UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended March 31, 1997
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition period from ______ to ______
Commission File Number: 0-15463
MENDIK REAL ESTATE LIMITED PARTNERSHIP
Exact Name of Registrant as Specified in its Charter
New York 11-2774249
State or Other Jurisdiction I.R.S. Employer
of Incorporation or Organization Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn: Andre Anderson 10285
Address of Principal Executive Offices Zip Code
(212) 526-3237
Registrant's Telephone Number, Including Area Code
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
CONSOLIDATED BALANCE SHEETS At March 31, At December 31,
1997 1996
Assets
Real estate investments:
Land $ 17,528,163 $ 17,528,163
Buildings and improvements 85,462,602 85,279,508
102,990,765 102,807,671
Less accumulated depreciation (1,367,024) ---
101,623,741 102,807,671
Property held for disposition 16,200,000 16,200,000
Cash and cash equivalents 3,289,714 4,727,720
Restricted cash 970,675 960,489
U.S. Treasuries and Agencies 2,116,100 2,121,910
Rent and other receivables (net of
allowance for doubtful accounts of
$118,611 in 1996 and 1997) 618,808 1,192,114
Deferred rent receivable 10,634,618 10,453,202
Other assets, net of accumulated
amortization of $8,239,882 in 1997
and $6,577,521 in 1996 9,283,135 7,994,965
Total Assets $144,736,791 $146,458,071
Liabilities and Partners' Capital (Deficit)
Liabilities:
Accounts payable and accrued expenses $ 1,643,769 $ 1,859,961
Deferred income 6,559,780 6,550,650
Due to affiliates 1,531,172 2,907,737
Security deposits payable 970,675 960,489
Accrued interest payable 778,491 799,315
Mortgages payable 71,500,000 71,500,000
Notes payable to affiliates 2,230,000 2,230,000
Total Liabilities 85,213,887 86,808,152
Minority interest 20,105,125 20,075,882
Partners' Capital (Deficit):
General Partners (471,073) (470,917)
Limited Partners (395,169 units outstanding) 39,888,852 40,044,954
Total Partners' Capital 39,417,779 39,574,037
Total Liabilities and Partners' Capital $144,736,791 $146,458,071
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
For the three months ended March 31, 1997
Special
Limited General Limited
Partners Partners Partner Total
Balance at December 31, 1996 $40,044,954 $(470,917) $ --- $39,574,037
Net loss (156,102) (156) --- (156,258)
Balance at March 31, 1997 $39,888,852 $(471,073) $ --- $39,417,779
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 1997 1996
Income
Rental $ 8,607,411 $ 8,070,917
Interest 12,908 27,899
Total Income 8,620,319 8,098,816
Expenses
Property operating 5,045,432 4,790,883
Depreciation and amortization 1,836,303 2,698,632
Interest 1,744,992 1,825,138
General and administrative 120,607 80,170
Total Expenses 8,747,334 9,394,823
Loss before minority interest (127,015) (1,296,007)
Minority interest in consolidated venture (29,243) 260,328
Net Loss $ (156,258) $(1,035,679)
Net Loss Allocated:
To the General Partners $ (156) $ (10,357)
To the Special Limited Partner --- ---
To the Limited Partners (156,102) (1,025,322)
$ (156,258) $(1,035,679)
Per limited partnership unit
(395,169 outstanding) $(0.40) $(2.59)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1997 1996
Cash Flows From Operating Activities
Net loss $ (156,258) $(1,035,679)
Adjustments to reconcile net loss to
net cash used for operating activities:
Depreciation 1,500,001 2,248,648
Amortization 336,302 449,984
Minority interest in consolidated venture 29,243 (260,328)
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Restricted cash (10,186) 20,728
U.S. Treasuries and Agencies 5,810 (4,858)
Rent and other receivables 573,306 (61,418)
Deferred rent receivable (181,416) (552,895)
Other assets (1,624,472) (1,682,350)
Accounts payable and accrued expenses 469,148 12,717
Deferred income 9,130 (246,163)
Due to affiliates (1,376,565) (744,552)
Security deposits payable 10,186 (20,728)
Accrued interest payable (20,824) 33,177
Net cash used for operating activities (436,595) (1,843,717)
Cash Flows From Investing Activities
Additions to real estate assets (316,070) (2,796,387)
Accounts payable - real estate assets (685,341) 1,344,214
Net cash used for investing activities (1,001,411) (1,452,173)
Cash Flows From Financing Activities
Proceeds from mortgage and notes payable --- 60,800
Net cash provided by financing activities --- 60,800
Net decrease in cash and cash equivalents (1,438,006) (3,235,090)
Cash and cash equivalents, beginning of period 4,727,720 4,673,561
Cash and cash equivalents, end of period $ 3,289,714 $ 1,438,471
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest $ 1,765,816 $ 1,791,961
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The unaudited financial statements should be read in conjunction with the
Partnership's annual 1996 audited financial statements within form 10-K.
The unaudited interim financial statements include all normal and reoccurring
adjustments which are, in the opinion of management, necessary to present a
fair statement of financial position as of March 31, 1997 and the results of
operations and cash flows for the three months ended March 31, 1997 and 1996
and the statement of partners' capital (deficit) for the three months ended
March 31, 1997. Results of operations for the period are not necessarily
indicative of the results to be expected for the full year.
Reclassification. Certain prior year amounts have been reclassified in order
to conform to the current year's presentation.
The following significant event occurred subsequent to fiscal year 1996, and no
material contingency exists which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
During the 1997 period, certain expenses incurred by NY Real Estate Services 1
Inc. ("NYRES1") and its affiliates in servicing the Partnership, which were
voluntarily absorbed by affiliates of NYRES1 in prior periods, were reimbursed
to NYRES1 and its affiliates.
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
During the three months ended March 31, 1997, the Partnership funded operating
costs, the cost of tenant improvements, leasing commissions, and building
capital improvements from four sources: (i) cash flow generated by the property
located at Two Park Avenue (the "Park Avenue Property"), the Partnership's
leasehold interest in 550/600 Mamaroneck Avenue, Harrsion, New York (the "Saxon
Woods Corporate Center) and the Partnership's leasehold interest in the
property located at 330 West 34th Street, New York, New York (the "34th Street
Property"), (ii) Partnership reserves, (iii) the deferral of property
management fees and leasing commissions with respect to certain of the
Properties by Mendik Realty, an affiliate of Mendik RELP Corporation, (iv) the
deferral of interest payments on the NYRES1 Loan. Because certain Properties
may be sold, it is expected that funds from certain of these sources may be
reduced or unavailable in the future.
Park Avenue Property - As of March 31, 1997, the Park Avenue Property was
approximately 98% leased. The costs of leasing space at the Property are being
funded with existing Property cash flow and reserves maintained by the joint
venture that owns the Park Avenue Property. In order to fund tenant
improvements and leasing commissions for the new leases as well as certain
other leases currently under negotiation, the Partnership utilized or committed
to utilize substantially all of the Property's cash reserves which at March 31,
1997 were approximately $2.2 million over and above a reserve for real estate
taxes.
The Park Avenue Property was subject to nonrecourse financing totalling $65
million in principal which was scheduled to mature in December 1998, however,
the lender had the right to accelerate the maturity upon six-months notice. In
order to address the risk of such acceleration, the Partnership refinanced the
existing loan, which refinancing closed in April 1997. Under the new mortgage,
which matures in April 2000, interest is payable at a floating rate (LIBOR plus
150 basis points), which should reduce the Partnership's debt service costs
(assuming short-term LIBOR rates remain stable). Additionally, there will be
no prepayment penalty (other than in connection with breakage costs of any
LIBOR contract), in the event the Partnership repays the full amount due under
the mortgage prior to maturity, which should provide the Partnership with
flexibility in connection with the Partnership's plan to eventually sell its
60% interest in Two Park Company (the partnership that owns the Park Avenue
Property), within the next 12 to 24 months.
The remaining 40% interest in the Park Avenue Property is owned by B & B Park
Avenue L.P. ("B&B"), of which Mendik RELP Corporation was a general partner.
On December 13, 1996, FW/Mendik REIT LLC, an affiliate of Mendik RELP
Corporation, entered into a contract with the partners that owned substantially
all of the interest in B&B to acquire their interest in B&B. The closing under
the contract took place on April 15, 1997. Following the closing, FW/Mendik
REIT LLC conveyed its interest in B&B to an affiliate of Vornado Realty Trust
("Vornado"), a real estate investment trust whose shares of stock are traded on
the New York Stock Exchange. The conveyance to the affiliate of Vornado was in
connection with the consolidation of Vornado and Mendik Realty Company, Inc.
and certain of its affiliates, which consolidation was also consummated on
April 15, 1997.
Major tenants at the Park Avenue Property are The Times Mirror Company Inc.,
which leases approximately 287,000 square feet (29% of the total leaseable area
in the Property) under leases which expire on September 30, 2010, and Smith
Barney, which leases 99,839 square feet (11% of the total leaseable area in the
Property) under a lease expiring May 30, 1998. During 1996, Smith Barney
vacated its space, and, as a result, the Partnership has commenced efforts to
re-lease such space and recently entered into a lease for 20,000 square feet
with a subtenant of Smith Barney, which lease will take effect upon the
expiration of the Smith Barney lease. Smith Barney continues to remain current
on its rental payments to the Partnership in accordance with the terms of the
existing lease.
Saxon Woods Corporate Center - The Saxon Woods Corporate Center consists of two
office buildings, which had a combined leased rate of approximately 97% as of
March 31, 1997. Individually, the 550 Mamaroneck building was 98% leased and
the 600 Mamaroneck building was 96% leased. The Partnership signed a lease
amendment during the first quarter of 1997 with Commodity Quotations, pursuant
to which the tenant agreed not to exercise its cancellation option and also
extended its lease at the property for approximately 24,000 square feet.
Commodity Quotations also expanded the amount of its leased space by
approximately 3,300 square feet for a five-year term through August 30, 2002,
coterminous with the lease for 24,000 square feet. In connection with the
amendment to the tenant's existing lease, the tenant will no longer have the
option of terminating the lease prior to its expiration.
