization Property Owner to, dispose of
any Real Estate Properties in any single transaction having a sales
price (net of any Indebtedness secured by a Lien on such Real Estate
Properties, if any) in excess of $50,000,000 or grant a Lien to secure
Indebtedness in any single transaction in an amount in excess of
$25,000,000 (except as permitted in Section 7.03) unless, in each such
event, Borrower has provided to the Lender a certificate signed by a
Financial Officer setting forth in reasonable detail computations
evidencing compliance with the covenants contained in Sections 9.07,
9.08, 9.09, 9.10, and 9.11, and certifying that no Default has occurred
and is continuing, or would occur and be continuing after giving effect
to such proposed sale or Lien, taking into account any Loan to be
prepaid from the proceeds of such transaction. Furthermore, Borrower
will not permit Obligors to dispose or permit the disposition of all or
any part of the Individual Properties, or any direct or indirect
interest therein provided, however, (a) a Megaplex Property may be
replaced pursuant to Section 9.35, and (b) a Pad Property may be sold
pursuant to Section 2.10.
9.07 Liens.
(a) Borrower will not, nor will it permit any other Obligor
to, create, incur, assume or suffer to exist any Lien upon any of the
Individual Properties, whether now owned or hereafter acquired, except
the following (collectively, "PERMITTED LIENS"):
(i) Liens imposed by any Governmental Authority for
taxes, assessments or charges not yet due or that are being
contested in good faith and by appropriate proceedings if,
unless the amount thereof is not material with
76
respect to it or its financial condition, adequate reserves
with respect thereto are maintained on the books of Borrower
or the affected Subsidiaries, as the case may be, in
accordance with GAAP;
(ii) carriers', warehousemen's, mechanics' (other
than mechanic's liens shown in the title policies and title
reports listed on Schedule VIII, which shall be deemed
Permitted Liens), materialmen's, repairmen's or other like
Liens arising in the ordinary course of business that are not
overdue for a period of more than 60 days or that are being
contested in good faith and by appropriate proceedings and
Liens securing judgments but only to the extent for an amount
and for a period not resulting in an Event of Default under
clause (k) of Section 10;
(iii) pledges or deposits under worker's
compensation, unemployment insurance and other social security
legislation;
(iv) deposits to secure the performance of bids,
trade contracts (other than for Indebtedness), leases,
statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the
ordinary course of business;
(v) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of the Individual
Property or minor imperfections in title thereto or other
encumbrances listed in title reports approved by Lender that,
in the aggregate, are not material in amount, and that do not
in any case materially detract from the value of the
Individual Property subject thereto or interfere with the
ordinary conduct of the business of Borrower or any of its
Subsidiaries;
(vi) Qualified Leases permitted under the terms of
this Agreement;
(vii) Qualified Ground Leases permitted under the
terms of this Agreement;
(viii) Any lien existing on the Effective Date and
set forth on Schedule 8.16(b) hereto; and
(ix) Any lien arising as permitted by Section
7.03(c), Section 7.06, Section 9.08(c) or Section 9.08(d)
below.
(b) Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its other Property, whether now owned or hereafter acquired,
which would cause a Default hereunder or under any other agreements to
which Borrower or any of its Subsidiaries are parties or by which any
of them or any of their respective assets is bound.
77
9.08 Indebtedness. Borrower will not permit any Subsidiary
Guarantor or Securitization Property Owner to, create, incur or suffer to exist
any Indebtedness except:
(a) Indebtedness to Lender hereunder;
(b) Recourse Indebtedness for (i) dividends declared but not
yet paid, (ii) trade payables in the ordinary course of business so
long a such trade payables are payable within 90 days after the date of
the original invoice and (iii) equipment leases either having rental of
no more than $500,000 in the aggregate which (x) is unsecured by a Lien
and (y) does not otherwise cause a Default under the terms of this
Agreement or any other agreement to which Borrower or a Subsidiary is a
party or by which it or its assets is otherwise bound or equipment
leases included as part of the Woodridge FF&E Plan;
(c) Subsidiaries other than the Subsidiary Guarantors and
other than Securitized Property Owner may incur Non-Recourse
Indebtedness or Recourse Indebtedness which does not otherwise cause a
Default under the terms of this Agreement or any other agreement to
which Borrower or its Subsidiaries or by which any of such Persons or
such Person's assets may be bound; and
(d) any Indebtedness associated with an acquisition in
accordance with either Section 7.03(ii)(a) or 7.03(c) alone, or
Sections 9.24 and any of 7.03(ii)(a), 7.03(c) or 7.06.
9.09 Investments. Megaplex Owner will not, nor will it permit
any of its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) Investments outstanding on the date hereof and identified
in Schedule 8.18(b);
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by Borrower and its Subsidiaries in Borrower
and its Subsidiaries for Permitted Uses;
(e) Subject to the provisions of Section 9.24, Investments in
Real Estate Properties (including investments in down REIT's and to
joint ventures formed to hold or develop properties);
(f) Hedging Agreements required under Section 9.12;
(g) The Cap Agreement; or
(h) The acquisition of the Ground Leases.
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9.10 Restricted Payments. Borrower will not, nor will it
permit any of its Subsidiaries to, as determined on an aggregate annual basis,
declare or make any Restricted Payment (a) in excess of 90% of Funds Available
for Distribution in any year or (b) during any period when an Event of Default
shall have occurred and be continuing. Notwithstanding the foregoing sentence,
Borrower's Subsidiaries may distribute up to 100% of FFO to Borrower (or a pro
rata portion thereof based on Borrower's ownership interest in its respective
Subsidiaries). Notwithstanding the foregoing, Borrower and its Subsidiaries
shall have the right to make any Restricted Payment required to enable Borrower
to maintain its REIT status.
9.11 Certain Financial Covenants.
(a) Minimum Fixed Charges Ratio. As at the end of each fiscal
quarter, the Fixed Charges Ratio shall not be less than 1.75 to 1.
(b) Minimum Interest Coverage Ratio. As at the end of each
fiscal quarter, the Interest Coverage Ratio shall not be less than 2.0
to 1.
9.12 Tranche C Required Acquisitions. On or prior to the date
which is (i) 60 days following the Effective Date, Borrower shall cause the
acquisitions required by Section 2.04B(a) to occur so as to permit Borrower to
receive an aggregate of $4,000,000 of advances of Tranche C.
9.13 Lines of Business. Borrower will not, nor will it permit
any of its Subsidiaries to, engage to any substantial extent in any line or
lines of business activity other than the businesses contemplated by the
definition of Permitted Uses and Investments permitted under Section 9.09.
9.14 Transactions with Affiliates. Except as expressly
permitted by this Agreement, Borrower will not permit any Subsidiary Guarantors
or the Securitization Property Owner to, directly or indirectly: (a) make any
Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any Property to an Affiliate; (c) merge into or consolidate with or
purchase or acquire Property from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including Guarantees and assumptions of obligations of an Affiliate, but
excluding investments in Subsidiaries; provided that (x) any Affiliate who is an
individual may serve as a director, trustee, officer or employee of Borrower or
any of its Subsidiaries and receive reasonable compensation for his or her
services in such capacity, (y) a Subsidiary, other than the Subsidiary
Guarantors and other than the Securitization Property Owner, may convey a Real
Property to a wholly owned Subsidiary of Borrower in connection with
Indebtedness incurred by the transferee Subsidiary to the extent such
Non-Recourse Indebtedness is permitted under this Agreement, and (z) Borrower
may, in connection with any such permitted Indebtedness of a Subsidiary agree to
indemnify the applicable lender in connection with such Non-Recourse
Indebtedness with respect to customary environmental indemnities and customary
carve-outs for Non-Recourse Indebtedness.
9.15 Restrictive Agreements. Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of Borrower or
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any Subsidiary to create, incur or permit to exist any Lien upon any of its Real
Estate Properties, or (b) the ability of any Subsidiary to pay dividends or
other distributions with respect to any shares of its capital stock or to make
or repay loans or advances to Borrower or any other Subsidiary or to Guarantee
Indebtedness of Borrower or any other Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
this Agreement, (ii) clause (a) of the foregoing shall not apply to restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to the
property or assets securing such Indebtedness and (iii) clause (a) of the
foregoing shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof. Borrower will cause Subsidiary Guarantors to
make timely sufficient distributions and dividends to pay the Indebtedness
incurred pursuant to the Loan Document as and when due and payable.
9.16 Use of Proceeds. Borrower will use the proceeds of the
Loan hereunder solely for (a) working capital purposes, (b) the acquisition,
leasing, development and expansion of Individual Properties for Permitted Uses,
(c) to finance the payment of fees, expenses, and other costs payable in
connection with this Agreement, and (d) Investments permitted under Section 9.09
and uses ancillary to any of the foregoing, all of the foregoing subject,
however, to the terms and conditions of this Agreement (including Section 9.24
below). No part of the proceeds of any Loan will be used, directly or
indirectly, for any purpose that entails a violation of Regulations T, U and X,
the 1933 Act, the Securities Exchange Act of 1934 or the SEC Rules and
Regulations. To the extent that proceeds are used, directly or indirectly, to
acquire Individual Properties, Borrower shall (subject to the provisions of
Section 7.03) cause Lender to obtain a Lien in its favor on such Individual
Properties or upon equity or debt instruments pertaining to the Persons in which
an Investment is made. Lender will, in connection therewith, obtain all
mortgages, pledges, consents, estoppels, subordination agreements and other
information and rights as Lender currently has, or is permitted to have, on
comparable Property in connection with the Loan and security therefor, all
provided by, or at the expense of, Borrower.
9.17 Ownership of Subsidiaries.
(a) Ownership of Subsidiaries. Borrower will, and will cause
each of its Subsidiaries to, take such action from time to time as
shall be necessary to ensure that each of its Subsidiaries remains a
Subsidiary.
(b) Certain Restrictions. Borrower will not permit Megaplex
Owner or any of Megaplex Owner's Subsidiaries to enter into, after the
date hereof, any indenture, agreement, instrument or other arrangement
that, directly or indirectly, prohibits or restrains, or has the effect
of prohibiting or restraining, or imposes materially adverse conditions
upon, the incurrence or payment of Indebtedness, the granting of Liens,
the declaration or payment of dividends, the making of loans, advances
or Investments or the sale, assignment, transfer or other disposition
of Property.
9.18 Modifications of Certain Documents. No Obligor will
consent to (or permit Securitized Property Owner to enter into) any
modification, supplement or waiver of any of the provisions of (a) any Loan
Document; (b) such Person's declaration of trust, by-laws or
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other charter documents if, in the case of this clause (b) such changes would
materially and adversely affect any of the rights of Lender under any Loan
Document, or (c) the documents evidencing or securing Indebtedness evidenced by
the Megaplex Nine Loan Documents or Archon Securitized Loan Documents, without,
in the case of any of clause (a), (b) or (c), the prior consent of Lender.
9.19 Further Assurances. Borrower shall, and shall cause each
Obligor to, cooperate with Lender and will execute any and all further
documents, agreements and instruments, and take all such further actions which
may be required under any applicable law, or which Lender may reasonably
request, to effectuate the transactions contemplated by the Loan Documents.
9.20 Environmental Compliance.
(a) Borrower covenants and agrees that (i) the uses and
operations on or of the Real Estate Properties, shall be in material
compliance with all Environmental Laws and permits issued pursuant
thereto, (ii) it shall use diligent efforts to enforce the provisions
of each Qualified Lease relative to compliance with all applicable
Environmental Laws and permits and (iii) in the event that any
Hazardous Materials are present on, under or emanate from the Real
Estate Properties, or migrate onto or into the Real Estate Properties,
Borrower shall, if required by any Governmental Authority, cause (or
use diligent efforts to cause the lessee under any Qualified Lease to
cause) the Remediation of such Hazardous Materials, in accordance with
applicable Environmental Laws.
(b) If Lender has reasonable grounds to believe that an
Environmental Defect has occurred with respect to any one or more of
the Individual Properties which would cost in excess of $1,000,000 to
remediate, whether or not a Default shall have occurred, Lender may,
from time to time, for the purpose of assessing and determining whether
an Environmental Defect has in fact occurred, cause Borrower to obtain
one or more environmental assessments or audits of such Individual
Property prepared by a hydrogeologist, an independent engineer or other
qualified consultant or expert approved by Lender to (i) evaluate or
confirm (A) whether any Hazardous Materials are present in the soil or
water at such Individual Property and (B) whether the use and operation
of such Individual Property including any and all storage areas,
storage tanks, drains, dry wells and leaching areas, and (ii) if and to
the extent reasonable, appropriate and required pursuant to applicable
Environmental Laws, the taking of soil samples, surface water samples
and ground water samples, as well as such other investigations or
analyses as Lender reasonably deems appropriate. All such environmental
assessments shall be at the sole cost and expense of Borrower.
