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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
APRIL 14, 2000
BEACON CAPITAL PARTNERS, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
MARYLAND 000-24905 04-3403281
- ---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
ONE FEDERAL STREET, 26TH FLOOR, BOSTON, MASSACHUSETTS 02110
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 457-0400
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ITEM 2 - ACQUISITION OR DISPOSITION OF ASSETS
On April 20, 2000, Beacon Capital Partners, Inc. ("Beacon") sold
The Draper Building, a 475,000 square foot office and laboratory space
located in Cambridge, Massachusetts, for $72.5 million. The $72.5 million
sale price was arrived at after arms-length negotiations between Beacon and
the purchaser, The Charles Stark Draper Laboratory, Inc. Draper Laboratory is
an independent not-for-profit institution engaged in applied research,
engineering development and education and has been the sole tenant of The
Draper Building since 1974.
ITEM 5 - OTHER EVENTS
On April 14, 2000, Beacon signed a Loan Agreement between One
Kendall LLC and Cambridge Athenaeum LLC as Borrowers and Secore Financial
Corporation as Lender in the amount of $140,000,000. Beacon is general
partner of Beacon Capital Partners, L.P., a Delaware limited partnership
("Beacon LP"), which is a manager of Beacon/PW Kendall LLC, a Delaware
limited liability company ("Beacon/PW"), which is a manager of CAMEZZ LLC, a
Delaware limited liability company ("CAMEZZ"), which is a manager of the
Borrowers. On the same day, Beacon also signed a Mezzanine Loan Agreement
between Camezz as Borrower and Secore Financial Corporation as Lender in the
amount of $35,000,000.
ITEM 7 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit 99.1 - April 20, 2000 Press Release Announcing Sale of The
Draper Building
Exhibit 99.2 - Loan Agreement Between One Kendall LLC and Cambridge
Athenaeum LLC as Borrowers and Secore Financial
Corporation as Lender
Exhibit 99.3 - Loan Agreement Between Camezz LLC as Borrower and Secore
Financial Corporation as Mezzanine Lender
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEACON CAPITAL PARTNERS, INC.
Date: April 21, 2000 By:/s/ Randy J. Parker
------------------------------------
Randy J. Parker
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
Exhibit 99.1 - April 20, 2000 Press Release Announcing Sale of The Draper
Building
Exhibit 99.2 - Loan Agreement Between One Kendall LLC and Cambridge
Athenaeum LLC as Borrowers and Secore Financial
Corporation as Lender
Exhibit 99.3 - Loan Agreement Between Camezz LLC as Borrower and Secore
Financial Corporation as Mezzanine Lender
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Exhibit 99.1
EXHIBIT 99.1 - APRIL 20, 2000 PRESS RELEASE ANNOUNCING SALE OF THE DRAPER
BUILDING
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BEACON CAPITAL PARTNERS, INC.
One Federal Street
Boston, Massachusetts 02110
Contact: Randy J. Parker NEWS RELEASE
Chief Financial Officer
(617) 457-0400
THE DRAPER BUILDING SOLD BY BEACON CAPITAL PARTNERS
TO DRAPER LABORATORY FOR $72.5 MILLION
BOSTON, April 20, 2000 -- Beacon Capital Partners, Inc. announced today that it
has sold The Draper Building, located adjacent to its Technology Square office
complex in Cambridge, Massachusetts, for $72.5 million.
The purchaser is The Charles Stark Draper Laboratory, Inc., an independent
not-for-profit institution engaged in applied research, engineering development
and education. Draper Laboratory has been the sole tenant of The Draper Building
since 1974.
Beacon's four-building Technology Square and The Draper Building were purchased
together for $123 million from a partnership managed by The Prudential Insurance
Company of America in June 1998. The Draper Building contains approximately
475,000 square feet of office and laboratory space.
Beacon Capital Partners, formed in January 1998 to pursue investment
opportunities in commercial real estate, is led by Alan M. Leventhal, Chairman
and CEO, and Lionel P. Fortin, President and COO. The company is based in Boston
and has a regional office in Los Angeles.
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Exhibit 99.2
LOAN AGREEMENT BETWEEN ONE KENDALL LLC AND CAMBRIDGE ATHENAEUM LLC AS
BORROWERS AND SECORE FINANCIAL CORPORATION AS LENDER
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===============================================================================
LOAN AGREEMENT
Dated as of April 14, 2000
Between
ONE KENDALL LLC
and
CAMBRIDGE ATHENAEUM LLC,
together, as Borrower
and
SECORE FINANCIAL CORPORATION,
as Lender
===============================================================================
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TABLE OF CONTENTS
<TABLE>
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I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions...........................................................1
Section 1.2 Principles of Construction...........................................15
II. THE LOAN
Section 2.1 The Loan.............................................................15
2.1.1 Agreement to Lend and Borrow.........................................15
2.1.2 Single Disbursement to Borrower......................................15
2.1.3 The Note.............................................................15
2.1.4 Use of Proceeds......................................................15
Section 2.2 Interest Rate........................................................15
2.2.1 Applicable Interest Rate.............................................15
2.2.2 Interest Calculation.................................................15
2.2.3 Determination of Interest Rate.......................................16
2.2.4 Usury Savings........................................................18
Section 2.3 Loan Payments........................................................18
2.3.1 Payment Before Maturity Date.........................................18
2.3.2 Payment on Maturity Date; Extension of Maturity Date.................19
2.3.3 Interest Rate and Payment after Default..............................19
2.3.4 Late Payment Charge..................................................20
2.3.5 Method and Place of Payment..........................................20
Section 2.4 Prepayments..........................................................20
2.4.1 Voluntary Prepayments; Prepayment Fees...............................20
2.4.2 Other Prepayments....................................................22
III. REPRESENTATIONS AND WARRANTIES
Section 3.1 Borrower Representations.............................................22
3.1.1 Organization.........................................................22
3.1.2 Proceedings..........................................................23
3.1.3 No Conflicts.........................................................23
3.1.4 Litigation...........................................................23
3.1.5 Agreements...........................................................23
3.1.6 Consents.............................................................23
3.1.7 Title................................................................23
3.1.8 No Plan Assets.......................................................24
3.1.9 Compliance...........................................................24
3.1.10 Financial Information................................................24
3.1.11 Condemnation.........................................................24
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3.1.12 Utilities and Public Access..........................................24
3.1.13 Separate Lots........................................................25
3.1.14 Assessments..........................................................25
3.1.15 Enforceability.......................................................25
3.1.16 Assignment of Leases.................................................25
3.1.17 Insurance............................................................25
3.1.18 Licenses.............................................................25
3.1.19 Flood Zone...........................................................25
3.1.20 Physical Condition...................................................25
3.1.21 Boundaries...........................................................26
3.1.22 Leases...............................................................26
3.1.23 Filing and Recording Taxes...........................................26
3.1.24 Single Purpose.......................................................27
3.1.25 Tax Filings..........................................................29
3.1.26 Solvency.............................................................30
3.1.27 Federal Reserve Regulations..........................................30
Section 3.2 Survival of Representations..........................................30
IV. BORROWER COVENANTS
Section 4.1 Borrower Affirmative Covenants.......................................30
4.1.1 Existence; Compliance with Legal Requirements........................30
4.1.2 Taxes and Other Charges..............................................31
4.1.3 Litigation...........................................................31
4.1.4 Access to Property...................................................32
4.1.5 Further Assurances; Supplemental Mortgage Affidavits.................32
4.1.6 Financial Reporting..................................................32
4.1.7 Title to the Property................................................33
4.1.8 Estoppel Statement...................................................33
4.1.9 Leases...............................................................34
4.1.10 Alterations..........................................................35
4.1.11 O&M Program..........................................................35
Section 4.2 Borrower Negative Covenants..........................................35
4.2.1 Due on Sale and Encumbrance; Transfers of Interests..................35
4.2.2 Liens................................................................35
4.2.3 Dissolution..........................................................36
4.2.4 Change in Business...................................................36
4.2.5 Debt Cancellation....................................................36
4.2.6 Affiliate Transactions...............................................36
4.2.7 Zoning...............................................................36
4.2.8 Assets...............................................................37
4.2.9 No Joint Assessment..................................................37
4.2.10 Principal Place of Business..........................................37
4.2.11 ERISA................................................................37
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V. INSURANCE, CASUALTY AND CONDEMNATION
Section 5.1 Insurance............................................................38
5.1.1 Insurance Policies...................................................38
5.1.2 Insurance Company....................................................41
Section 5.2 Casualty and Condemnation............................................41
5.2.1 Casualty.............................................................41
5.2.2 Condemnation.........................................................42
Section 5.3 Delivery of Net Proceeds.............................................42
5.3.1 Minor Casualty or Condemnation.......................................42
5.3.2 Major Casualty or Condemnation.......................................42
VI. RESERVE FUNDS
Section 6.1 Remediation Funds....................................................45
6.1.1 Deposit of Remediation Funds.........................................45
6.1.2 Release of Remediation Funds.........................................45
Section 6.2 Tax Funds............................................................46
6.2.1 Deposits of Tax Funds................................................46
6.2.2 Release of Tax Funds.................................................46
Section 6.3 Insurance Funds......................................................47
6.3.1 Deposits of Insurance Funds..........................................47
6.3.2 Release of Insurance Funds...........................................47
Section 6.4 Capital Expenditure Funds............................................47
6.4.1 Deposits of Capital Expenditure Funds................................47
6.4.2 Release of Capital Expenditure Funds.................................47
Section 6.5 Rollover Funds.......................................................49
6.5.1 Deposits of Rollover Funds...........................................49
6.5.2 Release of Rollover Funds............................................49
6.5.3 Release of Genzyme and Millennium Rollover Funds.....................50
Section 6.6 Application of Reserve Funds.........................................50
Section 6.7 Security Interest in Reserve Funds...................................51
6.7.1 Grant of Security Interest...........................................51
6.7.2 Income Taxes.........................................................51
6.7.3 Prohibition Against Further Encumbrance..............................51
Section 6.8 Letters of Credit....................................................51
6.8.1 Delivery of Letters of Credit........................................51
Section 6.9 Provisions Regarding Letters of Credit...............................52
6.9.1 Security for Debt....................................................52
6.9.2 Additional Rights of Lender..........................................52
VII. PROPERTY MANAGEMENT
Section 7.1 The Management Agreement.............................................53
Section 7.2 Prohibition Against Termination or Modification......................53
Section 7.3 Replacement of Manager...............................................53
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VIII. PERMITTED TRANSFERS
Section 8.1 Permitted Transfer of the Property...................................54
Section 8.2 Permitted Transfers of Interest in Borrower..........................54
IX. SALE AND SECURITIZATION OF MORTGAGE
Section 9.1 Sale of Mortgage and Securitization..................................55
Section 9.2 Securitization Indemnification.......................................57
X. DEFAULTS
Section 10.1 Event of Default.....................................................60
Section 10.2 Remedies.............................................................62
Section 10.3 Remedies Cumulative..................................................63
XI. MISCELLANEOUS
Section 11.1 Successors and Assigns...............................................64
Section 11.2 Lender's Discretion..................................................64
Section 11.3 Governing Law........................................................64
Section 11.4 Modification, Waiver in Writing......................................66
Section 11.5 Delay Not a Waiver...................................................66
Section 11.6 Notices..............................................................66
Section 11.7 Trial by Jury........................................................67
Section 11.8 Headings.............................................................68
Section 11.9 Severability.........................................................68
Section 11.10 Preferences..........................................................68
Section 11.11 Waiver of Notice.....................................................68
Section 11.12 Remedies of Borrower.................................................68
Section 11.13 Expenses; Indemnity..................................................69
Section 11.14 Schedules Incorporated...............................................70
Section 11.15 Offsets, Counterclaims and Defenses..................................70
Section 11.16 No Joint Venture or Partnership; No Third Party Beneficiaries........70
Section 11.17 Publicity............................................................70
Section 11.18 Waiver of Marshalling of Assets......................................70
Section 11.19 Waiver of Offsets/Defenses/Counterclaims.............................71
Section 11.20 Conflict; Construction of Documents; Reliance........................71
Section 11.21 Brokers and Financial Advisors.......................................71
Section 11.22 Exculpation..........................................................72
Section 11.23 Prior Agreements.....................................................73
Section 11.24 Servicer.............................................................73
Section 11.25 Partial Releases.....................................................74
Section 11.26 Joint and Several Liability..........................................76
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SCHEDULES
Schedule I - Rent Roll
Schedule II - Remediation
Schedule III - Release Amounts/Release Percentages
Schedule IV - Legal Description of Release Parcels
Schedule V - Form of Subordination, Nondisturbance and Attornment
Agreement
Schedule VI - Amortization Schedule
Schedule VII - Exceptions
Schedule VIII - Asbestos Operations and Maintenance Program
Requirements
</TABLE>
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of April 14, 2000 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
"Agreement"), is between SECORE FINANCIAL CORPORATION, a Pennsylvania
corporation, having an address at 7315 Wisconsin Avenue, Suite 450 North,
Bethesda, Maryland 20814 ("Lender"), One Kendall LLC, a Delaware limited
liability company, and Cambridge Athenaeum LLC, a Delaware limited liability
company, each having an address c/o Beacon Capital Partners, Inc., One Federal
Street, Boston, Massachusetts 02110 (together, "Borrower").
All capitalized terms used herein shall have the respective
meanings set forth in Article I hereof.
W I T N E S S E T H:
WHEREAS, Borrower desires to obtain the Loan from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower,
subject to and in accordance with the conditions and terms of this Agreement and
the other Loan Documents.
NOW, THEREFORE, in consideration of the covenants set forth in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree,
represent and warrant as follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly provided:
"ACCOUNT" shall have the meaning set forth in the Cash
Management Agreement.
"ACQUIRED PROPERTY STATEMENTS" shall have the meaning set
forth in Section 9.1(c).
"AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, owns more than forty percent (40%) of, is in
control of, is controlled by or is under common ownership or control with such
Person or is a director or officer of such Person or of an Affiliate of such
Person. As used in this definition, the term "CONTROL" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management, policies or activities of a Person, whether through ownership of
voting securities, by contract or otherwise.
"AGENT" shall mean LaSalle Bank National Association and any
successor Eligible Institution thereto.
"ALTA" shall mean American Land Title Association, or any
successor thereto.
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"ALTERATION THRESHOLD" shall mean (i) $1,500,000 with respect
to 215 First Street on an individual basis and (ii) $3,500,000 with respect to
the entire Property on an aggregate basis.
"ANNUAL BUDGET" shall mean the operating and capital budget
for the Property setting forth Borrower's good faith estimate of Gross Revenue,
Operating Expenses, and Capital Expenditures for the applicable Fiscal Year.
"APPLICABLE INTEREST RATE" shall mean 7.43% per annum for the
initial Interest Period and thereafter either (i) LIBOR plus the Spread with
respect to any period when the Loan is a LIBOR Loan or (ii) the Substitute Rate
plus the Substitute Spread with respect to any period when the Loan is a
Substitute Rate Loan.
"ASSIGNMENT OF CAP AGREEMENT" shall mean that certain
Collateral Assignment of Interest Rate Cap Agreement between Borrower and Lender
and acknowledged by the counterparty, and any other collateral assignment of the
Interest Rate Cap Agreement hereafter delivered.
"ASSIGNMENT OF LEASES" shall mean that certain first priority
Assignment of Leases and Rents, dated as of the date hereof, from Borrower, as
assignor, to Lender, as assignee, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"ASSIGNMENT OF MANAGEMENT AGREEMENT" shall mean that certain
Assignment of Management Agreement and Subordination of Management Fees dated
the date hereof among Borrower, Manager and Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"AWARD" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part of the
Property.
"BASIC CARRYING COSTS" shall mean the sum of the following
costs associated with the Property for the relevant Fiscal Year or payment
period: (i) Taxes and (ii) Insurance Premiums.
"BANKRUPTCY CODE" shall mean Title 11 of the United States
Code entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors' rights.
"BCI" shall mean Beacon Capital Partners, Inc., a Maryland
corporation, and any successor to all or substantially all of its assets,
whether by merger, sale of assets or otherwise.
"BCLP" shall mean Beacon Capital Partners, L.P., a Delaware
limited partnership, and any successor to all or substantially all of its
assets, whether by merger, sale of assets or otherwise.
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"BEACON" shall mean (i) BCI, and (ii) BCLP. The term "Beacon"
shall also include the ownership interests of the officers and/or directors of
BCI, provided that the aggregate of such ownership interests does not exceed
five percent (5%) of the ownership interests of Beacon, direct or indirect, in
Borrower.
"BORROWER" shall mean, collectively, One Kendall LLC, a
Delaware limited liability company, and Cambridge Athenaeum LLC, a Delaware
limited liability company, together with their respective permitted successors
and permitted assigns.
"BREAKAGE COSTS" shall have the meaning set forth in Section
2.2.3(g).
"BUILDING" shall mean each of the following individual
buildings or groups of buildings that constitute a portion of the Property: (i)
215 First Street, (ii) 100-500 Kendall Square, (iii) 600-700 Kendall Square,
(iv) 1400 Kendall Square, (v) 1500-1700 Kendall Square, (vi) the Kendall Square
Theatre and (vii) the Kendall Square Parking Garage.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a legal holiday on which national banks are not open for general
business in (i) the State of New York, (ii) the state where the corporate trust
office of the Trustee is located, or (iii) the state where the servicing offices
of the Servicer are located.
"CAPITAL EXPENDITURES" for any period shall mean amounts
expended for replacements and alterations to the Property and required to be
capitalized according to GAAP.
"CAPITAL EXPENDITURE FUNDS" shall have the meaning set forth
in Section 6.4.1.
"CAPITAL EXPENDITURES WORK" shall mean any labor performed or
materials installed in connection with any Capital Expenditure.
"CASH MANAGEMENT AGREEMENT" shall mean that certain Cash
Management Agreement of even date herewith among Lender, Borrower, Manager and
Agent.
"CASUALTY" shall mean the occurrence of any casualty, damage
or injury, by fire or otherwise, to the Property or any part thereof.
"CASUALTY CONSULTANT" shall have the meaning set forth in
Section 5.3.2(c).
"CASUALTY RETAINAGE" shall have the meaning set forth in
Section 5.3.2(d).
"CLEARING ACCOUNT" shall have the meaning set forth in the
Clearing Account Agreement.
"CLEARING ACCOUNT AGREEMENT" shall mean that certain Clearing
Account Agreement of even date herewith among Borrower, Lender and Clearing
Bank.
"CLEARING BANK" shall mean Fleet National Bank, together with
its successors and assigns.
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"CLOSING DATE" shall mean the date of funding the Loan.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.
"CONDEMNATION" shall mean a temporary or permanent taking by
any Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
"DEBT" shall mean the outstanding principal amount of the Loan
together with all interest accrued and unpaid thereon and all other sums
(including Breakage Costs and the Spread Maintenance Premium) due to Lender in
respect of the Loan under the Note, this Agreement, the Mortgage, the
Environmental Indemnity or any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular
period of time, scheduled principal and interest payments under the Note.
"DEBT SERVICE ACCOUNT" shall have the meaning set forth in the
Cash Management Agreement.
"DEBT SERVICE COVERAGE RATIO" shall mean the ratio of (i)
Underwritable Cash Flow for the twelve (12) full calendar month period
immediately preceding the date of calculation to (ii) $17,500,000, provided that
such amount of $17,500,000 shall be reduced by ten percent (10%) of any
prepayments of principal made with respect to the Loan or the Mezzanine Loan.
"DEFAULT" shall mean the occurrence of any event hereunder or
under any other Loan Document which, but for the giving of notice or passage of
time, or both, would be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate
per annum equal to the lesser of (i) the maximum rate permitted by applicable
law, or (ii) five percent (5%) above the Applicable Interest Rate.
"DETERMINATION DATE" shall mean, with respect to any Interest
Period, the date that is two (2) London Business Days prior to the beginning of
such Interest Period.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in
Section 9.2(a).
"ELIGIBLE INSTITUTION" shall mean a depository institution or
trust company insured by the Federal Deposit Insurance Corporation the short
term unsecured debt obligations or commercial paper of which are rated at least
A-1 by Standard & Poor's Ratings Group, P-1 by Moody's Investors Service, Inc.,
D-1 by Duff & Phelps Credit Rating Co. and F-1+ by Fitch IBCA, Inc. in the case
of accounts in which funds are held for thirty (30) days or less or, in the case
of accounts in which funds are held for more than thirty (30) days, the long
term unsecured
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debt obligations of which are rated at least "AA" by Fitch, Duff and S&P and
"Aa2" by Moody's. Any depository institution or trust company insured by the
Federal Deposit Insurance Corporation which is not rated by all of the Rating
Agencies may nonetheless qualify as an Eligible Institution if it has the
requisite ratings by at least two of the Rating Agencies (at least one of which
must be Standard & Poor's).
"ENVIRONMENTAL CONSULTANT" shall mean Haley & Aldrich, Inc.,
or such other environmental consultant as may be mutually agreed upon by Lender
and Borrower.
"ENVIRONMENTAL INDEMNITY" shall mean that certain
Environmental Indemnity Agreement dated as of the date hereof executed by
Borrower in connection with the Loan for the benefit of Lender.
"ENVIRONMENTAL REPORT" shall mean, collectively, (i) a report
on Phase I Environmental Site Assessment (the so-called "Summary Report")
prepared by Haley & Aldrich, Inc. in connection with the One Kendall Square and
Athenaeum Portfolio, Cambridge, MA (dated March, 2000), and the reports referred
to therein, (ii) a letter from Haley & Aldrich, Inc. regarding Athenaeum Parking
Lot No. 1, 187-199 First Street, Cambridge, MA dated April 10, 2000, and (iii) a
letter report from ATC Associates, Inc. regarding asbestos-containing materials
and indoor air quality at the One Kendall Square and Athenaeum properties (dated
April 6, 2000).
"EQUIPMENT" shall have the meaning set forth in the granting
clause of the Mortgage.
"ERISA" shall have the meaning set forth in Section 4.2.11.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
10.1.
"EXCHANGE ACT" shall have the meaning set forth in Section
9.2(a).
"EXCHANGE ACT FILING" shall have the meaning set forth in
Section 9.1(c)(v).
"FISCAL YEAR" shall mean each twelve month period commencing
on January 1 and ending on December 31 during each year of the term of the Loan.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession.
"GENZYME LEASE" shall mean, collectively, (a) that certain
Lease dated September 18, 1995 for the portion of the Property known as Building
200 between Robert A. Jones and K. George Najarian, Trustees of Old Cambridge
Realty Trust, as lessor, and Genzyme Corporation ("GENZYME"), as lessee, as
amended, (b) that certain Lease dated December 20, 1988 for the portion of the
Property known as Buildings 600, 650 and 700 between Robert A.
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Jones, K. George Najarian and David E. Clem, Trustees of Old Kendall Realty
Trust, as lessor, and Genzyme, as lessee, as amended, (c) that certain Lease
dated December 12, 1995 for storage space between Old Kendall Realty Trust, as
lessor, and Genzyme, as lessee, and (d) that certain Lease dated December 20,
1988 (but revised to be dated January 31, 1989 per Letter Agreement dated
January 31, 1989) for the portion of the Property known as Building 1400 between
Robert A. Jones, K. George Najarian and David E. Clem, Trustees of Old Binney
Realty Trust, as lessor, and Genzyme, as lessee, as amended.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever or any governmental
unit (federal, state, county, district, municipal, city or otherwise) whether
now or hereafter in existence.
"GROSS REVENUE" shall mean all revenue computed on an accrual
basis in accordance with GAAP (but without the so-called straightlining of
Rents), derived from the ownership and operation of the Property from whatever
source, including, but not limited to, Rents, but excluding sales, use and
occupancy or other taxes on receipts required to be accounted for by Borrower to
any Governmental Authority, non-recurring revenues as reasonably determined by
Lender, security deposits (except to the extent properly utilized to offset a
loss of Rent), refunds and uncollectible accounts, proceeds of casualty
insurance and Awards (other than business interruption or other loss of income
insurance related to business interruption or loss of income for the period in
question), and any disbursements to Borrower from the Reserve Funds or any other
fund established by the Loan Documents.
"GUARANTOR" shall mean, collectively, Beacon Capital Partners,
L.P., a Delaware limited partnership, and PW Realty Partners, LLC, a Delaware
limited liability company.
"IMPROVEMENTS" shall have the meaning set forth in the
granting clause of the Mortgage.
"INDEBTEDNESS" shall mean, for any Person, without
duplication: (i) all indebtedness of such Person for borrowed money, for amounts
drawn under a letter of credit, or for the deferred purchase price of property
for which such Person or its assets is liable, (ii) all unfunded amounts under a
loan agreement, letter of credit, or other credit facility for which such Person
would be liable if and to the extent that such amounts were advanced thereunder,
(iii) all amounts required to be paid by such Person as a guaranteed payment to
partners or a preferred or special dividend, including any mandatory redemption
of shares or interests, (iv) all indebtedness of another Person guaranteed by
such Person, directly or indirectly, (v) all obligations under leases that
constitute capital leases for which such Person is liable, and (vi) all
obligations of such Person under interest rate swaps, caps, floors, collars and
other interest hedge agreements, in each case whether such Person is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss.
"INDEPENDENT DIRECTOR" shall have the meaning set forth in
Section 3.1.24(p).
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"INSOLVENCY OPINION" shall mean that certain bankruptcy
nonconsolidation opinion letter dated the date hereof delivered by Goulston &
Storrs, P.C. in connection with the Loan.
"INSURANCE ACCOUNT" shall have the meaning set forth in the
Cash Management Agreement.
"INSURANCE FUNDS" shall have the meaning set forth in Section
6.3.1.
"INSURANCE PREMIUMS" shall have the meaning set forth in
Section 5.1.1(b).
"INTEREST PERIOD" shall mean (a) for the first period
hereunder, the period commencing on the Closing Date and ending on the last day
of the calendar month in which the Closing Date occurs, and (b) for each period
thereafter, the period commencing on the first (1st) day of each calendar month
and ending on the last day of such calendar month.
"INTEREST RATE CAP AGREEMENT" means an Interest Rate Cap
Agreement (together with the confirmation and schedules relating thereto) in
form and substance reasonably satisfactory to Lender between Borrower and a
counterparty reasonably acceptable to Lender with a rating by Standard & Poor's
of at least "AA".
"LEASE" shall mean any lease, letting, license, concession or
other agreement (whether written or oral and whether now or hereafter in effect)
pursuant to which any Person is granted a possessory interest in or right to use
or occupy all or any portion of any space in the Property (other than subleases
and subsubleases), and every modification, amendment or other agreement relating
to or entered into in connection with such lease or other agreement, and every
guarantee of the performance and observance of the covenants, conditions and
agreements to be performed and observed by the other party thereto.
"LEGAL REQUIREMENTS" shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities
affecting Borrower or the Property or any part thereof or the construction, use,
alteration or operation thereof, or any part thereof, whether now or hereafter
enacted and in force, including, without limitation, the Americans with
Disabilities Act of 1990, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to
Borrower, at any time in force affecting the Property or any part thereof,
including, without limitation, any which may (i) require repairs, modifications
or alterations in or to the Property or any part thereof, or (ii) in any way
limit the use and enjoyment thereof.
"LENDER" shall mean Secore Financial Corporation, a
Pennsylvania corporation, together with its successors and assigns.
"LENDER'S NOTICE" shall have the meaning set forth in Section
2.2.3(b).
"LETTER OF CREDIT" shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit acceptable to Lender and the
Rating Agencies (either an evergreen letter of credit or one which does not
expire until at least thirty (30) Business Days after the
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Maturity Date) in favor of Lender and entitling Lender to draw thereon in
Boston, Massachusetts or New York, New York, issued by a domestic Eligible
Institution or the U.S. agency or branch of a foreign Eligible Institution. If
at any time the party issuing any such Letter of Credit shall cease to be an
Eligible Institution, Lender shall have the right immediately to draw down the
same in full and hold the proceeds of such draw in accordance with the
applicable provisions hereof unless and until Borrower furnishes a substitute
Letter of Credit from an Eligible Institution.
"LIABILITIES" shall have the meaning set forth in Section
9.2(b).
"LIBOR" shall mean, with respect to each Interest Period, the
rate (expressed as a percentage per annum and rounded upward, if necessary, to
the next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month
period, that appears on Telerate Page 3750 (or the successor thereto) as of
11:00 a.m., London time, on the related Determination Date. If such rate does
not appear on Telerate Page 3750 as of 11:00 a.m., London time, on such
Determination Date, LIBOR shall be the arithmetic mean of the offered rates
(expressed as a percentage per annum) for deposits in U.S. dollars for a
one-month period that appear on the Reuters Screen Libor Page as of 11:00 a.m.,
London time, on such Determination Date, if at least two such offered rates so
appear. If fewer than two such offered rates appear on the Reuters Screen Libor
Page as of 11:00 a.m., London time, on such Determination Date, Lender shall
request the principal London office of any four major reference banks in the
London interbank market reasonably selected by Lender to provide such bank's
offered quotation (expressed as a percentage per annum) to prime banks in the
London interbank market for deposits in U.S. dollars for a one-month period as
of 11:00 a.m., London time, on such Determination Date for the then outstanding
principal amount of the Loan. If at least two such offered quotations are so
provided, LIBOR shall be the arithmetic mean of such quotations. If fewer than
two such quotations are so provided, Lender shall request any three major banks
in New York City reasonably selected by Lender to provide such bank's rate
(expressed as a percentage per annum) for loans in U.S. dollars to leading
European banks for a one-month period as of approximately 11:00 a.m., New York
City time, on the applicable Determination Date for the then outstanding
principal amount of the Loan. If at least two such rates are so provided, LIBOR
shall be the arithmetic mean of such rates. LIBOR shall be determined by Lender
or its agent acting in good faith, and, at Borrower's request, Lender shall
provide Borrower with the basis for its determination.
"LIBOR LOAN" shall mean the Loan at any time when the
Applicable Interest Rate is calculated at LIBOR plus the Spread in accordance
with the provisions of Article II hereof.
"LIEN" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer as security of, on or affecting the Property or any portion thereof
or Borrower, or any interest therein, including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement, and mechanic's, materialmen's and other similar liens
and encumbrances.
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"LIMITED GUARANTY" shall mean that certain Guaranty of
Recourse Obligations of even date herewith from Guarantor for the benefit of
Lender.
"LOAN" shall mean the loan in the original principal amount of
One Hundred Forty Million and No/100 Dollars ($140,000,000) made by Lender to
Borrower pursuant to this Agreement.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Note, the Mortgage, the Assignment of Leases, the Cash Management Agreement, the
Environmental Indemnity, the Limited Guaranty, the Assignment of Cap Agreement,
the Assignment of Management Agreement, the Clearing Account Agreement, and any
other documents now or hereafter executed and/or delivered in connection with
the Loan.
"LOCKBOX ACCOUNT" shall have the meaning set forth in the Cash
Management Agreement.
"LONDON BUSINESS DAY" shall mean any day other than a
Saturday, Sunday or any other day on which commercial banks in London, England
are not open for business.
"MAJOR LEASE" shall mean any Lease (i) covering more than
25,000 square feet at the Property or (ii) made with a Tenant that is a Tenant
under another Lease at the Property or that is an Affiliate of any other Tenant
under a Lease at the Property, if the Leases together cover more than 25,000
square feet.
"MANAGEMENT AGREEMENT" shall mean the management agreement or
agreements entered into with the Manager, pursuant to which the Manager is to
provide management and other services with respect to the Property.
"MANAGER" shall mean Beacon Capital Partners Management, LLC
and Spaulding and Slye Services Limited Partnership, or any other manager
approved in accordance with the terms and conditions of the Loan Documents.
"MATURITY DATE" shall mean May 1, 2002, as the same may be
extended pursuant to Section 2.3.2(b) hereof, or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.
"MAXIMUM LEGAL RATE" shall mean the maximum nonusurious
interest rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged or received on the indebtedness evidenced by the
Note and as provided for herein or the other Loan Documents, under the laws of
such state or states whose laws are held by any court of competent jurisdiction
to govern the interest rate provisions of the Loan.
"MEZZANINE BORROWER" shall mean CAMEZZ LLC, a Delaware limited
liability company.
"MEZZANINE EVENT OF DEFAULT" shall mean an "Event of Default"
under and as defined in the Mezzanine Loan Agreement.
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"MEZZANINE LENDER" shall mean Secore Financial Corporation, a
Pennsylvania corporation, together with its successors and assigns.
"MEZZANINE LOAN" shall mean that certain loan in the original
principal amount of Thirty-Five Million and No/100 Dollars ($35,000,000) of even
date herewith made by Mezzanine Lender to Mezzanine Borrower pursuant to the
Mezzanine Loan Agreement, together with any permitted refinancing thereof.
"MEZZANINE LOAN AGREEMENT" shall mean that certain Loan
Agreement of even date herewith between Mezzanine Lender and Mezzanine Borrower.
"MILLENNIUM LEASE" shall mean that certain lease dated June 8,
1994 for a portion of the Property located at 215 First Street between Cambridge
Athenaeum LLC, successor in interest to Athenaeum Realty Nominee Trust, as
Landlord, and Millennium Pharmaceuticals, Inc., successor by merger to
Leukosite, Inc., as tenant, as amended.
"MINIMUM DISBURSEMENT AMOUNT" shall mean One Hundred Thousand
and No/100 Dollars ($100,000).
"MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean the monthly
payment of Debt Service calculated in accordance with Section 2.2.
"MONTHLY PAYMENT DATE" shall mean the first (1st) day of every
calendar month occurring during the term of the Loan commencing on June 1, 2000.
"MORGAN STANLEY" shall have the meaning set forth in Section
9.2(b).
"MORGAN STANLEY GROUP" shall have the meaning set forth in
Section 9.2(b).
"MORTGAGE" shall mean that certain first priority Mortgage and
Security Agreement, dated the date hereof, executed and delivered by Borrower as
security for the Loan and encumbering the Property, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"MORTGAGE LOAN PERCENTAGE" shall mean 80%.
"NET PROCEEDS" shall mean: (i) the net amount of all insurance
proceeds payable as a result of a Casualty to the Property, after deduction of
reasonable costs and expenses (including, but not limited to, reasonable
attorneys' fees), if any, in collecting such insurance proceeds, or (ii) the net
amount of the Award, after deduction of reasonable costs and expenses
(including, but not limited to, reasonable attorneys' fees), if any, in
collecting such Award.
"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section 5.3.2(f).
"NOTE" shall have the meaning set forth in Section 2.1.3.
"NOTICE" shall have the meaning set forth in Section 11.6.
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"OFFICER'S CERTIFICATE" shall mean a certificate delivered to
Lender by Borrower which is signed by an authorized senior officer of Borrower.
"OPERATING EXPENSES" shall mean all costs and expenses
incurred by Borrower and computed on an accrual basis in accordance with GAAP
relating to the operation, maintenance and management of the Property,
including, without limitation, utilities, repairs and maintenance, insurance,
property taxes and assessments, advertising expenses, payroll and related taxes,
equipment lease payments, a management fee equal to the greater of three percent
(3%) of annual rents or the actual management fee, $0.40 per rentable square
foot of the Improvements per annum with respect to capital costs, and $1.00 per
rentable square foot of the Improvements per annum with respect to tenant
rollover expenses, but excluding actual Rollover Expenditures, actual Capital
Expenditures, Debt Service, depreciation, amortization and deposits required to
be made to the Reserve Funds; provided, however such costs and expenses shall be
subject to reasonable adjustment by Lender to normalize such costs and expenses.
"OTHER CHARGES" shall mean all ground rents, maintenance
charges, impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.
"PAINEWEBBER" shall mean Paine Webber Real Estate Securities
Inc., a Delaware corporation.
"PERMITTED ENCUMBRANCES" shall mean, collectively, (i) the
Liens and security interests created by the Loan Documents, (ii) all Liens,
encumbrances and other matters disclosed in the Title Insurance Policy, (iii)
Liens, if any, for Taxes imposed by any Governmental Authority not yet due or
delinquent, (iv) Leases and equipment leases existing as of the date hereof, (v)
Leases and equipment leases entered into after the date hereof in accordance
with the terms of the Loan Documents, and (vi) such other title and survey
exceptions as Lender has approved or may approve in writing in Lender's sole
discretion, provided that Lender's approval shall not be unreasonably withheld
or delayed with respect to such exceptions that do not individually or in the
aggregate materially adversely affect the value or use of the Property or
Borrower's ability to repay the Loan.
"PERMITTED INVESTMENTS" shall have the meaning set forth in
the Cash Management Agreement.
"PERMITTED PREPAYMENT DATE" shall mean May 1, 2001.
"PERMITTED TRANSFEREE" shall mean a corporation, partnership,
limited liability company or other entity (i) acceptable to Lender in its sole
discretion prior to a Securitization, (ii) acceptable to the Rating Agencies, as
evidenced by a Rating Agency Confirmation, after a Securitization, (iii) that
qualifies as a single purpose, bankruptcy remote entity under criteria
established by the Rating Agencies and (iv) whose counsel has delivered to
Lender a non-consolidation opinion reasonably acceptable to Lender and
acceptable to the Rating Agencies in their sole discretion.
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"PERSON" shall mean any individual, corporation, partnership,
limited liability company, joint venture, estate, trust, unincorporated
association, any other entity, any federal, state, county or municipal
government or any bureau, department or agency thereof and any fiduciary acting
in such capacity on behalf of any of the foregoing.
"PHYSICAL CONDITIONS REPORT" shall mean a report prepared by a
company satisfactory to Lender regarding the physical condition of the Property,
satisfactory in form and substance to Lender in its sole discretion, which
report shall, among other things, (i) confirm that the Property and its use
comply, in all material respects, with all applicable Legal Requirements
(including, without limitation, zoning, subdivision and building laws) and (ii)
include, if available, a copy of a final certificate of occupancy with respect
to all Improvements.
"POLICIES" shall have the meaning specified in Section
5.1.1(b).
"PREPAYMENT DATE" shall mean the date on which the Loan is
prepaid in accordance with the terms hereof.
"PROPERTY" shall mean the parcel of real property, the
Improvements thereon and all personal property owned by Borrower and encumbered
by the Mortgage, together with all rights pertaining to such property and
Improvements, all as more particularly described in the Granting Clauses of the
Mortgage.
"RATING AGENCIES" shall mean, prior to the final
Securitization of the Loan, each of Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., Moody's Investors Service, Inc.,
Duff & Phelps Credit Rating Co. and Fitch IBCA, Inc., or any other
nationally-recognized statistical rating agency which has been designated by
Lender and, after the final Securitization of the Loan, shall mean any of the
foregoing that have rated and continue to rate any of the Securities.
"RATING AGENCY CONFIRMATION" shall mean a written affirmation
from each of the Rating Agencies that the credit rating of the Securities by
such Rating Agency immediately prior to the occurrence of the event with respect
to which such Rating Agency Confirmation is sought will not be qualified,
downgraded or withdrawn as a result of the occurrence of such event, which
affirmation may be granted or withheld in such Rating Agency's sole and absolute
discretion.
"REGISTRATION STATEMENT" shall have the meaning set forth in
Section 9.2(b).
"RELEASE AMOUNT" shall mean, with respect to each Release
Parcel, the amount set forth on SCHEDULE III.
"RELEASE PARCELS" shall mean the portions of the Property
described on SCHEDULE IV.
"RELEASE PERCENTAGE" shall mean, with respect to each Release
Parcel, the percentage set forth on SCHEDULE III.
"REMEDIATION FUNDS" shall have the meaning set forth in
Section 6.1.1.
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"REMEDIATION" shall have the meaning set forth in Section
6.1.1.
"RENTS" shall mean all rents, moneys payable as damages or in
lieu of rent, revenues, deposits (including, without limitation, security,
utility and other deposits), accounts, cash, issues, profits, charges for
services rendered, and other consideration of whatever form or nature received
by or paid to or for the account of or benefit of Borrower or its agents or
employees from any and all sources arising from or attributable to the Property.
"RESERVE FUNDS" shall mean, collectively, Capital Expenditure
Funds, the Insurance Funds, the Tax Funds, the Remediation Funds and the
Rollover Funds.
"RESTORATION" shall have the meaning set forth in Section
5.2.1.
"RESTORATION THRESHOLD" shall mean (i) $1,500,000 with respect
to 215 First Street on an individual basis and (ii) $3,500,000 with respect to
the entire Property on an aggregate basis.
"ROLLOVER EXPENDITURES" shall mean expenses incurred by
Borrower in connection with the leasing of space at the Property, including,
without limitation, tenant improvement costs (both hard and soft costs), tenant
improvement allowances, legal fees and leasing commissions.
"ROLLOVER FUNDS" shall have the meaning set forth in Section
6.5.1.
"SECONDARY MARKET TRANSACTION" shall have the meaning set
forth in Section 9.1(a).
"SECURITIES" shall have the meaning set forth in Section
9.1(a).
"SECURITIES ACT" shall have the meaning set forth in Section
9.2(a).
"SECURITIZATION" shall have the meaning set forth in Section
9.1(a).
"SERVICER" shall have the meaning set forth in Section 11.24.
"SERVICING AGREEMENT" shall have the meaning set forth in
Section 11.24.
"SEVERED LOAN DOCUMENTS" shall have the meaning set forth in
Section 10.2(c).
"SPC PARTY" shall have the meaning set forth in Section
3.1.24(o)(ii).
"SPREAD" shall mean 130 basis points.
"SPREAD MAINTENANCE PREMIUM" shall mean, in connection with a
prepayment of all or any portion of the outstanding principal balance of the
Loan pursuant to Section 2.3.3 or 2.4.1(f) hereof, an amount equal to the
present value, discounted at LIBOR on the Closing Date, of all future
installments of interest which would have been due under the Note through and
including the Permitted Prepayment Date on the portion of the outstanding
principal balance of the Loan being prepaid as if interest accrued on such
portion of the principal balance being
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prepaid at an interest rate per annum equal to 1.27% The Spread Maintenance
Premium shall be calculated by Lender and shall be final absent manifest error.
"STANDARD STATEMENT" shall have the meaning set forth in
Section 9.1(c).
