<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
/X/ Quarterly report under Section 13 or 15 (d) of the Securities Exchange Act
of 1934
For the quarterly period ended June 30, 1999
/ / Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from to
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Commission file number: 000-24167
EBS Building, L.L.C.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 43-1794872
- ----------------------------------- -------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
c/o PricewaterhouseCoopers, LLP, 800 Market Street,
St. Louis, Missouri 63101-2695
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(Address of Principal Executive Offices)
(314)206-8500
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(Issuer's Telephone Number, Including Area Code)
N/A
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(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--------------- ---------------
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrants filed all documents and reports required
to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes X No
--------------- --------------
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of March 31, 1999, there
were 10,000,000 Class A Membership Units outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
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<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EBS BUILDING, L.L.C.
BALANCE SHEET
JUNE 30, 1999
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<TABLE>
<CAPTION>
JUNE 30, 1999 DECEMBER 31, 1998
(UNAUDITED)
<S> <C> <C>
ASSETS
Rental property $ 22,346,003 $ 19,683,977
Cash 362,069 512
Rents receivable 62,964 18,209
Prepaid expenses 43,367 19,931
Lease Commissions (net) 1,071,705 884,766
Lease Restructuring Costs (net) 547,648 766,703
Other assets 202 202
--------------- ---------------
Total assets $ 24,433,957 $ 21,374,300
--------------- ---------------
LIABILITIES
Accounts payable $ 339,819 $ 180,061
Accrued professional fees 90,928 73,636
Accrued utilities 138,897 78,695
Accrued salaries 15,979 34,131
Accrued property taxes 243,758 --
Accrued payable - other 6,000 451,845
Note payable 6,010,017 2,000,000
Other liabilities 25,708 11,262
--------------- ---------------
Total liabilities 6,871,106 2,829,630
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MEMBERS' EQUITY:
Membership Units (Class A - 10,000,000 authorized,
issued and outstanding at June 30, 1999 and December
31, 1998) -- --
Paid-in capital 19,810,522 19,810,522
Retained earnings (2,247,671) (1,265,852)
--------------- ---------------
Total members' equity 17,562,851 18,544,670
--------------- ---------------
Total liabilities and members' equity $ 24,433,957 $ 21,374,300
--------------- ---------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
EBS BUILDING, L.L.C.
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1999
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<TABLE>
<CAPTION>
FOR THE 3 MONTHS ENDED FOR THE 6 MONTHS ENDED
------------------------------------- ---------------------------------
JUNE 30, 1999 JUNE 30, 1998 JUNE 30, 1999 JUNE 30, 1998
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Income:
Rent $ 1,082,825 $ 876,511 $ 1,846,538 $ 1,693,398
Other 23,223 27,982 53,642 58,300
------------ ------------ ------------ ------------
Total income 1,106,048 904,493 1,900,180 1,751,698
------------ ------------ ------------ ------------
Expenses:
Maintenance 235,428 343,851 452,535 639,207
Professional fees 185,080 255,134 333,574 452,321
Utilities 187,949 180,974 367,167 351,255
General and administrative 682,240 130,600 877,620 208,912
Depreciation 258,327 131,278 511,176 246,329
Taxes (including real estate taxes) 121,879 104,234 243,758 208,265
Other operating expenses 51,701 43,891 96,169 83,704
------------ ------------ ------------ ------------
Total expenses 1,722,604 1,189,962 2,881,999 2,189,993
------------ ------------ ------------ ------------
Net loss $ (616,556) $ (285,469) $ (981,819) $ (438,295)
------------ ------------ ----------- ------------
Net loss per Class A Unit - primary $ (0.06) $ (0.03) $ (0.10) $ (0.05)
Net loss per Class A Unit -
fully diluted $ (0.06) $ (0.03) $ (0.10) $ (0.04)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
EBS BUILDING, L.L.C.
STATEMENT OF CHANGES IN MEMBERS' EQUITY
FOR THE PERIOD ENDED JUNE 30, 1999
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<TABLE>
<CAPTION>
CLASS A CLASS B
MEMBERSHIP MEMBERSHIP PAID IN RETAINED
UNITS UNITS CAPITAL EARNINGS TOTAL
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998 10,000,000 -- $19,810,522 $(1,265,852) $18,544,670
Units transferred (unaudited) -- -- -- -- --
Year to date loss (unaudited) -- -- -- (981,819) (981,819)
----------- ----------- ----------- ----------- -----------
Balance, June 30, 1999
(unaudited) 10,000,000 532,783 $19,810,522 $ (2,247,671) $17,562,851
=========== =========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
EBS BUILDING, L.L.C.
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED JUNE 30, 1999
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<TABLE>
<CAPTION>
FOR THE 6 MONTHS FOR THE 6 MONTHS
ENDED ENDED
JUNE 30, 1999 JUNE 30, 1998
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (981,819) $ (438,295)
Reconciliation of net loss to cash flows
provided by operating activities:
Depreciation expense 511,177 246,329
Changes in operating assets and liabilities:
Increase in assets, excluding cash
and rental property (78,113) 128,861
Increase in liabilities 31,459 50,040
----------- -----------
Cash flows provided by operating activities (517,296) (13,065)
----------- -----------
Cash flows from investing activities:
Additions to rental property (2,919,938) (437,252)
Payments for lease commissions (211,227) (119,023)
----------- -----------
Cash flows provided by investing activities (3,131,165) (556,275)
----------- -----------
Cash flows from financing activities:
Proceeds from note payable 4,010,017 170,000
----------- -----------
Cash flows provided by financing activities 4,010,017 170,000
----------- -----------
Net decrease in cash 361,556 (399,340)
Cash, beginning of period 512 403,919
----------- -----------
Cash, end of period $ 362,068 $ 4,579
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
EBS BUILDING, L.L.C.
Notes to Financial Statements (unaudited)
June 30, 1999
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1. The accompanying unaudited financial statements, in the opinion of the
Manager, include all adjustments necessary for a fair presentation of
the results for the interim periods presented. These adjustments
consist of normal recurring accruals. The financial statements are
presented in accordance with the requirements of Form 10-QSB and
consequently do not include all the disclosures required by generally
accepted accounting principles. For further information, refer to the
financial statements and notes thereto for the period ended December
31, 1998 included in the Company's Annual Report on Form 10-KSB filed
on March 31, 1999.
2. The following table sets forth the computation of primary and fully
diluted earnings (loss) per unit for the periods ended:
<TABLE>
<CAPTION>
For the 3 Months Ended For the 6 Months Ended
---------------------- ----------------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Numerator:
Net Earnings/(Loss) - Primary and Diluted $ (616,556) $ (285,469) $ (981,819) $ (438,295)
============= ============ ============ ===========
Denominator:
Weighted Average Units Outstanding -
Primary 10,000,000 9,381,002 10,000,000 9,304,117
Effect of Potentially Dilutive Units
- 618,998 - 695,883
------------- ------------ ------------ -----------
Units Outstanding - Diluted
10,000,000 10,000,000 10,000,000 10,000,000
============= ============ ============= ===========
Primary Earnings/(Loss) per Unit $ (0.06) $ (0.03) $ (0.10) $ (0.05)
Diluted Earnings/(Loss) per Unit $ (0.06) $ (0.03) $ (0.10) $ (0.04)
</TABLE>
The weighted average units outstanding - basic was calculated on a
daily outstanding unit basis. The outstanding units - diluted was
calculated assuming that all of the Class B Units currently issued and
outstanding will eventually be converted into an equal number of Class
A Units.
4. Effective June 18, 1999, the Company entered into a $12,000,000
revolving line of credit with FinPro, L.L.C. (the "Line of Credit"). An
initial advance of $6,000,000 was used in part to repay the outstanding
balance on the existing loan from First Bank. In addition, the Company
presently intends to use the Line of Credit for working capital needs
and tenant improvements. Borrowings under the Line of Credit bear
interest at a rate per annum equal to the LIBOR rate plus 3.5%. A
commitment fee of $180,000 was incurred for this Line of Credit. In
addition, debt redemption fees, servicing and administration fees and
unused commitment fees will be incurred. Payments due for borrowings
on the Line of Credit are for interest only until maturity (May 31,
2001), when all outstanding principal and interest is due and payable.
As of June 30, 1999, the Company had outstanding borrowings of
$6,010,017 under the Line of Credit.
5. On May 28, 1999, the Company entered into a ten-year lease with Baird,
Kurtz & Dobson ("BKD") for approximately 22,397 square feet of rentable
office space, or approximately 5% of total rentable space. The BKD
lease commences on September 5, 1999, provides annual rent ranging from
$380,749 to $403,146 and expires on September 15, 2009.
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
During the forthcoming twelve months of operations, the Company intends to
continue owning, managing, maintaining, repairing, leasing, selling,
hypothecating, mortgaging or otherwise dealing with the building located at 501
North Broadway, St. Louis, Missouri (the "Building"). Further, the Company
intends to actively market the Building for sale during the forthcoming twelve
months as well as to continue to secure additional tenant leasing agreements.
On March 9, 1999, Edison Brothers Stores, Inc. ("Edison"), the Building's
largest tenant, filed, together with seven of its affiliates, for Chapter 11
bankruptcy in the U.S. Bankruptcy court in Delaware. On July 14, 1999, Edison
filed a motion to extended the period within which they may assume or reject
their lease with the Company to October 29, 1999. The ultimate effect of the
bankruptcy filing of Edison on the operating results of the Company and its
ability to sell the Building is not known at this time.
During June of 1999, the Company entered into a $12,000,000 revolving line of
credit with FinPro, L.L.C. to cover any shortfalls in cash flows (the "Line of
Credit"). As of June 30, 1999, the Company had drawn $6,010,017 upon its line of
credit. Such funds were used to repay an existing $5,200,000 facility with First
Bank that matured on June 23, 1999, as well as to finance various other tenant
improvements and lease costs. The Line of Credit matures on May 31, 2001. Future
advances under the Line of Credit are available to pay future tenant improvement
costs, operating deficits and accrued interest on the Line of Credit. Management
believes that funds from operations and the Company's present availability under
its revolving line of credit provide sufficient resources to meet the Company's
present and anticipated financing needs.
On May 28, 1999, the Company entered into a ten-year lease with Baird, Kurtz &
Dobson ("BKD") for approximately 22,397 square feet of rentable office space, or
approximately 5% of total rentable space. The BKD lease commences on September
5, 1999, provides annual rent ranging from $380,749 to $403,146 and expires on
September 15, 2009. The Company incurred lease commission of approximately
$175,000 and tenant improvement costs of approximately $570,000 associated with
the BKD lease.
During the six months ended June 30, 1999, the Company experienced an increase
in cash of $361,556. This increase resulted from the initial advance under the
Line of Credit offset by tenant improvement and commission costs incurred with
various new lease agreements. In addition, the Company incurred a net loss of
$616,556 during the second quarter of fiscal 1999 as compared to a net loss of
$285,469 during the same period in the prior year. Such loss is primarily
attributable to bank fees and interest incurred related to the Line of Credit
and depreciation costs. Revenues during the second quarter of the fiscal year
increased 22% over the
<PAGE> 8
prior year due to the commencement of certain new leases including a lease with
Stifel Nicolaus & Company, Incorporated.
Year 2000 Compliance
The Company, through its Property Manager, utilizes computer software
for its corporate and real property accounting records and to prepare its
financial statements, as well as for internal accounting purposes. The current
principal accounting system software is not Year 2000 compliant. The Property
Manager has informed the Company that it has installed an update to its current
software and plans to perform separate validation testing of these systems. The
cost of such updates and testing will be borne by the Property Manager. However,
in the event that such systems should fail, as a contingency plan, the Company
could prepare all required accounting entries manually, without incurring
material additional operating expenses.
The Property Manager has also informed the Company that it has
completed a review of the major date-sensitive non-information technology
systems (such as the elevators, heating, ventilating, air conditioning and
cooling ("HVAC") systems, locks, and other like systems) in the Building and is
in the process of upgrading any systems that are not Year 2000 compliant. The
Property Manager plans to internally make such determinations. The Company
expects to incur no more than $60,000 in costs associated with upgrading the
current systems. The Property Manager estimates that all remediation work to the
Building will be completed by the end of the third quarter of the current fiscal
year. In the most reasonably likely worst case scenario, the failure of the
non-information technology systems in the Building could lead tenants to
withhold their rent payments, which could have a material adverse effect on the
Company's business, results of operations and financial condition. However, the
Company does not believe that the Year 2000 issue will pose significant problems
to the Company's information technology and non-information technology systems,
or that resolution of any potential problems with respect to such systems will
have a material adverse effect on the Company's financial condition or results
of operations.
The Company has not endeavored to determine whether or not its tenants
are Year 2000 compliant. The most reasonably likely worst case scenario facing
the Company as a result of a failure of its tenant's (or their financial service
providers') computer systems would be such tenant's inability to pay rent on
time. Such delays in payment could have a material adverse effect on the
Company's financial condition or results of operations.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits (listed by numbers corresponding to the Exhibit
Table of Item 601 of Regulation S-B)
3.1: Articles of Organization of the Issuer filed with the
Delaware Secretary of State on September 24, 1997
incorporated by reference to the Issuer's
<PAGE> 9
Registration Statement on Form 10-SB filed on April
30, 1998, Exhibit 2.1.
3.2: Members Agreement of EBS Building, L.L.C. a Limited
Liability Company, dated as of September 26, 1997
incorporated by reference to the Issuer's
Registration Statement on Form 10-SB filed on April
30, 1998, Exhibit 2.2.
4: See the Members Agreement, referenced as Exhibit 3.2.
10.6: Lease by and among EBS Building, L.L.C., Stifel
Financial Corp. and Stifel, Nicolaus & Company,
Incorporated, dated September 30, 1998 incorporated
by reference to the Issuer's Registration Statement
on Form 10-QSB filed on November 13, 1998, Exhibit
10.6.
10.7: Lease by and between EBS Building, L.L.C. and Edison
Brothers Stores, Inc., dated September 30, 1998
incorporated by reference to the Issuer's
Registration Statement on Form 10-QSB filed on
November 13, 1998, Exhibit 10.7.
10.8: Assignment of Lease by and between EBS Building,
L.L.C. and Edison Brothers Stores, Inc., dated
September 30, 1998 incorporated by reference to the
Issuer's Registration Statement on Form 10-QSB filed
on November 13, 1998, Exhibit 10.8.
10.9: First Amendment to Lease by and among EBS Building,
L.L.C., Stifel Financial Corp. and Stifel, Nicolaus &
Company, Incorporated, dated December 1, 1998,
incorporated by reference to the Issuer's Annual
Report on Form 10-KSB, filed March 31, 1999.
10.10: Second Amendment to Lease by and among EBS Building,
L.L.C., Stifel Financial Corp. and Stifel, Nicolaus &
Company, Incorporated, dated February 1, 1999
incorporated by reference to the Issuer's Annual
Report on Form 10-KSB, filed March 31, 1999.
<PAGE> 10
10.11 Credit Facility Agreement by and between EBS
Building, L.L.C. and FinPro, L.L.C., dated June 18,
1999.
10.12 Note by and between EBS Building, L.L.C. and FinPro,
L.L.C., dated June 18, 1999.
10.13 Deed of Trust, Security Agreement and Fixture Filing
by and between EBS Building, L.L.C. and FinPro,
L.L.C., dated June 18, 1999.
10.14 Environmental Indemnity Agreement by and between EBS
Building, L.L.C. and FinPro, L.L.C., dated June 18,
1999.
27: Financial Data Schedule.
(b) Reports on Form 8-K. The Issuer did not file any reports on
Form 8-K during the second fiscal quarter.
<PAGE> 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
REGISTRANT:
EBS Building, L.L.C.
By: PricewaterhouseCoopers LLP, as Manager
By:/s/ Keith F. Cooper
--------------------------------
Keith F. Cooper, Partner
Date: August 13, 1999
<PAGE> 12
Exhibit Index
3.1: Articles of Organization of the Issuer filed with the
Delaware Secretary of State on September 24, 1997
incorporated by reference to the Issuer's
Registration Statement on Form 10-SB filed on April
30, 1998, Exhibit 2.1.
3.2: Members Agreement of EBS Building, L.L.C. a Limited
Liability Company, dated as of September 26, 1997
incorporated by reference to the Issuer's
Registration Statement on Form 10-SB filed on April
30, 1998, Exhibit 2.2.
4: See the Members Agreement, referenced as Exhibit 3.2.
10.6: Lease by and among EBS Building, L.L.C., Stifel
Financial Corp. and Stifel, Nicolaus & Company,
Incorporated, dated September 30, 1998 incorporated
by reference to the Issuer's Registration Statement
on Form 10-QSB filed on November 13, 1998, Exhibit
10.6.
10.7: Lease by and between EBS Building, L.L.C. and Edison
Brothers Stores, Inc., dated September 30, 1998
incorporated by reference to the Issuer's
Registration Statement on Form 10-QSB filed on
November 13, 1998, Exhibit 10.7.
10.8: Assignment of Lease by and between EBS Building,
L.L.C. and Edison Brothers Stores, Inc., dated
September 30, 1998 incorporated by reference to the
Issuer's Registration Statement on Form 10-QSB filed
on November 13, 1998, Exhibit 10.8.
10.9: First Amendment to Lease by and among EBS Building,
L.L.C., Stifel Financial Corp. and Stifel, Nicolaus &
Company, Incorporated, dated December 1, 1998,
incorporated by reference to the Issuer's Annual
Report on Form 10-KSB, filed March 31, 1999.
10.10: Second Amendment to Lease by and among EBS Building,
L.L.C., Stifel Financial Corp. and Stifel, Nicolaus &
Company, Incorporated, dated February 1, 1999
incorporated by reference to the Issuer's Annual
Report on Form 10-KSB, filed March 31, 1999.
<PAGE> 13
10.11 Credit Facility Agreement by and between EBS
Building, L.L.C. and FinPro, L.L.C., dated June 18,
1999.
10.12 Note by and between EBS Building, L.L.C. and FinPro,
L.L.C., dated June 18, 1999.
10.13 Deed of Trust, Security Agreement and Fixture Filing
by and between EBS Building, L.L.C. and FinPro,
L.L.C., dated June 18, 1999.
10.14 Environmental Indemnity Agreement by and between EBS
Building, L.L.C. and FinPro, L.L.C., dated June 18,
1999.
27: Financial Data Schedule.
<PAGE> 1
CREDIT FACILITY AGREEMENT
BY THIS CREDIT FACILITY AGREEMENT ("Agreement") made and entered into
as of the 18th day of June, 1999, EBS BUILDING, L.L.C., A DELAWARE LIMITED
LIABILITY COMPANY ("EBS"), whose address is PricewaterhouseCoopers LLP, 800
Market Street, Suite 1800, St. Louis, Missouri 63101, Attn: Keith F. Cooper,
Partner ("Borrower") and FINPRO, L.L.C., A MISSOURI LIMITED LIABILITY COMPANY,
whose address is 1001 Cherry Street, Suite 308, Columbia, Missouri 65201
(hereinafter called "Lender"), for and in consideration of the recitals and
mutual promises contained herein, confirm and agree as follows:
SECTION 1. RECITALS; DEFINITIONS
1.1 Loan. Borrower has applied to Lender for a loan for the purpose of
financing renovation, and certain other expenses in connection with
leasing and operation of the building known and numbered as One
Financial Plaza, 500 Washington Avenue, St. Louis, Missouri containing
approximately 434,136 rentable square feet of office space (the
"Project").
1.2 Definitions. For the purposes of this Agreement, unless the context
otherwise requires, the following terms shall have the respective
meanings assigned to them in this Paragraph 1.2 or in the paragraph
hereof referred to below:
"Adjusted NOI" of Borrower, for any period, means all income of the
Project of any type for such period, less all Operating Expenses of the Project
for such period.
"Advance" and "Advances" means individually an advance of funds under,
and collectively advances of funds under the Loan.
"Agreement" means this Credit Facility Agreement.
"ALTA" means American Land Title Association.
"Appraisal" for the Project means an appraisal of the Project (i)
ordered by Lender, (ii) prepared by an appraiser reasonably satisfactory to
Lender, (iii) in compliance with all federal and state standards for appraisals
of real estate prepared by or on behalf of national banking associations. Lender
has approved the appraisal dated December 22, 1998 prepared by Joseph Blake
which has determined the Appraised Value of the Project to be $21,100,000.00 and
the "fully stabilized" Appraised Value of the Project to be $32,200,000.00.
"Appraised Value of the Project" at any time means the fair market
value of the Project, based upon the then most recent Appraisal, a current
validation of such Appraisal, or a new Appraisal, as the Lender may require in
its sole discretion.
"Approved Lease" means a Lease which has been approved by Lender as
provided in this Agreement.
<PAGE> 2
"Assignment" means the Assignment of Rents and Lessor's Interest in
Leases and Contract Rights of even date herewith from Borrower, as Assignor, to
Lender, as Assignee.
"Borrower's Architect" means a supervising architect of the
Improvements for the Project.
"Budget" with respect to any Lease, means the detailed budget for the
Tenant Improvements to be constructed by Borrower in accordance with such Lease,
prepared by or on behalf of Borrower and/or Borrower's Architect, allocating the
Buildout Price by categories and amount to specific items of Hard Costs and Soft
Costs, as the same may be amended, modified or supplemented with the consent of
Lender.
"Buildout Price" for any Tenant Improvements, means the sum of (i) the
Hard Costs, and (ii) the Soft Costs for the Tenant Improvements, as such amount
may be modified as expressly set forth in this Agreement.
"Business Day" means a Monday, Tuesday, Wednesday, Thursday or Friday
on which banks are open for business in St. Louis, Missouri.
"Change Orders" for any Tenant Improvements, means any amendments,
modifications or supplements to the Contract Documents, accompanied by a
certificate of Borrower, or at Lender's reasonable request (if Borrower is using
a supervising architect), Borrower's Architect outlining the impact of the
amendment or modification on the Buildout Price, the Budget, the Construction
Schedule and the Schedule of Values. All such amendments or modifications shall
be subject to the prior approval of Lender, not to be unreasonably withheld.
"Closing Date" means the earlier of the date of Initial Advance of
proceeds of the Loan or the recording of the Deed of Trust.
"Commitment Fee" means the amount set forth in Schedule 1.
"Completion Date" for any Tenant Improvements, means the date of the
final Subsequent Advance with respect to such Tenant Improvements.
"Construction Related Advance" shall have the meaning set forth in
Paragraph 2.1(d).
"Construction Schedule" for any Tenant Improvements, means the schedule
for construction of such Tenant Improvements prepared by the general contractor
and approved by Lender in the exercise of its reasonable judgment.
"Contract Documents" for any Tenant Improvements, means the architect's
agreements, the general contract, major subcontracts, the Construction Schedule
and the final drawings, specifications and other agreements and schedules for
the construction of such Tenant Improvements prepared by Borrower's Architect,
together with all amendments and modifications thereof and supplements thereto
made by Change Orders.
"Debt" means (i) any indebtedness of Borrower for borrowed money, (ii)
all indebtedness of Borrower evidenced by bonds, debentures, notes, letters of
credit, drafts or similar instruments,
2
<PAGE> 3
(iii) all indebtedness of Borrower to pay the deferred purchase price of
property or services, (iv) all capital lease obligations of Borrower, (v) all
Debt of others secured by a lien on any asset of Borrower, whether or not such
Debt is assumed by Borrower or guaranteed by Borrower, and (vi) payables and
accrued liabilities. The amount of Debt of Borrower at any date pursuant to
clauses (i)-(iv) and (vi) above shall be as would appear as a liability upon a
balance sheet of Borrower in accordance with GAAP.
"Debt Redemption Fee" means the amount set forth in Schedule 1.
"Deed of Trust" means the Deed of Trust, Security Agreement and Fixture
Filing, dated of even date herewith, executed by Borrower, as trustor, for the
benefit of Lender, as beneficiary, as may be amended, modified, extended,
renewed, restated, or supplemented from time to time.
"Edison Brothers Lease" means the Lease from Borrower to Edison
Brothers Stores, Inc., dated September 30, 1998, for floors 3, 4 and 5, parts of
floors 1 and 2, and the mezzanine levels of floors 1 and 2 in the Project.
"Escrow Account" shall have the meaning set forth in Paragraph 7.11.
"Event of Default" means the occurrence of any of the events or
conditions listed in Paragraph 10.1 herein.
"GAAP" means generally accepted accounting principles consistently
applied.
"Hard Costs" with respect to any Tenant Improvements, means the total
of all costs and expenses, other than the Soft Costs, relating to the
construction of such Tenant Improvements as identified in the Budget and
Schedule of Values for such Tenant Improvements.
"Improvements" means all the improvements now or hereafter located or
constructed on the Real Property.
"Initial Advance" shall mean the Advance made to Borrower pursuant to
Paragraph 2.1(c).
"Lease" means an enforceable lease for any portion of the Project.
"Loan" means the amounts to be loaned by Lender to Borrower pursuant to
the terms of this Agreement, the Note and the Security Documents.
"Loan Commitment" shall have the meaning set forth in Paragraph 2.1(a).
"Loan Documents" means this Agreement, the Note, the Security Documents
and any other agreements, documents, or instruments evidencing, securing or
otherwise relating to the Note, or executed or delivered in connection with the
Loan, as such agreements, documents, and instruments may be amended, modified,
extended, renewed or supplemented from time to time.
"Maturity Date" means May 31, 2001, or such earlier date as Borrower is
dissolved.
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"Maximum Initial Advance Amount" means the amount set forth in
Schedule 1.
"Maximum Lease Advance Amount" for any Lease means an amount calculated
as set forth in Schedule 1.
"Note" means that certain $12,000,000.00 Promissory Note of even date
herewith from Borrower to Lender as such note may be amended, modified,
extended, renewed, restated or supplemented from time to time.
"Operating Deficit Advance and Capitalized Interest Advance" shall mean
an advance made to Borrower pursuant to paragraph 2.1(d)(iii) or (iv).
"Operating Expenses" of the Project for any period means the sum of (i)
all actual ordinary and normal expenses of the operation of the Project
(Including management fees and legal fees and other ownership level expenses and
professional fees but excluding debt service, depreciation and the cost of all
replacements actually incurred), and (ii) replacement reserves for such period,
imputed at a rate equal to twenty cents ($0.20) per annum per rentable square
foot of the Project.
"Project" shall have the meaning set forth in the recitals to this
Agreement.
"Real Property" means, collectively, all the real property owned (with
respect to Parcel No. 1) and leased (with respect to Parcel No. 2) by Borrower
described on Exhibit "A", attached hereto and by this reference incorporated
herein.
"Request for Disbursement" means (i) for an Advance with respect to a
Lease under which Borrower is financing any Tenant Improvements, a properly
completed request for disbursement in the form attached hereto as Exhibit "F-1";
and (ii) for an Advance with respect to a Lease under which Borrower is not
financing any Tenant Improvements, or for which the Final Advance for Tenant
Improvements has been made by Lender, a properly completed request for
disbursement in the form attached hereto as Exhibit "F-2," each such request to
be certified to Lender by Borrower and delivered to Lender, prior to such
Advance as contemplated in this Agreement.
"Required Equity" shall have the meaning set forth in Paragraph 2.2(b)
of this Agreement.
"Retainage" has the meaning set forth in Paragraph 3(c) of Exhibit
"C-1".
"Retention Funds" with respect to any Tenant Improvements, means ten
percent (10%) of the costs under the construction contract for construction of
such Tenant Improvements.
"Schedule of Values" with respect to any Tenant Improvements, means AIA
Form G703, allocated by Construction Specifications Institute category, attached
to the Budget, prepared by Borrower and/or Borrower's Architect prior to any
Construction Component Advance for such Tenant Improvements, and approved by
Lender in its reasonable discretion.
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"Security Documents" means the Deed of Trust, the Assignment and any
other agreements, documents or instruments executed and delivered by Borrower in
order to grant and perfect the lien and security interest required herein, as
such agreements, documents, and instruments may be amended, modified, extended,
renewed or supplemented from time to time.
"Servicing Agent" means NationsBank, N.A. or any other successor
servicing agent from time to time appointed by Lender by giving written notice
to Borrower.
"Servicing and Administration Fee" means the amount set forth in
Schedule 1.
"Soft Costs" means certain fees, costs and expenses relating to the
construction of the related Tenant Improvements other than costs for labor and
materials, all as identified in the related Budget and the Schedule of Values,
including, without limitation, brokerage commissions.
"Subsequent Advances" means Advances following the Initial Advance.
"Tenant" means a tenant under a Lease.
"Tenant Improvements" means the improvements to be constructed upon the
premises described in any Lease in accordance with the Contract Documents for
such Tenant Improvements.
"Title Policy" means an ALTA mortgagee's title insurance policy or
similar policy acceptable to Lender.
SECTION 2. COMMITMENTS; ADVANCES
2.1 Loan.
(a) Loan Commitment. Subject to the conditions herein set
forth, Lender agrees to make a Loan available to Borrower in
the manner set forth below, upon the terms and conditions
herein expressed, in amounts that in the aggregate shall, not
exceed, Twelve Million And No/100 Dollars ($12,000,000.00).
(b) Note. The Loan shall be evidenced by a Note in the form
attached hereto as Exhibit B and interest and principal shall
be payable upon the terms and conditions contained therein.
(c) Initial Advance. Lender shall make an Advance to Borrower,
subject to all of the applicable terms and conditions provided
herein, in an aggregate amount equal to the sum of Six Million
Dollars ($6,000,000.00) as follows:
(i) The amount of $5,200,000 being the outstanding
balance on the existing loan from First Bank; and
(ii) The amount of $800,000 to be used to pay other
costs relating to operation and management of the
Project including, without limitation, the
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escrow deposit described in Paragraph 7.11 of this
Agreement and other fees and expenses associated
with this Agreement.