9.21 Qualified Ground Leases.
(a) Borrower shall, or shall cause the applicable Obligor or
tenant to, (i) pay or cause to be paid all rents, additional rents and
other sums required to be paid by any Obligor, as tenant under and
pursuant to the provisions of any Qualified Ground Lease related to an
Individual Property on or before the date on which such rent or other
charge becomes overdue, (ii) diligently perform and observe all of the
terms, covenants and
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conditions of any such Qualified Ground Lease on the part of any
Obligor, as tenant thereunder, to be performed and observed prior to
the expiration of any applicable grace period therein provided, (iii)
promptly notify Lender of the giving of any notice by the landlord
under any such Qualified Ground Lease to any Obligor of any default by
such Obligor, as tenant thereunder, to be performed or observed and
promptly deliver to Lender a true copy of each such notice, (iv) take
all necessary action to prevent the termination of any such Qualified
Ground Lease and (v) enforce each material covenant or obligation of
any such Qualified Ground Lease in accordance with its terms.
(b) Borrower shall not, and shall not permit any Obligor to,
surrender the leasehold estate created by any Qualified Ground Lease
relating to an Individual Property, or terminate or cancel such
Qualified Ground Lease except to the extent permitted pursuant to the
Loan Documents. Borrower shall not, and shall not permit any Obligor
to, without the prior written consent of Lender, modify, change,
supplement, alter or amend such Qualified Ground Lease, in any respect,
either orally or in writing, in any manner; provided, however, Lender
shall not unreasonably withhold or delay Lender's consent to any
proposed modification, change, supplementation, alteration or amendment
provided same does not in any manner adversely affect the Lender or in
any manner adversely impair the collateral value of the leasehold
created by such Qualified Ground Lease.
9.22 Qualified Leases.
(a) Borrower shall, and shall cause each Obligor to, (i)
promptly perform and fulfill, or cause to be performed and fulfilled,
each and every material term and provision of such Obligor's
obligations under any Qualified Lease relating to an Individual
Property, (ii) give to Lender a duplicate notice of default of each
default by any lessee under any such Qualified Lease, (iii) cause each
Qualified Lease executed after the date hereof to require the lessee
thereunder to agree to give to Lender written notice of each and every
notice of default given by such lessee to such Obligor under its
respective Qualified Lease and (iv) enforce each material covenant or
obligation of any such Qualified Lease in accordance with its terms.
(b) Borrower shall not, and shall prohibit each Obligor from,
performing or failing to perform any act which would (i) amend, extend,
cancel, abridge, or otherwise modify, or accept surrender of, or renew,
any Qualified Lease relating to an Individual Property (except with
respect to the Loews Lease and any Qualified Lease at the Westminster
Retail Property for less than 4,000 rentable square feet), now existing
or hereafter made, in such a manner as to cause same to be materially
changed from the terms and conditions of the Qualified Leases existing
as of the Original Effective Date or the terms and conditions when
Lender approves (or did subsequently approve) such Qualified Lease, as
applicable, without the consent of Lender, which consent shall not be
unreasonably withheld or delayed, (ii) assign, transfer, pledge,
subordinate or mortgage any such Qualified Lease (other than the
Qualified Lease for the Westminster Theatre Property) or any rent due
thereunder, (iii) waive, excuse, release or condone any material
nonperformance of any covenant of any such Qualified Lease by any
lessee thereunder or
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(iv) release any guarantor from its obligations under any guaranty of
any such Qualified Lease.
9.23 Manner of Making Payments; Cash Management.
(a) Deposits into Lockbox Account. Except to the extent
specifically provided to the contrary as set forth in Section 7.06,
Borrower shall cause all Rents from the Pad Properties and the Megaplex
Properties to be deposited into the Lockbox Account in accordance with
the Cash Management Agreement. Without limitation of the foregoing,
Borrower shall (a) deliver irrevocable written instructions to all
tenants under leases of the Pad Properties and Megaplex Properties
(except to the extent specifically provided to the contrary as set
forth in Section 7.06) to deliver all Rents payable thereunder directly
to the Lockbox Account, and (b) deposit all amounts received by
Borrower, and cause all deposits received by Megaplex Owner,
constituting Rents or other revenue of any kind from the Pad Properties
and Megaplex Properties into the Lockbox Account within one (1)
Business Day of receipt thereof. Additionally, (i) Borrower shall cause
all distributions and payments otherwise payable to or for the account
of Archon SPE Holdings from Securitization Property Owner or the
Securitized Properties, and (ii) upon Megaplex Owner's acquisition of
all of the membership interests in Westminster Holdings, Borrower shall
cause all distributions and payments otherwise payable to or for the
account of Westminster Holdings, Westminster Corporate GP, and/or
Westminster Retail from the Westminster Retail Property and to or for
the account of Westminster Holdings, Westminster Corporate GP and/or
Westminster Theatre and from the holder of the existing first mortgage
loan on the Westminster Theatre Property, or if such loan is repaid,
then from the Westminster Theatre Property, in all cases to be
deposited into the Lockbox Account in accordance with the Cash
Management Agreement. Without limitation of the foregoing, Borrower
shall, and shall cause Archon SPE Holdings and Securitization Property
Owner, to (1) deliver irrevocable written instructions to the agent
under and senior lender under the Archon Securitized Loan Documents to
deliver all such payments referenced in the immediately preceding
sentence directly to the Lockbox Account, and (2) deposit all such
amounts referenced in the immediately preceding sentence received by
Borrower, Archon SPE Holdings or Securitization Property Owner into the
Lockbox Account within one (1) Business Day of receipt thereof.
Additionally, upon Megaplex Owner's acquisition of all of the
membership interest in Westminster Holdings, Borrower shall, and shall
cause Megaplex Owner, Westminster Holdings, Westminster Corporate GP,
and Westminster Theatre to (A) deliver irrevocable written instructions
to agent under the holder of the existing first mortgage loan on the
Westminster Theatre Property to deliver all payments referenced in this
Section 9.23 relating to the Westminster Theatre Property directly to
the Lockbox Account, and (B) deposit all such amounts referenced above
relating to the Westminster Theatre Property received by Borrower,
Megaplex Owner, Westminster Holdings, Westminster Corporate GP, or
Westminster Theatre into the Lockbox Account within one (1) business
day of receipt thereof. Disbursements from the Lockbox Account will be
made in accordance with the terms and conditions of this Agreement and
the Cash Management Agreement. Lender shall have sole dominion and
control over the Lockbox Account and any other cash management account
established pursuant to the Cash Management Agreement and, except as
set forth in the Cash Management Agreement,
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Borrower shall have no rights to make withdrawals therefrom. Borrower
shall be responsible for all costs of maintaining all such accounts.
(b) Making of Payments. Each payment by Borrower hereunder or
under the Note shall be made in funds settled through the New York
Clearing House Interbank Payments System or other funds immediately
available to Lender by 11:00 a.m., New York City time, on the date such
payment is due, to Lender by deposit to such account as Lender may
designate by written notice to Borrower. Whenever any payment hereunder
or under the Note shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the first Business Day
preceding such scheduled due date.
(c) Payments Received in the Lockbox Account. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan
Documents, and provided no Event of Default has occurred and is
continuing, Borrower's obligations with respect to the monthly payment
of principal and interest and any amounts due for the Reserve Funds
shall be deemed satisfied to the extent sufficient amounts are
deposited in the Lockbox Account to satisfy such obligations and any
other obligations due on the dates each such payment is required,
regardless of whether any of such amounts are so applied by Lender.
(d) Following an Event of Default, in addition to any other
right or remedy Lender may have under the Loan Documents, Lender shall
have the option, acting in its sole and absolute discretion, to apply
funds, if any, on deposit in the Cash Trap Account (as set forth in the
Cash Management Agreement) (the "Cash Paydown Option") with application
of the payment of the associated Exit Fee to payment of Loan and other
obligations owing Lender on account of the Loan Documents.
Additionally, Lender agrees (i) to provide notice to Borrower of the
occurrence of a Cash Trap Termination Event under the Cash Management
Agreement promptly once Lender has knowledge such event has occurred,
and (ii) at such time as Lender has knowledge that the Megaplex Debt
Service Coverage Ratio equals or exceeds the Cash Trap MDSCR for each
month, measured month by month, for six (6) consecutive months, Lender
shall advise Agent and Borrower and permit the Cash Trap Account to be
disbursed to Borrower pursuant to the Cash Management Agreement
(subject to Section 7.04(d)).
9.24 Additional Real Estate Acquisitions. Subject to the
conditions set forth in this Section 9.24, Borrower shall be permitted to permit
Megaplex Owner to acquire, certain Real Estate Property without utilizing Loan
proceeds only if the conditions (other than utilizing Loan proceeds) set forth
in Section 7.03 are satisfied to Lender's satisfaction.
9.25 Taxes and Other Charges. Borrower shall, or shall cause
the applicable tenant under a Qualified Lease, if so required, to, pay all Taxes
and Other Charges now or hereafter levied or assessed or imposed against the
Individual Properties or any part thereof as the same become due and payable;
provided, however, Borrower's obligation to directly pay, or cause the
applicable tenant to directly pay, Taxes with respect to an Individual Property
shall be suspended for so long as such Taxes are paid from the Tax and Insurance
Escrow Fund and Borrower complies with the terms and provisions of Section 9.30
hereof. Borrower shall furnish
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to Lender receipts for the payment of the Taxes and the Other Charges prior to
the date the same shall become delinquent (provided, however, that Borrower is
not required to furnish such receipts for payment of Taxes in the event that
such Taxes have been paid by Lender pursuant to Section 9.30 hereof). Borrower
shall not suffer and shall promptly cause to be paid by the tenant under a
Qualified Lease for such property and discharged any Lien or charge whatsoever
which may be or become a Lien or charge against the Individual Properties, and
shall promptly pay, or cause the applicable tenant under a Qualified Lease to
pay, for all utility services provided to the Individual Properties. After prior
written notice to Lender, Borrower or the applicable tenant under a Qualified
Lease, at its own expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the amount or
validity or application in whole or in part of any Taxes or Other Charges,
provided that (i) no Default or Event of Default has occurred and remains
uncured; (ii) such contest is permitted under the provisions of any mortgage or
deed of trust superior in lien to the applicable Mortgage; (iii) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower is subject and shall not constitute a
default thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iv) no Individual Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (v) Borrower or the applicable tenant under a
Qualified Lease shall promptly upon final determination thereof pay the amount
of any such Taxes or Other Charges, together with all costs, interest and
penalties which may be payable in connection therewith; (vi) such proceeding
shall suspend the collection of such contested Taxes or Other Charges from the
applicable Individual Property; and (vii) Borrower shall furnish, or shall cause
the applicable tenant under a Qualified Lease to furnish, such security as may
be required in the proceeding, or as may be requested by Lender but subject to
the terms of any Qualified Lease applicable thereto, to insure the payment of
any such Taxes or Other Charges, together with all interest and penalties
thereon. Lender may pay over any such cash deposit or part thereof held by
Lender to the claimant entitled thereto at any time when, in the judgment of
Lender, the entitlement of such claimant is established or any Individual
Property (or part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, cancelled or lost or there shall be any danger of the
Lien of any Mortgage being primed by any related Lien.
9.26 Access to Individual Properties. Borrower shall permit
(or cause the requisite permission to be obtained to permit) agents,
representatives and employees of Lender to inspect the Individual Properties or
any part thereof at reasonable hours upon reasonable advance notice and subject
to the rights of tenants under the Qualified Leases.
9.27 Further Assurances. Borrower shall, at Borrower's sole
cost and expense:
(a) furnish to Lender all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and
specifications, appraisals, title and other insurance reports and
agreements, and each and every other document, certificate, agreement
and instrument required to be furnished by Borrower pursuant to the
terms of the Loan Documents or reasonably requested by Lender in
connection therewith;
(b) execute and deliver (or cause execution and delivery by
other Obligors) to Lender such documents, instruments, certificates,
assignments and other writings, and do such other acts necessary or
desirable, to evidence, preserve and/or protect the collateral
85
at any time securing or intended to secure the obligations of Borrower
under the Loan Documents, as Lender may reasonably require; and
(c) do and execute (or cause other Obligors to do and execute)
all and such further lawful and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as
Lender shall reasonably require from time to time.
9.28 Condemnation. Subject to Section 9.29 hereof and the
terms of the applicable Qualified Lease, Borrower shall promptly give Lender
notice of the actual or threatened commencement of any proceeding for the
Condemnation of any Individual Property and shall deliver to Lender copies of
any and all papers served in connection with such proceedings. Lender may
participate in any such proceedings, and Borrower shall from time to time
deliver to Lender all instruments requested by it to permit such participation.