During the third quarter of 1996, the Partnership finalized an agreement with
the lender of the $6.5 million Saxon Woods Line of Credit for a one-year
extension of the mortgage indebtedness, which is now scheduled to mature in
September 1997. The extension was completed in order to enable the Partnership
to continue its leasing efforts and better position the Property for sale.
In light of the Property's increase in occupancy level and appraised value
during the past year, in concert with strengthening demand for commercial
office space in Westchester County, the Partnership believes that the Property
is now positioned for a potential sale. The Partnership is in the process of
engaging a real estate broker to market the property for sale and expects to
sell the Property prior to the maturity of the $6.5 million Saxon Woods Line of
Credit in September 1997. However, there can be no assurances that such
efforts will be successful. During the fourth quarter of 1996, the Partnership
drew down the remaining $1.3 million available under the line of credit to fund
leasing costs and capital improvements. As a result of the Partnership's
intention to sell the property during 1997, the property has been reclassified
on the Partnership's balance sheet as property held for disposition as of
December 31, 1996.
34th Street Property - As of March 31, 1997, the 34th Street Property was 96%
leased. The largest tenant in the Property is the City of New York Human
Resources Administration (the "City") occupying approximately 48% of the total
leaseable area under a lease which was originally scheduled to expire in
February 2001.
During the first quarter of 1997, the Partnership reached an agreement with the
City of New York to amend and extend its existing lease at the Property for
approximately 300,000 square feet for a term of approximately ten years from
the previous scheduled expiration date of February 28, 2001. In accordance
with the terms of the lease amendment, the City will have the right to
terminate its lease in whole or in part at any time after the fifth anniversary
(March 21, 2002) of the signing of the lease amendment, with a cancellation fee
equal to the then unamortized brokerage commissions and architectural fees paid
in connection with the lease amendment. Also in connection with the lease
amendment, the ground lessor has agreed to fund up to $100,000 in costs
associated with tenant improvement work that will be completed on the space
occupied by the City. The terms of the amended lease call for the City to make
annual base rental payments of approximately $5.4 million for the first five
years of the amended lease, approximately $5.9 million for years six through
ten of the amended lease, and approximately $6.5 million for years eleven
through fifteen of the amended lease. In addition, the City is required to pay
its proportionate share of increases in real estate taxes and operating
expenses over a predetermined base year amount. Substantially all of the
property's cash flow will be used over the next several years to fund the costs
associated with the City's lease amendment, including the third party brokerage
commission, as well as costs associated with leases that were previously
entered into.
During the first quarter of 1997, the Partnership also entered into a long-term
lease with Information Builders Inc. for approximately 30,000 square feet,
including 5,000 square feet of basement space, of the available leaseable space
at the Property. Rent under this new lease is scheduled to commence on October
1, 1997.
The 34th Street Property is no longer encumbered by a mortgage obligation. The
previous mortgage was paid off in June 1995 for a discounted amount of $1.75
million, or approximately 10% of the Property's outstanding debt balance of
approximately $18 million, including principal and accrued interest. Funding
for the payoff was provided by an affiliate of NYRES1. The NYRES1 Loan bears
interest at the prime rate less one and one-quarter percent and matures upon
the earlier of December 31, 2025 or the termination of the Partnership. Accrued
interest and principal are payable on a current basis to the extent there is
net cash flow available from the Property. The loan is an unsecured obligation
of the Partnership. In connection with the loan, Mendik Realty agreed to
continue to defer its management fees and leasing commissions with respect to
the Property.
Operating Cash Reserves and Other Assets
The Partnership's consolidated cash reserves decreased by $1,438,006 to
$3,289,714 at March 31, 1997 from $4,727,720 at December 31, 1996. The
decrease is primarily attributable to payments for tenant improvements at the
Park Avenue Property and also the payment of real estate taxes in January 1997.
Rent and other receivables totalled $618,808 at March 31, 1997, compared to
$1,192,114 at December 31, 1996. The $573,306 decrease is primarily due to the
timing of rental payments made by certain tenants at the Partnership's
properties.
Other assets increased from $7,994,965 at December 31, 1996 to $9,283,135 at
March 31, 1997. The $1,288,170 increase is primarily attributable to the
prepayment of real estate taxes through June 30, 1997.
Short- and Long-term Liabilities
Accounts payable and accrued expenses decreased by $216,192 to $1,643,769 at
March 31, 1997, compared to $1,859,961 at December 31, 1996. The decrease is
primarily attributable to the payment of leasing commissions in the first
quarter of 1997 that had been accrued for during 1996.
Due to affiliates decreased from $2,907,737 at December 31, 1996 to $1,531,172
at March 31, 1997. The $1,376,565 decrease is primarily due to the payment of
deferred leasing commissions attributable to leasing activity at the Park
Avenue Property, and a decrease in the prepayment of cleaning and related
service charges.
Results of Operations
For the three months ended March 31, 1997, the Partnership generated a net loss
after depreciation and amortization of $156,258, compared to a net loss of
$1,035,679 for the corresponding period in 1996. The $879,421 decrease is
primarily attributable to an increase in rental income and a decrease in
depreciation and amortization expense.
Rental income for the three months ended March 31, 1997 totalled $8,607,411,
compared to $8,070,917 for the corresponding period in 1996. The $536,494
increase is primarily attributable to leasing activity at the 34th Street
Property during the fourth quarter of 1996 and, to a lesser extent, increases
in occupancy at the Saxon Woods Corporate Center and the 34th Street Property
subsequent to the first quarter of 1996.
Property operating expenses totalled $5,045,432 for the three months ended
March 31, 1997, compared to $4,790,883 for the corresponding period in 1996.
The $254,549 increase is primarily attributable to the timing of accruals for
cleaning costs, which were higher than in the first quarter of 1996 when there
was a strike by union employees, and utility expenses.
Depreciation and amortization expense for the three months ended March 31, 1997
totalled $1,836,303, compared to $2,698,632 for the corresponding period in
1996. The $862,329 decrease is primarily due to the write-down in the carrying
value of the properties as of December 31, 1996. Also, effective December 31,
1996, the Partnership ceased depreciation of the Saxon Woods Corporate Center
as required by Statement of Financial Accounting Standards No. 121.
General and administrative expenses totalled $120,607 for the three months
ended March 31, 1997, a $40,437 increase from $80,170 for the corresponding
period in 1996. During the 1997 period, certain expenses incurred by the
NYRES1 general partner, its affiliates, and an unaffiliated third party service
provider in servicing the Partnership, which were voluntarily absorbed by
affiliates of the NYRES1 general partner in prior periods, were
reimbursed to the NYRES1 general partner and its affiliates.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
27 Financial Data Schedule
99 (a) Term Loan Agreement between Two Park Company,
the Union Bank of Switzerland and the Lenders (as
defined in such agreement) dated as of April 15, 1997
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended March 31, 1997.
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.
MENDIK REAL ESTATE LIMITED PARTNERSHIP
BY: NY REAL ESTATE SERVICES 1 INC.
General Partner
Date: May 15, 1997 BY: /s/ Kenneth L. Zakin
Name: Kenneth L. Zakin
Title: Director, President and
Chief Financial Officer
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<ARTICLE> 5
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<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Mar-31-1997
<CASH> 3,289,714
<SECURITIES> 000
<RECEIVABLES> 11,372,037
<ALLOWANCES> 118,611
<INVENTORY> 000
<CURRENT-ASSETS> 3,289,714
<PP&E> 119,190,765
<DEPRECIATION> 1,367,024
<TOTAL-ASSETS> 144,736,791
<CURRENT-LIABILITIES> 1,643,769
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 39,417,779
<TOTAL-LIABILITY-AND-EQUITY> 144,736,791
<SALES> 8,607,411
<TOTAL-REVENUES> 8,620,319
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 7,002,342
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 1,744,992
<INCOME-PRETAX> (156,258)
<INCOME-TAX> 000
<INCOME-CONTINUING> (156,258)
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (156,258)
<EPS-PRIMARY> (0.40)
<EPS-DILUTED> (0.40)
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TERM LOAN AGREEMENT
dated as of April 15, 1997
among
TWO PARK COMPANY,
as Borrower,
THE LENDERS NAMED HEREIN,
as Lenders
and
UNION BANK OF SWITZERLAND
(New York Branch),
as Administrative Agent
LOCATION OF PREMISES:
2 Park Avenue
New York, New York
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Page
1.01. Definitions............................................. 1
1.02. Rules of Construction....................................9
ARTICLE II
THE LOAN
2.01. Generally...............................................10
2.02. Purpose.................................................10
2.03. Notice and Manner of Borrowing..........................10
2.04. Nature of Lenders' Obligations..........................10
2.05. Notes...................................................11
2.06. Payments and Distributions..............................11
2.07. Interest................................................12
2.08. Limitation on Number of Interest Periods................12
2.09. Conversions of Interest Rate............................13
2.10. Inapplicability of LIBO Based Rate......................13
2.11. Late Payment Premium....................................13
2.12. Voluntary Prepayments...................................13
2.13. Amortization Payments from Cash Flow....................14
2.14. Maintenance of Reserves.................................14
ARTICLE III
YIELD MAINTENANCE ETC.