(d) Subsequent Advances. Subject to the limitations and
conditions set forth in this Agreement, Lender shall make
Subsequent Advances from time to time to provide Borrower with
additional financing of up to Three Million Five Hundred
Thousand Dollars ($3,500,000) in the aggregate with respect to
any Approved Lease, including without limitation, if Borrower
so requests, to pay leasing commissions and to pay approved
costs in connection with the construction of Tenant
Improvements with respect to any Approved Lease. Lender shall
also make Subsequent Advances of up to Two Million Five
Hundred Thousand Dollars ($2,500,000) in the aggregate from
time to time to provide the Borrower with financing to pay
certain operating deficits and interest expenses as provided
below. All Subsequent Advances will be made by Lender subject
to the following conditions:
(i) Borrower-Financed Tenant Improvements. With
respect to any Lease which requires Borrower to
finance or pay for or construct any part of the
Tenant Improvements, Subsequent Advances in respect
of such Tenant Improvements (each, a "Construction
Related Advance") shall be made, subject to all of
the requirements of Exhibit "C-1," attached, and in
an aggregate amount not to exceed the Maximum Lease
Advance Amount for such Lease, upon Lender's (i)
receipt of a Request for Disbursement, together with,
if applicable, a list certified by Borrower or
Borrower's general contractor of payees and amounts
due to each payee in connection with such Subsequent
Advance, and (ii) approval of the corresponding
Subsequent Advance as herein provided. Such Advance
shall be made to Borrower, provided that if an Event
of Default is then continuing, Lender may determine
whether to disburse Subsequent Advances jointly to
Borrower and general contractor and/or subcontractors
or suppliers or directly to general contractor or
subcontractors or suppliers, rather than directly to
Borrower, and Borrower hereby irrevocably directs and
authorizes Lender to so disburse the funds. No
further direction or authorization from Borrower
shall be necessary for such Subsequent Advances.
(ii) Advances Not for Tenant Improvements. With
respect to (a) any Lease which does not require
Borrower to finance any part of the Tenant
Improvements and (b) any other Lease for which the
final Advance to finance Tenant Improvements has been
made as contemplated in clause (i) above or for which
Borrower has financed all such Tenant Improvements
itself, a Subsequent Advance for payment of leasing
commissions and other non-construction expenses with
respect to such Lease or to make any other capital
expenditure benefiting the Project permitted by
paragraph 7.17(a) (a "Lease Related Advance") shall
be made, subject to all of the requirements
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of Exhibit "C-2" attached hereto, upon (1) Lender's
receipt of a Request for Disbursement and (2)
approval of the Subsequent Advance as herein
provided. In no event shall Construction Related
Advances and Lease Related Advances under this clause
(ii) in the aggregate exceed the lesser of (a)
$3,500,000.00 or (b) an amount which when combined
with all other Advances under the Loan would exceed
$12,000,000.00.
(iii) Advances for Operating Deficits. Borrower may
request monthly Advances ("Operating Deficit
Advances") for the purpose of paying Operating
Expenses and/or ownership level expenses and
professional fees but only to the extent that
Borrower's income from the Project for the applicable
period and Borrower's liquid assets other than the
Real Property, but exclusive of up to $100,000.00 in
a Borrower held operating account, are insufficient
to pay the same. In no event shall Operating Deficit
Advances hereunder exceed the lesser of (a)
$1,000,000.00 in the aggregate or (b) an amount which
when combined with all other Advances under the Loan
would exceed $12,000,000.00.
(iv) Advances for Interest. All revenues of the
Project of any type shall be deposited by Borrower
into an operating account in Borrower's name
maintained at NationsBank, N.A. or at such other bank
as Lender shall from time to time direct by written
notice to Borrower. Borrower may withdraw funds from
such account to pay any and all amounts which are
permissible by the terms of this Agreement. On the
day that any payment of interest and/or principal is
due hereunder, Lender is hereby authorized to direct
NationsBank, N.A. to withdraw the amount of such
payment from the operating account (exclusive of the
$100,000 reserve referred to in (iii) above and
disburse the same to Lender. So long as no Event of
Default has occurred and is then continuing, if there
are insufficient funds in the operating account to
pay any payment of interest as and when due
hereunder, Lender shall make an Advance ("Capitalized
Interest Advance") to pay such deficiency. In no
event shall Capitalized Interest Advances hereunder
exceed the lesser of (a) $1,500,000.00 in the
aggregate, or (b) an amount which when combined with
all other Advances under the Loan would exceed
$12,000,000.00.
(v) Documentation with Respect to Advances. Each
Request for Disbursement shall include invoices
sufficient in the reasonable judgment of Lender or
Servicing Agent to substantiate all costs (if any)
which are to be paid from the requested Subsequent
Advance and such conditional lien waivers and/or
affidavits and other information as Lender or
Servicing Agent may reasonably require.
Notwithstanding anything to the contrary contained in
this Agreement, Borrower shall deliver all Requests
for Disbursement to Servicing Agent which shall
review the Request for compliance with the terms of
this Agreement prior to forwarding such
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Request to Lender. If a Request for Disbursement
includes a request to make an advance for Hard Costs,
a properly completed Application and Certificate for
Payment (AIA Forms G702 and G703) shall also be
executed by the general contractor and, if Borrower's
Architect is performing inspections, the Borrower's
Architect, and attached to the Request for
Disbursement.
2.2 Right to Advances.
(a) Borrower shall have no right to any Advance other than to
have the same disbursed by Lender in accordance with the
provisions of this Agreement. Any assignment or transfer,
voluntary or involuntary, of this Agreement or any right
hereunder shall not be binding upon or in any way affect
Lender without its written consent; Lender may nevertheless
make Advances in accordance with the provisions herein,
notwithstanding any such assignment or transfer.
(b) Any other provision of this Agreement to the contrary
notwithstanding, Lender shall be under no obligation to make
any Subsequent Advance with respect to a Lease which requires
Borrower to finance the construction of Tenant Improvements
unless, prior to such Subsequent Advance, Borrower has paid
from its own funds an amount equal to the full amount of the
related Buildout Price for any Tenant Improvements less the
Maximum Lease Advance Amount for such Lease ("Required
Equity").
(c) Anything in the foregoing to the contrary notwithstanding,
Lender shall have no obligation to make any Subsequent Advance
to Borrower with respect to any Lease if the amount of such
Advance, when combined with all other Subsequent Advances to
Borrower with respect to such Lease, would exceed the Maximum
Lease Advance Amount for such Lease.
(d) Lender shall have no obligation to make any Subsequent
Advance to Borrower if the amount of such Advance, when
combined with all other Advances under the Loan would exceed
the sum of $12,000,000.00.
(e) Subsequent Advances, other than Operating Deficit and
Capitalized Interest Advances, shall be in aggregate amounts
of not less than $200,000.00 (except for final draw Advances
for Tenant Improvements, which may be in the amount of the
final draw request).
2.3 Excess Advances. Upon written notice from Lender, Borrower shall
within two (2) business days after delivery of such notice repay any
Advance received by Borrower in excess of the amount Borrower is
entitled to under the provisions of this Agreement.
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SECTION 3. LOAN AND DOCUMENTATION FEES
3.1 Loan Fee. On the Closing Date, Lender shall have earned and
Borrower shall pay to Lender the Commitment Fee and the portions of the
Servicing and Administration Fee and Debt Redemption Fee due and
payable on the Closing Date.
3.2 Servicing and Administration Fee. Lender shall have earned and
Borrower shall pay the Servicing and Administration Fee in the amounts
and at the times set forth in Schedule 1 attached hereto.
3.3 Debt Redemption Fee. Lender shall have earned and Borrower shall
pay the Debt Redemption Fee in the amounts and at the times set forth
in Schedule 1 attached hereto.
3.4 Unused Commitment Fee. Lender shall have earned and Borrower shall
pay the Unused Commitment Fee in the amounts and at the times set forth
in Schedule 1 attached hereto.
SECTION 4. SECURITY
4.1 Security. Borrower shall cause the Loan and all of Borrower's
obligations under this Agreement to be secured by the following:
(a) The Deed of Trust constituting a first and prior lien on
the Project, subject only to such matters as specifically
approved by Lender therein.
(b) Valid and effectual assignments (which shall be made under
the Deed of Trust) of Borrower's interest in the Plans and
Specifications, all construction, architects' and engineers'
contracts, all operating, management and supervision
agreements, all other documents relating to the ownership,
development, construction, maintenance, leasing, management
and operation of such Project and all operating and other cash
accounts, securities, investments and similar property of the
Borrower;
(c) the Assignment, and
together with any UCC financing statements for filing and/or recording and any
other items reasonably required by Lender to fully perfect the liens and
security interests of Lender.
SECTION 5. CONDITIONS PRECEDENT FOR CLOSING AND ADVANCES
The obligation of Lender to make the Loan and each and every Advance is
subject to the following express conditions precedent:
5.1 Loan Documents. Borrower shall have executed (or obtained the
execution or issuance of) and delivered to Lender all of the following
documents, in form reasonably satisfactory to Lender:
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(a) This Agreement;
(b) The Note;
(c) The Security Documents:
(i) The Deed of Trust;
(ii) The Assignment;
(iii) UCC-1 financing statements as required by
Lender;
(d) An Environmental Indemnity Agreement executed by Borrower;
(e) Non-Disturbance, Attornment, Estoppel and Subordination
Agreements ("Non-Disturbance Agreements"), in form
satisfactory to Lender, executed by Borrower and all current
Tenants of the Project provided that only such agreements
executed by Stifel Financial Corp., Stifel Nicolaus & Company,
Incorporated, and Edison Brothers Stores Inc. shall be
required to be delivered to Lender prior to the Initial
Advance and such agreements from all current tenants must be
delivered to Lender prior to any Subsequent Advance;
(f) The Management Agreement Subordination, the Consulting
Agreement Subordination and the Brokerage Agreement
Subordination executed by Borrower and the entities providing
property management, consulting and brokerage services to the
Project and Borrower.
(g) Pro-forma balance sheet of Borrower, certified by the
manager of Borrower, showing its financial condition
immediately after the Initial Advance;
(h) Certificates of Borrower as to such matters regarding
Borrower's formation, good standing, authority and other
factual matters relating to the Project and Borrower's
representations and warranties in the Loan documents as Lender
may require.
(i) Such other items as Lender may reasonably require.
Full satisfaction of the requirements of this paragraph 5.1 with respect to the
Initial Advance shall constitute satisfaction of such requirements for all
additional Advances.
5.2 Fees and Expenses. Lender shall have received the Commitment Fee
and all portions of the Servicing and Administration Fee and the Debt
Redemption Fee payable at the time of such Advance, and Borrower shall
have paid or reimbursed Lender for Lender's expenses as provided in
Paragraph 12.7. Payment of the Commitment Fee at the time of the
Initial Advance shall constitute satisfaction of the Commitment Fee
requirement of this paragraph 5.2 for all additional Advances.
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5.3 Other Conditions. Borrower, at its expense, shall have obtained and
delivered to Lender the following items relating to the Project, all of
which shall be in form and content reasonably satisfactory to Lender
and shall be subject to approval in writing by Lender:
(a) The Appraisal certified to Lender.
(b) Four (4) prints of an original survey of the Real Property
and improvements thereon dated not more than sixty (60)
calendar days prior to the date of this Agreement (or dated
such earlier date, if any, as is satisfactory to the title
insurer, but in any event not more than one hundred eighty
(180) calendar days prior to the date of this Agreement)
satisfactory to Lender and the title insurer and otherwise
complying with Exhibit "D".
(c) An irrevocable commitment from a title insurance company
satisfactory to Lender to issue a Title Policy, with the Title
Policy being issued within a reasonable time after the
recording of the Deed of Trust, with such endorsements as
Lender may require, in the full amount of the Loan, insuring
the lien of the Deed of Trust to be a first and prior lien
upon the Project as security for all Advances pursuant to the
terms of this Agreement, subject only to such exceptions as
Lender may expressly approve in writing.
(d) A current preliminary environmental assessment (Phase I
assessment) of the Real Property and adjacent property, plus
any sampling and analysis (Phase II assessment) or special
limited assessment that Lender may require after review of the
Phase I assessment, together with any other environmental
investigations and reports that Lender may require, all of
which shall be by an environmental consulting firm acceptable
to Lender and none of which shall reveal any existing or
potential environmental condition adversely affecting the use
or value of the Real Property.
(e) Evidence that the Real Property is properly zoned for its
intended use.
(f) Certificates of insurance evidencing the following:
(i) Policies of insurance evidencing personal
liability and property damage liability coverages in
amounts not less than $10,000,000.00 (combined single
limit for bodily injury and property damage), and an
umbrella excess liability coverage in an amount not
less than $10,000,000.00 shall be in effect with
respect to Borrower. Such policies must be written on
an occurrence basis so as to provide blanket
contractual liability, broad form property damage
coverage, earthquake coverage and coverage for
products and completed operations. In addition, in
the event Borrower owns or operates any motor
vehicles there shall be obtained and maintained
business motor vehicle liability insurance protecting
Borrower and Lender against loss or losses from
liability relating to motor vehicles owned,
non-owned, hired or used by Borrower, any contractor,
any
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subcontractor, or any other person in any manner
related to the Project with a limit of liability of
not less than the amount set forth above (combined
single limit for personal injury (including bodily
injury and death) and property damage).
(ii) Fire and extended coverage insurance on the
Improvements in an amount not less than the full
insurable value on a replacement cost basis of the
insured Improvements and personal property related
thereto.
(iii) If applicable, evidence of worker's
compensation insurance coverage satisfactory to
Lender.
(iv) If the Real Property, or any part thereof, lies
within a "special flood hazard area" as designated on
maps prepared by the Department of Housing and Urban
Development, a National Flood Insurance Association
standard flood insurance policy, plus insurance from
a private insurance carrier if necessary, for the
duration of the Loan in the amount of the full
insurable value of the completed Improvements.
(v) Such other insurance as Lender may reasonably
require, which may include, without limitation,
insurance covering vandalism and malicious mischief,
sprinkler leakage, rent abatement and/or business
loss.
All insurance policies (i) shall be issued by an insurance company reasonably
acceptable to Lender, (ii) name Lender as an additional insured on all liability
insurance and first mortgagee on all casualty insurance, and (iii) provide that
Lender is to receive thirty (30) days written notice prior to cancellation.
(g) Evidence whether the Real Property, or any part thereof,
lies within a "special flood hazard area" as designated on
maps prepared by the Department of Housing and Urban
Development.
(h) Copies of all lease agreements affecting the Project and,
if requested by Lender, a summary detailing the major terms of
each lease, including, without limitation, contract rent, free
rent, and other concessions, prepaid rent, security deposits,
net effective rent, expense stop and other expense
information.
(i) Copies of all other material agreements between Borrower
and any architects, engineers, managers or supervisors related
to the maintenance, repair, leasing, management and operation
of the Project, together with written agreements by such
persons or entities that they will perform for Lender the
services contracted to Borrower, notwithstanding the
occurrence of any Event of Default and any trustee's sale or
foreclosure of the Deed of Trust (provided that such persons
or entities continue to receive payments under their
respective contracts), and the consent of such persons or
entities to the collateral assignment by Borrower to Lender of
their respective contracts.
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(j) Copies of any Declaration of Covenants, Conditions and
Restrictions and related documents pertaining to the Project.
(k) Evidence that all taxes and assessments levied against or
affecting the Real Property have been paid current.
(l) The following documents regarding Borrower: (i) a copy of
Borrower's organizational documents; (ii) evidence of the
proper formation and good standing of Borrower in the state of
its organization; (iii) evidence of qualification or
registration in the State of Missouri; and (iv) proper
resolutions, authorizations, certificates, and such other
documents as Lender may reasonably require, relating to the
existence and good standing of Borrower and the authority of
any person executing documents on behalf of Borrower.
(m) UCC search reports of Borrower as Lender may require.
(n) Financial statements from Borrower in form and content
satisfactory to Lender evidencing a financial condition of
Borrower that is satisfactory to Lender and subsequent
financial statements from Borrower as required by Lender. For
purposes of this requirement financial statements conforming
to generally accepted accounting principles and that conform
to the requirements of the SEC shall be deemed satisfactory.
(o) Such other information and documents as Lender may
reasonably require.
Satisfaction of items (a), (b), (c), (e) and (g) of this paragraph 5.3 at the
time of the Initial Advance shall constitute satisfaction of such requirements
for all additional Advances to Borrower. Satisfaction of all other items at the
time of the Initial Advance shall constitute satisfaction of such items for
additional Advances, except to the extent that any of such items require
updating in Lender's judgment reasonably exercised.
5.4 Hedging Contract. Borrower shall have purchased an interest rate
cap on terms satisfactory to Lender in Lender's sole discretion at a
cost not to exceed $25,000 which will be paid by Borrower.
5.5 Legal Opinion. Borrower, at its expense, shall have provided Lender
with a written opinion by counsel in form and substance reasonably
acceptable to Lender. Satisfaction of this requirement with respect to
the Initial Advance shall constitute satisfaction for additional
Advances except to the extent such legal opinion requires updating in
Lender's judgment reasonably exercised.
5.6 Representations True. All representations and warranties by
Borrower shall be true and correct in all material respects as of the
Closing Date and all agreements that Borrower is to have performed or
complied with by the date hereof shall have been performed or complied
with.
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5.7 No Event of Default. No Event of Default shall have occurred and be
continuing and no event has occurred and no condition shall have
occurred that, after notice or lapse of time, or both, would constitute
an Event of Default.
5.8 Adverse Change. There shall not have occurred, in the opinion of
Lender, any material adverse change in the business or financial
condition of Borrower or any material tenant or in the Project, or in
any other state of facts submitted to Lender in connection with the
Loan, from that which existed at the time Lender considered the
issuance of this Agreement. The fact of the bankruptcy filing by Edison
Brothers Stores, Inc. and any partial or full rejection of the Edison
Brothers Lease will not be deemed a material adverse change for the
purpose of this Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as follows:
6.1 Recitals and Statements. The recitals in this Agreement are true
and correct.
6.2 Organization and Good Standing. Borrower is duly organized, validly
existing and in good standing under the laws of the state of its
organization and is, to the extent required by law, qualified to do
business and is in good standing in the State of Missouri.
6.3 Power. Borrower has full power and authority to own its properties
and assets and to carry on its business as now being conducted. The
execution, delivery and performance of the Loan Documents has been duly
authorized by all requisite action on the part of Borrower.
6.4 Authority. Borrower is fully authorized and permitted to enter into
this Agreement, to execute any and all documentation required herein,
to borrow the amounts contemplated herein upon the terms set forth
herein and to perform the terms of this Agreement, none of which
conflicts with any provision of any law, rule or regulation applicable
to Borrower. The Loan Documents to which Borrower is a party are valid
and binding legal obligations of Borrower, and each is enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to the rights
of creditors generally and general principles of equity.
6.5 Enforceable Liens. The liens, security interests and assignments
created by the Security Documents will, when granted and recorded or
filed, be valid, effective, properly perfected and enforceable liens,
security interests and assignments.
6.6 No Breach. The execution, delivery and performance by Borrower of
the Loan Documents will not result in any breach of the terms,
conditions or provisions of, or constitute a default under, any
material agreement or instrument under which Borrower is a party or is
obligated. Borrower is not in default in the performance or observance
of any covenants, conditions or provisions of any such material
agreement or instrument.
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6.7 No Actions. Except as disclosed to Lender in writing prior to the
date of this Agreement, no actions, suits or proceedings are pending or
to Borrower's knowledge threatened against Borrower that if adversely
determined could reasonably be expected to materially and adversely
affect the repayment of the Loan, the performance by Borrower under
this Agreement or the financial condition, business or operations of
Borrower.
6.8 Licenses. Borrower has obtained and there remain in full force and
effect all material licenses, permits, consents, approvals and
authorizations necessary or appropriate for the management and
operation of the Improvements for their intended purpose that are
obtainable as of the date hereof.
6.9 Financial Statements True. All financial statements, profit and
loss statements, statements as to ownership and other statements or
reports previously or hereafter given to Lender by or on behalf of
Borrower are and shall be true, complete and correct in all material
respects in accordance with GAAP as of the date thereof. There has been
no material adverse change in the financial condition or the results of
the operation of Borrower since the latest financial statements of
Borrower given to Lender.
6.10 Filing of Taxes. Borrower has filed all federal, state and local
tax returns and has paid all of its current obligations before
delinquency, including all federal, state and local taxes and all other
payments required under federal, state or local law.
6.11 Affirmation of Representations and Warranties. Each request by
Borrower for an Advance shall constitute an affirmation on the part of
Borrower that the representations and warranties contained herein are
true and correct in all material respects as of the time of such
request and that the conditions precedent set forth in Section 5 hereof
have been fully satisfied or waived by Lender in writing. All
representations and warranties made herein shall survive the execution
of this Agreement, all Advances and the execution and delivery of all
other documents and instruments in connection with the Loan, so long as
Lender has any commitment to lend to Borrower hereunder and until the
Loan and all indebtedness hereunder have been paid in full and all of
Borrower's obligations hereunder have been fully discharged.
6.12 Year 2000 Compliance. Borrower has (i) initiated a review and
assessment of all areas within its business and operations (including
those affected by suppliers and vendors) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower (or its suppliers and vendors) may be
unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999),
(ii) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Borrower reasonably believes that all
computer applications (including those of its suppliers and vendors)
that are material to its business and operations will on a timely basis
be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 (that is, "Year 2000 Compliant"),
except to the extent that a failure to do so could not reasonably be
expected to have material adverse effect on Borrower, its businesses or
assets.
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SECTION 7. AFFIRMATIVE COVENANTS
So long as Lender has any commitment to lend to Borrower hereunder and
until the Loan and all other indebtedness hereunder have been paid in full and
all of Borrower's obligations hereunder have been fully discharged:
7.1 Payment of Construction Costs. Borrower shall promptly pay for, or
cause to be paid for, all labor, materials, equipment and fixtures used
in connection with the construction of the Tenant Improvements and all
other costs relating to the Improvements except that Borrower may
contest in good faith the validity or amount thereof provided that
Borrower shall have furnished to Lender upon Lender's request a cash
deposit or other appropriate security in an amount and form
satisfactory to Lender to protect Lender against the creation of any
lien on, or any sale or forfeiture of, any property encumbered by the
Security Documents. Upon the final determination of Borrower's
liability following the adjudication of such contest, Borrower shall
promptly pay or cause to be paid all sums, if any, determined to be
due. Any deposit or security provided by Borrower shall be returned to
Borrower upon the final determination of Borrower's contest and the
payment of the sums, if any, determined to be due.
7.2 [Intentionally Reserved]
7.3 Enforcement of Contracts. Borrower shall use commercially
reasonable efforts to enforce or cause the enforcement of the contracts
for the construction of the Tenant Improvements to ensure that the
contractors are required to promptly and diligently perform all of
their obligations thereunder and in such a manner as to preserve
Lender's security in the Project. No change, amendment or modification
shall be made to such contracts without the prior written consent of
Lender which consent shall not be unreasonably withheld, conditioned or
delayed, except changes, amendments or modifications that are (i) to
implement changes to the Plans and Specifications permitted hereby,
(ii) which do not individually or in the aggregate increase the cost of
any such contract by more than $25,000.00 or (iii) in connection with
Tenant Improvements wholly financed by a Tenant.
7.4 No Other Security Interests. No materials, equipment, fixtures or
any other part of the Improvements or articles of personal property
placed in the Improvements shall be purchased or installed under any
security agreement or other arrangements wherein the seller reserves or
purports to reserve the right to remove or to repossess any such items
or to consider them personal property after their incorporation into
the Improvements; provided the foregoing shall not preclude Borrower
from (i) leasing materials, equipment or fixtures in the ordinary
course of business, provided that annual payments under such leases do
not exceed $10,000.00 in any one calendar year; or (ii) incurring
purchase money indebtedness permitted pursuant to Section 8.4.
7.5 Maintenance of Licenses and Permits. Borrower shall maintain in
full force and effect all rights and licenses necessary to carry on its
business, and all permits, licenses, consents
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and approvals necessary for the construction, maintenance and operation
of the Improvements.
7.6 Compliance with Loan Documents. Borrower shall make all payments of
interest and principal on the Loan as and when due and shall keep and
comply with all terms, conditions and provisions of the Loan Documents.
7.7 [Intentionally Reserved]
7.8 Bank Accounts. Borrower shall maintain all of its Lender accounts
at NationsBank, N/A., or such other bank as Lender may direct from time
to time, which accounts shall be pledged to Lender as additional
security for the Loan.
7.9 Maintenance of Insurance. Borrower shall maintain in full force and
effect at all times all insurance coverage required to be provided
pursuant to Paragraph 5.3(f).
7.10 Payment of Taxes. Borrower shall pay all of its current
obligations before delinquency, including all federal, state and local
taxes and all other payments required under federal, state or local
law, subject to Borrower's right to contest taxes and assessments of
real and personal property as provided in the Deed of Trust.
7.11 Establishment and Maintenance of Tax and Insurance Escrow Account.
Borrower shall establish with Lender an interest bearing deposit
account ("Escrow Account") for the purpose of maintaining a cash
reserve for taxes and insurance in connection with the Real Property,
which account shall be pledged to Lender as further security for the
Loan. Commencing on the first Business Day of the first calendar
quarter after the date hereof, and on the first Business Day of each
October, January, April and July thereafter, Borrower shall deposit
into the Escrow Account the amount set forth in Schedule 1, and shall
make such further deposits as may be required under the Deed of Trust.
Simultaneously with the execution hereof Borrower shall also pay to
Lender for deposit in the Escrow Account the sum of Three Hundred
Thousand Dollars ($300,000.00) being the quarterly deposit that would
have been required had this loan been outstanding on January 1, 1999.
Lender shall make disbursements from such account to Borrower or, at
Lender's option to the taxing authority or the relevant insurance
company, upon presentation satisfactory to Lender of evidence of the
amounts due and payable thereon. Lender shall have no obligation to pay
charges for such taxes or insurance if there are not sufficient funds
in the Escrow Account for such purpose.
7.12 Books and Records; Access. Borrower shall maintain, in a safe
place, proper and accurate books and records relating to its operations
and its business affairs. Lender shall have the right from time to
time, upon prior written notice, to examine, and to make abstracts from
and photocopies of, Borrower's books and records. Lender shall keep any
and all such information as confidential and may not disclose such
information to third parties except to the extent required by law or to
Lender's employees, attorneys, agents, participants, transferees or
assignees or as may be necessary or appropriate to enforce any of
Borrower's obligations under the Loan Documents.
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7.13 Financial Reports. Borrower shall maintain a standard, modern
system of accounting that reflects the application of GAAP or of tax
basis accounting, consistently applied. Borrower shall furnish to
Lender or cause to be furnished to Lender the following in form and
detail reasonably satisfactory to Lender:
(a) Within ninety (90) days after the close of each fiscal
year, financial statements of Borrower, including a balance
sheet, statement of income and expenses and statement of cash
flows that include the results of the financial operation of
the Project, amounts and sources of contingent liabilities, a
reconciliation of changes in equity and liquidity
verification, all in reasonable detail and prepared according
to GAAP or to tax basis accounting, consistently applied. Year
end statements shall be audited by an independent certified
public accountant of Borrower.
(b) Within forty-five (45) days after the end of each quarter,
quarterly unaudited financial statements for the Project for
the previous quarter.
(c) Within forty-five (45) days after the end of each
quarterly accounting period, rent rolls for the Project,
including the name, annual rental amount and lease expiration
date for each Tenant.
(d) Within forty-five (45) days after the end of each
quarterly accounting period, a certificate signed by the
manager of Borrower in the form attached hereto as Exhibit
"E".
(e) When requested by Lender, such further information as
Lender may reasonably request relating to Borrower and/or the
operation of the Project.
(f) Copies of all material filings of Borrower with the
Securities and Exchange Commission, such copies to be
delivered to Lender within thirty (30) days after filing with
the Securities and Exchange Commission.
7.14 Subsequent Actions. Borrower shall immediately inform Lender of
any actions, suits or proceedings involving Borrower that if adversely
determined would materially and adversely affect the repayment of the
Loan, the performance by Borrower under this Agreement, or the
financial condition, business or operations of Borrower.
7.15 Further Assurances. Borrower shall execute and deliver such
additional documents and do such other acts as Lender may reasonably
require in order to effectuate Borrower's obligations with respect to
the Loan without substantively amending any of the Loan Documents.
7.16 Borrower Notices. Borrower shall promptly give notice in writing
to Lender of (i) the occurrence of any Event of Default, (ii) any
change in the name of Borrower, and in the case of a reorganization,
any change in name, identity or corporate structure, (iii) loss through
fire, theft, liability or property damage in excess of $25,000.00, and
(iv) all
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material developments disclosed to Borrower from any source in the
Edison Brothers bankruptcy proceedings which may have a material effect
upon the Edison Brothers Lease.
7.17 Financial Covenants. Until the Loan is repaid in full, Borrower
shall comply with the following:
(a) Permitted Expenses. Borrower shall not expend any income
of the Project of any type other than for (i) Operating
Expenses of the Project, (ii) payments of principal, interest
and other charges with respect to the Debt, (iii) fees and
expenses associated with the organization and operation of
Borrower (such as tax return preparation, fees and expenses of
filings with the Securities and Exchange Commission, asset
management fees and other similar expenses which are not
included in the definition of Operating Expenses), and (iv)
capital expenditures of or benefiting the Project, provided,
however, that after the making of any Operating Deficit
Advance or Capitalized Interest Advance to Borrower pursuant
to the terms of this Agreement, such capital expenditures
(exclusive of Tenant Improvements made pursuant to an Approved
Lease) shall be limited to the amount which is the greater of
(a) Two Hundred Thousand Dollars ($200,000.00) in the
aggregate per any period of twelve (12) consecutive calendar
months commencing on or after the date of such Operating
Deficit Advance or Capitalized Interest Advance or (b) such
other amount as may be approved by Lender in writing.