"STATE" shall mean the Commonwealth of Massachusetts.
"SUBSTITUTE RATE" shall have the meaning set forth in Section
2.2.3(b).
"SUBSTITUTE RATE LOAN" shall mean the Loan at any time when
the Applicable Interest Rate is calculated at the Substitute Rate plus the
Substitute Spread in accordance with the provisions of Article II hereof.
"SUBSTITUTE SPREAD" shall have the meaning set forth in
Section 2.2.3(b).
"SURVEY" shall mean a survey or surveys of the Property
prepared by a surveyor licensed in the State and satisfactory to Lender and the
company or companies issuing the Title Insurance Policy, and containing a
certification of such surveyor satisfactory to Lender.
"TAX ACCOUNT" shall have the meaning set forth in the Cash
Management Agreement.
"TAX FUNDS" shall have the meaning set forth in Section 6.2.1.
"TAXES" shall mean all real estate and personal property
taxes, assessments, water rates or sewer rents, now or hereafter levied or
assessed or imposed against the Property or part thereof, together with all
interest and penalties thereon.
"TENANT" shall mean any Person obligated under any Lease now
or hereafter affecting all or any part of the Property.
"TITLE INSURANCE POLICY" shall mean an ALTA mortgagee title
insurance policy in the form acceptable to Lender issued with respect to the
Property and insuring the lien of the Mortgage.
"TRANSFER" shall have the meaning set forth in Article 6 of
the Mortgage.
"TRUSTEE" shall mean any trustee holding the Loan in a
Securitization.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial Code as in effect in the State.
"UNDERWRITABLE CASH FLOW" shall mean the excess of Gross
Revenue over Operating Expenses. Lender's calculation of Underwritable Cash Flow
(including determination of items that do not qualify as Gross Revenue or
Operating Expenses) shall be made in good faith by Lender based upon Lender's
determination of Rating Agency criteria and shall be final absent manifest
error.
"UNDERWRITER GROUP" shall have the meaning set forth in
Section 9.2(b).
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"UPDATED INFORMATION" shall have the meaning set forth in
Section 9.1(b)(i).
"U.S. OBLIGATIONS" shall mean direct full faith and credit
obligations of the United States of America that are not subject to prepayment,
call or early redemption.
SECTION 1.2 PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and
schedules in or to this Agreement unless otherwise specified. Unless otherwise
specified, the words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.
II. THE LOAN
SECTION 2.1 THE LOAN.
2.1.1 AGREEMENT TO LEND AND BORROW. Subject to and upon the
terms and conditions set forth herein, Lender shall make the Loan to Borrower
and Borrower shall accept the Loan from Lender on the Closing Date.
2.1.2 SINGLE DISBURSEMENT TO BORROWER. Borrower shall
receive only one borrowing hereunder in respect of the Loan and any amount
borrowed and repaid hereunder in respect of the Loan may not be reborrowed.
2.1.3 THE NOTE. The Loan shall be evidenced by that certain
Promissory Note of even date herewith, in the stated principal amount of One
Hundred Forty Million and No/100 Dollars ($140,000,000), executed by Borrower
and payable to the order of Lender in evidence of the Loan (as the same may
hereafter be amended, supplemented, restated, increased, extended or
consolidated from time to time, the "NOTE") and shall be repaid in accordance
with the terms of this Agreement and the Note.
2.1.4 USE OF PROCEEDS. Borrower shall use proceeds of the
Loan to (i) pay and discharge any existing loans relating to the Property,
(ii) pay all past-due Basic Carrying Costs, if any, in respect of the
Property, (iii) deposit the Reserve Funds, (iv) pay costs and expenses
incurred in connection with the closing of the Loan, (v) fund any working
capital requirements of the Property, and (vi) distribute the balance, if any.
SECTION 2.2 INTEREST RATE.
2.2.1 APPLICABLE INTEREST RATE. Interest on the principal
balance of the Loan outstanding from time to time shall accrue from the Closing
Date up to and including the Maturity Date at the Applicable Interest Rate.
2.2.2 INTEREST CALCULATION. Interest on the outstanding
principal balance of the Loan shall be calculated by multiplying (a) the actual
number of days elapsed in the period for which the calculation is being made by
(b) the Applicable Interest Rate or the Default Rate, as
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then applicable, expressed as an annual rate divided by 360 by (c) the
outstanding principal balance.
2.2.3 DETERMINATION OF INTEREST RATE.
(a) Any change in the rate of interest hereunder due to a
change in the Applicable Interest Rate shall become effective as of the first
day on which such change in the Applicable Interest Rate shall become effective.
Each determination by Lender of the Applicable Interest Rate, acting in good
faith, shall be conclusive and binding for all purposes, absent manifest error.
(b) In the event that Lender shall have determined, acting in
good faith (which determination shall be conclusive and binding upon Borrower
absent manifest error), that by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for ascertaining
LIBOR, then Lender shall, by notice to Borrower ("LENDER'S NOTICE"), which
notice shall set forth in reasonable detail such circumstances, establish the
Applicable Interest Rate at Lender's then customary spread (the "SUBSTITUTE
SPREAD"), taking into account the size of the Loan and the creditworthiness of
Borrower, above a published index used for variable rate loans as reasonably
determined by Lender (the "SUBSTITUTE RATE"), such change to become effective as
of the first day of the next Interest Period. Lender's determination of the
Substitute Rate and the Substitute Spread shall be made in a manner consistent
with the manner in which Lender makes such determinations generally for its
other similarly situated borrowers.
(c) If, pursuant to the terms of this Agreement, the Loan has
been converted to a Substitute Rate Loan and Lender shall determine, acting in
good faith (which determination shall be conclusive and binding upon Borrower
absent manifest error), that the event(s) or circumstance(s) which resulted in
such conversion shall no longer be applicable, Lender shall give notice thereof
to Borrower, and the Substitute Rate Loan shall automatically convert to a LIBOR
Loan on the effective date set forth in such notice. Notwithstanding any
provision of this Agreement to the contrary, in no event shall Borrower have the
right to elect to convert a LIBOR Loan to a Substitute Rate Loan.
(d) Intentionally Omitted.
(e) If any change in law, or any change in the interpretation
of any existing law or future law or the application thereof, shall hereafter
make it unlawful for Lender to make or maintain a LIBOR Loan as contemplated
hereunder, (i) the obligation of Lender hereunder to make a LIBOR Loan shall be
cancelled forthwith and (ii) Lender may give Borrower a Lender's Notice,
establishing the Applicable Interest Rate at the Substitute Rate plus the
Substitute Spread, in which case the Applicable Interest Rate shall be a rate
equal to the Substitute Rate in effect from time to time plus the Substitute
Spread. If permitted by law, such change shall not become effective until the
expiration of the then current Interest Period. In the event the condition
necessitating the cancellation of Lender's obligation to make or maintain a
LIBOR Loan hereunder shall cease, Lender shall promptly notify Borrower of such
cessation and the Loan shall resume its characteristics as a LIBOR Loan in
accordance with the terms herein from and after the first day of the calendar
month next following such cessation. Borrower hereby agrees promptly to pay
Lender, upon demand, any additional amounts necessary to compensate
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Lender for any out-of-pocket costs incurred by Lender in making any
conversion in accordance with this Agreement, including, without limitation,
any interest or fees payable by Lender to lenders of funds obtained by it in
order to make or maintain the LIBOR Loan hereunder. Lender's notice of such
costs, as certified to Borrower, shall be set forth in reasonable detail and
Lender's calculation, made in good faith, shall be conclusive absent manifest
error.
(f) In the event that any change in any requirement of law or
in the interpretation or application thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) hereafter issued
from any central bank or other Governmental Authority:
(i) shall hereafter have the effect of reducing the rate of
return on Lender's capital as a consequence of its obligations
hereunder to a level below that which Lender could have achieved but
for such adoption, change or compliance (taking into consideration
Lender's policies with respect to capital adequacy) by any amount
deemed by Lender to be material; or
(ii) shall hereafter impose on Lender any other condition the
result of which is to increase the cost to Lender of making, renewing
or maintaining loans or extensions of credit or to reduce any amount
receivable hereunder;
then, in any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable which Lender deems to be material as reasonably
determined by Lender. If Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.2.3(f), Lender shall provide Borrower with not less
than thirty (30) days written notice specifying in reasonable detail the event
by reason of which it has become so entitled and the additional amount required
to fully compensate Lender for such additional cost or reduced amount. A
certificate as to any additional costs or amounts payable pursuant to the
foregoing sentence, executed by an authorized signatory of Lender and submitted
by Lender, acting in good faith, to Borrower, shall be conclusive in the absence
of manifest error. This provision shall survive payment of the Note and the
satisfaction of all other obligations of Borrower under this Agreement and the
Loan Documents; provided that any request by Lender for payment of amounts owed
by Borrower pursuant to this Section 2.2.3(f) shall be made within thirty (30)
days thereafter. Borrower shall not be obligated to pay any amounts which are
due under this Section 2.2.3(f) which relate to periods more than ninety (90)
days prior to the date Lender first gives Borrower notice of the factors which
may cause Borrower to owe amounts under this Section 2.2.3(f). Prior to a
Securitization, Lender shall only charge Borrower for amounts payable pursuant
to this Section 2.2.3(f) if Lender is generally imposing such charges on its
other similarly situated borrowers.
(g) Borrower agrees to indemnify Lender and to hold Lender
harmless from any loss or expense (other than consequential and punitive
damages) which Lender sustains or incurs as a consequence of (i) interest or
fees, if any, payable by Lender to lenders of funds obtained by it in order to
maintain a LIBOR Loan hereunder by reason of any default by Borrower in payment
of the principal of or interest on a LIBOR Loan, (ii) any prepayment (whether
voluntary or mandatory) of the LIBOR Loan on a day that (A) is not the Monthly
Payment Date immediately following the last day of an Interest Period with
respect thereto or
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(B) is the Monthly Payment Date immediately following the last day of an
Interest Period with respect thereto if Borrower did not give the prior
written notice of such prepayment required pursuant to the terms of this
Agreement, including, without limitation, such loss or expense arising from
interest or fees payable by Lender to lenders of funds obtained by it in
order to maintain the LIBOR Loan hereunder, and (iii) the conversion (for any
reason whatsoever, whether voluntary or involuntary) of the Applicable
Interest Rate to the Substitute Rate plus the Substitute Spread with respect
to any portion of the outstanding principal amount of the Loan then bearing
interest at a rate other than the Substitute Rate plus the Substitute Spread
on a date other than the Monthly Payment Date immediately following the last
day of an Interest Period, including, without limitation, such loss or
expenses arising from interest or fees, if any, payable by Lender to lenders
of funds obtained by it in order to maintain a LIBOR Loan hereunder (the
amounts referred to in clauses (i), (ii) and (iii) are herein referred to
collectively as the "BREAKAGE COSTS"). Whenever in this Section the term
"interest or fees payable by Lender to lenders of funds obtained by it" is
used and no such funds were actually obtained from such lenders, it shall
include interest or fees which would have been payable by Lender if it had
obtained funds from lenders in order to maintain a LIBOR Loan hereunder.
Lender will provide to Borrower a statement detailing such Breakage Costs and
the calculation thereof. This provision shall survive payment of the Note in
full and the satisfaction of all other obligations of Borrower under this
Agreement and the other Loan Documents; provided that any request by Lender
for payment of amounts due pursuant to this Section 2.2.3(g) shall be made
within thirty (30) days thereafter.
2.2.4 USURY SAVINGS. This Agreement and the other Loan
Documents are subject to the express condition that at no time shall Borrower be
required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate. If by the terms of this Agreement or the
other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Applicable Interest Rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate
and all previous payments in excess of the Maximum Legal Rate shall be deemed to
have been payments in reduction of principal and not on account of the interest
due hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
SECTION 2.3 LOAN PAYMENTS.
2.3.1 PAYMENT BEFORE MATURITY DATE. Borrower shall make a
payment to Lender of interest only on the Closing Date for the initial Interest
Period. Borrower shall make a payment to Lender of interest calculated in the
manner set forth herein and a payment of principal as set forth in the
amortization schedule for the entire Loan attached hereto as SCHEDULE VI on each
Monthly Payment Date to and including the Maturity Date. In the event that any
prepayments of principal are made in connection with a partial release pursuant
to Section 11.25 of this Agreement, however, the monthly payments of principal
shall be reduced by the amount of the amortization attributable to the related
Release Parcel as set forth on SCHEDULE VI; no other
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prepayment of principal shall reduce the monthly payments of principal set forth
in SCHEDULE VI. Each payment shall be applied first to accrued and unpaid
interest and the balance to principal.
2.3.2 PAYMENT ON MATURITY DATE; EXTENSION OF MATURITY DATE.
(a) Borrower shall pay to Lender on the Maturity Date the outstanding principal
balance of the Loan, all accrued and unpaid interest and all other amounts due
hereunder and under the Note, the Mortgage and the other Loan Documents.
(b) Borrower will have two (2) options to extend the Maturity
Date of the Loan for consecutive one (1) year periods. In order to exercise the
first such extension right, Borrower shall deliver to Lender notice of such
extension and all supporting financial data on or before January 1, 2002; and
upon the giving of such notice of extension, and subject to the satisfaction of
the conditions set forth below in this Section 2.3.2(b) on or before February 1,
2002, the Maturity Date as then in effect will be extended to May 1, 2003. In
order to exercise the second such extension right, Borrower shall deliver to
Lender notice of such extension and all supporting financial data on or before
January 1, 2003; and upon the giving of such notice of second extension, and
subject to the satisfaction of the conditions set forth below in this Section
2.3.2(b) on or before February 1, 2003, the Maturity Date as then in effect will
be extended to May 1, 2004. The Maturity Date shall be extended pursuant to
Borrower's notice as aforesaid, provided that the following conditions are
satisfied: (i) no Event of Default shall be in existence either at the time of
Borrower's notice or at February 1, 2002 or February 1, 2003 (as applicable),
(ii) the Underwritable Cash Flow as determined by Lender, acting in good faith,
as of February 1, 2002 or February 1, 2003 (as the case may be) shall be no less
than $19,250,000 (less any Underwritable Cash Flow attributable to portions of
the Property that have been released in accordance with Section 11.25 hereof or
otherwise with Lender's consent), (iii) Borrower shall have obtained an Interest
Rate Cap Agreement for the extended term with a 30-day LIBOR strike price of
8.35% based on a notional amount equal to the then outstanding principal balance
of the Loan (provided that if the Loan has been included in a Securitization,
Borrower shall have the right to obtain an Interest Rate Cap Agreement with a
higher strike price if it has delivered to Lender a Rating Agency Confirmation
as to such higher strike price, and if the Loan has not been included in a
Securitization, Borrower shall have the right to obtain an Interest Rate Cap
Agreement with a higher strike price if Lender in its sole and absolute
discretion has consented thereto) and such Interest Rate Cap Agreement shall
have been collaterally assigned to Lender pursuant to an assignment in
substantially the same form as the Assignment of Cap Agreement, and (iv) with
respect to the second extension option, the first extension option shall have
been properly exercised and Lender shall have received an extension fee in an
amount equal to one quarter of one percent (0.25%) of the then outstanding
principal balance of the Loan. If Borrower fails to exercise either extension
option strictly in accordance with the provisions hereof, such extension option
will automatically cease and terminate.
2.3.3 INTEREST RATE AND PAYMENT AFTER DEFAULT. In the event
that, and for so long as, any Event of Default shall have occurred and be
continuing, the outstanding principal balance of the Loan shall accrue interest
at the Default Rate, calculated from the date the Default occurred which led to
such an Event of Default without regard to any grace or cure periods contained
herein. If all or any part of the principal amount of the Loan is prepaid upon
acceleration of the Loan following the occurrence of an Event of Default prior
to the Permitted Prepayment Date, Borrower shall be required to pay Lender, in
addition to all other amounts then
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payable hereunder, a prepayment fee equal to one percent (1%) of the amount of
principal being repaid together with a Spread Maintenance Premium calculated
with respect to the amount of principal being repaid.
2.3.4 LATE PAYMENT CHARGE. If any principal (other than
principal due at maturity) or interest is not paid by Borrower on the date on
which it is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of five percent (5%) of such unpaid sum or the maximum amount permitted
by applicable law in order to defray the expense incurred by Lender in handling
and processing such delinquent payment and to compensate Lender for the loss of
the use of such delinquent payment; provided, however, that Borrower shall not
be required to pay such amount in connection with the failure to pay a monthly
installment of Debt Service on the date due if sufficient funds were on deposit
in the Debt Service Account (as defined in the Cash Management Agreement) on
such date and Lender failed to apply same to the payment of Debt Service. Any
such amount shall be secured by the Mortgage and the other Loan Documents.
2.3.5 METHOD AND PLACE OF PAYMENT. (a) Except as otherwise
specifically provided herein, all payments and prepayments under this Agreement
and the Note shall be made to Lender not later than 2:00 P.M., New York City
time, on the date when due and shall be made in lawful money of the United
States of America in immediately available funds at Lender's office, and any
funds received by Lender after such time shall, for all purposes hereof, be
deemed to have been paid on the next succeeding Business Day.
(b) Whenever any payment to be made hereunder or under any
other Loan Document shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest shall be payable at the
Applicable Interest Rate or the Default Rate, as the case may be, during such
extension.
(c) All payments required to be made by Borrower hereunder or
under the Note or the other Loan Documents shall be made irrespective of, and
without deduction for, any setoff, claim or counterclaim and shall be made
irrespective of any defense thereto.
SECTION 2.4 PREPAYMENTS.
2.4.1 VOLUNTARY PREPAYMENTS; PREPAYMENT FEES. (a) Borrower
shall not have the right to prepay the Loan (in whole or in part) prior to the
Permitted Prepayment Date except (i) pursuant to Section 11.25 hereof in
connection with a permitted release, (ii) pursuant to Section 2.4.1(d) hereof in
connection with the conversion of the Loan to a Substitute Rate Loan, (iii)
pursuant to Section 2.4.1(e) or Section 2.4.2 hereof in connection with a
Casualty or Condemnation, or (iv) pursuant to Section 2.4.1(f) hereof in
connection with certain environmental investigations or assessments requested by
Lender. Borrower shall have the right, at its option, upon thirty (30) days
prior written notice to Lender, to prepay the Debt in whole or in part at any
time on or after the Permitted Prepayment Date, subject to the conditions set
forth in Section 2.4.1(c), (g) and (h) below.
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(b) Borrower shall have the right, at any time and from time
to time, to prepay the Debt in part in connection with one or more permitted
releases in accordance with Section 11.25 hereof, provided that prior to the
Permitted Prepayment Date any such prepayment shall be in an amount not to
exceed the Release Amount for each related Release Parcel, plus any additional
prepayment as may be required in order to satisfy the Debt Service Coverage
Ratio test set forth in Section 11.25(b)(iv).
(c) Any prepayment made in connection with a permitted release
pursuant to Section 11.25 hereof shall be subject to a prepayment fee of one
percent (1%) of the amount prepaid if made prior to the Permitted Prepayment
Date. Subject to the provisions of Section 2.4.1(d) and (e) and Section 2.4.2
below, any prepayment (including a prepayment made in connection with a
permitted release) made during the period commencing on the Permitted Prepayment
Date through and including October 31, 2001 shall be subject to a prepayment fee
of one-half of one percent (0.5%) of the amount prepaid. Lender shall not be
obligated to accept any prepayment unless it is accompanied by the prepayment
fee, if any, due in connection therewith. Prepayments made after October 31,
2001 shall not be subject to any prepayment fee or penalty.
(d) If the Loan has been converted to a Substitute Rate Loan
pursuant to Section 2.2.3 hereof for three (3) or more consecutive Interest
Periods, Borrower shall have the right, upon thirty (30) days prior written
notice to Lender, to prepay the Debt in whole (but not in part) without
prepayment fee or penalty.
(e) If a Casualty or Condemnation shall occur and (i) the Net
Proceeds are more than $5,000,000, (ii) the conditions to release set forth in
Section 5.3.2(a)(ii), (iii) or (ix) have not been satisfied or, if for reasons
beyond the reasonable control of Borrower, the conditions to release set forth
in Section 5.3.2(a)(iv) or (vi) have not been satisfied and (iii) Lender has
elected not to make such Net Proceeds available for the Restoration of the
Property, Borrower shall have the right, upon thirty (30) days prior written
notice to Lender, to prepay the Debt in whole (but not in part) without
prepayment fee or penalty.
(f) In the event that, pursuant to the Environmental
Indemnity, Lender requests any environmental assessment or investigation of the
Property beyond a standard Phase I investigation, Borrower shall have the right,
upon thirty (30) days prior written notice to Lender given within thirty (30)
days after Lender makes such request, to prepay the Debt in whole (but not in
part), provided that Borrower shall not have the right to so prepay the Debt
prior to the Permitted Prepayment Date if Lender withdraws its request for such
assessment or investigation within ten (10) days after Borrower's election to
prepay the Debt pursuant to this Section 2.4.1(f). Any prepayment of the entire
Debt pursuant to this Section 2.4.1(f) shall be subject to payment of the Spread
Maintenance Premium if such prepayment is made prior to the Permitted Prepayment
Date, and shall be subject to the applicable prepayment fee, if any, provided
for in Section 2.4.1(c) if such prepayment is made on or after the Permitted
Prepayment Date. Borrower's right to prepay the Debt in whole (but not in part)
pursuant to this Section 2.4.1(f) shall be in addition to Borrower's rights to
prepay the Debt in part pursuant to Sections 2.4.1(b) and 11.25 (subject to the
applicable prepayment fee, if any, provided for in Section 2.4.1(c)), whether
prior to the Permitted Prepayment Date or thereafter, including (without
limitation) under circumstances where the assessment or investigation requested
by Lender relates solely to
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the portion of the Property to be released pursuant to said Section 11.25. If
Borrower so prepays the Debt in full, or if the portion of the Property to which
such requested assessment or investigation relates is released pursuant to
Section 11.25 incident to a partial prepayment of the Debt, then and in either
such event, no such assessment or investigation shall be required.
(g) It shall be a condition to any prepayment pursuant to this
Section 2.4.1, other than a prepayment in connection with a permitted release,
that a pro-rata portion of the Mezzanine Loan be simultaneously prepaid.
(h) Any prepayment received by Lender pursuant to this Section
2.4.1 on a date other than a Monthly Payment Date shall include interest which
would have accrued thereon to the next Monthly Payment Date and such amounts
(i.e., principal and interest prepaid by Borrower) shall be held by Lender as
collateral security for the Loan in an interest bearing account at an Eligible
Institution, with interest accruing on such amounts to the benefit of Borrower,
and shall be applied by Lender on the next Monthly Payment Date, with any
interest on such funds paid to Borrower on such date provided no Event of
Default then exists.
2.4.2 OTHER PREPAYMENTS. On each date on which Lender actually
receives a distribution of Net Proceeds and if Lender does not make such Net
Proceeds available to Borrower for the Restoration of the Property where Lender
is not required to do so, Borrower (a) shall, at Lender's option (and provided
Lender makes such Net Proceeds available therefor) or (b) may, at its option (in
which event Lender shall make such Net Proceeds available therefor), prepay the
outstanding principal balance of the Note in an amount equal to the amount of
such Net Proceeds multiplied by the Mortgage Loan Percentage, together with
interest that would have accrued on such amount through the next Monthly Payment
Date. The balance of such Net Proceeds shall be paid to Borrower and distributed
by Borrower to the Mezzanine Borrower and applied to prepay the outstanding
principal balance of the Mezzanine Loan. Any prepayment (i.e., principal and
interest) received by Lender pursuant to this Section 2.4.2 on a date other than
a Monthly Payment Date shall be held by Lender as collateral security for the
Loan in an interest bearing account, with such interest accruing to the benefit
of Borrower, and shall be applied by Lender on the next Monthly Payment Date.
Any prepayment pursuant to this Section 2.4.2 shall not be subject to any
prepayment fee or penalty.
III. REPRESENTATIONS AND WARRANTIES
SECTION 3.1 BORROWER REPRESENTATIONS.
Borrower represents and warrants that:
3.1.1 ORGANIZATION. Each of the entities comprising Borrower
and the SPC Party is duly organized, validly existing and in good standing with
full power and authority to own its assets and conduct its business, and is duly
qualified in all jurisdictions in which the ownership or lease of its property
or the conduct of its business requires such qualification. Borrower has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement and the other Loan Documents by it, and has the power and
authority to execute, deliver and perform under this Agreement, the other Loan
Documents and all the transactions contemplated hereby.
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3.1.2 PROCEEDINGS. This Agreement and the other Loan Documents
have been duly authorized, executed and delivered by Borrower and constitute a
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally, and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
3.1.3 NO CONFLICTS. The execution and delivery of this
Agreement and the other Loan Documents by Borrower and the performance of its
obligations hereunder and thereunder will not, to the best of Borrower's
knowledge, conflict with any provision of any law or regulation to which
Borrower is subject, or conflict with, result in a breach of or constitute a
default under, any of the terms, conditions or provisions of any of Borrower's
organizational documents or any agreement or instrument to which Borrower is a
party or by which it is bound, or any order or decree applicable to Borrower, or
result in the creation or imposition of any lien on any of Borrower's assets or
property (other than pursuant to the Loan Documents).
3.1.4 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to Borrower's knowledge, threatened against Borrower
in any court or by or before any other Governmental Authority which would
materially and adversely affect the ability of Borrower to carry out the
transactions contemplated by this Agreement.
3.1.5 AGREEMENTS. To the best of Borrower's knowledge,
Borrower is not in default with respect to any order or decree of any court or
any order, regulation or demand of any Governmental Authority, which default
might have consequences that would materially and adversely affect the condition
(financial or other) or operations of Borrower or its properties or might have
consequences that would materially and adversely affect its performance
hereunder.
3.1.6 CONSENTS. No consent, approval, authorization or order
of any court or Governmental Authority is required for the execution, delivery
and performance by Borrower of, or compliance by Borrower with, this Agreement
or the consummation of the transactions contemplated hereby, other than those
which have been obtained by Borrower.
3.1.7 TITLE. Borrower has good, marketable and insurable fee
simple title to the real property comprising part of the Property and good title
to the balance of the Property, free and clear of all Liens whatsoever except
the Permitted Encumbrances. To the best of Borrower's knowledge, the Mortgage,
when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will (to the extent that the liens and security interests created
thereby may be perfected by recording and/or filing as aforesaid) create (i) a
valid, first priority, perfected lien on the Property, subject only to Permitted
Encumbrances, and (ii) perfected security interests in and to, and perfected
collateral assignments of, all personalty (including the Leases), all in
accordance with the terms thereof, in each case subject only to any Permitted
Encumbrances. To the best of Borrower's knowledge, there are no mechanics',
materialman's or other similar liens or claims which have been filed for work,
labor or materials affecting the Property which are or may be liens prior to, or
equal or coordinate with, the lien of the Mortgage. None of the Permitted
Encumbrances, individually or in the aggregate, materially interfere with the
benefits of the
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security intended to be provided by the Mortgage and this Loan Agreement,
materially and adversely affect the value of the Property, materially impair the
use or operations of the Property or impair Borrower's ability to pay its
obligations in a timely manner.
3.1.8 NO PLAN ASSETS. As of the date hereof and throughout the
term of the Loan (a) Borrower is not and will not be an "employee benefit plan,"
as defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) none of
the assets of Borrower constitutes or will constitute "plan assets" of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101, (c) Borrower
is not and will not be a "governmental plan" within the meaning of Section 3(32)
of ERISA, and (d) transactions by or with Borrower are not and will not be
subject to state statutes regulating investment of, and fiduciary obligations
with respect to, governmental plans.
3.1.9 COMPLIANCE. To the best of Borrower's knowledge, except
as disclosed in the Environmental Report and/or Physical Conditions Report,
Borrower and the Property and the use thereof comply in all material respects
with all applicable Legal Requirements, including, without limitation, building
and zoning ordinances and codes. To the best of Borrower's knowledge, Borrower
is not in default or violation of any order, writ, injunction, decree or demand
of any Governmental Authority, the violation of which might materially adversely
affect the condition (financial or otherwise) or business of Borrower. To the
best of Borrower's knowledge, Borrower has not committed any act which may give
any Governmental Authority the right to cause Borrower to forfeit the Property
or any part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents.
3.1.10 FINANCIAL INFORMATION. All financial data, including,
without limitation, the statements of cash flow and income and operating
expense, that have been prepared by or for Borrower and delivered to Lender in
respect of the Property which cover the period since May 1, 1998 (i) are true,
complete and correct in all material respects, (ii) accurately represent the
financial condition of the Property as of the date of such reports, and (iii)
have been prepared in accordance with GAAP throughout the periods covered,
except as disclosed therein. Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on the Property or the
operation thereof, except as referred to or reflected in said financial
statements. Since the date of the financial statements, there has been no
material adverse change in the financial condition, operations or business of
Borrower or the Property from that set forth in said financial statements.
3.1.11 CONDEMNATION. No Condemnation or other similar
proceeding has been commenced or, to Borrower's best knowledge, is contemplated
with respect to all or any portion of the Property or for the relocation of
roadways providing access to the Property.
3.1.12 UTILITIES AND PUBLIC ACCESS. The Property has rights of
access to public ways and is served by water, sewer, sanitary sewer and storm
drain facilities adequate to service the Property for its intended uses.
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3.1.13 SEPARATE LOTS. The Property is comprised of one (1) or
more parcels which constitute separate tax lots and do not constitute a portion
of any other tax lot not a part of the Property.
3.1.14 ASSESSMENTS. There are no pending or (to the best of
Borrower's knowledge) proposed special or other assessments for public
improvements or otherwise affecting the Property, nor (to the best of Borrower's
knowledge) are there any contemplated improvements to the Property that may
result in such special or other assessments.
3.1.15 ENFORCEABILITY. The Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by Borrower, including
the defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally, and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), and Borrower has not asserted any right of rescission,
set-off, counterclaim or defense with respect thereto.
3.1.16 ASSIGNMENT OF LEASES. To the best of Borrower's
knowledge, the Assignment of Leases creates a valid assignment of, or a valid
security interest in, certain rights of Borrower under the Leases, subject only
to a license granted to Borrower to exercise the rights and to perform the
obligations of the lessor under the Leases, including the right to operate the
Property. No Person other than Lender has any interest in or assignment of
Borrower's interest in the Leases or any portion of the Rents due and payable or
to become due and payable thereunder.
3.1.17 INSURANCE. Borrower has obtained and has delivered to
Lender original or certified copies or certificates of all of the Policies, with
all premiums paid thereunder, reflecting the insurance coverages, amounts and
other requirements set forth in this Agreement. No claims have been made under
any of the Policies, other than claims which, in the aggregate, do not impair
the coverage of the Policies as to future insured claims, and neither Borrower
nor, to the best of Borrower's knowledge, any other Person has done, by act or
omission, anything which would impair the coverage of any of the Policies.
3.1.18 LICENSES. To the best of Borrower's knowledge, all
permits and approvals, including without limitation, certificates of occupancy
required by any Governmental Authority for the use, occupancy and operation of
the Property in the manner in which the Property is currently being used,
occupied and operated have been obtained and are in full force and effect.
3.1.19 FLOOD ZONE. None of the Improvements on the Property is
located in an area identified by the Federal Emergency Management Agency as a
special flood hazard area.
3.1.20 PHYSICAL CONDITION. Except as disclosed in the
Environmental Report, the Physical Conditions Report and in SCHEDULE VII hereof,
to the best of Borrower's knowledge, the Property, including, without
limitation, all buildings, improvements, parking facilities, sidewalks, storm
drainage systems, roofs, plumbing systems, HVAC systems, fire protection
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systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; there exists no structural
or other material defects or damages in the Property, whether latent or
otherwise, and Borrower has not received notice from any insurance company or
bonding company of any defects or inadequacies in the Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.
3.1.21 BOUNDARIES. Except as may be shown on the Survey, all
of the improvements which were included in determining the appraised value of
the Property lie wholly within the boundaries and building restriction lines of
the Property, and no improvements on adjoining properties encroach upon the
Property, and no easements or other encumbrances affecting the Property encroach
upon any of the improvements, so as to materially adversely affect the value or
marketability of the Property except for the Permitted Encumbrances and those
which are insured against by title insurance.
3.1.22 LEASES. Borrower represents and warrants to Lender with
respect to the Leases that: (a) the rent roll attached hereto as SCHEDULE I is
true, complete and correct in all material respects and the Property is not
subject to any Leases other than the Leases described in SCHEDULE I, (b) except
as otherwise disclosed in the estoppel certificates delivered to Lender in
connection with the Loan or as set forth on SCHEDULE VII, the Leases identified
on SCHEDULE I are in full force and effect and, to the best of Borrower's
knowledge, there are no material defaults thereunder by either party, (c) the
copies of those Leases which were delivered to Lender are true and complete and,
as to all Major Leases, except as may otherwise be disclosed in said estoppel
certificates, there are no material oral agreements with respect thereto and, as
to all other Leases, to the best of Borrower's knowledge and except as may
otherwise be disclosed in said estoppel certificates, there are no material oral
agreements with respect thereto, (d) no Rent (including security deposits) has
been paid more than one (1) month in advance of its due date, except by Leading
Market Technology, which has paid Rent through December 31, 2000, (e) all work
to be performed to date by Borrower under each Lease has been performed as
required and, if completed, except as may otherwise be disclosed in said
estoppel certificates, to the best of Borrower's knowledge, has been accepted by
the applicable Tenant, and (f) any payments, free rent, partial rent, rebate of
rent or other payments, credits, allowances or abatements required to be given
by Borrower to any Tenant has already been given to such Tenant, except as to
those which are to be provided to a Tenant after the date hereof pursuant to
such Tenant's Lease.
3.1.23 FILING AND RECORDING TAXES. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid under applicable Legal Requirements in connection with the
transfer of the Property to Borrower have been paid. All mortgage, mortgage
recording, stamp, intangible or other similar tax required to be paid under
applicable Legal Requirements in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement (except for deed
stamps which are required to be affixed to a foreclosure deed) of any of the
Loan Documents, including, without limitation, the Mortgage, have been paid or
are being paid simultaneously herewith. All taxes and governmental assessments
due and owing in respect of the Property have been paid, or an escrow
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of funds in an amount sufficient to cover such payments has been established
hereunder or are insured against by the Title Insurance Policy.
3.1.24 SINGLE PURPOSE. Borrower hereby represents and warrants
to Lender that as of the date hereof and covenants with Lender that until such
time as the Debt shall be paid in full (unless otherwise hereafter consented to
by Lender after receiving a Rating Agency Confirmation):
(a) Borrower does not own and will not own any asset or
property other than (i) the Property, (ii) incidental personal property
necessary for the ownership or operation of the Property, and (iii) the
Permitted Investments, cash and cash equivalents.
(b) Borrower will not engage in any business other than the
ownership, management and operation of the Property and Borrower will conduct
and operate its business as presently conducted and operated in all material
respects.
(c) Borrower will not enter into any contract or agreement
with any Affiliate of Borrower, any constituent party of Borrower or any
Affiliate of any constituent party, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available on
an arms-length basis with third parties other than any such party.
(d) Borrower has no outstanding Indebtedness for borrowed
money and will not incur any Indebtedness other than (i) the Debt, (ii)
unsecured trade payables and operational debt not evidenced by a note and in an
aggregate amount not exceeding $2,500,000 at any one time and (iii) Indebtedness
incurred in the financing of equipment and other personal property used on the
Property in an aggregate amount not exceeding $500,000 at any one time; provided
that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be
not more than ninety (90) days past due and incurred in the ordinary course of
business. No Indebtedness other than the Debt may be secured (subordinate or
PARI PASSU) by the Property, except that any permitted equipment financing may
be secured by such equipment.
(e) Borrower has not made and will not make any loans or
advances in the nature of loans to any third party (including any Affiliate or
constituent party), and shall not acquire obligations or securities of its
Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay
its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all
things necessary to observe organizational formalities and preserve its
existence, and Borrower will not, nor will Borrower permit any constituent party
to, amend, modify or otherwise change the partnership certificate, partnership
agreement, articles of incorporation and bylaws, operating agreement, trust or
other organizational documents of Borrower or the SPC Party without the prior
consent of Lender in any manner that (i) violates the single purpose covenants
set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes
any provision thereof that by its terms cannot be modified at any time when the
Loan or the Mezzanine Loan is outstanding or by its terms cannot be modified
without Lender's consent.
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(h) Borrower will maintain all of its books, records,
financial statements and bank accounts separate from those of its Affiliates and
any constituent party; provided, however, that Borrower's assets may be included
in a consolidated financial statement of its Affiliates if (i) inclusion on such
a consolidated financial statement is required to comply with the requirements
of GAAP, (ii) such consolidated financial statements shall contain a footnote to
the effect that Borrower's assets are owned by Borrower, and (iii) such assets
shall be listed on Borrower's own separate balance sheet. Except as permitted
under the preceding sentence, Borrower's assets will not be listed as assets on
the financial statement of any other entity; provided, however, that such
restriction shall not preclude any Person from listing its ownership interests
in Borrower as an asset on its financial statement. Borrower will file its own
tax returns and will not file a consolidated federal income tax return with any
other Person unless specifically mandated by applicable law or unless Borrower
is treated as a disregarded entity. Borrower shall maintain its books, records,
resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower or any constituent party of Borrower),
shall correct any known misunderstanding regarding its status as a separate
entity, shall conduct business in its own name, shall not identify itself or any
of its Affiliates as a division or part of the other and shall maintain and
utilize a separate telephone number (which may be a telephone number at the
Property) and separate stationery, invoices and checks bearing its own name.
(j) Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.
(k) Neither Borrower nor any constituent party will seek or
effect the liquidation, dissolution, winding up, liquidation, consolidation or
merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of
Borrower with those of any Affiliate or constituent party or any other Person,
and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party or any other
Person.
(n) Borrower will not guarantee or become obligated for the
debts of any other Person and does not and will not hold itself out to be
responsible for or have its credit available to satisfy the debts or obligations
of any other Person.
(o) Each entity comprising Borrower is a Delaware limited
liability company that (i) has Mezzanine Borrower as its only member and (ii)
has a non-member manager that is a Delaware corporation (the "SPC PARTY"). The
SPC Party will at all times comply, and will cause Borrower to comply, with each
of the representations, warranties, and covenants contained in this Section
3.1.24 as if such representation, warranty or covenant was made directly by the
SPC
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Party, except that the SPC Party shall not be required to maintain a separate
telephone number from that utilized by Borrower. Upon the withdrawal or the
disassociation of the SPC Party from Borrower, Borrower shall immediately
appoint a new SPC Party whose articles of incorporation are substantially
similar to those of the SPC Party and deliver a new non-consolidation opinion to
the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC
Party and its equity owners.
(p) Borrower shall at all times cause there to be at least two
duly appointed members of the board of directors (each, an "INDEPENDENT
DIRECTOR") of the SPC Party reasonably satisfactory to Lender who shall not have
been at the time of such individual's appointment, and may not have been at any
time during the preceding five years, (i) a stockholder, director, officer,
employee, partner, attorney or counsel of such corporation, Borrower or any
Affiliate of either of them, (ii) a customer, supplier or other Person who
derives any of its purchases or revenues from its activities with such
corporation, Borrower or any Affiliate of either of them, (iii) a Person or
other entity controlling or under common control with any such stockholder,
partner, customer, supplier or other Person, or (iv) a member of the immediate
family of any such stockholder, director, officer, employee, partner, customer,
supplier or other Person. As used in this definition, the term "CONTROL" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors
of the SPC Party to take any action which, under the terms of any certificate of
incorporation, by-laws or any voting trust agreement with respect to any common
stock, requires a vote of the board of directors of the SPC Party unless at the
time of such action there shall be at least two members who are each an
Independent Director.
(r) Borrower shall conduct its business so that the
assumptions made with respect to Borrower in the Insolvency Opinion shall be
true and correct in all material respects. In connection with the foregoing,
Borrower hereby covenants and agrees that it will comply with, or cause the
compliance with, (i) all of the facts and assumptions (whether regarding the
Borrower or any other Person) set forth in the Insolvency Opinion, (ii) all the
representations, warranties and covenants in this Section 3.1.24, and (iii) all
the organizational documents of the Borrower and the SPC Party.
(s) Borrower will not permit any Affiliate or constituent
party independent access to its bank accounts.
(t) Borrower shall pay the salaries of its own employees (if
any) from its own funds and maintain a sufficient number of employees (if any)
in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and
agents from its funds for services provided to it and pay from its own assets
all obligations of any kind incurred.
3.1.25 TAX FILINGS. Borrower has filed (or has obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed as of the date hereof and has paid
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or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Borrower. Borrower believes that its
tax returns properly reflect the income and taxes of Borrower for the periods
covered thereby, subject only to reasonable adjustments required by the Internal
Revenue Service or other applicable tax authority upon audit.
3.1.26 SOLVENCY. Borrower (a) has not entered into the
transaction or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor and (b) received reasonably equivalent value in exchange
for its obligations under the Loan Documents. Giving effect to the Loan, the
fair saleable value of Borrower's assets exceeds and will, immediately following
the making of the Loan, exceed Borrower's total liabilities, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities. The
fair saleable value of Borrower's assets is and will, immediately following the
making of the Loan, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its debts as such debts
become absolute and matured. Borrower's assets do not and, immediately following
the making of the Loan, will not constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur Indebtedness and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Indebtedness and liabilities as they mature (taking into account the
timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of obligations of Borrower).
3.1.27 FEDERAL RESERVE REGULATIONS. No part of the proceeds of
the Loan will be used for the purpose of purchasing or acquiring any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or for any other purpose which would be inconsistent with
such Regulation U or any other Regulations of such Board of Governors, or for
any purposes prohibited by Legal Requirements or by the terms and conditions of
this Agreement or the other Loan Documents.
SECTION 3.2 SURVIVAL OF REPRESENTATIONS.
The representations and warranties set forth in Section 3.1
shall survive for so long as any amount remains payable to Lender under this
Agreement or any of the other Loan Documents.
IV. BORROWER COVENANTS
SECTION 4.1 BORROWER AFFIRMATIVE COVENANTS.