3.01. Additional Costs and Other Effects of Regulatory Changes..15
3.02. Limitations on Availability of LIBO Based Rate............16
3.03. Certain Compensation......................................17
3.04. Intentionally Omitted.....................................18
3.05. Substitution of Lenders...................................18
ARTICLE IV
CONDITIONS PRECEDENT
4.01. Conditions Precedent to Loan..............................19
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Due Formation, Power and Authority........................24
5.02. Legally Enforceable Agreements............................24
5.03. Financial Statements......................................24
5.04. Compliance With Laws; Payment of Taxes....................25
5.05. Litigation................................................25
5.06. No Conflicts or Defaults..................................25
5.07. Solvency..................................................25
5.08. Governmental Regulation...................................25
5.09. Insurance.................................................25
5.10. ERISA.....................................................25
5.11. Other Documents...........................................26
5.12. No Default................................................26
5.13. Separate Tax and Zoning Lot...............................26
5.14. The Improvements..........................................26
ARTICLE VI
COVENANTS OF BORROWER
6.01. Compliance with Laws; Payment of Taxes....................27
6.02. Leases and Premises Documents.............................27
6.03. Intentionally Omitted.....................................28
6.04. Covenants, Restrictions and Easements.....................28
6.05. Payment of Costs..........................................28
6.06. Brokers...................................................29
6.07. Intentionally Omitted.....................................29
6.08. Management and Leasing of Premises........................29
6.09. Maintenance, Management, Service and Leasing Contracts....29
6.10. Administration Fee........................................29
6.11. Reporting Requirements....................................30
6.12. Interest Rate Hedging.....................................31
ARTICLE VII
ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS
7.01. Appointment, Powers and Immunities of Administrative Agent...31
7.02. Reliance by Administrative Agent.............................32
7.03. Defaults.....................................................32
7.04. Rights of Administrative Agent as Lender.....................33
7.05. Sharing of Costs by Lenders; Indemnification of
Administrative Agent.......................................33
7.06. Non-Reliance on Administrative Agent and Other Lenders.......34
7.07. Failure of Administrative Agent to Act.......................34
7.08. Resignation or Removal of Administrative Agent...............35
7.09. Amendments Concerning Agency Function........................35
7.10. Liability of Administrative Agent............................35
7.11. Transfer of Agency Function..................................35
7.12. Non-Receipt of Funds by Administrative Agent.................36
7.13. Withholding Taxes............................................36
7.14. Sharing of Payments among Lenders............................36
7.15. Possession of Documents......................................37
ARTICLE VIII
GENERAL CONDITIONS AND PROVISIONS
8.01. Intentionally Omitted.........................................37
8.02. No Third-Party Beneficiaries..................................37
8.03. Documentation, etc. Satisfactory..............................37
8.04. Administrative Agent's Determination Conclusive...............38
8.05. Notices.......................................................38
8.06. Amendments and Waivers........................................38
8.07. Assignment; Participation....................................39
8.08. Setoff........................................................41
8.09. Successors and Assigns........................................41
8.10. Severability..................................................41
8.11. Non-Waiver; Remedies Cumulative...............................41
8.12. Certain Waivers...............................................42
8.13. Expenses; Indemnification.....................................42
8.14. Counterparts..................................................43
8.15. Lenders' Right to Terminate...................................43
8.16. Governing Law; Jurisdiction..................................43
8.17. Integration...................................................44
8.18. Tenant Improvement Cash Collateral Account....................44
8.19. Non-Recourse to Borrower's Partners...........................46
EXHIBITS
A. Assignment and Assumption Agreement
B. Note
TERM LOAN AGREEMENT ("this Agreement") dated as of April 15, 1997 by and
among TWO PARK COMPANY, a New York general partnership ("Borrower"), UNION BANK
OF SWITZERLAND (New York Branch) (in its individual capacity and not as
Administrative Agent, "UBS"), BAYERISCHE LANDESBANK CAYMAN ISLANDS BRANCH
("Balaba"), L-BANK LANDESKREDITBANK BADEN-WURTTEMBERG ("L-Bank"),
SUDWESTDEUTSCHE LANDESBANK GIROZENTRALE ("Sudwest"; UBS, Balaba, L-Bank,
Sudwest and each other lender who may become a Lender pursuant to Section 3.05
or Section 8.07, each, a "Lender" and collectively, "Lenders") and UNION BANK
OF SWITZERLAND (New York Branch), as Administrative Agent for Lenders (together
with its successors in such capacity, "Administrative Agent").
Borrower is the owner of the fee interest in certain premises located as set
forth on the cover hereof, and of the Improvements (as hereinafter defined)
located thereon. Borrower desires that Lenders accept an assignment of and
modify the existing mortgage loan with respect to said premises so that the
same is on the terms provided for herein, and Lenders are prepared to do so on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, Borrower, Administrative Agent, and lenders hereby agree as
follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
1.01. Definitions. The following terms, as used herein, shall have the
following meanings:
"Account" -- Has the meaning specified in Section 8.18 (a).
"Additional Costs" -- Any costs, losses or expenses actually incurred by any
Lender which are attributable to its making or maintaining its Pro Rata
Share of the Loan, or any reduction in any amount receivable by any Lender
under the Loan or its Note.
"Administrative Agent's Office" -- Administrative Agent's Office as set forth
on the signature page of this Agreement, or such other address in the United
States as Administrative Agent may designate by notice to Borrower and
Lenders.
"Applicable Lending Office" -- For each Lender and for the portions of the
outstanding principal balance under its Note bearing interest at the Prime
Based Rate or the LIBO Based Rate, as applicable, the lending office of such
Lender (or of an affiliate of such Lender) designated as such on the
signature page hereof or in the applicable Assignment and Assumption Agreement,
or such other office of such Lender (or of an affiliate of such Lender) as
such Lender may from time to time specify to Administrative Agent and
Borrower as the office by which the portions of the outstanding principal
balance under its Note bearing interest at the Prime Based Rate or the LIBO
Base Rate, as applicable, are to be made and maintained.
"Applicable Margin" -- With respect to the Prime Based Rate, .50% per annum;
and with respect to the LIBO Based Rate, 1.50% per annum.
"Assignee" -- Has the meaning specified in Section 8.07.
"Assignment and Assumption Agreement" -- An Assignment and Assumption
Agreement, substantially in the form of EXHIBIT A, pursuant to which a Lender
assigns and an Assignee assumes rights and obligations in accordance with
Section 8.07.
"Business Day" -- Any day on which commercial banks are not authorized or
required to close in New York City; or, whenever such day relates to a LIBOR
Amount, an Interest Period with respect to a LIBOR Amount, any such day in
which Dollar deposits are also carried out in the London interbank market and
banks are open for business in London.
"Code" -- The Internal Revenue Code of 1986.
"Coverage Ratio" -- For any calendar quarter, the ratio (expressed as a
percentage), as determined by Administrative Agent (which determination shall
be conclusive so long as made in a reasonable basis), of (i) Net Operating
Income for a twelve (12)-month period ending with such calendar quarter to
(ii) Hypothetical Annual Debt Service for such calendar quarter.
"Default" -- Any event or circumstance which, with the giving of notice or the
passage of time, or both, would become and Event of Default.
"Default Rate" -- Has the meaning given to such term in the Mortgage.
"Deposit Threshold" -- Has the meaning specified in Section 8.18 (c).
"Dollars" and "$" -- Lawful money of the United States of America.
"Employee Benefit Plan" -- Any employee benefit or other plan established or
maintained, or to which contributions have been made, by Borrower.
"Engineering Consultant" -- Inspection & Valuation International or other
firm designated by Administrative Agent.
"ERISA" -- The Employee Retirement Income Security Act of 1974, including
the rules and regulations promulgated thereunder.
"ERISA Affiliate" -- Any corporation which is a member of the same controlled
group of corporations (within the meaning of Section 414 (b) of the Code) as
Borrower, or any trade or business which is under common control (within the
meaning of Section 414(c) of the Code) with Borrower, or any organization which
is required to be treated as a single employer with Borrower under Section 414
(m) or 414 (o) of the Code.
"Event of Default" -- Has the meaning given to such term in the Mortgage.
"Federal Funds Rate: -- For any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions as published by the
Federal Reserve Bank of New York for such day, provided that (i) if such day is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions of the immediately preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average of the rates quoted by three (3) Federal Funds brokers to
Administrative Agent on such day on such transactions.
"Financial Statements" -- Statements of the assets, liabilities (direct or
contingent), income, expenses and cash flow of Borrower, prepared in accordance
with generally accepted accounting principles in the Unite States of America as
in effect from time to time and consistently applied.
"GAAP" -- Generally accepted accounting principles in the United States on
America as in effect from time to time, consistently applied.
"Good Faith Contest" -- The contest of an item if: (i) the item is diligently
contested in good faith and by appropriate proceedings timely instituted; (ii)
adequate reserves are established with respect to the contested item; (iii)
during the period of such contest, the enforcement of any contested item is
effectively stayed; and (iv) the failure to pay or comply with the contested
item during the period of the contest is not likely to result in the sale or
forfeiture of the Mortgaged Property or any part thereof or in a material
adverse change in the status of the business or financial condition of Borrower
or in the ability of Borrower to perform its obligations under the Loan
Documents.
"Governmental Authorities" -- The United States, the State of New York and
any political subdivision, agency, department, commission, board, bureau or
instrumentality of either of them, including any local authorities, which
exercises jurisdiction over Borrower, the Premises or the Improvements.
"Hazardous Materials" -- Has the meaning given to such term in the Mortgage.
"Hypothetical Annual Debt Service" -- For any calendar quarter (the date of
the end of such calendar quarter being herein referred to as a "Determination
Date"), an amount equal to the constant annual payment of principal plus
interest required to fully amortize, over a term of twenty-five (25) years,
a hypothetical loan in an amount equal to the Principal Amount as of such
Determination Date, assuming such loan were to bear interest at a rate equal to
the greater of (i) 2% per annum in excess of the interpolated interest rate
on a ten (10) year United States Treasury Note (ii) the overall average
rate of interest actually payable on the Principal Amount as of such
Determination Date (without taking into account any interest rate hedging
agreement).
"Improvements" -- The Class A office building located on the Premises
containing approximately 955,862 square feet of rentable area, inclusive of
approximately 54,228 feet of retail space.
"Indemnity" -- An agreement from Borrower whereby, among other things,
Administrative Agent and Lenders are indemnified regarding Hazardous
Materials.
"Individual Loan Commitment" -- With respect to each Lender, the amount set
forth below opposite the name of such Lender (subject to adjustment in
accordance with the provisions of Section 3.05 and Section 8.07).
Lender Individual Loan Commitment
UBS $25,000,000
Balaba $21,500,000
L-Bank $ 8,500,000
Sudwest $10,000,000
"Interest Period" -- The period during which interest at the LIBO Based Rate,
determined as provided in this Agreement, shall be applicable to the LIBO
Rate Request Amount in question; provided, however, that each such period
shall be either one (1), two (2), or three (3) months, which shall be
measured from the date specified by Borrower in each LIBO Rate Request for
the commencement of the computation of interest at the LIBO Based Rate, to
the numerically corresponding day in the calendar month in which such period
terminates (or if there be no numerical correspondent in such month, or if the
date selected by Borrower for such commencement is the last Business Day of a
calendar month, then the last Business Day of the calendar month in which
such period terminates, or if the numerically corresponding day is not a
Business Day then the next succeeding Business Day, unless such next
succeeding Business Day enters a new calendar month, in which case such
period shall end on the next preceding Business Day) and in no event shall any
such period extend beyond the Maturity Date.