(b) No Equity Distributions. Borrower shall not make any
distribution to its members other than as payment for services
rendered currently upon arms' length terms and conditions
approved by Lender.
7.18 Leases. Each lease that is to be used in leasing any of the Real
Property shall be subject to Lender's prior written approval which
approval shall not be unreasonably withheld, conditioned or delayed.
Each such lease shall have been entered into by the Borrower in good
faith and at arm's length. Borrower shall assign to Lender in the
Assignment all of its right, title and interest in and to all Leases
and rents relating to the Improvements at the Project and shall execute
and deliver to Lender written assignments thereof in form satisfactory
to Lender. Upon request of Lender, which request shall not be made more
frequently than once during each calendar year unless an Event of
Default has occurred and is continuing, Borrower will use its
commercially reasonable efforts to deliver to Lender individual
estoppel certificates from all Tenants under such Leases certifying:
(a) that the leased premises have been completed to the satisfaction of
that Tenant, (b) that the lease is in full force and effect and there
are no existing defaults to the knowledge of that Tenant, (c) the date
upon which the term of the lease commenced and the date to which
rentals have been paid, (d) that there are no setoffs or counterclaims
against the rent payments and no credits against the rent payments
except as set forth in the Lease, (e) that the Lease has not been
amended or modified and there are no representations, warranties,
understandings or agreements pertaining to the subject matter thereof
other than as expressly stated in the written lease, and (f) that the
Tenant has no knowledge of any prior assignment or pledge of the lease
or of rentals thereunder.
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Anything in the foregoing to the contrary notwithstanding, Lender's
prior approval shall not be required for any Lease of less than 20,000
square feet of rentable space which (i) is in a form substantially
similar to the most current form of Lease used by Borrower which has
been provided to Lender, (ii) provides for rental in an amount not less
than $15.00 per square foot per year, and (iii) will not require
Borrower to finance tenant improvements for such Lease under the Loan.
Lender shall indicate its approval or disapproval of a proposed Lease
within ten (10) Business Days of Borrower's furnishing to Lender of the
proposed form of Lease, a proposed term sheet showing all essential
terms and any substantive changes to the form of Lease, financial
information regarding the Tenant and such other information as Lender
shall promptly and reasonably request with respect to such Lease and
the Tenant. Lender shall use reasonable efforts to provide such
approval or disapproval of such Lease as soon as practicable after it
receives the required information. Lender's failure to respond within
ten (10) Business Days shall be deemed Lender's approval of such
proposed Lease in substantially the form provided to Lender, subject
only to changes specifically stated in the term sheet provided to
Lender and other changes consistent with Borrower's customary leasing
practices. In the event that any business term or other material
substantive provision of any proposed Lease is different from that
previously provided to Lender, Lender shall have an additional ten (10)
Business Days after receipt of such term or provision to disapprove
such Lease. Lender agrees to sign a Subordination, Attornment and
Non-Disturbance Agreement at Borrower's request in form substantially
identical to the form attached hereto as Exhibit "G", upon delivery to
Lender of such form executed by all other parties thereto, with respect
to any approved (or deemed approved) Leases.
7.19 Year 2000 Compliance. Borrower will promptly notify Lender in the
event Borrower discovers or determines that any computer application
(including those of its suppliers and vendors) that is material to its
business and operations will not be Year 2000 compliant on a timely
basis, except to the extent that such failure could not reasonably be
expected to have a material adverse effect on Borrower, its businesses
or assets.
SECTION 8. NEGATIVE COVENANTS
So long as Lender has any commitment to lend to Borrower hereunder and
until the Loan and all other indebtedness hereunder have been paid in full and
all of Borrower's obligations hereunder have been fully discharged, Borrower
shall not, without receiving the prior written consent of Lender:
8.1 Dissolution or Liquidation. Dissolve or liquidate, or merge or
consolidate with or into any other entity.
8.2 Due on Sale or Encumbrance. Except as provided in Section 7.4 and
8.5, assign, transfer or convey any of its right, title and interest in
any property whether real or personal encumbered by the Security
Documents; create or suffer to be created any mortgage, pledge,
security interest, encumbrance or other lien on any property encumbered
by the Security Documents (other than liens arising from work the cost
of which is being properly contested in accordance with the terms
hereof); or create or suffer
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to be created any mortgage, pledge, security interest, encumbrance or
other lien on any other property or assets which it now owns or
hereafter acquires except in consideration of the contemporaneous
receipt by it of benefits equal or greater in value to the lien
created. Any change or transfer or more than fifty percent (50%) in the
aggregate of the total membership interests in Borrower to a single
member or person (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) shall be deemed a transfer of property
in violation of this Section.
8.3 Change in Accounting Period. Change the times of commencement or
termination of its fiscal year or other accounting periods; or change
its methods of accounting other than to conform to GAAP or to tax basis
accounting, consistently applied.
8.4 No Additional Debt. During the term of the Loan, without Lender's
prior written consent, which may be withheld in Lender's sole and
absolute discretion, incur any additional debt with respect to, or in
connection with its ownership and operation of the Project (including
without limitation any contingent or guarantor liability), except as
provided in Section 7.4 and except for (i) short term accounts payable
incurred in connection with the operation of the Project, or (ii)
purchase money borrowing for equipment, but not fixtures for the
Project, provided the aggregate amount of all such borrowings shall not
exceed One Hundred Thousand Dollars ($100,000.00) at any one time
outstanding, and provided further that no lender shall have a security
interest in any collateral securing the Loan other than a security
interest in the equipment so purchased.
8.5 Disposition of Personal Property. Borrower shall, have the right to
sell any items of tangible personal property provided that in
connection with any sale of an item acquired at a cost in excess of Ten
Thousand and no/100 Dollars ($10,000.00), Borrower shall simultaneously
with or prior to such sale, either (i) replace said item with an item
of a value substantially equal to that of the item being sold and which
replacement item shall be free from any title retention or security
interest or other encumbrance except to the extent permitted pursuant
to Paragraph 8.4 above; or (ii) deliver any net cash proceeds received
from such disposition promptly to Lender to be applied to the principal
balance of the Note without charge for prepayment.
SECTION 9. WAIVER
9.1 Delay or Omission. No delay or omission by Lender in exercising any
right, power or remedy hereunder, and no indulgence given to Borrower,
with respect to any term, condition or provision set forth herein,
shall impair any right, power or remedy of Lender under this Agreement,
or be construed as a waiver by Lender of, or acquiescence in, any Event
of Default. Likewise, no such delay, omission or indulgence by Lender
shall be construed as a variation or waiver of any of the terms,
conditions or provisions of this Agreement. Any actual waiver by Lender
of any Event of Default shall not be a waiver of any other prior or
subsequent Event of Default or of the same Event of Default after
notice to Borrower demanding strict performance.
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SECTION 10. DEFAULT
10.1 Event of Default. The occurrence of any of the following events or
conditions shall constitute an Event of Default under this Agreement
and with respect to the Loan:
(a) Any failure to pay any principal or interest under the
Note when the same shall become due and payable and such
failure continues for ten (10) days after notice thereof to
Borrower, or the failure to pay any other sum due under the
Loan Documents when the same shall become due and payable and
such failure continues for ten (10) days after notice thereof
to Borrower. No notice, however, shall be required after
maturity of the Note.
(b) Any failure to perform or observe any of the covenants,
conditions or provisions of the Loan Documents (other than a
failure described in one or more of the other provisions of
this Paragraph 10.1) and such failure either cannot be
remedied or, if it can be remedied, it continues unremedied
for a period of thirty (30) days after notice thereof to
Borrower; provided that if such failure is not of a nature
such that can reasonably be cured within 30 days, so long as
Borrower is diligently pursuing such cure in good faith, such
failure shall not constitute an Event of Default.
(c) Any warranty, representation or statement contained in the
Loan Documents, or made or furnished to Lender by or on behalf
of Borrower, that shall be or shall prove to have been false
when made or furnished in any material respect.
(d) The filing by Borrower (or against Borrower to which
Borrower acquiesces or that is not dismissed within sixty (60)
days after the filing thereof) of any proceeding under the
federal bankruptcy laws now or hereafter existing or any other
similar statute now or hereafter in effect; the entry of an
order for relief under such laws with respect to Borrower in a
proceeding in which Borrower is the debtor; or the appointment
of a receiver, trustee, custodian or conservator of all or any
part of the assets of Borrower.
(e) The insolvency of Borrower; or the execution by Borrower
of an assignment for the benefit of creditors; or the
convening by Borrower of a meeting of its creditors, or any
class thereof, for purposes of effecting a moratorium upon or
extension or composition of its debts; or if Borrower is
generally not paying its debts as they mature.
(f) The admission in writing by Borrower that it is unable to
pay its debts as they mature or that it is generally not
paying its debts as they mature.
(g) The liquidation, termination or dissolution of Borrower.
(h) Any levy or execution upon, or judicial seizure of, any
portion of any collateral or security for the Loan.
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(i) Any attachment or garnishment of, or the existence or
filing of any lien or encumbrance, other than any lien or
encumbrance permitted by the Deed of Trust, against, any
portion of any collateral or security for the Loan, that is
not removed or released within thirty (30) days after Borrower
obtains actual knowledge of its creation, not to exceed
forty-five (45) days after its creation.
(j) The institution of any legal action or proceedings to
enforce any lien or encumbrance upon any portion of any
collateral or security for the Loan, that is not bonded or
insured over to Lender's reasonable satisfaction or dismissed
within thirty (30) days after its institution.
(k) A transfer of the Project or any part thereof in violation
of Section 8.2 hereof.
10.2 Remedies. Upon the occurrence of any Event of Default and at any
time while such Event of Default is continuing, Lender may do one or
more of the following:
(a) Cease making Advances without notice;
(b) Declare the Loan and all other indebtedness of Borrower
hereunder immediately due and payable, without notice or
demand;
(c) Proceed to protect and enforce its rights and remedies
under all Loan Documents;
(d) Take over and complete construction of any Tenant
Improvements by or through any agent, contractor or
subcontractor of its selection, and make Advances in payment
of the costs, expenses, fees, reasonable attorneys' fees and
other charges incurred in connection with such taking over and
completion, together with reasonable allowances for
supervision; and
(e) Avail itself of any other relief to which Lender may be
legally or equitably entitled.
SECTION 11. ACTION UPON AGREEMENT
11.1 No Third Party Beneficiaries. This Agreement is made for the sole
protection and benefit of the parties hereto and no other person or
organization shall have any right of action hereon.
11.2 Integration. The Loan Documents embody the entire Agreement of the
parties with regard to the subject matter hereof. There are no
representations, promises, warranties, understandings or agreements
expressed or implied, oral or otherwise, in relation thereto, except
those expressly referred to or set forth therein. Borrower acknowledges
that its execution and delivery of this Agreement is its free and
voluntary act and deed, and that said execution and delivery have not
been induced by, nor done in reliance upon, any representations,
promises, warranties, understandings or agreements made by Lender, its
agents, officers, employees or representatives.
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11.3 Modifications. No promise, representation, warranty or agreement
made subsequent to the execution and delivery of this Agreement by
either party hereto, and no revocation, partial or otherwise, or
change, amendment or addition to, or alteration or modification of,
this Agreement shall be valid unless the same shall be in writing
signed by all parties hereto.
11.4 No Joint Venture. Lender and Borrower each have separate and
independent rights and obligations under this Agreement. Nothing
contained herein shall be construed as creating, forming or
constituting any partnership, joint venture, merger or consolidation of
Borrower and Lender for any purpose or in any respect.
SECTION 12. GENERAL
12.1 Survival. This Agreement shall survive the making of the Loan and
shall continue so long as any part of the Loan, or any extension or
renewal thereof, remains outstanding.
12.2 Discretionary Rights. All rights, powers and remedies granted
Lender herein, or otherwise available to Lender, are for the sole
benefit and protection of Lender, and Lender may exercise any such
right, power or remedy at its option and in its sole and absolute
discretion without any obligation to do so except to the extent Lender
has expressly agreed herein that its consent or approval will not be
unreasonably withheld or that its discretion will be exercised in a
reasonable manner. In addition, if, under the terms hereof, Lender is
given two or more alternative courses of action, Lender may elect any
alternative or combination of alternatives, at its option and in its
sole and absolute discretion except to the extent Lender has agreed
that its consent or approval will not be unreasonably withheld or that
its discretion will be exercised in a reasonable manner. All amounts
paid, suffered or incurred by Lender in exercising any authority
granted herein, including reasonable attorneys' fees, shall be secured
by the Security Documents, shall bear interest at the highest rate
payable on the Loan until paid, and shall be due and payable by
Borrower to Lender immediately without demand.
12.3 Indemnity. Borrower shall indemnify and hold Lender harmless from
and against all claims, costs, expenses, actions, suits, proceedings,
losses, damages and liabilities of any kind whatsoever, including but
not limited to reasonable attorneys' fees and expenses, arising out of
any matter relating, directly or indirectly, to the Loan, to the
ownership, development, construction, or sale of the Project, whether
resulting from internal disputes of Borrower, or whether involving
other third persons or entities, or out of any other matter whatsoever
related to any of the Loan Documents, or any property encumbered
thereby, but excluding any claim or liability which arises as the
result of the gross negligence or willful misconduct of Lender, its
officers, employees or agents. This indemnity provision shall continue
in full force and effect and shall survive not only the making of the
Loan and the Advances but shall also survive the repayment of the Loan
and the performance of all of Borrower's other obligations hereunder.
12.4 Construction. The provisions hereof shall apply to the parties
according to the context thereof and without regard to the number or
gender of words or expressions used.
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12.5 Time of Essence. Time is expressly made of the essence of this
Agreement.
12.6 Notices. All notices required or permitted to be given hereunder
shall be in writing and may be given in person or by United States
mail, by delivery service or by electronic transmission. Any notice
directed to a party to this Agreement shall become effective upon the
earliest of the following: (i) actual receipt by that party; (ii)
delivery to the designated address of that party, addressed to that
party; or (iii) if given by certified or registered United States mail,
seventy-two (72) hours after deposit with the United States Postal
Service, postage prepaid, addressed to that party at its designated
address. The designated address of a party shall be the address of that
party shown at the beginning of this Agreement or such other address as
that party, from time to time, may specify by notice to the other
parties. Notices to Borrower shall also include a copy to:
EBS Building, L.L.C.
PricewaterhouseCoopers, LLP
800 Market Street, Suite 1800
St. Louis, Missouri 63101
Attn: Keith F. Cooper, Partner
and
Bryan Cave LLP
One Metropolitan Square
St. Louis, MO 63102
Attn: George E. Murray III, Esq.
Notices to Lender shall include a copy to each of:
FinPro, L.L.C.
1001 Cherry Street
Suite 308
Columbia, Missouri 65201
Sonnenschein Nath & Rosenthal
One Metropolitan Square, Suite 3000
St. Louis, MO 63102
Attn: Thomas K. Vandiver
Notices to Servicing Agent shall be delivered to:
NationsBank, N.A.
7800 Forsyth Blvd.
St. Louis MO 63105
Attn: Jack Wiser
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12.7 Payment of Costs. Borrower shall pay upon demand all out of pocket
costs and expenses arising from the preparation of the Loan Documents,
the closing of the Loan, the making of Advances and the monitoring and
administration of the Loan, including but not limited to title
insurance premiums, other title company charges, recording and filing
fees, costs of Uniform Commercial Code searches, Lender's reasonable
outside attorneys' fees, Lender's inspection fees, appraisal and
appraisal review fees, any intangible or recording taxes and any other
charges that may be imposed on Lender as a direct result of this
transaction.
12.8 Choice of Law. This Agreement shall be governed by and construed
according to the laws of the State of Missouri, without giving effect
to conflict of laws principles.
12.9 Successors. Except as otherwise provided herein, this Agreement
shall be binding upon, and shall inure to the benefit of, the parties
hereto and their successors and assigns.
12.10 Headings. The headings or captions of sections and paragraphs in
this Agreement are for reference only, do not define or limit the
provisions of such sections or paragraphs, and shall not affect the
interpretation of this Agreement.
12.11 Participations. Lender, at any time, shall have the right to
sell, assign, transfer, negotiate or grant participation interests in
the Loan and in any documents and instruments executed in connection
herewith; provided that Borrower shall have no obligation with respect
to such sale, assignment or transfer until Borrower has received notice
thereof from Lender. Borrower hereby acknowledges and agrees that any
such disposition (other than a participation) shall give rise to a
direct obligation of Borrower to each such assignee. Lender is
authorized to furnish to any participant or prospective participant any
information or document that Lender may have or obtain regarding the
Loan or Borrower, provided such party signs a confidentiality agreement
reasonably satisfactory to Borrower. In addition to the foregoing, the
Security Documents and the Note shall, at any time until the same shall
be fully paid and satisfied, at the sole election of Lender, be split
or divided into two or more Notes and two or more Security Documents,
each of which shall cover all or a portion of the Project to be more
particularly described therein. To that end Borrower, upon written
request of Lender, shall execute, acknowledge and deliver to Lender
and/or its designee or designees substitute Notes and Security
Documents in such principal amounts aggregating not more than the then
unpaid principal amount secured by the Deed of Trust and containing
terms, provisions and clauses no less favorable to Borrower than those
contained herein and in the Note and such other documents and
instruments as may be required by Lender to effect the splitting of the
Note and the Security Documents.
12.12 Counterparts. This Agreement may be executed in counterparts, all
of which executed counterparts shall together constitute a single
document. Signature pages may be detached from the counterparts and
attached to a single copy of this Agreement to physically form one
document.
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12.13 ORAL MODIFICATIONS. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO
PROTECT YOU (BORROWER) AND US (LENDER) FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE
CONTAINED IN THIS WRITING AND THE OTHER LOAN DOCUMENTS, WHICH IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.
12.14 Incorporation by Reference. All schedules and exhibits attached
hereto are incorporated herein and made a part hereof by this
reference.
12.15 Business Loan. The proceeds of this Loan will be used for the
purposes specified in Section 408.035 of the Missouri Revised Statutes
and the indebtedness secured thereby constitutes both a business loan
and a real estate loan which comes within the purview of Section
408.035 R.S.Mo.
27
<PAGE> 28
IN WITNESS WHEREOF, these presents are executed as of the date first
indicated above.
EBS BUILDING, L.L.C., a Delaware limited liability company
By: PRICEWATERHOUSECOOPERS LLP,
MANAGER
By: /s/ Matthew R. Neimann
------------------------------------------------------
Matthew R. Niemann, Director
BORROWER
28
<PAGE> 29
IN WITNESS WHEREOF, these presents are executed as of the date first
indicated above.
FINPRO, L.L.C., a Missouri limited liability company
By: /s/ E. Stanley Kroenke
------------------------------------------------------
E. Stanley Kroenke, Manager
[EBS LOAN AGREEMENT]
LENDER
29
<PAGE> 30
LIST OF EXHIBITS
Schedule 1 Schedule of Terms
Exhibit A Legal Description of Project
Exhibit B Form of Note
Exhibit C-1 Conditions and Limitations for Subsequent Advances
(Construction-Related Advances)
Exhibit C-2 Conditions and Limitations for Subsequent Advances (Lease-
Related Advances)
Exhibit C-3 Conditions and Limitations for Subsequent Advances
(Operating Deficit and Interest Reserve Advances)
Exhibit D Survey Requirements
Exhibit E Quarterly Compliance Certificate
Exhibit F-1 Form of Request for Disbursement (Construction-Related
Advances)
Exhibit F-2 Form of Request for Disbursement (Lease-Related Advances)
Exhibit G Form of Subordination, Attornment and Non-Disturbance
Agreement
30
<PAGE> 31
SCHEDULE 1
SCHEDULE OF TERMS
1.2A Commitment Fee: One Hundred Eighty Thousand Dollars ($180,000.00),
Twenty-Five Thousand Dollars ($25,000.00) of which has been previously
paid by Borrower.
1.2B Debt Redemption Fee: Sixty Thousand Dollars ($60,000.00) payable
semi-annually in arrears [for a maximum fee of Two Hundred Forty
Thousand Dollars ($240,000.00)]. The first semi-annual payment shall be
prepaid at Loan Closing. If the Note is prepaid prior to maturity, this
fee shall be prorated on a monthly basis for any payment period of less
than six (6) months (exclusive of the first semi-annual payment which
shall not be prorated regardless of when the Loan is prepaid).
1.2C Servicing and Administration Fee. Sixty Thousand Dollars ($60,000.00)
per annum, in advance, payable by Borrower at Loan Closing, and again
one (1) year after the date hereof. If the Note is prepaid prior to
maturity, this fee shall be prorated on a monthly basis and the
overpayment thereof shall be refunded to Borrower (or credited against
the Note payoff amount).
1.2D Unused Commitment Fee: 0.25% per annum of the amount by which
$12,000,000.00 exceeds the total Advances made to Borrower, to be
calculated based upon the average daily ratio of the unfunded portion
of the Loan to the Maximum Loan Amount of $12,000,000.00 based upon an
actual/360-day year basis and paid quarterly in arrears on the first
day of the following calendar month commencing September 1, 1999.
1.2E Maximum Lease Advance Amount: An amount for any Lease calculated as
follows subject to adjustment by Lender as it deems reasonably
necessary to address any changes in the rental terms over the life of
the relevant Lease:
(a) The product of (i)(x) the weighted average annual rental rate under
the lease, calculated on a per square foot basis, minus (y) the then
current annual Operating Expenses of the Project, calculated on a per
square foot basis, minus (z) one year's amortization of tenant
improvement costs and leasing commissions paid by Borrower in
connection with such lease as amortized over the initial term of the
lease, calculated on a per square foot basis, times (ii) the number of
rentable square feet leased to the tenant pursuant to such lease;
minus
(b) The reserve requirement, calculated as the product of $0.20 times
the number of rentable square feet leased to the tenant pursuant to
such lease;
and dividing (a) minus (b) by
(c) Ten percent (10%),
31
<PAGE> 32
such that the Maximum Lease Advance Amount = (a-b)/(c).
For the purpose of the foregoing calculation, Operating Expenses shall
not include: (i) fees and expenses payable by the Borrower to the
manager of the Borrower; (ii) asset management fees; (iii) tax return
preparation fees; (iv) fees and expenses associated with filings by the
Borrower with the Securities and Exchange Commission; and (v) other
similar expenses which relate to the operation of the Borrower
exclusive of the operation and management of the Project.
OR.
Twenty-Five Dollars ($25.00) per rentable square foot whichever is less;
OR
Such greater amount as Lender may reasonably determine.
Example:
Assumptions:
- 5,000 square feet of leased space
- $15.00 per square foot per annum gross rent
- $7.00 per square foot per annum expenses
- Calculation of Maximum Lease Advance Amount
(a) 5,000 x ($15.00-$7.00) = $40,000.00
(b) $40,000.00 - (5,000 x $0.20) = $39,000.00
(c) $39,000.00 / .10 = $390,000.00 Maximum Lease Advance
Amount
7.11 Escrow Account. Quarterly required deposit amounts in the amount of
$150,000.00.
32
<PAGE> 33
EXHIBIT "A"
REAL PROPERTY
Legal Description of Property:
All that real property located in the City of St. Louis, State of Missouri, more
particularly described as follows:
Parcel No. 1: A tract of land being Book 119, part of Block 118, that part of
St. Charles Street, 50 feet wide, vacated by Ordinance No. 58574 and that part
of a 7.5 foot wide alley in Block 118 vacated by Ordinance No. 58533, in the
City of St. Louis, Missouri and being further described as follows: Beginning at
a point on the East line of Sixth Street, 60 feet wide, at its intersection with
the South line of vacated St. Charles Street, 50 feet wide, said point being the
Northwest corner of Block 118, thence North 1 degree 54 minutes 12 seconds East,
49.93 feet across vacated St. Charles Street to the Southwest corner of Block
119; thence along the East line of Sixth Street, North 0 degrees 09 minutes 53
seconds West, 150.46 feet to its intersection with the South line of Washington
Avenue, 80 feet wide, said point being the Northwest corner of Block 119; thence
along the South line of Washington Avenue, North 89 degrees 54 minutes 07
seconds East, 270.40 feet to its intersection with the West line of Broadway, 80
feet wide, said point being the Northeast corner of Block 119; thence along the
West line of Broadway, South 0 degrees 11 minutes 45 seconds East, 149.47 feet
to its intersection with the North line of vacated St. Charles Street, said
point being the Southeast corner of Book 119; thence South 2 degrees 26 minutes
11 seconds West, 50.14 feet across vacated St. Charles Street to the Northeast
corner of Block 118; thence continuing along the West line of Broadway, South 2
degrees 33 minutes 22 seconds West, 13.64 feet to a point on the East line of
Block 118; thence leaving said point and running North 87 degrees 22 minutes 23
seconds West 269.68 feet to the point of beginning according to survey by The
Clayton Engineering Company dated February, 1998.
Parcel No. 2: A tract of land being part of Block 118 together with the vacated
North and South Alley and portions of the following vacated streets, Broadway,
Locust Street and Sixth Street, in the City of St. Louis, Missouri, and
described as follows: Beginning at a point on the East line of Sixth Street, 60
feet wide at its intersection with the South line of former St. Charles Street,
50 feet wide, as vacated by Ordinance No. 58574, said point being the Northwest
corner of City Block 118 and the Westernmost corner of property conveyed to
Edison Brothers Redevelopment Corporation by deed recorded in Book 338M page 830
of the St. Louis City Records; thence leaving said point and running along the
line of said Edison Brothers Property, South 87 degrees 22 minutes 23 seconds
East, 269.68 feet to a point on the Eastern line of City Block 118, thence along
said Eastern Block line, North 2 degrees 33 minutes 22 seconds East, 2.00 feet
to a point on the North line of that portion of Broadway as vacated by Ordinance
No. 58656; thence along the North line of said vacated area South 87 degrees 22
minutes 23 seconds East, 13.33 feet to the Northeast corner thereof; thence
along the Eastern line of the portion of Broadway, as vacated, South 2 degrees
33 minutes 22 seconds West, 275.33 feet to an angle point therein;
A-1
<PAGE> 34
thence South 50 degrees 50 minutes 47 seconds West, 1797 feet to a point on the
South line of that portion of Locust Street as vacated by Ordinance No. 58656;
thence along the South line of said vacated area, North 87 degrees 22 minutes 23
seconds West, 268.51 feet to an angle point therein; thence North 39 degrees 14
minutes 03 seconds West, 20.11 feet to a point on the Western line of that
portion of Sixth Street, as vacated by Ordinance No. 58656; thence along the
West line of said vacated area, North 2 degrees 37 minutes 07 seconds East,
271.67 feet to the Northwest corner thereof; thence along the North line of said
vacated portion of Sixth Street South 87 degrees 22 minutes 23 seconds East,
12.0 feet to a point on the East line of Sixth Street; thence along said street
line, South 2 degrees 37 minutes 07 seconds West 1.33 feet to the point of
beginning, according to survey executed by Clayton Engineering Company.
A-2
<PAGE> 35
EXHIBIT "B"
FORM OF NOTE
B-1
<PAGE> 36
EXHIBIT "C-1"
CONDITIONS AND LIMITATIONS FOR SUBSEQUENT ADVANCES
(CONSTRUCTION-RELATED ADVANCES)
1. Lender Approval of Lease. Prior to the commencement
of construction of any Tenant Improvements, any part of
the construction of which is to be financed with any
Subsequent Advance, Borrower shall submit to Lender for
approval (a) a Lease for the premises on which any
Tenant Improvements are to be constructed (to the extent
not previously approved), (b) the Budget for the Tenant
Improvements, (c) the Contract Documents for the Tenant
Improvements and (d) all plans and specifications for
the Tenant Improvements. Lender shall be under no
obligation to make any Subsequent Advance until Lender
has approved such Lease (including, without limitation,
the identity and financial condition of the Tenant) or
such lease is deemed approved, and until Lender has
approved the Budget, Contract Documents and plans and
specifications, in Lender's discretion, not to be
unreasonably withheld conditioned or delayed.
2. Construction of Tenant Improvements. Borrower shall
(i) construct or, if the Tenant is obligated to
construct Tenant Improvements under the Lease, cause the
Tenant to construct the Tenant Improvements in good and
workmanlike manner and substantially in accordance with
the Contract Documents, (ii) commence, or cause to be
commenced, construction promptly as required under the
related Approved Lease, and (iii) once construction of
the Tenant Improvements has commenced, pursue or cause
to be pursued such construction diligently to completion
and complete such construction substantially in
accordance with the relevant Construction Schedule
subject to force majeure. Borrower shall construct or
cause to be constructed such Tenant Improvements in
accordance with all applicable laws, rules and
regulations of appropriate governmental authorities, so
as not to encroach upon any easement, right-of-way or
land of others and so as not to violate any setback
lines, applicable public or private use restrictions or
other restrictions or regulations.
3. Subsequent Advance Procedures and Request for
Disbursement.