Borrower shall, at its expense, or shall cause tenant under a Qualified Lease,
to the extent applicable, to, diligently prosecute any such proceedings and
shall consult with Lender, its attorneys and experts, and cooperate with them in
the carrying on or defense of any such proceedings. Notwithstanding any taking
by any public or quasi-public authority through Condemnation or otherwise
(including any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Loan and all other obligations
of Borrower to Lender under the Loan Documents at the time and in the manner
provided for its payment in the Note and in this Agreement and the Loan and all
other obligations of Borrower to Lender under the Loan Documents shall not be
reduced until any Award shall have been actually received and applied by Lender,
after the deduction of expenses of collection, to the reduction or discharge of
the Loan and all other obligations of Borrower to Lender under the Loan
Documents. Lender shall not be limited to the interest paid on the Award by the
condemning authority but shall be entitled to receive out of the Award interest
at the rate or rates provided herein or in the Note. If any Individual Property
or any portion thereof is taken by a condemning authority, Borrower shall
promptly commence and diligently prosecute, or shall cause the applicable tenant
under a Qualified Lease, to the extent applicable, to promptly commence and
diligently prosecute, the Restoration of the applicable Individual Property and
otherwise comply with the provisions of Section 9.29. Subject to Section 9.29(e)
hereof, if any Individual Property is sold, through foreclosure or otherwise,
prior to the receipt by Lender of the Award, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Loan and all other obligations of Borrower to Lender under the Loan
Documents.
9.29 Restoration. Subject to the terms of the applicable
Qualified Lease (other than and specifically excluding the Loews Lease), the
following provisions shall apply in connection with the Restoration of any
Individual Property:
(a) If the Net Proceeds shall be less than One Hundred
Thousand and No/100 Dollars ($100,000) and the costs of completing the
Restoration shall be less than One Hundred Thousand and No/100 Dollars
($100,000), the Net Proceeds will be disbursed by Lender to Borrower
upon receipt, provided that all of the conditions set forth in Section
9.29 are met and Borrower delivers to Lender a written undertaking to
expeditiously commence and to satisfactorily complete with due
diligence, or cause the
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tenant under a Qualified Lease, to the extent applicable, to
expeditiously commence and to satisfactorily complete with due
diligence, the Restoration in accordance with the terms of this
Agreement and the Qualified Lease.
(b) If the Net Proceeds are equal to or greater than One
Hundred Thousand and No/100 Dollars ($100,000) or the costs of
completing the Restoration is equal to or greater than One Hundred
Thousand and No/100 Dollars ($100,000) Lender shall make the Net
Proceeds available for the Restoration in accordance with the
provisions of this Section 9.29. The term "Net Proceeds" for purposes
of this Section 9.29 shall mean: (i) the net amount of all insurance
proceeds received by Lender pursuant to Section 9.05(b)(i), (iii), (iv)
and (ix) as a result of such damage or destruction, after deduction of
its reasonable costs and expenses (including reasonable counsel fees),
if any, in collecting same ("INSURANCE PROCEEDS"), or (ii) the net
amount of the Award, after deduction of its reasonable costs and
expenses (including reasonable counsel fees), if any, in collecting
same ("CONDEMNATION PROCEEDS"), whichever the case may be.
(i) The Net Proceeds shall be made available to
Borrower for Restoration provided that each of the following
conditions are met:
(A) no Event of Default shall have occurred and
be continuing;
(B) (1) in the event the Net Proceeds are
Insurance Proceeds, less than twenty-five
percent (25%) of the total floor area of the
Improvements on the Individual Property has
been damaged, destroyed or rendered unusable
as a result of such fire or other casualty
or (2) in the event the Net Proceeds are
Condemnation Proceeds, less than ten percent
(10%) of the land constituting the
Individual Property is taken, and such land
is located along the perimeter or periphery
of the Individual Property, and no portion
of the Improvements is located on such land;
(C) The applicable Qualified Lease shall remain
in full force and effect during and after
the completion of the Restoration,
notwithstanding the occurrence of any such
fire or other casualty or taking, whichever
the case may be;
(D) Borrower shall commence, or shall cause the
tenant under a Qualified Lease, to the
extent applicable, to commence, the
Restoration as soon as reasonably
practicable (but in no event later than
sixty (60) days after such damage or
destruction or taking, whichever the case
may be, occurs) and shall diligently pursue,
or shall cause the tenant under a Qualified
Lease, to the extent applicable, to pursue,
the same to satisfactory completion;
(E) Lender shall be satisfied that any operating
deficits, including all scheduled payments
of principal and interest under the Note,
which will be incurred with respect to the
Individual Property as a result
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of the occurrence of any such fire or other
casualty or taking, whichever the case may
be, will be covered out of (1) the Net
Proceeds, (2) the insurance coverage
referred to in Section 9.05(b)(ii), if
applicable, or (3) by other funds of
Borrower;
(F) Lender shall be satisfied that the
Restoration will be completed on or before
the earliest to occur of (1) six (6) months
prior to the Maturity Date, (2) the earliest
date required for such completion under the
terms of any Qualified Leases, (3) such time
as may be required under applicable zoning
law, ordinance, rule or regulation in order
to repair and restore the applicable
Individual Property to the condition it was
in immediately prior to such fire or other
casualty or to as nearly as possible the
condition it was in immediately prior to
such taking, as applicable or (4) the
expiration of the insurance coverage
referred to in Section 9.05(b);
(G) the Individual Property and the use thereof
after the Restoration will be in compliance
with and permitted under all applicable
zoning laws, ordinances, rules and
regulations;
(H) the Restoration shall be done and completed
by Borrower or the tenant under a Qualified
Lease, to the extent applicable, in an
expeditious and diligent fashion and in
compliance with all applicable governmental
laws, rules and regulations (including all
applicable environmental laws);
(I) such fire or other casualty or taking, as
applicable, does not result in the loss of
access to the Individual Property or the
related Improvements;
(J) Borrower shall deliver, or cause to be
delivered, to Lender a signed detailed
budget approved in writing by Borrower's or
a Qualified Lease tenant's architect or
engineer stating the entire cost of
completing the Restoration, which budget
shall be acceptable to Lender; and
(K) the Net Proceeds together with any cash or
cash equivalent deposited by Borrower or the
tenant under a Qualified Lease, to the
extent applicable, with Lender are
sufficient in Lender's discretion to cover
the cost of the Restoration.
(ii) The Net Proceeds shall be held by Lender in an
interest-bearing Eligible Account and, until disbursed in
accordance with the provisions of this Section 9.29(b), shall
constitute additional security for the Loan and other
obligations under the Loan Documents. The Net Proceeds shall
be disbursed by Lender to, or as directed by, Borrower from
time to time during the course of the Restoration, upon
receipt of evidence satisfactory to Lender that (A) all
materials
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installed and work and labor performed (except to the extent
that they are to be paid for out of the requested
disbursement) in connection with the Restoration have been
paid for in full, and (B) there exist no notices of pendency,
stop orders, mechanic's or materialman's liens or notices of
intention to file same, or any other liens or encumbrances of
any nature whatsoever on the Individual Property which have
not either been fully bonded to the satisfaction of Lender and
discharged of record or in the alternative fully insured to
the satisfaction of Lender by the title company issuing the
Title Insurance Policy.
(iii) All plans and specifications required in
connection with the Restoration shall be subject to prior
review and acceptance in all respects by Lender and by an
independent consulting engineer selected by Lender (the
"CASUALTY CONSULTANT"). Lender shall have the use of the plans
and specifications and all permits, licenses and approvals
required or obtained in connection with the Restoration. The
identity of the contractors, subcontractors and materialmen
engaged in the Restoration, as well as the contracts under
which they have been engaged, shall be subject to prior review
and acceptance by Lender and the Casualty Consultant. All
costs and expenses incurred by Lender in connection with
making the Net Proceeds available for the Restoration
including reasonable counsel fees and disbursements and the
Casualty Consultant's fees, shall be paid by Borrower.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal
to the costs actually incurred from time to time for work in
place as part of the Restoration, as certified by the Casualty
Consultant, minus the Casualty Retainage. The term "Casualty
Retainage" shall mean an amount equal to ten percent (10%) of
the costs actually incurred for work in place as part of the
Restoration, as certified by the Casualty Consultant, until
the Restoration has been completed. The Casualty Retainage
shall in no event, and notwithstanding anything to the
contrary set forth above in this Section 9.29(b), be less than
the amount actually held back by Borrower or the tenant under
a Qualified Lease, to the extent applicable, from contractors,
subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty
Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section
9.29(b) and that all approvals necessary for the re-occupancy
and use of the Individual Property have been obtained from all
appropriate governmental and quasi-governmental authorities,
and Lender receives evidence satisfactory to Lender that the
costs of the Restoration have been paid in full or will be
paid in full out of the Casualty Retainage; provided, however,
that Lender will release the portion of the Casualty Retainage
being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon
which the Casualty Consultant certifies to Lender that the
contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in
accordance with the provisions of the contractor's,
subcontractor's or materialman's contract, the contractor,
subcontractor or materialman delivers the lien waivers and
evidence of payment in full of all sums
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due to the contractor, subcontractor or materialman as may be
reasonably requested by Lender or by the title company issuing
the Title Insurance Policy, and Lender receives an endorsement
to its Title Insurance Policy insuring the continued priority
of the lien of the related Mortgage and evidence of payment of
any premium payable for such endorsement. If required by
Lender, the release of any such portion of the Casualty
Retainage shall be approved by the surety company, if any,
which has issued a payment or performance bond with respect to
the contractor, subcontractor or materialman.
(v) Lender shall not be obligated to make
disbursements of the Net Proceeds more frequently than once
every calendar month or in the amount less than Ten Thousand
Dollars ($10,000) (or a lesser amount if the total remaining
Net Proceeds are less than Ten Thousand Dollars ($10,000), in
which case only one disbursement of the remaining Net Proceeds
shall be made).
(vi) If at any time the Net Proceeds or the
undisbursed balance thereof shall not, in the opinion of
Lender in consultation with the Casualty Consultant, be
sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in
connection with the completion of the Restoration, Borrower
shall deposit the deficiency (the "NET PROCEEDS DEFICIENCY")
with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited
with Lender shall be held by Lender and shall be disbursed for
costs actually incurred in connection with the Restoration on
the same conditions applicable to the disbursement of the Net
Proceeds, and until so disbursed pursuant to this Section
9.29(b) shall constitute additional security for the Loan and
other obligations under the Loan Documents.
(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency
deposited with Lender after the Casualty Consultant certifies
to Lender that the Restoration has been completed in
accordance with the provisions of this Section 9329(b), and
the receipt by Lender of evidence satisfactory to Lender that
all costs incurred in connection with the Restoration have
been paid in full, shall be deposited by Lender in the Lockbox
Account to be applied in accordance with the priorities set
forth therein, provided no Event of Default shall have
occurred and shall be continuing under the Note, this
Agreement or any of the other Loan Documents.
(c) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to Section 9.29(b)(vii) will be retained and applied
by Lender toward the payment of the Loan and all other amounts owed by
Borrower to Lender under the Loan Documents whether or not then due and
payable in such order, priority and proportions as Lender in its sole
discretion shall deem proper, or, at the discretion of Lender, the same
may be paid, either in whole or in part, to Borrower for such purposes
as Lender shall approve, in its discretion.
(d) In the event of foreclosure of the Mortgage with respect
to the Individual Property, or other transfer of title to the
Individual Property in extinguishment in whole
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or in part of the Loan all right, title and interest of Borrower in and
to the Policies that are not blanket Policies then in force concerning
the Individual Property and all proceeds payable thereunder shall
thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title.
(e) Notwithstanding anything to the contrary set forth in this
Section 9.29, Lender and Borrower agree that, at all times while the
Qualified Lease is in full force and effect with respect to an
Individual Property, if (i) neither the applicable tenant thereunder
nor Borrower shall elect to terminate the related Qualified Lease and
(ii) the applicable tenant shall elect to restore such Individual
Property after the occurrence of a Casualty or Condemnation affecting
such Individual Property pursuant to the terms and provisions of the
related Qualified Lease, then (A) any related Net Proceeds shall be
deposited with Lender (or any disbursing agent approved by Lender) and
shall be disbursed by Lender (or any disbursing agent approved by
Lender) to the applicable tenant for application to the Restoration of
the related Individual Property in accordance with the terms and
provisions of an escrow agreement among Borrower, the applicable tenant
and Lender (or any disbursing agent approved by Lender), which escrow
agreement (1) shall provide for the disbursement of the deposited Net
Proceeds as the Restoration of the related Individual Property is
completed in accordance with an Application and Certificate in the form
of AIA Document G702 to be properly completed and executed by the
applicable tenant's contractor (or by the applicable tenant if such
tenant acts as its own contractor) and architect and submitted to
Lender (or any disbursing agent approved by Lender) in connection with
each disbursement of any portion of the deposited Net Proceeds, (2)
shall provide for the disbursement of the portion of the deposited Net
Proceeds that is the subject of any such completed and executed
Application and Certificate within five (5) Business Days of receipt by
Lender (or any disbursing agent approved by Lender) thereof, (3) shall
provide for the release of the deposited Net Proceeds to Borrower if
the applicable tenant shall fail to complete the Restoration of the
related Individual Property in accordance with the related Qualified
Lease, (4) shall be in form and substance satisfactory to Lender and
(5) shall provide that such escrow agreement may not be modified or
amended without the prior written consent of Lender; (B) Borrower shall
immediately pay to Lender any related Net Proceeds released to Borrower
by Lender (or any disbursing agent approved by Lender) pursuant to the
escrow agreement described in clause (A) above, which Net Proceeds
shall be applied in accordance with the terms and provisions of Section
9.29(a)-(c); and (C) the terms and provisions of this Section 9.29
shall be deemed to be satisfied so long as the applicable tenant
diligently pursues and completes the Restoration of such Individual
Property in accordance with the terms and provisions of the related
Qualified Lease. If Borrower shall elect to restore any Individual
Property affected by a Casualty or Condemnation pursuant to the terms
and provisions of the related Qualified Lease, Borrower's rights and
obligations with respect to the related Restoration and Net Proceeds
shall be as otherwise set forth in this Section 9.29.