Borrower hereby covenants and agrees with Lender that:
4.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower
shall do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its existence, rights, licenses, permits and franchises
and comply in all material respects with all Legal Requirements applicable to it
and the Property. Notwithstanding the foregoing, after prior notice to Lender,
Borrower, at its own expense, may suspend such compliance and contest by
appropriate legal proceeding, conducted in good faith and with due diligence,
the validity or
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applicability of any Legal Requirements to Borrower and/or the Property,
provided that (i) no Event of Default has occurred and remains uncured; (ii)
such proceeding shall be permitted under and be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) Borrower shall establish to
Lender's reasonable satisfaction that neither the Property nor any part thereof
or interest therein will be in imminent danger of being sold, forfeited,
terminated, canceled or lost; (iv) Borrower shall promptly upon final
determination thereof comply with such resulting Legal Requirements, and shall
pay all costs, interest and penalties which may be payable in connection
therewith; and (v) Borrower shall deposit with Lender cash, or other security as
may be approved by Lender, in an amount equal to 105% of the amount of all
damages, costs, interest and penalties that may be assessed against Borrower as
a result of such non-compliance, as reasonably determined by Lender; provided,
however, if agreed to by Lender, Borrower shall receive a credit against such
deposit for any Capital Expenditure Funds then on deposit and not otherwise
allocated for any other purpose.
4.1.2 TAXES AND OTHER CHARGES. Borrower shall pay all Taxes
and Other Charges now or hereafter levied or assessed or imposed against the
Property or any part thereof as the same become due and payable; provided,
however, Borrower's obligation to directly pay Taxes shall be suspended for so
long as Borrower complies with the terms and provisions of Section 6.2 hereof
and has not delivered a Letter of Credit in lieu of such escrows pursuant to
Section 6.8 hereof. Borrower shall furnish to Lender receipts for the payment of
the Taxes and the Other Charges within ten (10) days after the date the same are
due; provided, however, that Borrower is not required to furnish such receipts
for payment of Taxes in the event that such Taxes are payable by Lender pursuant
to Section 6.2 hereof and sufficient funds have been deposited with Lender for
the payment thereof in the manner required by Section 6.2. Borrower shall not
permit or suffer and shall promptly discharge any lien or charge against the
Property, other than Permitted Encumbrances. Notwithstanding the foregoing,
after prior notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, conducted in good faith and with due diligence,
the amount or validity of any Lien, Taxes or Other Charges, provided that (i) no
Event of Default has occurred and remains uncured; (ii) such proceeding shall be
permitted under and be conducted in accordance with all applicable statutes,
laws and ordinances; (iii) neither the Property nor any part thereof or interest
therein will be in imminent danger of being sold, forfeited, terminated,
canceled or lost; (iv) Borrower shall promptly upon final determination thereof
pay the amount of any such Lien, Taxes or Other Charges, together with all
costs, interest and penalties which may be payable in connection therewith; (v)
such proceeding shall suspend the collection of such Lien, Taxes or Other
Charges from the Property; and (vi) unless previously deposited with Lender,
Borrower shall deposit with Lender cash, or other security as may be approved by
Lender, in an amount equal to one hundred five percent (105%) of the contested
amount and all interest and penalties thereon; provided, however, that Borrower
shall receive a credit against such deposits for any amounts deposited with the
applicable taxing authority in connection with such proceeding. Lender may pay
over any such cash or other security held by Lender to the claimant entitled
thereto at any time when, in the judgment of Lender, the entitlement of such
claimant is established.
4.1.3 LITIGATION. Borrower shall give prompt notice to Lender
of any litigation or governmental proceedings pending or threatened against
Borrower which might materially adversely affect the Property or Borrower's
ability to perform its obligations hereunder or under the other Loan Documents.
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4.1.4 ACCESS TO PROPERTY. Borrower shall permit agents,
representatives and employees of Lender to inspect the Property or any part
thereof at reasonable hours upon reasonable advance notice.
4.1.5 FURTHER ASSURANCES; SUPPLEMENTAL MORTGAGE AFFIDAVITS.
Borrower shall, at Borrower's sole cost and expense:
(a) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and
(b) do and execute all and such further lawful and reasonable
acts, conveyances and assurances for the better and more effective carrying out
of the intents and purposes of this Agreement and the other Loan Documents, as
Lender shall reasonably require from time to time.
4.1.6 FINANCIAL REPORTING.
(a) Borrower shall keep and maintain or will cause to be kept
and maintained proper and accurate books and records, in accordance with GAAP,
reflecting the financial affairs of Borrower. Lender shall have the right from
time to time during normal business hours upon reasonable notice to Borrower to
examine such books and records at the office of Borrower or other Person
maintaining such books and records and to make such copies or extracts thereof
as Lender shall desire.
(b) Borrower shall furnish Lender annually, within ninety (90)
days following the end of each Fiscal Year, a complete copy of Mezzanine
Borrower's annual financial statements audited by a "Big Five" accounting firm
or other independent certified public accountant acceptable to Lender prepared
in accordance with GAAP covering the Property, including statements of income
and expense and cash flow and a balance sheet for Mezzanine Borrower. Such
statements shall be accompanied by Borrower's calculation of Underwritable Cash
Flow, Gross Revenue and Operating Expenses for the Property. Mezzanine
Borrower's annual financial statements shall be accompanied by a certificate
executed by the chief financial officer or treasurer of Mezzanine Borrower
stating that such annual financial statement presents fairly the financial
condition and the results of operations of Mezzanine Borrower and the Property.
Together with such annual financial statements, Borrower shall furnish to Lender
an Officer's Certificate certifying as of the date thereof whether to the best
of Borrower's knowledge there exists an event or circumstance which constitutes
a Default or Event of Default by Borrower under the Loan Documents and if such
Default or Event of Default exists, the nature thereof, the period of time it
has existed and the action then being taken to remedy the same.
(c) Borrower will furnish Lender on or before the forty-fifth
(45th) day after the end of each fiscal quarter including the quarter ending
December 31 (based on Mezzanine Borrower's Fiscal Year), the following items,
accompanied by certificate from the chief financial officer or treasurer of
Mezzanine Borrower, certifying that such items are true, correct, accurate
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and complete in all material respects and fairly present the financial condition
and results of the operations of Mezzanine Borrower and the Property in
accordance with GAAP as applicable:
(i) quarterly and year-to-date statements of income and
expense and cash flow prepared for such quarter and the portion of the
year then elapsed with respect to the Property, with a balance sheet
for such quarter for Mezzanine Borrower;
(ii) a calculation reflecting the Debt Service Coverage Ratio
as of the last day of such quarter, for such quarter and the last four
quarters (but not prior to the quarter ending June 30, 2000);
(iii) a current rent roll for the Property;
(iv) a comparison of the budgeted income and expenses and the
actual income and expenses for such quarter and year to date for the
Property, together with a detailed explanation of any variances in
excess of $50,000 which are more than five percent (5%) between
budgeted and actual amounts for such year to date; and
(v) any notice received from a Tenant under a Major Lease
threatening non-payment of Rent or other material default, alleging or
acknowledging a default by landlord, requesting a termination of such
Major Lease or a material modification of any Major Lease or notifying
Borrower of the exercise or non-exercise of any option provided for in
such Major Lease, or any other similar material correspondence received
by Borrower from such Tenants during the subject quarter.
(d) Borrower shall submit the Annual Budget to Lender for
Lender's review not later than thirty (30) days prior to the commencement of
each Fiscal Year.
(e) Borrower shall furnish to Lender, within ten (10) Business
Days after request (or as soon thereafter as may be reasonably possible), such
further detailed information with respect to the operation of the Property and
the financial affairs of Borrower as may be reasonably requested by Lender.
4.1.7 TITLE TO THE PROPERTY. Borrower will warrant and defend
the validity and priority of the Liens of the Mortgage and the Assignment of
Leases on the Property against the claims of all Persons whomsoever, subject
only to Permitted Encumbrances.
4.1.8 ESTOPPEL STATEMENT.
(a) After request by Lender, Borrower shall within ten (10)
Business Days furnish Lender with a statement, duly acknowledged and certified,
stating (i) the unpaid principal amount of the Note, (ii) the Applicable
Interest Rate of the Note, (iii) the date installments of interest and/or
principal were last paid, (iv) any offsets or defenses to the payment of the
Debt, if any, and (v) that this Agreement and the other Loan Documents have not
been modified or if modified, giving particulars of such modification. Not more
frequently than once each calendar year (unless incident to a sale of the
Property), Lender shall, upon request of Borrower, deliver a statement as to the
matters set forth in the foregoing clauses (i), (ii), (iii) and (v).
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(b) Upon request from Lender, Borrower shall request from each
Tenant under a Major Lease and use commercially reasonable efforts to obtain and
deliver to Lender, an estoppel certificate from each Tenant under any Major
Lease; provided that such certificate may be in the form required under such
Lease; provided further that Borrower shall not be required to deliver such
certificates more frequently than one (1) time during the initial term of the
Loan or more frequently than one (1) time during any extension term of the Loan.
4.1.9 LEASES.
(a) All Leases and all renewals of Leases (other than renewals
pursuant to options contained in the Leases) executed after the date hereof
shall (i) provide for rental rates comparable to then existing local market
rates for similar properties, (ii) be on commercially reasonable terms, (iii) as
to new Leases, provide that such Lease is subordinate to the Mortgage and that
the lessee will attorn to Lender and (iv) not contain any terms which would
materially adversely affect Lender's rights under the Loan Documents. All Major
Leases and all renewals, amendments and modifications thereof (other than
renewals and amendments entered into pursuant to or in implementation of options
or rights contained in such Major Leases) executed after the date hereof shall
be subject to Lender's prior approval, such approval not to be unreasonably
withheld, conditioned or delayed. A request by Borrower for the approval of any
Major Lease or any renewal, amendment or modification thereof pursuant to this
Section 4.1.9(a) or for Lender's approval of any other matter requiring Lender's
consent pursuant to this Section 4.1.9(a) may include a statement in bold face
type that if Lender fails to approve such Major Lease or other matter within ten
(10) Business Days after receipt by Lender of such request, it shall be deemed
to have been approved. If Lender fails to respond to any such request within ten
(10) Business Days after its receipt thereof and all information reasonably
required by Lender in order to adequately review such request, including,
without limitation (in connection with the approval of a Major Lease), the final
proposed Major Lease itself and blacklined copies of such Major Lease marked to
show the changes against the form of lease approved by Lender, Lender shall be
conclusively deemed to have approved such Major Lease or other matter, provided
that (in the case of approval of a Major Lease) blacklined copies of interim
drafts of such Major Lease were provided to Lender. Upon request, Lender shall
enter into a subordination, non-disturbance and attornment agreement in the form
attached hereto as SCHEDULE V (with such reasonable and customary changes
thereto as may be acceptable to Lender, acting reasonably and in good faith)
with any Tenant under a Lease approved by Lender.
(b) Borrower (i) shall observe and perform the obligations
imposed upon the lessor under the Leases in a commercially reasonable manner;
(ii) shall enforce the terms, covenants and conditions contained in the Leases
upon the part of the lessee thereunder to be observed or performed in a
commercially reasonable manner, provided, however, Borrower shall not terminate
or accept a surrender of a Major Lease (except pursuant to a right or option of
a Tenant contained therein) without Lender's prior approval, which shall not be
unreasonably withheld, conditioned or delayed (except that Borrower shall be
permitted without Lender's consent to terminate any Major Lease other than the
Genzyme Lease in the case of a default by the Tenant thereunder); (iii) shall
not collect any of the Rents more than one (1) month in advance (other than
security deposits); and (iv) shall not execute any assignment of lessor's
interest in the Leases or the Rents (except as contemplated by the Loan
Documents). Upon request, Borrower shall furnish Lender with executed copies of
all Leases.
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4.1.10 ALTERATIONS. Lender's prior approval shall be required
in connection with any alterations to any Improvements, including tenant
improvements, (a) that would be expected to have a material adverse effect on
Borrower's financial condition, the value of the Property or the Underwritable
Cash Flow or (b) the aggregate cost of which under contract at any one time
(including any related alteration, improvement or replacement) is reasonably
anticipated to exceed the Alteration Threshold. Lender shall be deemed to have
approved any tenant improvements provided for in a Lease approved (or deemed to
have been approved) by Lender, or which Borrower is entitled to enter into
without Lender's consent, pursuant to Section 4.1.9. If the total unpaid amounts
incurred and to be incurred with respect to such alterations to the Improvements
shall at any time exceed the Alteration Threshold, Borrower shall promptly
deliver to Lender as security for the payment of such amounts and as additional
security for Borrower's obligations under the Loan Documents any of the
following: (i) cash, (ii) U.S. Obligations, (iii) other securities acceptable to
Lender, provided that, if there shall have been a Securitization of the Loan,
Lender shall have received a Rating Agency Confirmation as to the form and
issuer of same, or (iv) a completion bond, provided that, if there shall have
been a Securitization of the Loan, Lender shall have received a Rating Agency
Confirmation as to the form and issuer of same. Such security shall be in an
amount equal to the excess of the total unpaid amounts incurred and to be
incurred with respect to such alterations to the Improvements (other than such
amounts to be paid or reimbursed by Tenants under the Leases) over the
Alteration Threshold. Borrower shall receive a credit against the security
required pursuant to this Section 4.1.10 in connection with tenant improvements
in an amount equal to the Rollover Funds on deposit and required to be deposited
during the construction of the related tenant improvements, and a credit against
the security required pursuant to this Section 4.1.10 in connection with any
other alterations in an amount equal to the Capital Expenditure Funds on deposit
and required to be deposited during the construction of the related alterations,
but in each case only to the extent such Reserve Funds have not been previously
so allocated to another alteration project.
4.1.11 O&M PROGRAM. Borrower shall comply in all material
respects with the asbestos operations and maintenance program requirements for
the Property attached hereto as SCHEDULE VIII.
SECTION 4.2 BORROWER NEGATIVE COVENANTS.
Borrower covenants and agrees with Lender that:
4.2.1 DUE ON SALE AND ENCUMBRANCE; TRANSFERS OF INTERESTS.
Without the prior written consent of Lender, neither Borrower nor any other
Person having a direct or indirect ownership or beneficial interest in Borrower
shall sell, convey, mortgage, grant, bargain, encumber, pledge, assign or
transfer any interest, direct or indirect, in the Borrower, the Property or any
part thereof, whether voluntarily or involuntarily, in violation of the
covenants and conditions set forth in the Mortgage and this Agreement.
4.2.2 LIENS. Borrower shall not create, incur, assume or
suffer to exist any Lien on any portion of the Property except for Permitted
Encumbrances.
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4.2.3 DISSOLUTION. Borrower shall not, without obtaining the
prior consent of Lender, (i) engage in any dissolution, liquidation or
consolidation or merger with or into any other business entity, (ii) engage in
any business activity not related to the ownership and operation of the
Property, (iii) transfer, lease or sell, in one transaction or any combination
of transactions, all or substantially all of the property or assets of Borrower
except to the extent expressly permitted by the Loan Documents, or (iv) cause,
permit or suffer the SPC Party to (A) dissolve, wind up or liquidate or take any
action, or omit to take an action, as a result of which the SPC Party would be
dissolved, wound up or liquidated in whole or in part, or (B) amend, modify,
waive or terminate the certificate of incorporation or bylaws of the SPC Party
in any manner that (1) violates the single purpose covenants set forth in
Section 3.1.24, or (2) amends, modifies or otherwise changes any provision
thereof that by its terms cannot be modified at any time when the Loan or the
Mezzanine Loan is outstanding or by its terms cannot be modified without
Lender's consent. Upon payment of the Debt and the satisfaction of all other
obligations of Borrower under the Loan Documents, Lender will execute and
deliver to Borrower a certificate in a form required by the Delaware Secretary
of State and/or as reasonably required by Borrower to evidence repayment of the
Debt and the ability of the SPC Party to thereafter amend its certificate of
incorporation and by-laws.
4.2.4 CHANGE IN BUSINESS. Borrower shall not enter into any
line of business other than the ownership and operation of the Property.
4.2.5 DEBT CANCELLATION. Borrower shall not cancel or
otherwise forgive or release any claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower's business.
4.2.6 AFFILIATE TRANSACTIONS. Borrower shall not enter into,
or be a party to, any transaction with an Affiliate of Borrower or any of the
members of Borrower except in the ordinary course of business and on terms which
are fully disclosed to Lender in advance and are no less favorable to Borrower
or such Affiliate than would be obtained in a comparable arm's-length
transaction with an unrelated third party.
4.2.7 ZONING. Borrower shall not initiate or consent to any
zoning reclassification of any portion of the Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of Lender, which consent
shall not be unreasonably withheld or delayed; provided, however, that the
foregoing shall not prohibit the continued use of the Property in its then
current manner if such use becomes a permitted non-conforming use by virtue of a
change in zoning or other land use laws which was not initiated by Borrower.
Notwithstanding the foregoing, if a Release Parcel is to be released pursuant to
Section 11.25 hereof, Borrower may make application to have the Release Parcel
legally subdivided so as to become a separate lot and/or may seek a variance or
other relief from, or a change in, existing zoning laws with respect to both the
Release Parcel and the remainder of the Property to permit such subdivision
and/or Borrower's contemplated development or redevelopment of the Release
Parcel (but without making the remainder of the Property or the use thereof
non-conforming); provided, however, that (a) all of the Property's then current
and
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intended uses shall in each instance thereafter comply with all zoning and
other land use laws, and (b) the remainder of the Property shall not be
adversely affected in any material way thereby and shall continue to comply in
all material respects with all Legal Requirements.
4.2.8 ASSETS. Borrower shall not purchase or own any property
other than the Property.
4.2.9 NO JOINT ASSESSMENT. Borrower shall not suffer, permit
or initiate the joint assessment of the Property (i) with any other real
property constituting a tax lot separate from the Property, and (ii) with any
portion of the Property which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the Property.
4.2.10 PRINCIPAL PLACE OF BUSINESS. Borrower shall not change
its principal place of business from the address set forth on the first page of
this Agreement without first giving Lender thirty (30) days prior notice.
4.2.11 ERISA. (a) Borrower shall not knowingly engage in any
transaction which would cause any obligation, or action taken or to be taken,
hereunder (or the exercise by Lender of any of its rights under the Note, this
Agreement or the other Loan Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(b) Borrower shall deliver to Lender such certifications or
other evidence from time to time throughout the term of the Loan, as requested
by Lender in its sole discretion, that (A) Borrower is not and does not maintain
an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject
to Title I of ERISA, or a "governmental plan" within the meaning of Section 3(3)
of ERISA; (B) Borrower is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (C) one or
more of the following circumstances is true:
(i) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower are held by "benefit plan
investors" within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R.
Section 2510.3-101(c) or (e).
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V. INSURANCE, CASUALTY AND CONDEMNATION
SECTION 5.1 INSURANCE.
5.1.1 INSURANCE POLICIES. (a) Borrower shall obtain and
maintain, or cause to be maintained, insurance for Borrower and the Property
providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements and
Borrower's personal property at the Property, including contingent
liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements, in each case (A) in an
amount equal to one hundred percent (100%) of the "Full Replacement
Cost," which for purposes of this Agreement shall mean actual
replacement value (exclusive of costs of excavations, foundations,
underground utilities and footings) with a waiver of depreciation; (B)
containing an agreed amount endorsement with respect to the
Improvements and Borrower's personal property at the Property waiving
all co-insurance provisions; (C) providing for no deductible in excess
of Twenty-Five Thousand and No/100 Dollars ($25,000) for all such
insurance coverage, except with respect to earthquake and flood
insurance, which shall provide for no deductible in excess of Fifty
Thousand and No/100 Dollars ($50,000); and (D) containing an "Ordinance
or Law Coverage" or "Enforcement" endorsement if any of the
Improvements or the use of the Property shall at any time constitute
legal non-conforming structures or uses. In addition, Borrower shall
obtain: (y) if any portion of the Improvements is currently or at any
time in the future located in a federally designated "special flood
hazard area", flood hazard insurance in an amount equal to the lesser
of (1) the outstanding principal balance of the Note or (2) the maximum
amount of such insurance available under the National Flood Insurance
Act of 1968, the Flood Disaster Protection Act of 1973 or the National
Flood Insurance Reform Act of 1994, as each may be amended, or such
greater amount as Lender shall reasonably require; and (z) earthquake
insurance in amounts and in form and substance satisfactory to Lender
in the event the Property is located in an area with a high degree of
seismic activity, provided that the insurance pursuant to clauses (y)
and (z) hereof shall be on terms consistent with the comprehensive all
risk insurance policy required under this subsection (i).
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring
upon, in or about the Property, such insurance (A) to be on the
so-called "occurrence" form with a limit, excluding umbrella coverage,
of at least Two Million and No/100 Dollars ($2,000,000) per occurrence
and Three Million and No/100 Dollars ($3,000,000) general aggregate;
(B) to continue at not less than the aforesaid limit until required to
be changed by Lender by reason of changed economic conditions making
such protection inadequate; and (C) to cover at least the following
hazards: (1) premises and operations; (2) products and completed
operations on an "if any" basis; (3) independent contractors; (4)
blanket contractual liability for all legal contracts, with customary
exceptions; and (5) contractual liability covering the indemnities
contained in Article 9 of the Mortgage to the extent the same is
available;
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(iii) business income insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance
provided for in subsection (i) above; and (C) in an amount equal to one
hundred percent (100%) of the projected gross income from the Property
for a period of twelve (12) months, with an extended period of
indemnity endorsement which provides that after the physical loss to
the Improvements and Personal Property has been repaired, the continued
loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of twelve
(12) months from the date that the Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period. The amount
of such business income insurance shall be determined prior to the date
hereof and at least once each year thereafter based on Borrower's
reasonable estimate of the gross income from the Property for the
succeeding twelve (12) month period. All proceeds payable to Lender
pursuant to this subsection shall be held by Lender in an
interest-bearing account (with interest to accrue to the benefit of
Borrower) and shall be applied to the obligations secured by the Loan
Documents from time to time due and payable hereunder and under the
Note and, provided that there then exists no Event of Default and
Lender reasonably determines that sufficient other funds will remain
available for the payment of amounts due under the Loan Documents, for
the payment of Operating Expenses in accordance with the Cash
Management Agreement; provided, however, that nothing herein contained
shall be deemed to relieve Borrower of its obligations to pay the
obligations secured by the Loan Documents on the respective dates of
payment provided for in the Note and the other Loan Documents except to
the extent such amounts are actually paid out of the proceeds of such
business income insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Improvements,
and only if the Property coverage form does not otherwise apply, (A)
owner's contingent or protective liability insurance covering claims
not covered by or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) the insurance
provided for in subsection (i) above written in a so-called builder's
risk completed value form (1) on a non-reporting basis, (2) against all
risks insured against pursuant to subsection (i) above, (3) including
permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits of
the state in which the Property is located, and employer's liability
insurance with a limit of at least One Million and No/100 Dollars
($1,000,000) per accident and per disease per employee, and One Million
and No/100 Dollars ($1,000,000) for disease aggregate in respect of any
work or operations on or about the Property, or in connection with the
Property or its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on
terms consistent with the commercial property insurance policy required
under subsection (i) above;
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(vii) umbrella liability insurance in addition to primary
coverage in an amount not less than Fifty Million and No/100 Dollars
($50,000,000) per occurrence on terms consistent with the commercial
general liability insurance policy required under subsection (ii) above
and (viii) below;
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing
minimum limits per occurrence, excluding umbrella coverage, of One
Million and No/100 Dollars ($1,000,000); and
(ix) upon sixty (60) days' notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time
may reasonably request against such other insurable hazards which at
the time are commonly insured against for property similar to the
Property located in or around the region in which the Property is
located.
(b) All insurance provided for in Section 5.1.1(a) shall be
obtained under valid and enforceable policies (collectively, the "POLICIES" or
in the singular, the "POLICY") and, to the extent not specified above, shall be
subject to the reasonable approval of Lender as to deductibles and, insofar as
the Policies relate to the Property, loss payees and insureds. Not less than ten
(10) days prior to the expiration dates of the Policies theretofore furnished to
Lender, certificates or binders of insurance evidencing the Policies,
accompanied by evidence satisfactory to Lender of payment of the premiums then
due thereunder (the "INSURANCE PREMIUMS"), shall be delivered by Borrower to
Lender; provided, however, that Borrower is not required to furnish such
receipts for payment of Insurance Premiums in the event that such Insurance
Premiums are payable by Lender pursuant to Section 6.3 hereof and sufficient
funds have been deposited with Lender for the payment thereof in the manner
required by Section 6.3.
(c) Any blanket insurance Policy shall specifically allocate
to the Property the amount of coverage from time to time required hereunder and
shall otherwise provide the same protection as would a separate Policy insuring
only the Property in compliance with the provisions of Section 5.1.1(a).
(d) All Policies of insurance provided for or contemplated by
Section 5.1.1(a), except for the Policy referenced in Section 5.1.1(a)(v), shall
name Borrower as the insured and Lender and its successors and/or assigns as the
additional insured, as its or their interests may appear, and, in the case of
property damage, boiler and machinery, flood and earthquake insurance, shall
contain a so-called New York standard non-contributing mortgagee clause, or its
equivalent, in favor of Lender providing that the loss thereunder shall be
payable to Lender.
(e) All Policies of insurance provided for in Section 5.1.1(a)
shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for
Borrower, or of any Tenant or other occupant, or failure to comply with
the provisions of any Policy, which might otherwise result in a
forfeiture of the insurance or any part thereof, shall in any way
affect the validity or enforceability of the insurance insofar as
Lender is concerned;
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(ii) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least
thirty (30) days' written notice to Lender and any other party named
therein as an additional insured; and
(iii) Lender shall not be liable for any Insurance Premiums
thereon or subject to any assessments thereunder.
(f) Prior to the Closing Date, Borrower shall purchase a
Pollution and Remediation Legal Liability Insurance Policy (claims-made and
reported) from Indian Harbor Insurance Company which lists Morgan Stanley Dean
Witter Mortgage Capital Inc. as the insured and Secore Financial Corporation as
an additional insured. Said environmental insurance policy shall include a
claims-made limit of Five Million Dollars ($5,000,000) per occurrence and in the
aggregate, a One Hundred Thousand Dollar ($100,000.00) self-insured retention,
and a six (6) year policy term.
(g) If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and effect,
Lender shall have the right, without notice to Borrower, to take such action as
Lender deems necessary to protect its interest in the Property, including,
without limitation, the obtaining of such insurance coverage as Lender in its
sole discretion deems appropriate and all premiums incurred by Lender in
connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Borrower to Lender upon demand and until paid shall be
secured by the Mortgage and shall bear interest at the Default Rate.
(h) In the event of foreclosure of the Mortgage or other
transfer of title to the Property in lieu of foreclosure in extinguishment in
whole or in part of the Debt, all right, title and interest of Borrower in and
to the Policies that are not blanket Policies then in force concerning the
Property and all proceeds payable thereunder shall thereupon vest in the
purchaser at such foreclosure or Lender or other transferee in the event of such
other transfer of title.
5.1.2 INSURANCE COMPANY. The Policies shall be issued by
financially sound and responsible insurance companies legally permitted to
insure properties in the state in which the Property is located. Each of such
insurance companies shall have a claims paying ability of "A+" or better by
Standard & Poor's and Fitch and "A1" or better by Moody's or, if any such
insurance companies are not rated by Fitch or Moody's, then at least A(X) by
A.M. Best.
SECTION 5.2 CASUALTY AND CONDEMNATION.
5.2.1 CASUALTY. If the Property shall sustain a Casualty,
Borrower shall give prompt notice of such Casualty to Lender and shall promptly
commence and diligently prosecute to completion the repair and restoration of
the Property, subject to then applicable Legal Requirements, as nearly as
possible to the condition the Property was in immediately prior to such Casualty
(a "RESTORATION") and otherwise in accordance with Section 5.3. Borrower shall
pay all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to, make proof of loss if not
made promptly by Borrower.
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5.2.2 CONDEMNATION. Borrower shall give Lender prompt notice
of any actual or threatened Condemnation by any Governmental Authority of all or
any part of the Property and shall deliver to Lender a copy of any and all
papers served in connection with such proceedings. Lender may participate in any
such proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by Lender to permit such participation. Borrower shall, at
its expense, diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. Notwithstanding any Condemnation, Borrower
shall continue to pay the Debt at the time and in the manner provided for its
payment in the Note and in this Agreement. Lender shall not be limited to the
interest paid on the Award by any Governmental Authority but shall be entitled
to receive out of the Award interest at the rate or rates provided herein or in
the Note. If the Property or any portion thereof is taken by any Governmental
Authority, Borrower shall promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of Section
5.3. If the Property is sold, through foreclosure or otherwise, prior to the
receipt by Lender of the Award, Lender shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.
SECTION 5.3 DELIVERY OF NET PROCEEDS.
5.3.1 MINOR CASUALTY OR CONDEMNATION. If a Casualty or
Condemnation has occurred to the Property and the Net Proceeds shall be less
than the Restoration Threshold and the costs of completing the Restoration shall
be less than the Restoration Threshold, and provided no Event of Default shall
have occurred and remain uncured, the Net Proceeds will be disbursed by Lender
to Borrower. Promptly after receipt of the Net Proceeds, Borrower shall commence
and satisfactorily complete with due diligence the Restoration in accordance
with the terms of this Agreement.
5.3.2 MAJOR CASUALTY OR CONDEMNATION. (a) If a Casualty or
Condemnation has occurred to the Property and the Net Proceeds are equal to or
greater than the Restoration Threshold or the costs of completing the
Restoration is equal to or greater than the Restoration Threshold, Lender shall
make the Net Proceeds available for the Restoration, provided that each of the
following conditions are met:
(i) no Event of Default shall have occurred and be continuing;
(ii) (A) in the event the Net Proceeds are insurance proceeds,
less than thirty-three percent (33%) of the entire Improvements has
been damaged, destroyed or rendered unusable as a result of such
Casualty or (B) in the event the Net Proceeds are an Award, less than
ten percent (10%) of the land constituting the Property is taken;
(iii) After giving effect to such Restoration, the Debt
Service Coverage Ratio for the Property shall be no less than 1.09 to
1.0;
(iv) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than thirty (30) days
after the recovery of the Net
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Proceeds payable on account of such Casualty or Condemnation, whichever
the case may be, occurs) and shall diligently pursue the same to
satisfactory completion;
(v) Lender shall be satisfied that any operating deficits and
all payments of principal and interest under the Note will be paid
during the period required for Restoration from (A) the Net Proceeds,
or (B) other funds of Borrower;
(vi) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (A) the date three (3)
months prior to the Maturity Date, (B) such time as may be required
under applicable Legal Requirements in order to repair and restore the
Property to the condition it was in immediately prior to such Casualty
or to as nearly as possible the condition it was in immediately prior
to such Condemnation, as applicable, or (C) the expiration of the
insurance coverage referred to in Section 5.1.1(a)(iii);
(vii) the Property and the use thereof after the Restoration
will be in material compliance with and permitted under all applicable
Legal Requirements;
(viii) the Restoration shall be done and completed by Borrower
in an expeditious and diligent fashion and in compliance with all
applicable Legal Requirements in all material respects; and
(ix) such Casualty or Condemnation, as applicable, does not
result in the permanent loss of access to the Property, any affected
Building or the related Improvements.
(b) The Net Proceeds shall be paid directly to Lender and held
by Lender in an interest-bearing account and, until disbursed in accordance with
the provisions of this Section 5.3.2, shall constitute additional security for
the Debt. The Net Proceeds shall be disbursed by Lender to, or as directed by,
Borrower from time to time during the course of the Restoration, upon receipt of
evidence reasonably satisfactory to Lender that (A) all requirements set forth
in Section 5.3.2(a) have been satisfied to the extent such requirements are
capable of being satisfied prior to such disbursement, (B) all materials
installed and work and labor performed (except to the extent that they are to be
paid for out of the requested disbursement) in connection with the Restoration
have been paid for in full (subject to applicable retainage amounts), and (C)
there exist no notices of pendency, stop orders, mechanic's or materialman's
liens or notices of intention to file same, or any other liens or encumbrances
of any nature whatsoever on the Property arising out of the Restoration which
have not either been fully bonded to the satisfaction of Lender or discharged of
record or in the alternative fully insured to the satisfaction of Lender by the
title company issuing the Title Insurance Policy.
(c) All plans and specifications required in connection with
the Restoration shall be subject to prior approval of Lender and an independent
architect selected by Lender (the "CASUALTY CONSULTANT"), which approval shall
not be unreasonably withheld or delayed. The identity of the contractors and
materialmen engaged by Borrower for services in excess of $250,000 in connection
with the Restoration, as well as the contracts under which they have been
engaged, shall be subject to approval of Lender and the Casualty Consultant,
which approval
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shall not be unreasonably withheld or delayed. All costs and expenses incurred
by Lender in connection with recovering, holding and advancing the Net Proceeds
for the Restoration including, without limitation, reasonable attorneys' fees
and disbursements and the Casualty Consultant's fees and disbursements, shall be
paid by Borrower.
(d) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, less the Casualty
Retainage. The term "CASUALTY RETAINAGE" shall mean, as to each contractor,
subcontractor or materialman engaged in the Restoration, an amount equal to ten
percent (10%) of the first half of the costs actually incurred for work in place
as part of the Restoration, as certified by the Casualty Consultant, until the
Restoration has been completed. The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Section
5.3.2(d), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Section 5.3.2(d) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
Governmental Authorities, and Lender receives evidence satisfactory to Lender
that the costs of the Restoration have been paid in full or will be paid in full
out of the Casualty Retainage; provided, however, that Lender will release the
portion of the Casualty Retainage being held with respect to any contractor,
subcontractor or materialman engaged in the Restoration as of the date upon
which the Casualty Consultant certifies to Lender that the contractor,
subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the contractor's,
subcontractor's or materialman's contract, the contractor, subcontractor or
materialman delivers the lien waivers and evidence of payment in full of all
sums due to the contractor, subcontractor or materialman as may be reasonably
requested by Lender or by the title company issuing the Title Insurance Policy,
and Lender receives an endorsement to the Title Insurance Policy insuring the
continued priority of the lien of the Mortgage and evidence of payment of any
premium payable for such endorsement. If required by Lender, the release of any
such portion of the Casualty Retainage shall be approved by the surety company,
if any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
(e) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.
(f) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Lender acting in good faith in consultation
with the Casualty Consultant, be sufficient to pay in full the balance of the
costs which are estimated by the Casualty Consultant to be incurred in
connection with the completion of the Restoration, Borrower shall deposit the
deficiency (the "NET PROCEEDS DEFICIENCY") with Lender before any further
disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency
deposited with Lender shall be held by Lender in an interest-bearing account and
shall be disbursed for costs actually incurred in connection with the
Restoration on the same conditions applicable to the disbursement of the Net
Proceeds, and until so disbursed pursuant to this Section 5.3.2 shall constitute
additional security for the Debt.
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(g) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender after the
Casualty Consultant certifies to Lender that the Restoration has been completed
in accordance with the provisions of this Section 5.3.2, and the receipt by
Lender of evidence reasonably satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in full, shall be remitted by
Lender to Borrower, provided no Event of Default shall have occurred and shall
be continuing under any of the Loan Documents.
(h) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Section 5.3.2(g) may be retained and applied by Lender toward the
payment of the Debt on the next Monthly Payment Date, whether or not then due
and payable, in such order, priority and proportions as Lender in its sole
discretion shall deem proper, but without any prepayment fee, penalty or
Breakage Costs (unless an Event of Default then exists), or, at the discretion
of Lender, the same may be paid, either in whole or in part, to Borrower for
such purposes as Lender shall designate.
VI. RESERVE FUNDS
SECTION 6.1 REMEDIATION FUNDS
6.1.1 DEPOSIT OF REMEDIATION FUNDS. On the Closing Date,
Borrower shall deposit with Agent the amount of Three Hundred Thousand and
No/100 Dollars ($300,000) for the costs that may be incurred if Borrower is
required pursuant to this Section 6.1.1 to perform the environmental remediation
described on SCHEDULE II (such environmental remediation herein referred to as
the "REMEDIATION" and the amounts so deposited are referred to herein as the
"REMEDIATION FUNDS"). Borrower shall undertake and complete the Remediation if
at any time (a) commencement and/or completion of such Remediation is then
required in order to comply with any Legal Requirements, (b) Borrower receives
any notice of a claim or threatened claim relating in any way to the
environmental condition described on SCHEDULE II, or (c) the Environmental
Consultant recommends that the Remedation be undertaken. Additionally, Borrower
shall have the right to elect to undertake the Remediation at any time. Upon
request of Lender, which request shall not be made more than once in any six (6)
month period nor prior to November 1, 2000, Borrower shall cause the
Environmental Consultant to conduct an updated surface investigation of 195
First Street and deliver to Lender the recommendation of the Environmental
Consultant as to whether the Remediation should be undertaken.
6.1.2 RELEASE OF REMEDIATION FUNDS. Lender shall direct Agent
to disburse to Borrower the Remediation Funds upon satisfaction by Borrower of
each of the following conditions: (a) Borrower shall submit a request for
payment to Lender at least ten (10) days prior to the date on which Borrower
requests such payment be made, (b) on the date such request is received by
Lender and on the date such payment is to be made, no Event of Default shall
exist and remain uncured, (c) Lender shall have received a certificate from
Borrower (i) stating that the portion of the Remediation to be funded by the
requested disbursement has been completed (to the extent being funded) in a good
and workmanlike manner and in accordance with all applicable Legal Requirements,
such certificate to be accompanied by a copy of any license, permit or other
approval by any Governmental Authority required in connection with the
Remediation, (ii) identifying each Person that supplied materials or labor in
connection with the
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portion of the Remediation to be funded by the requested disbursement, and (iii)
stating that each such Person has been paid in full or will be paid in full upon
such disbursement for work performed to date, subject to applicable retainage
amounts, such certificate to be accompanied by evidence of payment reasonably
satisfactory to Lender, (d) at Lender's option, Lender shall have received a
report satisfactory to Lender in its reasonable discretion from the
Environmental Consultant in respect of its inspection of the Remediation, and
(e) Lender shall have received such other evidence as Lender shall reasonably
request that the portion of the Remediation to be funded by the requested
disbursement has been completed (to the extent being funded) and is paid for or
will be paid for upon such disbursement to Borrower, subject to applicable
retainage amounts. Lender shall not be required to disburse Remediation Funds
more frequently than once each calendar month, unless such requested
disbursement is in an amount greater than the Minimum Disbursement Amount (or a
lesser amount if the total remaining Remediation Funds are less than the Minimum
Disbursement Amount, in which case only one disbursement of the amount remaining
in the account shall be made). Provided no Event of Default then exists, all
remaining Remediation Funds shall be returned to Borrower (1) upon the
completion of the Remediation, (2) after the Debt has been paid in full or (3)
upon the release of 195 First Street in accordance with Section 11.25 hereof.
SECTION 6.2 TAX FUNDS.
6.2.1 DEPOSITS OF TAX FUNDS. On the Closing Date, Borrower
shall deposit with Agent the amount of Three Hundred Seventy Thousand Eight
Hundred Fifty-Two and No/100 Dollars ($370,852) and, pursuant to the Cash
Management Agreement, there shall be deposited on each Monthly Payment Date an
amount equal to one-twelfth of the Taxes that Lender estimates will be payable
during the next ensuing twelve (12) months in order to accumulate sufficient
funds to pay all such Taxes at least ten (10) days prior to their respective due
dates. Amounts deposited pursuant to this Section 6.2.1 are referred to herein
as the "TAX FUNDS". If at any time Lender reasonably determines that the Tax
Funds will not be sufficient to pay the Taxes, Lender shall notify Borrower of
such determination and the monthly deposits for Taxes shall be increased by the
amount that Lender estimates is sufficient to make up the deficiency at least
ten (10) days prior to the respective due dates for the Taxes; provided that if
Borrower receives notice of any deficiency after the date that is ten (10) days
prior to the date that Taxes are due, Borrower will deposit such amount within
one (1) Business Day after its receipt of such notice.
6.2.2 RELEASE OF TAX FUNDS. Provided no Event of Default then
exists and Lender has received all tax bills, Lender or Servicer shall apply the
Tax Funds to payments of Taxes on or within fifteen (15) days prior to the due
dates therefor. In making any payment relating to Taxes, Lender or Servicer may
do so according to any bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof. If the amount of the Tax Funds
shall exceed the amounts due for Taxes, Lender or Servicer shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Tax Funds. Any Tax Funds remaining after the Debt has
been paid in full shall be returned to Borrower.
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SECTION 6.3 INSURANCE FUNDS.
6.3.1 DEPOSITS OF INSURANCE FUNDS. On the Closing Date,
Borrower shall deposit with Agent the amount of Two Hundred Sixteen Thousand One
Hundred Six and No/100 Dollars ($216,106) and, pursuant to the Cash Management
Agreement, there shall be deposited on each Monthly Payment Date an amount equal
to one-twelfth of the Insurance Premiums that Lender estimates will be payable
for the renewal of the coverage afforded by the Policies upon the expiration
thereof in order to accumulate sufficient funds to pay all such Insurance
Premiums at least fifteen (15) days prior to the expiration of the Policies.
Amounts deposited pursuant to this Section 6.3.1 are referred to herein as the
"INSURANCE FUNDS". If at any time Lender reasonably determines that the
Insurance Funds will not be sufficient to pay the Insurance Premiums, Lender
shall notify Borrower of such determination and the monthly deposits for
Insurance Premiums shall be increased by the amount that Lender estimates is
sufficient to make up the deficiency at least thirty (30) days prior to
expiration of the Policies.
6.3.2 RELEASE OF INSURANCE FUNDS. Provided no Event of Default
then exists and Lender shall have received all bills for the payment thereof,
Lender or Servicer shall apply the Insurance Funds to payment of Insurance
Premiums on or within fifteen (15) days prior to the due dates therefor. In
making any payment relating to Insurance Premiums, Lender or Servicer may do so
according to any bill, statement or estimate procured from the insurer or its
agent, without inquiry into the accuracy of such bill, statement or estimate. If
the amount of the Insurance Funds shall exceed the amounts due for Insurance
Premiums, Lender or Servicer shall, in its sole discretion, return any excess to
Borrower or credit such excess against future payments to be made to the
Insurance Funds. Any Insurance Funds remaining after the Debt has been paid in
full shall be returned to Borrower.