(a) If Borrower is obligated to construct the
Tenant Improvements under any Lease or finance the
construction thereof, Borrower shall prepare and
submit to Lender a
C-1
<PAGE> 37
Request for Disbursement for each Subsequent
Advance with regard to such Tenant Improvements,
but no more often than once per month. No Request
for Disbursement, except the final Request for
Disbursement with respect to the Tenant
Improvements for any Lease, shall be for an amount
less than $200,000.00 except to the extent the
aggregate cost for such improvements is less than
$200,000.00, in which event Borrower may request
such lesser amount. Each Request for Disbursement
shall be delivered to Lender not less than ten (10)
Business Days prior to the requested Subsequent
Advance Date and shall be accompanied by the
following:
(1) all information and documentation required
by this Agreement;
(2) evidence that all conditions of this
Agreement required to be satisfied prior to
such Subsequent Advance have been satisfied or
waived; and
(3) such additional information, affidavits,
certificates and other documents as may be
reasonably required by Lender for making the
Subsequent Advance; provided, however, that
lien waivers with respect to payments to
contractors to be financed with the proceeds
of such Advance may be conditional lien
waivers.
Within seven (7) Business Days of Lender's receipt of the Request for
Disbursement, Lender will approve or disapprove the Request for Disbursement.
Lender will review and consider approval of all Requests for Disbursement
submitted by Borrower in good faith. In the event of disapproval, Lender will
also promptly notify Borrower of such disapproval and the basis therefor by
telephone (confirmed in writing). If the Request for Disbursement is approved by
Lender, Lender will pay the amount requested in such Request for Disbursement to
Borrower, or during the continuance of an Event of Default, directly to the
contractors and subcontractors to be paid under such Request for Disbursement,
less the applicable Retainage, on or before the requested Subsequent Advance
Date in accordance with the terms and conditions of this Agreement. If the
Request for Disbursement is not approved in its entirety, Lender shall disburse
approved amounts, but shall not be obligated to disburse any disapproved portion
of the Request for Disbursement until resolution of each basis for disapproval
to the satisfaction of Lender, although Lender may, in its sole discretion,
disburse all or any portion of the requested amount prior to such resolution.
Within ten (10) Business Days of the resolution of each basis for disapproval to
the reasonable satisfaction of Lender, Lender shall disburse the remaining
portion of the requested Subsequent Advance.
C-2
<PAGE> 38
(b) No Subsequent Advances shall be approved for
materials purchased or to be purchased but not yet
installed or incorporated into the Tenant
Improvements.
(c) Lender may withhold for its own benefit 10% of
the Hard Costs of each approved Subsequent Advance
(the "Retainage"). The Retainage will be disbursed
upon substantial completion of the Tenant
Improvements to the extent the contractors and
subcontractors are then entitled to such amount
under the construction contracts. In Lender's
reasonable discretion, at Borrower's request, the
Retainage may be reduced to an amount less than 10%
of Hard Costs, provided that Lender's agreement to
such reduction in any one case shall not be
construed to require Lender to so consent in any
other case.
4. Additional Conditions Precedent to Subsequent
Advances. The obligations of Lender hereunder to approve
and make each Subsequent Advance subject to this Exhibit
C-1 shall be subject to the following conditions
precedent:
(i) Request for Disbursement. Requests
for Subsequent Advances shall be
accompanied by supporting documentation,
the adequacy and completeness of which
shall be reasonably approved by Lender,
including, without limitation, a list
certified by general contractor or
Borrower of payees and amounts to be paid
to each payee in connection with such
Request for Disbursement, invoices, lien
waivers for the prior draw, a schedule in
spreadsheet form of all costs incurred to
date by Borrower with respect to the
Approved Lease broken down on a line item
basis and compared with the related
amounts in the approved Budget for such
Lease, affidavits, indemnity agreements
and such other agreements, instruments,
documents and certificates as may be
reasonably required by Lender, including,
without limitation, all such items
related to Borrower's expenditure of the
Required Equity with respect to the
related Subsequent Advance. If work is
not performed by Borrower, the
certificates of
C-3
<PAGE> 39
Borrower regarding the foregoing may be
based on Borrower's reasonable inquiry.
(ii) Architect's Certificate. If required
by Lender, Lender shall have received
such certificates from Borrower's
Architect, if Borrower's Architect is
performing inspections, certifying that
all work for which an Advance is being
requested by Borrower has been performed
in accordance with the Approved Plans and
Specifications and applicable law, the
amount of the Advance requested
represents work in place based on on-site
observations and the data comprising the
Draw Request, the work has progressed as
indicated and the applicable contractor
is entitled to payment of the amount
certified.
(iii) No Events of Default. As of the
date of the Request for Disbursement and
the date of the Subsequent Advance, there
shall have been no Event of Default, and
no event shall exist which by notice,
passage of time or both would constitute
an Event of Default under this Agreement.
(iv) Notices, Applications and Filings.
All notices, applications and filings
required by any governmental authority in
connection with the related Tenant
Improvements shall have been duly filed.
(v) Certifications and Governmental
Approvals. Evidence satisfactory to
Lender of Borrower's receipt of all
required governmental certifications and
approvals in connection with the related
Tenant Improvements.
(vi) Other Conditions. To the extent
applicable, Lender shall have received
any and all affidavits, indemnity
agreements, lien waivers, certificates
and other documents that may be
reasonably required by Lender, including,
without limitation, an affidavit of
general contractor as to the payment of
all
C-4
<PAGE> 40
contractors, subcontractors, suppliers,
materialmen and vendors entitled thereto
in connection with the related Tenant
Improvements; provided, however, that
lien waivers with respect to payments to
contractors to be financed with the
proceeds of such Advance may be
conditional lien waivers.
5. Special Conditions for Final Advance. In addition to
the requirements set forth in the preceding Paragraph,
the obligation of Lender to make the final Advance with
respect to Tenant Improvements financed by Borrower for
any particular Lease is also conditioned upon the
receipt by Lender of the following:
(i) Certificates of Occupancy. Evidence
satisfactory to Lender of the issuance by
all appropriate governmental authorities
of final certificates of use and
occupancy of the related Tenant
Improvements, to the extent required
under applicable law.
(ii) Completion Certificates. A
certificate to Lender by Borrower
certifying (i) a final certificate of use
and occupancy of the Tenant Improvements
has been issued; and (ii) covering such
other matters as Lender may reasonably
require. If the work is not to be
performed by Borrower, the certificates
of Borrower regarding the foregoing may
be based upon Borrower's reasonable
inquiry.
(iii) Borrower's Affidavit; Borrower's
Certification.
(A) An affidavit of Borrower stating
that each person providing any
material or performing any work in
connection with the premises has
been (or if applicable, will be,
with the proceeds of and immediately
following receipt by Borrower of
such final Loan Advance) paid in
full or bonded (or funds have been
or will be, from the proceeds of the
Final
C-5
<PAGE> 41
Advance, reserved therefor) to the
satisfaction of Lender, and that all
withholding taxes have been paid and
lien waivers have been (or if
applicable, will be, with the
proceeds of and immediately
following receipt by Borrower of
such final Advance) obtained from
all contractors, material
subcontractors and material
suppliers who have performed work or
supplied materials in connection
with the construction of the Tenant
Improvements and who have lien
rights, and covering such other
matters as Lender may reasonably
require. If the work is not to be
performed by Borrower, the affidavit
of Borrower regarding the foregoing
may be based upon Borrower's
reasonable inquiry.
(B) A certificate from Borrower to
Lender stating that (a) the Tenant
Improvements have been completed
substantially in accordance with the
Contract Documents subject to
customary punch-list items, (b)
Borrower and the Tenant have
accepted the Tenant Improvements as
constructed, and (c) if applicable,
upon delivery by Lender of the final
Loan Advance to those persons and/or
entities described in the Request
for Disbursement with respect to
such Advance, Lender shall have
satisfied all of its obligations
under this Agreement to disburse
Advances under the Loan with respect
to such Lease and, without affecting
Borrower's continuing
representations, warranties,
covenants, agreements and
obligations hereunder, Lender shall
have no further duties or
obligations under this Agreement to
C-6
<PAGE> 42
disburse Advances with respect to
such Lease. If the work is not to be
performed by Borrower, the affidavit
of Borrower regarding the foregoing
may be based upon Borrower's
reasonable inquiry.
(C) Upon reasonable request by
Lender, copies of all documents,
instruments and agreements and all
insurance policies and certificates
required to be delivered pursuant to
any Contract Document together with
any other evidence reasonably
required by Lender that the Tenant
Improvements have been substantially
completed in accordance with the
Contract Documents in compliance
with all Requirements of
Governmental Authority and free of
all liens.
6. Method of Subsequent Advance. Any Subsequent Advance
made by Lender, or so much thereof as Lender may
consider proper, may be disbursed at Lender's option to
Borrower or its order or, at Lender's election, in the
case of Tenant Improvements to be constructed by
Borrower under any Lease, after an Event of Default,
directly to the applicable general contractor, or to the
persons furnishing labor, materials and/or services in
connection with the Improvements. Lender shall have no
obligation to see that the Advances made by it to
Borrower or any designee of Borrower are actually used
by that party to pay for labor and materials furnished
for construction of the Tenant Improvements. Borrower
acknowledges that this determination is its
responsibility, and Borrower assumes all risks in
connection with any Advance made pursuant to this
paragraph.
7. Withholding Advances. Lender shall have no obligation
to require and/or obtain lien waivers or receipts, and,
although Lender may require presentation to it of lien
waivers and/or receipts, Lender shall have no
responsibility for the validity thereof nor for the
correctness of the amounts indicated thereon. No Advance
by Lender shall constitute approval of any certification
or relieve any person making such certification of
responsibility therefor.
8. Change Orders; Payment of Additional Costs; In
Balance.
C-7
<PAGE> 43
(i) All Change Orders which individually
or in the aggregate for Tenant
Improvements, which are to be paid for by
Borrower under any Lease exceed
$25,000.00 are subject to the prior
consent of Lender not to be unreasonably
withheld. Lender shall have the right to
impose a reasonable fee for its review of
Change Orders, which fee shall be based
on the nature of the requested change. At
the time Borrower requests Lender's
consent to a Change Order, Borrower must
also notify Lender whether Borrower
intends to pay for all or a portion of
the additional costs resulting from such
Change Order, if any, or desires that
Lender fund all or a portion of such
additional costs through Advances. Lender
shall have the right, but not the
obligation, in its sole discretion, to
fund all or a portion of amounts required
to complete the Tenant Improvements in
excess of the Buildout Price due to
Change Orders. If Lender elects to fund
all or a portion of such excess amounts,
such amounts funded will be advanced as
Subsequent Advances in accordance with
this Agreement and included in the
Buildout Price for purposes of
calculating the amount of the Loan. If
Lender does not elect to fund all or a
portion of such excess amounts, Borrower
shall immediately deposit funds with
Lender equal to the portion of the excess
amounts Lender will not fund, and Lender
shall disburse such deposited funds
toward payment of the Buildout Price
prior to the Advance of any further funds
under the Loan, subject to the
satisfaction of the requirements for
making Subsequent Advances set forth in
this Agreement.
(ii) Borrower agrees to execute such
amendments to the Note and related
documents, as Lender shall require to
evidence the inclusion of additional
amounts
C-8
<PAGE> 44
funded by Lender pursuant to this Section
in the Loan.
(iii) If Lender shall reasonably
determine that the Schedule of Values
and/or the Budget is not "in balance" as
provided in this subsection, Lender may,
at its option, refuse to make or approve
further Advances and may require Borrower
to deposit with Lender cash or other
security acceptable to Lender in its sole
discretion in such amount as Lender deems
necessary to put the Schedule of Values
and/or the Budget "in balance." No funds
of Lender shall be disbursed until all
sums deposited by Borrower have been
disbursed. The Schedule of Values and/or
the Budget shall be "in balance" only at
such times that Lender determines, in its
sole and reasonable judgment, that the
moneys available to Borrower for the
payment or reimbursement of (1) the total
costs of constructing the Tenant
Improvements as set forth in the Budget
are at least equal to the amount that
must be expended in order to complete the
Tenant Improvements and to pay all costs
and other expenses contemplated
hereunder, and (2) unexpended amounts
within each category or line item in the
Schedule of Values and/or the Budget are
at least equal to the amount of costs
that must be expended to pay each
category or line item. Any costs listed
as contingencies on the Schedule of
Values and/or the Budget shall be deemed
to be actual costs for the purposes of
balancing. The determination as to
whether the Schedule of Values and/or the
Budget is "in balance" may be made by
Lender at any time, including in
connection with any Request for
Disbursement. Within ten (10) Business
Days following notice from Lender that
the Schedule of Values and/or the Budget
is not "in balance," Borrower shall make
the deposit required to be made pursuant
to this subsection. Any such
C-9
<PAGE> 45
amounts deposited with Lender shall be
the next funds disbursed by Lender,
subject to the terms and conditions of
this Agreement.
9. Mechanics' and Materialmen Liens.
(i) Borrower will certify, or cause the
general contractor, if any, to certify,
to Lender upon request at any time, and
from time to time, as to all materialmen,
laborers, subcontractors, suppliers and
any other parties who might or could
claim statutory or common law liens as a
result of furnishing material or labor to
the Premises or any portion thereof or
interest therein, together with evidence
satisfactory to Lender showing that such
parties have been paid (or will be paid
from the Subsequent Advances) all amounts
then due for labor and materials. In
addition, Borrower will provide or cause
to be provided to Lender, promptly upon
Lender's request, copies of any
preliminary notice or notice, written or
oral, from any laborer, subcontractor,
materialman or supplier to the effect
that said laborer, subcontractor,
materialman or supplier has not been paid
when due or intends to or has filed any
mechanics lien for any labor or materials
furnished in connection with the
construction of the Tenant Improvements.
(ii) If, during the construction of the
Tenant Improvements, a lien is filed
against the Project for work performed on
or goods and/or services provided to the
Project, and if Borrower is not then in
breach or default of this Agreement,
Borrower shall have thirty (30) Business
Days after Lender's request that the lien
be released from the applicable real
property records or that Borrower post a
bond or provide an indemnity satisfactory
to Lender to cause the same to be
accomplished. If Borrower fails to so
cause such lien to be released or to post
such a bond or deliver such an
C-10
<PAGE> 46
indemnity, such failure shall be an Event
of Default under this Agreement and shall
entitle Lender to exercise the remedies
set forth in Section 10.2.
10. Inspection, Audits and Information Regarding Tenant
Improvements and Construction Component Advances.
(i) Borrower shall permit Lender and its
representatives and agents, to enter upon
the Real Property at all times during
normal business hours and at other times
upon not less than 24 hours prior written
notice and to inspect the Tenant
Improvements and all materials to be used
in the construction thereof, and shall
cooperate and cause the general
contractor, if any, to cooperate with
Lender and its representatives and
agents, during such inspections,
including making available to Lender
working copies of the Contract Documents
together with all related supplementary
materials.
(ii) Borrower shall permit Lender and its
representatives and agents, to examine,
copy and make extracts of the books,
records, accounting data and other
documents of Borrower that relate to
compliance with the terms of this Exhibit
including, without limitation, all
permits, licenses, consents and approvals
of all governmental authorities having
jurisdiction over Borrower or the
Project. All such books, records and
documents shall be made available to
Lender, and its representatives and
agents promptly upon written demand
therefor; and, at the request of Lender,
Borrower shall furnish Lender and its
representatives and agents with
convenient facilities for the foregoing
purpose.
(iii) It is expressly understood and
agreed that Lender shall have no duty to
supervise or to inspect the construction
of any Tenant Improvements or any books,
records, drawings, permits or approvals
concerning
C-11
<PAGE> 47
the construction of such Tenant
Improvements, and that any such
inspection or review shall be for the
sole purpose of determining whether or
not the obligations of Borrower under
this Agreement are being properly
discharged and of preserving Lender's
rights hereunder or under the Contract
Documents. If Lender or its agents should
inspect the construction of the Tenant
Improvements or any books and records,
Lender and its agents shall have no
liability or obligation to Borrower or
any third party arising out of such
inspection. A review or inspection not
followed by a notice of an Event of
Default shall not constitute a waiver of
any default then existing; nor shall it
constitute an acknowledgment or
representation by Lender that there has
been or will be compliance with the
Contract Documents, that the construction
is free from defects in materials or
workmanship, or that there has been a
waiver of Lender's right thereafter to
insist that any Tenant Improvements be
constructed in accordance with the
Contract Documents. Lender's failure to
inspect the construction of the Tenant
Improvements or any part thereof or any
books, records, drawings, permits and
approvals related to the construction of
the Tenant Improvements shall not
constitute a waiver of any of Lender's
rights hereunder. Neither Borrower nor
any third party shall be entitled to rely
upon any inspection or review undertaken
by Lender, and Lender owes no duty of
care to Borrower or any third person to
protect against, or inform Borrower or
any third person of the existence of,
negligent, faulty, unlawful, inadequate
or defective design or construction of
the Tenant Improvements.
11. Insurance. In addition to the insurance requirements
Borrower is otherwise obligated under this Agreement to
satisfy, Borrower shall obtain and maintain the
following insurance:
C-12
<PAGE> 48
(i) Architect's Insurance. An architect's
professional liability insurance policy
obtained by Borrower's Architect, if any,
in an amount not less than $1,000,000.00
per occurrence. Evidence of such
insurance shall be delivered to Lender.
(ii) General Contractor's Liability
Insurance. General contractor's liability
insurance policy in an amount not less
than $1,000,000.00 per occurrence.
Evidence of such insurance shall be
delivered to Lender.
Borrower shall cooperate with Lender in obtaining for Lender the benefits of any
insurance proceeds lawfully or equitably payable to Lender in connection with
the transactions contemplated hereby, and shall reimburse Lender for any
reasonable expenses incurred in connection therewith (including reasonable
attorneys' fees and expenses, and the payment by Borrower of the expense of an
Appraisal on behalf of Lender in case of a fire or other casualty affecting the
Land or the Tenant Improvements which Lender reasonably believes has a material
adverse effect on the value of the Project).
12. Representations and Warranties of Borrower. The
following representations and warranties, to the extent
applicable, shall be deemed made by Borrower as of the
date of each submission of a Request for Disbursement by
Borrower:
(i) Approval of Contract Documents;
General Contract. The Contract Documents
have been approved by Borrower and, to
the extent required by applicable law or
any effective restrictive covenant, each
governmental authority and the
beneficiaries of each such covenant
respectively. The general contract
provides for the construction of the
Tenant Improvements for a stipulated
amount or guaranteed maximum price.
(ii) Compliance With Laws. The design,
layout and anticipated use of the Tenant
Improvements complies with or will comply
with in all material respects, by the
Completion Date, all applicable zoning
ordinances, regulations and restrictive
covenants affecting the leased premises
and all other requirements of any
governmental
C-13
<PAGE> 49
authority and all requirements for such
use have been or will have been satisfied
by the Completion Date.
(iii) Licenses; Permits. Borrower has
obtained all licenses, permits,
authorizations, consents and approvals
from governmental authorities and/or
third parties necessary to commence
construction of the Tenant Improvements,
such licenses, permits, authorizations
and consents are in full force and effect
and will be maintained in full force and
effect throughout construction of the
Tenant Improvements, and Borrower has no
reason to believe that all licenses,
permits, certifications and approvals
with respect to the Tenant Improvements
to be issued subsequent to the date of
this Agreement will not be issued in the
ordinary course of business. In addition
to those licenses, permits,
certifications and approvals which are
required to commence construction of the
Tenant Improvements, Borrower shall
timely obtain and maintain all other
licenses, permits, certifications and
approvals required to construct or
complete the Tenant Improvements. On or
before the Completion Date, Borrower
shall have obtained from each
governmental authority all licenses,
permits, authorizations, consents and
approvals necessary for the occupancy and
operation of the Tenant Improvements for
their intended purpose, and as of the
Completion Date such licenses, permits,
authorizations, consents and approvals
will be in full force and effect.
(iv) Lien Potential. Borrower has made no
material contract or arrangement of any
kind which has given rise to, or the
performance of which by the other party
thereto would give rise to, a lien or
claim of lien on the Premises, except for
its arrangements with Borrower's
Architect, general contractor and
contractors or
C-14
<PAGE> 50
subcontractors which have been disclosed
to Lender and the purchase money
financing permitted pursuant to paragraph
8.4 of the Agreement.
(v) No Defaults. To Borrower's knowledge,
there exist no defaults under this
Agreement, the Note or any of the
documents executed in connection with the
Note, and no event has occurred and is
continuing which with notice or the
passage of time or both would constitute
a default under this Agreement or any of
such documents.
(vi) Representations and Warranties. All
representations and warranties of
Borrower in the Note, any other Loan
Documents, and in any certificates or
other instruments delivered pursuant
thereto are incorporated herein by
reference as though fully set forth.
(vii) Other Financing. Borrower
represents that it does not require and
agrees that it will not avail itself of
any other debt financing in connection
with the Project without the prior
written consent of Lender excluding trade
payables and accruals in the ordinary
course of business and the purchase money
financing permitted pursuant to paragraph
8.4 of the Agreement.
13. Retention of Lender's Inspector.
(i) Lender may retain, at Lender's sole
cost and expense, an architectural/
engineering firm ("Lender's Inspector")
to review the work-related items, the
Contract Documents, permits, licenses and
the Budget and any changes to such items;
inspect the Premises prior to
commencement of the work for purposes of
determining the condition of the Premises
and any existing Tenant Improvements;
make periodic inspections of the Premises
during normal business hours and at other
times upon not
C-15
<PAGE> 51
less than 24 hours prior written notice
and the work so that Lender may monitor
whether Borrower is in compliance with
the terms and conditions hereof, and
certifying that each Request for
Disbursement is not in excess of the work
completed and the amount to which
Borrower is entitled under the terms and
conditions of this Agreement. Lender may
also require an inspection of the Work by
Lender's Inspector: (a) prior to each
Subsequent Advance; (b) at least once
each month during the course of
completion of the work; (c) upon
substantial completion; and (d) at such
other time as Lender may, in its
reasonable judgment, deem necessary due
to actual or suspected non-compliance
with the plans and specifications,
Contract Documents, any law, regulation
or private restriction, sound
architectural, engineering or
construction principles or commonly
accepted safety standards; or Borrower's
failure to satisfy the requirements
hereof. In exercising such rights, Lender
shall not unreasonably interfere with
Borrower's construction of the Tenant
Improvements.
(ii) Lender shall have no duty to
supervise or to review and inspect the
work, the Contract Documents, permits,
licenses, the Budget, any books and
records pertaining thereto or any changes
to such items or the construction of the
work. Any inspection made by Lender shall
be for the sole purpose of determining
whether the Obligations are being
performed and preserving Lender's rights
hereunder. If Lender, or Lender's
Inspector acting on behalf of Lender,
should review or inspect the work, the
Contract Documents, permits, licenses,
the Budget, any books and records
pertaining thereto or any changes to such
items or the construction of the work,
Lender and Lender's Inspector shall have
no liability or obligation to Borrower or
any third person arising out of such
inspection;
C-16
<PAGE> 52
and neither Borrower nor any third person
shall be entitled to rely upon any such
inspection or review. Inspection not
followed by notice of default shall not
constitute (1) waiver of any default then
existing; (2) an acknowledgment or
representation by Lender or Lender's
Inspector that there has been or will be
compliance with the Contract Documents,
permits, licenses, the Budget, applicable
laws, regulations and private
restrictions, sound construction,
engineering or architectural principles
or commonly accepted safety standards, or
that the construction is lien free or
free from defective materials or
workmanship; or (3) a waiver of Lender's
right thereafter to insist that
completion of the work occur in
accordance with the Contract Documents,
permits, licenses, the Budget, applicable
laws, regulations and restrictions, sound
construction, engineering or
architectural principles or commonly
safety standards and free from defective
materials and workmanship. Lender and
Lender's Inspector owe no duty of care to
Borrower or any third person to protect
against, or inform Borrower or any third
person of, the existence of negligence,
faulty, inadequate or defective design or
construction of the Work.
14. Satisfaction of Conditions. Although Lender shall
have no obligation to make any Subsequent Advance unless
and until all of the conditions and prior performances
set forth herein have been kept, fulfilled or performed,
and until all inspections, certifications, releases,
waivers, or paid bills or other requirements set forth
herein have been made, delivered and complied with,
Lender, at its sole discretion, may make Advances prior
to that time without waiving or releasing any of the
requirements or conditions of this Agreement; but
Borrower shall continue to be strictly obligated and
subject thereto, and all such conditions, prior
performances and other requirements shall nevertheless
be strictly and punctually complied with, fulfilled and
performed; and, notwithstanding any such Advance,
Lender, at its sole discretion, may discontinue any
C-17
<PAGE> 53
further Advances at any time until all of the
conditions, prior performances and other requirements of
this Agreement have been strictly fulfilled, performed
and complied with.
C-18
<PAGE> 54
EXHIBIT "C-2"
CONDITIONS AND LIMITATIONS FOR SUBSEQUENT ADVANCES
(LEASE-RELATED ADVANCES)
15. Lender Approval of Lease. Prior to any Subsequent Advance with
respect to a Lease, which Advance is not requested to fund any Tenant
Improvements, Borrower shall: submit to Lender for approval (a) a Lease for the
related premises to the extent not already approved, (b) if requested by Lender
and if applicable, the Budget and the Contract Documents for any Tenant
Improvements to be constructed and financed by the Tenant under such Lease.
Lender shall be under no obligation to make any Subsequent Advance with respect
to such Lease until Lender has approved such Lease (including, without
limitation, the identity and financial condition of the Tenant) or such lease is
deemed approved, and other items, in Lender's discretion, not to be unreasonably
withheld, conditioned or delayed.
16. Construction of Tenant Improvements. With respect to
any Lease under which Tenant Improvements are to be
constructed, but no part of such Improvements are to be
financed by a Subsequent Advance, Borrower shall (i) use
reasonable efforts to cause the Tenant to construct the
Tenant Improvements in good and workmanlike manner and
substantially in accordance with the Contract Documents,
(ii) commence, or use reasonable efforts to cause to be
commenced, construction promptly as required under the
related Approved Lease, and (iii) once construction of
the Tenant Improvements has commenced, pursue or cause
to be pursued such construction diligently to completion
and complete such construction substantially in
accordance with the relevant Construction Schedule.
Borrower shall use reasonable efforts to cause such
Tenant Improvements to be constructed in accordance with
all applicable laws, rules and regulations of
appropriate governmental authorities, so as not to
encroach upon any easement, right-of-way or land of
others and so as not to violate any setback lines,
applicable public or private use restrictions or other
restrictions or regulations.
17. Eligible Expenses. A Subsequent Advance other than a
Construction-Related Advance made pursuant to Exhibit
"C-1", may only be made to pay or reimburse Borrower for
(i) the cost of any leasing commission, legal fees or
other out-of-pocket expenses approved by Lender in its
sole discretion in connection with an Approved Lease,
(ii) to make any other capital expenditure benefiting
the Project permitted by paragraph 7.17(a), or (iii) to
pay any other Operating Expenses of the Project or other
ownership level expenses of the Borrower.
C-2-1
<PAGE> 55
18. SUBSEQUENT ADVANCE PROCEDURES AND REQUEST FOR
DISBURSEMENT.
(a) Borrower shall prepare and submit to Lender a
Request for Disbursement for any such Subsequent
Advance subject to this Exhibit C-2. Each Request
for Disbursement shall be delivered to Lender not
less than ten (10) Business Days prior to the
requested Subsequent Advance date and shall be
accompanied by the following:
(i) all information and documentation
required by this Agreement;
(ii) evidence that all conditions of this
Agreement required to be satisfied prior
to such Subsequent Advance have been
satisfied or waived;
(iii) copies of all relevant
documentation evidencing the amount and
payment, if any, of the expenses for
which a Subsequent Advance is being
requested including, but not limited to,
a waiver of lien with respect to any
brokerage commissions to be paid
hereunder; and
(iv) such additional information,
affidavits, certificates and other
documents as may be reasonably required
by Lender for making the Subsequent
Advance.
Within seven (7) Business Days of Lender's receipt of the Request for
Disbursement, Lender will approve or disapprove the Request for Disbursement.
Lender will review and consider approval of all Requests for Disbursement
submitted by Borrower in good faith.
19. Additional Conditions Precedent to Subsequent
Advances. The obligations of Lender hereunder to approve
and make each Subsequent Advance subject to this Exhibit
C-2 shall be subject to the following conditions
precedent:
(i) Certificates of Occupancy. If
applicable, evidence satisfactory to
Lender of the issuance by all appropriate
governmental authorities of final
certificates of use and occupancy of the
related Tenant
C-2-2
<PAGE> 56
Improvements, to the extent required by
applicable law.
(ii) Completion Certificates. If
applicable, certificate to Lender by
Borrower certifying (i) that the Tenant
Improvements have been completed
substantially in accordance with the
Contract Documents; (ii) a final
certificate of use and occupancy of the
Tenant Improvements has been issued; and
(iii) covering such other matters as
Lender may reasonably require.
(iii) Borrower's Affidavit; Borrower's
Certification.
(A) If applicable, an affidavit of
Borrower stating that each person
providing any material or performing
any work in connection with the
premises has been paid in full or
bonded (or funds have been reserved
therefor) to the satisfaction of
Lender, and that all withholding
taxes have been paid and lien
waivers have been obtained from all
contractors, subcontractors and
suppliers who have performed work or
supplied materials in connection
with the construction of any Tenant
Improvements and who have lien
rights, and covering such other
matters as Lender may require.
(B) If applicable, a certificate
from Borrower to Lender stating that
(a) the Tenant Improvements have
been completed substantially in
accordance with the Contract
Documents subject to punch-list
items and (b) Borrower and the
Tenant have accepted the Tenant
Improvements as constructed subject
to punch-list items.
C-2-3
<PAGE> 57
(C) Other Items. Upon reasonable
request by Lender, copies of all
documents, instruments and
agreements and all insurance
policies and certificates required
to be delivered pursuant to any
Contract Document together with any
other evidence required by Lender
that the Tenant Improvements have
been substantially completed in
accordance with the Contract
Documents in compliance with all
Requirements of Governmental
Authority and free of all liens.