"Law" -- Any federal, state or local law, statute, rule, regulation,
ordinance, order, decree, directive, requirement, code, notice of violation or
rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or otherwise,
including any judicial or administrative order, determination, consent decree
or judgment.
"Lenders' Counsel" -- Dewey Ballantine, 1301 Avenue of the Americas, New
York, New York 10019-6092
"LIBO Based Rate" -- With respect to any LIBOR Amount, the rate per annum
(expressed as a percentage) determined by Administrative Agent to be equal to
the sum of (i) the quotient of the LIBO Rate for the LIBOR Amount and Interest
Period in question divided by [1 minus the Reserve Requirement] (rounded up to
the nearest 1/100 of 1%) and (ii) the Applicable Margin.
"LIBO Rate" -- The rate per annum (rounded up to the nearest 1/16 of 1%)
offered to the London branch of Union Bank of Switzerland by prime banks in
the London interbank market at approximately 11 a.m. (London time) two
(2) Business Days prior to the first day of the applicable Interest Period,
for deposits in immediately available funds, in Dollars, of amounts comparable
to the LIBO Rate Request Amount for the same period of time as the Interest
Period selected by Borrower in the LIBO Rate Request.
"LIBO Rate Request" -- Borrower's telephonic notice (to be promptly confirmed
in writing), to be received by Administrative Agent by 12 Noon (New York time)
three (3) Business Days prior to the date specified in the LIBO Rate Request
for the commencement of the Interest Period (which specified date must be a
Business Day), of (a) its intention to have all or any portion of the Principal
Amount which is not then the subject of an Interest Period (other than an
Interest Period which is termination on the Business Day specified in the
notice) bear interest at the LIBO Based Rate and (b) the Interest Period
desired be Borrower in respect of the amount specified.
"LIBO Rate Request Amount" -- The amount, to be specified by Borrower in each
LIBO Rate Request, which Borrower desires bear interest at the LIBO Based Rate
and which shall in no event be less than $1,000,000 and which, at
Administrative Agent's option, shall be an integral multiple of $100,000.
"LIBOR Amount" -- Each portion of the Principal Amount bearing interest at the
LIBO Based Rate pursuant to a particular LIBO Rate Request.
"Loan" -- The loan in the Loan Amount made by Lenders pursuant hereto.
"Loan Amount" -- $65,000,000.
"Loan Documents" -- This Agreement, the Notes, the Mortgage, the Indemnity,
Uniform Commercial Code financing statements in respect of the Mortgaged
Property and any other collateral given as security for the Loan, and any
other documents executed and delivered by Borrower which evidence or secure the
Loan.
"Major Lease" -- Any lease for space in excess of 20,000 square feet of the
rentable area of the Improvements.
"Majority Lenders" -- At any time, those Lenders holding Notes evidencing a
majority of the Principal Amount.
"Maturity Date" -- March 1, 2000.
"Mortgage" -- The consolidated mortgage, assignment of leases and rents and
security agreement made to Administrative Agent, as agent for Lenders, to
secure the payment and performance of Borrower's obligations hereunder, under
the Notes and otherwise in respect of the Loan.
"Mortgaged Property" -- The Premises and other property constituting the
"Mortgaged Property", as said quoted term is defined in the Mortgage.
"Multiemployer Plan" -- Any plan defined as such in Section 3 (37) of ERISA.
"Net Cash Flow" -- For any month, the excess, if any, of (a) gross receipts
from the Premises for such month, determined on a cash basis (including all
the items enumerated in clause (a) of the definition of "Net Operating
Expenses" in this Section, but excluding any income paid to any
Borrower-affiliated cleaning contractor servicing the Premises), over (b) the
sum of (i) all operating expenses (and, to the extent reasonably approved by
Administrative Agent, capital expenditures and leasing related expenditures)
with respect to the Premises for such month, determined on a cash basis
(including, without limitation, all the items enumerated in clause (b) of the
definition of "Net Operating Income" in this Section), (ii) actual interest
expense on the Loan for such month and (iii) amounts reserved by Borrower
(subject to Administrative Agent's approval, not to be unreasonably withheld,
delayed or conditioned) during such month for Premises-related purposes,
including, without limitation, amounts reserved for capital improvements or
operating expenses with respect to the Premises but specifically excluding, to
the extent that the amount on deposit in the Account is less than the Deposit
Threshold, reserves for leasing commissions, tenant allowances, tenant
improvements or other leasing-related costs (but specifically including, to the
extent that the amount on deposit in the Account is greater than or equal to
the Deposit Threshold, reserves for leasing commissions, tenant allowances,
tenant improvements or other leasing-related costs). In no event shall
expenditures for Premises-related purposes be included in the amount determined
pursuant to clause (b) above to the extent a reserve has previously been
established for such expenditures and the amount of such reserve has been
included in the amount determined pursuant to said clause (b).
"Net Operating Income" -- For any twelve (12)-month period, an amount, as
determined by Administrative Agent (which determination shall be
conclusive so long as made on a reasonable basis), equal to:
(a) all actual revenues from the operation of the Premises during such
period (adjusted as set forth at the end of this definition), determined
in accordance with GAAP, including all rental and other payments,
including, without limitation, base rent, additional rent, promotional
revenues, percentage rent and payments for common area maintenance, taxes
and operating expenses;
less
(b) all operating expenses in connection with the Premises during such
period, determined in accordance with GAAP, including, without limitation,
insurance premiums, real estate taxes, ordinary maintenance and
repair expenses, management fees (not to exceed 2.0% of the sum
calculated pursuant to clause (a) above) and any other operating
expenses, all as determined in accordance with GAAP, but excluding (i)
debt service payable under the Loan, (ii) capital expenditures as
described in sub-clause (b) (i) of the definition of "Net Operating
Income" in this Section, (iii) amounts reserved as described in
sub-clause (b) (iii) of said definition of "Net Cash Flow", (iv)
amounts expended in connection with the leasing of the Premises and
(v) amounts required to be deposited into the Account pursuant to
Section 8.18.
For purposes of computing the amount pursuant to clause (a) above, in
the event that a lease is executed (and, to the extent
Administrative Agent's approval thereof is required pursuant to this
Agreement, such approval is given or deemed given) with respect to space
in the Premises that was vacant at any time during such twelve (12) month
period, the tenant under such lease shall be deemed to have been in
occupancy and paying rent during the period of vacancy, and said amount
shall be adjusted upward correspondingly.
"Note"; "Notes" -- Have the respective meanings given to such terms in
Section 2.05.
"Participant"; "Participation" -- Have the respective meanings
specified in Section 8.07.
"Pension Plan" -- Any employee pension benefit plan within the meaning
of Section 3 (2) of ERISA with respect to which Borrower or any
ERISA Affiliate at any relevant time has liability or an obligation to
contribute.
"Person" -- An individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity of whatever nature.
"Premises" -- The real property described on Schedule A to the Mortgage
and located as indicated on the cover hereof, upon all or part of which
the Improvements are located.
"Premises Documents" -- Has the meaning given to such term in the
Mortgage.
"Prime Based Rate" -- The Applicable Margin plus the greater of (i) the
Federal Funds Rate plus 1/2 of 1% per annum or (ii) the prime commercial
lending rate as announced from time to time by Administrative Agent at
Administrative Agent's Office, each change in said rates to be effective
as of the date of such change.
"Principal Amount" -- At any time, the aggregate outstanding principal
amount of the Notes.
"Pro Rata Share" -- With respect to each Lender, the ratio of such
Lender's Individual Loan Commitment to the loan Amount.
As of the date thereof, the Lenders' respective Pro Rata Shares are as
follows:
Lender Pro Rata Share
UBS 100%
"Regulation D" -- Regulation D of the Board of Governors of the Federal
Reserve System.
"Regulatory Change" -- With respect to any Lender and the charging and
collecting of interest at the LIBO Based Rate, any change after the date
thereof in United States federal, state or foreign laws or regulations
(including Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks
including such Lender under any United States federal, state or foreign
laws or regulations (whether or not having the force of law) by any court
or governmental or monetary authority charged with the interpretation or
administration thereof, excluding any change the effect of which is
reflected in a change in the LIBO Based Rate.
"Reserve Requirement" -- The rate at which reserves (including any
marginal, supplemental or emergency reserves) are actually required to be
maintained by any Lender or and Lender's respective Participants, if any,
under Regulation D against "Euro-Currency Liabilities", as such quoted
term is used in Regulation D. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by any Lender or any Lender's respective
Participants in the loan by reason of any Regulatory Change against (i)
any category of liabilities which includes deposits by reference to which
the LIBO Based Rate is to be determined as provided in this Agreement or
(ii) any category of extensions of credit or other assets which includes
loans the interest rate on which is determined on the basis of rates used
in determining the LIBO Rate.
"Super-Majority Lenders" -- At any time, those Lenders holding Notes
evidencing at least 66-2/3% of the Principal Amount.
"Title Insurer" -- The issuer(s), approved by Administrative Agent, of
the title insurance policy or policies insuring the Mortgage.
1.02. Rules of Construction. Except as expressly provided otherwise, when
used in this Agreement (i) "or" is not exclusive, (ii) "hereunder",
"herein", "hereof" and the like refer to this Agreement as a whole, (iii)
"Article", "Section", "Schedule" and "Exhibit" refer to Articles, Sections,
Schedules, and Exhibits of this Agreement, (iv) terms defined in the singular
shall have a correlative meaning when used in the plural and vice versa, (v) a
reference to a Law includes any amendment, modification or supplement to, or
replacement of, such Law and (vi) a reference to a document shall mean such
document as the same may be amended, modified or supplemented from time to time
in accordance with its terms. The cover page and the Exhibits and Schedules
annexed hereto are incorporated as a part of this Agreement with the same
effect as if set forth in the body hereof. Any table of contents and all
captions and headings herein are for convenience only and shall not affect the
interpretation or construction hereof.