SECTION 6.4 CAPITAL EXPENDITURE FUNDS.
6.4.1 DEPOSITS OF CAPITAL EXPENDITURE FUNDS. Borrower shall
deposit with Agent on each Monthly Payment Date an amount equal to $32,500 for
annual Capital Expenditures approved by Lender, which approval shall not be
unreasonably withheld or delayed; provided that upon a partial release pursuant
to Section 11.25 hereof, such amount of $32,500 shall be reduced by the Release
Percentage for the related Release Parcel. Amounts deposited pursuant to this
Section 6.4.1 are referred to herein as the "CAPITAL EXPENDITURE FUNDS".
6.4.2 RELEASE OF CAPITAL EXPENDITURE FUNDS. (a) Lender shall
direct Agent to disburse Capital Expenditure Funds only for Capital
Expenditures.
(b) Lender shall direct Agent to disburse to Borrower the
Capital Expenditure Funds upon satisfaction by Borrower of each of the following
conditions: (i) Borrower shall submit a request for payment to Lender at least
ten (10) days prior to the date on which Borrower requests such payment be made
and specifies the Capital Expenditures to be paid, (ii) on the date such request
is received by Lender and on the date such payment is to be made, no Event of
Default shall exist and remain uncured, (iii) Lender shall have received a
certificate from Borrower (A) stating that the items to be funded by the
requested disbursement are Capital Expenditures, (B) stating that all Capital
Expenditures at the Property to be funded by the
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requested disbursement have been completed (to the extent being funded) in a
good and workmanlike manner and in accordance with all applicable Legal
Requirements, such certificate to be accompanied by a copy of any license,
permit or other approval required by any Governmental Authority in connection
with the Capital Expenditures, (C) identifying each Person that supplied
materials or labor in connection with the Capital Expenditures to be funded by
the requested disbursement, and (D) stating that each such Person has been paid
in full or will be paid in full upon such disbursement for work performed to
date, subject to applicable retainage amounts, such certificate to be
accompanied by evidence of payment reasonably satisfactory to Lender, (iv) at
Lender's option after consecutive disbursements which total at least $250,000, a
title search for the Property indicating that the Property is free from all
Liens, claims and other encumbrances, other than Permitted Encumbrances, unless
the same have been bonded or otherwise secured to Lender's satisfaction, and (v)
at Lender's option, if the cost of any individual Capital Expenditure exceeds
$250,000, Lender shall have received a report satisfactory to Lender in its
reasonable discretion from an architect or engineer approved by Lender in
respect of such architect's or engineer's inspection of the Capital Expenditures
Work, and (vi) Lender shall have received such other evidence as Lender shall
reasonably request that the Capital Expenditures at the Property to be funded by
the requested disbursement have been completed (to the extent being funded) and
are paid for or will be paid upon such disbursement to Borrower, subject to
applicable retainage amounts. Lender shall not be required to disburse Capital
Expenditure Funds more frequently than once each calendar month, unless such
requested disbursement is in an amount greater than the Minimum Disbursement
Amount (or a lesser amount if the total amount of Capital Expenditure Funds is
less than the Minimum Disbursement Amount, in which case only one disbursement
of the amount remaining in the account shall be made).
(c) Nothing in this Section 6.4.2 shall (i) make Lender
responsible for making or completing the Capital Expenditures Work; (ii) require
Lender to expend funds in addition to the Capital Expenditure Funds to complete
any Capital Expenditures Work; (iii) obligate Lender to proceed with the Capital
Expenditures Work; or (iv) obligate Lender to demand from Borrower additional
sums to complete any Capital Expenditures Work.
(d) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector), at Lender's cost (unless the provisions of Section 6.4.2(e) below
applies), to enter onto the Property upon reasonable prior notice during normal
business hours (subject to the rights of Tenants under their Leases) to inspect
the progress of any Capital Expenditures Work and all materials being used in
connection therewith and to examine all plans and shop drawings relating to such
Capital Expenditures Work. Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender's representatives or such
other Persons described above in connection with inspections described in this
Section 6.4.2(d).
(e) If a disbursement will exceed $250,000, Lender may require
an inspection of the Property at Borrower's expense prior to making a
disbursement of Capital Expenditure Funds in order to verify completion of the
Capital Expenditures Work (to the extent being funded) for which reimbursement
is sought. Lender may require that such inspection be conducted by an
appropriate independent qualified professional selected by Lender and may
require a certificate of completion by an independent qualified professional
architect reasonably
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acceptable to Lender prior to the disbursement of the requested Capital
Expenditure Funds. Borrower shall pay the expense of the inspection as required
hereunder, whether such inspection is conducted by Lender or by an independent
qualified professional architect.
(f) In addition to any insurance required under the Loan
Documents, Borrower shall provide or cause to be provided worker's compensation
insurance, builder's risk, and public liability insurance and other insurance to
the extent required under applicable law in connection with Capital Expenditures
Work. All such policies shall be in form and amount reasonably satisfactory to
Lender.
(g) Any Capital Expenditure Funds remaining after the Debt has
been paid in full shall be returned to Borrower.
SECTION 6.5 ROLLOVER FUNDS.
6.5.1 DEPOSITS OF ROLLOVER FUNDS. On the Closing Date,
Borrower shall deposit with Agent the amount of Five Hundred Ninety-Seven
Thousand Eight Hundred Eighty and No/100 Dollars ($597,880) in respect of
certain tenant improvement allowances owed to the tenant under the Genzyme Lease
and Six Hundred Seven Thousand Nine Hundred Fifty and No/100 Dollars ($607,950)
in respect of certain tenant improvement allowances owed to the tenant under the
Millennium Lease. In addition, Borrower shall deposit with Lender for Rollover
Expenditures that may be incurred following the date hereof (a) $106,667 on each
Monthly Payment Date through and including the Monthly Payment Date occurring in
April, 2001, (b) $65,000 on each Monthly Payment Date commencing with the
Monthly Payment Date occurring in May, 2001, through and including the Monthly
Payment Date occurring in April, 2002, (c) in the event that Borrower exercises
its first option to extend the Maturity Date in accordance with Section 2.3.2(b)
hereof, $83,333 on each Monthly Payment Date commencing with the Monthly Payment
Date occurring in May, 2002, through and including the Monthly Payment Date
occurring in April, 2003, and (d) in the event that Borrower exercises its
second option to extend the Maturity Date in accordance with Section 2.3.2(b)
hereof, $125,000 on each Monthly Payment Date commencing with the Monthly
Payment Date occurring in May, 2003, through and including the Monthly Payment
Date occurring in April, 2004. Upon a partial release pursuant to Section 11.25
hereof, the amount of the required monthly deposits pursuant to this Section
6.5.1 shall be reduced by the Release Percentage for the related Release Parcel.
Amounts deposited pursuant to this Section 6.5.1 are referred to herein as the
"ROLLOVER FUNDS".
6.5.2 RELEASE OF ROLLOVER FUNDS. Lender shall direct Agent to
disburse to Borrower the Rollover Funds (other than the Rollover Funds deposited
in respect of the Genzyme Lease and the Millennium Lease) upon satisfaction by
Borrower of each of the following conditions: (i) Borrower shall submit a
request for payment to Lender at least ten (10) days prior to the date on which
Borrower requests such payment be made and specifies the Rollover Expenditures
to be paid, (ii) on the date such request is received by Lender and on the date
such payment is to be made, no Event of Default shall exist and remain uncured,
(iii) Lender shall have received a copy of the Lease in respect of which
Borrower is obligated to pay or reimburse certain Rollover Expenditures, (iv)
Lender shall have received a schedule of leasing commissions payments, if any,
included in such Rollover Expenditures, (v) Lender shall have received a
certificate from Borrower (A) stating that all tenant improvements at the
Property to
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be funded by the requested disbursement have been completed (to the extent being
funded) in a good and workmanlike manner and in accordance with all applicable
Legal Requirements, such certificate to be accompanied by a copy of any license,
permit or other approval by any Governmental Authority required in connection
with the tenant improvements, (B) identifying each Person that supplied
materials or labor in connection with the tenant improvements performed at the
Property to be funded by the requested disbursement, and (C) stating that each
such Person has been paid in full or will be paid in full upon such disbursement
for work performed to date, subject to applicable retainage amounts, such
certificate to be accompanied by evidence of payment reasonably satisfactory to
Lender, (vi) at Lender's option after consecutive disbursements for tenant
improvements which total at least $250,000, a title search for the Property
indicating that the Property is free from all Liens, claims and other
encumbrances, other than Permitted Encumbrances, unless bonded over or otherwise
secured to Lender's satisfaction, and (vii) Lender shall have received such
other evidence as Lender shall reasonably request that the tenant improvements
at the Property to be funded by the requested disbursement have been completed
(to the extent being funded) and are paid for or will be paid upon such
disbursement to Borrower, subject to applicable retainage amounts. In no event
shall Lender be required to disburse Rollover Funds in an amount in excess of
$25.00 per rentable square foot of space for any Lease unless (x) the total
tenant improvement allowance for such Lease is less than $100,000 or (y) Lender,
acting reasonably and in good faith, agrees to an amount in excess of $25.00 per
rentable square foot. Lender shall not be required to disburse Rollover Funds
more frequently than once each calendar month, unless such requested
disbursement is in an amount greater than the Minimum Disbursement Amount (or a
lesser amount if the total amount of Rollover Funds is less than the Minimum
Disbursement Amount, in which case only one disbursement of the amount remaining
in the account shall be made). Any Rollover Funds remaining after the Debt has
been paid in full shall be returned to Borrower.
6.5.3 RELEASE OF GENZYME AND MILLENNIUM ROLLOVER FUNDS. Lender
shall direct Agent to disburse to Borrower the Rollover Funds deposited in
respect of the Genzyme Lease and the Millennium Lease upon satisfaction by
Borrower of each of the following conditions: (i) Borrower shall submit a
request for payment to Lender at least ten (10) days prior to the date on which
Borrower requests such payment be made, (ii) on the date such request is
received by Lender and on the date such payment is to be made, no Event of
Default shall exist and remain uncured, and (iii) Lender shall have received a
certificate from Borrower stating either (A) that the tenant improvement
allowance under the related Lease, to the extent being funded by the requested
disbursement, has been paid or will be paid upon such disbursement, such
certificate to be accompanied by a copy of the Tenant's request for such
payment, or (B) that the Tenant under the related Lease is no longer entitled to
reimbursement for any tenant improvement allowance covered by said Rollover
Funds.
SECTION 6.6 APPLICATION OF RESERVE FUNDS.
Upon the occurrence of an Event of Default, Lender, at its
option, may withdraw the Reserve Funds and apply the Reserve Funds to the items
for which the Reserve Funds were established or to payment of the Debt in such
order, proportion and priority as Lender may determine in its sole discretion.
Lender's right to withdraw and apply the Reserve Funds shall be in addition to
all other rights and remedies provided to Lender under the Loan Documents.
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SECTION 6.7 SECURITY INTEREST IN RESERVE FUNDS.
6.7.1 GRANT OF SECURITY INTEREST. Borrower shall be the owner
of the Reserve Funds. Borrower hereby pledges, assigns and grants a security
interest to Lender, as security for payment of the Debt and the performance of
all other terms, conditions and covenants of the Loan Documents on Borrower's
part to be paid and performed, in all of Borrower's right, title and interest in
and to the Reserve Funds. The Reserve Funds shall be under the sole dominion and
control of Lender, as more particularly set forth in the Cash Management
Agreement.
6.7.2 INCOME TAXES. Borrower shall report on its federal,
state and local income tax returns all interest or income accrued on the Reserve
Funds.
6.7.3 PROHIBITION AGAINST FURTHER ENCUMBRANCE. Borrower shall
not, without the prior consent of Lender, further pledge, assign or grant any
security interest in the Reserve Funds or permit any lien or encumbrance to
attach thereto, or any levy to be made thereon, or any UCC-1 Financing
Statements, except those naming Lender as the secured party, to be filed with
respect thereto.
SECTION 6.8 LETTERS OF CREDIT.
6.8.1 DELIVERY OF LETTERS OF CREDIT. (a) In lieu of making the
payments to any of the Reserve Funds, Borrower may deliver to Lender a Letter of
Credit in accordance with the provisions of this Section 6.8. Additionally,
Borrower may deliver to Lender a Letter of Credit in accordance with the
provisions of this Section 6.8 in lieu of deposits previously made to the
Reserve Funds, in which case such Reserve Funds, to the extent of such Letter of
Credit, shall be disbursed to Borrower. The aggregate amount of any Letter of
Credit and cash on deposit with respect to any of the Reserve Funds shall at all
times be at least equal to the aggregate amount which Borrower is required to
have on deposit in such Reserve Fund pursuant to this Agreement. In determining
the aggregate amount of any Letter of Credit and cash required to be on deposit
in respect of the Capital Expenditure Funds, the Rollover Funds and/or the
Remediation Funds, such aggregate amounts shall equal all amounts required to be
deposited hereunder through the date of delivery of the applicable Letter of
Credit, less amounts expended by Borrower for Capital Expenditures, Rollover
Expenditures or Remediation, as applicable, for which Borrower has satisfied the
conditions to withdrawal from the related Reserve Fund. In the event that a
Letter of Credit is delivered in lieu of any portion of the Tax Funds or the
Insurance Funds, Borrower shall be responsible for the payment of Taxes or
Insurance Premiums, as applicable, and Lender shall not be responsible therefor.
(b) Borrower shall give Lender no less than thirty (30) days
notice of Borrower's election to deliver a Letter of Credit and Borrower shall
pay to Lender all of Lender's reasonable out-of-pocket costs and expenses in
connection therewith. Borrower shall not be entitled to draw from any such
Letter of Credit; provided, however, that the amount of any Letter of Credit
delivered in respect of Capital Expenditure Funds, Rollover Funds or Remediation
Funds may be periodically reduced to the extent of amounts expended by Borrower
for Capital Expenditures, Rollover Expenditures or Remediation, as applicable,
for which Borrower has satisfied the conditions to withdrawal from the related
Reserve Fund. Upon thirty (30) days notice to Lender, Borrower may replace a
Letter of Credit with a cash deposit to the
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applicable Reserve Fund if a Letter of Credit has been outstanding for more than
six (6) months. Prior to the return of a Letter of Credit, Borrower shall
deposit an amount equal to the amount that would have accumulated in the
applicable Reserve Fund and not been disbursed in accordance with this Agreement
if such Letter of Credit had not been delivered.
(c) Borrower shall provide Lender with notice of any increases
in the annual payments for Taxes or Insurance Premiums thirty (30) days prior to
the effective date of any such increase and any applicable Letter of Credit
shall be increased by such increased amount at least ten (10) days prior to the
effective date of such increase.
SECTION 6.9 PROVISIONS REGARDING LETTERS OF CREDIT.
6.9.1 SECURITY FOR DEBT. Each Letter of Credit delivered under
this Agreement shall be additional security for the payment of the Debt. Upon
the occurrence of an Event of Default, Lender shall have the right, at its
option, to draw on any Letter of Credit and to apply all or any part thereof to
the payment of the items for which such Letter of Credit was established or to
apply each such Letter of Credit to payment of the Debt in such order,
proportion or priority as Lender may determine. On the Maturity Date, any such
Letter of Credit may be applied to reduce the Debt.
6.9.2 ADDITIONAL RIGHTS OF LENDER. In addition to any other
right Lender may have to draw upon a Letter of Credit pursuant to the terms and
conditions of this Agreement, Lender shall have the additional rights to draw in
full any Letter of Credit: (a) with respect to any evergreen Letter of Credit,
if Lender has received a notice from the issuing bank that the Letter of Credit
will not be renewed and a substitute Letter of Credit or cash in the amount of
the outstanding Letter of Credit is not provided at least thirty (30) days prior
to the date on which the outstanding Letter of Credit is scheduled to expire;
(b) with respect to any Letter of Credit with a stated expiration date, if
Lender has not received a notice from the issuing bank that it has renewed the
Letter of Credit at least thirty (30) days prior to the date on which such
Letter of Credit is scheduled to expire and a substitute Letter of Credit or
cash in the amount of the outstanding Letter of Credit is not provided at least
thirty (30) days prior to the date on which the outstanding Letter of Credit is
scheduled to expire; (c) upon receipt of notice from the issuing bank that the
Letter of Credit will be terminated (except if the termination of such Letter of
Credit is permitted pursuant to the terms and conditions of this Agreement or a
substitute Letter of Credit or cash is provided); or (d) if Lender has received
notice that the bank issuing the Letter of Credit shall cease to be an Eligible
Institution and a substitute Letter of Credit has not been provided within ten
(10) days. Notwithstanding anything to the contrary contained in the above,
Lender is not obligated to draw any Letter of Credit upon the happening of an
event specified in (a), (b), (c) or (d) above and shall not be liable for any
losses sustained by Borrower due to the insolvency of the bank issuing the
Letter of Credit if Lender has not drawn the Letter of Credit. If Lender draws
upon a Letter of Credit, the amount so drawn shall be deposited by Lender into
the related account established pursuant to the Cash Management Agreement,
provided no Event of Default then exists.
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VII. PROPERTY MANAGEMENT
SECTION 7.1 THE MANAGEMENT AGREEMENT.
Borrower shall cause Manager to manage the Property in
accordance with the Management Agreement. Borrower shall (i) diligently perform
and observe in all material respects the terms, covenants and conditions of the
Management Agreement on the part of Borrower to be performed and observed, and
(ii) promptly notify Lender of any notice from Manager to Borrower of any
default by Borrower in the performance or observance of any of the terms,
covenants or conditions of the Management Agreement on the part of Borrower to
be performed and observed. If Borrower shall default beyond the expiration of
cure periods in the performance or observance of any material term, covenant or
condition of the Management Agreement on the part of Borrower to be performed or
observed, then, without limiting Lender's other rights or remedies under this
Agreement or the other Loan Documents, and without waiving or releasing Borrower
from any of its obligations hereunder or under the Management Agreement, upon
notice to Borrower, Lender shall have the right, but shall be under no
obligation, to pay any sums and to perform any act as may be appropriate to
cause all the material terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed or observed.
SECTION 7.2 PROHIBITION AGAINST TERMINATION OR
MODIFICATION.
Borrower shall not surrender, terminate (except for
termination by reason of a default by Manager thereunder which remains uncured
beyond applicable notice and grace periods under the Management Agreement),
materially modify, renew or extend the Management Agreement, or enter into any
other agreement relating to the management of the Property with Manager or any
other Person, or consent to the assignment by the Manager of its interest under
the Management Agreement, in each case without the express consent of Lender,
which consent shall not be unreasonably withheld or delayed; provided, however,
with respect to a new manager such consent may be conditioned upon Borrower
delivering a Rating Agency Confirmation as to such new manager and management
agreement. If at any time Lender consents to the appointment of a new manager,
such new manager and Borrower shall, as a condition of Lender's consent, execute
a subordination of management agreement in a form substantially similar to the
Assignment of Management Agreement.
SECTION 7.3 REPLACEMENT OF MANAGER.
Lender shall have the right to terminate the Management
Agreement and to require Borrower to replace the Manager with a Person chosen by
Borrower and approved by Lender (which approval shall not be unreasonably
withheld or delayed) upon the occurrence and during the continuance of any one
or more of the following events: (i) at any time when an Event of Default
exists, or (ii) if at any time when the Debt Service Coverage Ratio falls below
1.05 to 1.0, as reasonably determined by Lender on a quarterly basis, Manager is
managing the Property in a manner that is inconsistent with standards that are
customary for comparable properties. If the Management Agreement does not
provide that it may be terminated by Lender upon the occurrence of either of the
foregoing events, the Management Agreement shall provide that it may be
terminated by Borrower upon thirty (30) days notice to Manager, and Borrower
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shall, if requested by Lender, terminate the Management Agreement upon the
occurrence of either of the foregoing events.
VIII. PERMITTED TRANSFERS
SECTION 8.1 PERMITTED TRANSFER OF THE PROPERTY.
Lender shall not withhold its consent to the conveyance of the
Property to a Permitted Transferee provided that (a) Lender has received an
agreement, acceptable to it in its reasonable discretion, pursuant to which
Permitted Transferee assumes all of Borrower's obligations under the Loan
Documents, subject to the limitations on liability contained therein, (b) Lender
shall have been reimbursed for all reasonable out-of-pocket expenses incurred by
Lender in connection with such transfer, including, without limitation,
reasonable attorneys' fees, (c) Lender shall have been reimbursed for Lender's
administrative costs of processing the transfer in an amount not to exceed
$30,000 and (d) Lender shall have received such documents, certificates and
legal opinions as it may reasonably request in connection therewith.
SECTION 8.2 PERMITTED TRANSFERS OF INTEREST IN BORROWER.
Borrower shall not permit or suffer the Transfer of any
ownership interest in Borrower or in any entity owning directly or indirectly
any interest in Borrower. The preceding sentence notwithstanding, Borrower may
permit Transfers of indirect ownership interests in Borrower or in any entity
owning directly or indirectly any interest in Borrower, provided that (a) any
such Transfer is a complete conveyance of the related interest and not a pledge,
encumbrance or other Transfer of such interest, (b) either (i) the transferee is
approved by Lender in its sole discretion or (ii) Beacon and/or PaineWebber own,
directly or indirectly, 100% of the ownership interests in Borrower and
Mezzanine Borrower after such Transfer, (c) if Beacon continues to own any
indirect interests in Borrower after such Transfer, BCI shall be the sole
general partner of BCLP and shall have the right and power to direct the
day-to-day management, business and affairs of BCLP, and (d) if, after giving
effect to any such Transfer and all prior Transfers, more than 49% of the direct
or indirect interests of Borrower are held by an affiliated group other than
Beacon or PaineWebber, Lender receives a non-consolidation opinion acceptable to
Lender in its reasonable discretion or, if the Loan is then included in a
Securitization, acceptable to the Rating Agencies in their sole discretion;
provided that a non-consolidation opinion shall be required to the extent that
either Beacon or PaineWebber drop their ownership interests in Borrower or
Mezzanine Borrower below 49% and subsequently increase it back to 49% or more.
Additionally, (i) pledges and other encumbrances of the direct or indirect
interests held by Beacon and/or PaineWebber (and/or by their direct or indirect
subsidiaries) in Beacon/PW Kendall LLC or in any entity that directly or
indirectly owns Beacon/PW Kendall LLC shall be permitted, provided that the
foreclosure of any such interests shall be an Event of Default unless permitted
by the immediately preceding sentence, and (ii) pledges, encumbrances and other
Transfers of any direct or indirect ownership interest in Beacon or PaineWebber
or in any entity owning directly or indirectly any interest in Beacon or
PaineWebber shall not be restricted hereby or by any other provision of the Loan
Documents, subject only to the provisions of clause (c) above with respect to
Beacon. Lender hereby consents to the pledge of the ownership interests in
Borrower by the Mezzanine Borrower and of the ownership interests in CAOK
Managers, Inc. by Beacon Capital Partners, Inc., as security for
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the Mezzanine Loan. Notwithstanding anything in this Section 8.2 to the
contrary, other than with respect to the Mezzanine Loan, no transfers of direct
ownership interests in Borrower shall be permitted.
IX. SALE AND SECURITIZATION OF MORTGAGE
SECTION 9.1 SALE OF MORTGAGE AND SECURITIZATION.
(a) Lender shall have the right at its expense (i) to sell or
otherwise transfer the Loan or any portion thereof as a whole loan, (ii) to sell
participation interests in the Loan or (iii) to securitize the Loan or any
portion thereof in a single asset securitization or a pooled loan
securitization. (The transaction referred to in clauses (i), (ii) and (iii)
shall hereinafter be referred to collectively as "SECONDARY MARKET TRANSACTIONS"
and the transactions referred to in clause (iii) shall hereinafter be referred
to as a "SECURITIZATION". Any certificates, notes or other securities issued in
connection with a Securitization are hereinafter referred to as "SECURITIES").
Lender shall pay all reasonable third-party costs and expenses hereafter
incurred by Borrower in connection with any Secondary Market Transaction or
Securitization. In the event that Lender sells participation interests in the
Loan or includes only a portion of the Loan in a Securitization or otherwise
transfers only a portion of the Loan, the Loan shall be administered by a single
agent or master servicer and Borrower shall deal solely with such single agent
or master servicer in connection with all matters (including, without
limitation, Lender consents and approvals) relating to the Loan.
(b) If requested by Lender, Borrower shall use reasonable
efforts to assist Lender in satisfying the market standards to which Lender
customarily adheres or which may be reasonably required in the marketplace or by
the Rating Agencies in connection with any Secondary Market Transactions,
including, without limitation, to:
(i) (A) provide updated financial and other information with
respect to the Property, the business operated at the Property,
Borrower and the Manager, (B) provide updated budgets relating to the
Property and (C) permit Lender to obtain updated appraisals, market
studies, environmental reviews (Phase I's only), property condition
reports and other due diligence investigations of the Property (the
"UPDATED INFORMATION"), together, if customary, with appropriate
verification of the Updated Information through letters of auditors or
opinions of counsel acceptable to Lender and the Rating Agencies;
(ii) at Lender's expense, provide opinions of counsel, which
may be relied upon by Lender, the Rating Agencies and their respective
counsel, agents and representatives, as to non-consolidation,
fraudulent conveyance, and true sale or any other opinion customary in
Secondary Market Transactions or required by the Rating Agencies with
respect to the Property and Borrower and its Affiliates, which counsel
and opinions shall be reasonably satisfactory to Lender and the Rating
Agencies;
(iii) provide updated, as of the closing date of the Secondary
Market Transaction, representations and warranties made in the Loan
Documents, with appropriate modifications to reflect changed
circumstances which do not otherwise
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constitute a Default under the Loan Documents, and such additional
representations and warranties, if accurate, as the Rating Agencies may
reasonably require; and
(iv) execute amendments to the Loan Documents and Borrower's
organizational documents reasonably requested by Lender; provided,
however, that Borrower shall not be required to modify or amend any
Loan Document if such modification or amendment would (A) change the
interest rate, the stated maturity or the amortization of principal as
set forth herein or in the Note, (B) modify or amend any other economic
term of the Loan, or (C) otherwise increase the obligations or decrease
the rights of Borrower under the Loan Documents.
(c) If requested by Lender for the sole purpose of
facilitating the requirements of Lender's compliance with SEC Staff Accounting
Bulletin 71 or any supplement or successor thereto, Borrower shall provide
Lender (at Lender's expense to the extent of any incremental costs over the cost
incurred by Borrower for the financial statements otherwise required to be
provided by Borrower pursuant to this Agreement) with the following financial
statements with respect to Mezzanine Borrower or the Property, as applicable (it
being understood that Lender shall request (A) full financial statements only if
it anticipates that the principal amount of the Loan at the time of
Securitization may, or if the principal amount of the Loan at any time during
which the Loan is included in a Securitization does, equal or exceed 20% of the
aggregate principal amount of all mortgage loans included in the Securitization
and (B) summaries of such financial statements if the principal amount of the
Loan at any such time equals or exceeds 10% of such aggregate principal amount):
(i) As of the Closing Date, a balance sheet with respect to
the Property as of the end of the two most recent Fiscal Years, meeting
the requirements of Section 210.3 01 of Regulation S-X of the
Securities Act and statements of income and statements of cash flows
with respect to the Property for the three most recent Fiscal Years
(but not prior to May 1, 1998), meeting the requirements of Section
210.3-02 of Regulation S-X, (all of such financial statements,
collectively, the "STANDARD STATEMENTS"); provided, however, that if
the Property would be deemed to constitute a business and not real
estate under Regulation S-X that has been acquired by Borrower from an
unaffiliated third party, as to which the other conditions set forth in
Section 210.3-05 of Regulation S-X for provision of financial
statements in accordance with such Section have been met, at Lender's
election in lieu of or in addition to the Standard Statements otherwise
required by this Section 9.1(c)(i), Borrower shall instead provide the
financial statements required by such Section 210.3-05 of Regulation
S-X ("ACQUIRED PROPERTY Statements").
(ii) Not later than 45 days after the end of each fiscal
quarter following the Closing Date, a financial statement prepared in
accordance with Section 210.10-01 of Regulation S-X (provided, that if
for such corresponding period of the most recent Fiscal Year Acquired
Property Statements were permitted to be provided hereunder pursuant to
paragraph (i) above, Borrower shall instead provide Acquired Property
Statements for such corresponding period). If requested by Lender,
Borrower shall also provide "summarized financial information," as
defined in Section 210.1-02(bb) of Regulation S-X, with respect to such
quarterly financial statements.
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(iii) Not later than 60 days after the end of each Fiscal Year
following the Closing Date, a balance sheet of the Property as of the
end of such Fiscal Year, meeting the requirements of Section 210.3-01
of Regulation S-X, and statements of income and statements of cash
flows of the Property for such Fiscal Year, meeting the requirements of
Section 210.3-02 of Regulation S-X. If requested by Lender, Borrower
shall provide summarized financial information with respect to such
annual financial statements.
(iv) In the event Lender determines, in connection with a
Securitization, that the financial statements required in order to
comply with Regulation S-X or Legal Requirements are other than as
provided herein, then notwithstanding the provisions of this Section,
Lender may request, and Borrower shall promptly provide, such
combination of Acquired Property Statements and/or Standard Statements
as may be necessary for such compliance.
(v) Any other or additional financial statements, or
financial, statistical or operating information, as shall be required
pursuant to Regulation S-X or other Legal Requirements in connection
with any Disclosure Document or any filing under or pursuant to the
Exchange Act in connection with or relating to a Securitization
(hereinafter an "EXCHANGE ACT FILING") or as shall otherwise be
reasonably requested by Lender to meet disclosure, rating agency or
marketing requirements.
All financial statements provided by Borrower pursuant to this Section 9.1(c)
shall be prepared in accordance with GAAP, and shall meet the requirements of
Regulation S-X. All financial statements relating to a Fiscal Year shall be
audited by the independent accountants in accordance with auditing standards
generally accepted in the United States, shall be accompanied by the manually
executed report of the independent accountants thereon, which report shall meet
the requirements of Regulation S-X, and shall be further accompanied by a
manually executed written consent of the independent accountants, in form and
substance reasonably acceptable to Lender, to the inclusion of such financial
statements in any Disclosure Document and any Exchange Act Filing and to the use
of the name of such independent accountants and the reference to such
independent accountants as "experts" in any Disclosure Document and Exchange Act
Filing, all of which shall be provided at the same time as the related financial
statements are required to be provided. All other financial statements shall be
certified by the chief financial officer or treasurer of Borrower, which
certification shall state that such financial statements meet the requirements
set forth in the first sentence of this paragraph.
SECTION 9.2 SECURITIZATION INDEMNIFICATION.
(a) Borrower understands that information provided to Lender
by Borrower and its agents, counsel and representatives may be included in
disclosure documents in connection with the Securitization, including, without
limitation, an offering circular, a prospectus, prospectus supplement, private
placement memorandum or other offering document (each, an "DISCLOSURE DOCUMENT")
and may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "SECURITIES ACT"), or
the Securities and Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
may be made available to investors or prospective investors in the Securities,
the Rating Agencies, and service providers relating to the Securitization.
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(b) Borrower shall provide in connection with each of (i) a
preliminary and a final private placement memorandum or (ii) a preliminary and
final prospectus or prospectus supplement, as applicable, an agreement (A)
certifying that Borrower has examined such specific sections of the Disclosure
Documents as may be reasonably specified by Lender and that each such section,
as it relates to Borrower, Borrower's Affiliates, the Property, any affiliated
Manager and other aspects of the Loan, does not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading, (B) indemnifying Lender (and for purposes of this Section 9.2,
Lender hereunder shall include its officers and directors), the Affiliate of
Morgan Stanley Dean Witter & Co. ("MORGAN STANLEY") that has filed the
registration statement relating to the Securitization (the "REGISTRATION
Statement"), each of its directors, each of its officers who have signed the
Registration Statement and each Person that controls the Affiliate within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, the "MORGAN STANLEY GROUP"), and Morgan Stanley, each of its
directors and each Person who controls Morgan Stanley within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act
(collectively, the "UNDERWRITER GROUP") for any losses, claims, damages or
liabilities (collectively, the "LIABILITIES") to which Lender, the Morgan
Stanley Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such sections or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated in such sections or necessary in order to make the
statements in such sections, in light of the circumstances under which they were
made, not misleading and (C) agreeing to reimburse Lender, the Morgan Stanley
Group and/or the Underwriter Group for any legal or other expenses reasonably
incurred by Lender, the Morgan Stanley Group and the Underwriter Group in
connection with investigating or defending the Liabilities; provided, however,
that Borrower will be liable in any such case under clauses (B) or (C) above
only to the extent that any such Liability arises out of or is based upon any
such untrue statement or omission made therein in reliance upon and in
conformity with information furnished to Lender by or on behalf of Borrower in
connection with the preparation of the Disclosure Document or in connection with
the underwriting or closing of the Loan, including, without limitation,
financial statements of Borrower, operating statements and rent rolls with
respect to the Property. This indemnity agreement will be in addition to any
liability which Borrower may otherwise have.
(c) In connection with Exchange Act Filings, Borrower shall
(i) indemnify Lender, the Morgan Stanley Group and the Underwriter Group for
Liabilities to which Lender, the Morgan Stanley Group or the Underwriter Group
may become subject insofar as the Liabilities arise out of or are based upon the
omission or alleged omission to state in such sections of the Disclosure
Document a material fact required to be stated therein in order to make such
statements, in light of the circumstances under which they were made, not
misleading and (ii) reimburse Lender, the Morgan Stanley Group or the
Underwriter Group for any legal or other expenses reasonably incurred by Lender,
the Morgan Stanley Group or the Underwriter Group in connection with defending
or investigating the Liabilities. Borrower will be liable in any such case under
this Section 9.2(c) only to the extent that any such liability arises out of or
is based upon any such untrue statement or omission made in the Disclosure
Documents in reliance upon and in conformity with information furnished to
Lender by or on behalf of Borrower (or by reason of Borrower failing to furnish
such information) in connection with the preparation of the
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Disclosure Documents or in connection with the underwriting of the Loan,
including, without limitation, financial statements of Borrower, operating
statements and rent rolls with respect to the Property.
(d) Promptly after receipt by an indemnified party under this
Section 9.2 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9.2, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. After notice from the indemnifying party to such
indemnified party under this Section 9.2, such indemnified party shall pay for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party at the cost of the indemnifying party. The indemnifying party
shall not be liable for the expenses of more than one separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 9.2(b) or
(c) is for any reason held to be unenforceable as to an indemnified party in
respect of any losses, claims, damages or liabilities (or action in respect
thereof) referred to therein which would otherwise be indemnifiable under
Section 9.2(b) or (c), the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses, claims,
damages or liabilities (or action in respect thereof); PROVIDED, HOWEVER, that
no Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) Morgan Stanley's and Borrower's
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; and (iii) any other equitable considerations appropriate
in the circumstances. Lender and Borrower hereby agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation.
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(f) The liabilities and obligations of both Borrower and
Lender under this Section 9.2 shall survive the termination of this Agreement
and the satisfaction and discharge of the Debt.
X. DEFAULTS
SECTION 10.1 EVENT OF DEFAULT.
(a) Each of the following events shall constitute an event of
default hereunder (an "EVENT OF DEFAULT"):
(i) if (A) any payment of principal, interest or monthly
escrow amount is not paid when due, unless any such amount is not paid
when due as a result of (x) the failure of Clearing Bank to transfer
funds on deposit in the Clearing Account to the Lockbox Account in
accordance with the Clearing Account Agreement, provided that Borrower
pays such amount within one (1) Business Day after written notice from
Lender to Borrower, (y) the failure of Agent to transfer funds on
deposit in the Lockbox Account to the Debt Service Account or any other
Account in accordance with the Cash Management Agreement, provided that
Borrower pays such amount within one (1) Business Day after written
notice from Lender to Borrower, or (z) the failure of Lender to cause
the same to be paid out of the Debt Service Account when required under
the Cash Management Agreement, provided that sufficient amounts have
been deposited therein pursuant to the Cash Management Agreement or (B)
any other portion of the Debt is not paid within five (5) days of
written notice from Lender to Borrower;
(ii) if any of the Taxes or Other Charges are not paid when
due, unless any such amount is not paid when due as a result of (A) the
failure of Clearing Bank to transfer funds on deposit in the Clearing
Account to the Lockbox Account in accordance with the Clearing Account
Agreement, provided that Borrower pays such amount within one (1)
Business Day after written notice from Lender to Borrower, (B) the
failure of Agent to transfer funds on deposit in the Lockbox Account to
the Tax Account in accordance with the Cash Management Agreement,
provided that Borrower pays such amount within one (1) Business Day
after written notice from Lender to Borrower, or (z) the failure of
Lender to cause the same to be paid out of the Tax Funds when required
hereunder or under the Cash Management Agreement, provided that
sufficient amounts have been deposited therein pursuant to the Cash
Management Agreement;
(iii) if the Policies are not kept in full force and effect,
unless as a result of (A) the failure of Clearing Bank to transfer
funds on deposit in the Clearing Account to the Lockbox Account in
accordance with the Clearing Account Agreement, provided that Borrower
pays such amount within one (1) Business Day after written notice from
Lender to Borrower, (B) the failure of Agent to transfer funds on
deposit in the Lockbox Account to the Insurance Account in accordance
with the Cash Management Agreement, provided that Borrower pays such
amount within one (1) Business Day after written notice from Lender to
Borrower, or (z) the failure of Lender to cause the same to be paid out
of the Insurance Funds when required hereunder or under the Cash
Management
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Agreement, provided that sufficient amounts have been deposited therein
pursuant to the Cash Management Agreement;
(iv) if (A) there is a transfer of title to the Property or
any portion thereof in violation of Article 6 of the Mortgage, (B)
there is a transfer of title to any direct or indirect interest in
Borrower in violation of Section 8.2 hereof, or (C) Borrower
voluntarily breaches or permits any other breach of Article 6 of the
Mortgage;
(v) if any representation or warranty made by Borrower herein
or in any other Loan Document or in any report, certificate, financial
statement or other instrument, agreement or document prepared by or on
behalf of Borrower and furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or
warranty was made; provided that Borrower shall have twenty (20) days
after notice from Lender to cure in a manner satisfactory to Lender any
such breach of a representation or warranty that is susceptible to
cure, except that Borrower shall have no opportunity to cure any breach
of a representation or warranty (A) made to the best of Borrower's
knowledge (i.e., which Borrower knew was false when made), (B) that was
otherwise intentionally misrepresented, or (C) made pursuant to Section
3.1.24 hereof;
(vi) if Borrower, Guarantor or the SPC Party shall make an
assignment for the benefit of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed
for Borrower, Guarantor or the SPC Party or if Borrower, Guarantor or
the SPC Party shall be adjudicated a bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be
filed by or against, consented to, or acquiesced in by, Borrower,
Guarantor or the SPC Party, or if any proceeding for the dissolution or
liquidation of Borrower shall be instituted; PROVIDED, HOWEVER, if such
appointment, adjudication, petition or proceeding was involuntary and
not consented to by Borrower, Guarantor or the SPC Party, upon the same
not being discharged, stayed or dismissed within sixty (60) days;
(viii) if Borrower attempts to assign its rights under this
Agreement or any of the other Loan Documents or any interest herein or
therein in contravention of the Loan Documents;
(ix) if any of the assumptions contained in the Insolvency
Opinion, or in any other non-consolidation opinion delivered to Lender
in connection with the Loan, or in any other non-consolidation opinion
delivered subsequent to the closing of the Loan, is or shall become
untrue in any material respect;
(x) if Borrower breaches any of its covenants contained in
Section 3.1.24 hereof in any material respect;
(xi) if Borrower shall continue to be in Default under any of
the other terms, covenants or conditions of this Agreement not
specified in subsections (i) to (x) above, or in any other Loan
Document which does not provide for a specific notice and cure period
with respect to such Default, for ten (10) days after notice to
Borrower from Lender, in
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the case of any Default which can be cured by the payment of a sum of
money, or for thirty (30) days after notice from Lender in the case of
any other Default; PROVIDED, HOWEVER, that if such non-monetary Default
is susceptible of cure but cannot reasonably be cured within such
30-day period and provided further that Borrower shall have commenced
to cure such Default within such 30-day period and thereafter
diligently and expeditiously proceeds to cure the same, such 30-day
period shall be extended for such time as is reasonably necessary for
Borrower in the exercise of due diligence to cure such Default, such
additional period not to exceed one hundred twenty (120) days; or
(xii) if there shall be default under any of the other Loan
Documents beyond any applicable cure periods contained in such Loan
Documents, whether as to Borrower or the Property, or if any other such
event shall occur or condition shall exist, if the effect of such event
or condition is to accelerate the maturity of any portion of the Debt
or to permit Lender to accelerate the maturity of all or any portion of
the Debt.
(b) Upon the occurrence of an Event of Default (other than an
Event of Default described in clauses (vi), (vii) or (viii) above) and at any
time thereafter while such Event of Default continues, Lender may, in addition
to any other rights or remedies available to it pursuant to this Agreement and
the other Loan Documents or at law or in equity, take such action, without
notice or demand, that Lender deems advisable to protect and enforce its rights
against Borrower and in and to the Property, including, without limitation,
declaring the Debt to be immediately due and payable, and Lender may enforce or
avail itself of any or all rights or remedies provided in the Loan Documents
against Borrower and the Property, including, without limitation, all rights or
remedies available at law or in equity; and upon any Event of Default described
in clauses (vi), (vii) or (viii) above, the Debt and all other obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
SECTION 10.2 REMEDIES.
(a) Upon the occurrence and during the continuance of an Event
of Default, all or any one or more of the rights, powers, privileges and other
remedies available to Lender against Borrower under this Agreement or any of the
other Loan Documents executed and delivered by, or applicable to, Borrower or at
law or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Debt shall be declared due and payable, and
whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan
Documents with respect to the Property. Any such actions taken by Lender shall
be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, if an Event of
Default is continuing (i) Lender is not subject to any "one action" or "election
of remedies" law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until
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Lender has exhausted all of its remedies against the Property and the Mortgage
has been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Debt or the Debt has been paid in full.