9.30 Tax and Insurance Escrow Fund.
(a) Tax and Insurance Escrow Fund. Borrower shall pay to
Lender on each date a payment of interest on the Loan is due (i)
one-twelfth of the Taxes that Lender
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estimates will be payable during the next ensuing twelve (12) months in
order to accumulate with Lender sufficient funds to pay all such Taxes
at least thirty (30) days prior to their respective due dates, and (ii)
one-twelfth of the Insurance Premiums that Lender estimates will be
payable for the renewal of the coverage afforded by the Policies upon
the expiration thereof in order to accumulate with Lender sufficient
funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies (said amounts in (a) and (b)
above hereinafter called the "TAX AND INSURANCE ESCROW FUND"). The Tax
and Insurance Escrow Fund and the payments of interest or principal or
both, payable pursuant to the Note, shall be added together and shall
be paid as an aggregate sum by Borrower to Lender. Lender will apply
the Tax and Insurance Escrow Fund to payments of Taxes and Insurance
Premiums required to be made by Borrower pursuant to this Agreement and
under the Mortgages. In making any payment relating to the Tax and
Insurance Escrow Fund, Lender may do so according to any bill,
statement or estimate procured from the appropriate public office (with
respect to Taxes) or insurer or agent (with respect to Insurance
Premiums), without inquiry into the accuracy of such bill, statement or
estimate or into the validity of any tax, assessment, sale, forfeiture,
tax lien or title or claim thereof. If the amount of the Tax and
Insurance Escrow Fund shall exceed the actual amounts due for Taxes and
Insurance Premiums, Lender shall, in its sole discretion, return any
excess to Borrower or credit such excess against future payments to be
made to the Tax and Insurance Escrow Fund. Any amount remaining in the
Tax and Insurance Escrow Fund after the Loan and all of Borrower's
other obligations to Lender have been paid in full shall be returned to
Borrower. In allocating such excess, Lender may deal with the Person
shown on the records of Lender to be the owner of the Individual
Properties. If at any time Lender reasonably determines that the Tax
and Insurance Escrow Fund is not or will not be sufficient to pay Taxes
and Insurance Premiums by the dates set forth in (i) and (ii) above,
Lender shall notify Borrower of such determination and Borrower shall
increase its monthly payments to Lender by the amount that Lender
estimates is sufficient to make up the deficiency at least thirty (30)
days prior to delinquency of the Taxes and/or thirty (30) days prior to
expiration of the Policies, as the case may be.
(b) Exemption from Tax and Insurance Escrow Requirements.
Notwithstanding the terms and provisions of Section 9.30(a), Borrower
shall not be required to contribute to the Tax and Insurance Escrow
Fund, provided that (a) no Event of Default shall have occurred and (b)
Borrower delivers, or causes the tenant under a Qualified Lease, to the
extent applicable, to deliver, to Lender (i) receipts for payment or
other evidence satisfactory to Lender that the Taxes and Other Charges
with respect to each Individual Property have been paid no later than
ten (10) days prior to the date the same shall become delinquent
(unless Borrower or the tenant under a Qualified Lease, to the extent
applicable, is contesting such Taxes or Other Charges in accordance
with the terms and provisions of this Agreement and the other Loan
Documents) and (ii) written evidence satisfactory to Lender that all
Policies required pursuant to Section 9.05 and by the Mortgage are in
full force and effect and that all related Insurance Premiums have been
paid no later than ten (10) days prior to the expiration dates of such
Policies. Upon the occurrence of an Event of Default or notice from
Lender that the terms and provisions of clause (b)(i) or clause (b)(ii)
above have not been satisfied, Borrower shall begin to make monthly
payments to the Tax and Insurance Escrow Fund in accordance with the
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terms and provisions of Section 9.30(a) commencing on the next date
interest is due to be paid to Lender.
9.31 Replacements and Replacement Reserve.
(a) Replacement Reserve Fund. Borrower shall pay to Lender on
each date a payment of interest on the Loan is due one-twelfth (1/12)
of the amount (the "REPLACEMENT RESERVE MONTHLY DEPOSIT") reasonably
estimated by Lender in its sole discretion to be due for replacements
and repairs required to be made to the Individual Properties during the
calendar year in order to maintain the Individual Properties in a first
class condition (collectively, the "REPLACEMENTS"). Amounts so
deposited shall hereinafter be referred to as Borrower's "REPLACEMENT
RESERVE FUND" and the account in which such amounts are held shall
hereinafter be referred to as Borrower's "REPLACEMENT RESERVE ACCOUNT."
Lender may reassess its estimate of the amount necessary for the
Replacement Reserve Fund from time to time, and may increase the
monthly amounts required to be deposited into the Replacement Reserve
Fund upon thirty (30) days notice to Borrower if Lender determines in
its reasonable discretion that an increase is necessary to maintain the
proper maintenance and operation of the Individual Properties. Any
amount held in the Replacement Reserve Account and allocated for an
Individual Property shall be retained by Lender and credited toward the
future Replacement Reserves Monthly Deposits required by Lender
hereunder in the event such Individual Property is released from the
Lien of its related Mortgage in accordance with the Loan Documents.
(b) Disbursements from Replacement Reserve Account.
(i) Lender shall make disbursements from the
Replacement Reserve Account to pay Borrower only for the costs
of the Replacements. Lender shall not be obligated to make
disbursements from the Replacement Reserve Account to
reimburse Borrower for the costs of routine maintenance to an
Individual Property or for costs which are to be reimbursed
from the Required Repair Fund.
(ii) Lender shall, upon written request from Borrower
and satisfaction of the requirements set forth in this Section
9.31(b), disburse to Borrower amounts from the Replacement
Reserve Account necessary to pay for the actual approved costs
of Replacements or to reimburse Borrower therefor, upon
completion of such Replacements (or, upon partial completion
in the case of Replacements made pursuant to Section
9.31(b)(v) as determined by Lender. In no event shall Lender
be obligated to disburse funds from the Replacement Reserve
Account if a Default or an Event of Default exists.
(iii) Each request for disbursement from the
Replacement Reserve Account shall be in a form specified or
approved by Lender and shall specify (i) the specific
Replacements for which the disbursement is requested, (ii) the
quantity and price of each item purchased, if the Replacement
includes the purchase or replacement of specific items, (iii)
the price of all materials (grouped by type or category) used
in any Replacement other than the purchase or
93
replacement of specific items, and (iv) the cost of all
contracted labor or other services applicable to each
Replacement for which such request for disbursement is made.
With each request Borrower shall certify that all Replacements
have been made in accordance with all applicable Legal
Requirements of any Governmental Authority having jurisdiction
over the applicable Individual Property to which the
Replacements are being provided. Each request for disbursement
shall include copies of invoices for all items or materials
purchased and all contracted labor or services provided and,
unless Lender has agreed to issue joint checks as described
below in connection with a particular Replacement, each
request shall include evidence satisfactory to Lender of
payment of all such amounts. Except as provided in Section
9.31(b)(v), each request for disbursement from the Replacement
Reserve Account shall be made only after completion of the
Replacement for which disbursement is requested. Borrower
shall provide Lender evidence of completion satisfactory to
Lender in its reasonable judgment.
(iv) Borrower shall pay all invoices in connection
with the Replacements with respect to which a disbursement is
requested prior to submitting such request for disbursement
from the Replacement Reserve Account or, at the request of
Borrower, Lender will issue joint checks, payable to Borrower
and the contractor, supplier, materialman, mechanic,
subcontractor or other party to whom payment is due in
connection with a Replacement. In the case of payments made by
joint check, Lender may require a waiver of lien from each
Person receiving payment prior to Lender's disbursement from
the Replacement Reserve Account. In addition, as a condition
to any disbursement, Lender may require Borrower to obtain
lien waivers from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount
equal to or greater than Twenty-Five Thousand and NO/100
Dollars ($25,000) for completion of its work or delivery of
its materials. Any lien waiver delivered hereunder shall
conform to the requirements of applicable law and shall cover
all work performed and materials supplied (including equipment
and fixtures) for the applicable Individual Property by that
contractor, supplier, subcontractor, mechanic or materialman
through the date covered by the current reimbursement request
(or, in the event that payment to such contractor, supplier,
subcontractor, mechanic or materialmen is to be made by a
joint check, the release of lien shall be effective through
the date covered by the previous release of funds request).
(v) If (i) the cost of a Replacement exceeds
Twenty-Five Thousand and NO/100 Dollars ($25,000), (ii) the
contractor performing such Replacement requires periodic
payments pursuant to terms of a written contract, and (iii)
Lender has approved in writing in advance such periodic
payments, a request for reimbursement from the Replacement
Reserve Account may be made after completion of a portion of
the work under such contract, provided (A) such contract
requires payment upon completion of such portion of the work,
(B) the materials for which the request is made are on site at
the applicable Individual Property and are properly secured or
have been installed in such Individual Property, (C) all other
conditions in this Agreement for disbursement have been
94
satisfied, (D) funds remaining in the Replacement Reserve
Account are, in Lender's judgment, sufficient to complete such
Replacement and other Replacements when required, and (E) if
required by Lender, each contractor or subcontractor receiving
payments under such contract shall provide a waiver of lien
with respect to amounts which have been paid to that
contractor or subcontractor.
(vi) Borrower shall not make a request for
disbursement from the Replacement Reserve Account more
frequently than once in any calendar month and (except in
connection with the final disbursement) the total cost of all
Replacements in any request shall not be less than Twenty-Five
Thousand and NO/100 Dollars ($25,000.00).
(c) Performance of Replacements. Each of the following are and
shall be subject to the terms of the Qualified Lease applicable
thereto, if any:
(i) Borrower shall make, or cause the tenant under a
Qualified Lease, to the extent applicable, to make,
Replacements when required in order to keep each Individual
Property in condition and repair consistent with comparable
properties, including for Megaplex Properties, other movie
theater properties in the same market segment in metropolitan
areas comparable to the one in which the respective Megaplex
Property is located, and to keep each Individual Property or
any portion thereof from deteriorating. Borrower shall
complete all Replacements in a good and workmanlike manner as
soon as practicable following the commencement of making each
such Replacement.
(ii) Lender reserves the right, at its option, to
approve all contracts or work orders with materialmen,
mechanics, suppliers, subcontractors, contractors or other
parties providing labor or materials in connection with the
Replacements. Upon Lender's request, Borrower shall assign any
contract or subcontract to Lender.
(iii) In the event Lender determines in its
reasonable discretion that any Replacement is not being
performed in a workmanlike or timely manner or that any
Replacement has not been completed in a workmanlike or timely
manner, Lender shall have the option to withhold disbursement
for such unsatisfactory Replacement and to proceed under
existing contracts or to contract with third parties to
complete such Replacement and to apply the Replacement Reserve
Fund toward the labor and materials necessary to complete such
Replacement, without providing any prior notice to Borrower
and to exercise any and all other remedies available to Lender
upon an Event of Default hereunder.
(iv) In order to facilitate Lender's completion or
making of the Replacements pursuant to Section 9.31(c)(iii)
above, Borrower grants Lender the right to enter onto any
Individual Property and perform any and all work and labor
necessary to complete or make the Replacements and/or employ
watchmen to protect such Individual Property from damage. All
sums so expended by
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Lender, to the extent not from the Replacement Reserve Fund,
shall be deemed to have been advanced under the Loan to
Borrower and secured by the Mortgages and all other security
for the Loan. For this purpose Borrower constitutes and
appoints Lender its true and lawful attorney-in-fact with full
power of substitution to complete or undertake the
Replacements in the name of Borrower. Such power of attorney
shall be deemed to be a power coupled with an interest and
cannot be revoked. Borrower empowers said attorney-in-fact as
follows: (i) to use any funds in the Replacement Reserve
Account for the purpose of making or completing the
Replacements; (ii) to make such additions, changes and
corrections to the Replacements as shall be necessary or
desirable to complete the Replacements; (iii) to employ such
contractors, subcontractors, agents, architects and inspectors
as shall be required for such purposes; (iv) to pay, settle or
compromise all existing bills and claims which are or may
become Liens against any Individual Property, or as may be
necessary or desirable for the completion of the Replacements,
or for clearance of title; (v) to execute all applications and
certificates in the name of Borrower which may be required by
any of the contract documents; (vi) to prosecute and defend
all actions or proceedings in connection with any Individual
Property or the rehabilitation and repair of any Individual
Property; and (vii) to do any and every act which Borrower
might do in its own behalf to fulfill the terms of this
Agreement.