(iv) If the Advance is for the purpose of
making a capital expenditure benefiting
the Project, then Borrower shall also
provide, to the extent applicable to the
making of such capital expenditure, the
items described in Exhibit "C-1"
paragraph 4 and all references therein to
Tenant Improvements shall be deemed to be
references to such capital expenditures.
20. Withholding Advances. Lender, in its discretion, may
withhold any Subsequent Advance subject to this Exhibit
C-2 until Lender has received releases of lien, waivers
of lien or paid bills in form reasonably satisfactory to
it. Lender shall have no obligation to require and/or
obtain lien waivers or receipts, and, although Lender
may require presentation to it of lien waivers and/or
receipts, Lender shall have no responsibility for the
validity thereof nor for the correctness of the amounts
indicated thereon. No Advance by Lender shall constitute
approval of any certification or relieve any person
making such certification of responsibility therefor.
21. Representations and Warranties of Borrower. The
following representations and warranties, to the extent
applicable, shall be deemed made as of the date of each
submission of a Request for Disbursement by Borrower
with respect to each Subsequent Advance by Lender under
such Request for Disbursement:
(i) Approval of Contract Documents;
General Contract. If applicable, the
Contract Documents have been approved by
Borrower and, to the extent required by
C-2-4
<PAGE> 58
applicable law and/or each
governmental authority.
(ii) Compliance With Laws. To the best of
Borrower's knowledge, if applicable, the
design, layout and anticipated use of the
Tenant Improvements complies with or will
comply with in all material respects, by
the Completion Date, all applicable
zoning ordinances, regulations and
restrictive covenants affecting the
leased premises and all other
requirements of any governmental
authority and all requirements for such
use have been or will have been satisfied
in all material respects by the
Completion Date.
(iii) Licenses; Permits. To the best of
Borrower's knowledge, if applicable,
Borrower (or the tenant constructing the
same) has obtained all licenses, permits,
certifications and approvals required to
construct or complete the Tenant
Improvements. On or before the Completion
Date, Borrower (or the tenant
constructing the same) shall have
obtained from each governmental authority
and from each beneficiary of each
restrictive covenant all licenses,
permits, authorizations, consents and
approvals necessary for the occupancy and
operation of the Tenant Improvements for
their intended purpose, and as of the
Completion Date such licenses, permits,
authorizations, consents and approvals
will be in full force and effect.
(iv) No Defaults. To Borrower's knowledge
there exist no Events of Default under
this Agreement, the Note or any other
Loan Documents executed in connection
with the Note, and no event has occurred
and is continuing which with notice or
the passage of time or both would
constitute a default under this Agreement
or any of such documents.
C-2-5
<PAGE> 59
(v) Representations and Warranties. All
representations and warranties of the
Borrower in the Note, any other Loan
Documents, and in any certificates or
other instruments delivered pursuant
thereto are incorporated herein by
reference as though fully set forth.
22. Satisfaction of Conditions. Although Lender shall
have no obligation to make any Subsequent Advance unless
and until all of the conditions and prior performances
set forth herein have been kept, fulfilled or performed,
and until all inspections, certifications, releases,
waivers, or paid bills or other requirements set forth
herein have been made, delivered and complied with,
Lender, at its sole discretion, may make Advances prior
to that time without waiving or releasing any of the
requirements or conditions of this Agreement; but
Borrower shall continue to be strictly obligated and
subject thereto, and all such conditions, prior
performances and other requirements shall nevertheless
be strictly and punctually complied with, fulfilled and
performed; and, notwithstanding any such Subsequent
Advance, Lender, at its sole discretion, may discontinue
any further Subsequent Advances at any time until all of
the conditions, prior performances and other
requirements of this Agreement have been strictly
fulfilled, performed and complied with.
C-2-6
<PAGE> 60
EXHIBIT "C-3"
CONDITIONS AND LIMITATIONS FOR SUBSEQUENT ADVANCES
(OPERATING DEFICIT AND CAPITALIZED INTEREST ADVANCES)
23. Eligible Expenses. An Operating Deficit Advance may only be made to
pay or reimburse Borrower for Operating Expenses (excluding replacement
reserves) and ownership level expenses and professional fees. A Capitalized
Interest Advance may only be made to reimburse Borrower for interest then due
and payable on the Note.
24. Conditions for Disbursement.
A. Borrower shall be eligible for an Operating Deficit Advance
only if:
(a) No Event of Default has occurred and is then continuing;
and
(b) Borrower has exhausted all other liquid resources
available to it other than the Real Property, and not more than
One Hundred Thousand Dollars ($100,000.00) retained in the
operating account in order to pay such expenses.
(c) Lender shall have no obligation to make an Advance
hereunder to the extent that such an Advance would cause the total
of all Operating Deficit Advances to exceed the sum of
$1,000,000.00 or would cause the sum of all Advances made under
the Note to exceed the sum of $12,000,000.00.
B. Borrower shall be eligible for a Capitalized Interest Advance
only if:
(a) No Event of Default has occurred and is then continuing;
(b) Borrower has exhausted all other liquid resources
available to it, other than the Real Property to pay such
interest; and not more than One Hundred Thousand Dollars
($100,000.00) retained in the operating account in order to pay
such expenses; and
(c) Lender shall have no obligation to make an Advance
hereunder to the extent that such an Advance would cause the total
of all Capitalized Interest Advances to exceed the sum of
$1,500,000.00, or would cause the sum of all Advances made under
the Note to exceed the sum of $12,000,000.00.
25. Subsequent Advance Procedures and Request for
Disbursement.
(a) Borrower shall prepare and submit to Servicing Agent a Request
for Disbursement for any such Operating Deficit Advance. Each Request
for Disbursement
C-3-1
<PAGE> 61
shall be delivered to Lender not less than ten (10) Business Days prior
to the requested Operating Deficit Advance date and shall be
accompanied by the following:
(i) all information and documentation required by
this Agreement;
(ii) evidence that all conditions of this Agreement
required to be satisfied prior to such Operating Deficit
Advance have been satisfied or waived;
(iii) copies of all relevant documentation evidencing
the amount and payment, if any, of the expenses for which an
Operating Deficit Advance is being requested; and
(iv) such additional information, affidavits,
certificates and other documents as may be reasonably
required by Lender for making the Operating Deficit Advance.
Within seven (7) Business Days of Lender's receipt of the Request for
Disbursement, Lender will approve or disapprove the Request for Disbursement.
Lender will review and consider approval of all Requests for Disbursement
submitted by Borrower in good faith.
26. Additional Conditions Precedent to Subsequent
Advances. The obligations of Lender hereunder to
approve and make each Subsequent Advance subject
to this Exhibit C-3 shall be subject to the
following conditions precedent:
(i) Financial Information. Lender's receipt of such financial
statements and information as Lender shall request evidencing
Borrower's eligibility for an Operating Deficit or Capitalized Interest
Advance including but not limited to Borrower's financial statement for
the most recent calendar month including profit and loss statement and
balance sheet certified by Borrower as accurate and complete in all
material respects subject to normal year-end adjustments.
(ii) Invoices. Lender's receipt of copies of such invoices as
Lender shall reasonably request evidencing the expenses for which an
Operating Deficit Advance is being requested together with evidence
that all expenses for which any previous Operating Deficit Advance has
been made have been paid in full.
27. Representations and Warranties of Borrower.
The following representations and warranties,
to the extent applicable,shall be deemed made
as of the date of each submission of a Request
for Disbursement by Borrower with respect to
each Subsequent Advance by Lender undersuch
Request for Disbursement:
(i) To Borrower's knowledge there exist no Events of Default
under this Agreement, the Note or any other Loan Documents and no event
has occurred and is
C-3-2
<PAGE> 62
continuing which with notice or the passage of time or both would
constitute a default under this Agreement or any of such documents.
(ii) All representations and warranties of the Borrower in
the Note, any other Loan Documents, and in any certificates or other
instruments delivered pursuant thereto are incorporated herein by
reference as though fully set forth.
28. Satisfaction of Conditions. Although Lender
shall have no obligation to make any Subsequent
Advance unless and until all of the conditions and
prior performances set forth herein have been kept,
fulfilled or performed, and until all inspections,
certifications, releases, waivers, or paid bills or
other requirements set forth herein have been made,
delivered and complied with, Lender, at its sole
discretion, may make Advances prior to that time
without waiving or releasing any of the
requirements or conditions of this Agreement; but
Borrower shall continue to be strictly obligated
and subject thereto, and all such conditions, prior
performances and other requirements shall
nevertheless be strictly and punctually complied
with, fulfilled and performed; and, notwithstanding
any such Subsequent Advance, Lender, at its sole
discretion, may discontinue any further Subsequent
Advances at any time until all of the conditions,
prior performances and other requirements of this
Agreement have been strictly fulfilled, performed
and complied with.
C-3-3
<PAGE> 63
EXHIBIT "D"
SURVEY REQUIREMENTS
1. The survey must be certified by a surveyor licensed in the jurisdiction in
which the Mortgaged Property is located. If that jurisdiction licenses
engineers instead of surveyors, then the survey may be certified by such a
licensed engineer.
2. The survey must be dated no more than sixty (60) days prior to the date the
Mortgage is recorded.
3. The survey must be acceptable to the title insurance company for purposes of
insuring title free and clear of survey questions.
4. The survey must meet the requirements of an ALTA/ACSM Land Title Survey,
made in accordance with the Minimum Standard Detail Requirements for
American Land Title Association and American Congress on Surveying and
Mapping Land Title Surveys, as adopted in 1997.
5. The description of the Mortgaged Property shown on the survey must conform
to the legal description shown in the title insurance commitment for the
Mortgaged Property. If the title insurance commitment refers to a recorded
plat, then such plat with appropriate recording references must be indicated
on the survey.
6. A surveyor's certificate in the following form must be printed as a legend
on the survey:
The undersigned hereby certifies to FINPRO, L.L.C., Lender,
, Borrower and , Title Insurer that (a) this
survey is true and correct and was made on the ground under my supervision
as per the field notes shown hereon and correctly shows the boundary lines
and dimensions and area of the land indicated hereon and each individual
parcel thereof indicated hereon; (b) all monuments shown hereon actually
exist, and the location, size and type of such monuments are correctly
shown; (c) this survey correctly shows the location, size and type of all
buildings, structures, other improvements and visible items on the subject
Property; (d) this survey correctly shows the location and dimensions of all
alleys, streets, roads, rights-of-way, easements, building setback lines and
other matters of record affecting the subject Property according to the
legal description in such easements and other matters (with instrument,
book, and page number indicated); (e) except as shown, there are no visible
(1) improvements, easements, rights-of-way, party walls, drainage ditches,
streams, uses, discrepancies or conflicts, (2) encroachments onto adjoining
premises, streets, or alleys by any of said buildings, structures, or other
improvements, (3) encroachments onto the subject Property by buildings,
structures, or other improvements on adjoining premises, or (4)
encroachments on any easement, building setback line or other restricted
area by any buildings, structures or other improvements on the subject
property; (f) the distance from the nearest intersecting street or road is
as shown hereon; (g) the subject property abuts a dedicated public street or
road as shown hereon; (h) except as shown, no part of the Property is
located in a 100-year Flood
D-1
<PAGE> 64
Plain or in an identified "flood prone area," as defined pursuant to the
Flood Disaster Protection Act of 1973, as amended, as reflected by Flood
Insurance Rate Map Panel # dated , which such map panel
covers the area in which the Property is situated; and (i) this survey meets
the requirements of an ALTA/ACSM Land Survey.
Dated:
----------------------
Name of Surveyor
Registration No:
----------------------
[SEAL]
D-2
<PAGE> 65
EXHIBIT "E"
QUARTERLY COMPLIANCE CERTIFICATE
FOR FISCAL QUARTER ENDING
,
("REPORTING QUARTER")
FINPRO, L.L.C.
1001 Cherry Street
Suite 308
Columbia, Missouri 65201
Date: , 19 (1)
Ladies and Gentlemen:
This Quarterly Compliance Certificate refers to the Loan Agreement
dated as of , 1999 (as it may hereafter be amended, modified,
extended or restated from time to time, the "Loan Agreement"), among EBS
Building, L.L.C., a Delaware limited liability company ("Borrower"), and FINPRO,
L.L.C., a Missouri limited liability company ("Lender"). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to such terms
in the Loan Agreement.
Pursuant to Paragraph 7.13 (d) of the Loan Agreement, the undersigned,
a member or manager of Borrower, hereby certifies that:
1. Enclosed are the required financial statements for the quarter
ending for Borrower as required under Paragraph 7.13 (b) of the Loan Agreement.
2. To the best of the undersigned's knowledge, no "Event of Default"
has occurred [or if so, specify the nature and extent thereof and any corrective
actions taken or to be taken].
EBS BUILDING, L.L.C., A DELAWARE LIMITED LIABILITY
COMPANY
BY: PRICEWATERHOUSECOOPERS LLP, MANAGER
By:
--------------------------------------------
Authorized Representative
- --------------------
(1) To be submitted within 45 days after the end of each fiscal quarter of
each fiscal year of Borrower.
E-1
<PAGE> 66
EXHIBIT "F-1"
FORM OF REQUEST FOR DISBURSEMENT
(CONSTRUCTION RELATED ADVANCES)
To: FINPRO, L.L.C.
From: EBS Building, L.L.C. ("Borrower")
Re: EBS Building, St. Louis, Missouri
The undersigned authorized representative of Borrower hereby requests that,
pursuant to the Loan Agreement dated , 1999, Lender authorize a
Subsequent Advance with respect to the property identified above and under the
Borrower's Note dated , 1999, of the following amounts for the Tenant
Improvement work at the above-referenced site for the period beginning ,
19 and ending , 19 . Borrower has attached substantiation of all
of the following hard costs (AIA forms G702 and G703) and soft costs (invoices
for each line item).
Date: , 19
EBS BUILDING, L.L.C., A DELAWARE LIMITED LIABILITY
COMPANY
By:
---------------------------------------------
Authorized Representative
F-1-1
<PAGE> 67
EXHIBIT "F-2"
FORM OF REQUEST FOR DISBURSEMENT
(LEASE-RELATED ADVANCES)
To: FINPRO, L.L.C.
From: EBS Building, L.L.C. ("Borrower")
Re: EBS Building, St. Louis, Missouri
The undersigned authorized representative of Borrower hereby requests that,
pursuant to the Credit Facility Agreement dated , 1999, Lender
authorize a Subsequent Advance with respect to the property identified above and
under the Note dated , 1999, of the following amounts with respect to
the Lease for the above-referenced site. Tenant Improvements at such site have
been fully completed and accepted by the Tenant. Borrower has attached
substantiation of the acceptance of such Tenant Improvements by such Tenant, of
payment of all construction costs associated therewith, and all lien waivers and
other items with respect to the requested Advance required under the Agreement.
F-2-1
<PAGE> 68
MAXIMUM LEASE ADVANCE AMOUNT AS CALCULATED PURSUANT TO
SCHEDULE 1 $
---------------
Less Prior Disbursements, If Any
with respect to Borrower-financed
Tenant Improvements $
---------------
TOTAL OF REQUEST FOR DISBURSEMENT: $
---------------
Date: ,
EBS BUILDING, L.L.C., A DELAWARE LIMITED LIABILITY
COMPANY
By:
---------------------------------------------
Authorized Representative
F-2-2
<PAGE> 1
N O T E
$12,000,000.00 JUNE 18, 1999
FOR VALUE RECEIVED, the undersigned, EBS BUILDING, L.L.C., a Delaware
limited liability company ("Borrower") promise(s) to pay to the order of FINPRO,
L.L.C., A MISSOURI LIMITED LIABILITY COMPANY ("Lender") at its office at 1001
Cherry Street, Suite 308, Columbia, Missouri 65201, or at such other place or
places as the holder of this Note may from time to time designate in writing, in
lawful money of the United States, the principal sum of Twelve Million and
No/100 Dollars ($12,000,000.00) or such lesser sum as may then constitute the
aggregate unpaid principal amount of all loans made by Lender to Borrower
pursuant to the Loan Agreement referred to below, together with interest to be
computed from the date hereof as set forth below:
Interest shall accrue, be computed and be payable on the unpaid
principal balance of this Note at a fluctuating rate equal to the LIBOR Rate
adjusted for Federal Reserve Board requirements and similar assessments, if any,
imposed upon Lender from time to time plus three and one-half percent (3.50%)
per annum (the "Standard Rate"). For the purposes hereof, the term "LIBOR Rate"
shall mean the per annum rate of interest as determined by Lender in its
reasonable discretion, at which deposits in United States dollars in an amount
approximately equal to the unpaid principal amount hereof and with maturities
comparable to the interest period selected by Borrower, are offered to
NationsBank, N.A. in immediately available funds in the London Interbank Market
by leading lenders in the Eurodollar market at approximately 11 a.m. (London
time) on the date ("Quote Date") which is two (2) business days prior to the
date upon which the rate is to become effective, as quoted to Borrower by Lender
on the Quote Date. For the purposes of the preceding sentence, the initial
interest period selected by Borrower shall be deemed to be one month and the
initial LIBOR Rate shall be effective for that period. Thereafter the succeeding
interest periods shall be either one-month, two-month or three-month interest
periods, as selected by Borrower on the Quote Date, and the succeeding LIBOR
Rates shall be effective for such selected periods; provided, however, that if
Borrower fails to select an interest period on any Quote Date, the next
succeeding interest period shall be deemed to be a one-month interest period;
and provided further that no more than four (4) interest periods may be in
effect at any one time. In no event may Borrower elect an interest period beyond
the maturity of this Note; provided, however, if an interest period expires
within thirty (30) days prior to the maturity of this Note, then the one-month
LIBOR interest period will be used for the short period. All defined terms used
herein which are not defined herein shall have the same definitions as set forth
in the Loan Agreement (as defined below).
The rate of interest charged on the Loan shall change immediately and
contemporaneously with any change in the LIBOR Rate. Interest shall be computed
for the actual number of days which have elapsed, on the basis of a 360-day
year.
Principal and interest payments shall be due and payable as follows:
Interest shall be payable on the first (1st) day of each month,
commencing on July 1, 1999, until this indebtedness is paid in full.
All unpaid principal shall be due and payable May 31, 2001, or on
the earlier dissolution of Borrower.
DISBURSEMENT. This Note is being disbursed pursuant to the terms of a
Credit Facility Agreement between Borrower and Lender of even date herewith (the
"Loan Agreement") and is secured by and is
<PAGE> 2
entitled to the benefits of a Deed of Trust, Security Agreement and Fixture
Filing (the "Mortgage") and an Assignment of Rents and Lessor's Interest in
Leases and Contract Rights, each granted by the Borrower and each of even date
herewith, and is further secured by and entitled to the benefits of an
Environmental Indemnity Agreement, a Management Agreement Subordination, a
Consulting Agreement Subordination and a Brokerage Agreement Subordination, each
of even date herewith. No amount that is repaid hereunder may be re-borrowed by
Borrower. This Note, all of the instruments described above which further
evidence or secure this Note, and any and all instruments now or hereafter
executed pursuant to or in connection with any of the foregoing, are
collectively referred to as the "Loan Documents." Reference is hereby made to
the Loan Documents for a description of the property pledged to secure the Note
(the "Mortgaged Premises"), and a statement of when the principal balance hereof
may be accelerated.
DEFAULT. A "Default" is hereby defined as (i) a failure of Borrower to
make any payment of interest, principal, or other sums payable hereunder, when
due, which failure is not cured within ten (10) days after written notice of
such failure is given by Lender to the Borrower in accordance with paragraph 25
of the Mortgage, or (ii) any other breach or failure by Borrower to comply with
any other obligation or covenant in any of the Loan Documents which has not been
cured within any applicable cure period established therein. In case of a
Default, if the holder of this Note so elects, notice of election being
expressly waived, the unpaid principal amount hereof and all interest and other
sums due hereunder may be declared due and payable forthwith. In case of a
Default in the payment of any installment when due, and the holder of this Note
does not exercise its option to declare all unpaid indebtedness due and payable,
the undersigned, at the holder's option, shall pay a "late charge" in the amount
of four percent (4%) of the installments due, when paid more than fifteen (15)
days after the due date thereof, and the holder of this Note may apply payments
received on any amounts due hereunder or under the terms of any instrument now
or hereafter evidencing or securing this Note as the said holder may determine.
The entire principal balance shall bear interest at two and one-half percent (2
1/2 %) per annum in excess of the Standard Rate after maturity whether by
acceleration or in due course; provided, however, that the interest rate shall
in no event exceed the maximum rate allowed by applicable law. The failure to
exercise, in case of one or more Defaults, any right or remedy given in this
paragraph, shall not preclude the holder of this Note from exercising any right
or remedy given in this paragraph in case of one or more subsequent Defaults. In
the event a Default shall have occurred and be continuing, Lender will not be
obligated to fund any additional moneys under this Note.
COSTS. The Borrower agrees to pay all costs of collection when
incurred, including reasonable attorneys' fees. No extension of the time for the
payment of this Note or any installment thereof made by agreement with any
person now or hereafter liable for the payment of this Note shall operate to
release, discharge, modify, change or affect the original liability under this
Note, either in whole or in part, of any of the undersigned. Presentment, demand
for payment, notice of dishonor and protest are hereby waived.
PREPAYMENT. Privilege is reserved to pay the debt in whole or in part
at any time and from time to time without penalty.
WAIVER OF JURY. In the event any controversy or claim between or among
the parties hereto shall not be resolved, to the fullest extent permitted by
law, the parties hereto waive the right to trial by jury in connection with any
action, suit or other proceeding arising out of or relating to this instrument
or any other loan document.
PURPOSE. This Note is given for the business purpose of financing real
estate and shall be construed in accordance with the laws of the State of
Missouri.
-2-
<PAGE> 3
ORAL MODIFICATIONS. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU
(BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.
The proceeds of this Note secured by Deed of Trust will be used for the
purposes specified in Section 408.035 of the Missouri Revised Statutes and the
indebtedness secured thereby constitutes both a business loan and a real estate
loan which come within the purview of Section 408.035 R.S.Mo.
EBS BUILDING, L.L.C., A DELAWARE LIMITED LIABILITY
COMPANY
BY: PRICEWATERHOUSECOOPERS LLP,
MANAGER
BY: /S/ MATTHEW R. NIEMANN
-----------------------------------
MATTHEW R. NIEMANN, DIRECTOR
-3-
<PAGE> 4
EXHIBIT 10.18
DEED OF TRUST, SECURITY AGREEMENT
AND
FIXTURE FILING
TO
FINPRO, L.L.C.
("MORTGAGEE")
THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING SECURES FUTURE
ADVANCES AND FUTURE OBLIGATIONS OF PRINCIPAL UP TO A TOTAL AMOUNT OF
$12,000,000.00 AND INTEREST AND OTHER AMOUNTS AS PERMITTED BY SECTION 443.055 OF
THE REVISED STATUTES OF THE STATE OF MISSOURI, AS IT MAY BE AMENDED FROM TIME TO
TIME, AND THIS DEED OF TRUST IS GOVERNED BY SAID SECTION.
THIS DEED OF TRUST (referred to herein as "this instrument"), executed as of
June 18, 1999, by and among EBS BUILDING, L.L.C., a Delaware limited liability
company whose address is PriceWaterhouseCoopers LLP, 800 Market Street, Suite
1800, St. Louis, Missouri 63101, Attn: Keith F. Cooper, Partner ("Mortgagor"),
Thomas K. Vandiver, whose address is Sonnenschein Nath & Rosenthal, One
Metropolitan Square, Suite 3000, St. Louis, Missouri 63102 ("Trustee"), and
Mortgagee, whose address is 1001 Cherry Street, Suite 308, Columbia, Missouri
65201.
W I T N E S S E T H:
Mortgagor, for and in consideration of the loans, advances or other
financial accommodations by Mortgagee giving rise to the debt herein described
and the sum of One Dollar ($1.00), the receipt and adequacy of which are hereby
acknowledged, GRANTS, TRANSFERS, ASSIGNS, BARGAINS and SELLS, CONVEYS and
CONFIRMS to Trustee the following real property, whether now owned or held or
hereafter acquired by Mortgagor and whether now or hereafter existing (the
"Mortgaged Property"), subject to those easements, covenants, conditions, and
restrictions of record as of the date hereof and those written leases disclosed
in writing to Mortgagee on or prior to the date hereof, to have and to hold the
Mortgaged Property, with all rights, appurtenances and privileges thereunto
belonging, unto the Trustee, his successors and assigns forever.
Mortgagor agrees and acknowledges that disbursement of loan proceeds to
Mortgagor shall be subject to the terms and conditions of that certain Credit
Facility Agreement between Mortgagor and Mortgagee of even date herewith (the
"Loan Agreement").
The Mortgaged Property is the following:
(1) all of the following described land (the "Land") situated in the City of
St. Louis, State of Missouri:
SEE LEGAL DESCRIPTION ON EXHIBIT "A" ATTACHED HERETO AND MADE A PART
HEREOF
(2) all improvements and fixtures (the "Improvements") now or hereafter
existing or constructed upon the Land, including, but not limited to,
buildings and other structures;
(3) all of the hereditaments, easements, licenses, privileges, rights-of-way,
water rights, uses and other appurtenances to the Land and Improvements;
<PAGE> 5
(4) all right, title and interest, if any, of Mortgagor in and to nearby ways,
roads, streets, boulevards, avenues or other public thoroughfares; and
(5) all right, title and interest of Mortgagor in and to the rents, income,
issues, profits and revenues of all of the foregoing, including, but not
limited to, rents and royalties payable with respect to oil, gas or
minerals located on or under the Land.
(6) all of Mortgagor's rights as Lessee under that certain Lease dated December
22, 1982 by and between Land Clearance for Redevelopment Authority of the
City of St. Louis (the "LCRA"), as Lessor, and Edison Brothers Stores,
Inc., as Lessee, as amended by Addendum No. 1 dated October 4, 1984 and
Addendum No. 2 dated April 1, 1985 and as assigned to Mortgagor by
Assignment of Lease dated September 30, 1998 by and between Edison Brothers
Stores, Inc., as Assignor, and EBS Building, L.L.C., as Assignee (the
"Lease"), which Lease grants to Mortgagor the right to use 250 parking
spaces and certain other amenities in the parking garage constructed by the
Lessor on land located in City Block 118 in the City of St. Louis,
Missouri, and more particularly described in Exhibit B attached hereto and
made a part hereof.
This conveyance is made in trust, however, to secure all of the
following (the "Obligations"), and it is contemplated that the balance
outstanding under the Documents may fluctuate and that this instrument shall
secure the balance outstanding under the Documents from time to time from zero
up to the maximum stated in the notice regarding future advances at the
beginning of this instrument and, to the extent allowed by law, advances made by
Mortgagee or obligations incurred by Mortgagee, for the reasonable protection of
the security interest in the "Collateral" (as such term is defined in paragraph
2 below), including, but not limited to, amounts for taxes, insurance, repair,
maintenance and preservation of the Collateral, completion of improvements on
the Mortgaged Property and expenses of collection, sale and foreclosure
hereunder and that the same shall have priority over any intervening or
subsequent liens and encumbrances:
(7) The payment of all amounts due, including, but not limited to,
principal, interest, fees and expenses, from time to time (whether at stated
maturity, by acceleration or otherwise) and obligations arising under the
following documents, all of which are incorporated herein by reference:
(a) promissory note of Mortgagor in the principal amount of
$12,000,000.00 dated of even date with this Deed of Trust, with a
final payment of principal and interest due on May 31, 2001; and
(b) this instrument, the Loan Agreement, an Assignment of Rents and
Lessor's Interest in Leases and Contract Rights, an Environmental
Indemnity Agreement, a Management Agreement Assignment and
Subordination, a Consulting Agreement Assignment and Subordination, a
Brokerage Agreement Assignment and Subordination and Uniform Commercial
Code Financing Statements, each of even date herewith, and all
additional security agreements, mortgages, deeds of trust, assignments
and other instruments and agreements which are now or hereafter
executed and delivered to Mortgagee relative to the Obligations or
Collateral; and
(c) any and all extensions, renewals, amendments, replacements,
restatements, refinances, refundings or modifications (including, but
not limited to, modifications to interest rates or other payment terms)
of any of the foregoing.
The term "Documents" shall mean, unless otherwise specified, all of the
documents referred to in clauses (a), (b) and (c) above and "Document" shall
mean any one of such documents. Each Document shall be equal and without
preference over another.
<PAGE> 6
(8) The observance and performance by Mortgagor of each and every term,
covenant, condition and agreement required by the Documents to be observed
and performed by Mortgagor.
MORTGAGOR FURTHER COVENANTS, AGREES, REPRESENTS AND WARRANTS AS
FOLLOWS:
1. DEFINED TERMS. All capitalized terms used in this instrument shall have the
meanings defined in the Sections where they are first used or if not therein
defined, the following meanings (such meanings to be equally applicable to both
the singular and the plural forms of the terms defined):
"Charter Documents" means the certificate or articles of incorporation
and bylaws of a corporation, the constitution, certificate or articles of
association and bylaws of an unincorporated association, the partnership
agreement of a general partnership agreement and certificate of partnership of a
limited partnership, the trust instruments under which a trust exists, and the
Articles of Organization and Operating Agreement of a limited liability company.
"Contaminants" means any pollutants, hazardous or toxic substances or
wastes, or contaminated materials including asbestos, urea formaldehyde,
petroleum products, pesticides, PCBs and all other materials and substances
designated or regulated as hazardous or toxic substances or wastes, pollutants
or contaminated materials under any Environmental Laws or regulation promulgated
thereunder.
"Default Rate" means an interest rate of two and one-half percent
(2.5%) in excess of the Above Standard Rate as defined in the Note.