(b) Lender shall have the right from time to time to partially
foreclose the Mortgage in any manner and for any amounts secured by the Mortgage
then due and payable as determined by Lender in its sole discretion including,
without limitation, the following circumstances: (i) in the event Borrower
defaults beyond any applicable grace period in the payment of one or more
scheduled payments of principal and interest, Lender may foreclose the Mortgage
to recover such delinquent payments, or (ii) in the event Lender elects to
accelerate less than the entire outstanding principal balance of the Loan,
Lender may foreclose the Mortgage to recover so much of the principal balance of
the Loan as Lender may accelerate and such other sums secured by the Mortgage as
Lender may elect. Notwithstanding one or more partial foreclosures, the Property
shall remain subject to the Mortgage to secure payment of sums secured by the
Mortgage and not previously recovered.
(c) If an Event of Default occurs and is continuing, Lender
shall have the right from time to time to sever the Note and the other Loan
Documents into one or more separate notes, mortgages and other security
documents (the "SEVERED LOAN DOCUMENTS") in such denominations as Lender shall
determine in its sole discretion for purposes of evidencing and enforcing its
rights and remedies provided hereunder. Borrower shall execute and deliver to
Lender from time to time, promptly after the request of Lender, a severance
agreement and such other documents as Lender shall request in order to effect
the severance described in the preceding sentence, all in form and substance
reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably
appoints Lender as its true and lawful attorney, coupled with an interest, in
its name and stead to make and execute all documents necessary or desirable to
effect the aforesaid severance, Borrower ratifying all that its said attorney
shall do by virtue thereof; provided, however, Lender shall not make or execute
any such documents under such power until three (3) days after notice has been
given to Borrower by Lender of Lender's intent to exercise its rights under such
power.
(d) Any amounts recovered from the Property or any other
collateral for the Loan after an Event of Default may be applied by Lender
toward the payment of any interest and/or principal of the Loan and/or any other
amounts due under the Loan Documents in such order, priority and proportions as
Lender in its sole discretion shall determine.
SECTION 10.3 REMEDIES CUMULATIVE.
The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to
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Borrower shall not be construed to be a waiver of any subsequent Default or
Event of Default by Borrower or to impair any remedy, right or power
consequent thereon.
XI. MISCELLANEOUS
SECTION 11.1 SUCCESSORS AND ASSIGNS.
All covenants, promises and agreements in this Agreement, by
or on behalf of Borrower, shall inure to the benefit of the legal
representatives, successors and assigns of Lender.
SECTION 11.2 LENDER'S DISCRETION.
Whenever pursuant to this Agreement Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive. Prior to a Securitization, whenever
pursuant to this Agreement the Rating Agencies are given any right to approve or
disapprove, or any arrangement or term is to be satisfactory to the Rating
Agencies, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory, based upon Lender's
determination of Rating Agency criteria, shall be substituted therefor.
SECTION 11.3 GOVERNING LAW.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK,
AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED
PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY
AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,
VALIDITY AND ENFORCEABILITY OF ALL LOAN
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DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER AND LENDER EACH HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(B) TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY AT LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT
MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT:
PAINEWEBBER INCORPORATED
1285 AVENUE OF THE AMERICAS, 38TH FLOOR
NEW YORK, NY 10019
ATTN: KEVIN D. COX
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
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SECTION 11.4 MODIFICATION, WAIVER IN WRITING.
No modification, amendment, extension, discharge, termination
or waiver of any provision of this Agreement or of any other Loan Document, nor
consent to any departure by Borrower or Lender therefrom, shall in any event be
effective unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on, Borrower shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.
SECTION 11.5 DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under any
other Loan Document, shall operate as or constitute a waiver thereof, nor shall
a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement or any other Loan Document, Lender shall not be
deemed to have waived any right either to require prompt payment when due of all
other amounts due under this Agreement or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
SECTION 11.6 NOTICES.
All notices, demands, requests, consents, approvals or other
communications (any of the foregoing, a "NOTICE") required, permitted, or
desired to be given hereunder shall be in writing sent by telefax (with answer
back acknowledged and a copy sent by hand or by reputable overnight courier
within one (1) Business Day thereafter) or by registered or certified mail,
postage prepaid, return receipt requested, or delivered by hand or reputable
overnight courier addressed to the party to be so notified at its address
hereinafter set forth, or to such other address as such party may hereafter
specify in accordance with the provisions of this Section 11.6. Any Notice shall
be deemed to have been received: (a) three (3) days after the date such Notice
is mailed, (b) on the date of sending by telefax (and not the date of sending
the copy as required above) if sent during business hours on a Business Day
(otherwise on the next Business Day), (c) on the date of delivery by hand if
delivered during business hours on a Business Day (otherwise on the next
Business Day), and (d) on the next Business Day if sent by an overnight
commercial courier, in each case addressed to the parties as follows:
If to Lender: Morgan Stanley Dean Witter Mortgage Capital Inc.
1585 Broadway
38th Floor
New York, New York 10036
Attention: James Flaum & Kevin Swartz
Facsimile No.: (212) 761-0524
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with a copy to: Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: John M. Zizzo, Esq.
Facsimile No.: (212) 504-6666
If to Borrower: One Kendall LLC and Cambridge Athenaeum LLC
c/o Beacon Capital Partners, Inc.
One Federal Street
26th Floor
Boston, Massachusetts 02110
Attention: General Counsel
Facsimile No.: (617) 457-0499
with a copy to: PaineWebber Incorporated
1285 Avenue of the Americas, 38th Floor
New York, New York 10019
Attention: Kevin D. Cox
Facsimile No.: (212) 713-7947
and: Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110
Attention: Robert J. Mack, Esq.
Facsimile No.: (617) 574-4112
and: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Alan J. Pomerantz, Esq.
Facsimile No.: (212) 310-8007
SECTION 11.7 TRIAL BY JURY.
BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE
OTHER PARTY.
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SECTION 11.8 HEADINGS.
The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
SECTION 11.9 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
SECTION 11.10 PREFERENCES.
To the extent Borrower makes a payment or payments to Lender,
which payment or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent of such payment
or proceeds received, the obligations hereunder or part thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received by Lender.
SECTION 11.11 WAIVER OF NOTICE.
Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.
SECTION 11.12 REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that Lender
or its agents have acted unreasonably or unreasonably delayed acting in any case
where, by law or under this Agreement or the other Loan Documents, Lender or
such agent, as the case may be, has an obligation to act reasonably or promptly,
neither Lender nor its agents shall be liable for any monetary damages, and
Borrower's sole remedy shall be limited to commencing an action seeking
injunctive relief or declaratory judgment. Any action or proceeding to determine
whether Lender has acted reasonably may be determined by an action seeking
declaratory judgment. Any expedited procedure legally available with such a
declaratory judgment action or action for injunctive relief may be utilized to
the extent possible.
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SECTION 11.13 EXPENSES; INDEMNITY.
(a) Borrower shall pay or, if Borrower fails to pay, reimburse
Lender upon receipt of notice from Lender, for all reasonable costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by Lender in
connection with (i) enforcing after a Default Borrower's ongoing performance of
and compliance with Borrower's agreements and covenants contained in this
Agreement and the other Loan Documents on its part to be performed or complied
with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (ii) the negotiation,
preparation, execution, delivery and administration of any consents, amendments,
waivers or other modifications to this Agreement and the other Loan Documents
and any other documents or matters requested by Borrower; (iii) the filing and
recording fees and expenses, title insurance and reasonable fees and expenses of
counsel for providing to Lender all required legal opinions, and other similar
expenses incurred, in creating and perfecting the Liens in favor of Lender
pursuant to this Agreement and the other Loan Documents; (iv) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, this Agreement, the other Loan Documents, the
Property, or any other security given for the Loan; and (v) enforcing any
obligations of or collecting any payments due from Borrower under this
Agreement, the other Loan Documents or with respect to the Property after a
Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or of
any insolvency or bankruptcy proceedings; provided, however, that Borrower shall
not be liable for the payment of any such costs and expenses to the extent the
same arise by reason of the gross negligence, illegal acts, fraud or willful
misconduct of Lender. Any costs due and payable to Lender may be paid to Lender
pursuant to the Cash Management Agreement. Notwithstanding anything to the
contrary contained herein, subject to the indemnification obligations of
Borrower set forth in Section 9.2(b) and (c) above, in no event shall Borrower
be responsible for any costs incurred by Lender in connection with a
Securitization or a Secondary Market Transaction.
(b) Borrower shall indemnify, defend and hold harmless Lender
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever incurred by Lender to, or asserted against
Lender by, third parties (including, without limitation, the reasonable fees and
disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender in any manner relating to or arising out of (i)
any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the "INDEMNIFIED LIABILITIES"); PROVIDED, HOWEVER, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.
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SECTION 11.14 SCHEDULES INCORPORATED.
The Schedules annexed hereto are hereby incorporated herein as
a part of this Agreement with the same effect as if set forth in the body
hereof.
SECTION 11.15 OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lender's interest in and to this Agreement and
the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
non-mandatory counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such assignee upon such
documents and any such right to interpose or assert any such unrelated offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Borrower.
SECTION 11.16 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD
PARTY BENEFICIARIES.
(a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for
the benefit of Lender and Borrower, and nothing contained in this Agreement or
the other Loan Documents shall be deemed to confer upon anyone other than Lender
and Borrower any right to insist upon or to enforce the performance or
observance of any of the obligations contained herein or therein. All conditions
to the obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.
SECTION 11.17 PUBLICITY.
Unless required by law, all news releases, publicity or
advertising by Borrower or its Affiliates through any media intended to reach
the general public which refers to the Loan Documents or the financing evidenced
by the Loan Documents, to Lender, Morgan Stanley Mortgage Capital Inc., or any
of their Affiliates shall be subject to the prior approval of Lender, which
approval shall not be unreasonably withheld or delayed.
SECTION 11.18 WAIVER OF MARSHALLING OF ASSETS.
To the fullest extent permitted by law, Borrower, for itself
and its successors and assigns, waives all rights to a marshalling of the assets
of Borrower, Borrower's members and
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others with interests in Borrower, and of the Property, and shall not assert any
right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Lender under the Loan Documents to a sale of the Property for the
collection of the Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Property in preference to every other claimant whatsoever.
SECTION 11.19 WAIVER OF OFFSETS/DEFENSES/COUNTERCLAIMS.
Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents or otherwise to offset any obligations to
make the payments required by the Loan Documents. No failure by Lender to
perform any of its obligations hereunder shall result in any offset against any
payments which Borrower is obligated to make under any of the Loan Documents.
SECTION 11.20 CONFLICT; CONSTRUCTION OF DOCUMENTS;
RELIANCE.
In the event of any conflict between the provisions of this
Agreement and any of the other Loan Documents, the provisions of this Agreement
shall control. The parties hereto acknowledge that they were represented by
competent counsel in connection with the negotiation, drafting and execution of
the Loan Documents and that such Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.
Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely
on its own judgment and advisors in entering into the Loan without relying in
any manner on any statements, representations or recommendations of Lender or
any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to
any limitation whatsoever in the exercise of any rights or remedies available to
it under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender's exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.
SECTION 11.21 BROKERS AND FINANCIAL ADVISORS.
Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Borrower shall
indemnify, defend and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including Lender's reasonable
attorneys' fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein. The provisions of this Section 11.21 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.
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SECTION 11.22 EXCULPATION.
Subject to the qualifications below, Lender shall not enforce
the liability and obligation of Borrower to perform and observe the obligations
contained in the Note, this Agreement, the Mortgage or the other Loan Documents
by any action or proceeding wherein a money judgment shall be sought against
Borrower, except that Lender may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Lender to enforce and realize upon its interest under the Note, this Agreement,
the Mortgage and the other Loan Documents, or in the Property, the Rents, or any
other collateral given to Lender pursuant to the Loan Documents; PROVIDED,
HOWEVER, that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's interest in the Property, in the Rents and in any other collateral
given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage
and the other Loan Documents, agrees that it shall not sue for, seek or demand
any deficiency judgment against Borrower in any such action or proceeding under
or by reason of or under or in connection with the Note, this Agreement, the
Mortgage or the other Loan Documents. The provisions of this Section shall not,
however, (a) constitute a waiver, release or impairment of any obligation
evidenced or secured by any of the Loan Documents; (b) impair the right of
Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (c) affect the validity or
enforceability of any guaranty made in connection with the Loan or any of the
rights and remedies of Lender thereunder; (d) impair the right of Lender to
obtain the appointment of a receiver; (e) impair the enforcement of the
Assignment of Leases; (f) constitute a prohibition against Lender to seek a
deficiency judgment against Borrower in order to fully realize the security
granted by the Mortgage or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against the Property; or
(g) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Lender (including attorneys' fees and costs reasonably incurred) arising out of
or in connection with the following:
(i) fraud or intentional misrepresentation by Borrower or any
Guarantor in connection with the Loan;
(ii) the willful misconduct of Borrower (except that this
clause (ii) shall not apply to any failure to make payments with
respect to the Loan);
(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity;
(iv) the removal or disposal by Borrower or any Affiliate of
Borrower of any portion of the Property after notice to Borrower of an
Event of Default;
(v) the misapplication or conversion by Borrower of (A) any
insurance proceeds paid by reason of any loss, damage or destruction to
the Property, (B) any Awards or other amounts received in connection
with the Condemnation of all or a portion of the Property, or (C) any
Rents following notice to Borrower of an Event of Default;
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(vi) Borrower's failure to pay charges for labor or materials
or other charges for work performed by or on behalf of Borrower that
can create a mechanics' lien on any portion of the Property (unless
Borrower is negotiating such charges in good faith or is contesting
such lien in accordance with this Agreement) if the Property generates
sufficient funds to make such payments after payment of amounts due
under the Loan and the Mezzanine Loan (including, without limitation,
payments of the Reserve Funds) and other Operating Expenses;
(vii) any security deposits, advance deposits or any other
deposits collected by Borrower with respect to the Property which are
not delivered to Lender upon a foreclosure of the Property or action in
lieu thereof, except to the extent any such deposits were applied in
accordance with the terms and conditions of any of the Leases prior to
the occurrence of the Event of Default that gave rise to such
foreclosure or action in lieu thereof;
(viii) Borrower's indemnification of Lender set forth in
Section 9.2 hereof;
(ix) the failure of Borrower to appoint a new property manager
upon the request of Lender after notice to Borrower of an Event of
Default as required pursuant to the last sentence of Section 7.3 of
this Agreement; and
(x) the failure of Borrower to direct any Tenant to pay its
Rent in accordance with the Cash Management Agreement.
Notwithstanding anything to the contrary in this Agreement, the Note or any of
the Loan Documents, (A) Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt or to require that all collateral shall continue to secure all of the Debt
owing to Lender in accordance with the Loan Documents, and (B) the Debt shall be
fully recourse to Borrower in the event that: (i) Borrower fails to obtain
Lender's prior consent to any subordinate financing or other voluntary Lien
(other than a Permitted Encumbrance) encumbering Borrower's interest in the
Property; or (ii) Borrower fails to obtain Lender's prior consent to any
voluntary assignment, transfer, or conveyance of the Property or any interest
therein or any interest, direct or indirect, in Borrower, if such consent is
required by the Mortgage or this Agreement.
SECTION 11.23 PRIOR AGREEMENTS.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, including, without limitation, the Commitment
Letter dated February 11, 2000 between Borrower and Lender, are superseded by
the terms of this Agreement and the other Loan Documents.
SECTION 11.24 SERVICER.
At the option of Lender, the Loan may be serviced by a
servicer (the "SERVICER") selected by Lender and Lender may delegate all or any
portion of its responsibilities under this
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Agreement and the other Loan Documents to the Servicer pursuant to a servicing
agreement (the "SERVICING AGREEMENT") between Lender and Servicer. Borrower
shall not be responsible for any set-up fees or any other initial costs relating
to or arising under the Servicing Agreement. Borrower shall not be responsible
for payment of the monthly servicing fee or any other fee due to the Servicer
under the Servicing Agreement; Servicer shall, however, be entitled to
reimbursement of costs and expenses as and to the same extent (but without
duplication) as Lender is entitled thereto under the applicable provisions of
this Agreement and the other Loan Documents.
SECTION 11.25 PARTIAL RELEASES.
Borrower may obtain the release of one or more of the Release
Parcels from the lien of the Mortgage and related Loan Documents at any time
(and from time to time), upon the satisfaction of each of the following
conditions:
(a) Immediately prior to, and after giving effect to, the
proposed release, no Event of Default or Mezzanine Event of Default shall have
occurred and be continuing.
(b) Lender shall have received (i) payment of an amount equal
to the Release Amount for each such Release Parcel, plus any additional amounts
which may then be prepaid in accordance with Section 2.4.1 of this Agreement,
(ii) payment of any reasonable expenses incurred by Lender in connection with
such release (including, without limitation, reasonable attorneys' fees) and any
other amounts then due and owing to Lender pursuant to this Agreement and the
other Loan Documents, (iii) any prepayment fee required pursuant to Section
2.4.1 of this Agreement, and (iv) evidence satisfactory to Lender that the Debt
Service Coverage Ratio after giving effect to such release will equal or exceed
the Debt Service Coverage Ratio immediately prior to such release.
(c) Mezzanine Lender shall have received all sums required to
be paid to Mezzanine Lender in connection with the release of such Release
Parcel pursuant to the terms and conditions of Section 2.3 of the Mezzanine Loan
Agreement.
(d) Borrower shall submit to Lender, not less than five (5)
Business Days prior to the date of such release, a partial release of the
Mortgage and related Loan Documents for execution by Lender. Such release shall
be in a form appropriate for the jurisdiction in which the Property is located
and reasonably satisfactory to Lender. In addition, Borrower shall provide all
other documentation Lender reasonably requires to be delivered by Borrower in
connection with such release.
(e) Borrower shall have delivered to Lender (i) an endorsement
to the Title Insurance Policy, an opinion of counsel (from counsel reasonably
acceptable to Lender) or a certificate of an architect (from an architect
reasonably acceptable to Lender and licensed to practice in the State)
indicating that the Release Parcel has been legally subdivided from the
remainder of the Property, (ii) an endorsement to the Title Insurance Policy, an
opinion of counsel (from counsel reasonably acceptable to Lender) or a
certificate of an architect (from an architect reasonably acceptable to Lender
and licensed to practice in the State) indicating that the balance of the
Property separately conforms to and is in material compliance with all Legal
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<PAGE>
Requirements and constitutes a separate tax lot(s), (iii) a certificate from an
architect or engineer licensed to practice in the State and reasonably
acceptable to Lender (or an opinion of counsel from counsel reasonably
satisfactory to Lender as to compliance with Legal Requirements) to the effect
that the Release Parcel is not necessary (y) for the remainder of the Property
to comply with any applicable zoning, building, land use or parking or other
Legal Requirements applicable to the remainder of the Property, or (z) for the
uses of the remainder of the Property, including, without limitation, for
access, driveways, parking, utilities, drainage flows or any other purpose
(giving effect to any easements therefor reserved over the Release Parcel for
the benefit of the remainder of the Property) and (iv) with respect to 1700
Kendall Square, an ALTA survey in the form of the Survey delineating a legal
description for the building known as 1700 Kendall Square and the balance of the
plot of land on which 1700 Kendall Square and 1500 Kendall Square are located.
The delineation of the proposed lot line between 1700 Kendall Square and 1500
Kendall Square set forth on SCHEDULE IV is approximate; the final lot line will
be subject to the approval of Lender, such approval not to be unreasonably
withheld or delayed. Additionally, if 215 First Street is not simultaneously
released, the Parking Lot across from 215 First Street (i.e., 195 First Street)
shall be released only if Borrower can demonstrate to Lender's reasonable
satisfaction that it has made alternate parking arrangements for tenants at 215
First Street reasonably satisfactory to Lender. Moreover, if 1700 Kendall Square
and the Kendall Square Theatre are released, Borrower must demonstrate to
Lender's reasonable satisfaction that the parking available for the remainder of
the Property (including that contained in the Kendall Square Parking Garage, but
excluding any portion of same allocated to 1700 Kendall Square and the Kendall
Square Theatre) is satisfactory for the proper use and operation of the
remainder of the Property.
(f) Simultaneously with the release, Borrower shall convey fee
simple title to the Release Parcel to a Person other than Borrower. If Borrower
is unable to legally subdivide 1700 Kendall Square and the Kendall Square
Theatre from the remainder of the Property, however, Borrower shall have the
right to lease 1700 Kendall Square and the Kendall Square Theatre to a Person
other than Borrower in lieu of such conveyance and Lender shall subordinate the
Lien of the Mortgage and the other Loan Documents to such lease, provided (i)
Borrower complies with all of the conditions to release set forth in this
Section 11.25 (including, without limitation, the payment of the Release Amount
to Lender and any additional amounts which may then be prepaid pursuant to
Section 2.4.1 hereof and the payment of the sums required to be paid to
Mezzanine Lender for the release thereof) other than the requirements that such
Release Parcel be legally subdivided from the remainder of the Property, (ii)
the request for such lease shall be accompanied by an endorsement to the Title
Insurance Policy, an opinion of counsel (from counsel reasonably acceptable to
Lender) or an architect's certificate from an architect reasonably acceptable to
Lender that such a subdivision is not required in order for the remainder of the
Property to comply with Legal Requirements, and (iii) such lease shall contain
the following provisions: (A) 1700 Kendall Square shall not be used for any
purpose other than an expansion of the existing cinema during the period ending
May 1, 2004 (or sooner, upon repayment of the Loan in full), (B) the lease shall
be triple net with the tenant being responsible for all allocable taxes and all
insurance, maintenance, utility, repair and other obligations generally
contained in a triple net lease, (C) the tenant shall be required to restore the
demised premises in the case of casualty and condemnation to a safe and
habitable condition and/or to remove any damaged structures or debris therefrom
so as to leave the demised premises
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in a safe condition, and (D) the tenant shall discharge (unless the same have
been bonded or otherwise secured to Lender's satisfaction) within thirty (30)
days any mechanic's Lien filed against the demised premises by reason of the
acts of the tenant or Persons claiming by, through or under the tenant. Such
lease may permit the tenant to procure mortgage financing secured by the
leasehold estate created thereby. If a conveyance is made under this subsection
(f) which is stated to be made for nominal consideration or if a lease is made
under this subsection (f) for nominal rent, the same will not be considered a
breach of Sections 3.1.24(c) or 4.2.6 hereof provided it is in effect a
distribution of an asset to the indirect owner of Borrower above the level of
Mezzanine Borrower and a contribution of capital to the transferee of such deed
or lessee under such lease, as the case may be. References in this Agreement or
in any of the other Loan Documents to a "release of a Release Parcel" (or words
of similar import) shall be deemed to include a lease of 1700 Kendall Square and
the Kendall Square Theatre permitted pursuant to this Section 11.25(f), if
applicable.
SECTION 11.26 JOINT AND SEVERAL LIABILITY.
If more than one Person has executed this Agreement as
"Borrower," the obligations of all such Persons hereunder shall be joint and
several.
[NO FURTHER TEXT ON THIS PAGE]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
BORROWER:
ONE KENDALL LLC, a Delaware limited
liability company
By: CAMEZZ LLC, a Delaware limited
liability company, its Manager
By: Beacon/PW Kendall LLC, a Delaware
limited liability company, its
Manager
By: Beacon Capital Partners,
L.P., a Delaware limited
partnership, its Manager
By: Beacon Capital
Partners, Inc., a
Maryland corporation,
its general partner
By: /s/ Nancy J. Broderick
------------------------
Nancy J. Broderick
Vice President & Treasurer
CAMBRIDGE ATHENAEUM LLC, a Delaware limited
liability company
By: CAMEZZ LLC, a Delaware limited liability
company, its Manager
By: Beacon/PW Kendall LLC, a Delaware limited
liability company, its Manager
By: Beacon Capital Partners, L.P., a
Delaware limited partnership, its
Manager
By: Beacon Capital Partners, Inc.,
a Maryland corporation, its
general partner
By: /s/ Nancy J. Broderick
------------------------
Nancy J. Broderick
Vice President & Treasurer
<PAGE>
LENDER:
SECORE FINANCIAL CORPORATION, a Pennsylvania
corporation
By: /s/ Tamera S. Massey
-------------------------------
Title: Executive Vice President
<PAGE>
Exhibit 99.3
LOAN AGREEMENT BETWEEN CAMEZZ LLC AS BORROWER AND SECORE FINANCIAL CORPORATION
AS MEZZANINE LENDER
<PAGE>
EXECUTION COPY
================================================================================
CAMEZZ LLC
BORROWER
LOAN AGREEMENT
DATED AS OF APRIL 14, 2000
SECORE FINANCIAL CORPORATION
MEZZANINE LENDER
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1
DEFINITIONS
1.1 Defined Terms......................................................................2
1.2 Other Definitional Provisions.....................................................13
ARTICLE 2
AMOUNT AND TERMS OF MEZZANINE LOAN
2.1 Mezzanine Loan; Maturity Date.....................................................14
2.2 Mezzanine Note....................................................................14
2.3 Prepayments.......................................................................15
2.4 Interest Rate; Repayment; Payment Dates...........................................17
2.5 Computation of Interest...........................................................20
2.6 Interest Rate Cap Agreement.......................................................20
2.7 Payments upon Liquidation Event...................................................21
2.8 Payment of Principal and Interest.................................................21
2.9 Usury Savings.....................................................................22
2.10 Late Payment Charge...............................................................22
2.11 Servicer..........................................................................22
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Single Purpose....................................................................23
3.2 Limited Assets and Liabilities....................................................23
3.3 Existence; Compliance with Law....................................................23
3.4 Power; Authorization; Enforceable Obligations.....................................23
3.5 No Legal Bar......................................................................23
3.6 No Material Litigation............................................................24
3.7 No Contractual Obligations........................................................24
3.8 No Burdensome Restrictions........................................................24
3.9 Investment Company Act and Other Statutes.........................................24
3.10 Subsidiaries......................................................................24
3.11 Accuracy and Completeness of Information..........................................24
3.12 No Default........................................................................25
3.13 Organizational Chart..............................................................25
3.14 Financial Statements..............................................................25
3.15 Tax Filings.......................................................................25
3.16 Solvency..........................................................................25
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ARTICLE 4
CONDITIONS PRECEDENT
4.1 Conditions Precedent to Mezzanine Loan............................................26
ARTICLE 5
ADDITIONAL REPRESENTATIONS,
WARRANTIES AND COVENANTS
5.1 Single Purpose Entity/Separateness................................................27
5.2 Operational Matters...............................................................29
5.3 Amendments........................................................................31
5.4 Manager...........................................................................31
5.5 Independent Directors; Bankruptcy Action..........................................31
5.6 Interest Rate Cap.................................................................31
5.7 Conduct of Business and Maintenance of Existence..................................31
5.8 Inspection of Mortgaged Property; Books and Records; Discussions; Consents........32
5.9 Notices...........................................................................32
5.10 Special Distributions.............................................................33
5.11 Reports, etc......................................................................33
5.12 Financial Statements..............................................................33
5.13 Curing............................................................................33
5.14 Further Assurances................................................................33
5.15 Indemnification...................................................................34
ARTICLE 6
NEGATIVE COVENANTS
6.1 Single Purpose Existence and Separateness of Entities.............................34
6.2 Limitation on Securities Issuances................................................34
6.3 Limitations on Distributions......................................................34
6.4 Liens.............................................................................35
6.5 Other Limitations.................................................................35
6.6 Contractual Obligations...........................................................36
6.7 Major Leases......................................................................36
ARTICLE 7
EVENTS OF DEFAULT
7.1 Events of Default.................................................................36
7.2 Remedies for Events of Default....................................................38
7.3 Power of Attorney.................................................................39
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ARTICLE 8
OTHER AGREEMENTS
8.1 Permitted Transactions............................................................39
8.2 Termination of Manager; Management................................................42
8.3 Borrower Transfer Restrictions....................................................42
8.4 Budgets...........................................................................43
ARTICLE 9
MISCELLANEOUS
9.1 Amendments and Waivers............................................................44
9.2 Notices...........................................................................44
9.3 No Waiver; Cumulative Remedies....................................................45
9.4 Survival of Representations and Warranties........................................46
9.5 Payment of Expenses and Taxes.....................................................46
9.6 Successors and Assigns............................................................47
9.7 Set-off...........................................................................47
9.8 Counterparts......................................................................48
9.9 GOVERNING LAW.....................................................................48
9.10 Severability......................................................................48
9.11 Integration.......................................................................48
9.12 Submission To Jurisdiction; Waivers...............................................48
9.13 Acknowledgments...................................................................49
9.14 Exculpation.......................................................................49
9.15 Reinstatement.....................................................................50
9.16 WAIVER OF JURY TRIAL, DAMAGES, JURISDICTION.......................................51
9.17 Cooperation.......................................................................52
SCHEDULES
Schedule 1 ORGANIZATIONAL CHART
Schedule 2 MEZZANINE RELEASE AMOUNTS
Schedule 3 MATERIAL LITIGATION
</TABLE>
iii
<PAGE>
LOAN AGREEMENT, dated as of April 14, 2000, between CAMEZZ
LLC, a Delaware limited liability company, as borrower (the "BORROWER"), and
Secore Financial Corporation, a Pennsylvania corporation, as mezzanine lender
(collectively, with its permitted successors and assigns, "MEZZANINE LENDER").
WHEREAS, Secore Financial Corporation, a Pennsylvania
corporation, as mortgage lender ("MORTGAGE LENDER"), is making a loan in the
principal amount of $140,000,000 (the "MORTGAGE LOAN") to One Kendall LLC, a
Delaware limited liability company ("MORTGAGOR I"), and Cambridge Athenaeum LLC,
a Delaware limited liability company ("MORTGAGOR II" and, collectively with
Mortgagor I, the "MORTGAGORS") pursuant to a Loan Agreement dated April 14, 2000
(as amended, supplemented or otherwise modified from time to time, the "MORTGAGE
LOAN AGREEMENT"), which Mortgage Loan is evidenced by a Promissory Note dated as
of April 14, 2000 (the "MORTGAGE NOTE") made by Mortgagors to Mortgage Lender
and secured by a certain Mortgage and Security Agreement dated April 14, 2000
(the "MORTGAGE") by the Mortgagors in favor of Mortgage Lender pursuant to which
the Mortgagors have granted the Mortgage Lender a first priority mortgage on,
among other things, the real property as more fully described in the Mortgage
(collectively, the "MORTGAGED PROPERTY");
WHEREAS, Borrower is the legal and beneficial owner of all of
the membership interests in Mortgagor I, consisting of a 100% membership
interest therein, and all of the membership interests in Mortgagor II,
consisting of a 100% membership interest therein (collectively, the "PLEDGED
COMPANY INTERESTS");
WHEREAS, CAOK Managers, Inc., a Delaware corporation (the
"MORTGAGOR MANAGING ENTITY"), is the non-member special manager of each of
Mortgagor I and Mortgagor II;
WHEREAS, Beacon Capital Partners, Inc., a Maryland corporation
(the "STOCK OWNER"), is the legal and beneficial owner of 100% of the stock of
Mortgagor Managing Entity (the "PLEDGED MANAGING ENTITY INTERESTS");
WHEREAS, the Borrower has requested Mezzanine Lender to make a
loan to it in the aggregate principal amount of $35,000,000 (the "MEZZANINE
LOAN"); and
WHEREAS, as a condition precedent to the obligation of
Mezzanine Lender to make the Mezzanine Loan to the Borrower, Borrower has agreed
to enter into a Pledge and Security Agreement, dated as of the date hereof, in
favor of Mezzanine Lender (as amended, supplemented or otherwise modified from
time to time, the "PLEDGE AGREEMENT"), pursuant to which Borrower shall grant to
Mezzanine Lender a first priority security interest in the Pledged Company
Interests and the Stock Owner shall grant to Mezzanine Lender a first priority
security interest in the Pledged Managing Entity Interests and all proceeds of
each thereof (collectively, the "COLLATERAL") as collateral security for the
Mezzanine Obligations (as defined below);
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
<PAGE>
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following
terms have the meanings ascribed to them below:
"AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, owns more than forty percent (40%) of, is in
control of, is controlled by or is under common ownership or control with such
Person or is a director or officer of such Person or of an Affiliate of such
Person. As used in this definition, the term "CONTROL" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management, policies or activities of a Person, whether through ownership of
voting securities, by contract or otherwise.
"AGREEMENT": this Loan Agreement, as amended, supplemented or
modified from time to time.
"ANNUAL BUDGET" shall mean the operating and capital budget
for the Mortgaged Property setting forth Mortgagors' good faith estimate of
Gross Revenue, Operating Expenses, and Capital Expenditures for the applicable
Fiscal Year.
"APPLICABLE INTEREST RATE" shall mean 13.08% per annum for the
initial Interest Period and thereafter either (i) LIBOR plus the Spread with
respect to any period when the Mezzanine Loan is a LIBOR Loan or (ii) the
Substitute Rate plus the Substitute Spread with respect to any period when the
Mezzanine Loan is a Substitute Rate Loan.
"APPROVED ANNUAL BUDGET": as defined in Section 8.4.
"ASSIGNMENT OF CAP AGREEMENT" shall mean that certain
Collateral Assignment of Interest Rate Cap Agreement between Borrower and
Mezzanine Lender and acknowledged by the counterparty, and any other collateral
assignment of the Interest Rate Cap Agreement hereafter delivered.
"BANKRUPTCY ACTION": Any of the following:
(A) taking any action that is intended to cause any
of the Borrower or any of its Subsidiaries to become insolvent; or
(B) (i) commencing any case, proceeding or other
action with respect to the Borrower or any of its Subsidiaries under
any existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors;
(ii) instituting proceedings to have the
Borrower or any of its Subsidiaries adjudicated as bankrupt or
insolvent;
(iii) consenting to the institution of
bankruptcy or insolvency proceedings against the Borrower or
any of its Subsidiaries;
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<PAGE>
(iv) filing a petition or consent to a
petition seeking reorganization, arrangement, adjustment,
winding-up, dissolution, composition, liquidation or other
relief on behalf of any of the Subsidiaries of such
Subsidiary's debt or on behalf of the Borrower of its debts
under any federal or state law relating to bankruptcy;
(v) seeking or consenting to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or any similar official for the Borrower or any of
its Subsidiaries or a substantial portion of any of their
respective properties;
(vi) making any assignment for the benefit
of creditors of any of the Borrower or any of its
Subsidiaries; or
(vii) taking any action or causing any of
the Borrower or any of its Subsidiaries to take any action in
furtherance of any of the foregoing.
"BCI" shall mean Beacon Capital Partners, Inc., a Maryland
corporation, and any successor to all or substantially all of its assets,
whether by merger, sale of assets or otherwise.
"BCLP" shall mean Beacon Capital Partners, L.P., a Delaware
limited partnership, and any successor to all or substantially all of its
assets, whether by merger, sale of assets or otherwise.
"BEACON" shall mean (i) BCI, and (ii) BCLP. The term "Beacon"
shall also include the ownership interests of the officers and/or directors of
BCI, PROVIDED that the aggregate of such ownership interests does not exceed
five percent (5%) of the ownership interests of Beacon, direct or indirect, in
Borrower.
"BORROWER": as defined in the introductory paragraph to this
Agreement.
"BORROWER OPERATING AGREEMENT": the Limited Liability Company
Agreement of Borrower, dated of even date herewith.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a legal holiday on which national banks are not open for general
business in (i) the State of New York, (ii) the state where the corporate trust
office of the Trustee (as defined in the Mortgage Loan Agreement) is located, or
(iii) the state where the servicing offices of the Servicer (as defined in the
Mortgage Loan Agreement) are located.
"CAPITAL EXPENDITURES": for any period shall mean amounts
expended for replacements and alterations to the Mortgaged Property and required
to be capitalized according to GAAP.
"CASH MANAGEMENT AGREEMENT": the Cash Management Agreement,
dated the date hereof, among Mortgagors, Mortgage Lender, Manager and LaSalle
Bank National Association, as agent, and any extensions, renewals or
modifications thereof.
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<PAGE>
"CASUALTY EVENT": as defined in Section 2.7(a).
"CLOSING DATE": shall mean the date of funding of the
Mezzanine Loan.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": as defined in the recitals to this Agreement.
"CONSUMER PRICE INDEX (CPI)": shall mean the "Consumer Price
Index" or "CPI," for Boston-Lawrence-Salem, MA-NH for Urban Consumers, All
Items, of the United States Bureau of Labor Statistics, 1982-84 = 100. If the
Bureau of Labor Statistics substantially revises the manner in which the CPI is
determined, an adjustment shall be made in the revised index which would produce
results equivalent, as nearly as possible, to those which would be obtained if
the CPI had not been so revised. If the 1982-84 average shall no longer be used
as an index of 100, such change shall constitute a substantial revision. If the
CPI becomes unavailable to the public because publication is discontinued, or
otherwise, the Mezzanine Lender shall substitute therefor a comparable index
based upon changes in the cost of living or purchasing power of the consumer
dollar published by any other governmental agency reasonably acceptable to
Borrower or, if no such index is available, then, subject to reasonable approval
of Borrower, a comparable index published by a major bank, other financial
institution, university or recognized financial publication shall be
substituted.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound, or any provision of the foregoing.
"DEBT SERVICE" shall mean, with respect to any particular
period of time, scheduled principal and interest payments under the Mezzanine
Note.
"DEBT SERVICE COVERAGE RATIO" shall mean the ratio of (i)
Underwritable Cash Flow for the twelve (12) full calendar month period
immediately preceding the date of calculation to (ii) $17,500,000, PROVIDED that
such amount of $17,500,000 shall be reduced by ten percent (10%) of any
prepayments of principal made with respect to the Mortgage Loan or the Mezzanine
Loan.
"DEFAULT": any of the events specified in Article 7, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition has been satisfied.
"DEFAULT RATE": the Applicable Interest Rate plus five percent
(5%) per annum. In the event the Default Rate is greater than the maximum rate
permitted by applicable law, the Default Rate shall be the maximum rate
permitted by applicable law.
"DETERMINATION DATE" shall mean, with respect to any Interest
Period, the date that is two (2) London Business Days prior to the beginning of
such Interest Period.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
4
<PAGE>
"ELIGIBLE INSTITUTION" shall mean a depository institution or
trust company insured by the Federal Deposit Insurance Corporation, the short
term unsecured debt obligations or commercial paper of which are rated at least
A-1 by Standard & Poor's Rating Group, P-1 by Moody's Investors Service, Inc.,
D-1 by Duff & Phelps Credit Rating Co. and F-1+ by Fitch IBCA, Inc. in the case
of accounts in which funds are held for thirty (30) days or less or, in the case
of accounts in which funds are held for more than thirty (30) days, the long
term unsecured debt obligations of which are rated at least "AA" by Fitch IBCA,
Inc., Duff & Phelps Credit Rating Co. and Standard & Poor's Rating Group and
"Aa2" by Moody's Investors Services, Inc. Any depository institution or trust
company insured by the Federal Deposit Insurance Corporation which in not rated
by all of the Rating Agencies may nonetheless qualify as an Eligible Institution
if it has the requisite ratings by at least two of the Rating Agencies (at least
one of which must be Standard & Poor's Rating Group).
"EVENT OF DEFAULT": as defined in Article 7.
"FISCAL YEAR" shall mean each twelve month period commencing
on January 1 and ending on December 31 during each year of the term of the
Mezzanine Loan.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever or any governmental
unit (federal, state, county, district, municipal, city or otherwise) whether
now or hereafter in existence.
"GROSS REVENUE" shall mean all revenue computed on an accrual
basis in accordance with GAAP (but without the so-called straightlining of
Rents, as defined in the Mortgage Loan Agreement), derived from the ownership
and operation of the Mortgaged Property from whatever source, including, but not
limited to, Rents, but excluding sales, use and occupancy or other taxes on
receipts required to be accounted for by Mortgagors to any Governmental
Authority, non-recurring revenues as reasonably determined by Mezzanine Lender,
security deposits (except to the extent properly utilized to offset a loss of
Rent), refunds and uncollectible accounts, proceeds of casualty insurance and
Awards (as defined in the Mortgage Loan Agreement) (other than business
interruption or other loss of income insurance related to business interruption
or loss of income for the period in question), and any disbursements to
Mortgagors from the Reserve Funds (as defined in the Mortgage Loan Agreement) or
any other fund established by the Mortgage Loan Documents.
"GUARANTOR" shall mean, collectively, Beacon Capital Partners,
L.P., a Delaware limited partnership, and PW Realty Partners, LLC, a Delaware
limited liability company.
"INDEBTEDNESS" shall mean, for any Person, without
duplication: (i) all indebtedness of such Person for borrowed money, for amounts
drawn under a letter of credit, or
5
<PAGE>
for the deferred purchase price of property for which such Person or its assets
is liable, (ii) all unfunded amounts under a loan agreement, letter of credit,
or other credit facility for which such Person would be liable if and to the
extent that such amounts were advanced thereunder, (iii) all amounts required to
be paid by such Person as a guaranteed payment to partners or a preferred or
special dividend, including any mandatory redemption of shares or interests,
(iv) all indebtedness of another Person guaranteed by such Person, directly or
indirectly, (v) all obligations under leases that constitute capital leases for
which such Person is liable, and (vi) all obligations of such Person under
interest rate swaps, caps, floors, collars and other interest hedge agreements,
in each case whether such Person is liable contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which obligations such Person
otherwise assures a creditor against loss.
"INDEMNIFIED LIABILITIES": as defined in Section 9.5.
"INDEPENDENT DIRECTOR": with respect to any SPC Party which is
a corporation, a duly appointed member of the Board of Directors of such SPC
Party reasonably satisfactory to Mezzanine Lender who shall not have been at the
time of such individual's appointment, and may not have been at any time during
the preceding five years, (i) a stockholder, director, officer, employee,
partner, attorney or counsel of such corporation, Borrower, either of the
Mortgagors or any Affiliate of any of them, (ii) a customer, supplier or other
Person who derives any of its purchases or revenues from its activities with
such corporation, Borrower or any Affiliate of either of them, (iii) a Person or
other entity controlling or under common control with any such stockholder,
partner, customer, supplier or other Person, or (iv) a member of the immediate
family of any such stockholder, director, officer, employee, partner, customer,
supplier or other Person. As used herein, the term "CONTROL" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise.