(v) Nothing in this Section 9.31 shall: (i) make
Lender responsible for making or completing the Replacements;
(ii) require Lender to expend funds in addition to the
Replacement Reserve Fund to make or complete any Replacement;
(iii) obligate Lender to proceed with the Replacements; or
(iv) obligate Lender to demand from Borrower additional sums
to make or complete any Replacement.
(vi) Borrower shall permit Lender and Lender's agents
and representatives (including Lender's engineer, architect,
or inspector) or third parties making Replacements pursuant to
this Section 9.31 to enter onto each Individual Property
during normal business hours (subject to the rights of tenants
under their Qualified Leases) to inspect the progress of any
Replacements and all materials being used in connection
therewith, to examine all plans and shop drawings relating to
such Replacements which are or may be kept at each Individual
Property, and to complete any Replacements made pursuant to
this Section 9.31. Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender's
representatives or such other persons described above in
connection with inspections described in this Section
9.31(cxvi) or the completion of Replacements pursuant to this
Section 9.31.
(vii) Lender may require an inspection of the
Individual Property at Borrower's expense prior to making a
disbursement from the Replacement Reserve Account in order to
verify completion of the Replacements for which reimbursement
is sought. Lender may require that such inspection be
conducted by an appropriate independent qualified professional
selected by Lender and/or may require a copy of a certificate
of completion by an independent qualified professional
acceptable to Lender prior to the disbursement of any amounts
from
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the Replacement Reserve Account. Borrower shall pay the
expense of the inspection as required hereunder, whether such
inspection is conducted by Lender or by an independent
qualified professional.
(viii) The Replacements and all materials, equipment,
fixtures, or any other item comprising a part of any
Replacement shall be constructed, installed or completed, as
applicable, free and clear of all mechanics', materialmen's or
other liens (except for those Liens existing on the Original
Effective Date which have been approved in writing by Lender).
(ix) Before each disbursement from the Replacement
Reserve Account, Lender may require Borrower to provide Lender
with a search of title to the applicable Individual Property
effective to the date of the disbursement, which search shows
that no mechanics' or materialmen's liens or other liens of
any nature have been placed against the applicable Individual
Property since the date of recordation of the related Mortgage
and that title to such Individual Property is free and clear
of all Liens (other than the lien of the related Mortgage and
any other Liens previously approved in writing by Lender, if
any).
(x) All Replacements shall comply with all applicable
Legal Requirements of all Governmental Authorities having
jurisdiction over the applicable Individual Property and
applicable insurance requirements including, without
limitation, applicable building codes, special use permits,
environmental regulations, and requirements of insurance
underwriters.
(xi) In addition to any insurance required under the
Loan Documents, Borrower shall provide or cause to be provided
workmen's compensation insurance, builder's risk, and public
liability insurance and other insurance to the extent required
under applicable law in connection with a particular
Replacement. All such policies shall be in form and amount
reasonably satisfactory to Lender. All such policies which can
be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed.
Certified copies of such policies shall be delivered to
Lender.
(d) Failure to Make Replacements.
(i) It shall be an Event of Default under this
Agreement if Borrower fails to comply with any provision of
this Section 9.31 and such failure is not cured within thirty
(30) days after notice from Lender. Upon the occurrence of
such an Event of Default, Lender may use the Replacement
Reserve Fund (or any portion thereof) for any purpose,
including but not limited to completion of the Replacements as
provided in Section 9.31, or for any other repair or
replacement to any Individual Property or toward payment of
the Loan or other obligations of Borrower to Lender in such
order, proportion and priority as Lender may determine in its
sole discretion. Lender's right to withdraw and apply the
Replacement Reserve Funds shall be in addition to all other
rights and remedies provided to Lender under this Agreement
and the other Loan Documents.
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(ii) Nothing in this Agreement shall obligate Lender
to apply all or any portion of the Replacement Reserve Fund on
account of an Event of Default to payment of the Loan or other
amounts owed by Borrower to Lender pursuant to the Loan
Documents or in any specific order or priority.
(e) Balance in a Replacement Reserve Account. The
insufficiency of any balance in the Replacement Reserve Account shall
not relieve Borrower from its obligation to fulfill all preservation
and maintenance covenants in the Loan Documents.
(f) Indemnification. Borrower shall indemnify Lender and hold
Lender harmless from and against any and all actions, suits, claims,
demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorneys fees and
expenses) arising from or in any way connected with the performance of
the Replacements. Borrower shall assign to Lender all rights and claims
Borrower may have against all persons or entities supplying labor or
materials in connection with the Replacements; provided, however, that
Lender may not pursue any such right or claim unless an Event of
Default has occurred and remains uncured.
(g) Exemption from Replacement Reserve Fund Requirements.
Notwithstanding the terms and provisions of Section 9.31(a) and Section
9.31(b), Borrower shall not be required to make the Replacement Reserve
Monthly Deposit, provided that (a) no Event of Default shall have
occurred and (b) Borrower makes, or causes the applicable tenant under
a Qualified Lease to make, the Replacements in accordance with the
terms and provisions of this Section 9.31. Upon (i) the occurrence of
an Event of Default or (ii) Borrower's failure to make, or cause to be
made, all Replacements in accordance with the terms and provisions of
this Section 9.31 within ten (10) days after notice of such failure
from Lender, Borrower shall begin to make the Replacement Reserve
Monthly Deposit in accordance with the terms and provisions of Section
9.31(a) commencing on the next date interest is due to be paid to
Lender.
9.32 Ground Lease Reserve Fund.
(a) Deposits to Ground Lease Fund. On each date a payment of
interest is due after the date hereof and so long as an Obligor is a
tenant under a Ground Lease, Borrower shall pay to Lender one-twelfth
of the rents (including both base and additional rents) and other
charges that Lender estimates will be payable by the applicable Obligor
as tenant under the Ground Leases (collectively, "GROUND RENTS") during
the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such rents and other charges at least
thirty (30) days prior to their respective due dates. Amounts so
deposited shall hereinafter be referred to as the "GROUND LEASE RESERVE
FUND" and the account in which such amounts are held shall hereinafter
be referred to as the "Ground Lease Reserve Account."
(b) Release of Ground Lease Funds. Lender shall have the right
to apply the Ground Lease Funds to payment of rents and other charges
due under any Ground Lease. In making any payment relating to rents and
other charges under any Ground Lease, Lender may do so according to any
bill, statement or estimate procured from the lessor
98
under such Ground Lease, without inquiry into the accuracy of such
bill, statement or estimate. If the amount of Ground Lease Reserve
Funds shall exceed the amounts due for rents and other charges under
the Ground Leases for the immediately succeeding twelve (12) months as
determined by Lender, Lender shall, in its sole discretion, return any
excess to Borrower or credit such excess against future payments to be
made to the Ground Lease Funds. Any Ground Lease Funds remaining after
the Loan and all other obligations of Borrower to Lender under the Loan
Documents have been paid in full shall be returned to Borrower.
(c) Exemption from Ground Lease Reserve Fund Requirements.
Notwithstanding the terms and provisions of Section 9.32(a) and Section
9.32(b), Borrower shall not be required to contribute to the Ground
Lease Reserve Fund provided that (a) no Event of Default shall have
occurred, (b) the ground lessors under the Ground Leases shall remain
obligated to notify Lender of any default by Borrower, as tenant, under
the Ground Leases and permit Lender a reasonable opportunity to cure
such default and (c) no payment or other default by Borrower, as
tenant, shall have occurred under any Ground Lease. Upon the occurrence
of an Event of Default or notice from Lender that the conditions set
forth in clauses (b) or (c) above have not been satisfied, Borrower
shall begin to make payments to the Ground Lease Reserve Fund in
accordance with the terms and provisions of Section 9.32(a) commencing
on the next date interest is due to be paid to Lender.
9.33 Intentionally Deleted.
9.34 Independent Directors. Within thirty days of Lender's
written request (which may be given at any time and in Lender's sole
discretion), Borrower shall cause Megaplex Owner, Archon SPE holdings,
or both, to have at least two Independent Directors and cause the
articles of incorporation for such Persons to be amended to require
such two Independent Directors, and thereafter will not cause or allow
the board of directors of such entity to take any action requiring the
unanimous affirmative vote of one hundred percent (100%) of the members
of its board of directors unless two Independent Directors shall have
participated in such vote.
9.35 Substitution Rights. From time to time Borrower may
request the right to sell an existing Megaplex Property and have it be
released from the Mortgage Lien and, simultaneously with such sale,
acquire a new Real Estate Property which is a reasonably comparable
theater property which would become a Megaplex Property under the Loan
Documents and be subject to the Lien of a Mortgage securing the Loan
and other obligations of Obligors to Lender. If Lender consents to such
request (which consent can be granted, withheld or conditioned in
Lender's sole discretion), Borrower shall comply (i) with all of the
provisions of Section 7.03(c) (other than the requirement of using Loan
proceeds) for the acquisition of additional Real Estate Properties plus
appropriate title insurance and other deliveries so that Lender's
position and information about such new property is comparable with
Lender's position and information relating to the Initial Megaplex
Properties, and (ii) with such other conditions as Lender may impose in
its sole and absolute condition. If Lender does not consent to such
request, Lender shall have no obligation to release its Mortgage Lien
on such existing Megaplex Property or otherwise consent to any sale or
disposition of such Megaplex Property.
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9.36 Reserve Funds, Generally.
(a) Borrower grants to Lender a first priority perfected
security interest in each Tax and Insurance Escrow Fund, Replacement
Reserve Fund, Ground Lease Reserve Fund, the Required Repairs Fund, and
any other escrow or reserve fund established by the Loan Documents
(each such fund is herein called a "RESERVE Fund" and collectively, the
"RESERVE FUNDS") and any and all monies now or hereafter deposited in
each Reserve Fund as additional security for payment of the Loan and
other obligations of Borrower to Lender. Until expended or applied in
accordance herewith, the Reserve Funds shall constitute additional
security for the Loan and other obligations of Borrower to Lender.
(b) Upon the occurrence of an Event of Default, Lender may, in
addition to any and all other rights and remedies available to Lender,
apply any sums then present in any or all of the Reserve Funds to the
payment of the Loan and other obligations of Borrower to Lender in any
order in its sole discretion.
(c) The Reserve Funds shall not constitute trust funds and may
be commingled with other monies held by Lender.
(d) Borrower shall not, without obtaining the prior written
consent of Lender, further pledge, assign or grant any security
interest in any Reserve Fund or the monies deposited therein or permit
any lien or encumbrance to attach thereto, or any levy to be made
thereon, or any UCC-1 Financing Statements, except those naming Lender
as the secured party, to be filed with respect thereto.
9.37 Archon Securitization Loan Documents. Borrower shall
cause Archon SPE Holdings and Securitization Property Owner at all times to
comply with and not permit an event of default to occur under the Archon
Securitization Loan Documents. Borrower shall not permit Archon SPE Holdings or
Securitization Property Owner to amend or modify the Archon Securitization Loan
Documents without Lender's prior written consent. Additionally, Borrower shall
use its best efforts to cause, on or before November 19, 2001, Archon SPE
Holdings and Securitization Property Owner to amend the Archon Securitized Loan
Documents to permit, without further action or consent (other than notice to any
party), Lender or its designee, to foreclose or otherwise take title to and
assume all ownership rights with respect to the stock which is pledged to Lender
pursuant to the Pledge Agreement and to enter into an intercreditor agreement
with Lender, all in forms reasonably acceptable to Lender (the foregoing
requirements to obtain such amendment and intercreditor agreement, to the extent
not waived by Lender as provided in the last sentence of this Section 9.37, are
collectively referred to herein as the "ARCHON REQUIRED AMENDMENTS"). Lender
agrees to negotiate in good faith and on a commercially reasonable basis in
obtaining Archon Required Amendments. Lender reserves the right, but is under no
obligation, to waive (as Lender determines in its sole and absolute discretion)
all or any portion of the requirements that Borrower obtain the Archon Required
Amendments.
9.38 [INTENTIONALLY DELETED]
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9.39 [INTENTIONALLY DELETED]
9.40 Required Repairs Fund.
(a) Borrower shall perform, or shall cause Megaplex Owner or
the tenant under the applicable Qualified Lease to perform, the repairs
at the Individual Owned Properties, as more particularly set forth on
Schedule 9.40 hereto (such repairs hereinafter referred to as "REQUIRED
REPAIRS"). Borrower shall complete, or shall cause Megaplex Owner or
the tenant under the applicable Qualified Lease to complete, the
Required Repairs on or before the required deadline for each repair as
set forth on Schedule 9.40. It shall be an Event of Default under this
Agreement if (a) Borrower does not complete, or cause to be completed,
the Required Repairs at each Individual Owned Property by the required
deadline for each repair as set forth on Schedule 9.40, and (b)
Borrower does not satisfy each condition contained in 9.40(b) hereof.