ARTICLE II
THE LOAN
2.01. Generally. Subject to the terms, conditions and provisions of this
Agreement, and on the basis of the representations, warranties and covenants
made herein and in the other Loan Documents, each Lender agrees to make its Pro
Rata Share of, and Borrower agrees to accept, the Loan upon satisfaction of the
conditions set forth in Section 4.01. The Loan shall be made through the
acquisition by Lenders of, and the modification of, the existing indebtedness
on the Premises.
2.02. Purpose. The Loan shall be made for the business purpose of
extending and modifying the existing indebtedness on the Premises.
2.03. Notice and Manner of Borrowing. Borrower shall submit to
Administrative Agent a request for disbursement of the proceeds of the Loan no
later than four (4) Business Days prior to the date such disbursement is to be
made. Administrative Agent, no later than two (2) Business Days prior to the
date such disbursement is to be made, shall notify each Lender of such request
for disbursement. Not later than 10:00 a.m. (New York time) on the date such
disbursement is to be made, each Lender shall, through its Applicable Lending
Office and subject to the conditions of this Agreement, make the amount to be
disbursed by it available to Administrative Agent, at Administrative Agent's
Office and in immediately available funds. The amount so received by
Administrative Agent shall, subject to the conditions of this Agreement, be
made available to Borrower by Administrative Agent by wire transfer to an
account(s) designated by Borrower in the request for disbursement.
2.04. Nature of Lenders' Obligations. The obligations of Lenders under
this Agreement are several, and no Lender shall be responsible for the failure
of any other Lender to fund such other Lender's Pro Rata Share of the Loan.
However, the failure of any Lender to fund its Pro Rata Share of the Loan on
the date specified therefor shall not relieve any other Lender of its
obligation to fund its Pro Rata Share of the Loan on such date.
2.05. Notes. The Loan shall be evidenced by notes of Borrower in the
form of EXHIBIT B, duly completed and executed by Borrower (one for each
Lender in an amount equal to such Lender's Individual Loan Commitment, Payable
for the account of such Lender's Applicable Lending Office), in an aggregate
principal amount equal to the Loan Amount (it being understood that the notes,
aggregating the Loan Amount, dated the date hereof, by Borrower to Lenders,
respectively, shall amend and restate in their entirety the notes described in,
and consolidated by, a Note Assumption, Consolidation, Severance and
Modification Agreement among Borrower and Lenders, dated the date hereof). Such
notes to Lenders, as the same may hereafter be amended, modified, extended,
severed, assigned, substituted, renewed or restated from time to time
(including, without limitation, any substitute notes pursuant to Section 3.05
or 8.07), are referred to herein individually as a "Note" and collectively as
the "Notes". The Notes shall mature, and all outstanding principal and other
sums thereunder shall be paid in full, on the Maturity Date, as the same may be
accelerated or extended in accordance with the terms and conditions of the Loan
Documents.
Each Lender is hereby authorized by Borrower to endorse on the schedule
attached to its Note the amount of each payment of principal received by such
Lender on account of the Loan, which endorsement shall, in the absence of
manifest error, be conclusive as to the outstanding balance under such Note;
provided, however, that the failure to make any such notation shall not limit
or otherwise affect the obligations of Borrower under this Agreement or the
Notes.
2.06. Payments and Distributions. Borrower shall make each payment under
this Agreement and under the Notes not later than 11:00 a.m. (New York time)
on the date when due to Administrative Agent at Administrative Agent's Office
in immediately available funds. Administrative Agent will thereafter, on the
day of its receipt of each such payment, cause to be distributed to each Lender
such Lender's appropriate share (based upon the respective outstanding
principal amounts of the Notes and the respective rates of interest thereunder)
of the payments of principal and interest , and its appropriate share of the
payments of other sums, in like funds for the account of such Lender's
Applicable Lending Office.
Except to the extent provided in this Agreement, whenever any payment to
be made under this Agreement or under the Notes is due on any day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
the payment of interest and, if applicable, fees, as the case may be.
Notwithstanding the foregoing provisions of this Section, Administrative
Agent shall deduct, from amounts due and that would otherwise be payable to a
Lender in default under its obligations under Section 7.05, the amount
owing by such Lender pursuant to said Section 7.05 and pay the amount so
deducted to itself, the other Lenders, or such other party as is entitled to
such amount, as applicable.
2.07. Interest. Borrower shall have the option, subject to the terms
and conditions set forth in this Agreement, of paying interest on the Principal
Amount or portions thereof at the Prime Based Rate or the LIBO Based Rate. If
Borrower desires the application of the LIBO Based Rate, it shall submit a LIBO
Rate Request to Administrative Agent, which LIBO Rate Request shall be
irrevocable, subject to Borrower's right to convert the rate of interest
payable under the Notes with respect to any LIBOR Amount from the LIBO Based
Rate to the Prime Based Rate as provided in Section 2.09. Administrative
Agent shall, on the day of its receipt of the LIBO Rate Request from Borrower,
notify each Lender, either by telephone or by facsimile, of the specified LIBOR
Amount and the amount of the Lender's portion thereof, the Interest Period and
date of commencement thereof, and the interest rate applicable to such LIBOR
Amount. Each LIBO Rate Request shall be applicable to the Notes in accordance
with the Lenders' respective Pro Rata Shares, so that, barring a conversion or
suspension of the LIBO Based Rate by one or more, but not all, Lenders,
pursuant to Article III, the outstanding principal amounts of each of the Notes
shall contain segments bearing interest at the Prime Based Rate and/or LIBO
Based Rate(s) under particular Interest Period(s), each of which segments
shall correspond to a proportional segment of the outstanding principal amount
of every other Note. In the event that Borrower fails to submit a LIBO Rate
Request with respect to a LIBOR Amount not later than 12 Noon (New York time)
three (3) Business Days prior to the last day of the relevant Interest Period,
the LIBOR Amount in question shall bear interest, commencing at the end of such
Interest Period, at the Prime Based Rate.
Interest shall be computed on an actual/360-day basis (i.e., interest for
each day during which any portion of the Principal Amount is bearing interest
at a particular interest rate per annum shall be computed at such rate divided
by 360).
Borrower shall pay interest on the Principal Amount to Administrative
Agent for the account of Lenders. Interest on the Principal Amount shall be
payable, in arrears, monthly on the first day of the first month following the
disbursement of the proceeds of the Loan and on the first day of each month
thereafter until the Notes are repaid in full.
2.08. Limitation on Number of Interest Periods. Borrower shall not have
the right to have more than five (5) Interest Periods, in the aggregate, in
respect of the Loan in effect at any one time, whether or not any portion of
the Principal Amount is then bearing interest at the Prime Based Rate.
2.09. Conversions of Interest Rate. Provided there exists no Event of
Default, Borrower shall have the right to convert, from time to time, the rate
of interest payable under the Notes with respect to any portion of the
Principal Amount to the LIBO Based Rate or the Prime Based Rate, subject to the
terms of this Agreement (including, without limitation, the payment of all
amounts due in connection with any such conversion from the LIBO Based Rate on
a date other than the last day of an applicable Interest Period) and provided
that, in the case of a conversion from the LIBO Based Rate, the entire LIBOR
Amount is the subject of the conversion. Conversions shall be accomplished (i)
in the case of a conversion from the Prime Based Rate to the LIBO Based Rate,
by Borrower's submission of a LIBO Rate Request in accordance with Section 2.07
or (ii) in the case of a conversion from the LIBO Based Rate to the Prime
Based Rate, by Borrower's request to Administrative Agent by telephone (to be
promptly confirmed in writing), to be received by Administrative Agent at
least three (3) Business Days prior to the date specified for such conversion,
specifying the LIBOR amount with respect to which the interest rate is to be
converted and the date of the conversion. On the date of its receipt of such
request, Administrative Agent shall notify each Lender thereof either by
telephone or by facsimile.
2.10. Inapplicability of LIBO Based Rate. Any portion of the Principal
Amount to which the LIBO Based Rate is not or cannot pursuant to the terms of
this Agreement be applicable shall bear interest at the Prime Based Rate.
Following the occurrence of an Event of Default, those portions of the
Principal Amount bearing interest at the LIBO Based Rate shall, at the option
of the Majority Lenders, at the expiration of the Interest Period applicable
thereto and without notice to Borrower, bear interest at the Prime Based Rate.
In addition, during the Existence of such an Event of Default, Borrower shall
have no right to submit a LIBO Rate Request with respect to any LIBOR Amount
for which the current Interest Period is expiring. The foregoing provisions
shall not be construed as a waiver by Lenders of their right to pursue any
other remedies available to them under the Mortgage or any other Loan Document
nor shall they be construed to limit in any way the application of the Default
Rate as provided in the Mortgage.
2.11. Late Payment Premium. Borrower shall pay to Administrative Agent
for the account of Lenders a late payment premium in the amount of 5% of any
payments of principal or interest under the Loan made more than fifteen (15)
days after the due date thereof, which late payment premium shall be due with
any such late payment.
2.12. Voluntary Prepayments. Borrower may, upon at least ten (10)
Business Days' notice to Administrative Agent, prepay the Principal Amount, in
whole or part, without premium or penalty, provided that (i) any partial
prepayment under this Section shall be in a principal amount of not less than
$1,000,000 and an integral multiple of $100,000; (ii) prepayment of a
LIBOR Amount other than on the last day of the applicable Interest Period shall
be subject to the provisions of Section 3.03; and (iii) each prepayment
under this Section shall include all interest accrued on the amount of
principal prepaid (and all late charges and other sums that may be payable)
through the date of prepayment.
2.13. Amortization Payments from Cash Flow. If the Coverage Ratio for
any calendar quarter shall be less than 150%, then, in addition to the
required payments of interest on the Notes, Borrower shall, and hereby
covenants to, make monthly payments, to be applied in reduction of the
Principal Amount, until the requisite Coverage Ratio has been attained for two
consecutive calendar quarters, as hereinafter provided. Such monthly payments
shall be (a) due on the 25th day of the month immediately following the
quarter for which the requisite Coverage Ratio is not attained and on the 25th
day of each month thereafter through and including the 25th day of the last
month of the second consecutive calendar quarter for which the Coverage Ratio
equals or exceeds 150% and (b) in an amount equal to Net Cash Flow for the
month immediately preceding the month in which the payment is due. If, after
the requisite Coverage Ratio shall be re-established, the Coverage Ratio shall
again fall below 150%, monthly payments of principal shall again be required
as described above. Notwithstanding the foregoing, payments pursuant to this
Section shall only be required if and to the extent there remains any Net Cash
Flow for the month in question following the making of the payment, if any,
required pursuant to Section 8.18 (c).