"INTERCREDITOR AGREEMENT": the Intercreditor Agreement, dated
April 14, 2000, between Mezzanine Lender and Mortgage Lender.
"INTEREST PERIOD" shall mean (a) for the first period
hereunder, the period commencing on the Closing Date and ending on the last day
of the calendar month in which the Closing Date occurs, and (b) for each period
thereafter, the period commencing on the first (1st) day of each calendar month
and ending on the last day of such calendar month.
"INSOLVENCY OPINION" shall mean that certain bankruptcy
nonconsolidation opinion letter dated the date hereof delivered by Goulston &
Storrs, P.C. in connection with the Mezzanine Loan.
"INTEREST RATE CAP AGREEMENT" means an Interest Rate Cap
Agreement (together with the confirmation and schedules relating thereto) in
form and substance reasonably satisfactory to Mezzanine Lender between Borrower
and a counterparty reasonably acceptable to Mezzanine Lender with a rating by
Standard & Poor's of at least "AA".
"LEGAL REQUIREMENTS" shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgements, decrees and
6
<PAGE>
injunctions of Governmental Authorities affecting Borrower, either of the
Mortgagors or the Mortgaged Property or any part thereof or the construction,
use, alteration or operation thereof, or any part thereof, whether now or
hereafter enacted and in force, including, without limitation, the Americans
with Disabilities Act of 1990, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to Borrower
or either of the Mortgagors, at any time in force affecting the Mortgaged
Property or any part thereof, including, without limitation, any which may (i)
require repairs, modifications or alterations in or to the Mortgaged Property or
any part thereof, or (ii) in any way limit the use and enjoyment thereof.
"LIBOR" shall mean, with respect to each Interest Period, the
rate (expressed as a percentage per annum and rounded upward, if necessary, to
the next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month
period, that appears on Telerate Page 3750 (or the successor thereto) as of
11:00 a.m., London time, on the related Determination Date. If such rate does
not appear on Telerate Page 3750 as of 11:00 a.m., London time, on such
Determination Date, LIBOR shall be the arithmetic mean of the offered rates
(expressed as a percentage per annum) for deposits in U.S. dollars for a
one-month period that appear on the Reuters Screen Libor Page as of 11:00 a.m.,
London time, on such Determination Date, if at least two such offered rates so
appear. If fewer than two such offered rates appear on the Reuters Screen Libor
Page as of 11:00 a.m., London time, on such Determination Date, Mezzanine Lender
shall request the principal London office of any four major reference banks in
the London interbank market reasonably selected by Mezzanine Lender to provide
such bank's offered quotation (expressed as a percentage per annum) to prime
banks in the London interbank market for deposits in U.S. dollars for a
one-month period as of 11:00 a.m., London time, on such Determination Date for
the then outstanding principal amount of the Mezzanine Loan. If at least two
such offered quotations are so provided, LIBOR shall be the arithmetic mean of
such quotations. If fewer than two such quotations are so provided, Lender shall
request any three major banks in New York City reasonably selected by Mezzanine
Lender to provide such bank's rate (expressed as a percentage per annum) for
loans in U.S. dollars to leading European banks for a one-month period as of
approximately 11:00 a.m., New York City time, on the applicable Determination
Date for the then outstanding principal amount of the Mezzanine Loan. If at
least two such rates are so provided, LIBOR shall be the arithmetic mean of such
rates. LIBOR shall be determined by Mezzanine Lender or its agent, acting in
good faith, and, at Borrower's request, Mezzanine Lender shall provide Borrower
with the basis for its determination.
"LIBOR LOAN" shall mean the Mezzanine Loan at any time when
the Applicable Interest Rate is calculated at LIBOR plus the Spread in
accordance with the provisions of Article 2 hereof.
"LIEN": any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), or
preference, priority or other pledge agreement or preferential arrangement of
any kind or nature whatsoever, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction in respect of any of the foregoing.
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"LIMITED GUARANTY" shall mean that certain Guaranty of
Recourse Obligations of even date herewith from Guarantor for the benefit of
Mezzanine Lender.
"LIQUIDATION EVENT": as defined in Section 2.7.
"LOAN TRANSFER": as defined in section 9.17.
"LOAN TRANSFEREE": as defined in Section 9.6.
"LONDON BUSINESS DAY" shall mean any day other than a
Saturday, Sunday or any other day on which commercial banks in London, England
are not open for business.
"MAJOR LEASE" shall mean any lease (i) covering more than
25,000 square feet at the Mortgaged Property or (ii) made with a tenant that is
a tenant under another lease at the Mortgaged Property or that is an Affiliate
of any other tenant under a lease at the Mortgaged Property, if the leases
together cover more than 25,000 square feet.
"MANAGEMENT AGREEMENT": any property management agreement or
agreements entered into with the Manager, pursuant to which the Manager is to
provide management and other services with respect to the Mortgaged Property.
"MANAGEMENT FEES": any property management fees payable in
respect of the Mortgaged Property.
"MANAGER" shall mean Beacon Capital Partners Management, LLC
and Spaulding and Slye Services Limited Partnership, or any other manager
approved in accordance with the terms and conditions of the Mezzanine Loan
Documents.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (i)
the business, operations, property or condition (financial or otherwise) of
Borrower, any of its Subsidiaries or the Guarantor, (ii) the ability of
Borrower, any of its Subsidiaries or Guarantor to pay or perform its respective
obligations, liabilities and indebtedness under this Agreement or any of the
other Mezzanine Loan Documents to which it is a party as such payment or
performance becomes due in accordance with the terms hereof or thereof, or (iii)
the rights, powers and remedies of the Mezzanine Lender under this Agreement or
any of the other Mezzanine Loan Documents or the validity, legality or
enforceability of this Agreement or any of the other Mezzanine Loan Documents.
"MATURITY DATE" shall mean May 1, 2002, as the same may be
extended pursuant to 2.1(b) hereof, or such other date on which the final
payment of principal of the Mezzanine Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.
"MAXIMUM LEGAL RATE" shall mean the maximum nonusurious
interest rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged or received on the indebtedness evidenced by the
Mezzanine Note and as provided for herein or the other Mezzanine Loan Documents,
under the laws of such state or states whose laws are held by any court of
competent jurisdiction to govern the interest rate provisions of the Mezzanine
Loan.
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"MEZZANINE CASH COLLATERAL AGREEMENT": the Mezzanine Cash
Collateral Account Security, Pledge, Assignment and Control Agreement, dated the
date of this Agreement, among Borrower, Mortgagors, Mezzanine Lender and LaSalle
Bank National Association, as agent, and any extensions, renewals, amendments or
modifications thereof.
"MEZZANINE DEBT SERVICE ACCOUNT": as defined in the Mezzanine
Cash Collateral Agreement.
"MEZZANINE LENDER": as defined in the introductory paragraph
to this Agreement.
"MEZZANINE LOAN": as defined in the recitals to this
Agreement.
"MEZZANINE LOAN DOCUMENTS": the collective reference to this
Agreement, the Mezzanine Note, the Pledge Agreement, the Mezzanine Cash
Collateral Agreement, the Interest Rate Cap Agreement, the Limited Guaranty and
any and all other agreements executed in connection herewith or therewith.
"MEZZANINE NET PROCEEDS" shall mean 20% of all "Net Proceeds"
(as defined in the Mortgage Loan Agreement).
"MEZZANINE NOTE": as defined in Section 2.2.
"MEZZANINE OBLIGATIONS": all obligations of the Borrower now
or hereafter existing with respect to the Mezzanine Loan, whether for principal,
interest, fees, expenses or otherwise, and all obligations of the Borrower now
or hereafter existing under this Agreement, the Mezzanine Note and all other
Mezzanine Loan Documents.
"MEZZANINE RELEASE AMOUNT": with respect to the Release
Parcels, the amount specified on Schedule 2 hereto.
"MONTHLY PAYMENT DATE" shall mean the first (1st) day of every
calendar month occurring during the term of the Mezzanine Loan commencing on
June 1, 2000.
"MORTGAGE": as defined in the recitals to this Agreement.
"MORTGAGE LENDER": as defined in the recitals to this
Agreement.
"MORTGAGE LOAN": as defined in the recitals to this Agreement.
"MORTGAGE LOAN AGREEMENT": as defined in the recitals to this
Agreement.
"MORTGAGE LOAN DOCUMENTS": the collective reference to the
Mortgage Loan Agreement, the Mortgage Note, the Mortgage, the Cash Management
Agreement, and any and all other documents executed in connection therewith.
"MORTGAGE NOTE": as defined in the recitals to this Agreement.
"MORTGAGED PROPERTY" as defined in the recitals to this
Agreement.
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"MORTGAGOR COMPANY AGREEMENT I": the First Amended and
Restated Limited Liability Company Agreement of Mortgagor I, dated the date
hereof, among Borrower, as member, Mortgagor I and Mortgagor Managing Entity.
"MORTGAGOR COMPANY AGREEMENT II": the First Amended and
Restated Limited Liability Company Agreement of Mortgagor II, dated the date
hereof, among Borrower, as member, Mortgagor II and Mortgagor Managing Entity.
"MORTGAGOR COMPANY AGREEMENTS": collectively, Mortgagor
Company Agreement I and Mortgagor Company Agreement II.
"MORTGAGOR I": as defined in the recitals to this Agreement.
"MORTGAGOR II": as defined in the recitals to this Agreement.
"MORTGAGOR MANAGING ENTITY": as defined in the recitals to
this Agreement.
"NET LIQUIDATION PROCEEDS": with respect to any Liquidation
Event, all amounts paid to or received by or on behalf of the Mortgagors in
connection with such Liquidation Event, less amounts required or permitted to be
deducted therefrom and amounts paid pursuant to the Mortgage Loan Documents to
Mortgage Lender, including, without limitation, proceeds of any sale,
refinancing or other disposition or liquidation, and less (i) in the case of a
foreclosure sale or Transfer of the Mortgaged Property in connection with
realization thereon following an Event of Default under the Mortgage Loan, or
other disposition, such reasonable and customary costs and expenses of sale or
other disposition (including attorneys' fees and brokerage commissions), (ii) in
the case of a foreclosure sale, such costs and expenses incurred by Mortgage
Lender under the Mortgage Loan Documents as Mortgage Lender shall be entitled to
receive reimbursement for under the terms of the Mortgage Loan Documents and
(iii) in the case of a refinancing of the Mortgage Loan or the Mortgaged
Properties, such costs and expenses (including attorneys' fees) of such
refinancing as shall be reasonably approved by Mezzanine Lender.
"OPERATING EXPENSES" shall mean all costs and expenses
incurred by Mortgagors and computed on an accrual basis in accordance with GAAP
relating to the operation, maintenance and management of the Mortgaged Property,
including, without limitation, utilities, repairs and maintenance, insurance,
property taxes and assessments, advertising expenses, payroll and related taxes,
equipment lease payments, a management fee equal to the greater of three percent
(3%) of annual rents or the actual management fee, $0.40 per rentable square
foot of the Improvements (as defined in the Mortgage Loan Agreement) per annum
with respect to capital costs, and $1.00 per rentable square foot of the
Improvements per annum with respect to tenant rollover expenses, but excluding
actual Rollover Expenditures (as defined in the Mortgage Loan Agreement), actual
Capital Expenditures, Debt Service (as defined in the Mortgage Loan Agreement),
depreciation, amortization and deposits required to be made to the Reserve
Funds; provided, however such costs and expenses shall be subject to reasonable
adjustment by Mezzanine Lender to normalize such costs and expenses.
"ORGANIZATIONAL DOCUMENTS" means, as to any Person, the
certificate of incorporation and by-laws with respect to a corporation; the
certificate of organization or formation and operating agreement with respect to
a limited liability company; the certificate of
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limited partnership and partnership agreement with respect to a limited
partnership; or any other organizational or governing documents of such Person.
"PAINEWEBBER" shall mean Paine Webber Real Estate Securities
Inc., a Delaware corporation.
"PERMITTED PREPAYMENT DATE": May 1, 2001.
"PERMITTED TRANSFEREE" shall mean a corporation, partnership,
limited liability company or other entity (i) acceptable to Mezzanine Lender in
its sole discretion, (ii) that qualifies as a single purpose, bankruptcy remote
entity under criteria established by the Rating Agencies and (iii) whose counsel
has delivered to Mezzanine Lender a non-consolidation opinion acceptable to
Mezzanine Lender in its reasonable discretion.
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLEDGE AGREEMENT": as defined in the recitals to this
Agreement.
"PLEDGED COMPANY INTERESTS": as defined in the recitals to
this Agreement.
"PLEDGED MANAGING ENTITY INTERESTS": as defined in the
recitals to this Agreement.
"RATING AGENCIES": shall mean each of Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody's
Investors Service, Inc., Duff & Phelps Credit Rating Co. and Fitch IBCA, Inc.,
or any other nationally-recognized statistical rating agency which has been
designated by Mortgage Lender and, after the final Securitization (as defined in
the Mortgage Loan Agreement) of the Mortgage Loan, shall mean any of the
foregoing that have rated and continue to rate any of the Securities (as defined
in the Mortgage Loan Agreement). Notwithstanding the foregoing, if there has
been a securitization of the Mezzanine Loan, the term "Rating Agencies" shall
mean any of the rating agencies named above that have rated and continue to rate
any of the certificates, notes or other securities issued in connection with
such securitization.
"RELEASE PARCELS": the portions of the Mortgaged Property
described on Schedule 2.
"REQUIREMENT OF LAW": as to any Person, the certificate of
incorporation and by-laws with respect to a corporation; the certificate of
organization and operating agreement with respect to a limited liability
company; the certificate of limited partnership and partnership agreement with
respect to a limited partnership, or any other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief financial officer or
treasurer of the Borrower.
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"SECONDARY MARKET TRANSACTION" means the sale of the Mortgage
Note or the first successful public or private securitization of rated single or
multi-class securities secured by or evidencing ownership interests in the
Mortgage Note.
"SINGLE PURPOSE ENTITY": a Person whose organizational
documents contain, and who covenants that it shall comply, or cause compliance
with, the provisions of Sections 5.1, 5.2, 5.3 and 5.5.
"SPC PARTY" shall mean: (i) in the case of Mortgagors,
Mortgagor Managing Entity; (ii) in the case of Borrower, Kendall Athenaeum LLC;
(iii) in the case of Kendall Athenaeum LLC, Cambridge Kendall SPC, Inc; and (iv)
any successor to any of the aforesaid entities provided that it will at all
times comply with each of the representations, warranties and covenants
contained in Section 5.2 hereof as if such representations, warranties and
covenants were made directly by such SPC Party.
"SPREAD" shall mean 695 basis points.
"SPREAD MAINTENANCE PREMIUM" shall mean, in connection with a
prepayment of all or any portion of the outstanding principal balance of the
Mezzanine Loan pursuant to Section 2.4(b) or 2.3(g) hereof, an amount equal to
the present value, discounted at LIBOR on the Closing Date, of all future
installments of interest which would have been due under the Mezzanine Note
through and including the Permitted Prepayment Date on the portion of the
outstanding principal balance of the Mezzanine Loan being prepaid as if interest
accrued on such portion of the principal balance being prepaid at an interest
rate per annum equal to the 6.92%. The Spread Maintenance Premium shall be
calculated by Mezzanine Lender and shall be final absent manifest error.
"SUBSIDIARY": as to any Person, any corporation, partnership,
limited liability company or other entity in which such Person holds an equity
interest which is more than 10% of the equity classes issued by such entity.
"SUBSTITUTE RATE" shall have the meaning set forth in Section
2.4(d).
"SUBSTITUTE RATE LOAN" shall mean the Mezzanine Loan at any
time when the Applicable Interest Rate is calculated at the Substitute Rate plus
the Substitute Spread in accordance with the provisions of Article 2 hereof.
"SUBSTITUTE SPREAD" shall have the meaning set forth in
Section 2.4(d).
"TRANSFER": to sell, assign, convey, transfer, pledge or
otherwise dispose of, or where used as a noun, a sale, assignment, conveyance,
transfer, pledge or other disposition.
"UNDERWRITABLE CASH FLOW" shall be as calculated by the
Mezzanine Lender pursuant to the definition of "Underwritable Cash Flow" set
forth in the Mortgage Loan Agreement.
"UNIFORM COMMERCIAL CODE": the Uniform Commercial Code as in
effect in the State of New York or comparable law of any jurisdiction as in
effect from time to time.
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1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified herein, all terms defined in
this Agreement shall have such defined meanings when used in the Mezzanine Note
or any certificate or other document made or delivered pursuant hereto.
(b) References to the plural include the singular, the plural,
the part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and the word "including" when used in this Agreement shall be deemed
to be followed by the words "but not limited to".
(c) References to "determination" of or by the Mezzanine
Lender shall be deemed to include reasonable good faith estimates by the
Mezzanine Lender (in the case of quantitative determinations) and reasonable
good faith beliefs by the Mezzanine Lender (in the case of qualitative
determinations) and such reasonable determination shall be conclusive absent
manifest error.
(d) Except as expressly set forth to the contrary in this
Agreement or any other Mezzanine Loan Document, whenever the Mezzanine Lender is
granted the right herein to act in its discretion or to grant or withhold
consent, such right shall be exercised in Mezzanine Lenders sole and absolute
discretion.
(e) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
(f) The section and other headings contained in this Agreement
or any other Mezzanine Loan Document and the Table of Contents preceding this
Agreement or such other Mezzanine Loan Document are for reference purposes only
and shall not control or affect the construction of this Agreement or such other
Mezzanine Loan Document or the interpretation thereof in any respect.
(g) Reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement or other Mezzanine Loan Document, as the case may
be, and reference to a Person in a particular capacity excludes such Person in
any other capacity.
(h) Reference to any agreement (including this Agreement and
any other Mezzanine Loan Document together with the schedules and exhibits
hereto or thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for, superseded or
restated.
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ARTICLE 2
AMOUNT AND TERMS OF MEZZANINE LOAN
2.1 MEZZANINE LOAN; MATURITY DATE.
(a) Mezzanine Lender shall make the Mezzanine Loan to the
Borrower on the Closing Date in the principal amount of $35,000,000, on the
terms and subject to the conditions of this Agreement, including satisfaction of
the conditions contained in Section 4.1.
(b) The Mezzanine Loan is scheduled to mature on the Maturity
Date, PROVIDED, Borrower will have two (2) options to extend the Maturity Date
of the Mezzanine Loan for consecutive one (1) year periods. In order to exercise
the first such extension right, Borrower shall deliver to Mezzanine Lender
notice of such extension and all supporting financial data on or before January
1, 2002; and upon the giving of such notice of extension, and subject to the
satisfaction of the conditions set forth below in this Section 2.1(b) on or
before February 1, 2002, the Maturity Date as then in effect will be extended to
May 1, 2003. In order to exercise the second such extension right, Borrower
shall deliver to Mezzanine Lender notice of such extension and all supporting
financial data on or before January 1, 2003; and upon the giving of such notice
of second extension, and subject to the satisfaction of the conditions set forth
below in this Section 2.1(b) on or before February 1, 2003, the Maturity Date as
then in effect will be extended to May 1, 2004. The Maturity Date shall be
extended pursuant to Borrower's notice as aforesaid, PROVIDED that the following
conditions are satisfied: (i) no Event of Default shall be in existence either
at the time of Borrower's notice or at February 1, 2002 or February 1, 2003 (as
applicable), (ii) the Underwritable Cash Flow as determined by Mezzanine Lender,
acting in good faith, as of February 1, 2002 or February 1, 2003 (as the case
may be) shall be no less than $19,250,000 (less any Underwritable Cash Flow
attributable to portions of the Mortgaged Property that have been released in
accordance with Section 2.3(f) hereof or otherwise with Mezzanine Lender's
consent), (iii) Borrower shall have obtained an Interest Rate Cap Agreement for
the extended term with a 30-day LIBOR strike price of 8.35% based on a notional
amount equal to the then outstanding principal balance of the Mezzanine Loan
(PROVIDED that Borrower shall have the right to obtain an Interest Rate Cap
Agreement with a higher strike price if Mezzanine Lender, in its sole and
absolute discretion, has consented thereto) and such Interest Rate Cap Agreement
shall have been collaterally assigned to Mezzanine Lender pursuant to an
assignment in substantially the same form as the Assignment of Cap Agreement,
and (iv) with respect to the second extension option, the first extension option
shall have been properly exercised and Mezzanine Lender shall have received an
extension fee in an amount equal to one quarter of one percent (0.25%) of the
then outstanding principal balance of the Mezzanine Loan. If Borrower fails to
exercise either extension option strictly in accordance with the provisions
hereof, such extension option will automatically cease and terminate.
2.2 MEZZANINE NOTE. The Mezzanine Loan shall be evidenced by a
promissory note of the Borrower (the "Mezzanine Note"), payable to the order of
Mezzanine Lender and representing the obligation of the Borrower to pay the
amount of the Mezzanine Loan, interest thereon as prescribed in Section 2.4, and
all other amounts due hereunder. The Mezzanine Note shall (a) be dated the
Closing Date, (b) be stated to mature on the Maturity Date, (c) bear interest
for the period from the date hereof on the unpaid principal amount thereof
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at the Applicable Interest Rate and (d) be subject to repayment as provided in
this Agreement unless otherwise earlier prepaid or accelerated in accordance
with the terms hereof.
2.3 PREPAYMENTS.
(a) Borrower shall not have the right to prepay the Mezzanine
Loan (in whole or in part) prior to the Permitted Prepayment Date except (i)
pursuant to Section 2.3(f) in connection with a permitted release, (ii) pursuant
to Section 2.3(b) in connection with the conversion of the Mezzanine Loan to a
Substitute Rate Loan or a discrepancy in the calculation of Underwritable Cash
Flow, (iii) pursuant to Section 2.3(c) or 2.3(e) hereof in connection with a
Casualty of Condemnation (as defined in the Mortgage Loan Agreement), or (iv)
pursuant to Section 2.3(g) hereof in connection with certain environmental
investigations or assessments requested by Mortgage Lender. Borrower shall have
the right, at its option, upon thirty (30) days prior written notice to
Mezzanine Lender, to prepay the Mezzanine Loan in whole or in part at any time
on or after the Permitted Prepayment Date, subject to the conditions set forth
in this Section 2.3(a) and in Section 2.3(d). Additionally, Borrower shall have
the right, at any time and from time to time, to prepay the Mezzanine Loan in
part in connection with one or more permitted releases in accordance with
Section 2.3(f) hereof, PROVIDED that prior to the Permitted Prepayment Date any
such prepayment shall be in an amount not to exceed the Mezzanine Release Amount
for each related Release Parcel, plus any additional prepayment as may be
required in order to satisfy the Debt Service Coverage Ratio test set forth in
Section 2.3(f) hereof. Any prepayment made in connection with a permitted
release pursuant to Section 2.3(f) hereof shall be subject to a prepayment fee
of one percent (1%) of the amount prepaid if made prior to the Permitted
Prepayment Date. Subject to the provisions of Section 2.3(b), (c) and (e) below,
any prepayment (including a prepayment made in connection with a permitted
release) made during the period commencing on the Permitted Prepayment Date
through and including October 31, 2001 shall be subject to a prepayment fee of
one-half of one percent (0.5%) of the amount prepaid. Mezzanine Lender shall not
be obligated to accept any prepayment unless it is accompanied by the prepayment
fee, if any, due in connection therewith. Prepayments made after October 31,
2001 shall not be subject to any prepayment fee or penalty.
(b) If the Mezzanine Loan has been converted to a Substitute
Rate Loan pursuant to Section 2.4(d) hereof for three (3) or more consecutive
Interest Periods, Borrower shall have the right, upon thirty (30) days' prior
written notice to Mezzanine Lender, to prepay the Mezzanine Loan in whole (but
not in part) without prepayment fee or penalty. If the Mezzanine Lender does not
consent to an extension of the Mezzanine Loan pursuant to Section 2.1(b) due to
its determination that the Underwritable Cash Flow test under clause (ii) of
said Section 2.1(b) has not been met, when the Mortgage Lender has agreed to
such extension, the Borrower shall have the right, upon 10 days' prior written
notice to Mezzanine Lender, to prepay the Mezzanine Loan in whole (but not in
part) without prepayment fee or penalty.
(c) If a prepayment under Section 2.4.1(e) of the Mortgage
Loan Agreement is made, Borrower shall have the right, upon thirty (30) days'
prior written notice to Mezzanine Lender, to prepay the Mezzanine Loan in whole
(but not in part) without prepayment fee or penalty.
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(d) Any prepayment received by Mezzanine Lender pursuant to
this Section 2.3 on a date other than a Monthly Payment Date shall include
interest which would have accrued thereon to the next Monthly Payment Date and
such amounts (i.e., principal and interest prepaid by Borrower) shall be held by
Mezzanine Lender as collateral security for the Mezzanine Loan in an interest
bearing account at an Eligible Institution, with interest accruing on such
amounts to the benefit of Borrower, and shall be applied by Mezzanine Lender on
the next Monthly Payment Date, with any interest on such funds paid to Borrower
on such date provided no Event of Default then exists.
(e) On each date on which Mezzanine Lender actually receives a
distribution of Mezzanine Net Proceeds, Borrower (a) shall, at Mezzanine
Lender's option (and provided Mezzanine Lender makes such Mezzanine Net Proceeds
available therefor) or (b) may, at its option (in which event Mezzanine Lender
shall make such Mezzanine Net Proceeds available therefor), prepay the
outstanding principal balance of the Mezzanine Note in an amount equal to the
amount of such Mezzanine Net Proceeds, together with interest that would have
accrued on such amount through the next Monthly Payment Date. Any prepayment
(i.e., principal and interest) received by Mezzanine Lender pursuant to this
Section 2.3 on a date other than a Monthly Payment Date shall be held by
Mezzanine Lender as collateral security for the Mezzanine Loan in an interest
bearing account, with such interest accruing to the benefit of Borrower, and
shall be applied by Mezzanine Lender on the next Monthly Payment Date. Any
prepayment pursuant to this Section 2.3(e) shall not be subject to any
prepayment fee or penalty.
(f) In the event of a partial prepayment of the Mortgage Loan
incident to a release of a Release Parcel in accordance with Section 11.25 of
the Mortgage Loan Agreement, the Borrower shall, on the date of such release,
prepay the Mezzanine Loan in an amount equal to the Mezzanine Release Amount for
the Release Parcel being released, plus any additional prepayment as may be
required in order to satisfy the Debt Service Coverage Ratio test set forth in
the second to last sentence of this Section 2.3(f), and the Borrower shall
deposit such amounts directly into the Mezzanine Debt Service Account to be
applied in accordance with the terms of the Mezzanine Cash Collateral Agreement.
Borrower hereby agrees to (i) the payment of any reasonable expenses incurred by
Mezzanine Lender in connection with such release (including, without limitation,
reasonable attorneys' fees) and any other amounts then due and owing to
Mezzanine Lender pursuant to this Agreement and the other Mezzanine Loan
Documents, and (ii) a prepayment fee (if any) in the amount required pursuant to
Section 2.3(a). All amounts paid to Mezzanine Lender in connection with a
partial release shall either be paid on a Monthly Payment Date or shall include
interest thereon through the next Monthly Payment Date. Borrower hereby agrees
that it will not consent to a release pursuant to Section 11.25 of the Mortgage
Loan Agreement unless it has provided the Mezzanine Lender evidence satisfactory
to Mezzanine Lender that the Debt Service Coverage Ratio after giving effect to
such release will equal or exceed the Debt Service Coverage Ratio immediately
prior to such release. Borrower shall notify Mezzanine Lender of any proposed
prepayment of the Mortgage Loan by Mortgagors under Section 11.25 of the
Mortgage Loan Agreement not later than thirty (30) days prior to the date of
such release. If a conveyance is made under Section 11.25(f) of the Mortgage
Loan Agreement which is stated to be made for nominal consideration or if a
lease is made under said Section 11.25(f) for nominal rent, the same will not be
considered a breach of Section 5.1(d) hereof provided it is in effect a
distribution of an asset to the indirect owner of either Mortgagor
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above the level of Borrower and a contribution of capital to the transferee of
such deed or lessee under such lease, as the case may be.
(g) If a prepayment under Section 2.4.1(f) of the Mortgage
Loan Agreement is made, Borrower shall prepay the Mezzanine Loan in whole (but
not in part) simultaneously with the prepayment of the Mortgage Loan pursuant to
said Section 2.4.1(f). Any prepayment of the entire Mezzanine Loan pursuant to
this Section 2.3(g) shall be subject to payment of the Spread Maintenance
Premium if such prepayment is made prior to the Permitted Prepayment Date, and
shall be subject to the applicable prepayment fee, if any, provided for in
Section 2.3(a) if such prepayment is made on or after the Permitted Prepayment
Date. Borrower's right to prepay the Mezzanine Loan in whole (but not in part)
pursuant to this Section 2.3(g) shall be in addition to Borrower's rights to
prepay the Mezzanine Loan in part pursuant to the third sentence of Section
2.3(a) and Section 2.3(f) hereof (subject to the applicable prepayment fee, if
any, provided for in Section 2.3(a)), whether prior to the Permitted Prepayment
Date or thereafter, including (without limitation) under circumstances where the
assessment or investigation requested by Mortgage Lender relates solely to the
portion of the Mortgaged Property to be released pursuant to Section 11.25 of
the Mortgage Loan Agreement.
2.4 INTEREST RATE; REPAYMENT; PAYMENT DATES.
(a) Interest on the principal balance of the Mezzanine Loan
outstanding from time to time shall accrue from the Closing Date up to and
including the Maturity Date at the Applicable Interest Rate.
(b) In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal balance
of the Mezzanine Loan shall accrue interest at the Default Rate, calculated from
the date the Default occurred which led to such an Event of Default without
regard to any grace or cure periods contained herein. If all or any part of the
principal amount of the Mezzanine Loan is prepaid upon acceleration of the
Mezzanine Loan following the occurrence of an Event of Default prior to the
Permitted Prepayment Date, Borrower shall be required to pay Mezzanine Lender,
in addition to all other amounts then payable hereunder, a prepayment fee equal
to one percent (1%) of the amount of principal being repaid together with a
Spread Maintenance Premium calculated with respect to the amount of principal
being repaid.
(c) Any change in the rate of interest hereunder due to a
change in the Applicable Interest Rate shall become effective as of the first
day on which such change in the Applicable Interest Rate shall become effective.
Each determination by Mezzanine Lender of the Applicable Interest Rate, acting
in good faith, shall be conclusive and binding for all purposes, absent manifest
error.
(d) In the event that Mezzanine Lender shall have determined,
acting in good faith (which determination shall be conclusive and binding upon
Borrower absent manifest error), that by reason of circumstances affecting the
interbank eurodollar market, adequate and reasonable means do not exist for
ascertaining LIBOR, then Mezzanine Lender shall, by notice to Borrower
("MEZZANINE LENDER'S NOTICE"), which notice shall set forth in reasonable detail
such circumstances, establish the Applicable Interest Rate at Mezzanine Lender's
then customary
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spread (the "SUBSTITUTE SPREAD"), taking into account the size of the Mezzanine
Loan and the creditworthiness of Borrower, above a published index used for
variable rate loans as reasonably determined by Mezzanine Lender (the
"SUBSTITUTE RATE"), such change to become effective as of the first day of the
next Interest Period. Mezzanine Lender's determination of the Substitute Rate
and the Substitute Spread shall be made in a manner consistent with the manner
in which Mezzanine Lender makes such determinations generally for its other
similarly situated borrowers.
(e) If, pursuant to the terms of this Agreement, the Mezzanine
Loan has been converted to a Substitute Rate Loan and Mezzanine Lender shall
determine, acting in good faith (which determination shall be conclusive and
binding upon Borrower absent manifest error), that the event(s) or
circumstance(s) which resulted in such conversion shall no longer be applicable,
Mezzanine Lender shall give notice thereof to Borrower, and the Substitute Rate
Loan shall automatically convert to a LIBOR Loan on the effective date set forth
in such notice. Notwithstanding any provision of this Agreement to the contrary,
in no event shall Borrower have the right to elect to convert a LIBOR Loan to a
Substitute Rate Loan.
(f) Intentionally Omitted.
(g) If any change in law, or any change in the interpretation
of any existing or future law or the application thereof, shall hereafter make
it unlawful for Mezzanine Lender to make or maintain a LIBOR Loan as
contemplated hereunder, (i) the obligation of Mezzanine Lender hereunder to make
a LIBOR Loan shall be cancelled forthwith and (ii) Mezzanine Lender may give
Borrower a Mezzanine Lender's Notice, establishing the Applicable Interest Rate
at the Substitute Rate plus the Substitute Spread, in which case the Applicable
Interest Rate shall be a rate equal to the Substitute Rate in effect from time
to time plus the Substitute Spread. If permitted by law, such change shall not
become effective until the expiration of the then current Interest Period. In
the event the condition necessitating the cancellation of Mezzanine Lender's
obligation to make or maintain a LIBOR Loan hereunder shall cease, Mezzanine
Lender shall promptly notify Borrower of such cessation and the Mezzanine Loan
shall resume its characteristics as a LIBOR Loan in accordance with the terms
herein from and after the first day of the calendar month next following such
cessation. Borrower hereby agrees promptly to pay Mezzanine Lender, upon demand,
any additional amounts necessary to compensate Mezzanine Lender for any
out-of-pocket costs incurred by Mezzanine Lender in making any conversion in
accordance with this Agreement, including, without limitation, any interest or
fees payable by Mezzanine Lender to lenders of funds obtained by it in order to
make or maintain the LIBOR Loan hereunder. Mezzanine Lender's notice of such
costs, as certified to Borrower, shall be set forth in reasonable detail and
Mezzanine Lender's calculation, made in good faith, shall be conclusive absent
manifest error.
(h) In the event that any change in any requirement of law or
in the interpretation or application thereof, or compliance by Mezzanine Lender
with any request or directive (whether or not having the force of law) hereafter
issued from any central bank or other Governmental Authority:
(i) shall hereafter have the effect of reducing the rate of
return on Mezzanine Lender's capital as a consequence of its
obligations hereunder to a level below that which
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Mezzanine Lender could have achieved but for such adoption, change or
compliance (taking into consideration Mezzanine Lender's policies with
respect to capital adequacy) by any amount deemed by Mezzanine Lender
to be material; or
(ii) shall hereafter impose on Mezzanine Lender any other
condition the result of which is to increase the cost to Mezzanine
Lender of making, renewing or maintaining loans or extensions of credit
or to reduce any amount receivable hereunder;
then, in any such case, Borrower shall promptly pay Mezzanine Lender, upon
demand, any additional amounts necessary to compensate Mezzanine Lender for such
additional cost or reduced amount receivable which Mezzanine Lender deems to be
material as reasonably determined by Mezzanine Lender. If Mezzanine Lender
becomes entitled to claim any additional amounts pursuant to this Section
2.4(h), Mezzanine Lender shall provide Borrower with not less than thirty (30)
days written notice specifying in reasonable detail the event by reason of which
it has become so entitled and the additional amount required to fully compensate
Mezzanine Lender for such additional cost or reduced amount. A certificate as to
any additional costs or amounts payable pursuant to the foregoing sentence,
executed by an authorized signatory of Mezzanine Lender and submitted by
Mezzanine Lender, acting in good faith, to Borrower, shall be conclusive in the
absence of manifest error. This provision shall survive payment of the Mezzanine
Note and the satisfaction of all other obligations of Borrower under this
Agreement and the Mezzanine Loan Documents; provided that any request by
Mezzanine Lender for payment of amounts owed by Borrower pursuant to this
Section 2.4(h) shall be made within thirty (30) days thereafter. Borrower shall
not be obligated to pay any amounts which are due under this Section 2.4(h)
which relate to periods more than ninety (90) days prior to the date Mezzanine
Lender first gives Borrower notice of the factors which may cause Borrower to
owe amounts under this Section 2.4(h). Prior to a securitization of the
Mezzanine Loan, Mezzanine Lender shall only charge Borrower for amounts payable
pursuant to this Section 2.4(h) if Mezzanine Lender is generally imposing such
charges on its other similarly situated borrowers.
(i) Borrower agrees to indemnify Mezzanine Lender and to
hold Mezzanine Lender harmless from any loss or expense (other than
consequential and punitive damages) which Mezzanine Lender sustains or incurs
as a consequence of (i) interest or fees, if any, payable by Mezzanine Lender
to lenders of funds obtained by it in order to maintain a LIBOR Loan
hereunder by reason of any default by Borrower in payment of the principal of
or interest on a LIBOR Loan, (ii) any prepayment (whether voluntary or
mandatory) of the LIBOR Loan on a day that (A) is not the Monthly Payment
Date immediately following the last day of an Interest Period with respect
thereto or (B) is the Monthly Payment Date immediately following the last day
of an Interest Period with respect thereto if Borrower did not give the prior
written notice of such prepayment required pursuant to the terms of this
Agreement, including, without limitation, such loss or expense arising from
interest or fees, if any, payable by Mezzanine Lender to lenders of funds
obtained by it in order to maintain the LIBOR Loan hereunder, and (iii) the
conversion (for any reason whatsoever, whether voluntary or involuntary) of
the Applicable Interest Rate to the Substitute Rate plus the Substitute
Spread with respect to any portion of the outstanding principal amount of the
Mezzanine Loan then bearing interest at a rate other than the Substitute Rate
plus the Substitute Spread on a date other than the Monthly Payment Date
immediately following the last day of an Interest Period, including, without
limitation, such loss or expenses arising from interest or fees, if any,
payable by Mezzanine Lender to lenders of
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funds obtained by it in order to maintain a LIBOR Loan hereunder (the amounts
referred to in clauses (i), (ii) and (iii) are herein referred to
collectively as the "Breakage Costs"). Whenever in this section the term
"interest or fees payable by Mezzanine Lender to lenders of funds obtained by
it" is used and no such funds were actually obtained from such lenders, it
shall include interest or fees which would have been payable by Mezzanine
Lender if it had obtained funds from lenders in order to maintain a LIBOR
Loan hereunder. Mezzanine Lender will provide to Borrower a statement
detailing such Breakage Costs and the calculation thereof. This provision
shall survive payment of the Mezzanine Note in full and the satisfaction of
all other obligations of Borrower under this Agreement and the other
Mezzanine Loan Documents; PROVIDED that any request by Mezzanine Lender for
payment of amounts due pursuant to this Section 2.4(i) shall be made within
thirty (30) days thereafter.
(j) Borrower shall pay to Mezzanine Lender on the Maturity
Date the outstanding principal balance of the Mezzanine Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Mezzanine Note
and the other Mezzanine Loan Documents.
(k) Except as otherwise specifically provided herein, all
payments and prepayments under this Agreement and the Mezzanine Note shall be
made to Mezzanine Lender not later than 2:00 P.M., New York City time, on the
date when due and shall be made in lawful money of the United States of America
in immediately available funds at Mezzanine Lender's office, and any funds
received by Mezzanine Lender after such time shall, for all purposes hereof, be
deemed to have been paid on the next succeeding Business Day.
(l) Whenever any payment to be made hereunder or under any
other Mezzanine Loan Document shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the Applicable Interest Rate or the Default Rate, as the case may be,
during such extension.
(m) All payments required to be made by Borrower hereunder or
under the Mezzanine Note or the other Mezzanine Loan Documents shall be made
irrespective of, and without deduction for, any set-off, claim or counterclaim
and shall be made irrespective of any defense thereto.
2.5 COMPUTATION OF INTEREST. Interest on the outstanding
principal balance of the Mezzanine Loan shall be calculated by multiplying (a)
the actual number of days elapsed in the period for which the calculation is
being made by (b) the Applicable Interest Rate or the Default Rate, as then
applicable, expressed as an annual rate divided by 360 by (c) the outstanding
principal balance.
2.6 INTEREST RATE CAP AGREEMENT. The Borrower shall maintain
the Interest Rate Cap Agreement, at its sole cost and expense, at all times from
the date hereof to (and including) the Maturity Date.
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2.7 PAYMENTS UPON LIQUIDATION EVENT.
(a) In the event of (i) a Transfer of any Mortgaged Property
in connection with realization thereon following an Event of Default under the
Mortgage Loan, including without limitation a foreclosure sale, or (ii) any
refinancing of the Mortgaged Properties or the Mortgage Loan (each, a
"LIQUIDATION EVENT"), the Borrower shall cause any related Net Liquidation
Proceeds received by Borrower to be deposited directly into the Mezzanine Debt
Service Account and to be applied to prepayment of the Mezzanine Loan. In the
event of (x) any casualty to the Mortgaged Property or any material portion
thereof, or (y) any condemnation of the Mortgaged Property or any material
portion thereof (each, a "CASUALTY EVENT), the Borrower shall cause any
Mezzanine Net Proceeds received by Borrower to be deposited directly into the
Mezzanine Debt Service Account and to be applied to prepayment of the Mezzanine
Loan. The preceding sentence shall not, however, apply (A) if there is a
Casualty Event and Mortgage Lender makes the Net Proceeds thereof available to
the Mortgagors for Restoration (as defined in the Mortgage Loan Agreement), or
(B) with respect to any sums remitted to the Mortgagors pursuant to Section
5.3.2(g) of the Mortgage Loan Agreement.
(b) Borrower shall notify Mezzanine Lender of any Liquidation
Event or Casualty Event not later than one Business Day following the first date
on which Borrower has knowledge of such event. Borrower shall be deemed to have
knowledge of (i) a sale (other than a foreclosure sale) of the Mortgaged
Properties on the date on which a contract of sale for such sale is entered
into, and as to a foreclosure sale, on the date notice of such foreclosure sale
is given to Borrower or a Mortgagor, and (ii) a refinancing of the Mortgaged
Properties, on the date on which a commitment for such refinancing has been
entered into.
(c) The provisions of this Section 2.7 shall not be construed
to contravene in any manner the restrictions and other provisions regarding
refinancing of the Mortgage Loan or Transfer of the Mortgaged Property or
otherwise set forth in Section 6.5 or otherwise in this Agreement.