Upon the occurrence of such an Event of Default, Lender, at its option,
may withdraw all Required Repair Funds from the Required Repair Account
and Lender may apply such funds either to completion of the Required
Repairs at one or more of the Individual Owned Properties or toward
payment of the Loan and other obligations owed by Borrower to Lender in
such order, proportion and priority as Lender may determine in its sole
discretion. Lender's right to withdraw and apply Required Repair Funds
shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents. On the
Original Effective Date, Borrower deposited with Lender the amount for
each Individual Owned Property set forth on such Schedule 9.40 hereto
to perform the Required Repairs for such Individual Owned Property.
Amounts so deposited shall hereinafter be referred to as Borrower's
"REQUIRED REPAIR FUND" and the accounts are held shall hereinafter be
referred to as Borrower's "REQUIRED REPAIR ACCOUNT."
(b) Lender shall disburse to Borrower the Required Repair
Funds from the Required Repair Account from time to time upon
satisfaction by Borrower of each of the following conditions: (a)
Borrower shall submit a written request for payment to Lender at least
thirty (30) days prior to the date on which Borrower requests such
payment be made and specifies the Required Repairs to be paid, (b) on
the date such request is received by Lender and on the date such
payment is to be made, no Default or Event of Default shall exist and
remain uncured, (c) Lender shall have received a certificate from
Borrower (i) stating that all Required Repairs at the applicable
Individual Owned Property to be funded by the requested disbursement
have been completed in good and workmanlike manner and in accordance
with all applicable federal, state and local laws, rules and
regulations, such certificate to be accompanied by a copy of any
license, permit or other approval by any Governmental Authority
required to commence and/or complete the Required Repairs, (ii)
identifying each Person that supplied materials or labor in connection
with the Required Repairs performed at such Individual Owned Property
to be funded by the requested disbursement, and (iii) stating that each
such Person has been paid in full or will be paid in full upon such
disbursement, such certificate to be accompanied by lien waivers or
other evidence of payment satisfactory to Lender, (d) at Lender's
option, a title search for such Individual Owned Property indicating
that such Individual Owned Property is free from all liens, claims and
other encumbrances not previously approved by Lender, and (e) Lender
shall have received such other evidence
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as Lender shall reasonably request that the Required Repairs at such
Individual Owned Property to be funded by the requested disbursement
have been completed and are paid for or will be paid upon such
disbursement to Borrower. Lender shall not be required to make
disbursements form the Required Repair Account with respect to any
Individual Owned Property unless such requested disbursement is in an
amount greater than Twenty-Five Thousand and No/100 Dollars ($25,000)
(or a lesser amount if the total amount in the Required Repair Account
is less than Twenty-Five Thousand and No/100 Dollars ($25,000), in
which case only one disbursement of the amount remaining in the account
shall be made) and such disbursement shall be made only upon
satisfaction of each condition contained in this Section 9.40(b).
Section 10. Events of Default. If one or more of the following events
(herein called "EVENTS OF DEFAULT") shall occur and be continuing:
(a) Borrower shall default in the payment of any principal of
the Loan when due (whether at stated maturity or at mandatory or
optional prepayment); or
(b) Borrower shall default in the payment of (i) any interest
on any Loan, (ii) any fee or (iii) any other amount (other than an
amount referred to in clause (a) of this Section 10) payable by it
hereunder or under any other Loan Document when due and such default
shall, in the case of (ii) or (iii), have continued unremedied for more
than 5 Business Days (but not beyond the stated maturity of the Loan
(whether lapse of time, prepayment, acceleration or otherwise); or
(c) any representation, warranty or certification made or
deemed made herein or in any other Loan Document (or in any
modification or supplement hereto or thereto) by Borrower or any of its
Subsidiaries, or any certificate furnished by any Obligor, to Lender
pursuant to the provisions hereof or thereof, shall prove to have been
false or misleading as of the time made or furnished in any material
respect (except to the extent derived from Tenant Information which
Borrower did not know was incorrect); or
(d) any Obligor shall default in the performance of any of its
obligations under any of Sections 9.03, 9.04 (as to its legal existence
and REIT status), 9.05, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11, 9.12, 9.13,
9.14, 9.15, 9.16, 9.17, 9.20(b), 9.21(b) or 9.22(b), and 9.23; or
(e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Section 10) or any other
Loan Document and such failure shall continue unremedied for a period
of 30 or more days after notice thereof to Borrower by Lender; or
(f) Borrower or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its other
Indebtedness aggregating $2,500,000 or more; or Borrower or any of its
Subsidiaries shall default in the payment when due of any amount
aggregating $2,500,000 or more under any Hedging Agreement and, in
either case, shall not have cured such default within the applicable
grace period, if any; or
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(g) any event specified in any note, agreement, indenture or
other document evidencing or relating to any other Indebtedness
aggregating $2,500,000 or more of Borrower or any of its Subsidiaries
shall occur if the effect of such event is to cause, or (with the
giving of any notice or the lapse of time or both) to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, such Indebtedness to become due, or
to require that it be prepaid in full (whether by redemption, purchase,
offer to purchase or otherwise), prior to its stated maturity or to
have the interest rate thereon reset to a level so that securities
evidencing such Indebtedness trade at a higher level; or any event
specified in any Hedging Agreement shall occur if the effect of such
event is to cause, or (with the giving of any notice or the lapse of
time or both) to permit, termination or liquidation payment or payments
aggregating $2,500,000 or more to become due; or
(h) a proceeding or case shall be commenced, without the
application or consent of Borrower or its affected Subsidiary, in any
court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution (other than the planned dissolution of Excel
Westminster AMC, Inc.), arrangement or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of Borrower or
such Subsidiary or of all or any substantial part of its Property, or
(iii) similar relief in respect of Borrower or such Subsidiary under
any law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving
or ordering any of the foregoing shall be entered and continue unstayed
and in effect, for a period of 60 or more days; or an order for relief
against Borrower or any of its Subsidiaries shall be entered in an
involuntary case under the Bankruptcy Code; or
(i) Borrower or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or of
all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary
case under the Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the Bankruptcy Code or
(vi) take any corporate action for the purpose of effecting any of the
foregoing (other than for the planned dissolution of Excel Westminster
AMC, Inc.); or
(j) Borrower or any of its Subsidiaries shall admit in writing
its inability to, or be generally unable to, pay its debts as such
debts become due; or
(k) a final judgment or judgments for the payment of money of
$2,500,000 or more in the aggregate (exclusive of judgment amounts
covered by insurance where the insurer has admitted or failed to deny
liability in respect of such judgment) shall be rendered by one or more
courts, administrative tribunals or other bodies having jurisdiction
against Borrower or any of its Subsidiaries and the same shall not be
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discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 30 days from
the date of entry thereof or Borrower or the relevant Subsidiary shall
not, within such period of 30 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(l) an event or condition shall occur or exist with respect to
any Plan or Multiemployer Plan and, as a result of such event or
condition, together with all other such events or conditions, Borrower
or any ERISA Affiliate shall incur or in the opinion of the Lender
shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or the PBGC (or any combination of the foregoing)
that, in the determination of the Lender, would (either individually or
in the aggregate) have a Material Adverse Effect; or
(m) there shall have been asserted against Borrower or any of
its Subsidiaries an Environmental Claim that, in the judgment of the
Lender, is reasonably likely to be determined adversely to Borrower or
any of its Subsidiaries, and the amount thereof (either individually or
in the aggregate) is reasonably likely to have a Material Adverse
Effect (insofar as such amount is payable by Borrower or any of its
Subsidiaries but after deducting any portion thereof that is reasonably
expected to be covered by insurance or paid by other creditworthy
Persons jointly and severally liable therefor); or
(n) a Change in Control of any Obligor shall occur; or
(o) If Borrower has not borrowed all of Tranche B by November
19, 2001 (or such longer period as Lender may elect in its sole
discretion); provided, however, that it shall not be an Event of
Default under this subsection (p) if the sole reason for Borrower's
failure to borrow all of Tranche B within such time frame is Borrower's
failure to obtain the Archon Required Amendments after otherwise
complying with the terms of Section 9.37; or
(p) any "Event of Default" under any other provision of this
Agreement or any other Loan Document.
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (h) or (i) of this Section 10 with respect to any Obligor,
Lender may, by notice to Borrower, terminate the obligation of Lender to advance
Loan Proceeds and/or declare the principal amount then outstanding of, and the
accrued interest on, the Loan and all other amounts payable by the Obligors
hereunder and under the Note (including any amounts payable under Section 5.03)
to be forthwith due and payable, whereupon such amounts shall be immediately due
and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by each Obligor; and (2) in the
case of the occurrence of an Event of Default referred to in clause (h) or (i)
of this Section 10 with respect to any Obligor, the obligation of Lender to
advance Loan Proceeds shall automatically be terminated and the principal amount
then outstanding of, and the accrued interest on, the Loan, and all other
amounts payable by the Obligors hereunder and under the Note (including any
amounts payable under Section 5.03) shall automatically become immediately due
and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by each Obligor.
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Section 11. Current Balances. Attached as Exhibit J is a list of the
full amount of the Loan advanced, interest owed, and amounts held in Reserves as
of the date set forth on such exhibit. Borrower, the Subsidiary Guarantors, and
Lender each acknowledge and agree that such amounts are true, correct, and
complete as of such date.
Section 12. Miscellaneous.
12.01 Notices. All notices, requests and other communications
provided for herein (including any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing (including by
telecopy), delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof (below the name of
Borrower, in the case of any Subsidiary Guarantor); or, as to any party, at such
other address as shall be designated by such party in a notice to each other
party. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
12.02 Waiver. No failure on the part of the Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement or Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement or Note preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
law.
12.03 Amendments, Etc. Except as otherwise expressly provided
in this Agreement, any provision of this Agreement may be modified or
supplemented only by an instrument in writing signed by Borrower and Lender and
any provision of this Agreement may be waived by Lender.
12.04 Expenses, Etc. Borrower agrees to pay or reimburse
Lender, upon demand from Lender, for: (a) all reasonable out-of-pocket costs and
expenses of Lender (including, without limitation, the reasonable fees and
expenses of Katten Muchin Zavis, special counsel to Lender and the reasonable
fees and expenses of Lender's special state counsel) in connection with (i) the
negotiation, preparation, execution and delivery of this Agreement and the other
Loan Documents and the extension of credit hereunder and (ii) the negotiation or
preparation of any modification, supplement or waiver of any of the terms of
this Agreement or any of the other Loan Documents (whether or not consummated);
(b) all reasonable out-of-pocket costs and expenses of Lender (including the
reasonable fees and expenses of legal counsel) in connection with (i) any
Default and any enforcement or collection proceedings resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding
up or liquidation proceedings, (y) judicial or regulatory proceedings and (z)
workout, restructuring or other negotiations or proceedings (whether or not the
workout, restructuring or transaction contemplated thereby is consummated) and
(ii) the enforcement of this Section 12.04; and (c) all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents or any other document referred to herein or therein.
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Borrower hereby agrees to defend, indemnify and hold each of the
Indemnified Parties harmless from and against, any and all losses, liabilities,
claims, damages or expenses incurred by any of them, whether or not Lender is a
party thereto) arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or litigation or other
proceedings) relating to the extensions of credit hereunder or any actual or
proposed use by Borrower or any of its Subsidiaries of the proceeds of any of
the extensions of credit hereunder, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified or such
Indemnified Party's material breach of this Agreement, or claims against such
Indemnified Party arising from its own acts or omissions to the extent wholly
unrelated to this Agreement). Without limiting the generality of the foregoing,
Borrower will defend, indemnify and hold each of the Indemnified Parties
harmless against, any losses, liabilities, claims, damages or expenses described
in the preceding sentence (but excluding, as provided in the preceding sentence,
any loss, liability, claim, damage or expense incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified or such
Indemnified Party's material breach of this Agreement, or claims against such
Indemnified Party arising from its own acts or omissions to the extent wholly
unrelated to this Agreement) arising under any Environmental Law as a result of
the past, present or future operations of Borrower or any of its Subsidiaries,
or the past, present or future condition of any site or facility owned, operated
or leased at any time by Borrower or any of its Subsidiaries, or any Release or
threatened Release of any Hazardous Materials at or from any such site or
facility, excluding any such Release or threatened Release that shall occur
during any period when Lender shall be in possession of any such site or
facility following the exercise by the Lender of any of its rights and remedies
hereunder, but including any such Release or threatened Release occurring during
such period that is a continuation of conditions previously in existence, or of
practices employed by Borrower and its Subsidiaries, at such site or facility.
12.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12.06 Assignments by Obligors. No Obligor may assign any of
its rights or obligations hereunder or under the Note without the prior consent
of the Lender.