"Environmental Enforcement Action" means any action, proceeding or
investigation instituted by the U. S. Environmental Protection Agency, the
Missouri Department of Natural Resources or any other federal, state or local
governmental agency related to any suspected or actual violation of any
Environmental Laws or Contaminants with respect to the Property and/or any
business conducted thereon.
"Environmental Laws" means the Clean Water Act, the Clean Air Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Superfund Amendment and
Reauthorization Act, the Toxic Substances Control Act, the Occupational Safety
and Health Act and any other federal, state or local environmental statute, rule
or regulation as enacted or amended from time to time and all licenses, orders,
permits, certificates or like authorizations promulgated under any of the
foregoing.
"Environmental Release" means any spilling, leaking, migrating,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, or disposing into the environment of any Contaminant which
causes the Property not to be in compliance with any applicable Environmental
Laws.
"Mortgagee" means the Mortgagee identified as such in this instrument
and any subsequent holder of any of the Documents or the other Obligations.
2. SECURITY INTEREST. Mortgagor also grants to Mortgagee to secure the
Obligations a security interest in all goods and personal property now owned or
hereafter acquired by Mortgagor that are intended to be used or are actually
used in the operation or maintenance of the Land and Improvements, and all
right, title and interest of Mortgagor in and to all of the following: (i) all
fixed assets, equipment, furniture and trade fixtures and other personal
property and construction materials and supplies used or intended to be used on
the Mortgaged Property, whether or not stored on the Land, (ii) all plans,
specifications, drawings, computations, sketches, test data, survey results,
models, photographs, renderings of or relating to the Mortgaged Property, (iii)
any security and like deposits, bank and deposit accounts, trademarks,
<PAGE> 7
tradenames, logos, general intangibles and other materials, now owned or
hereafter acquired, used or intended to be used in connection with the Mortgaged
Property, (iv) Mortgagor's interest as licensor or licensee, permitor or
permittee, assignor or assignee or contractor or contractee, in, under and to
all licenses, permits and contract rights now or hereafter held by Mortgagor
pertaining to the Mortgaged Property or pertaining to all contracting or
architectural services in connection with the Mortgaged Property, together with
all amendments, modifications, supplements, general conditions and addendum
thereto and work product resulting therefrom, (v) all security deposits, escrow
payments, sale contracts, earnest money deposits, leasing and management
agreements, building and other permits, governmental and other authorizations,
licenses or commitments issued by various governmental agencies, utility
companies, lending institutions or other entities, franchises, advertisements,
rights, agreements, warranties and all other intangible or tangible personal
property now or hereafter issued used in connection with or required with
respect to the Mortgaged Property or the use thereof, (vi) all surveys, soil
reports and samples obtained or prepared in connection with the Land and budgets
and financial projections and information, utility allowance, trademarks, trade
names, logos and any and all agreements and contract rights and any parking
agreements, operating agreements, easement and reciprocal easements regarding,
pertaining to or used in connection with or required with respect to the
Mortgaged Property or the use thereof, (vii) Mortgagor's contract rights under
all receivables now or hereafter owing to Mortgagor under all existing and
future leases of space and occupancy agreements in all buildings now or
hereafter located on the Land; and all replacements thereof, substitutions
therefor and accessions thereto and cash and non-cash proceeds thereof, and
(viii) all right, title and interest of Mortgagor in those items set forth on
Exhibit B to the Uniform Commercial Code Financing Statement between Mortgagor
and Mortgagee of even date herewith (the "Personal Property Collateral"). This
instrument constitutes a "security agreement" as that term is used in the
Uniform Commercial Code in effect where the Mortgaged Property is located. This
instrument is a "Construction Mortgage" as that term is defined in Section 9-313
of the Uniform Commercial Code in effect where the Mortgaged Property is
located. The Personal Property Collateral and the Mortgaged Property are
hereinafter collectively referred to as the "Collateral".
3. ASSIGNMENT OF RENTS. Mortgagor hereby assigns to Mortgagee all of the
rents, issues, income, profits and revenues arising from the Mortgaged Property,
its interest as lessor in all existing and future leases of all or any part of
the Mortgaged Property, and its interest as licensor in all existing and future
licenses pertaining to the Mortgaged Property. Such assignment shall not be
construed as a consent by Mortgagee to any such lease or license or impose upon
Mortgagee any obligations with respect thereto. This assignment is absolute and
effective immediately; provided, however, that until an Event of Default occurs,
Mortgagor may receive the rents, issues, income, profits and revenues arising
from the Mortgaged Property, but shall hold the same as a trust fund to be
applied to the Obligations as they become due before using the same for any
other purpose. Mortgagor shall not terminate or cancel any such lease or
license, nor terminate or accept a surrender or cancellation of any such lease
or license, nor reduce the rent or fees payable thereunder, nor accept any
prepayment of rent or fees (except such amount as may be required by the terms
of the relevant lease or license to be prepaid for a period of not more than one
month) without first obtaining the written consent of Mortgagee on each
occasion, provided, however, that Mortgagor may alter, modify, amend, terminate
or cancel any Lease, or accept a surrender of any Lease, or waive any term or
condition of any Lease demising floor area not in excess of 20,000 square feet
without the prior consent (written or otherwise) of Mortgagee. Mortgagor shall
perform all of its obligations as lessor or licensor under such leases and
licenses. Mortgagor is executing and delivering to Mortgagee, on the date
hereof, an Assignment of Rents and Lessor's Interest in Leases and Contract
Rights (the "Assignment of Leases") in favor of Mortgagee. If any provision of
this Paragraph 3 pertaining to the assignment of leases or rents conflicts with
any of the provisions of the Assignment of Leases, then the provisions of the
Assignment of Leases shall govern.
<PAGE> 8
4. ESCROW OF TAXES, ASSESSMENTS AND INSURANCE. Mortgagor shall upon
Mortgagee's demand in writing deposit into the account for taxes and insurance
set forth in Section 7.11 of the Loan Agreement the amount, if any, as estimated
by Lender by which the annual charge against the Mortgaged Property for general
and special state, county and municipal taxes and assessments, and the annual
cost of insurance required to be maintained herein exceeds the amount required
to be deposited pursuant to Section 7.11 of the Loan Agreement. These payments
shall be held in said account pursuant to the terms of the Loan Agreement, shall
not bear interest and shall be applied by Mortgagee to payment of general and
special taxes and assessments and insurance premiums as they become due. In the
event the sums to be paid by Mortgagor shall not be sufficient to pay any such
general or special tax or assessment or insurance premium when due, Mortgagor
shall, immediately upon notice from Mortgagee, pay the deficiency to Mortgagee,
which shall then pay the general or special tax or assessment or insurance
premium then due. In case of default of any of the terms of this instrument, the
above funds deposited with Mortgagee shall constitute additional security for
all Obligations secured hereby and may be applied by Mortgagee against the same.
5. REPRESENTATIONS AND WARRANTIES. Mortgagor represents and warrants to
Mortgagee that:
5.1. POWER AND AUTHORITY. Mortgagor has full power, authority and legal
capacity to execute this instrument and perform Mortgagor's obligations
hereunder. If Mortgagor is not an individual,
5.1.1. Mortgagor is duly organized and exists in good standing under
the laws of the state of its organization; Mortgagor is duly qualified
to do business and is in good standing in every state where any of the
Collateral is located and the nature or extent of its business or
properties there require it to be qualified to do business as a foreign
entity; and Mortgagor has the power and authority to own and use the
Collateral as it is now being used.
5.1.2. The persons who have executed this instrument have been duly
authorized to execute and deliver this instrument on behalf of
Mortgagor; and this instrument has been duly authorized by all
requisite action of Mortgagor and its shareholders, partners or other
persons whose action is required for such authority to exist.
5.2. CONSENTS, PERMITS AND APPROVALS. Other than the consent of the
LCRA in connection with the assignment of the Lease, no consent of any third
party, and no consent, permit, license, approval or authorization of, or
registration, declaration or filing with or notice to, any governmental
authority is required in connection with the execution and delivery of this
instrument or the performance by Mortgagor of its obligations hereunder, or the
validity or enforceability against Mortgagor of this instrument.
5.3. LEGAL RESTRAINT. The execution and delivery of this instrument and
the performance by Mortgagor of its obligations hereunder does not and will not
violate any provision of any law, rule or regulation or of any order, judgment,
award or decree of any court, arbitrator or governmental authority, the Charter
Documents of Mortgagor or any security issued by Mortgagor if Mortgagor is not
an individual, or any agreement, indenture or undertaking to which Mortgagor is
a party or by which Mortgagor or the Collateral is bound or affected.
5.4. TITLE TO COLLATERAL. Mortgagor has marketable fee simple title to
the Mortgaged Property except for the leasehold estate in the portion of the
Mortgaged Property subject to the Lease, and owns the Personal Property
Collateral, free and clear of all easements, covenants, restrictions,
conditions, encumbrances, liens and claims except those easements, covenants,
conditions and restrictions of record as of the date hereof and those written
leases disclosed to Mortgagee on or prior to the date hereof.
<PAGE> 9
5.5. ENVIRONMENTAL REPRESENTATIONS. To the best of Mortgagor's
knowledge, information and belief:
5.5.1. The Mortgaged Property is free of any Contaminants (as defined
herein) and neither Mortgagor nor any other person (including, but not
limited to, prior owners, occupiers and tenants) has ever caused or
permitted any Contaminant to be manufactured, placed, generated,
stored, held, transferred, processed, produced, transported or disposed
on, at, through or under the Mortgaged Property other than minimal
quantities of substances on the Mortgaged Property which technically
could be considered Contaminants provided that such substances are of a
type and are held only in a quantity normally used in connection with
the construction, occupancy or operation of comparable buildings (such
as cleaning fluids, and supplies normally used in the day to day
operation of business offices), and such substances are being held,
stored and used in complete and strict compliance with all applicable
Environmental Laws.
5.5.2. Mortgagor has not caused or permitted any Contaminants to be
manufactured, placed, stored, located or disposed of on, under or at
any other real property owned, occupied (under leases or licenses or
otherwise) or operated by the Mortgagor other than minimal quantities
of substances on the Mortgaged Property which technically could be
considered Contaminants provided that such substances are of a type and
are held only in a quantity normally used in connection with the
construction, occupancy or operation of comparable buildings (such as
cleaning fluids, and supplies normally used in the day to day operation
of business offices), and such substances are being held, stored and
used in complete and strict compliance with all applicable
Environmental Laws.
5.5.3. No lien has or is currently attached to any revenues or any real
or personal property owned by Mortgagor including, but not limited to,
the Mortgaged Property as a result of any governmental entity expending
monies as a result of any alleged Environmental Release or the
existence of on, thorough or under the Mortgaged Property of a
Contaminant or a breach of an Environmental Law.
5.5.4. Neither Mortgagor nor, to Mortgagor's knowledge, any other
person (including, but not limited to, prior owners, occupants and
tenants) has received any notice or advice of any Environmental
Enforcement Action.
5.5.5. Mortgagor has conducted or caused to be conducted by a
consultant acceptable to Mortgagee a site assessment of the Mortgaged
Property to determine the presence of conditions indicating the
presence of Contaminants on the Mortgaged Property or violations of
Environmental Laws with respect to the Mortgaged Property. Mortgagor's
consultant has found no evidence of the presence of such Contaminants
or the violation of such Environmental Laws except as disclosed in such
report. A copy of said consultant's report has been delivered to
Mortgagee and Mortgagee has been authorized by Mortgagor and its
consultant to rely upon said report in agreeing to make the loan
secured by this Mortgage.
Mortgagor hereby agrees to indemnify, defend and hold Mortgagee
harmless from and against any claims, damages, actions, liabilities, causes of
action, suits, investigations and judgments of any nature whatsoever, including,
without limitation, attorney's fees and expenses, incurred by Mortgagee in
connection with any breach of the representations and warranties set forth in
this paragraph except to the extent caused by Mortgagee. The foregoing indemnity
shall survive the payoff of the Note secured by this Mortgage.
<PAGE> 10
5.6. ENVIRONMENTAL COVENANTS. Mortgagor covenants and agrees that:
5.6.1. Mortgagor will keep or cause to be kept the Mortgaged Property
and any other real property owned, occupied or operated by Mortgagor
free of any Contaminants.
5.6.2. Mortgagor will not use the Mortgaged Property or any other real
property owned, operated or occupied by Mortgagor for the manufacture,
placement, generation, storage, location or disposal of any
Contaminants nor permit the Mortgaged Property or any other property
owned, occupied or operated by it to be used in such a manner.
5.6.3. Mortgagor shall not cause or permit to exist as a result of any
intentional or unintentional action or omission on its part or for
which it is responsible under applicable Environmental Laws an
Environmental Release of any Contaminant.
5.6.4. In the event of any Environmental Release of a Contaminant onto
the Mortgaged Property or to any other property owned, occupied or
leased by it or for which it is other wise responsible under applicable
Environmental Law, it shall promptly remediate or cause the remediation
of such Environmental Release in accordance with the provisions of all
Environmental Laws of governmental entities and authorities having
jurisdiction.
5.6.5. Mortgagor shall provide notice in writing to Mortgagee of any of
the following within three (3) business days:
a. An Environmental Release of any Contaminant on the Mortgaged
Property or onto any other real property owned, occupied or
operated by it or for which Environmental Release it is or may
be responsible or with respect to which such responsibility is
asserted by a governmental agency or in any private cause of
action, by a party to such suit under applicable law; or
b. Any notice of any pending or threatened Environmental
Enforcement Action with respect to Mortgagor or the Mortgaged
Property including copies of complaints, orders, citations or
notices from any person or entity including, without limitation,
Environmental Protection Agency and applicable state agencies.
5.6.6. Mortgagor hereby agrees that any reporting obligations created
under federal, state or local Environmental Laws and regulations shall
be the obligation of Mortgagor and not the Mortgagee.
5.7. MORTGAGEE'S ENVIRONMENTAL RIGHTS. In addition to any other rights
Mortgagee has, Mortgagee shall have the following additional rights and remedies
with respect to the environmental status of the Mortgaged Property:
5.7.1. Mortgagee shall have the right, but not the obligation, and
without limitation of Mortgagee's other rights under this Mortgage,
without materially interfering with the rights or occupancies of
tenants except in the event of an emergency, to enter onto the
Mortgaged Property to conduct tests or to take such other actions as it
deems reasonably necessary to cleanup, remediate, encapsulate, remove,
resolve or minimize the impact of, or otherwise deal with, any
Contaminants or Environmental Enforcement Actions or breaches of
Environmental Laws pertaining to the Mortgaged Property or any part
thereof which could result in an order, suit or other action against
Mortgagor and/or which, in the reasonable opinion of Mortgagee, could
jeopardize its security under this Mortgage. All reasonable costs and
expenses incurred by
<PAGE> 11
Mortgagee in the exercise of any such rights shall be secured by this
Mortgage and shall be payable by Mortgagor upon demand. Mortgagee may
only exercise the foregoing rights in the event Mortgagor shall have
received notice from Mortgagee with respect thereto and shall have
failed to take or initiate such action within the cure period
applicable to the performance of covenants hereunder.
5.7.2. Mortgagee shall have the right, in its sole discretion, to
require Mortgagor to periodically (but not more frequently than
annually unless an Environmental Enforcement Action is then outstanding
in which case this limitation will not apply) perform (at Mortgagor's
expense) environmental assessments satisfactory to Mortgagee, of the
Mortgaged Property. Said assessment must be by an environmental
consultant satisfactory to Mortgagee. Should Mortgagor fail to perform
or cause to be performed said environmental assessment within sixty
(60) days of the Mortgagee's written request, Mortgagee shall have the
right, but not the obligation, to retain an environmental consultant to
perform said environmental assessment. All reasonable costs and
expenses incurred by Mortgagee in the exercise of such rights shall be
secured by this Mortgage and shall be payable by Mortgagor upon demand
or charged to Mortgagor's loan balance at the discretion of Mortgagee.
5.7.3. Mortgagee's rights under this Article shall be exercised by it
in its sole discretion and for the benefit of Mortgagee only. Mortgagee
shall have no obligation to enter into the Mortgaged Property or to
take any other action which it is authorized by this Article to take
for the protection of its security. Any action which it may elect to
take hereunder shall be for its own benefit and all Mortgagee
beneficiary rights are hereby expressly negated. Mortgagee shall have
no responsibility for the conduct of Mortgagor's environmental
practices on the Mortgaged Property or in any other location. Any
action or inaction by Mortgagee hereunder shall not be deemed to
constitute the taking of control over Mortgagee waste disposal, waste
management, or other environmental practices with respect to the
Mortgaged Property or any other property.
6. COVENANTS. Mortgagor covenants and agrees with Mortgagee as follows:
6.1. PAYMENT OF PRINCIPAL AND INTEREST. Mortgagor will pay the
indebtedness evidenced by the Documents in accordance with the terms thereof,
without demand, counterclaim, offset, deduction or defense and without any
relief from valuation or appraisement laws of the State in which the Mortgaged
Property is located.
6.2. PAYMENT OF LIENABLE CHARGES AND CLAIMS. Mortgagor shall pay,
before they become delinquent, all taxes, penalties, assessments, charges and
other amounts which, if not so paid, will result in the imposition of a lien on
any of the Collateral, and Mortgagor shall pay all claims of contractors,
subcontractors, materialmen, laborers and suppliers which, if not paid, will
entitle the claimant to impose a mechanic or materialman's lien upon any of the
Collateral, except such of the foregoing as are being diligently contested in
good faith by Mortgagor by appropriate proceedings and for which Mortgagor has
obtained a bond to protect the interest of Mortgagee from a bonding company
acceptable to Mortgagee, or established reserves acceptable to Mortgagee or
caused Mortgagee's title insurance company to affirmatively insure over such
lien; provided, however, that, if in the reasonable judgment of Mortgagee, the
lien or security interest created by this instrument is materially endangered or
any material part of the Collateral is subject to imminent loss or diminution in
value as a result of such contest, then Mortgagor shall pay the same immediately
upon demand by Mortgagee. Mortgagor shall furnish to Mortgagee upon its request
evidence of its compliance with this Section.
<PAGE> 12
6.3. PRESERVATION OF COLLATERAL. Mortgagor shall not commit or allow
waste of the Collateral and shall repair and maintain the Collateral so as to
keep it in no less than the same condition as existed on the date hereof,
ordinary wear and tear alone excepted.
6.4. COMPLIANCE WITH LAWS. Mortgagor shall comply with all laws, rules,
regulations and codes, including, but not limited to, fire and building codes of
federal, state and local authorities applicable to the Collateral or the use of
the Collateral, and with the requirements of every board of fire underwriters or
similar body whose requirements apply to similar property in the area where any
of the Collateral is located.
6.5. ALTERATIONS. Mortgagor shall not commit or allow any alteration,
demolition or removal of any of the Improvements which would materially impair
the value of the Collateral without the prior written consent of Mortgagee. The
foregoing shall not apply to alterations, demolition or removal in connection
with improvements contemplated by an approved lease.
6.6. INSPECTION BY MORTGAGEE. Mortgagee may at any time upon reasonable
prior notice inspect the Collateral and all books and records of Mortgagor
pertaining to the Collateral. Mortgagor shall give Mortgagee access to the
Collateral to exercise any of Mortgagee's rights and remedies under this
instrument.
6.7. INSURANCE. Mortgagor shall at all times keep the Collateral
insured, in insurance companies and under forms of insurance acceptable to
Mortgagee, against fire, extended coverage and other perils as Mortgagee may
from time to time require ("Casualty Insurance"). If Mortgagor regularly carries
on a business using any of the Collateral, however, Mortgagor may omit from the
coverage of such insurance any items of the Collateral which are not of a
character usually insured by others carrying on a similar business. Mortgagor
shall also at all times carry insurance, in insurance companies acceptable to
Mortgagee, against liability on account of damage to persons or property
("Liability Insurance"), (the Casualty Insurance, Liability Insurance and any
other insurance required herein to be maintained by Mortgagor are sometimes
hereinafter referred to collectively as the "Insurance"). If Mortgagor regularly
carries on a business using any of the Collateral, the Liability Insurance shall
include product liability insurance and insurance required under all applicable
workers' compensation laws and shall cover all other liabilities common to
Mortgagor's business, in such manner and to such extent as such coverage is
usually carried by others conducting a similar business. All policies of
Liability Insurance shall name Mortgagee as an additional insured. All policies
of Casualty Insurance shall reflect Mortgagee's interest therein as a mortgagee
under a standard New York or Union mortgagee clause. All policies of Insurance
shall contain a clause providing that such policies may not be canceled without
thirty (30) days' prior written notice to Mortgagee. Mortgagor shall furnish to
Mortgagee upon its request at any time certificates evidencing the existence of
the Insurance. Such certificates shall specify the names of the insurers, the
limits of coverage, the expiration dates and the types of coverage, and shall
reflect that Mortgagee is an additional insured or that the proceeds thereof are
payable to Mortgagor and Mortgagee as their interests may appear, as applicable.
Upon the occurrence and during the continuance of an Event of Default, Mortgagee
is authorized, but not obligated, as the attorney-in-fact for Mortgagor, (i) to
adjust and compromise proceeds payable under the policies of Insurance without
the consent of Mortgagor, (ii) to collect, receive and give receipts for such
proceeds in the name of Mortgagor and Mortgagee, and (iii) to endorse
Mortgagor's name upon any instrument in payment thereof. This power granted
Mortgagee shall be deemed coupled with an interest and shall be irrevocable.
Mortgagee may, at Mortgagee's sole option, apply the proceeds of Insurance to
the Obligations, and shall pay the portion not so applied to Mortgagor.
Notwithstanding the foregoing, in the event that the amount of any such proceeds
does not exceed $250,000.00, Mortgagor shall have the right to receive such
proceeds, provided that Mortgagor applies the same to the repair and/or
<PAGE> 13
restoration of the Mortgaged Property. If the area where the Improvements are
located is now or in the future designated as a special flood hazard area
pursuant to the Flood Disaster Protection Act of 1973 (as amended), and if the
community where the Improvements are located is participating in the National
Flood Insurance Program, Mortgagor shall obtain and continuously maintain a
National Flood Insurance Program Standard Flood Insurance Policy or equivalent
covering the Mortgaged Property.
If at any time Mortgagee is not in receipt of written evidence
that all insurance required hereunder is in full force and effect, Mortgagee
shall have the right, without notice to Mortgagor, to take such action as
Mortgagee deems necessary to protect its interest in the Mortgaged Property,
including, without limitation, the obtaining of such insurance coverage as
Mortgagee in its sole discretion deems appropriate, and all expenses incurred by
Mortgagee in connection with such action or in obtaining such insurance and
keeping it in effect shall be paid by Mortgagor to Mortgagee upon demand and
until paid shall be secured by this Mortgage and shall bear interest at the
Default Rate.
For the purpose of this Paragraph, the terms "you" and "your"
shall refer to Mortgagor and the terms "we" and "us" shall refer to Mortgagee.
UNLESS YOU PROVIDE US WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR
AGREEMENT WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR
INTERESTS IN YOUR COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR
INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR
ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH THE COLLATERAL. YOU MAY
LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING US WITH
EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY OUR AGREEMENT. IF WE
PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF
THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES
WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE UNTIL THE
EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF
THE INSURANCE MAY BE ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE
COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO
OBTAIN ON YOUR OWN.
6.8. CONDEMNATION. Mortgagor hereby assigns to Mortgagee all awards and
payments, including any interest thereon, and the right to receive the same,
which may be made with respect to the Collateral as a result of (i) condemnation
or the exercise of the right of eminent domain by any public or quasi-public
authority, (ii) the alteration of the grade of any street or (iii) any other
injury to or decrease in the value of the Collateral. Mortgagor agrees to
execute and deliver such further instruments as may be requested by Mortgagee to
confirm this assignment and sufficient for the purpose of assigning all proceeds
from such awards or payments to Mortgagee. Mortgagee is authorized, but not
obligated, as the attorney-in-fact for Mortgagor, to collect, receive and give
receipts for such awards and payments. This power granted Mortgagee shall be
deemed coupled with an interest and shall be irrevocable. Mortgagee may, at
Mortgagee's sole option, apply such awards and payments to the Obligations,
whether or not then due and payable, and shall pay the portion not so applied to
Mortgagor.
6.9. MORTGAGEE'S RIGHT TO CAUSE PERFORMANCE OF COVENANTS. If Mortgagor
fails to maintain and pay the premiums for Insurance as required in Section 6.7,
to pay all taxes, penalties, assessments, charges, and claims as required in
Section 6.2, or to repair and maintain any of the Collateral as required in
Section 6.3, or if Mortgagor fails to keep or perform any of Mortgagor's other
covenants herein after notice and the applicable cure period, Mortgagee may
cause such repairs and maintenance to be made, obtain such
<PAGE> 14
Insurance, pay such taxes, penalties, assessments, charges or claims, or cause
such other covenants to be performed. Mortgagor shall pay to Mortgagee on demand
all amounts paid by Mortgagee for the foregoing and the amount of all expenses
incurred by Mortgagee in connection therewith, together with interest thereon
from the date when incurred at the Default Rate. Such amounts and interest shall
be secured by this instrument and shall be a lien on and security interest in
the Collateral prior to any right, title, interest, lien or claim in or upon the
Collateral subordinate to the lien of this instrument. Any such payments by
Mortgagee shall not be deemed a waiver of any Default. Mortgagee shall not be
obligated to exercise Mortgagee's rights under this Section and shall not be
liable to Mortgagor for any failure to do so.
6.10. COSTS OF PRESERVING OR ENFORCING THIS INSTRUMENT. Mortgagor shall
(to the extent permitted by law) pay to Mortgagee on demand the amount of all
costs and expenses, including reasonable attorneys' fees and disbursements and
appraisal fees, incurred by Mortgagee in connection with (i) amendment,
interpretation or enforcement of this instrument, Mortgagee's rights or remedies
under this instrument, or the priority of the lien and security interest of this
instrument, (ii) collection of any of the Obligations, or (iii) any title
examination or title insurance commitment or policy relating to the Mortgaged
Property, together with interest thereon from the date when incurred at the
Default Rate. Such amounts and interest shall be secured by this instrument and
shall be a lien on and security interest in the Collateral prior to any right,
title, interest, lien or claim in or upon the Collateral subordinate to the lien
of this instrument.
6.11. CHANGE IN TAX LAW. If, after the date of this instrument, any law
becomes effective where any of the Collateral is located that imposes a tax on
Mortgagee or any of the Obligations based upon or as a consequence of the amount
value or existence of this instrument or any of the Obligations, Mortgagee shall
have the right to declare that the Obligations, including all accrued interest,
shall be immediately due and payable; provided, however, that Mortgagee shall
not have such right if Mortgagor is permitted by law to pay the whole of such
tax in addition to the Obligations, in which event Mortgagor shall reimburse
Mortgagee for such tax upon demand and the amount thereof shall be secured by
this instrument and shall be a lien on and security interest in the Collateral
prior to any right, title, interest, lien or claim in or upon the Collateral
subordinate to the lien of this instrument.
6.12. CERTIFICATIONS. Mortgagor, upon the request of Mortgagee, shall
certify to Mortgagee or to any proposed assignee of this instrument, by a
writing duly acknowledged, whether any offsets or defenses are alleged to exist
against the Obligations and the names and addresses of any lessees or licensees
of the Mortgaged Property or any part thereof, together with a summary of the
material terms of their respective leases or licenses, the rents and fees
payable thereunder and whether any default exists thereunder. Mortgagee may
request such a certificate from Mortgagor at any time and from time to time.
Such certificate shall be executed and delivered to Mortgagee within ten (10)
business days of such request.
6.13. INDEMNITY. Mortgagor shall (to the extent permitted by law)
protect, defend, and indemnify Mortgagee, and hold Mortgagee harmless from and
against, any claims, actions or proceedings against Mortgagee and any loss,
cost, damage or expense, including, but not limited to, reasonable attorneys'
fees and disbursements, incurred by Mortgagee, arising out of or in any way
related to a breach of the representations, warranties, covenants or agreements
of Mortgagor herein. Mortgagee shall have the right, jointly with Mortgagor, to
negotiate and settle any such claims, actions or proceedings.
6.14. DEFENSE OF TITLE. Mortgagor shall execute and deliver to
Mortgagee, at Mortgagor's sole expense, such further assurances of title to the
Collateral that are reasonably necessary to evidence, preserve or protect the
lien and security interest created by this instrument. Mortgagor shall, at its
sole
<PAGE> 15
expense, warrant and defend title to the Collateral and the priority of the lien
and security interest created by this instrument against all claims and demands
whatsoever.
6.15. MAINTAIN EXISTENCE. Mortgagor will maintain in good standing its
corporate (if Mortgagor is a corporation) its limited liability company (if
Mortgagor is a limited liability company), its trust (if Mortgagor is a trust)
or partnership (if Mortgagor is a partnership) existence and its authority to
transact business in all jurisdictions where the nature of its business or
properties requires it to be so authorized.
7. FINANCIAL STATEMENTS.
7.1. Mortgagor will keep accurate books and records in accordance with
sound accounting principles in which full, true and correct entries shall be
promptly made with respect to the Mortgaged Property and the operation thereof,
and will permit all such books and records to be inspected and copied, and the
Mortgaged Property to be inspected and photographed, by Mortgagee and its
representatives during normal business hours and at any other reasonable times.
7.2. Mortgagor shall furnish to Mortgagee such financial information
and statements as are required by the Loan Agreement.