2.14. Maintenance of Reserves. In the event that Borrower establishes
reserves as contemplated by sub-clause (b) (iii) of the definition of "Net
Cash Flow" in Section 1.01, Borrower covenants (i) to hold such reserves
in an account separate from Borrower's other funds, (ii) not to use such
reserves other than for the purposes for which the same were established or
other Premises-related purposes reasonably approved by Administrative Agent and
(iii) in any event not to distribute any portion of such reserves to its
constituent partners; provided, however, that at Borrower's request,
Administrative Agent shall, if it reasonably determines that the amount of any
such reserve exceeds the amount required for the purpose for which such reserve
was established, permit Borrower to apply such excess to the next payment(s)
of interest due under the Notes. At any time during which the balance on
deposit in the Account equals or exceeds the Deposit Threshold (but at no
other times) Borrower shall be permitted, subject to Administrative Agent's
approval, not to be unreasonably withheld, delayed or conditioned, to establish
and fund reserves for leasing-related costs that are anticipated to exceed the
amount on deposit in the Account; provided, however, that in no event shall
the amount of such reserves exceed, in the aggregate, at any one time,
$2,000,000 unless Borrower deposits the excess over $2,000,000 unless
Borrower deposits the excess over $2,000,000 into the Account to be held and
disbursed as provided in Section 8.18.
ARTICLE III
YIELD MAINTENANCE ETC.
3.01. Additional Costs and Other Effects of Regulatory Changes. Borrower
shall pay directly to a Lender, promptly upon demand, such amounts as are
necessary to compensate such Lender for Additional Costs resulting from any
Regulatory Change which (i) subjects such Lender to any tax, duty or other
charge with respect to the Loan or its Note, or changes the basis of taxation
of any amounts payable to such Lender under the Loan or its Note (other than
taxes imposed on the overall gross or net income of such Lender or of its
Applicable Lending Office by the jurisdiction in which such Lender's principal
office or such Applicable Lending Office is located), (ii) imposes, modifies or
deems applicable any reserve, special deposit or similar requirements relating
to any extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender, (iii) imposes on such Lender or, in the case of
LIBOR Amounts, on the London interbank market, any other condition affecting
the Loan or its Note, or any of such extensions of credit or liabilities or
(iv) imposes any capital adequacy requirements on such Lender by virtue of the
Loan or the Notes. Such Lender will notify Borrower (with a copy to
Administrative Agent) of any event occurring after the date hereof which would
entitle it to compensation pursuant to this paragraph as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation, and will designate a different Applicable Lending Office for
those portions of the Loan affected by such compensation, and will designate a
different Applicable Lending Office for those portions of the Loan affected by
such event if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in such Lender's sole opinion, be
disadvantageous to it, provided that such Lender shall have no obligation to so
designate an Applicable Lending Office located in the United States.
Without limiting the effect of the immediately preceding paragraph, in
the event that, by reason of any Regulatory Change, (i) a Lender incurs
Additional Costs based on or measured by the excess above a specified level of
the amount of (1) a category of deposits or other liabilities of such Lender
which includes deposits by reference to which the LIBO Rate is determined as
provided in this Agreement and/or (2) a category of extensions of credit or
other assets of such Lender which includes loans the interest on which is
determined on the basis of rates referred to in the definition of "LIBO Rate"
in Section 1.01, (ii) a Lender becomes subject to restrictions on the amount of
such a category of liabilities or assets which it may hold or (iii) it shall be
unlawful or impossible for a Lender to make or maintain its Pro Rata Share of
the Loan (or any portion thereof) at the LIBO Based Rate, then such Lender's
obligation to make or maintain its Pro Rata share of the Loan (or portions
thereof) at the LIBO Based Rate (and Borrower's right to request the same from
such Lender) shall be suspended and such Lender shall give notice thereof to
Borrower (with a copy to Administrative Agent) and, upon the giving of such
notice, interest payable on the affected Note shall be converted to the Prime
Based Rate, unless such Lender may lawfully continue to maintain its Pro Rata
Share of the Loan (or any portion thereof) then bearing interest at the LIBO
Based Rate to the end of the current Interest Period(s), at which time the
interest rate on the affected Note shall convert to the Prime Based Rate. If
subsequent to any conversion to the Prime Based Rate as provided above such
Lender determines that such Regulatory Change has ceased to be in effect, such
Lender will so notify Borrower (with a copy to Administrative Agent), and
Borrower may convert the rate of interest payable under the affected Note with
respect to those portions of the Principal Amount bearing interest at the Prime
Based Rate to the LIBO Based Rate by submitting a LIBO Rate Request in respect
thereof and otherwise complying with the provisions of this Agreement with
respect thereto.
Determinations by each Lender of the existence or effect of any
Regulatory Change on its costs of making or maintaining its Pro Rata Share of
the Loan, or portions thereof, at the LIBO Based Rate, or on amounts receivable
by it in respect thereof, and of the additional amounts required to compensate
such Lender in respect of Additional Costs, shall be conclusive, so long as
made on a reasonable basis.
3.02. Limitations on Availability of LIBO Based Rate. Anything herein
to the contrary notwithstanding, if, at the time of or prior to the
determination of the LIBO Based Rate in respect of any LIBO Rate Request Amount
as provided in this Agreement, (i) Administrative Agent determines (which
determination shall be conclusive, so long as made on a reasonable basis) that
by reason of circumstances affecting the London interbank market generally,
adequate and fair means do not or will not exist for determining the LIBO Based
Rate applicable to an Interest Period or (ii) a Lender determines (which
determination shall be conclusive, so long as made on a reasonable basis) that
the LIBO Rate will not accurately reflect the cost to such Lender of making or
maintaining its Pro Rata Share of the Loan (or any portion thereof) at the
LIBO Based Rate, then Administrative Agent, in the case of the circumstances
described in clause (i) above, or such Lender, in the case of the
circumstances described in clause (ii) above, shall give Borrower prompt
notice thereof (with a copy to Administrative Agent in the case of the notice
from such Lender), and the LIBO Rate Request Amount in question, in the case
of the circumstances described in clause (i) above, or such Lender's portion
thereof, in the case of the circumstances described in clause (ii) above,
shall bear interest, or continue to bear interest, as the case may be, at the
Prime Based Rate. If at any time subsequent to Administrative Agent's or such
Lender's giving of such notice, Administrative Agent or such Lender, as the
case may be, determines that because of a change in circumstances the LIBO
Based Rate is again available to Borrower, Administrative Agent or such Lender,
as the case may be, shall so notify Borrower (with a copy to Administrative
Agent, in the case of the notice from such Lender) and Borrower may convert
the rate of interest payable under the Notes or such Lender's Note, as the case
may be, from the Prime Based Rate to the LIBO Based Rate by submitting a LIBO
Rate Request in respect thereof and otherwise complying with the provisions of
this Agreement with respect thereto.
3.03. Certain Compensation. Borrower shall pay directly to a Lender,
immediately upon request and notwithstanding contrary provision contained in
the Mortgage or other Loan Documents, such amounts as shall, in the judgment of
such Lender (which shall be conclusive so long as made on a reasonable basis),
compensate it for any loss, cost or expense (including "breakage" costs but
excluding "yield maintenance" amounts) incurred by it as a result of (i) any
payment or prepayment (under any circumstances whatsoever, whether voluntary
or involuntary) of any portion of the Principal Amount bearing interest at the
LIBO Based Rate on a date other than the last day of an applicable Interest
Period, (ii) the conversion (for any reason whatsoever, whether voluntary or
involuntary) of the rate of interest payable under such Lender's Note from the
LIBO Based Rate to the Prime Based Rate with respect to any portion of the
Principal Amount then bearing interest at the LIBO Based Rate on a date other
than the last day of an applicable Interest Period, (iii) the failure of all
or a portion of the advance of Loan proceeds which was to have borne interest
at the LIBO Based Rate pursuant to a LIBO Rate Request to be made or (iv) the
failure of Borrower to borrow in accordance with a LIBO Rate Request submitted
by it, which amounts shall include, without limitation, an amount equal to the
present value (using as a discount rate the rate at which interest is computed
pursuant to clause (y) below) of the excess, if any, of (x) the amount of
interest that would have accrued at the LIBO Based Rate (less the Applicable
Margin) on the amount so prepaid, converted, not advanced or not borrowed, as
the case may be, for the period from the date of occurrence to the last day of
the applicable Interest Period over (y) the amount of interest (as
determined in good faith by such Lender) that such Lender would have paid to
Borrower (and other customers) on a Euro-Dollar deposit placed by such Lender
with leading banks in the London interbank market for an amount comparable to
the amount so prepaid, converted, not advanced or not borrowed, as the case may
be, for the period from the date of occurrence to the last day of the
applicable Interest Period. Notwithstanding the provisions of clause (i)
above, in the case of premature payments of sums bearing interest at the LIBO
Based Rate required by the provisions of Section 2.13, so long as no Event
of Default is then continuing, Administrative Agent, at Borrower's request,
shall hold the amount of the payment in an interest-bearing cash collateral
account until the expiration of the Interest Period(s) in question in order to
minimize or eliminate the amount which would otherwise be due from Borrower
under this Section (it being acknowledged that (A) interest shall continue to
accrue and be due and payable on the entire Principal Amount until such payment
is applied in reduction of the Principal Amount and (B) interest accrued on
the cash collateral account shall be applied toward Borrower's obligations
under the Loan).
3.04. Intentionally Omitted.
3.05. Substitution of Lenders. If any Lender (an "Affected Lender") (i)
makes demand upon Borrower for (or if Borrower is otherwise required to pay)
Additional Costs pursuant to Section 3.01 or (ii) gives notice to Borrower that
such Lender is unable to make or maintain its Pro Rata Share of the Loan at the
LIBO Based Rate as a result of a condition described in clause (ii) of Section
3.02 or in the second paragraph of Section 3.01, Borrower may, within ninety
(90) days of receipt of such demand or notice, as the case may be, give written
notice (a "Substitution Notice") to Administrative Agent and to each Lender of
its intention to replace such Affected Lender with another financial
institution (the "Substitute Lender") designated in such Substitution Notice.