12.07 Secondary Market Transaction in Loan and Note. Borrower
and each Subsidiary Guarantor agrees that Lender has the absolute right to
securitize, sell, assign, pledge, syndicate, grant participations in, or
otherwise dispose of, all or any portion of the Loan (each such transaction, a
"SECURITIZATION"). Lender may determine to resell some or all of the Loan or
retain title to some or all of the Loan as part of a Securitization. Provided
that the following are at no material additional expense to any Obligor (other
than expenses which an Obligor is otherwise obligated to pay pursuant the Loan
Documents), do not create any additional material obligations of any Obligor or
materially adversely affect any Obligor's rights under the Loan Documents:
(a) Borrower agrees that Borrower shall cooperate, and
Borrower shall cause each Subsidiary Guarantor to cooperate, in all
reasonable respects at the request of Lender in connection with any
such Securitization, including in connection with any
106
documentation changes and any site inspections, updated appraisals,
financial information (including financial statements and other
financial information as described in this Agreement) or other
diligence requested or conducted by any investors, and/or any Rating
Agency, whether before or after funding. In connection with any
Securitization, Lender may, among other things, in its sole discretion,
determine to (i) reconstitute the Loan such that it is recast into
multiple loans of such priorities and terms as Lender may determine (so
long as the economic terms of the Loan do not, in the aggregate,
materially change), and/or (ii) sever the Loan or any tranche thereof
into two or more self-contained, internally cross-collateralized
mortgage loan financings (any of all of the foregoing, a "LOAN
RECONSTITUTION"). Borrower agrees that Borrower will reasonably
cooperate, and cause each Subsidiary Guarantor to reasonably cooperate,
in all material respects at the request of the Lender in connection
with any such Loan Reconstitution.
(b) Without in any way limiting the generality of the
foregoing, each Obligor agrees that Lender may, among other things, in
its sole discretion, elect to effect a Loan Reconstitution pursuant to
which the Loan is recast into a senior loan tranche (the "SENIOR
TRANCHE") and a junior loan tranche (the "JUNIOR TRANCHE") as follows:
(i) the principal amount of each of the Senior Tranche and the Junior
Tranche will be determined by Lender in its sole discretion (provided
that the aggregate principal amount thereof shall not exceed the
aggregate principal amount of the Loan outstanding immediately prior to
such Loan Reconstitution); (ii) the interest rate applicable to each of
the Senior Tranche and the Junior Tranche shall be determined by Lender
in its sole discretion (provided that the blended interest rate from
time to time applicable to the Senior Tranche and the Junior Tranche
and the payments as a result thereof shall not exceed the interest rate
and the payments as a result thereof which, but for such Loan
Reconstitution, would have been applicable from time to time under the
Loan pursuant to this Agreement), (iii) the Senior Tranche will
continue to be evidenced and secured by the Loan Documents and the
Junior Tranche will be evidenced and secured by one (1) or more pledge
agreements of all of the stock, shares, partnership interests,
membership interests, beneficial interests or other ownership interests
in Obligors and by other loan documents which are substantially in the
forms of the Loan Documents, in each case with such documentation
changes as Lender may reasonably request (1) to evidence the principal
amount of and interest rate applicable to each of the Senior Tranche
and the Junior Tranche and the subordination of the Junior Tranche to
the Senior Tranche, (2) at Lender's election to cause the Senior
Tranche to cross-default the Junior Tranche and/or the Junior Tranche
to cross default the Senior Tranche, (3) at Lender's election, to cause
certain of the provisions of this Agreement (including, without
limitation, the definition of or affecting financial ratios and the
release price calculations) to be applicable to the Senior Tranche and
the Junior Tranche on an aggregate basis, (4) at Lender's election, the
pledgor(s) under the pledge agreement securing the Junior Tranche shall
be the obligor(s) with regard to the Junior Tranche, Borrower shall
cause the pledgors in question to execute the applicable documentation
required by Lender and the applicable Obligor will no longer be an
obligor with regard to the portion of the Loan represented by the
Junior Tranche; and (5) to reflect such other documentation changes
and/or changes to the structure of the Loan and the organizational
documents of each Obligor and the other pledgors, if any, as Lender may
reasonably request in connection with the Senior Tranche
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and/or the Junior Tranche. At Lender's election, the Senior Tranche and
Junior Tranche may each be subject to one or more Securitizations.
(c) Except to the extent the Loan Documents otherwise require,
Obligors shall not be required to pay for material third party
out-of-pocket costs and expenses which are incurred in a Securitization
subsequent to the Closing Date.
(d) Without in any way limiting the generality of the
foregoing, each Obligor agrees that, in order to implement a
Securitization involving a public offering or private placement of
certificates ("CERTIFICATES"), (i) Lender may transfer, pledge or
assign to one or more of a depositor, indenture trust, owner trust or
other trust (collectively, a "DEPOSITOR") all right, title and interest
of Lender in, to and under the Loan and the Loan Documents, (ii) if
such Securitization is a public offering of Certificates, some or all
of Lenders in, or the Depositor, as the case may be, may exercise the
Replacement Option, and (iii) the Depositor may enter into a pooling
and servicing agreement or other agreement which provides for issuance
of the Certificates (the "POOLING AND SERVICING AGREEMENT"). Pursuant
to the Pooling and Servicing Agreement, the Depositor will assign,
pledge or grant to the certificate trustee (or to the indenture
trustee, as trustee, if such Securitization involves a public or
private offering of Certificates), among other things, all of the
Depositor's right, title and interest in, to and under each of the Loan
Documents (as such Loan Documents may have therefore been amended or
reconstituted, including in connection with the exercise of the
Replacement Option, if applicable) and may grant to the certificate
trustee (or to the indenture trustee, as trustee, if applicable in
connection with a Securitization involving a public or private offering
of Certificates) the full or any part of the exclusive and irrevocable
right, power and authority to exercise or to determine to refrain from
exercising, any rights, powers and privileges of the Lender under the
Loan Documents, including, without limitation, (x) the right to grant
or withhold any and all consents or approvals which may be requested or
given pursuant to this Agreement or any of the other Loan Documents,
and the right to exercise any vote or abstain from voting on any matter
on which a vote may be required hereunder or thereunder, including any
determination to amend, modify, waiver or terminate any provision
hereof or thereof, (y) the right to give and receive any and all
notices, demands or other communication which are required to be, or
may be, given hereunder or thereunder, and (z) the right to exercise or
determine to refrain from exercising any and all rights and remedies
hereunder or thereunder. For all purposes of this Agreement and the
other Loan Documents, each Obligor may assume, and shall recognize,
that upon such assignment (other than for collateral purposes and, if
for collateral purposes, upon assignment in connection with the
exercise of remedies or in lieu of the exercise of remedies) to the
certificate trustee or the indenture trustee, as the case may be, the
certificate trustee or the indenture trustee, as the case may be, shall
be and become the Lender for all purposes hereunder and under the other
Loan Documents and shall have all rights of Lender hereunder and
thereunder, including, without limitation, the right to exercise or
refrain from exercising any and all of such rights, powers and
privileges. Each Obligor further agrees that the Depositor, Lender,
certificate trustee and/or the indenture trustee may delegate any or
all of Lender's rights, powers and privileges to a servicer
("SERVICER") and each Obligor shall recognize the Servicer as the agent
of the certificate trustee and/or the indenture trustee, as the case
may be.
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(e) Each Obligor acknowledges and agrees that the Certificates
representing beneficial interests in the Loan may be offered to the
public in a transaction requiring registration under the Securities Act
of 1933, as amended. In such event, the holder of the Loan (who at such
time may be Lender, an administrative agent, as agent, for Lender or
the Depositor) shall have the absolute right at any time in connection
with effecting such Securitization, to exercise the Replacement Option,
provided that each Obligor is afforded not less than 10 Business Days'
prior written notice of the intention to exercise the Replacement
Option. "REPLACEMENT OPTION," when used herein or in any of the other
Loan Documents, shall mean the right and option of the then holder of
the Loan to require Borrower to (i) execute and deliver an indenture
(the "Indenture") with a trustee (which trustee shall be qualified to
act as such under the Trust Indenture Act of 1939 and shall otherwise
be selected by and satisfactory to the then holder of the Loan) which
Indenture shall amend and restate this Agreement (or otherwise replace
this Agreement) in its entirety insofar as it relates to the Loan, (ii)
cooperate with the then holder of the Loan and any other required
Persons in connection with the qualification of the Indenture under the
Trust Indenture Act of 1939, (iii) issue notes under and pursuant to
the Indenture (the "INDENTURE NOTES"), which Indenture Notes shall be
duly authenticated and delivered by the indenture trustee, in
replacement of the Note evidencing the Loan, (iv) take all actions as
are required to cause the Indenture Notes to be secured by the Loan
Documents, and to ensure that the priority of the Mortgage is not
impaired by virtue of such replacement of the Note with the Indenture
Notes, and (v) cooperate with the then holder of the Loan in connection
with the assignment of such holder's interest under the Loan Documents
in question to the indenture trustee, as trustee for the benefit of the
holder of the Indenture Notes.
(f) Each Obligor will, upon request from Lender, in connection
with a Securitization, enter into such acknowledgments and
confirmations of the applicable assignments as Lender may request.
12.08 Sale of Note and Securitization. At the request of the
holder of the Note and, to the extent not already required to be provided by an
Obligor under this Agreement or the other Loan Documents, each Obligor shall,
subject to the terms and provisions of this Section 12.08, use reasonable
efforts to satisfy the market standards to which the holder of the Note
customarily adheres or which may be reasonably required in the marketplace or by
the Rating Agencies in connection with a Securitization, including using
reasonable efforts to do (or cause to be done) the following (but Obligors will
not in any event be required pursuant to any of the provisions of this Section
12.08 to incur, suffer or accept (except to a de minimis extent) (i) any lesser
rights or greater obligations as are currently set forth in the Loan Documents
or an Obligor's organizational documents (unless Borrower is made whole by the
holder of the Note), or (ii) except as expressly set forth in this Section
12.08, any expense:
(a) (i) provide such financial and other information as may be
reasonably requested, subject to the terms and provisions hereof, with
respect to the Individual Property, Borrower, Subsidiary Guarantors and
their Subsidiaries and affiliates, and, to the extent in the possession
of an Obligor and not subject to confidentiality restrictions, any
tenants of any Individual Property, (ii) provide business plans and
budgets relating to the Individual Property (and to the extent such
information is readily available to
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Borrower, the same shall be provided without cost to Lender) and (iii)
to perform or permit or cause to be performed or permitted or allow
Lender to perform such site inspection, appraisals, market studies,
environmental reviews and reports (Phase I's and, if appropriate, Phase
II's), engineering reports and other due diligence investigations of
the Property, as may be reasonably requested by Lender or the Rating
Agencies or as may be necessary or appropriate in connection with the
Securitization (the "Provided Information"), together, if customary,
with appropriate verification and/or consents of the Provided
Information to the extent reasonably obtainable, through letters of
auditors, engineers or appraisers or opinions of counsel; and
(b) cause independent counsel to render opinions as to
fraudulent conveyance or any other opinion customary in securitization
transactions with respect to the Individual Property, and Borrower, and
its affiliates (but not a true sale or 10b-5 opinion), including,
without limitation, a nonconsolidation opinion and/or insolvency option
acceptable to Lender and all applicable rating agencies, which counsel
and opinions shall be reasonably satisfactory to Lender and the Rating
Agencies and which shall be addressed to such Persons as shall be
reasonably designated by the holder of the Note. Any Obligor's failure
to deliver the opinions required hereby within such ten (10) Business
Days after written request therefor shall constitute an "Event of
Default" hereunder.
12.09 Cooperation with Rating Agencies. In the event this Loan
becomes an asset in or of a Securitization, Borrower agrees upon Lender's
request to meet with representatives of the Rating Agencies in connection with
such a Securitization to discuss the business and operations of the Individual
Properties and, in that regard, agrees to cooperate with the reasonable requests
of the Rating Agencies including, without limitation delivering any existing
environmental materials relating to the Individual Properties in Borrower's
possession.
12.10 Securitization Indemnification.
(a) Each Obligor understands that certain of the Provided
Information and the information required to be delivered by Borrower
hereunder (the "REQUIRED REPORTS") may be included in disclosure
documents in connection with the Securitization, including a prospectus
or private placement memorandum (each, a "DISCLOSURE DOCUMENT") and may
also be included in filings with the United States Securities and
Exchange Commission pursuant to applicable law, or provided or made
available to investors or prospective investors in the Securities, the
Rating Agencies, and service providers relating to the Securitization.
In the event that the Disclosure Document is required to be revised
prior to the sale of Securities or other transfer of ownership with
respect to the Securitization, each Obligor will cooperate with the
holder of the Note in updating the Provided Information or Required
Reports for inclusion or summary in the Disclosure Document by
providing all current information pertaining to any Obligor, any
Subsidiary of an Obligor, and the Individual Properties necessary to
keep the Disclosure Document accurate and complete in all material
respects with respect to such matters.