7.3. Mortgagor will furnish to Mortgagee at Mortgagor's expense, all
evidence which Mortgagee may from time to time reasonably request as to
compliance with all provisions of the Loan Documents. Any inspection or audit of
the Mortgaged Property or the books and records of Mortgagor, or the procuring
of documents and financial and other information, by or on behalf of Mortgagee,
shall be for Mortgagee's protection only, and shall not constitute any
assumption of responsibility to Mortgagor or anyone else with regard to the
condition, construction, maintenance or operation of the Mortgaged Property nor
Mortgagee's approval of any certification given to Mortgagee nor relive
Mortgagor of any of Mortgagor's obligations.
8. WAIVER OF RIGHTS. Except to the extent contrary to applicable law, Mortgagor
hereby releases and waives the benefit of all laws now existing or hereafter
enacted that provide for appraisal before sale of the items of the Collateral
being sold or that provide for the extension of the time for the enforcement of
the collection of the Obligations or that create or extend the period for
redemption of any of the Collateral from any sale thereof to collect the
Obligations.
9. DEFAULT. Any one or more of the following shall constitute a "Default" under
this instrument:
9.1. PAYMENT OF OBLIGATIONS EVIDENCED BY THE DOCUMENTS OR OTHER
OBLIGATIONS. Nonpayment of any principal, interest or other payment on the
Obligations, whether evidenced by the Documents or constituting any fee or other
amount due from Mortgagor to Mortgagee hereunder, on or when such payment
becomes due (whether by acceleration or otherwise), and which nonpayment is not
cured within ten (10) days of the date on which Mortgagee gives written notice
of nonpayment to the Mortgagor in accordance with paragraph 25 of the Mortgage.
9.2. OTHER MATERIAL AGREEMENTS. A breach or default under any material
agreement (other than the Documents) relating to the Mortgaged Property,
including but not limited to the Lease, which continues unremedied beyond any
applicable grace or cure period.
9.3. PAYMENT OR ACCELERATION OF OTHER INDEBTEDNESS. Nonpayment, when
due, of any other indebtedness of Mortgagor having a principal balance in excess
of $500,000.00 (other than the
<PAGE> 16
Obligations) which continues unremedied beyond any applicable grace or cure
period or acceleration of any other indebtedness of Mortgagor prior to the
stated maturity thereof.
9.4. REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made by Mortgagor herein, in any Document, or in any other agreement, instrument
or other paper delivered to Mortgagee proves to have been untrue or misleading
in any material respect at the time when made or deemed to be made.
9.5. DISPOSAL OF COLLATERAL. After the date hereof, any conveyance,
further encumbrance, exchange, lease or other transfer or disposal, title
encumbrance, or agreement to transfer, lease or dispose, of any Collateral; or a
change of Mortgagor's manager other than to a similarly situated institutional
manager, without Mortgagee's prior written consent.
9.6. LOSS OF COLLATERAL. Uninsured loss, theft, damage or destruction
to or of any item of the Collateral resulting in an uninsured loss in excess of
$500,000.00.
9.7. BANKRUPTCY, INSOLVENCY, ETC. Mortgagor (i) fails to pay or admits
in writing Mortgagor's inability to pay, Mortgagor's debts as they become due or
otherwise become insolvent (however evidenced); (ii) makes an assignment for the
benefit of creditors; (iii) is adjudicated insolvent or bankrupt, (iv) petitions
or applies to any tribunal for a receiver or trustee of Mortgagor or any
substantial part of Mortgagor's property, or allows any such receivership or
trusteeship imposed without Mortgagor's consent to continue undischarged for a
period of sixty (60) days; (v) files a petition in bankruptcy or commences any
other proceeding relating to Mortgagor under any reorganization, arrangement,
adjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; (vi) has commenced against it
any such proceeding which remains undismissed for a period of sixty (60) days;
or (vii) by any act authorizes, consents to or acquiesces in any of the
foregoing.
9.8. JUDGMENTS, ATTACHMENT, ETC. Any one or more judgments or orders
against Mortgagor in excess of $100,000 or any attachment or other levy against
any of the Collateral remains unpaid, unstayed on appeal, undischarged, unbonded
or undismissed for a period of thirty (30) days.
9.9. LIQUIDATION OR DISSOLUTION. Mortgagor, if other than an
individual, is liquidated or dissolved or Mortgagor otherwise fails to maintain
its corporate or partnership existence, as the case may be, in good standing in
its state of organization or its authority to transact business is revoked,
suspended or relinquished in any state where the nature of its business or
properties requires it to be so authorized. Mortgagor, if an individual, dies or
is adjudicated incompetent.
9.10. MATERIAL CHANGE. The dissolution, termination or failure to
maintain the corporate existence of Borrower or Guarantor (if an entity).
9.11. COVENANTS, TERMS OR AGREEMENTS. A default by Mortgagor in the due
observance or performance of any covenant, term or agreement contained herein or
in any Document (other than a breach which would constitute a Default under
Sections 9.1 through 9.11 hereof) which default is not remedied within thirty
(30) days after the date on which Bank gives written notice of such default to
Borrower or such longer period as may be reasonably necessary to effect such
remedy.
10. REMEDIES UPON DEFAULT. If a Default occurs, Mortgagee shall have the right
to do one or more of the following:
<PAGE> 17
10.1. Mortgagee may, at its option and without notice or demand to
Mortgagor except as otherwise required by applicable law, declare all of the
Obligations immediately due and payable regardless of maturity.
10.2. Mortgagee may, at its option and without notice or demand to
Mortgagor except as otherwise required by applicable law, take immediate
possession of some or all of the Collateral, with or without appointment of a
receiver or application therefor, and lease or rent the same either in its own
name or in the name of Mortgagor, and receive the rents, income, issues, profits
and any other revenues thereof and apply the same, after payment of (to the
extent permitted by law) all costs and expenses incurred by Mortgagee in doing
the foregoing, including, but not limited to, reasonable attorneys' fees and
disbursements, to the Obligations. Mortgagor hereby irrevocably appoints
Mortgagee as Mortgagor's attorney-in-fact to manage, repair, maintain, lease and
rent the Collateral and collect all rents, income, issues, profits and any other
revenues thereof, with full power and authority to bring suit to collect the
same and to give receipts therefor; provided, however, that Mortgagee shall not
be obligated to do so. This power granted Mortgagee shall be deemed coupled with
an interest and shall be irrevocable.
10.3. Mortgagee may direct Trustee to sell the Mortgaged Property as
provided herein or to institute an action of foreclosure on this instrument or
to institute other proceedings according to law for foreclosure, and prosecute
the same to judgment, execution and sale, for the collection of the Obligations
and (to the extent permitted by law) all costs and expenses of such proceedings,
including, but not limited to, reasonable attorneys' fees and disbursements.
Mortgagee shall have the continuing right to control and direct the time and
manner in which Trustee effects and completes the foregoing.
10.4. Mortgagee may exercise in respect of the Personal Property
Collateral all of the rights and remedies available to a secured party upon
default under the applicable provisions of the Uniform Commercial Code then in
effect where the Personal Property Collateral is located.
10.5. Mortgagee may setoff and apply all net balances in any and all
bank and deposit accounts of Borrower held by Bank against any sums due under
the Note or under any of the other Loan Documents.
11. APPOINTMENT OF RECEIVER. In any action or proceeding for foreclosure, or
upon actual or threatened waste to any part of the Collateral, Mortgagee shall
be entitled, to the extent permitted by applicable law, to the appointment of a
receiver to take possession of, and to operate, maintain, and manage the
Collateral and to collect the rents, income, issues, profits and revenues from
the Collateral and pay the same over to Mortgagee for application to the
Obligations. Mortgagee shall be entitled to the appointment of such a receiver
as a matter of right without regard to the value of the Collateral as security
for the Obligations or the solvency of Mortgagor or anyone else who may be
liable for the payment or performance of the Obligations.
12. SALE BY TRUSTEE UNDER POWER OF SALE.
12.1. If Mortgagee so directs Trustee after a Default occurs, Trustee
shall sell the Mortgaged Property as a single parcel or in separate parcels at
one or more sales (each a "Non-Judicial Sale").
12.2. Each Non-Judicial Sale shall be a public sale to the highest
bidder and shall be conducted at the door of the court house or other location
then customarily employed for that purpose in the county where the Mortgaged
Property is located. Trustee shall give notice of the time and place of each
Non-Judicial Sale and a description of the property to be sold as is then
required by the laws of the state where the Mortgaged Property is located, or if
there is no such requirement, as Trustee may deem appropriate;
<PAGE> 18
provided, however, that by announcement by Trustee at the original time and
place set therefor, a Non-Judicial Sale may be adjourned to another time and
place in the city where the Mortgaged Property is located, and thereafter may be
similarly adjourned from time to time, each without further notice (unless
otherwise required by law), and may be made at any time or place to which the
same is so adjourned.
12.3. Trustee's power of sale under this instrument shall not be
exhausted by any Non-Judicial Sale if any part of the Mortgaged Property remains
unsold, but shall continue unimpaired until the earlier of the time that all of
the Mortgaged Property has been sold or the Obligations have been paid in full.
13. OTHER MATTERS RELATING TO ENFORCEMENT OF REMEDIES. The term "Sale" in this
Section 13 refers to a Non-Judicial Sale or a Sale of an item of the Collateral
made pursuant to judicial proceedings for foreclosure (a "Judicial Sale"), as
applicable under the circumstances. The term "Selling Official" in this Section
13 refers to Trustee (in the case of a Non-Judicial Sale) and to the public
officer who conducts the sale under execution or order of the court (in the case
of a Judicial Sale).
13.1. Upon any Sale of any item of the Collateral, it shall not be
necessary for the Selling Official to have present or constructively in his
possession any of the Collateral.
13.2. Upon the completion of every Sale, the Selling Official shall
execute and deliver to each purchaser a bill of sale or deed of conveyance, as
appropriate, for the items of the Collateral that are sold. Mortgagor hereby
grants every such Selling Official the power as the attorney-in-fact of
Mortgagor to execute and deliver in Mortgagor's name all deeds, bills of sale
and conveyances necessary to convey and transfer to the purchaser all of
Mortgagor's rights, title and interest in the items of the Collateral that are
sold. Mortgagor hereby ratifies and confirms all that its said attorney-in-fact
lawfully does pursuant to such power. Nevertheless, Mortgagor, if so requested
by Selling Official or by any purchaser, shall ratify any such sale by executing
and delivering to such Selling Official or to such purchaser, as applicable,
such deeds, bills of sale or other instruments of conveyance and transfer as may
be specified in any such request.
13.3. The recitals contained in any instrument of conveyance or
transfer made by a Selling Official to any purchaser at any Sale shall, to the
extent permitted by law, conclusively establish the truth and accuracy of the
matters stated therein, including, but not limited to, the amount of the
Obligations, the occurrence of a Default, and the advertisement and conduct of
such Sale in the manner provided herein or under applicable law. All
prerequisites to such Sale shall be presumed from such recitals to have been
satisfied and performed.
13.4. To the extent permitted by applicable law, every Sale, or sale
made as contemplated by Section 10.4, shall operate to divest all rights, title
and interest of Mortgagor in and to the items of the Collateral that are sold,
and shall be a perpetual bar, both at law and in equity, against Mortgagor and
Mortgagor's heirs, executors, administrators, personal representatives,
successors and assigns, and against everyone else claiming the item sold either
from, through or under Mortgagor or Mortgagor's heirs, executors,
administrators, personal representatives, successors or assigns.
13.5. A receipt from any person authorized to receive the purchase
money paid at any Sale, or sale made as contemplated by Section 10.4, shall be
sufficient discharge therefor to the purchaser. After paying such purchase money
and receiving such receipt, neither such purchaser nor such purchaser's heirs,
executors, administrators, personal representatives, successors or assigns shall
have any responsibility or liability respecting the application of such purchase
money or any loss, misapplication or non-application of any of such purchase
money, or to inquire as to the authorization, necessity, expediency or
regularity of any such sale.
<PAGE> 19
13.6. In any Sale or sale made as contemplated by Section 10.4, the
Mortgagee may bid for and purchase any of the Collateral being sold, and shall
be entitled, upon presentment of the relevant Documents and documents evidencing
the same, to apply the amount of the Obligations held by it against the purchase
price for the items of the Collateral so purchased. The amount so applied shall
be credited against the Documents and other Obligations in the same order as
provided in Section 14.
14. APPLICATION OF SALE PROCEEDS. The proceeds of any Non-Judicial Sale,
Judicial Sale or other sale or realization from the Collateral pursuant to this
instrument, and all other monies received by Mortgagee in any proceedings for
the enforcement hereof, shall be paid and applied as follows:
First, (to the extent permitted by law) to the payment of the
costs and expenses of so realizing on the Collateral, including, but
not limited to, (i) reasonable compensation to the Trustee, his agents
and attorneys, and (ii) all costs and expenses incurred by Mortgagee in
connection therewith, including, but not limited to, reasonable
attorneys' fees and disbursements, together with interest thereon at
the Default Rate from the date incurred;
Second, to the portion of the Obligations that constitute
interest accrued but unpaid;
Third, to the remainder of the Obligations; and
Fourth, the balance, if any, to the Mortgagor or its heirs,
executors, administrators, personal representatives, successors or
assigns or to whosoever else may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
15. PARTIAL RELEASE. Any part of the Collateral may be released by Mortgagee
from the lien and security interest created by this instrument. Any such partial
release shall be at the sole option of Mortgagee; Mortgagee shall not be
obligated to grant partial releases. Any such partial release shall not affect
the lien and security interest created by this instrument as to the remainder of
the Collateral.
16. FULL RELEASE. When the Obligations are paid in full and all of Mortgagor's
covenants and agreements in this instrument are fully performed, this instrument
shall be released of record at the cost of Mortgagor.
17. LEASE TO MORTGAGOR. The Mortgaged Property is hereby leased to Mortgagor,
for a term ending at the earlier of the time when this instrument is released
and satisfied or the Mortgaged Property is sold as provided in this instrument,
for a rental of one cent ($.01) per month, payable monthly upon demand.
Mortgagor shall, without notice or demand therefor, immediately surrender
peaceable possession of the Mortgaged Property to the purchaser thereof at a
Non-Judicial Sale or Judicial Sale. The purchaser shall be entitled to institute
summary proceedings for possession of the Mortgaged Property if possession is
not so surrendered.
18. SUBSTITUTION OF TRUSTEE. Mortgagee is hereby granted the power at any time,
for any reason or no reason, to remove the Trustee and appoint a successor. Such
removal and appointment shall be by written instrument duly executed by
Mortgagee and recorded in the office of the recorder of deeds of the city where
this instrument is recorded. Upon the recording of such instrument, the
successor shall succeed to all of the powers, duties and obligations of the
Trustee under this instrument. Any successor Trustee may be removed and another
successor appointed by Mortgagee in the same manner. A successor Trustee shall
not be liable or responsible for any acts or omissions of his predecessors.
<PAGE> 20
19. GOVERNING LAW. This instrument and the rights and obligations of the parties
hereunder shall be governed by and construed and interpreted in accordance with
the laws of the State of Missouri, without regard to choice or conflict of laws
rules.
20. ADDITIONAL OR OTHER SECURITY. Mortgagee may take additional security for the
Obligations, and Mortgagee may resort for the payment of the Obligations to any
other security therefor held by Mortgagee in such order and manner as Mortgagee
may elect, without releasing or impairing the lien and security interest created
by this instrument.
21. EFFECT OF EXTENSIONS AND MODIFICATIONS. Mortgagee, at its sole option, may
extend the time for the payment or performance of the Obligations, or reduce the
payments of principal or interest thereof, or accept a modification or renewal
of the Documents or other Obligations (including such as effect an increase in
the interest rate thereof), without the consent of any endorser, guarantor or
other party to the Documents or any other document evidencing any of the
Obligations. Any such extension, reduction, modification or renewal shall not
impair or affect the priority of the lien and security interest created by this
instrument, or limited, release, discharge or affect the liability of Mortgagor,
any endorser, guarantor or other party to the Documents or any other document
evidencing the Obligations, except in accordance with the strict terms and tenor
of any such extension, reduction, modification or renewal, and regardless of
whether Mortgagor consents to any such extension, reduction, modification or
renewal where a subsequent owner of the Mortgaged Property and Mortgagee are the
parties to the extension, reduction, modification or renewal.
22. MORTGAGEE'S RIGHTS NON-EXCLUSIVE. The rights and remedies of Mortgagee under
this instrument are in addition to the rights and remedies of Mortgagee at law
and in equity. The exercise of any of Mortgagee's rights or remedies shall not
be deemed to be an election of one right or remedy over another or to prevent
Mortgagee from exercising any other of Mortgagee's rights or remedies.
23. PARTIAL INVALIDITY. If any provision of this instrument is held to be
invalid or unenforceable, the rest of this instrument shall remain fully valid
and enforceable.
24. WAIVERS AND AMENDMENTS. No failure by Mortgagee to insist upon the strict
and timely performance of any of the provisions of this instrument shall be
deemed a waiver thereof. Mortgagee, notwithstanding any such failure, shall have
the right to insist upon the strict and timely performance by Mortgagor of any
and all terms and provisions of this instrument to be performed by Mortgagor. No
waiver by Mortgagee shall be effective unless it is in writing and signed by an
authorized officer of Mortgagee. No such waiver shall operate as a waiver of any
other matter or of a similar matter at a future time. This instrument may not be
modified or amended except by a duly recorded writing executed by both Mortgagor
and an authorized officer of Mortgagee.
25. NOTICES. Any communication between the parties shall be deemed given if in
writing and upon (i) receipt, if personally delivered to Mortgagor or Mortgagee,
or (ii) deposit in the U.S. Mail addressed to Mortgagor at Mortgagor's Notice
Address or Mortgagee at Mortgagee's Notice Address, if sent by certified or
registered mail, or (iii) receipt, if sent by facsimile to Mortgagor's or
Mortgagee's FAX Number. No communication from or concerning Mortgagor shall be
deemed for any purpose to have been received by Mortgagee unless it is in
writing and actually received by an executive officer of Mortgagee. Whenever
applicable provisions of the Uniform Commercial Code or other applicable law
require that notice be reasonable, ten (10) days' notice shall be deemed
reasonable. Mortgagor's "Notice Address" is the mailing address shown below
Mortgagor's signature. Mortgagor's FAX Number is the telephone number for
Mortgagor's facsimile machine shown below Mortgagor's signature.
<PAGE> 21
26. CAPTIONS. Section captions in this instrument are for convenience only and
shall not affect the interpretation or construction of this instrument.
27. BINDING EFFECT. This instrument shall bind Mortgagor and Mortgagor's heirs,
executors, administrators, personal representatives, successors and assigns, and
shall inure to the benefit of Mortgagee and Mortgagee's successors and assigns.
28. [INTENTIONALLY DELETED]
29. WAIVER OF JURY. In the event any controversy or claim between or among the
parties hereto shall not be resolved as provided above, to the fullest extent
permitted by law, the parties hereto waive the right to trial by jury in
connection with any action, suit or other proceeding arising out of or relating
to this instrument or any other loan Document.
30. REPRESENTATIONS AND COVENANTS RE: LEASE.
A. REPRESENTATIONS.
(i) To Mortgagor's knowledge, the Lease is a valid and
subsisting lease of the property therein described and is in
full force and effect in accordance with its terms, and has
not been further amended or modified in any respect.
(ii) No default has occurred and is continuing under the
Lease and to Mortgagor's knowledge no event has occurred or
is occurring which, with the passage of time or service of
notice or both, would constitute an event of default under
the Lease.
(iii) To Mortgagor's knowledge, the Lease is subject to no
liens or encumbrances other than as set forth in the
mortgagee title insurance policy insuring the lien of this
Mortgage, a copy of which has been furnished to Mortgagor.
(iv) Mortgagor is the owner of the leasehold estate created
by the Lease and has the right and authority under the Lease
to execute this Mortgage and to encumber the leasehold estate
as provided herein.
B. AFFIRMATIVE AND NEGATIVE COVENANTS.
(v) Mortgagor will promptly perform and observe all the
terms, covenants and conditions required to be
performed and observed by Mortgagor as lessee under the
Lease, within the periods (exclusive of grace periods,
if any) provided in the Lease, and will do all things
reasonably necessary to preserve and keep unimpaired
its rights under the Lease. Mortgagor will furnish the
Mortgagee, upon demand, proof of payment of all items
which are required to be paid by the Mortgagor pursuant
to the Lease. Mortgagor shall not waive any of its
material rights under the Lease, or refrain from
exercising any material right or remedy accorded to it
under the Lease on account of any material default by
the lessor thereunder, or release the lessor from any
material economic liability without first
<PAGE> 22
obtaining the written consent of Mortgagee which
consent shall not be unreasonably withheld, conditioned
or delayed.
(vi) In the event Mortgagor shall violate any of the
covenants specified in subparagraph (i) above, then Mortgagee
shall have the right (but shall not be obligated) to take any
action, without allowing for expiration of any period of
grace, as Mortgagee may deem necessary or desirable to
prevent or cure any default of Mortgagor under the Lease or
any default of the lessor thereunder, it being agreed that
upon receipt by Mortgagee from the lessor under the Lease of
any notice of default, Mortgagee shall be entitled to rely
thereon and take any of the aforesaid action even though
Mortgagor denies or questions the existence of any such
default, and shall have the immediate right to enter all or
any portion of the Mortgaged Property at such times and in
such manner as Mortgagee deems appropriate in order to
prevent or to cure any such default.
(vii) For the purpose of preventing or curing any default by
Mortgagor under the Lease, Mortgagee may after notice to
Borrower and a reasonable opportunity for Borrower to act
(but shall be under no obligation to) do any act or execute
any document in the name of Mortgagor or as its
attorney-in-fact, as well as in the name of Mortgagee. Upon
the occurrence and during the continuance of an Event of
Default, Mortgagor hereby irrevocably appoints Mortgagee its
true and lawful attorney-in-fact in its name or otherwise to
do any and all acts and to execute any and all documents
which in the opinion of Mortgagee may be necessary or
desirable to prevent or cure any default under the Lease or
to preserve any rights of Mortgagor in, to or under the
Lease, including the right to effectuate a renewal of the
Lease or to preserve any rights of Mortgagor whatsoever in
respect of any part of the Mortgaged Property.
(viii) The curing by Mortgagee of any default by Mortgagor
under the Lease shall not remove or waive, as between
Mortgagor and Mortgagee, the default which occurred hereunder
by virtue of the default by Mortgagor under the Lease, and
all sums expended by Mortgagee in order to cure any such
default and costs and expenses incurred by Mortgagee in
connection with the curing of such default shall be paid by
Mortgagor to Mortgagee upon demand with interest thereon at
the post-Default rate set forth in the Note from the date
paid by Mortgagee.
(ix) Mortgagor covenants and agrees that Mortgagor will not
surrender Mortgagor's leasehold estate and interest
hereinabove described under the Lease, nor terminate or
cancel the Lease, and that Mortgagor will not without the
express written consent of Mortgagee modify, change,
supplement, alter or amend the Lease in any material respect,
either orally or in writing, and as further security for the
repayment of the indebtedness secured hereby and for the
performance of the covenants herein and in the Lease,
Mortgagor hereby assigns to Mortgagee all of Mortgagor's
rights, privileges and prerogatives as Lessee under the Lease
to terminate, cancel, modify, change, supplement, alter or
amend the Lease, and any such termination, cancellation,
modification, change, supplement, alteration or amendment of
the Lease, without the prior written consent thereto by
Mortgagee, shall be void and of no force and effect. So long
as there is no Event of Default
<PAGE> 23
under, any of the covenants or agreements in the Lease,
Mortgagee shall have no right to terminate, cancel, modify,
change, supplement, alter or amend the Lease.
(x) Mortgagor covenants and agrees that no release or
forbearance, except an express written agreement to release,
of any of Mortgagor's obligations under the Lease, pursuant
to the Lease or otherwise, shall release Mortgagor from any
of Mortgagor's obligations hereunder, including Mortgagor's
obligations with respect to the payment of rent as provided
for in the Lease and the performance of all of the terms,
provisions, covenants, conditions and agreements contained in
the Lease, to be kept, performed and complied with by the
Lessee therein.
<PAGE> 24
IN WITNESS WHEREOF, this instrument has been executed as of the day and
year first above written.
MORTGAGOR:
EBS BUILDING, L.L.C., a Delaware limited
liability company
BY: PRICEWATERHOUSECOOPERS LLP,
MANAGER
BY: /S/ MATTHEW R. NIEMANN
-----------------------------------
MATTHEW R. NIEMANN, DIRECTOR
Mortgagor's Notice Address: PricewaterhouseCoopers LLP
800 Market Street, Suite 1800
St. Louis, Missouri 63101
Attn: Keith F. Cooper, Partner
Telephone Number: (314) 206-8500 FAX Number: (314) 206-8459
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 16TH day of June, 1999, before me appeared MATTHEW R. NIEMANN,
to me personally known, who, being by me duly sworn, did say that he is a
Director of PRICEWATERHOUSECOOPERS LLP, which is the Manager of EBS BUILDING,
L.L.C., a limited liability company of the State of Delaware, and that said
instrument was signed on behalf of said limited liability company, by authority
of its Members; and said MATTHEW R. NIEMANN acknowledged said instrument to be
the free act and deed of said limited liability company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in the City and State aforesaid, the day and year first above
written.
/s/ Susan G. Reiss
--------------------------------------
Notary Public
My commission expires: June 4, 2002
<PAGE> 25
IN WITNESS WHEREOF, this instrument has been executed as of the day and
year first above written.
MORTGAGEE:
FINPRO, L.L.C., a Missouri limited liability
company
BY: /S/ E. STANLEY KROENKE
-----------------------------------------
E. STANLEY KROENKE, MANAGER
[EBS DEED OF TRUST]
Mortgagee's Notice Address: c/o The Kroenke Group
1001 Cherry Street, Suite 308
Columbia, Missouri 65201
Telephone Number: ( ) FAX Number: ( )
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 18TH day of June, 1999, before me appeared E. STANLEY KROENKE,
to me personally known, who, being by me duly sworn, did say that he is the
Manager of FINPRO, L.L.C., a Missouri limited liability company, and that said
instrument was signed on behalf of said limited liability company, by authority
of its Members; and said E. STANLEY KROENKE acknowledged said instrument to be
the free act and deed of said limited liability company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in the County and State aforesaid, the day and year first
above written.
/s/ Katherine E. Schubel
---------------------------------------------
Notary Public
My commission expires: 2/6/2002
--------------------
<PAGE> 26
IN WITNESS WHEREOF, this instrument has been executed as of the day and
year first above written.
TRUSTEE:
/s/ Thomas K. Vandiver
-------------------------------------
Thomas K. Vandiver
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 18th day of June, 1999, before me personally appeared THOMAS K.
VANDIVER, to me known to be the person described in and who executed the
foregoing instrument, and acknowledged that he executed the same as his free act
and deed in his capacity as Trustee.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in the County and State aforesaid, the day and year first
above written.
/s/ Katherine E. Schubel
-------------------------------------
Notary Public
My commission expires: 2/6/2002
------------------
<PAGE> 27
EXHIBIT "A"
(LEGAL DESCRIPTION)
All that real property located in the City of St. Louis, State of Missouri, more
particularly described as follows:
A tract of land being Book 119, part of Block 118, that part of St. Charles
Street, 50 feet wide, vacated by Ordinance No. 58574 and that part of a 7.5 foot
wide alley in Block 118 vacated by Ordinance No. 58533, in the City of St.
Louis, Missouri and being further described as follows: Beginning at a point on
the East line of Sixth Street, 60 feet wide, at its intersection with the South
line of vacated St. Charles Street, 50 feet wide, said point being the Northwest
corner of Block 118, thence North 1 degree 54 minutes 12 seconds East, 49.93
feet across vacated St. Charles Street to the Southwest corner of Block 119;
thence along the East line of Sixth Street, North 0 degrees 09 minutes 53
seconds West, 150.46 feet to its intersection with the South line of Washington
Avenue, 80 feet wide, said point being the Northwest corner of Block 119; thence
along the South line of Washington Avenue, North 89 degrees 54 minutes 07
seconds East, 270.40 feet to its intersection with the West line of Broadway, 80
feet wide, said point being the Northeast corner of Block 119; thence along the
West line of Broadway, South 0 degrees 11 minutes 45 seconds East, 149.47 feet
to its intersection with the North line of vacated St. Charles Street, said
point being the Southeast corner of Book 119; thence South 2 degrees 26 minutes
11 seconds West, 50.14 feet across vacated St. Charles Street to the Northeast
corner of Block 118; thence continuing along the West line of Broadway, South 2
degrees 33 minutes 22 seconds West, 13.64 feet to a point on the East line of
Block 118; thence leaving said point and running North 87 degrees 2 minutes 23
seconds West 269.68 feet to the point of beginning according to survey by The
Clayton Engineering Company dated February, 1998.
<PAGE> 28
EXHIBIT "B"
(LEGAL DESCRIPTION)
All that real property located in the City of St. Louis, State of Missouri, more
particularly described as follows:
A tract of land being part of Block 118 together with the vacated North and
South Alley and portions of the following vacated streets, Broadway, Locust
Street and Sixth Street, in the City of St. Louis, Missouri, and described as
follows: Beginning at a point on the East line of Sixth Street, 60 feet wide at
its intersection with the South line of former St. Charles Street, 50 feet wide,
as vacated by Ordinance No. 58574, said point being the Northwest corner of City
Block 118 and the Westernmost corner of property conveyed to Edison Brothers
Redevelopment Corporation by deed recorded in Book 338M page 830 of the St.