2.8 PAYMENT OF PRINCIPAL AND INTEREST.
(a) Borrower shall make a payment to Mezzanine Lender of
interest only on the Closing Date for the initial Interest Period. Borrower
shall make a payment to Mezzanine Lender of interest calculated in the manner
set forth herein and a payment of principal as set forth in the amortization
schedule for the entire Mezzanine Loan attached to the Mezzanine Note as
Schedule A on each Monthly Payment Date to and including the Maturity Date. In
the event that any prepayments of principal are made in connection with a
partial release pursuant to Section 2.3(f) of this Agreement, however, the
monthly payments of principal shall be reduced by the amount of the amortization
attributable to the related Release Parcel as set forth on said Schedule A; no
other prepayment of principal shall reduce the monthly payments of principal set
forth on said Schedule A. Each payment shall be applied first to accrued and
unpaid interest and the balance to principal.
(b) If an Event of Default shall have occurred and be
continuing, the Mezzanine Lender shall apply amounts collected with respect to
the Mezzanine Obligations in its own discretion.
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2.9 USURY SAVINGS. This Agreement and the other Mezzanine Loan
Documents are subject to the express condition that at no time shall Borrower be
required to pay interest on the principal balance of the Loan at a rate which
could subject Mezzanine Lender to either civil or criminal liability as a result
of being in excess of the Maximum Legal Rate. If by the terms of this Agreement
or the other Mezzanine Loan Documents, Borrower is at any time required or
obligated to pay interest on the principal balance due hereunder at a rate in
excess of the Maximum Legal Rate, the Applicable Interest Rate or the Default
Rate, as the case may be, shall be deemed to be immediately reduced to the
Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate
shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder. All sums paid or agreed to be paid to
Mezzanine Lender for the use, forbearance, or detention of the sums due under
the Mezzanine Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Mezzanine Loan until payment in full so that the rate or amount of interest
on account of the Mezzanine Loan does not exceed the Maximum Legal Rate from
time to time in effect and applicable to the Mezzanine Loan for so long as the
Mezzanine Loan is outstanding.
2.10 LATE PAYMENT CHARGE. If any principal (other than
principal due at maturity) or interest is not paid by Borrower on the date on
which it is due, Borrower shall pay to Mezzanine Lender upon demand an amount
equal to the lesser of five percent (5%) of such unpaid sum or the maximum
amount permitted by applicable law in order to defray the expense incurred by
Mezzanine Lender in handling and processing such delinquent payment and to
compensate Mezzanine Lender for the loss of the use of such delinquent payment;
PROVIDED, HOWEVER, that Borrower shall not be required to pay such amount in
connection with the failure to pay a monthly installment of Debt Service on the
date due if sufficient funds were on deposit in the Mezzanine Debt Service
Account on such date and Mezzanine Lender failed to apply same to the payment of
Debt Service.
2.11 SERVICER. At the option of Mezzanine Lender, the
Mezzanine Loan may be serviced by a servicer (the "SERVICER") selected by
Mezzanine Lender and Mezzanine Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Mezzanine Loan Documents to
the Servicer pursuant to a servicing agreement (the "SERVICING AGREEMENT")
between Mezzanine Lender and Servicer. Borrower shall not be responsible for any
set-up fees or any other initial costs relating to or arising under the
Servicing Agreement. Borrower shall not be responsible for payment of the
monthly servicing fee or any other fee due to the Servicer under the Servicing
Agreement; Servicer shall, however, be entitled to reimbursement of costs and
expenses as and to the same extent (but without duplication) as Mezzanine Lender
is entitled thereto under the applicable provisions of this Agreement and the
other Mezzanine Loan Documents.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
All of the representations and warranties contained in the
Mortgage Loan Documents are hereby incorporated into this Agreement and deemed
made hereunder as and when made thereunder and shall remain incorporated without
regard to any waiver, amendment
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or other modification thereof by the Mortgage Lender or to whether the related
Mortgage Loan Document has been repaid, defeased or otherwise terminated, unless
otherwise consented to in writing by Mezzanine Lender.
In addition, in order to induce Mezzanine Lender to enter into
this Agreement and to make the Mezzanine Loan provided for under this Agreement,
Borrower hereby represents and warrants to Mezzanine Lender as follows:
3.1 SINGLE PURPOSE. Borrower and each of Borrower's
Subsidiaries is a Single Purpose Entity.
3.2 LIMITED ASSETS AND LIABILITIES. Except for assets and
liabilities, not material in the aggregate, that are incidental to its
activities as member of Mortgagor I and/or as member of Mortgagor II, the assets
of Borrower consist solely of the related Pledged Company Interests, and the
liabilities of Borrower are limited to those created under this Agreement and
the other Mezzanine Loan Documents.
3.3 EXISTENCE; COMPLIANCE WITH LAW. The Borrower and each of
Borrower's Subsidiaries (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified as a foreign limited liability company and in good standing under the
laws of each jurisdiction where the conduct of its business or ownership of its
properties requires such qualification, (iii) has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Mezzanine Loan Documents by it, and (iv) is in compliance with all
Requirements of Law in all material respects.
3.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower has the power and authority to make, deliver and perform its
obligations under the Mezzanine Loan Documents and to borrow hereunder and has
taken all necessary action to authorize such borrowing and to authorize the
execution, delivery and performance of each of the Mezzanine Loan Documents. No
consent or authorization of, filing with or other act by or in respect of, any
arbitrator or Governmental Authority or any other Person is required in
connection with the borrowing hereunder or with the execution, delivery,
performance, validity or enforceability of the Mezzanine Loan Documents, except
for filings of financing statements in connection with Liens created pursuant to
the Mezzanine Loan Documents. This Agreement has been, and each other Mezzanine
Loan Document to which it is a party will be, duly executed and delivered on
behalf of the Borrower. This Agreement constitutes, and each other Mezzanine
Loan Document when executed and delivered will constitute, a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
3.5 NO LEGAL BAR. To the best of Borrower's knowledge, the
execution, delivery and performance of the Mezzanine Loan Documents, the
borrowing hereunder and the use of the proceeds thereof will not violate any
Requirement of Law, and will not result in, or require, the creation or
imposition of any Lien (other than pursuant to the Pledge Agreement and
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Mezzanine Cash Collateral Agreement) on any of the Borrower's assets pursuant to
any Requirement of Law.
3.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower, any
Subsidiary of the Borrower or Guarantor or against any of their respective
assets, properties or revenues (a) with respect to any of the Mezzanine Loan
Documents or any of the transactions contemplated hereby, or (b) which could
reasonably be expected to have a Material Adverse Effect, subject, however, to
those matters set forth in Schedule 3 hereto.
3.7 NO CONTRACTUAL OBLIGATIONS. Other than the Mezzanine Loan
Documents, the Borrower Operating Agreement and the Mortgagor Company
Agreements, as of the date of this Agreement, the Borrower is not subject to any
Contractual Obligations and has not entered into any agreement, instrument or
undertaking by which it or its assets are bound, and has not incurred any
Indebtedness, and prior to the date of this Agreement Borrower has not entered
into any Contractual Obligation or any agreement, instrument or undertaking by
which it or its assets are bound or incurred any Indebtedness.
3.8 NO BURDENSOME RESTRICTIONS. To the best of Borrower's
knowledge, no Requirement of Law applicable to Borrower could reasonably be
expected to have a Material Adverse Effect.
3.9 INVESTMENT COMPANY ACT AND OTHER STATUTES. The Borrower is
not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to any regulation under any federal or state statute
or regulation (other than Resolutions of the Board of Governors of the Federal
Reserve System) which limits its ability to incur indebtedness.
3.10 SUBSIDIARIES.
(a) Effective as of the consummation of the transactions
contemplated by this Agreement, Beacon/PW Kendall LLC, a Delaware limited
liability company, is a member-manager of the Borrower and owns a 99.3849%
membership interest in the Borrower; and Kendall Athenaeum LLC, a Delaware
limited liability company, is the other member-manager of the Borrower and owns
a 0.6151% membership interest in the Borrower. The Borrower does not have any
Subsidiaries other than the Mortgagors.
(b) The Borrower does not own any equity interests other than
the related Pledged Company Interests.
3.11 ACCURACY AND COMPLETENESS OF INFORMATION. All
information, reports and other papers and data with respect to the Borrower or
any Mortgagor prepared by or for the Borrower or either Mortgagor and furnished
to Mezzanine Lender were, at the time the materials were so furnished, and as of
the date hereof are, complete and correct in all material respects, to the
extent necessary to give Mezzanine Lender a true and accurate knowledge of the
subject matter thereof in all material respects. No document furnished or
statement made in writing to
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Mezzanine Lender by the Borrower or either Mortgagor in connection with the
negotiation, preparation or execution of this Agreement contains any untrue
statement of a material fact or omits to state any such material fact necessary
in order to make the statements contained therein not misleading, in light of
the circumstances in which the same were made.
3.12 NO DEFAULT. As of the date hereof, no Default and no
event that with the giving of notice and/or the lapse of time would constitute a
Default exists.
3.13 ORGANIZATIONAL CHART. The organizational chart attached
as Schedule 1 hereto, relating to the Borrower and certain Affiliates and other
parties, is true, complete and correct on and as of the date hereof.
3.14 FINANCIAL STATEMENTS. All financial data, including,
without limitation, the statements of cash flow and income and operating
expense, that have been prepared by or for Borrower or either Mortgagor and
delivered to Mezzanine Lender which cover the period since May 1, 1998 (i) are
true, complete and correct in all material respects, (ii) accurately represent
the financial condition of the Property as of the date of such reports, and
(iii) have been prepared in accordance with GAAP throughout the periods covered,
except as disclosed therein. Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on the Borrower,
except as referred to or reflected in said financial statements. Since the date
of the financial statements, there has been no material adverse change in the
financial condition, operations or business of Borrower from that set forth in
said financial statements.
3.15 TAX FILINGS. Each Mortgagor has filed (or has obtained
effective extensions for filing) all material federal, state and local tax
returns required to be filed as of the date hereof and has paid or made adequate
provision for the payment of all material federal, state and local taxes,
charges and assessments before the date they would be delinquent from such
Mortgagor (other than taxes being contested in good faith as permitted by the
Mortgage Loan Documents).
3.16 SOLVENCY. The fair saleable value of Borrower's assets
exceeds and will, immediately following the issuance and sale of the Mezzanine
Note and the consummation of the other transactions contemplated to take place
simultaneously therewith, exceed Borrower's liabilities, including subordinated,
unliquidated, disputed and contingent liabilities. Borrower's assets do not and,
immediately following the issuance and sale of the Mezzanine Note and the
consummation of the other transactions contemplated to take place simultaneously
therewith, will not constitute unreasonably insufficient capital to carry out
its business as conducted or as proposed to be conducted. The Borrower does not
intend to, and Borrower does not believe that it will, incur debts and
liabilities (including, without limitation, contingent liabilities) beyond its
ability to pay such debts and liabilities as they mature.
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ARTICLE 4
CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO MEZZANINE LOAN. The obligation of
Mezzanine Lender to make the Mezzanine Loan hereunder is subject to the
satisfaction of the following conditions precedent:
(a) MEZZANINE LOAN DOCUMENTS. Mezzanine Lender shall have
received, in form and substance satisfactory to Mezzanine Lender, duly executed
copies of (i) this Agreement, (ii) the Mezzanine Note, (iii) the Pledge
Agreement, (iv) the Mezzanine Cash Collateral Agreement, (v) the Intercreditor
Agreement, (vi) the Interest Rate Cap Agreement, (vii) the Limited Guaranty, and
(viii) the other Mezzanine Loan Documents.
(b) LEGAL OPINION. Mezzanine Lender shall have received from
counsel to Borrower reasonably satisfactory to Mezzanine Lender (i) an opinion
letter as to enforceability and other matters in form and substance reasonably
satisfactory to Mezzanine Lender, and (ii) an opinion letter as to certain
bankruptcy related matters in form and substance reasonably satisfactory to
Mezzanine Lender.
(c) CORPORATE PROCEEDINGS. Mezzanine Lender shall have
received a copy of authorizations, in form and substance reasonably satisfactory
to Mezzanine Lender, of BEACON/PW KENDALL LLC authorizing the execution,
delivery and performance of the Mezzanine Loan Documents to which Borrower is a
party and the granting of Liens thereunder, and the borrowing contemplated
hereunder, in each case certified by the Secretary of Beacon Capital Partners,
Inc., which certificate shall state that the authorizations thereby certified
have not been amended, modified, revoked or rescinded and shall be in form and
substance reasonably satisfactory to Mezzanine Lender.
(d) ORGANIZATIONAL DOCUMENTATION. Mezzanine Lender shall have
received true and complete copies of (i) the Borrower Operating Agreement,
certified as a complete and correct copy thereof by Beacon/PW Kendall LLC, and
(ii) the Mortgagor Company Agreements, certified as a complete and correct copy
thereof by Borrower, and (iii) the Articles of Incorporation of the Mortgagor
Managing Entity, certified as a complete and correct copy thereof by an
authorized officer of the Mortgagor Managing Entity or by the Mortgagors, and
Mezzanine Lender shall have approved each of the foregoing documents.
(e) NO VIOLATION. The consummation of the transactions
contemplated hereby shall not contravene, violate or conflict with, nor cause
Borrower, any Mortgagor or Mezzanine Lender to be in any violation of, any
Requirement of Law.
(f) INCUMBENCY CERTIFICATES. Mezzanine Lender shall have
received a certificate as to the signature of the officers of or on behalf of
the Borrower executing each Mezzanine Loan Document to which Borrower is a party
and any certificate or other document to be delivered by it pursuant hereto and
thereto, together with evidence of the incumbency of such officers.
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(g) FEES AND EXPENSES. Mezzanine Lender shall have received
payment of all reasonable out-of-pocket costs and expenses of Mezzanine Lender
that shall have been invoiced to the Borrower and are required to be paid by the
Borrower under this Agreement.
(h) GOOD STANDING CERTIFICATES. Mezzanine Lender shall have
received copies of certificates dated as of a recent date from the Secretary of
State or other appropriate authority of such jurisdiction, evidencing the good
standing and, if applicable, qualification to do business of Borrower, the
Mortgagor Managing Entity and each Mortgagor from their respective states of
organization and each state in which the conduct of their business or ownership
of their properties requires them to be qualified to do business.
(i) INITIAL BUDGET. Mezzanine Lender shall have received an
Annual Budget for the Mortgaged Property for the period commencing on January 1,
2000 and ending on December 31, 2000 (the "INITIAL BUDGET").
(j) ADDITIONAL MATTERS. The Borrower shall have executed and
delivered such other documents, instruments, certificates and/or opinions as the
Mezzanine Lender may reasonably request on or prior to funding of the Mezzanine
Loan. All other documents and legal matters in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to Mezzanine Lender and its counsel.
(k) MORTGAGE LOAN. The Mortgage Loan shall have closed.
ARTICLE 5
ADDITIONAL REPRESENTATIONS,
WARRANTIES AND COVENANTS
5.1 SINGLE PURPOSE ENTITY/SEPARATENESS. Borrower hereby
represents and warrants to Mezzanine Lender as of the date hereof and (unless
otherwise consented to by Mezzanine Lender) covenants and/or agrees (as the case
may be) as follows:
(a) Each of the Borrower and Mortgagors and the Mortgagor
Managing Entity shall engage solely in the following business and shall not
conduct its business in any manner inconsistent with the following: (i) in the
case of Borrower, owning a 100% membership interest in Mortgagor I and a 100%
membership interest in Mortgagor II, borrowing and giving security for the
Mezzanine Loan pursuant to the terms of the Mezzanine Loan Documents and
performing all acts required or permitted under the Mezzanine Loan, and
transacting any and all lawful business for which a limited liability company
may be organized under the Delaware Limited Liability Act that is incident,
necessary and appropriate to the foregoing; (ii) in the case of each Mortgagor,
owning, holding, selling, leasing, developing, financing, refinancing,
transferring, exchanging, operating and managing the Mortgaged Property owned by
such Mortgagor, borrowing and giving security for the Mortgage Loan pursuant to
the terms of the Mortgage Loan Documents and performing all acts required or
permitted under the Mortgage Loan, and transacting any and all lawful business
for which a limited liability company may be organized under the laws regarding,
and engaging in such other lawful activities permitted to, limited liability
companies under the statute under which such Mortgagor is formed as are
necessary,
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incidental or appropriate in connection therewith; and (iii) in the case of the
Mortgagor Managing Entity, acting as non-member manager of each Mortgagor and
engaging in such activities as are necessary, incidental or advisable in
connection therewith.
(b) The Borrower does not own or will not own any asset or
property other than (i) the Pledged Company Interests and (ii) incidental
personal property necessary for the ownership of such interests. The Mortgagor
Managing Entity does not own nor will it own any asset or property other than
(i) an ownership interest (if any) in the entity set forth in Schedule I and
(ii) incidental personal property necessary for the ownership of such interests.
None of the Mortgagors will engage in any business other than the ownership,
management and operation of the Mortgaged Property, and each Mortgagor will
conduct and operate its business as presently conducted and operated in all
material respects. The Borrower will not engage in any business other than the
ownership of the Pledged Company Interests, and will conduct and operate its
business as presently conducted and operated in all material respects.
(c) [Reserved].
(d) None of the Mortgagors or the Borrower will enter into any
contract or agreement with any Affiliate of such Mortgagor or Borrower or any
constituent party of such Mortgagor or Borrower or any Affiliate of any
constituent party, except upon terms and conditions that are intrinsically fair
and substantially similar to those that would be available on an arm's length
basis with third parties other than any such party.
(e) Neither Borrower, either Mortgagor nor the Mortgagor
Managing Entity has any outstanding Indebtedness for borrowed money, and,
notwithstanding any other provision of this Agreement, and so long as any
obligations under the Mezzanine Note remain outstanding and have not been
discharged in full, neither Borrower, either Mortgagor nor the Mortgagor
Managing Entity will (and Borrower agrees that it will not permit either
Mortgagor to, and will cause each Mortgagor to cause the Mortgagor Managing
Entity not to) incur any Indebtedness, other than (x) in the case of Borrower
and Mortgagor Managing Entity, unsecured trade payables and operational debt not
evidenced by a note and in an aggregate amount (for each such entity) not
exceeding $100,000 at any one time, PROVIDED that such trade payables and
operational debt shall be not more than ninety (90) days past due and incurred
in the ordinary course of business, and (y) in the case of Mortgagors,
Indebtedness of the types described in clauses (ii) and (iii) of Section
3.1.24(d) of the Mortgage Loan Agreement (subject to the limitations contained
therein); PROVIDED, FURTHER, HOWEVER, each Mortgagor is authorized to execute,
deliver and perform the Mortgage Note, the Mortgage and the other Mortgage Loan
Documents and Borrower is authorized to execute, deliver and perform the
Mezzanine Loan Documents;
(f) None of the Mortgagors or the Borrower has made, and none
of the Mortgagors or the Borrower will make, any loans or advances in the nature
of loans to any third party (including any Affiliate or constituent party of the
Mortgagors or Borrower), and shall not acquire obligations or securities of its
Affiliates.
(g) Each Mortgagor and the Borrower is and will remain solvent
and the Borrower and each Mortgagor will pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from their
own assets as the same shall become due.
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(h) Each Mortgagor and the Borrower has done or caused to be
done and will do all things necessary to observe organizational formalities and
preserve its existence, and none of the Mortgagors or the Borrower will, nor
will any Mortgagor or the Borrower permit its respective SPC Party to, amend,
modify or otherwise change the certificate of formation, articles of
incorporation and bylaws, limited liability company agreement or other
organizational documents of such Mortgagor, Borrower or SPC Party in any manner
that (i) violates the single purpose covenants set forth in this Section 5.1, or
(ii) amends, modifies or otherwise changes any provision thereof that by its
terms cannot be modified at any time when the Mortgage Loan or the Mezzanine
Loan is outstanding or by its terms cannot be modified without Mezzanine
Lender's consent.
5.2 OPERATIONAL MATTERS. Notwithstanding any other provision
of this Agreement, and so long as any obligations secured by the Mortgage remain
outstanding and have not been discharged in full, Borrower and each Mortgagor
and the Mortgagor Managing Entity shall do all of the following (and Borrower
shall cause each Mortgagor, and shall cause each Mortgagor to cause the
Mortgagor Managing Entity, to do all of the following) unless otherwise
consented to by Mezzanine Lender:
(a) maintain all of its books, records, financial statements
and bank accounts separate from those of its Affiliates and any constituent
party; PROVIDED, HOWEVER, that each such Person's assets may be included in a
consolidated financial statement of each such Person's Affiliates if (i)
inclusion on such a consolidated financial statement is required to comply with
the requirements of GAAP, (ii) such consolidated financial statements shall
contain a footnote to the effect that each such Person's assets are owned by
such Person, and (iii) such assets shall be listed on such Person's own separate
balance sheet. Except as permitted under the preceding sentence, each such
Person's assets will not be listed as assets on the financial statement of any
other entity; PROVIDED, HOWEVER, that such restriction shall not preclude any
Person from listing its ownership interests in any such Person as an asset on
its financial statement. Each such Person will file its own tax returns and will
not file a consolidated federal income tax return with any other Person unless
specifically mandated by applicable law or unless such Person is treated as a
disregarded entity. Each such Person shall maintain its books, records,
resolutions and agreements as official records;
(b) hold itself out to the public as a legal entity separate
and distinct from any other entity (including any Affiliate or any constituent
party), correct any known misunderstanding regarding its status as a separate
entity, conduct business in its own name, not identify itself or any of its
Affiliates as a division or part of the other, and maintain and utilize separate
stationery, invoices and checks bearing its own name;
(c) maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations;
(d) not seek or effect the liquidation, dissolution,
winding-up, liquidation, consolidation or merger, in whole or in part, of
Borrower;
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(e) not commingle its funds and other assets with those of any
Affiliate or constituent party or any other Person, and will hold all of its
assets in its own name;
(f) maintain its assets in such a manner that it will not be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any Affiliate or constituent party or any other Person;
(g) not guarantee or become obligated for the debts of any
other Person and does not and will not hold itself out to be responsible for or
have its credit available to satisfy the debts or obligations of any other
Person;
(h) Borrower and each Mortgagor will at all times have as its
managing member or non-member manager or special manager the applicable SPC
Party whose sole asset is its interest, if any, in such entity and each such SPC
Party will at all times comply, and will cause such entity to comply, with each
of the representations, warranties, and covenants contained in this Section 5.2
as if such representation, warranty or covenant was made directly by such SPC
Party. Upon the withdrawal or the disassociation of an SPC Party from such
entity, such entity shall immediately appoint a new SPC Party whose articles of
incorporation or limited liability company agreement are substantially similar
to those of such SPC Party and deliver a new non-consolidation opinion to the
Mezzanine Lender with respect to the new SPC Party and its equity owners;
(i) at all times cause there to be at least two Independent
Directors of each SPC Party that is a corporation reasonably satisfactory to
Mezzanine Lender;
(j) not cause or permit the board of directors of any SPC
Party that is a corporation to take any action which, under the terms of any
certificate of incorporation, by-laws or any voting trust agreement with respect
to any common stock, requires a vote of the board of directors of such SPC Party
unless at the time of such action there shall be at least two members who are
each an Independent Director;
(k) conduct its business so that the assumptions made with
respect to such entity in the Insolvency Opinion shall be true and correct in
all material respects. In connection with the foregoing, it hereby covenants and
agrees that it will comply with, or cause the compliance with, (i) all of the
facts and assumptions (whether regarding the Borrower or any other Person) set
forth in the Insolvency Opinion, (ii) all the representations, warranties and
covenants in this Section 5.2, and (iii) all the organizational documents of the
Borrower, the Mortgagors and any SPC Party;
(l) not permit any Affiliate or constituent party independent
access to its bank accounts;
(m) pay the salaries of its own employees (if any) from its
own funds and maintain a sufficient number of employees (if any) in light of its
contemplated business operations; and
(n) compensate each of its consultants and agents from its
funds for services provided to it and pay from its own assets all obligations of
any kind incurred.
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5.3 AMENDMENTS. None of the Mortgagors or the Borrower will,
nor will any Mortgagor or the Borrower permit any SPC Party to, amend, modify or
waive or seek a waiver of any of the Organizational Documents of such Mortgagor,
Borrower or SPC Party without Mezzanine Lender's consent in any manner that (i)
violates the single purpose covenants set forth in Sections 5.1, 5.2 or 5.5, or
(ii) amends, modifies or otherwise changes any provision thereof that by its
terms cannot be modified at any time when the Mortgage Loan or the Mezzanine
Loan is outstanding or by its terms cannot be modified without Mezzanine
Lender's consent.
5.4 MANAGER. Borrower, as sole member and a manager of
Mortgagors, will at all times comply, and will cause each Mortgagor to comply,
with each of the representations, warranties and covenants contained in Sections
5.1 and 5.2. Borrower's SPC Party will at all times comply, and Borrower's
managing members will cause Borrower to comply, with each of the
representations, warranties and covenants contained in Sections 5.1 and 5.2 as
if such representation, warranty or covenant was made directly by the Borrower's
SPC Party.
5.5 INDEPENDENT DIRECTORS; BANKRUPTCY ACTION.
(a) Notwithstanding any other provision of this Agreement, and
so long as any obligations under the Mezzanine Loan Documents remain outstanding
and have not been discharged in full, each SPC Party that is a corporation at
all times shall have at least two Independent Directors. No resignation or
removal of an Independent Director shall be effective until such successor shall
have accepted his or her appointment as an Independent Director by a written
instrument. In the event of a vacancy in the position of Independent Director,
the Borrower or Mortgagor (as the case may be), subject to the approval of the
Mezzanine Lender, which approval shall not be unreasonably withheld or delayed,
shall, as soon as practicable, cause the SPC Party to appoint a successor
Independent Director. No Independent Director shall at any time serve as trustee
in bankruptcy for any Affiliates of the entity for which it is serving as
Independent Director.
(b) Notwithstanding any other provision of this Agreement, and
so long as any obligations secured by the Mortgage remain outstanding and have
not been discharged in full, no Borrower or any Mortgagor or SPC Party or any
other Person shall have any authority to take any Bankruptcy Action on behalf of
Borrower or any Mortgagor or such SPC Party, or cause or permit Borrower or any
Mortgagor or SPC Party to take any Bankruptcy Action, without in each case the
prior written consent of both Independent Directors.
5.6 INTEREST RATE CAP. The Borrower shall cause the Mortgagors
to maintain an interest rate cap agreement as required under the Mortgage Loan.
5.7 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Borrower and each of its Subsidiaries shall: (a) preserve, renew and keep in
full force and effect its existence, (b) engage in business of the same general
type as now conducted by it and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to maintain all
material rights, privileges and franchises necessary or desirable in the normal
conduct of its business and (c) comply in all material respects with all
Requirements of Law. Notwithstanding the foregoing, after prior notice to
Mezzanine Lender, Borrower and/or each of its Subsidiaries,
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at its own expense, may suspend such compliance and contest by appropriate legal
proceeding, conducted in good faith and with due diligence, the validity or
applicability of any Legal Requirements to Borrower, such Subsidiaries and/or
the Mortgaged Property, provided that (i) no Event of Default has occurred and
remains uncured; (ii) such proceeding shall be permitted under and be conducted
in accordance with all applicable statutes, laws and ordinances; (iii) Borrower
or any of its Subsidiaries shall establish to Mezzanine Lender's reasonable
satisfaction that neither the Mortgaged Property nor any part thereof or
interest therein will be in imminent danger of being sold, forfeited, terminated
canceled or lost; (iv) Borrower or such Subsidiaries shall promptly upon final
determination thereof comply with such resulting Legal Requirements, and shall
pay all costs, interest and penalties which may be payable in connection
therewith; and (v) unless deposited with Mortgage Lender pursuant to the
Mortgage Loan Agreement, Borrower shall deposit with Mezzanine Lender cash, or
other security as may be approved by Mezzanine Lender, in an amount equal to
105% of the amount of all costs, interest and penalties that may be assessed
against Borrower or such Subsidiaries as a result of such non-compliance.
5.8 INSPECTION OF MORTGAGED PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS; CONSENTS.
(a) The Borrower and each of its Subsidiaries shall keep
proper books of records and account in which full, true and correct entries
shall be made of all dealings and transactions in relation to its business and
activities; and permit representatives of Mezzanine Lender upon reasonable prior
notice to such Person to examine and make abstracts from any of the books and
records of such Person, at any reasonable time during normal business hours and
as often as may reasonably be desired, and to discuss the business and financial
and other condition of such Person with officers of such Person and the
accountants and other representatives of such Person.
(b) Representatives of Mezzanine Lender shall be permitted
upon reasonable prior notice to Borrower at any reasonable time during normal
business hours and as often as may reasonably be desired to examine the
Mortgaged Property and to discuss the business and financial and other condition
of the Mortgagors with officers of such Mortgagors and the accountants and other
representatives of such Mortgagors.
5.9 NOTICES. Borrower shall give notice, or cause notice to be
given, to Mezzanine Lender promptly upon the occurrence of:
(a) any Default;
(b) any default or event of default under any Contractual
Obligation of Borrower or, to the knowledge of Borrower, of any of the
Mortgagors, Mortgagor Managing Entity or Guarantor that could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Borrower or, to the
knowledge of the Borrower, affecting any of the Mortgagors or Guarantor which,
if adversely determined, could reasonably be expected to have a Material Adverse
Effect;
(d) a change in the business, operations, property or
financial or other condition or prospects of Borrower or, to the knowledge of
Borrower, any of the Mortgagors, the
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Mortgagor Managing Entity or Guarantor which could reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action, if any, Borrower or, to the
knowledge of Borrower, the Mortgagors, the Mortgagor Managing Entity or
Guarantor proposes to take with respect thereto.
5.10 SPECIAL DISTRIBUTIONS. On each date on which amounts are
required to be disbursed to the Mezzanine Debt Service Account pursuant to the
terms of the Mezzanine Cash Collateral Agreement or are required to be paid to
Mezzanine Lender under any of the Mezzanine Loan Documents, the Borrower shall
exercise its rights under the related Mortgagor Company Agreement, the Cash
Management Agreement and/or the Mezzanine Cash Collateral Agreement to cause the
Mortgagors to make to Borrower a distribution in an aggregate amount such that
Mezzanine Lender shall receive the amount required to be disbursed to the
Mezzanine Debt Service Account or otherwise paid to Mezzanine Lender on such
date.
5.11 REPORTS, ETC. Borrower shall furnish, or cause to be
furnished, to Mezzanine Lender copies of all financial statements, reports,
budgets and summaries required to be delivered to Mortgage Lender under the
Mortgage Loan Documents (including, without limitation, those set forth in
Section 4.1.6 of the Mortgage Loan Agreement), to the extent the same are
provided to Borrower from the Mortgagors pursuant to the Mortgagor Company
Agreements, at the same time as each such document is furnished to the Mortgage
Lender. Any financial information which is required by the Mortgage Loan
Agreement to be certified to Mortgage Lender shall also be certified to
Mezzanine Lender.
5.12 FINANCIAL STATEMENTS. Borrower shall keep and maintain or
will cause to be kept and maintained proper and accurate books and records, in
accordance with GAAP, reflecting the financial affairs of Borrower. Mezzanine
Lender shall have the right from time to time during normal business hours upon
reasonable notice to Borrower to examine such books and records at the office of
Borrower or other Person maintaining such books and records and to make such
copies or extracts thereof as Mezzanine Lender shall desire.
5.13 CURING. Mezzanine Lender shall have the right, but shall
not have the obligation, to exercise the Borrower's rights, to the extent
Borrower shall have the same, under the applicable Mortgagor Company Agreement
(a) to cure a default by the related Mortgagor under the Mortgage Loan and (b)
to satisfy any Liens, claims or judgments against the Mortgaged Property (except
for Liens permitted by the Mortgage Loan Documents), unless, in the case of
either (a) or (b), Borrower or the related Mortgagor shall be diligently
pursuing remedies to cure to Mezzanine Lender's reasonable satisfaction. The
Borrower shall reimburse Mezzanine Lender on demand for any and all costs
incurred by Mezzanine Lender in connection with curing such a default by any of
the Mortgagors under the Mortgage Loan or satisfying any Liens, claims or
judgments against the Mortgaged Property.
5.14 FURTHER ASSURANCES. Borrower shall at any time and from
time to time, upon the reasonable request of Mezzanine Lender, and at the sole
expense of the Borrower, promptly and duly execute and deliver such further
instruments and documents and take such
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further actions as Mezzanine Lender may reasonably request to carry out and
obtain and preserve the full benefits of this Agreement and the other Mezzanine
Loan Documents and of the rights and powers granted herein and therein.
5.15 INDEMNIFICATION. Borrower shall indemnify Mezzanine
Lender against any claims for brokerage fees or commissions asserted in
connection with the Mezzanine Loan and pay all expenses incurred by Mezzanine
Lender in connection with the defense of any action or proceeding brought to
collect any such brokerage fees or commissions.
ARTICLE 6
NEGATIVE COVENANTS
6.1 SINGLE PURPOSE EXISTENCE AND SEPARATENESS OF ENTITIES.
(a) None of the Borrower or its Subsidiaries shall: (i) take
any actions in violation of its organizational documents, or that would
otherwise adversely affect its existence as a Single Purpose Entity, (ii) amend,
modify, waive or terminate, without the prior written consent of Mezzanine
Lender, the Borrower Operating Agreement or the Articles of Incorporation of the
Mortgagor Managing Entity or any of their respective other organizational
documents in any manner that (x) violates the single purpose covenants as set
forth in Sections 5.1, 5.2, 5.3 or 5.5 or (y) amends, modifies or otherwise
changes any provision thereof that by its terms cannot be modified at any time
when the Mortgage Loan or the Mezzanine Loan is outstanding or by its terms
cannot be modified without Mezzanine Lender's consent, or (iii) consent to the
amendment, modification, waiver or termination, without the prior written
consent of Mezzanine Lender, which shall not be unreasonably withheld or
delayed, of any of the Mortgage Loan Documents.
(b) None of the Borrower or its Subsidiaries shall (i) cause
or permit the Collateral or other assets or property of Borrower to be subject
to any Lien other than as provided for or permitted in the Mezzanine Loan
Documents or cause or permit any assets or property of any Mortgagor to be
subject to any Lien other than as provided for or permitted by the Mortgage Loan
Documents, and subject to Mortgagors' contest rights set forth in the Mortgage
Loan Agreement, (ii) acquire the assets of any other Person, except those owned
as of the date hereof, (iii) make any material changes in Borrower's present
method of conducting business, or (iv) loan money to any Person.
6.2 LIMITATION ON SECURITIES ISSUANCES. None of the Borrower
or any of its Subsidiaries shall issue any membership interests or other
securities other than those that have been issued as of the date hereof.
6.3 LIMITATIONS ON DISTRIBUTIONS. Following the occurrence and
during the continuance of an Event of Default (and, in the case of an Event of
Default for which Borrower is not entitled to notice, after notice thereof), the
Borrower shall not make any distributions to its members.
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6.4 LIENS. None of the Borrower or its Subsidiaries shall take
any action that would impair the Lien created under this Agreement, the Pledge
Agreement, the Mezzanine Cash Collateral Agreement or any other Mezzanine Loan
Document.
6.5 OTHER LIMITATIONS. Prior to the payment in full of the
Mezzanine Obligations, none of the Borrower or its Subsidiaries shall, without
the prior written consent of Mezzanine Lender (which may be furnished or
withheld at its sole and absolute discretion, except in the case of clause (c)
below in which case Mezzanine Lender's consent shall not be unreasonably
withheld or delayed), give its consent or approval to any of the following
actions or items:
(a) except as permitted by the terms of Section 8.1, (i) any
refinance of the Mortgage Loan, (ii) any prepayment in full of the Mortgage
Loan, or (iii) any Transfer of the Mortgaged Property or any portion thereof,
(b) putting any additional voluntary Liens on the Mortgaged
Property;
(c) any modification, amendment, consolidation, spread,
restatement, waiver or termination of any of the Mortgage Loan Documents;
(d) for so long as an Event of Default continues to exist,
approve the terms of any Annual Budget;
(e) the distribution to the members of any Mortgagor of
property other than cash, cash equivalents or any Release Parcel;
(f) except (i) as set forth in an Approved Annual Budget, if
applicable, or (ii) except as permitted under the Mortgage Loan Documents
(including, without limitation, pursuant to any lease approved by Mortgage
Lender or entered into without such approval pursuant to the terms of the
Mortgage Loan Agreement; provided, however, that in the case of a Major Lease
which is not affirmatively approved by Mortgage Lender pursuant to the terms of
the Mortgage Loan Agreement, such Major Lease must be approved or deemed
approved by Mezzanine Lender pursuant to Section 6.7), any (A) improvement,
renovation or refurbishment of all or any part of the Mortgaged Property to a
materially higher standard or level than that of comparable properties in the
same market segment and in the same geographical area as the Mortgaged Property,
(B) removal, demolition or material alteration of the improvements or equipment
on the Mortgaged Property or (C) material increase in the square footage or
gross leasable area of the improvements on the Mortgaged Property if a material
portion of any of the expenses in connection therewith are paid or incurred by
the applicable Mortgagor;
(g) any material change in the method of conduct of the
business of the Borrower or any of its Subsidiaries (including the entering into
of an operating lease with respect to any hotel); or
(h) except as required or permitted by the Mortgage Loan
Documents, any determination to restore the Mortgaged Property after a casualty
or condemnation.
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6.6 CONTRACTUAL OBLIGATIONS. Other than the Mezzanine Loan
Documents, the Borrower Operating Agreement (and the initial membership
interests in Borrower issued pursuant thereto) and the Mortgagor Company
Agreements, none of the Borrower or its assets shall be subject to any
Contractual Obligations, and the Borrower shall not enter into any agreement,
instrument or undertaking by which it or its assets are bound, except for such
liabilities, not material in the aggregate, that are incidental to its
activities as a member of a Mortgagor.
6.7 MAJOR LEASES. The Borrower shall not without the prior
written consent of the Mezzanine Lender, which shall not be unreasonably
withheld, conditioned or delayed, give its consent or approval to a Mortgagor's
entering into any Major Lease or any amendment, modification or non-default
termination of any such Major Lease (other than amendments or modifications
entered into pursuant to or in implementation of options or rights contained in
such Major Lease and other than terminations entered into pursuant to or in
implementation of rights of a tenant contained therein); PROVIDED, HOWEVER, that
if Mezzanine Lender fails to respond to a request by Borrower for such approval
within ten (10) Business Days after its receipt of the final proposed Major
Lease (or amendment, modification or non-default termination) and all
information reasonably required by Mezzanine Lender in order to adequately
review such request, including, without limitation (in connection with the
approval of a Major Lease), blacklined copies of such Major Lease marked to show
the changes against the form of lease, Mezzanine Lender shall be conclusively
deemed to have approved such Major Lease (or amendment, modification or
non-default termination); provided that (in connection with the approval of a
Major Lease) blacklined copies of interim drafts of such Major Lease were
provided to Mezzanine Lender. If Mortgage Lender consents to or approves any
Major Lease (or amendment, modification or non-default termination thereof),
which has not been consented to or approved by Mezzanine Lender, Borrower may
nevertheless proceed with the transaction.
ARTICLE 7
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. The occurrence of any of the following
events shall be deemed the occurrence of an "EVENT OF DEFAULT":
(a) Borrower shall fail to pay any principal or any interest
on the Mezzanine Note when due in accordance with the terms thereof or hereof;
or
(b) Borrower shall fail to pay any amount payable (other than
pursuant to clause (a)) pursuant to this Agreement, the Mezzanine Note or any
other Mezzanine Loan Document when due and payable in accordance with the
provisions hereof or thereof, and such failure is not cured within a period of
five (5) Business Days after notice thereof; or
(c) If any representation or warranty made by Borrower herein
or in any other Mezzanine Loan Document or in any report, certificate, financial
statement or other instrument, agreement or document prepared by or on behalf of
Borrower and furnished to Mezzanine Lender shall have been false or misleading
in any material respect as of the date the representation or warranty was made;
provided that Borrower shall have twenty (20) days after
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notice from Mezzanine Lender to cure in a manner satisfactory to Mezzanine
Lender any such breach of a representation or warranty that is susceptible to
cure, except that Borrower shall have no opportunity to cure any breach of a
representation or warranty (A) made to the best of Borrower's knowledge (i.e.,
which Borrower knew was false when made), (B) that was otherwise intentionally
misrepresented, or (C) made pursuant to Section 5.1 hereof;
(d) Any of the Borrower or Borrower's Subsidiaries (as
applicable) shall breach in any material respect any of the terms of:
(i) Section 2.7(a) (Payments upon Liquidation Event);
(ii) Take any Bankruptcy Action in violation of Section 5.5(b)
(Independent Directors);
(iii) Borrower takes any action to prevent Section 5.10
(Special Distributions) from being complied with;
(iv) Section 6.2 (Limitation on Securities Issuances);
(v) Section 6.3 (Limitations on Distributions);
(vi) Section 6.4 (Liens), if Borrower takes any action which
is intended to cause a violation of Section 6.4; or
(vii) Section 6.5 (a) or (b) (Limitations on Transfers and
additional Liens).
(e) if (A) there is a transfer of title to Borrower's
ownership interest in the Mortgagors or either of them, (B) there is a transfer
of title to any direct or indirect interest in Borrower in violation of Section
8.3 hereof, or (C) Borrower voluntarily breaches or permits any other breach of
Section 8.3 hereof.