If, within thirty (30) days of Administrative Agent's receipt of such
Substitution Notice, (x) Administrative Agent shall notify Borrower and each
Lender in writing that the Substitute Lender is reasonably satisfactory to the
Super-Majority Lenders and (y) the Affected Lender shall not agree to waive the
payment of the Additional Costs in question or the effect of the circumstances
described in clause (ii) of Section 3.02 or in the second paragraph of Section
3.01, then the Affected Lender shall, so long as no Default shall exist, assign
its Note and all of its rights and obligations under this Agreement to the
Substitute Lender, and the Substitute Lender shall assume all of the Affected
Lender's rights and obligations, pursuant to an agreement, substantially in the
form of an Assignment and Assumption Agreement, executed by the Affected Lender
and the Substitute Lender. In connection with such assignment and assumption,
the Substitute Lender shall pay to the Affected Lender an amount equal to the
outstanding principal amount under the Affected Lender's Note plus all interest
accrued thereon, plus all other amounts, if any (other than the Additional
Costs in question), then due and payable to the Affected Lender with respect to
the Loan; provided, however, that prior to or simultaneously with any such
assignment and assumption, Borrower shall have paid to such Affected Lender all
amounts properly demanded and unreimbursed under this Article III. Upon the
effective date of such assignment and assumption, the Substitute Lender shall
become a party to this Agreement and shall have all the rights and obligations
of a Lender as set forth in such Assignment and Assumption Agreement, and the
Affected Lender shall be released from its obligations hereunder, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this Section, a note shall be issued to the
Substitute Lender by Borrower, in substitution for the Affected Lender's Note,
and the Affected Lender shall return its Note to Borrower. Such substitute
note shall constitute a "Note", and the obligations evidenced by such
substitute note shall be secured by the Mortgage. In connection with
Borrower's execution of such substitute note as aforesaid, Borrower shall
deliver to Administrative Agent evidence, satisfactory to Administrative Agent,
of all requisite partnership/corporate or other action to authorize Borrower's
execution and delivery of the substitute note and any related documents. If
the Substitute Lender is not incorporated under the Laws of the United States
of America or a state thereof, it shall, prior to the first date of which
interest or fees are payable hereunder for its account, deliver to Borrower
and Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with
Section 7.13.
Borrower, Administrative Agent and Lenders shall execute such
modifications to the Loan Documents as shall, in the reasonable judgment of
Administrative Agent, be necessary or desirable in connection with the
substitution of Lenders in accordance with the foregoing provisions of this
Section.
Administrative Agent agrees to cooperate with Borrower's efforts to
procure a Substitute Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.01. Conditions Precedent to Loan. Lenders shall not be obligated to
consummate the Loan transaction until the following conditions shall have been
satisfied:
(a) There shall exist no Default or Event of Default;
(b) The representations and warranties made to Administrative Agent or
Lenders herein, in the other Loan Documents and in any other
document, certificate or statement executed or delivered to
Administrative Agent or Lenders in connection with the Loan shall be
true and correct on and as of the date of the advance with the same
effect as if made on such date;
(c) The Improvements shall not have been materially injured or damaged
by fire or other casualty; and
(d) Lenders shall have received and approved each of the following:
(1) Fees and Expenses. All fees and expenses incurred by Agent
(including, without limitation, the reasonable fees and expenses of
Lenders' Counsel, the Engineering Consultant, Lenders' environmental
consultant, and the preparer of the appraisal required by paragraph
(4) below);
(2) Loan Documents. This Agreement and each of the other Loan
Documents, duly executed by the parties thereto, and, where applicable,
duly acknowledged and in proper form for recording or filing, as the
case may be, and all necessary or desirable recordings and filings
shall have been duly made;
(3) Financial Statements. Current Financial Statements and such
other financial data as Administrative Agent shall reasonably require;
(4) Appraisal. An independent M.A.I. appraisal of the Premises and
Improvements complying in all respects with the standards for real
estate appraisals established pursuant to the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989;
(5) Insurance Policies. The policies of insurance required by the
Mortgage, together with evidence of the payment of the premiums
therefor;
(6) Hazardous Materials Report/Certification. A detailed report
and certification, in Administrative Agent's standard form, by a
properly qualified engineer, which shall include, inter alia, a
certification that such engineer has obtained and examined the list of
prior owners, tenants and other users required below, and has made an
on-site physical examination of the Premises, and a visual observation
of the surrounding areas, and has found no evidence of past or present
Hazardous Materials activities or the presence of Hazardous Materials;
(7) Title Policy. A paid title insurance policy (or policies), in
the amount of the Mortgage, in ALTA 10-17-92 or other form approved by
Lenders' Counsel, issued by the Title Insurer, which shall insure the
Mortgage to be a valid lien on Borrower's interests in the Premises
free and clear of all defects and encumbrances except those previously
received and approved by Lender's Counsel, and shall contain:
(i) full coverage against mechanics' liens (filed and
inchoate),
(ii) a reference to the survey but no survey exceptions except
those theretofore approved by Lenders' Counsel,
(iii) such affirmative insurance and endorsements as Lenders'
Counsel may require, and
(iv) if any such policy is dated earlier than the date of the
disbursement of the Loan, and endorsement to such policy, in a
form approved by Lender's Counsel, redating the policy and setting
forth no additional exceptions except those approved by Lenders'
Counsel,
and shall be accompanied by such reinsurance agreements between the
Title Insurer and title companies approved by Administrative Agent,
in ALTA 1994 facultative form, as Administrative Agent may require;
(8) Survey. A current as-built survey of the Premises certified
to Administrative Agent and the Title Insurer showing:
(i) the location of the perimeter of the Premises by courses
and distances,
(ii) all easements, rights-of-way, and utility lines referred
to in the title policy required by this Agreement or which
actually service or cross the Premises,
(iii) the lines of the streets abutting the Premises and the
width thereof, and any established building and setback lines,
(iv) encroachments and the extent thereof upon the Premises,
(v) the Improvements and the relationship thereof by distances
to the perimeter of the Premises, establishing building,
setback and street lines, and
(vi) if the Premises are described as being on a filed map, a
legend relating the survey to said map;
(9) Leases and Premises Documents. Certified copies of all leases
in respect of the Premises accompanied by, in the case of Major Leases
and any other leases specified by Administrative Agent, estoppel
certificates from the tenants thereunder; a certified copy of the
standard form of lease Borrower will use in connection with the leasing
of space in the Improvements; and certified copies of all Premises
Documents;
(10) Counsel Opinion. An opinion of Borrower's counsel
reasonably acceptable to Lender's Counsel;
(11) Organizational Documents. If Borrower, the mortgagor or
grantor under the Mortgage (if different from Borrower) or any
general partner of any of them is a corporation, current copies of the
following documents with respect to each (unless otherwise
indicated):
(i) a good-standing certificate from the jurisdiction of its
incorporation and, as to Borrower and the mortgagor under the
Mortgage only, from the State of New York,
(ii) a resolution, certified by the corporate secretary, of
the shareholders or directors of the corporation authorizing the
consummation of the transactions contemplated hereby and the
execution, delivery and performance of the Loan Documents to be
executed, delivered or performed by said corporation (including
any substitute or replacement Notes executed and delivered
pursuant to Section 3.05 or 8.07), and
(iii) a certificate of the corporate secretary as to the
incumbency of the officers executing any of the documents required
hereby,
and, if Borrower, the mortgagor under the Mortgage (if different from
Borrower) or any general partner of any of them is a partnership,
venture, limited liability company or trust:
(iv) the entity's organizational agreement and all amendments
and attachments thereto, certified by a general partner, venturer,
member or trustee to be true and complete,
(v) any certificates filed or required to be filed by the
entity in the jurisdiction of its formation and in the State of
New York in order for it to do business in those jurisdictions,
and
(vi) any consents by partners, ventures, members, trustees or
beneficiaries required for the consummation of the transactions
contemplated hereby;
(12) List of Prior Owners. A list, certified by the Title
Insurer, of the prior owners, tenants and other users, during the
period from January 1, 1940 to the date of such certification, of all
or any portion of the Premises or the improvements thereon;
(13) Evidence of Acquisition Costs. If all or a portion of
proceeds of the Loan will be used to reimburse Borrower for its costs
of acquisition of the Premises, a copy, certified to be true and
complete, of the purchase agreement and deed pursuant to which the
Premises and Improvements have been or will be acquired by Borrower;
(14) Permits and Approvals. Copies of the certificate(s) of
occupancy for the Improvements and/or any and all other authorizations
(including plot plan and subdivision approvals, zoning variances,
water, sewer, building and other permits) required by Governmental
Authorities or otherwise necessary for the use, occupancy and operation
of the Premises and/or Improvements for their intended purposes in
accordance with all applicable Laws;
(15) Management and Leasing Contracts. Certified copies of all
agreements providing for or relating to the management or leasing of
the Premises or Improvements; and certified copies of all contracts
with respect to the maintenance or operation of the Premises or
Improvements providing for payments to the service provider in excess
of $100,000 per year; together with, in the case of each of the
foregoing, such "will-serve" letters in respect thereof as
Administrative Agent may require;
(16) Chattel Searches. UCC searches against Borrower or other
owner of the Premises and advice from the Title Insurer to the effect
that searches of proper public records disclose no leases of
personality or financing statements filed or recorded against the
Premises, Borrower or other owner of any Mortgaged Property;
(17) Consultant's Report. A report from the Engineering
Consultant to the effects that (i) the Improvements are in
satisfactory condition and have been constructed in accordance with
the plans and specifications therefor and with all applicable
Premises Documents and have been approved by all applicable
Governmental Authorities, (ii) the Improvements comply with all
applicable zoning and other Laws and (iii) all roads and
utilities necessary for the full utilization of the Improvements for
their intended purposes have been completed and are available to and
servicing the Premises; and to such other effects as Administrative
Agent may reasonably request;
(18) Interest Rate Protection. Evidence that Borrower has
formulated an interest rate protection program satisfactory to
Administrative Agent;
(19) Deposit in Account. Borrower shall have deposited a minimum
of $2,000,000 in the Account; and
(20) Additional Documentation. Such other approvals, opinions or
documents as Administrative Agent may reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Administrative Agent and Lenders
that:
5.01. Due Formation, Power and Authority. If it, the mortgagor under
the Mortgage (if different from Borrower) or any general partner of any of
them is a corporation, partnership, venture, limited liability company or
trust, each such entity is duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its formation, is qualified to
do business (if required) and is in good standing in the State of New York,
and has full power and authority to consummate the transactions contemplated
hereby and to execute, deliver and perform this Agreement and any Loan Document
to which it is a party.