Louis City Records; thence leaving said point and running along the line of said
Edison Brothers Property, South 87 degrees 22 minutes 23 seconds East, 269.68
feet to a point on the Eastern line of City Block 118, thence along said Eastern
Block line, North 2 degrees 33 minutes 22 seconds East, 2.00 feet to a point on
the North line of that portion of Broadway as vacated by Ordinance No. 58656;
thence along the North line of said vacated area South 87 degrees 22 minutes 23
seconds East, 13.33 feet to the Northeast corner thereof; thence along the
Eastern line of the portion of Broadway, as vacated, South 2 degrees 33 minutes
22 seconds West, 275.33 feet to an angle point therein; thence South 50 degrees
50 minutes 47 seconds West, 1797 feet to a point on the South line of that
portion of Locust Street as vacated by Ordinance No. 58656; thence along the
South line of said vacated area, North 87 degrees 22 minutes 23 seconds West,
268.51 feet to an angle point therein; thence North 39 degrees 14 minutes 03
seconds West, 20.11 feet to a point on the Western line of that portion of Sixth
Street, as vacated by Ordinance No. 58656; thence along the West line of said
vacated area, North 2 degrees 37 minutes 07 seconds East, 271.67 feet to the
Northwest corner thereof; thence along the North line of said vacated portion of
Sixth Street South 87 degrees 22 minutes 23 seconds East, 12.0 feet to a point
on the East line of Sixth Street; thence along said street line, South 2 degrees
37 minutes 07 seconds West 1.33 feet to the point of beginning, according to
survey executed by Clayton Engineering Company.
-2-
<PAGE> 1
ENVIRONMENTAL INDEMNITY AGREEMENT
THIS AGREEMENT, which is dated as of June 18, 1999, is executed by EBS BUILDING,
L.L.C., A DELAWARE LIMITED LIABILITY COMPANY ("Borrower") as a condition to, and
to induce FINPRO, L.L.C., A MISSOURI LIMITED LIABILITY COMPANY ("Lender") to
make a loan (the "Loan") to Borrower evidenced or to be evidenced by a
Promissory Note of even date herewith made by Borrower payable to the order of
Lender in the principal face amount of $12,000,000.00, which Loan is secured or
to be secured by a Deed of Trust, Security Agreement and Fixture Filing (the
"Mortgage") of even date herewith, encumbering certain real and personal
property as therein described (collectively, the "Property") including the land
described in Exhibit A which is attached hereto and made a part hereof. The term
"Documents" is used herein as defined in the Mortgage. This Agreement is one of
the Documents.
1. CERTAIN DEFINITIONS. As used in this Agreement:
(a) "ENVIRONMENTAL CLAIM" means any investigative, enforcement, cleanup,
removal, containment, remedial or other private or governmental or
regulatory action at any time threatened, instituted or completed
pursuant to any applicable Environmental Requirement (hereinafter
defined), against Borrower or against or with respect to the Property
or any condition, use or activity on the Property (including any such
action against Lender), and any claim at any time threatened or made by
any person against Borrower or against or with respect to the Property
or any condition, use or activity on the Property (including any such
claim against Lender), relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or in any way arising in
connection with any Hazardous Material (hereinafter defined) or any
Environmental Requirement.
(b) "ENVIRONMENTAL REQUIREMENT" means any Environmental Law (hereinafter
defined), agreement or restriction (including but not limited to any
condition or requirement imposed by any insurance or surety company),
as the same now exists or may be changed or amended or come into effect
in the future, which pertains to health, safety, any Hazardous
Material, or the environment, including but not limited to ground or
air or water or noise pollution or contamination, and underground or
aboveground tanks.
(c) "HAZARDOUS MATERIAL" means any substance, whether solid, liquid or
gaseous which is listed, defined or regulated as a "hazardous
substance", "hazardous waste" or "solid waste", or otherwise classified
as hazardous or toxic, in or pursuant to any Environmental Requirement;
or which is or contains asbestos, radon, any polychlorinated biphenyl,
urea formaldehyde foam insulation, explosive or radioactive material,
or motor fuel or other petroleum hydrocarbons; or which causes or poses
a threat to cause a contamination or nuisance on the Property or any
adjacent property or a hazard to the environment or to the health or
safety of persons on the Property.
(d) "ENVIRONMENTAL LAW" means any federal, state or local law, statute,
ordinance, code, rule, regulation, license, authorization, decision,
order, injunction, decree, or rule of common law, and any judicial
interpretation of any of the foregoing, which pertains to health,
safety, any Hazardous Material, or the environment (including but not
limited to ground or air or water or noise pollution or contamination,
and underground or aboveground tanks) and shall include without
limitation, the Solid Waste Disposal Act, 42 U.S.C. Section 6901 et
seq.; the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 et seq. ("CERCLA"), as
amended by the
<PAGE> 2
Superfund Amendments and Reauthorization Act of 1986 ("SARA"); the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.;
the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et
seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 300f et seq.; and any other state
or federal environmental statutes, and all rules, regulations, orders
and decrees now or hereafter promulgated under any of the foregoing, as
any of the foregoing now exist or may be changed or amended or come
into effect in the future.
(e) "ON" or "on", when used with respect to the Property or any property
adjacent to the Property, means "on, in, under, above or about".
2. REPRESENTATIONS AND WARRANTIES. To the best of Borrower's knowledge,
Borrower hereby represents and warrants to, and covenants with, Lender,
without regard to whether Lender has or hereafter obtains any knowledge or
report of the environmental condition of the Property, but subject to all
matters disclosed in the Environmental Report dated December 31, 1998
prepared by ATC Associates as Project Number 87730.8008 (the "Report"), a
copy of which has been furnished to Lender, as follows:
(a) During the period of Borrower's ownership of the Property, to the best
of Borrower's knowledge the Property has not been used for industrial
or manufacturing purposes, for landfill, dumping or other waste
disposal activities or operations, for generation, storage, use, sale,
treatment, processing, recycling or disposal of any Hazardous Material,
or for any other use that could give rise to the release of any
Hazardous Material on the Property; to the best of Borrower's
knowledge, no such use of the Property occurred at any time prior to
the period of Borrower's ownership of the Property; and to the best of
Borrower's knowledge without inquiry, no such use on any adjacent
property occurred at any time prior to the date hereof;
(b) To the best of Borrower's knowledge, there is no Hazardous Material,
storage tank (or similar vessel) whether underground or otherwise, sump
or well currently on the Property;
(c) Borrower has received no notice and has no knowledge of any
Environmental Claim or any completed, pending or proposed or threatened
investigation or inquiry concerning the presence or release of any
Hazardous Material on the Property or any adjacent property or
concerning whether any condition, use or activity on the Property or
any adjacent property is in violation of any Environmental Requirement;
(d) To the best of Borrower's knowledge the present conditions, uses and
activities on the Property do not violate any Environmental Requirement
and the use of the Property which Borrower (and each tenant and
subtenant, if any) makes and intends to make of the Property complies
and will comply with all applicable Environmental Requirements;
(e) The Property does not appear on and to the best of Borrower's knowledge
has never been on the National Priorities List, any federal or state
"superfund" or "superlien" list, or any other list or database of
properties maintained by any local, state or federal agency or
department showing properties which are known to contain or which are
suspected of containing a Hazardous Material;
-2-
<PAGE> 3
(f) Borrower has never applied for and been denied environmental impairment
liability insurance coverage relating to the Property; and
(g) Neither Borrower nor, to Borrower's knowledge, any tenant or subtenant,
has obtained or is required to obtain any permit or authorization to
construct, occupy, operate, use or conduct any activity on any of the
Property by reason of any Environmental Requirement.
3. VIOLATIONS. Borrower will not cause, commit, permit or allow to continue (i)
any violation of any Environmental Requirement (a) by Borrower or by any
person or entity (b) by or with respect to the Property or any use of or
condition or activity on the Property, or (ii) the attachment of any
environmental lien to the Property. Borrower will not place, install,
dispose of or release, or cause, permit, or allow the placing, installation,
disposal, spilling, leaking, dumping or release of, any Hazardous Material
or additional storage tanks (or similar vessel) on the Property and will
keep the Property free of Hazardous Material.
Notwithstanding the foregoing provisions of this Section 3, Borrower shall not
be in Default under this Section 3 should Borrower store minimal quantities of
substances on the Property which technically could be considered Hazardous
Material, provided that: such substances are of a type and are held only in a
quantity normally used in connection with the construction, occupancy or
operation of comparable buildings (such as cleaning fluids, and supplies
normally used in the day to day operation of business offices), such substances
are being held, stored and used in complete and strict compliance with all
applicable Environmental Requirements, and the indemnity in Section 7 of this
Agreement shall always apply to such substances, and it shall be and continue to
be the responsibility of Borrower to take all remedial action required under and
in accordance with Section 6 of this Agreement in the event of any unlawful
release of any such substance.
4. NOTICE TO LENDER. Borrower shall promptly deliver to Lender a copy of each
report pertaining to the Property prepared by or on behalf of Borrower
pursuant to any Environmental Requirement. Borrower shall immediately advise
Lender in writing of any Environmental Claim or of the discovery of any
Hazardous Material on the Property, as soon as Borrower first obtains
knowledge thereof, including a full description of the nature and extent of
the Environmental Claim and/or Hazardous Material and all relevant
circumstances.
5. SITE ASSESSMENTS AND INFORMATION. If Lender shall ever have a reasonable
basis to believe that any Hazardous Material affects the Property (other
than materials described in the Report), or if any Environmental Claim is
made or threatened, or if a Default (as defined in the Mortgage) shall have
occurred under the Documents, or upon the occurrence of the Release Date
(hereinafter defined) if requested by Lender, Borrower shall at its expense,
provide to Lender from time to time, in each case within sixty (60) days
after Lender's request, an Environmental Assessment (hereinafter defined)
made after the date of Lender's request. As used in this Agreement, the term
"Environmental Assessment" means a report (including all drafts thereof) of
an environmental assessment of the Property of such scope (including but not
limited to the taking of soil borings and air and groundwater samples and
other above and below ground testing) as Lender may request, by a consulting
firm acceptable to Lender and made in accordance with Lender's established
guidelines. Borrower will cooperate with each consulting firm making any
such Environmental Assessment and will supply to the consulting firm, from
time to time and promptly on request, all information available to Borrower
to facilitate the completion of the Environmental Assessment. If Borrower
fails to furnish Lender within thirty (30) days after Lender's request with
a copy of an agreement with an acceptable environmental consulting firm to
provide such Environmental Assessment, or if Borrower fails to furnish to
Lender such Environmental Assessment within sixty
-3-
<PAGE> 4
(60) days after Lender's request, Lender may cause any such Environmental
Assessment to be made at Borrower's expense and risk. Lender and its
designees are hereby granted access to the Property at any time or times,
upon reasonable notice (which may be written or oral), and a license which
is coupled with an interest and irrevocable, to make or cause to be made
such Environmental Assessments, Lender may disclose to interested parties
any information Lender ever has about the environmental condition or
compliance of the Property, but shall be under no duty to disclose any such
information except as may be required by law. Lender shall be under no duty
to make any Environmental Assessment of the Property, and in no event shall
any such Environmental Assessment by Lender be or give rise to a
representation that any Hazardous Material is or is not present on the
Property, or that there has been or shall be compliance with any
Environmental Requirement, nor shall Borrower or any other person be
entitled to rely on any Environmental Assessment made by Lender or at
Lender's request. Lender owes no duty of care to protect Borrower or any
other person against, or to inform them of, any Hazardous Material or other
adverse condition affecting the Property.
6. REMEDIAL ACTIONS.
(a) If any Hazardous Material is discovered on the Property at any time and
regardless of the cause, (i) Borrower shall promptly at Borrower's sole
risk and expense remove (or encapsulate in accordance with customary
remediation practices), treat, and dispose of the Hazardous Material in
compliance with all applicable Environmental Requirements and solely
under Borrower's name (or if removal is prohibited by any Environmental
Requirement, take whatever action is required by any Environmental
Requirement), in addition to taking such other action as is necessary
to have the full use and benefit of the Property as contemplated by the
Documents, and provide Lender with satisfactory evidence thereof; and
(ii) if requested by Lender, provide to Lender within thirty (30) days
of Lender's request a bond, letter of credit or other financial
assurance evidencing to Lender's satisfaction that all necessary funds
are readily available to pay the costs and expenses of the actions
required by clause (i) preceding and to discharge any assessments or
liens established against the Property as a result of the presence of
the Hazardous Material on the Property. Within fifteen (15) days after
completion of such remedial actions, Borrower shall obtain and deliver
to Lender an Environmental Assessment of the Property made after such
completion and confirming to Lender's satisfaction that all required
remedial action as stated above has been taken and successfully
completed and that there is no evidence or suspicion of any
contamination or risk of contamination on the Property or any adjacent
property, or of violation of any Environmental Requirement, with
respect to any such Hazardous Material.
(b) Lender may, but shall never be obligated to, remove or cause the
removal of any Hazardous Material from the Property (or if removal is
prohibited by any Environmental Requirement, take or cause the taking
of such other action as is required by any Environmental Requirement)
if Borrower fails to promptly commence such remedial actions following
discovery and thereafter diligently prosecute the same to the
satisfaction of Lender (without limitation of Lender's rights to
declare a default under any of the Documents and to exercise all rights
and remedies available by reason thereof); and Lender and its designees
are hereby granted access to the Property at any time or times, upon
reasonable notice (which may be written or oral), and a license which
is coupled with an interest and irrevocable, to remove or cause such
removal or to take or cause the taking of any such other action.
-4-
<PAGE> 5
7. INDEMNITY.
(a) Borrower hereby agrees to protect, indemnify, defend and hold (i)
Lender; (ii) the trustee(s) under the Mortgage (the "Trustee"); (iii)
any persons or entities owned or controlled by, controlling, or under
common control or affiliated with Lender and/or Trustee; (iv) any
participants in the Loan; (v) the directors, officers, partners,
employees and agents of Lender and/or Trustee, and/or such persons or
entities; and (vi) the heirs, personal representatives, successors and
assigns of each of the foregoing persons or entities (each an
"Indemnified Party") harmless from and against, and if and to the
extent paid, reimburse them on demand for, any and all Environmental
Damages (hereinafter defined). The foregoing indemnity shall not apply
to a particular Indemnified Party to the extent that the subject of the
indemnification is caused by or arises out of the negligence or willful
misconduct of that particular Indemnified Party. Upon demand by Lender,
Borrower shall diligently defend any Environmental Claim which affects
the Property or is made or commenced against Lender, whether alone or
together with any other person, all at Borrower's own cost and expense
and by counsel to be approved by Lender in the exercise of its
reasonable judgment. In the alternative, at any time Lender may elect
to conduct its own defense through counsel selected by Lender and at
the cost and expense of Borrower.
(b) As used in this Agreement, the term "Environmental Damages" means all
claims, demands, liabilities (including strict liability), losses,
damages (including consequential damages), causes of action, judgments,
penalties, fines, costs and expenses (including reasonable fees, costs
and expenses of attorneys, consultants, contractors, experts and
laboratories), of any and every kind or character, contingent or
otherwise, matured or unmatured, known or unknown, foreseeable or
unforeseeable, made, incurred, suffered, brought, or imposed at any
time and from time to time, whether before or after the Release Date
(hereinafter defined) and arising in whole or in part from:
(1) the presence of any Hazardous Material on the Property, or any
escape, seepage, leakage, spillage, emission, release, discharge or disposal
of any Hazardous Material on or from the Property, or the migration or
release or threatened migration or release of any Hazardous Material to,
from or through the Property, on or before the Release Date; or
(2) any act, omission, event or circumstance existing or occurring in
connection with the handling, treatment, containment, removal, storage,
decontamination clean-up, transport or disposal of any Hazardous Material
which is at any time on or before the Release Date present on the Property;
or
(3) the breach of any representation, warranty, covenant or agreement
contained in this Agreement because of any event or condition occurring or
existing on or before the Release Date; or
(4) any violation on or before the Release Date, of any Environmental
Requirement in effect on or before the Release Date, regardless of whether
any act, omission, event or circumstance giving rise to the violation
constituted a violation at the time of the occurrence or inception of such
act, omission, event or circumstance; or
(5) any Environmental Claim, or the filing or imposition of any
environmental lien against the Property, because of, resulting from, in
connection with, or arising out of any of the matters referred to in
subparagraphs (1) through (4) preceding;
-5-
<PAGE> 6
and regardless of whether any of the foregoing subparagraphs (1) through (5)
was caused by a Borrower or a tenant or subtenant, or a prior owner of the
Property or its tenant or subtenant, or any third party, including but not
limited to (i) injury or damage to any person, property or natural resource
occurring on or off the Property, including but not limited to, the cost of
demolition and rebuilding of any improvements on real property; (ii) the
investigation or remediation of any such Hazardous Material or violation of
Environmental Requirement, including but not limited to the preparation of
any feasibility studies or reports and the performance of any cleanup,
remediation, removal, response, abatement, containment, closure,
restoration, monitoring or similar work required by any Environmental
Requirement or necessary to have full use and benefit of the Property as
contemplated by the Documents (including any of the same in connection with
any foreclosure action or transfer in lieu thereof); (iii) all liability to
pay or indemnify any person or governmental authority for costs expended in
connection with any of the foregoing; (iv) the investigation and defense of
any claim, whether or not such claim is ultimately defeated; and (v) the
settlement of any claim or judgment.
(c) As used in this Agreement, the term "Release Date" means the earlier of
the following two dates: (i) the date on which the indebtedness and
obligations secured by the Mortgage have been paid and performed in
full and the Mortgage has been released; or (ii) the date on which the
lien of the Mortgage is fully and finally foreclosed or a conveyance by
deed in lieu of such foreclosure is fully and finally effective and
possession of the Property has been given to and accepted by the
Purchaser or grantee free of occupancy and claims to occupancy by
Borrower and its heirs, devisees, representatives, successors and
assigns; provided that, if such payment, performance, release,
foreclosure or conveyance is challenged, in bankruptcy proceedings or
otherwise, the Release Date shall be deemed not to have occurred until
such challenge is validly released, dismissed with prejudice or
otherwise barred by law from further assertion.
8. CONSIDERATION; SURVIVAL; CUMULATIVE RIGHTS. Borrower acknowledges that
Lender has relied and will rely on the representations, warranties,
covenants and agreements herein in closing and funding the Loan and that the
execution and delivery of this Agreement is an essential condition but for
which Lender would not close or fund the Loan. The representations,
warranties, covenants and agreements in this Agreement shall be binding upon
Borrower and its successors, assigns and legal representatives and shall
inure to the benefit of Lender and its successors, assigns and legal
representatives and participants in the Loan; and shall not terminate on the
Release Date or upon the release, foreclosure or other termination of the
Mortgage, but will survive the Release Date, the payment in full of the
indebtedness secured by the Mortgage, foreclosure of the Mortgage or
conveyance in lieu of foreclosure, the release or termination of the
Mortgage and any and all of the other Documents, any investigation by or on
behalf of the Lender, any bankruptcy or other debtor relief proceeding, and
any other event whatsoever. Any amount to be paid under this Agreement by
Borrower shall be a demand obligation owing by Borrower (which Borrower
hereby promise to pay). Lender's rights under this Agreement shall be in
addition to all rights of Lender under the Documents or at law or in equity,
under this Agreement shall be in addition to all rights of Lender under the
Documents or at law or in equity, and payments by Borrower under this
Agreement shall not reduce Borrower's obligation and liabilities under any
of the Documents. The liability of Borrower or any other person under this
Agreement shall not be limited or impaired in any way by any provision in
the Documents or applicable law limiting Borrower's or such other person's
liability or Lender's recourse or rights to a deficiency judgment, or by any
change, extension, release, inaccuracy, breach or failure to perform by any
party under the Documents, Borrower's (and, if applicable, such other
person's) liability hereunder being direct and primary and not as a
guarantor or surety. Borrower hereby assigns and irrevocably transfers to
Lender any and all
-6-
<PAGE> 7
rights of subrogation, contribution, indemnification, reimbursement or
similar rights it may have against Borrower or any other person for
Environmental Damages. Nothing in this Agreement or in any other Loan
Document shall limit or impair any rights or remedies of Lender, Trustee
and/or any other Indemnified Party against Borrower or any other person
under any Environmental Requirement or otherwise at law or in equity,
including without limitation, any rights of contribution or indemnification.
9. NO WAIVER. No delay or omission by Lender to exercise any right under this
Agreement shall impair any such right nor shall it be construed to be a
waiver thereof. No waiver of any single breach or Default under this
Agreement shall be deemed a waiver of any other breach or Default. Any
waiver, consent or approval under this Agreement must be in writing to be
effective.
10. NOTICES. All notices, requests, consents, demands and other communications
required or which any party desires to give hereunder or under any other
Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by courier, or by registered or
certified United States mail, postage prepaid, addressed to the party to
whom directed at the addresses specified at the end of this Agreement
(unless changed by similar notice in writing given by the particular party
whose address is to be changed) or by telegram, telex, or facsimile. Any
such notice or communication shall be deemed to have been given either at
the time of personal delivery or, in the case of courier or mail, as of the
date of first attempted delivery at the address and in the manner provided
herein, or, in the case of telegram, telex or facsimile, upon receipt;
provided that, service of a notice required by any applicable statute, shall
be considered complete when the requirements of that statute are met.
Notwithstanding the foregoing, no notice of change of address shall be
effective except upon actual receipt. This Section shall not be construed in
any way to affect or impair any waiver of notice or demand provided in any
Loan Document or to require giving notice or demand to or upon any person in
any situation or for any reason.
11. INVALID PROVISIONS. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of
any other provision and a determination that the application of any
provision of this Agreement to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.
12. CONSTRUCTION. Whenever in this Agreement the singular number is used, the
same shall include plural where appropriate, and vice versa; and words of
any gender in this Agreement shall include each other gender where
appropriate. The headings in this Agreement are for convenience only and
shall be disregarded in the interpretation hereof. Reference to "person" or
"entity" means firms, associations, partnerships, joint ventures, trusts,
limited liability companies, corporations and other legal entities,
including public or governmental bodies, agencies or instrumentalities, as
well as natural persons.
13. WAIVER OF JURY TRIAL. In the event any dispute between Borrower and Lender
is not resolved pursuant to the arbitration provision above, each of the
parties waives trial by jury in any court action or proceeding to which
Borrower and Lender may be parties, arising out of, in connection with or in
any way pertaining to, this instrument or any other documents evidencing or
securing the loan transaction herein involved. It is agreed and understood
that this waiver constitutes a waiver of trial by jury of all claims against
all parties to such action or proceedings, including claims against parties
who are not parties to this instrument, in each case whether now existing or
hereafter arising, and whether sounding in contract or tort or otherwise.
This waiver is knowingly,
-7-
<PAGE> 8
willingly and voluntarily made by each of the parties, and each of the
parties hereby represents that no representations of fact or opinion have
been made by any individual to induce this waiver of trial by jury or to in
any way modify or nullify its effect. Each of the parties further represents
and warrants that it has been represented in the signing of this instrument
and in the making of this waiver by independent legal counsel, or has had
the opportunity to be represented by independent legal counsel selected of
its own free will, and that it has had the opportunity to discuss this
waiver with counsel. Each of the parties agree and consent that the other
party may file an original counterpart or a copy of this document with any
court as written evidence of the consent of each of the other parties to the
waiver of its right to trial by jury.
14. SERVICE OF PROCESS. Borrower hereby waives personal service and consents to
process being served in any suit, action, or proceeding instituted in
connection with this instrument or the Documents by (i) the mailing of a
copy thereof by certified mail, postage prepaid, return receipt requested,
to Borrower at its address set forth on the signature page hereof and
service so made shall be deemed to be completed five (5) days after the same
shall have been so deposited in the U.S. Mail, or (ii) at Lender's option by
serving a copy thereof upon Borrower. Borrower irrevocably agrees that such
service shall be deemed to be service of process upon Borrower in any such
suit, action, or proceeding. Nothing in this document shall affect the right
of Lender to serve process in any manner otherwise permitted by law and
nothing in this Note will limit the right of Lender otherwise to bring
proceedings against Borrower in the courts of any jurisdiction or
jurisdictions.
15. EXECUTION; MODIFICATION. This Agreement may be executed in a number of
identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement. This
Agreement may be amended only by an instrument in writing intended for that
purpose executed jointly by an authorized representative of each party
hereof.
16. ENTIRE AGREEMENT. THE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS TO THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
Executed and dated as of the date first written above.
-8-
<PAGE> 9
The address of Borrower is:
PricewaterhouseCoopers LLP
800 Market Street, Suite 1800
St. Louis, Missouri 63101
Attn: Keith F. Cooper, Partner
Fax: (314) 206-8459
BORROWER:
EBS BUILDING, L.L.C., a Delaware limited
liability company
By: PRICEWATERHOUSECOOPERS LLP,
MANAGER
By: /s/ Matthew R. Niemann
----------------------------------
Matthew R. Niemann, Director
-9-
<PAGE> 10
The address of Lender is:
FinPro, L.L.C.
1001 Cherry Street
Suite 308
Columbia, Missouri 65201
LENDER:
FINPRO, L.L.C.,A Missouri Limited Liability
Company)
BY: /S/ E. Stanley Kroenke
-------------------------------------
E. Stanley Kroenke, Manager
[EBS LOAN-ENVIRONMENTAL INDEMNITY]
-10-
<PAGE> 11
EXHIBIT A
(DESCRIPTION OF LAND)
All that real property located in the City of St. Louis, State of Missouri, more
particularly described as follows:
Parcel No. 1: A tract of land being Book 119, part of Block 118, that part of
St. Charles Street, 50 feet wide, vacated by Ordinance No. 58574 and that part
of a 7.5 foot wide alley in Block 118 vacated by Ordinance No. 58533, in the
City of St. Louis, Missouri and being further described as follows: Beginning at
a point on the East line of Sixth Street, 60 feet wide, at its intersection with
the South line of vacated St. Charles Street, 50 feet wide, said point being the
Northwest corner of Block 118, thence North 1 degree 54 minutes 12 seconds East,
49.93 feet across vacated St. Charles Street to the Southwest corner of Block
119; thence along the East line of Sixth Street, North 0 degrees 09 minutes 53
seconds West, 150.46 feet to its intersection with the South line of Washington
Avenue, 80 feet wide, said point being the Northwest corner of Block 119; thence
along the South line of Washington Avenue, North 89 degrees 54 minutes 07
seconds East, 270.40 feet to its intersection with the West line of Broadway, 80
feet wide, said point being the Northeast corner of Block 119; thence along the
West line of Broadway, South 0 degrees 11 minutes 45 seconds East, 149.47 feet
to its intersection with the North line of vacated St. Charles Street, said
point being the Southeast corner of Book 119; thence South 2 degrees 26 minutes
11 seconds West, 50.14 feet across vacated St. Charles Street to the Northeast
corner of Block 118; thence continuing along the West line of Broadway, South 2
degrees 33 minutes 22 seconds West, 13.64 feet to a point on the East line of
Block 118; thence leaving said point and running North 87 degrees 2 minutes 23
seconds West 269.68 feet to the point of beginning according to survey by The
Clayton Engineering Company dated February, 1998.
Parcel No. 2: A tract of land being part of Block 118 together with the vacated
North and South Alley and portions of the following vacated streets, Broadway,
Locust Street and Sixth Street, in the City of St. Louis, Missouri, and
described as follows: Beginning at a point on the East line of Sixth Street, 60
feet wide at its intersection with the South line of former St. Charles Street,
50 feet wide, as vacated by Ordinance No. 58574, said point being the Northwest
corner of City Block 118 and the Westernmost corner of property conveyed to
Edison Brothers Redevelopment Corporation by deed recorded in Book 338M page 830
of the St. Louis City Records; thence leaving said point and running along the
line of said Edison Brothers Property, South 87 degrees 22 minutes 23 seconds
East, 269.68 feet to a point on the Eastern line of City Block 118, thence along
said Eastern Block line, North 2 degrees 33 minutes 22 seconds East, 2.00 feet
to a point on the North line of that portion of Broadway as vacated by Ordinance
No. 58656; thence along the North line of said vacated area South 87 degrees 22
minutes 23 seconds East, 13.33 feet to the Northeast corner thereof; thence
along the Eastern line of the portion of Broadway, as vacated, South 2 degrees
33 minutes 22 seconds West, 275.33 feet to an angle point therein; thence South
50 degrees 50 minutes 47 seconds West, 1797 feet to a point on the South line of
that portion of Locust Street as vacated by Ordinance No. 58656; thence along
the South line of said vacated area, North 87 degrees 22 minutes 23 seconds
West, 268.51 feet to an angle point therein; thence North 39 degrees 14 minutes
03 seconds West, 20.11 feet to a point on the Western line of that portion of
Sixth Street, as vacated by Ordinance No. 58656; thence along the West line of
said vacated area, North 2 degrees 37 minutes 07 seconds East, 271.67 feet to
the Northwest corner thereof; thence along the North line of said vacated
portion of Sixth Street South 87 degrees 22 minutes 23 seconds East, 12.0 feet
to a point on the East line of Sixth Street; thence along said street line,
South 2 degrees 37 minutes 07 seconds West 1.33 feet to the point of beginning,
according to survey executed by Clayton Engineering Company.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 362,069
<SECURITIES> 0
<RECEIVABLES> 62,964
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 468,601
<PP&E> 23,534,879
<DEPRECIATION> (1,188,876)
<TOTAL-ASSETS> 24,433,957
<CURRENT-LIABILITIES> 861,089
<BONDS> 6,010,017
0
0
<COMMON> 0
<OTHER-SE> 17,562,851
<TOTAL-LIABILITY-AND-EQUITY> 24,433,957
<SALES> 0
<TOTAL-REVENUES> 1,900,180
<CGS> 0
<TOTAL-COSTS> 2,256,408
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 625,591
<INCOME-PRETAX> (981,819)
<INCOME-TAX> 0
<INCOME-CONTINUING> (981,819)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (981,819)
<EPS-BASIC> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