(f) If any of the assumptions contained in the Insolvency
Opinion, or in any other non-consolidation opinion delivered to Mezzanine Lender
in connection with the Mezzanine Loan, or in any other non-consolidation opinion
delivered subsequent to the closing of the Mezzanine Loan, is or shall become
untrue in any material respect;
(g) If a receiver, liquidator or trustee shall be appointed
for Borrower, any Mortgagor or the SPC Party or if Borrower, any Mortgagor or
the SPC Party shall be adjudicated a bankrupt or insolvent, or if any petition
for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy
law, or any similar federal or state law, shall be filed by or against,
consented to, or acquiesced in by, Borrower, any Mortgagor or the SPC Party, or
if any proceeding for the dissolution or liquidation of Borrower or any
Mortgagor shall be instituted; PROVIDED, HOWEVER, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower, any Mortgagor or the SPC Party, upon the same not being discharged,
stayed or dismissed within sixty (60) days;
(h) Any Mezzanine Loan Document shall cease to be in full
force and effect, or any party thereto (other than the Mezzanine Lender) shall
so assert in writing, or the Liens
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created pursuant to any Mezzanine Loan Document shall cease to be a fully
perfected enforceable first priority security interest; or any portion of the
Collateral is Transferred without Mezzanine Lender's prior written consent;
PROVIDED, HOWEVER, the Borrower shall have thirty (30) days after Borrower has
notice of such Default to cure such Default if, after giving effect to such
cure, the Mezzanine Lender's security interest in the Collateral will be
maintained as a perfected, first priority Lien; or
(i) One or more judgments or decrees shall be entered against
the Borrower or any one or more of the Mortgagors or the Mortgagor Managing
Entity, involving in the aggregate a liability (not paid or fully covered by
insurance, subject to customary deductibles, or fully indemnified against by a
party reasonably acceptable to Mezzanine Lender) of $1,000,000 or more (in the
case of the Borrower), $1,000,000 or more (in the case of the Mortgagor Managing
Entity), and $1,000,000 or more (in the case of the Mortgagors) and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or
(j) Either (x) this Agreement, the Mezzanine Note or any other
Mezzanine Loan Document or any Lien granted hereunder or thereunder shall, in
whole or in any material part, terminate, cease to be effective or cease to be a
legally valid, binding and enforceable obligation of the Borrower, or any Lien
securing the Mezzanine Loan or any Mezzanine Loan Documents shall, in whole or
in part, cease to be a perfected first priority Lien (except in any of the
foregoing cases in accordance with the terms hereof or under any other Mezzanine
Loan Document); or (y) Borrower or any Subsidiary of Borrower shall take any
action in furtherance thereof; provided, however, the Borrower shall have thirty
(30) days after Borrower has notice of such Default to cure such Default if,
after giving effect to such cure, the Mezzanine Lender's security interest in
the Collateral will be maintained as a perfected, first priority Lien; or
(k) If Borrower shall continue to be in Default under any of
the other terms, covenants or conditions of this Agreement not specified in
subsections (a)-(j) above, or in any other Mezzanine Loan Document which does
not provide for a specific notice and cure period with respect to such Default,
for ten (10) days after notice to Borrower from Mezzanine Lender, in the case of
any Default which can be cured by the payment of a sum of money, or for thirty
(30) days after notice from Mezzanine Lender in the case of any other Default;
PROVIDED, HOWEVER, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such 30-day period and PROVIDED FURTHER that
Borrower shall have commenced to cure such Default within such 30-day period and
thereafter diligently and expeditiously proceeds to cure the same, such 30-day
period shall be extended for such time as is reasonably necessary for Borrower
in the exercise of due diligence to cure such Default, such additional period
not to exceed one hundred twenty (120) days; or
(l) An Event of Default under (and as defined in) the Mortgage
Loan Agreement or any of the other Mortgage Loan Documents shall occur.
7.2 REMEDIES FOR EVENTS OF DEFAULT.
(a) If an Event of Default shall have occurred and be
continuing, then, and in any such event, (i) if such event is an Event of
Default specified in Sections 7.1(e) or (f) above,
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the Mezzanine Loan hereunder shall immediately accelerate and the Mezzanine Loan
(with accrued interest thereon) and all other amounts owing under the Mezzanine
Note and the other Mezzanine Obligations shall immediately become due and
payable, and (ii) if such event is any other Event of Default, then Mezzanine
Lender may by notice of default to the Borrower, declare the Mezzanine Loan
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Mezzanine Note to be due and payable forthwith, whereupon the
same shall immediately become due and payable. Except as expressly provided
above in this Article 7 or elsewhere in this Agreement, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
(b) In addition to any other remedies set forth in this
Section 7.2, if an Event of Default shall have occurred and be continuing, the
Mezzanine Loan shall bear interest at the Default Rate. The Mezzanine Loan shall
continue to bear interest at the Default Rate until the earlier of: (i) the
Mezzanine Loan is paid in full or (ii) such Event of Default is otherwise cured
or waived in writing by the Mezzanine Lender. In addition, as provided in
Section 6.3, the Borrower shall not make any distributions to its members
following the occurrence and during the continuance of an Event of Default.
(c) If an Event of Default shall have occurred and be
continuing, Mezzanine Lender may exercise all rights and remedies which it has
under the Mezzanine Loan Documents, at law, in equity or otherwise. Without
limiting the foregoing, Mezzanine Lender may, subject to the terms of the Pledge
Agreement, foreclose on or otherwise enforce the Borrower's obligations against
the Collateral and may exercise all the rights and remedies of a secured party
under the Uniform Commercial Code, as adopted and enacted by the State or States
where any of the Collateral is located.
7.3 POWER OF ATTORNEY. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges granted in this
subsection, Borrower hereby irrevocably constitutes and appoints the Mezzanine
Lender its true and lawful attorney-in-fact to execute, acknowledge and deliver
any instruments and do and perform any acts such as are referred to in this
subsection in the name and on behalf of Borrower. This power of attorney is a
power coupled with an interest and cannot be revoked.
ARTICLE 8
OTHER AGREEMENTS
8.1 PERMITTED TRANSACTIONS. Borrower shall not be entitled to
give its consent or approval to a Transfer of any Mortgaged Property unless it
obtains the prior written consent of Mezzanine Lender (which may be furnished or
withheld at its sole discretion); PROVIDED, HOWEVER, that Borrower is not
required to obtain the consent of the Mezzanine Lender to a Transfer of a
Release Parcel in connection with any partial prepayment pursuant to Section
2.3(f) hereof; PROVIDED, FURTHER, HOWEVER, that, after a Secondary Market
Transaction, Mezzanine Lender shall permit a refinancing in full of the Mortgage
Loan ("Permitted Refinancing") or permit a conveyance of the Mortgaged
Properties to a Permitted Transferee ("Permitted Property Transfer") if, after
considering the following factors, it determines in its reasonable discretion
that such factors shall have been satisfied:
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(a) PERMITTED REFINANCING:
(i) no Event of Default or Default of which Borrower has been
given notice shall have occurred and be continuing;
(ii) the new mortgage loan ("NEW MORTGAGE LOAN") shall have
(A) an interest rate that is no higher than the current interest rate
for the Mortgage Loan, as determined by the Mezzanine Lender in its
sole discretion (and shall provide for an interest rate cap
substantially identical to the interest rate cap agreement then in
existence with respect to the Mortgage Loan), (B) a principal balance
that is no more than the balance of the Mortgage Loan on the date of
the refinancing, and (C) an amortization schedule that provides for
repayment in monthly installments each of which is no greater than the
monthly payments then due under the Mortgage Note, and (D) a maturity
date that is the same as that provided for under the Mortgage Loan at
the time of the closing thereof;
(iii) the terms of the New Mortgage Loan shall permit the
Mezzanine Loan, shall provide the same express rights to the Mezzanine
Lender as the Mortgage Loan and shall not conflict with the terms of
the Mezzanine Loan and the new mortgage lender shall enter into an
intercreditor agreement with Mezzanine Lender no less favorable to
Mezzanine Lender than the intercreditor agreement entered into by the
Mortgage Lender and Mezzanine Lender on the date hereof;
(iv) the Mortgaged Properties may not be transferred in
connection with such refinancing except pursuant to a Permitted
Property Transfer;
(v) the Borrower shall pay all reasonable costs and expenses
of Mezzanine Lender incurred in connection with any such refinancing,
including, without limitation, reasonable fees and expenses of
Mezzanine Lender's counsel; and
(vi) Mezzanine Lender shall have received such settlement
statements, pay-off letters, opinions and other documentation as it
shall reasonably request in connection with such refinancing.
(b) PERMITTED PROPERTY TRANSFER:
(i) such Transfer has been approved or deemed approved under
the Mortgage Loan Documents;
(ii) no Event of Default or Default of which Borrower has been
given notice shall have occurred and be continuing;
(iii) each Rating Agency rating securities issued in a
Secondary Market Transaction shall have confirmed in writing that such
Transfer shall not result in the reduction, qualification or withdrawal
of the then current ratings of such securities;
(iv) the Permitted Transferee shall have been approved by the
Mezzanine Lender in its sole discretion;
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(v) the entity to which the Mortgaged Properties are
Transferred (the "NEW MORTGAGOR") (A) shall assume (1) the Mortgage
Loan and the Mortgage Loan Documents, subject to the limitations on
liability contained therein, and (2) all the agreements of the
Mortgagor under the Mortgage Loan Documents, subject to the limitations
on liability contained therein, (B) shall be a bankruptcy-remote Single
Purpose Entity, and (C) shall otherwise have a legal, financial and
ownership structure that is at least as favorable to Mezzanine Lender,
as determined by Mezzanine Lender in its reasonable discretion, as the
legal, financial and ownership structure of the Mortgagor;
(vi) all of the entities which own interests in the New
Mortgagor similar to the interests in the Mortgagor owned by the
Borrower (the "MEZZANINE ENTITIES") (A) shall assume the Mezzanine Loan
and all the agreements of the Borrower under the Mezzanine Loan
Documents, subject to the limitations on liability contained therein
(and without limiting the foregoing, all of the ownership interests in
the New Mortgagor, all payments thereon and all proceeds thereof shall
be pledged to Mezzanine Lender on terms no less favorable than the
pledge of the Collateral under the Pledge Agreement), (B) shall each be
a bankruptcy-remote Single Purpose Entity, and (C) shall otherwise have
a legal, financial and ownership structure that is at least as
favorable to Mezzanine Lender, as determined by Mezzanine Lender in its
reasonable discretion, as the legal, financial and ownership structure
of the Borrower and the Mortgagor Managing Entity;
(vii) there shall be delivered to Mezzanine Lender opinions of
counsel, in form, substance and from counsel reasonably satisfactory to
Mezzanine Lender as Mezzanine Lender requests on the following matters,
subject to exceptions, assumptions and conditions customarily contained
in such opinions: (A) a "nonconsolidation opinion" with respect to the
Mezzanine Entities and such of their Affiliates as shall be reasonably
requested by Mezzanine Lender, (B) such other bankruptcy related
opinions as shall be requested by Mezzanine Lender, including an
opinion that no fraudulent conveyance or preference results from the
transfer of the Mortgaged Properties and the assumption by the
Mezzanine Entities of the obligations of the Borrower under the
Mezzanine Loan Documents, and all related transactions, (C) such
corporate and securities opinions as shall be reasonably requested by
Mezzanine Lender, including without limitation any and all opinions as
shall have been delivered to Mezzanine Lender in connection with the
making of the Mezzanine Loan, and (iv) such other legal opinions as
shall be reasonably requested by Mezzanine Lender;
(viii) Borrower shall pay all reasonable costs and expenses of
Mezzanine Lender incurred in connection with any such Transfer,
including, without limitation, reasonable fees and expenses of
Mezzanine Lender's counsel;
(ix) Mezzanine Lender shall have been reimbursed for Mezzanine
Lender's administrative costs of processing the Transfer in an amount
not to exceed $20,000; and
(x) Mezzanine Lender shall have received such documents,
certificates and legal opinions as it may reasonably request.
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8.2 TERMINATION OF MANAGER; MANAGEMENT.
(a) Borrower shall not approve the surrender, termination
(except for termination by reason of a default by Manager thereunder which
remains uncured beyond applicable notice and grace periods under the Management
Agreement) material modification, renewal or extension of the Management
Agreement, or the entering into of any other agreement relating to the
management of the Mortgaged Property with Manager or any other Person, or
consent to the assignment by the Manager of its interest under the Management
Agreement, in each case without the express consent of Mezzanine Lender, which
consent shall not be unreasonably withheld or delayed. If at any time Mezzanine
Lender consents to the appointment of a new manager, such new manager and
Borrower shall, as a condition of Lender's consent, execute a subordination of
management agreement in a form substantially similar to the Subordination of
Management Agreement entered into as of the date hereof with respect to the
Mezzanine Loan.
(b) From and during the continuance of any one or more of the
following events: (i) at any time following the occurrence and during the
continuance of an Event of Default or (ii) if at any time when the Debt Service
Coverage Ratio falls below 1.05 to 1.0, as reasonably determined by Mezzanine
Lender on a quarterly basis, Manager is managing the Mortgaged Property in a
manner that is inconsistent with standards that are customary for comparable
properties, at the direction of Mezzanine Lender, Borrower shall direct
Mortgagors (i) to terminate the Manager, and (ii) to appoint a new Manager,
reasonably acceptable to the Mezzanine Lender, and enter into a new Management
Agreement with such replacement manager (the "REPLACEMENT MANAGER").
(c) The rights of Mezzanine Lender (i) to approve any
surrender, termination, cancellation, material modification, renewal or
extension of the Management Agreement, (ii) to cause the termination of the
existing Manager and (iii) to approve a Replacement Manager shall be subject to
the rights of the Mortgage Lender under the Mortgage Loan Documents to take such
actions, and any action so taken by Mortgage Lender shall be binding on
Mezzanine Lender. In the event both Mezzanine Lender and the Mortgage Lender
shall have such rights under the Mezzanine Loan Documents and Mortgage Loan
Documents, respectively, Mezzanine Lender may exercise such rights, but only to
the extent the Mortgage Lender shall not have previously exercised such rights,
and the Mortgage Lender shall not subsequently exercise such rights as to the
matter in question.
(d) Nothing in this Agreement shall be construed as limiting
Mortgagor's right to enforce its rights against a Manager under the related
Management Agreement.
8.3 BORROWER TRANSFER RESTRICTIONS.
(a) Borrower shall not permit or suffer the Transfer of any of
its ownership interest in the Mortgagors or either of them. Borrower shall not
permit or suffer the Transfer of any ownership interest in Borrower or in any
entity owning directly or indirectly any interest in Borrower. The preceding
sentence notwithstanding, Borrower may permit Transfers of indirect ownership
interests in Borrower or in any entity owning directly or indirectly any
interest in Borrower PROVIDED that (a) any such Transfer is a complete
conveyance of the related interest
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and not a pledge, encumbrance or other Transfer of such interest, (b) either (i)
the transferee is approved by Mezzanine Lender in its sole discretion or (ii)
Beacon and/or PaineWebber own, directly or indirectly, 100% of the ownership
interests in Borrower after such Transfer, (c) if Beacon continues to own any
indirect interests in Borrower after such Transfer, BCI shall be the sole
general partner of BCLP and shall have the right and power to direct the
day-to-day management, business and affairs of BCLP, and (d) if, after giving
effect to any such Transfer and all prior Transfers, more than 49% of the direct
or indirect interests of Borrower are held by an affiliated group other than
Beacon or PaineWebber, Mezzanine Lender receives a non-consolidation opinion
acceptable to Mezzanine Lender in its reasonable discretion; PROVIDED that a
non-consolidation opinion shall be required to the extent that either Beacon or
PaineWebber drop their ownership interests in Borrower below 49% and
subsequently increase it back to 49% or more. Additionally, (i) pledges and
other encumbrances of the direct or indirect interests held by Beacon and/or
PaineWebber (and/or by their direct or indirect subsidiaries) in Beacon/PW
Kendall LLC or in any entity that directly or indirectly owns Beacon/PW Kendall
LLC shall be permitted, provided that the foreclosure of any such interests
shall be an Event of Default unless permitted by the immediately preceding
sentence, and (ii) pledges, encumbrances and other Transfers of any direct or
indirect ownership interest in Beacon or PaineWebber or in any entity owning
directly or indirectly any interest in Beacon or PaineWebber shall not be
restricted hereby or by any other provision of the Mezzanine Loan Documents,
subject only to the provisions of clause (c) above with respect to Beacon.
Mezzanine Lender hereby consents to the pledge of the ownership interests in
Mortgagors by the Borrower and of the ownership interests in the Mortgagor
Managing Entity by the Stock Owner as security for the Mezzanine Loan. The
Mezzanine Lender agrees that it will consent to the Transfer of interests in the
Mortgagor Managing Entity to any entity owned, directly or indirectly, 100% by
Beacon and/or PaineWebber (the "NEW OWNER"), provided that it receives a pledge
agreement from the New Owner in a form substantially similar to the Pledge
Agreement.
8.4 BUDGETS.
(a) For each calendar year following the occurrence and during
the continuance of an Event of Default, Borrower shall submit to Mezzanine
Lender for Mezzanine Lender's written approval (which shall not be unreasonably
withheld or delayed) an Annual Budget for the Mortgaged Property not later than
thirty (30) days prior to the commencement of such calendar year, in form
satisfactory to Mezzanine Lender setting forth in reasonable detail budgeted
monthly operating income and monthly operating expenses and other cash expenses
for the Mortgaged Properties (including without limitation Management Fees,
which shall not exceed four percent (4%) of the gross revenues from the
Mortgaged Properties). In the event Mezzanine Lender objects to a proposed
Annual Budget, Mezzanine Lender shall advise the Borrower of such objections in
writing within ten (10) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections), and Borrower shall provide
for such Annual Budget to be revised within five (5) days after receipt of
notice and resubmit the same to Mezzanine Lender. Mezzanine Lender shall advise
Borrower in writing of any objections to such revised Annual Budget within ten
(10) days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections), and Borrower shall provide for such Annual
Budget to be revised in accordance with the process described in this Section
until Mezzanine Lender approves an Annual Budget, PROVIDED that if in each case
the correspondence to Mezzanine Lender requesting approval of the Annual Budget
contains a bold-faced,
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conspicuous legend at the top of the first page to the effect that "IF YOU FAIL
TO RESPOND TO THIS REQUEST FOR APPROVAL IN WRITING WITHIN __ DAYS, YOUR APPROVAL
SHALL BE DEEMED GIVEN," and if Mezzanine Lender does not advise Borrower in
writing of its objections to any proposed Annual Budget within the applicable
time period set forth in this Section, then such proposed Annual Budget shall be
deemed approved by Mezzanine Lender. Each such Annual Budget approved by
Mezzanine Lender in accordance with the terms hereof shall be referred to herein
as an "APPROVED ANNUAL BUDGET." Until such time that Mezzanine Lender approves a
proposed Annual Budget, the most recently Approved Annual Budget shall apply,
PROVIDED that such Approved Annual Budget shall be adjusted (i) to reflect
actual increases in rents, real estate taxes, insurance premiums and utilities
expenses and (ii) such that it shall increase by an amount equal to the greater
of (A) 2.5% of the amount of the next preceding Annual Budget and (B) the amount
of the next preceding Annual Budget multiplied by the increase in the Consumer
Price Index from the beginning to the end of the calendar year relating to such
next preceding Annual Budget.
(b) So long as an Event of Default continues to exist, without
the prior written consent of the Mezzanine Lender, the Borrower shall not
approve or consent to any of the Mortgagors entering into any contracts or other
agreements nor expending any funds not provided for in the Approved Annual
Budget, other than expenditures required to be made by reason of the occurrence
of any emergency (I.E., an unexpected event which threatens imminent harm to
persons or property at the Mortgaged Property) and with respect to which it
would be impracticable, under the circumstances, to obtain Mezzanine Lender's
prior consent thereto. Borrower shall notify Mezzanine Lender as promptly as
practicable with respect to any such emergency expenditures made with respect to
the Mortgaged Property.
ARTICLE 9
MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement, the
Mezzanine Note, or any other Mezzanine Loan Document nor any terms hereof or
thereof may be amended, modified or waived other than by a written agreement
executed by the party against which such amendment, modification or waiver is
sought to be enforced.
9.2 NOTICES. All notices, demands, requests, consents,
approvals or other communications (any of the foregoing, a "NOTICE") required,
permitted, or desired to be given hereunder shall be in writing sent by telefax
(with answer back acknowledged and a copy sent by hand or by reputable overnight
courier within one (1) Business Day thereafter) or by registered or certified
mail, postage prepaid, return receipt requested, or delivered by hand or
reputable overnight courier addressed to the party to be so notified at its
address hereinafter set forth, or to such other address as such party may
hereafter specify in accordance with the provisions of this Section 9.2. Any
Notice shall be deemed to have been received: (a) three (3) days after the date
such Notice is mailed, (b) on the date of sending by telefax (and not the date
of sending the copy as required above) if sent during business hours on a
Business Day (otherwise on the next Business Day), (c) on the date of delivery
by hand if delivered during business hours on a Business Day (otherwise on the
next Business Day), and (d) on the next Business Day if sent by an overnight
commercial courier, in each case addressed to the parties as follows:
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Borrower: CAMEZZ LLC
c/o Beacon Capital Partners, Inc.
One Federal Street
26th Floor
Boston, MA 02110
Attention: General Counsel
Facsimile No.: (617) 457-0499
with a copy to:
PaineWebber Incorporated
1285 Avenue of the Americas, 38th Floor
New York, NY 10019
Attention: Kevin D. Cox
Facsimile No.: (212) 713-7947
and: Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, MA 02110
Attention: Robert J. Mack, Esq.
Facsimile No.: (617) 574-4112
and: Weil, Gotshal and Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Alan J. Pomerantz, Esq.
Facsimile No.: (212) 310-8007
Mezzanine Lender: Morgan Stanley Dean Witter Mortgage
Capital Inc.
1585 Broadway
New York, NY 10036
Attention: James Flaum and Kevin Swartz
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, NY 10038
Attention: Anna H. Glick, Esq.
Telephone: (212) 504-6309
Telecopy: (212) 504-6666
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of Mezzanine Lender, any right, remedy,
power or privilege hereunder or under the Mezzanine Loan Documents shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any
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other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
or provided in the Mezzanine Loan Documents are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Agreement, in the other Mezzanine
Loan Documents and in any document, certificate or statement prepared by
Borrower and delivered pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the other Mezzanine Loan Documents, and shall
continue in full force and effect until payment in full of the Mezzanine Loan
and any other amount owing to Mezzanine Lender under this Agreement or the other
Mezzanine Loan Documents.
9.5 PAYMENT OF EXPENSES AND TAXES. Borrower shall promptly (a)
pay or reimburse Mezzanine Lender for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement, the
Mezzanine Note and the other Mezzanine Loan Documents and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to Mezzanine Lender, (b) pay or
reimburse Mezzanine Lender for all its costs and expenses incurred in connection
with the enforcement, after an Event of Default or in the case of an imminent
Event of Default, of any rights under this Agreement, the Mezzanine Note and any
such other documents, including, without limitation, reasonable fees and
disbursements of counsel to Mezzanine Lender, (c) pay, indemnify, and hold
Mezzanine Lender harmless from any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes (specifically excluding, in any event, income
taxes and the like for which Mezzanine Lender is liable), if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, the Mezzanine Note, the Mezzanine Loan Documents and
any such other documents, and (d) pay, indemnify, and hold Mezzanine Lender, and
all officers, directors, stockholders, partners, employees, agents, successors
and assigns thereof, harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including the
reasonable fees and disbursements of counsel) incurred by Mezzanine Lender
arising out of the occurrence or existence of any of the following (it being
understood that in no event will the indemnified parties be required to actually
pay or incur any costs or expenses as a condition to the effectiveness of the
foregoing indemnity): (1) the Mezzanine Lender's interest in any of the
Collateral or any of the Mezzanine Collateral (as defined in the Mezzanine Cash
Collateral Agreement), or any interest therein, or receipt of any rents or other
sum therefrom, (2) any negligence or tortuous act or omission on the part of
Borrower or any of its agents, contractors, servants or employees, (3) the
execution, delivery, enforcement (after an Event of Default or in the case of an
imminent Event of Default) and performance of this Agreement, the Mezzanine
Note, the Mezzanine Loan Documents and any such other documents (all the
foregoing, collectively, the "Indemnified Liabilities") or (4) any claims
related to this Agreement; PROVIDED that the Borrower shall not have any
obligation hereunder to Mezzanine Lender or the other
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indemnified parties with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of Mezzanine Lender or the other
indemnified parties; PROVIDED, FURTHER, that Mezzanine Lender may settle any
claims subject only to the Borrower's consent which shall not be unreasonably
withheld or delayed. Any indemnified party will give Borrower prompt notice
after such indemnified party obtains actual knowledge of any potential claim by
such indemnified party for indemnification hereunder. Nothing herein shall
compromise the right of the Mezzanine Lender (or any indemnified party) to
appoint its own counsel at the Borrower's expense for its defense with respect
to any action if and only if there is a conflict. The agreements in this Section
9.5 shall survive repayment of the Mezzanine Note and all other amounts payable
hereunder.
9.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of Borrower, Mezzanine Lender, all future holders
of the Mezzanine Note and their respective successors and assigns, EXCEPT that
the Borrower may not Transfer any of its rights under this Agreement, the
Mezzanine Note or any other Mezzanine Loan Document without the prior written
consent of Mezzanine Lender. Borrower acknowledges and agrees that Mezzanine
Lender may at any time, without consent of the Borrower or Mortgagors, Transfer
the Mezzanine Loan (including all or any of the rights under the Mezzanine Loan
Documents) or Transfer or grant participations in the Mezzanine Loan (including
all rights under the Mezzanine Loan Documents) to other Persons (each, a "Loan
Transferee"), and Borrower shall reasonably cooperate in all respects in order
to help effect such Transfer but shall not be required to incur any third-party
costs in connection therewith unless reimbursed by Mezzanine Lender. Subject to
the foregoing, Borrower acknowledges and agrees that upon its receipt of notice
of such Transfer, each Loan Transferee may exercise all rights of payment
(including without limitation rights of set-off) with respect to the Mezzanine
Loan as fully as if such Loan Transferee were the initial Mezzanine Lender or
the direct holder thereof, as applicable, EXCEPT THAT all participants in the
Mezzanine Loan may only take such actions through the Mezzanine Lender. In the
event any Loan Transferee shall be a non-U.S. Person, Borrower not shall be
responsible for any withholdings or filings that may need to be made as a result
of such Loan Transferee's status as a non-U.S. Person, and such non-U.S. Person
shall execute and deliver certificates or affidavits with respect thereto.
9.7 SET-OFF. In addition to any rights and remedies of
Mezzanine Lender provided by law, Mezzanine Lender shall have the right, without
prior notice to Borrower, any such notice being expressly waived by Borrower to
the extent permitted by applicable law, upon and during the continuance of any
Event of Default or upon the filing of a petition under any of the provisions of
the federal bankruptcy act or amendments thereto, by or against, the making of
an assignment for the benefit of creditors by, the application for the
appointment, or the appointment, of any receiver of, or of any of the property
of, the issuance of any execution against any of the property of, the issuance
of a subpoena or order, in supplementary proceedings, against or with respect to
any of the property of, or the issuance of a warrant of attachment against any
of the property of, Borrower, to set-off and apply against any indebtedness,
whether matured or unmatured, of Borrower to Mezzanine Lender, any amount owing
from Mezzanine Lender to Borrower, at or at any time after the happening of any
of the above mentioned events, and the aforesaid right of set-off may be
exercised by Mezzanine Lender against Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of Borrower, or
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against anyone else claiming through or against Borrower or such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by such Mezzanine
Lender prior to the making, filing or issuance, or service upon such Mezzanine
Lender of, or of notice of, any such petition, assignment for the benefit of
creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant.
9.8 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.
9.9 GOVERNING LAW. THIS AGREEMENT AND THE MEZZANINE NOTE AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE MEZZANINE
NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
9.10 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 INTEGRATION. This Agreement represents the agreement of
Borrower and Mezzanine Lender with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by Mezzanine
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Mezzanine Loan Documents.
9.12 SUBMISSION TO JURISDICTION; WAIVERS. To the extent
permitted by applicable law, Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Mezzanine Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York sitting in the City and County of New York, the courts of the
United States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same; and
(c) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
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9.13 ACKNOWLEDGMENTS. Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Mezzanine Note and the other
Mezzanine Loan Documents;
(b) Mezzanine Lender does not have any fiduciary relationship
to the Borrower, and the relationship between Mezzanine Lender and the Borrower
is solely that of debtor and creditor; and
(c) no joint venture exists between Mezzanine Lender and the
Borrower.
9.14 EXCULPATION. Subject to the qualifications below,
Mezzanine Lender shall not enforce the liability and obligation of Borrower to
perform and observe the obligations contained in the Mezzanine Note, this
Agreement, the Pledge Agreement or the other Mezzanine Loan Documents by any
action or proceeding wherein a money judgment shall be sought against Borrower,
except that Mezzanine Lender may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Mezzanine Lender to enforce and realize upon its interest under the Mezzanine
Note, this Agreement, the Pledge Agreement and the other Mezzanine Loan
Documents, or in the Collateral, or any other collateral given to Mezzanine
Lender pursuant to the Mezzanine Loan Documents; PROVIDED, HOWEVER, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower only to the extent of Borrower's interest
in the Collateral and in any other collateral given to Mezzanine Lender, and
Mezzanine Lender, by accepting the Mezzanine Note, this Agreement, the Pledge
Agreement and the other Mezzanine Loan Documents, agrees that it shall not sue
for, seek or demand any deficiency judgment against Borrower in any such action
or proceeding under or by reason of or under or in connection with the Mezzanine
Note, this Agreement, the Pledge Agreement or the other Mezzanine Loan
Documents. The provisions of this Section shall not, however, (a) constitute a
waiver, release or impairment of any obligation evidenced or secured by any of
the Mezzanine Loan Documents; (b) impair the right of Mezzanine Lender to name
Borrower as a party defendant in any action or suit for foreclosure and sale
under the Pledge Agreement; (c) affect the validity or enforceability of any
guaranty made in connection with the Mezzanine Loan or any of the rights and
remedies of Mezzanine Lender thereunder; (d) impair the right of Mezzanine
Lender to obtain the appointment of a receiver; (e) constitute a prohibition
against Mezzanine Lender to seek a deficiency judgment against Borrower in order
to fully realize the security granted by the Pledge Agreement or to commence any
other appropriate action or proceeding in order for Mezzanine Lender to exercise
its remedies against all of the Collateral; or (f) constitute a waiver of the
right of Mezzanine Lender to enforce the liability and obligation of Borrower,
by money judgment or otherwise, to the extent of any loss, damage, cost,
expense, liability, claim or other obligation incurred by Mezzanine Lender
(including attorneys' fees and costs reasonably incurred) arising out of or in
connection with the following:
(i) fraud or intentional misrepresentation by Borrower or any
Guarantor in connection with the Mezzanine Loan;
(ii) the willful misconduct of Borrower (except that this
clause (ii) shall not apply to any failure to make payments with
respect to the Mezzanine Loan);
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(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity (as defined in
the Mortgage Loan Agreement);
(iv) the removal or disposal by Borrower or any Affiliate of
Borrower of any portion of the Mortgaged Property after notice to
Borrower of an Event of Default;
(v) the misapplication or conversion by Borrower of any
Mezzanine Net Proceeds;
(vi) Borrower's failure to cause either Mortgagor to pay
charges for labor or materials or other charges for work performed by
or on behalf of such Mortgagor that can create a mechanics' lien on any
portion of the Mortgaged Property (unless such Mortgagor is negotiating
such charges in good faith or is contesting such lien in accordance
with the Mortgage Loan Agreement) if the Mortgaged Property generates
sufficient funds to make such payments after payment of amounts due
under the Mortgage Loan and the Mezzanine Loan (including, without
limitation, payments of the Reserve Funds) and other Operating
Expenses;
(vii) the failure of Borrower to cause the Mortgagors to
appoint a new property manager upon the request of Mezzanine Lender
after notice to Borrower of an Event of Default as and to the extent
required pursuant to Section 8.2 of this Agreement; and
(viii) the failure of Borrower to cause the Mortgagors to
direct any Tenant (as defined in the Mortgage Loan Agreement) to pay
its Rent in accordance with the Cash Management Agreement.
Notwithstanding anything to the contrary in this Agreement,
the Mezzanine Note or any of the other Mezzanine Loan Documents, (A) Mezzanine
Lender shall not be deemed to have waived any right which it may have under
Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy
Code to file a claim for the full amount of the Mezzanine Obligations or to
require that all Collateral shall continue to secure all of the Mezzanine
Obligations owing to Mezzanine Lender in accordance with the Mezzanine Loan
Documents, and (B) the Mezzanine Obligations shall be fully recourse to the
Borrower in the event that (i) the Borrower fails to obtain Mezzanine Lender's
prior written consent prior to consenting to any subordinate financing or
consenting to other voluntary Lien (other than a Permitted Encumbrance, as
defined in the Mortgage Loan Agreement) encumbering any Mortgagor's interest in
the Mortgaged Property; or (ii) Borrower fails to obtain Mezzanine Lender's
prior consent to any voluntary assignment, transfer, or conveyance of the
Collateral or Mortgaged Property or any interest therein or any interest, direct
or indirect, in Borrower or any Mortgagor, if such consent is required by this
Agreement.
9.15 REINSTATEMENT. This Agreement and each other Mezzanine
Loan Document shall continue to be effective or be reinstated, as the case may
be, if at any time payment and performance of the Mezzanine Obligations or any
part thereof is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned to the Borrower, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any
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part thereof, is rescinded, reduced, restored or returned, the Mezzanine
Obligations shall be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
9.16 WAIVER OF JURY TRIAL, DAMAGES, JURISDICTION. BORROWER AND
MEZZANINE LENDER EACH HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL ON ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE
OTHER MEZZANINE LOAN DOCUMENTS TO WHICH IT IS A PARTY, THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, OR ANY DEALINGS BETWEEN BORROWER AND THE
MEZZANINE LENDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. BORROWER AND MEZZANINE LENDER EACH ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO THE OTHER PARTY TO ENTER INTO A BUSINESS
RELATIONSHIP WITH IT. BORROWER AND MEZZANINE LENDER EACH REPRESENTS AND WARRANTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH WAIVER IS
KNOWINGLY AND VOLUNTARILY GIVEN FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED, EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
REPLACEMENTS, REAFFIRMATIONS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY OTHER MEZZANINE LOAN DOCUMENTS OR ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
WITH RESPECT TO ANY ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER MEZZANINE LOAN DOCUMENT, BORROWER SHALL AND HEREBY DOES
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE CITY AND COUNTY OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK SITTING IN THE CITY OF COUNTY
OF NEW YORK (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM). BORROWER HEREBY
WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER MEZZANINE LOAN
DOCUMENTS, (A) THAT IT IS NOT SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION,
SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN THOSE COURTS OR
THAT THIS AGREEMENT OR ANY OF THE OTHER MEZZANINE LOAN DOCUMENTS MAY NOT BE
ENFORCED IN OR BY THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION,
(B) THAT THE ACTION, SUIT OR PROCEEDING IS
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BROUGHT IN AN INCONVENIENT FORUM OR (C) THAT THE VENUE OF THE ACTION, SUIT OR
PROCEEDING IS IMPROPER. IN THE EVENT ANY SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION IS COMMENCED, BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE,
AND PERSONAL JURISDICTION OVER BORROWER OBTAINED, BY SERVICE OF A COPY OF THE
SUMMONS, COMPLAINT AND OTHER PLEADINGS REQUIRED TO COMMENCE SUCH LITIGATION UPON
BORROWER AT THE ADDRESS OF BORROWER AND TO THE ATTENTION OF SUCH PERSON AS SET
FORTH IN SECTION 9.2.
9.17 COOPERATION. Borrower acknowledges that Mezzanine Lender
and its successors and assigns may (a) sell the Mezzanine Note, the Mezzanine
Loan and the other Mezzanine Loan Documents to one or more investors as a whole
loan, (b) participate the Mezzanine Loan evidenced by the Mezzanine Note to one
or more investors, (c) deposit the Mezzanine Note and the other Mezzanine Loan
Documents with a trust, which trust may sell certificates to investors
evidencing an ownership interest in the trust assets, or (d) otherwise sell the
Mezzanine Loan or any interest therein to investors (the transactions referred
to in clauses (a) through (d) are hereinafter each referred to as a "LOAN
TRANSFER"). Borrower shall, at Mezzanine Lender's cost and expense, cooperate
with Mezzanine Lender in effecting any such Loan Transfer and shall, at
Mezzanine Lender's cost and expense, cooperate to implement all requirements
imposed by any Rating Agency involved in any Loan Transfer. Borrower shall
provide such information and documents (other than confidential or proprietary
information) relating to Borrower and its managing members as Mezzanine Lender
may reasonably request in connection with any such Loan Transfer, in each case
at Mezzanine Lender's sole cost and expense. In addition, Borrower shall make
available to Mezzanine Lender all information concerning its business and
operations (other than confidential or proprietary information) that Mezzanine
Lender may reasonably request. Mezzanine Lender shall be permitted to share all
such information with the investment banking firms, Rating Agencies, accounting
firms, law firms and other third-party advisory firms involved with the
Mezzanine Loan and the Mezzanine Loan Documents or the applicable Loan Transfer.
It is understood that the information prepared and provided by Borrower to
Mezzanine Lender may ultimately be incorporated into the offering documents for
the Loan Transfer and, thus, various investors may also see some or all of the
information. Mezzanine Lender and all of the aforesaid third-party advisors and
professional firms shall be entitled to rely on the information prepared and
supplied by, or on behalf of, Borrower in the form as provided by Borrower.
Mezzanine Lender may publicize the existence of the Mezzanine Loan in connection
with its marketing for a Loan Transfer.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their proper and duly authorized officers as of
the date set forth above.
CAMEZZ LLC, a Delaware limited liability company
By: Beacon/PW Kendall LLC, a Delaware limited
liability company, its Manager
By: Beacon Capital Partners, L.P., a
Delaware limited partnership, its
Manager
By: Beacon Capital Partners, Inc.,
a Maryland corporation, its
general partner
By: /s/ Nancy J. Broderick
----------------------
Nancy J. Broderick
Vice President
and Treasurer
SECORE FINANCIAL CORPORATION
By: /s/ Tamera S. Massey
-------------------------------
Title: Executive Vice President
<PAGE>
NOTE
$35,000,000 _____ New York, New York
April 14, 2000
FOR VALUE RECEIVED, the undersigned, CAMEZZ LLC, a Delaware
limited liability company, (the "BORROWER"), hereby unconditionally promises to
pay to the order of SECORE FINANCIAL CORPORATION, a Pennsylvania corporation
(the "MEZZANINE LENDER"), located at 7315 Wisconsin Avenue, Suite 450 North,
Bethesda, Maryland 20814, to such account as Mezzanine Lender may direct by
written notice to Borrower, in lawful money of the United States of America and
by wire transfer of immediately available funds, the principal amount of
Thirty-Five Million Dollars ($35,000,000), or so much thereof as may be advanced
pursuant to the Loan Agreement (as defined below), in such amounts and at such
times as set forth in the Loan Agreement and Schedule A hereto, with a final
payment of the unpaid principal amount hereof, together with unpaid interest
accrued hereon and all other amounts due hereunder, on the Maturity Date.
The undersigned further agrees to pay interest in like money
to such account on the unpaid principal amount hereof from time to time from the
date hereof on the dates and at the applicable rate per annum as provided in
Section 2.4 of the Loan Agreement until paid in full. The "Interest Rate" on the
unpaid principal amount hereof shall be the Applicable Interest Rate. In the
event the Interest Rate is greater than the maximum rate permitted by applicable
law, the Interest Rate shall be the maximum rate permitted by applicable law.
This Note is the Mezzanine Note referred to in Section 2.2 of
the Loan Agreement, dated the date hereof (the "LOAN AGREEMENT"), between the
undersigned and Mezzanine Lender and is entitled to the benefits thereof and is
subject to the terms thereof. Capitalized terms used herein but not defined
herein shall have the meanings ascribed thereto in the Loan Agreement.
The Loan Agreement contains provisions for voluntary and
mandatory prepayments of the principal amount hereof prior to the Maturity Date,
upon the terms and conditions specified therein.
Upon the occurrence and during the continuance of any one or
more of the Events of Default specified in the Loan Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided therein.
This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of the Borrower or Mezzanine Lender, but only by an agreement in writing
signed by the party against whom enforcement of any such modification,
amendment, waiver, extension, change, discharge or termination is sought.
Whenever used, the singular number shall include the plural, the plural the
singular, and the words "Mezzanine Lender" and "Borrower" shall include their
respective successors, assigns, heirs, executors and administrators.
<PAGE>
Borrower and all others who may become liable for the payment
of all or any part of the indebtedness hereunder do hereby severally waive
presentment and demand for payment, notice of dishonor, protest, notice of
protest, notice of nonpayment, notice of intent to accelerate the maturity
hereof and of acceleration, except for such notices as are required to be given
to Borrower under the Loan Agreement or any of the other Mezzanine Loan
Documents. No release of any security for the indebtedness hereunder or of any
person liable for payment of the indebtedness hereunder, no extension of time
for payment of this Note or any installment hereof, and no alteration, amendment
or waiver of any provision of the Mezzanine Loan Documents made by agreement
between Mezzanine Lender and any other person or party shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of
Borrower, or any other person or party who may become liable under the Mezzanine
Loan Documents for the payment of all or any part of the indebtedness hereunder.
Borrower represents that Borrower has full power, authority
and legal right to execute, deliver and perform its obligations under this Note,
the Loan Agreement and the other Mezzanine Loan Documents and that this Note,
the Loan Agreement and the other Mezzanine Loan Documents constitute valid and
binding obligations of Borrower.
The provisions of Section 9.14 of the Loan Agreement are
hereby incorporated by reference into this Note to the same extent and with the
same force as if fully set forth herein.
All notices or other communications required or permitted to
be given pursuant hereto shall be given in the manner specified in Section 9.2
of the Loan Agreement directed to the parties at their respective addresses as
provided therein.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed and delivered as of the day first above written.
CAMEZZ LLC, a Delaware limited liability company
By: Beacon/PW Kendall LLC, a Delaware limited
liability company, its Manager
By: Beacon Capital Partners, L.P., a
Delaware limited partnership, its
Manager
By: Beacon Capital Partners,
Inc., a Maryland corporation,
its general partner
By: /s/ Nancy J. Broderick
----------------------
Nancy J. Broderick
Vice President
and Treasurer