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(b) In connection with each of (x) a preliminary and a private
placement memorandum or (y) a preliminary and final prospectus, as
applicable, Borrower agrees to provide an indemnification certificate:
(i) provided Borrower has been requested by Lender to
do so, and if the applicable items have been revised to
reflect all of Borrower's comments, certifying that Borrower
has examined those portions of such memorandum or prospectus,
as applicable, expressly pertaining to any Obligor, any
Subsidiary of an Obligor, and the Individual Properties and
the Loan including applicable portions of the sections
entitled "Special Considerations," "Description of the
Mortgages," "Description of the Mortgage Loans and Mortgaged
Properties," "Borrower" and "Certain Legal Aspects of the
Mortgage Loan," (or analogous portions or sections) and such
sections (and any other sections reasonably requested and
pertaining to any Obligor, any Subsidiary of an Obligor, and
the Individual Properties or the Loan), all of which sections
have been identified to Borrower by Lender do not contain any
untrue statement of a material fact or, to the best of
Borrower's knowledge, omit to state a material fact necessary
in order to make the statements made, in the light of the
circumstances under which they were made, not materially
misleading as the applicable sections pertain to Borrower, the
Loan and the Properties;
(ii) indemnifying Lender and the Affiliates of Lender
that have filed a registration statement relating to the
Securitization (the "REGISTRATION STATEMENT"), each of their
directors, each of their officers who have signed the
Registration Statement and each Person who controls Lender or
Lender Parent within the meaning of any federal or state
securities laws (collectively, the "LENDER GROUP"), any
underwriters selected by Lender or Lender Parent for the
Securitization, and each Person who controls the underwriters
in question, within the meaning of any federal or state
securities laws (collectively, the "UNDERWRITER GROUP") for
any losses, claims, damages or liabilities (the "LIABILITIES")
to which Lender, the Lender Group or the Underwriter Group may
become subject insofar as the Liabilities arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in the applicable portions of such
sections described in Section 12.10(b)(i) expressly applicable
and relating to the Obligors, any Subsidiary of the Obligors,
the Individual Properties or the Loan, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated in the applicable portions
of such sections or necessary in order to make the statements
in the applicable portions of such sections or in light of the
circumstances under which they were made, not misleading,
provided, however, that Borrower shall not be required to
indemnify Lender for any Liabilities relating to untrue
statements or omissions which Borrower identifies to Lender in
writing at the time of Borrower's examination of the
Registration Statement; and
(iii) agreeing to reimburse the Lender, the Lender
Group and the Underwriter Group for any legal or other
expenses reasonably incurred by such Persons in connection
with investigating or defending the Liabilities. Borrower's
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Liability under clauses (i), (ii) above and this clause (iii)
shall be limited to Liabilities arising out of or based upon
any such untrue statement or omission made therein in reliance
upon and in conformity with information prepared and furnished
to Lender by any Obligor pursuant to provisions of Sections
12.08, 12.09, and 12.10 hereof. This indemnity agreement will
be in addition to any liability which Borrower may otherwise
have.
(c) Promptly after receipt by an indemnified party under this
Section 12.10 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 12.10, notify the
indemnifying party in writing of the commencement thereof, but the
omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may
have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the
event that any action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled, jointly with any other
indemnifying party, to participate therein and, to the extent that it
(or they) may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party. After notice from the
indemnifying party to such indemnified party under this Section 12.10,
the indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there are any legal defenses
available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right, following notice to
and consultation with Borrower, to select separate counsel to assert
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties at the expense of
the indemnifying party. The indemnifying party shall not be liable for
the expenses of more than one separate counsel unless an indemnified
party shall have reasonably concluded that there may be legal defenses
available to it that are different from or additional to those
available to another indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provided for in this Section 12.10
is for any reason held to be unenforceable by an indemnified party in
respect of any losses, claims, damages or liabilities (or action in
respect thereof) referred to therein which would otherwise be
indemnifiable under this Section 12.10 the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages or liabilities (or action in
respect thereof); provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. In determining
the amount of contribution to which the respective parties are
entitled, the following factors shall be considered: (i) the Lender
Group's and Borrower's relative knowledge and access to information
concerning the
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matter with respect to which claim was asserted; (ii) the opportunity
to correct and prevent any statement or omission; and (iii) any other
equitable considerations appropriate in the circumstances. Lender and
Borrower hereby agree that it may not be equitable if the amount of
such contribution were determined by pro rata or per capita allocation.
(e) Rating Surveillance. Lender may retain the Rating Agencies
to provide rating surveillance services on any certificates issued in a
Securitization.
12.11 Retention of Servicer. Lender reserves the right to
retain a servicer to act as its agent hereunder with such powers as are
specifically delegated to the servicer by Lender, whether pursuant to the terms
of this Agreement, the Mortgage or otherwise, together with such other powers as
are reasonably incidental thereto. In no event shall any Obligor be required to
pay any servicer fees, securitization trustee fees or other securitization
administrative expenses except as may be expressly provided in this Agreement.
Notwithstanding the foregoing, Borrower shall pay any reasonable fees and
expenses of the servicer in connection with a prepayment, release of an
Individual Property, assumption or modification of the Loan, enforcement of the
Loan Documents or any other amounts which Borrower may be obligated to pay
pursuant to the Loan Documents.
12.12 Survival. The obligations of Borrower under Sections
5.03, 12.04, and 12.10 the obligations of each Subsidiary Guarantor under
Section 6.03 shall survive the repayment of the Loan the expiration or
termination of the Lender's obligation to advance and the termination of this
Agreement or any provision hereof and, in the case of Lender that may assign any
interest in the Loan hereunder, shall survive the making of such assignment,
notwithstanding that such assigning Lender may cease to be a "Lender" hereunder.
In addition, each representation and warranty made, or deemed to be made by a
notice of any extension of credit, herein or pursuant hereto shall survive the
making of such representation and warranty, and Lender shall not be deemed to
have waived, by reason of making any extension of credit hereunder, any Default
that may arise by reason of such representation or warranty proving to have been
false or misleading, notwithstanding that Lender may have had notice or
knowledge or reason to believe that such representation or warranty was false or
misleading at the time such extension of credit was made.
12.13 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
12.14 Governing Law; Submission to Jurisdiction.
(a) Governing Law. This Agreement and the Note shall be
governed by, and construed in accordance with, the law of the State of
New York.
(b) Submission to Jurisdiction. Each Obligor hereby
irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court
from
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any thereof, in any action or proceeding arising out of or relating to
this Agreement, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may
be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that Lender may otherwise have to
bring any action or proceeding relating to this Agreement against such
Obligor or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each Obligor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any court referred to in paragraph (b) of
this Section. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such
court.
(d) Service of Process. Each party to this Agreement
irrevocably consents to service of process in the manner provided for
notices in Section 12.01. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other
manner permitted by law.
12.15 WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS AND LENDER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.16 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
12.17 Treatment of Certain Information; Confidentiality.
(a) Borrower acknowledges that from time to time financial
advisory, investment banking and other services may be offered or
provided to Borrower or one or more of its Subsidiaries (in connection
with this Agreement or otherwise) by Lender or by one or more
subsidiaries or affiliates of Lender and Borrower hereby authorizes
Lender to share any information delivered to Lender by Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such
subsidiary or affiliate, it being understood that any such subsidiary
or affiliate receiving such information shall be bound by the
provisions of paragraph (b) below as if it were a Lender hereunder.
Such authorization and binding effect shall survive the repayment of
the Loan.
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(b) Lender agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with its
customary procedures for handling confidential information of the same
nature and in accordance with safe and sound lending practices and
shall not use same for any purpose other than in connection with this
Agreement or as permitted below or elsewhere in this Section 12, any
non-public information supplied to it by Borrower pursuant to this
Agreement, provided that nothing herein shall limit the disclosure of
any such information (i) after such information shall have become
public (other than through a violation of this Section 12.17), (ii) to
the extent required by applicable law or judicial process, (iii) to
counsel for the Lender, (iv) to bank examiners (or any other regulatory
authority having jurisdiction over any Lender), or to auditors,
accountants or advisors, (v) to the Lender, (vi) in connection with any
litigation to which the Lender or another Indemnified Party is a party,
or in connection with the enforcement of rights or remedies hereunder
or under any other Loan Document, (vii) to a subsidiary or affiliate of
such Lender as provided in paragraph (a) above, (viii) to any rating
agency or insurer, or (ix) in connection with a Securitization so long
as any assignee, pledgee, transferor, servicer, fiscal agent of
transferee or participant (or prospective assignee, pledgee,
transferor, servicer, fiscal agent of transferee or participant) is
advised of the confidential nature of the items in question. The
obligations of Lender under this Section 12.17 shall supersede and
replace the obligations of such Lender under any confidentiality
agreement, if any. The foregoing covenants may be enforced by Borrower
by obtaining injunctive or specific relief from a court of competent
jurisdiction, without the necessity of posting bond or proving lack of
adequate remedy at law, such remedies to be cumulative and not
exclusive of any other remedies available to Borrower at law or in
equity.
12.18 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "CHARGES"), shall exceed the
maximum lawful rate (the "MAXIMUM RATE") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section 12.18 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Rate to the date of repayment, shall
have been received by such Lender.
12.19 Construction of Documents. The parties hereto
acknowledge that they were represented by counsel in connection with the
negotiation and drafting of the loan Documents and that the Loan Documents shall
not be subject to the principle of construing their meaning against the party
which drafted same.
12.20 Waiver and Release. Borrower hereby represents and
warrants to, and covenants with, Lender that as of the Effective Date (a)
Borrower has no defenses, offsets or
115
counterclaims of any kind or nature whatsoever against Lender with respect to
this Agreement, the other Loan Documents, the transactions contemplated therein,
any action previously taken or not taken by Lender with respect thereto or with
respect to any security interest, encumbrance, lien or collateral in connection
therewith to secure the liabilities of Borrower thereunder, or any prior loans
or documents related thereto, and (b) Lender has fully performed all obligations
to Borrower which they may have had or have on and as of the date hereof and the
Effective Date. Without limiting the generality of the foregoing, Borrower, on
its own behalf and on the behalf of its past, present and future
representatives, partners, and managers, members, shareholders, officers,
directors, agents, employees, servants, direct and indirect subsidiaries, and
successors and assigns (hereinafter referred to as the "BORROWING GROUP") hereby
waives, releases and forever discharges Lender, and each of its past, present
and future officers, directors, subsidiary and affiliated entities or companies,
agents, servants, employees, shareholders, partners, members, managers,
representatives, successors, assigns, attorneys, accountants, assets and
properties, as the case may be (hereinafter referred to as the "LENDER GROUP")
from and against all manner of actions, cause and causes of action, suits,
debts, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, obligations,
liabilities, costs, expenses, losses, damages, judgments, executions, claims and
demands, of whatever kind and nature, in law or in equity, whether known or
unknown, whether or not concealed or hidden, arising out of or relating to any
matter, cause or thing whatsoever, that any of the Borrowing Group, jointly or
severally, may have had, or now have or that may subsequently accrue (with the
exception of any failure of Lender to fund the remaining portion of Tranche C
after Borrower has satisfied all conditions to such funding) against the Lender
Group by reason of any matter or thing whatsoever through the date hereof
arising out of or in any way connected to the Loan. Borrower acknowledges and
agrees that Lender is specifically relying upon the representations, warranties,
covenants and agreements contained herein and that such representations,
warranties, covenants, and agreements constitute a material inducement to enter
into the transactions contemplated in this Agreement.
[3 Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
BORROWER:
ENTERTAINMENT PROPERTIES TRUST
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Address for Notices:
Union Station
30 Pershing Road
Suite 201
Kansas City, Missouri 64108
Attention: David Brain
Telecopier No.: (816) 472-5794
Telephone No.: (816) 472-1700
SUBSIDIARY GUARANTORS:
MEGAPLEX FOUR, INC.
By: ________________________________________
Name:_______________________________________
Title:______________________________________
Address for Notices:
Union Station
30 Pershing Road
Suite 201
Kansas City, Missouri 64108
Attention: David Brain
Telecopier No.: (816) 472-5794
Telephone No.: (816) 472-1700
117
SUBSIDIARY GUARANTORS (CONT.)
THEATRE SUB, INC.
By: ________________________________________
Name:_______________________________________
Title:______________________________________
Address for Notices:
Union Station
30 Pershing Road
Suite 201
Kansas City, Missouri 64108
Attention: David Brain
Telecopier No.: (816) 472-5794
Telephone No.: (816) 472-1700
118
LENDER:
SFT II, INC., a Delaware corporation
___________________________________________
___________________________________________
Name:______________________________________
Title:_____________________________________
Address for Notices:
1114 Avenue of the Americas
27th Floor
New York, New York 10036
Attention: ________________________________
Telecopier No.:____________________________
Telephone No.:_____________________________
119