5.02. Legally Enforceable Agreements. Each Loan Document is a legal,
valid and binding obligation, enforceable in accordance with its terms, except
to the extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar Laws affecting creditors' rights generally.
5.03. Financial Statements. Financial Statements have been hereto fore
delivered to Lenders which are true, correct and current in all respects and
which fairly present the financial condition of Borrower as of the respective
dates thereof; no material adverse change has occurred in the financial
condition reflected therein since the respective dates thereof and no
borrowings (other than the Loan) which might hive rise to a lien or claim
against the Mortgaged Property or proceeds of the Loan have been made by
Borrower or others since the dates thereof.
5.04. Compliance With Laws; Payment of Taxes. Borrower is in compliance
with, and the transactions contemplated hereby and the other Loan Documents do
not and will not violate any provision of, or require any filing,
registration, consent or approval under, any Law presently in effect having
applicability to Borrower; Borrower has filed all tax returns (federal, state
and local) required to be filed and has paid all taxes, assessments and
governmental charges and levies due and payable (including those in respect of
the Premises), including interest and penalties.
5.05. Litigation. There are no actions, suits or proceedings pending or,
to Borrower's knowledge, threatened against or affecting it, the Premises, the
validity or enforceability of the Mortgage or the priority of the lien thereof
at law, in equity or before or by any Governmental Authorities except actions,
suits or proceedings which have been disclosed to Administrative Agent and
Lenders in writing (including the action entitled DeLeo v. NY Real Estate
Services I, Inc., Index No. 97-600185, New York State Supreme Court, New York
County) and which are fully covered by insurance or would, if adversely
determined, not substantially impair the ability of Borrower to pay when due
any amounts which may become payable under the Notes or to otherwise pay and
perform its obligations in connection with the Loan; to Borrower's knowledge,
it is not in default with respect to any order, writ, injunction, decree or
demand of any court or Governmental Authorities.
5.06. No Conflicts or Defaults. The consummation of the transactions
contemplated hereby and the performance hereof and of the other Loan Documents
have not resulted and will not result in any breach of, or constitute a default
under, any mortgage, deed of trust, lease, bank loan or credit agreement,
corporate charter, by-laws, partnership agreement or other instrument to which
Borrower is a party or by which it may be bound or affected.
5.07. Solvency. Borrower is, and upon consummation of the transactions
contemplated by this Agreement, the other Loan Documents and any other related
documents, will be, solvent.
5.08. Governmental Regulation. Borrower is not subject to regulation
under the Investment Company Act of 1940 or any Law limiting its ability to
incur indebtedness for money borrowed as contemplated hereby.
5.09. Insurance. Borrower has in force, and has paid the premiums in
respect of, all of the insurance required by the Mortgage.
5.10. ERISA. Neither Borrower nor any other Person, including any
fiduciary, has engaged in any prohibited transaction (as defined in Section
4975 of the Code or Section 406 of ERISA) which could subject Borrower or any
Person whom it has an obligation to indemnify to any tax or penalty imposed
under Section 4975 of the Code or Section 502 of ERISA; neither Borrower nor
any ERISA Affiliate maintains, contributes to or has any liability with respect
to a Multiemployer Plan or any other plan subject to Title IV of ERISA; each
Employee Benefit Plan is administered in accordance with its terms and in
compliance with all applicable Laws, including any reporting requirements; each
Pension Plan intending to qualify under Section 401 (a) or 401 (k) of the Code
does so qualify; there is no lien outstanding or security interest given in
connection with a Pension Plan; neither Borrower nor any ERISA Affiliate has
any liability with respect to an accumulated funding deficiency (whether or not
waived) under Section 412 of the Code or Section 302 of ERISA; Borrower has no
liability for retiree medical or death benefits (contingent or otherwise) other
than as required by Section 4980B of the Code; and no part of the funds to be
used by Borrower in satisfaction of its obligations under this Agreement and
the other Loan Documents constitute "plan assets" of any "employee benefit
plan" within the meaning of ERISA or of any "plan" within the meaning of
Section 4975(e)(1) of the Code, as interpreted by the Internal Revenue Service
and the United States Department of Labor in rules, regulations, releases or
bulletins or as interpreted under applicable case law.
5.11. Other Documents. The Major Leases and Premises Documents are in
full force and effect; Borrower has received no notice that it is in default
beyond applicable notice and cure periods under any of the landlord's
obligations under any lease which has not been cured; and, to Borrower's
knowledge, no tenant is in default beyond applicable notice and cure periods
under any of its material obligations under any lease (other than payment of
rent not more than one (1) month in arrears).
5.12. No Default. There exists no Default or Event of Default.
5.13. Separate Tax and Zoning Lot. The premises constitute a distinct
parcel for purposes of zoning and of taxes, assessments and impositions (public
or private) and are not otherwise considered as part of a larger single lot
for purposes of zoning or of taxes, assessments or impositions (public or
private).
5.14. The Improvements. Borrower has not received notice of any
violation of Law which has not been cured; and, subject to tenants' compliance
with the terms of their leases, the use and occupancy of the Improvements
comply with all applicable Laws.
ARTICLE VI
COVENANTS OF BORROWER
6.01. Compliance with Laws; Payment of Taxes. Other than to the extent
Borrower is engaged in a Good Faith Contest, comply with all Laws applicable to
it or the Mortgaged Property, or any part thereof, such compliance to include,
without limitation, paying before the same become delinquent all taxes,
assessments and governmental charges imposed on it or the Mortgaged Property.
6.02. Leases and Premises Documents. Deliver to Administrative Agent
certified copies of all leases in respect of the Premises and all Premises
Documents and all amendments to any thereof (in any case, whether executed
before or after the date hereof) together with, if requested by Administrative
Agent and obtainable by Borrower with reasonable effort, current financial
statements of the tenants thereunder or parties thereto, as the case may be,
and of the guarantor(s), if any, of such tenants or parties; keep all Premises
Documents in full force and effect; and, except as may be permitted by the
Mortgage, not terminate or surrender any lease of the Premises. Borrower
shall not enter into any (x) Major Lease without the prior written approval of
Administrative Agent (such approval not to be unreasonably withheld, delayed
or conditioned) or (y) other lease in respect of the Premises without the
prior written approval of Administrative Agent, if such Lease is on
below-market terms (taking into account the type and quality of the tenant).
In any case where Administrative Agent's approval of a lease under this Section
is required, the following procedure shall be followed. Borrower shall submit
to Administrative Agent a term sheet summarizing the principal terms of the
lease, accompanied by a request for approval thereof and also accompanied by,
to the extent that Borrower was able to obtain them after having used
reasonable efforts to do so, the respective current financial statements of the
lessee under such proposed lease and the guarantor(s), if any, of such
lessee's obligations thereunder. Administrative Agent shall notify Borrower
within ten (10) Business Days after its receipt of the term sheet and
accompanying materials of its approval or disapproval of the term sheet. In
the event notice of approval or disapproval is not given by the end of such
period, such term sheet shall be deemed approved, provided the written request
for approval from Borrower contains the legend set forth in the last sentence
of this Section. Borrower shall also submit to Administrative Agent a request
for approval of the lease itself, accompanied by (1) a copy of the proposed
lease, executed by the tenant, (2) any guaranty(ies) of said lease, and
(3) if the lease is based on Borrower's standard form, a copy of the lease
marked to show changes form the approved standard lease form. Administrative
Agent shall notify Borrower within ten (10) Business Days after its receipt
of the lease and accompanying materials of its approval or disapproval of the
lease. Administrative Agent may not object to any lease provision that is
consistent with terms of an approved (or deemed approved) term sheet.
Administrative Agent's failure to give notification of approval or disapproval
to Borrower within such ten (10) Business Day period shall be deemed to
constitute Administrative Agent's approval of the lease, provided the written
request for approval from Borrower contains the legend set forth in the last
sentence of this Section. In no event shall a lease be deemed approved if the
term sheet with respect thereto was disapproved and, notwithstanding anything
to the contrary contained in this Section, no lease or term sheet shall be
deemed approved during the existence of an Event of Default. Each request for
approval of a lease or term sheet pursuant to this Section shall make specific
reference to the provisions of this Section and shall expressly state, in all
capital letters on the first page thereof: "YOU ARE HEREBY REMINDED THAT YOUR
FAILURE TO PROVIDE NOTIFICATION OF APPROVAL OR DISAPPROVAL NOT LATER THAN TEN
(10) BUSINESS DAYS AFTER YOUR RECEIPT OF THIS REQUEST, SO LONG AS ACCOMPANIED
BY THE MATERIALS REQUIRED BY SECTION 6.02 OF THE TERM LOAN AGREEMENT, SHALL
BE DEEMED TO CONSTITUTE YOUR APPROVAL THEREOF."
6.03. Intentionally Omitted.
6.04. Covenants, Restrictions and Easements. Comply with all
restrictions, covenants and easements affecting the Premises or the
Improvements and cause the satisfaction of all conditions hereof.
6.05. Payment of Costs. Pay all costs and expenses required for the
satisfaction of the conditions hereof, including, without limitation,
(i) all document and stamp taxes, recording and filing expenses and
fees and commissions lawfully due to brokers in connection with the
transactions contemplated hereby,
(ii) any taxes, insurance premiums, liens, security interests or
other claims or charges against the Premises or Improvements, and
(iii) all costs of completion of the work to be performed by
Borrower in space to be occupied in the Improvements (including public
space) to permit the lawful occupancy thereof for the purposes
contemplated by actual lessees of such space as set forth in the
individual leases or subleases thereof or in detailed work letters or
other agreements with respect thereto, or, in cases where there are no
such leases, subleases, work letters or other documents as aforesaid,
as set forth in Borrower's standard work letter or the standard form of
lease, if any, required by paragraph (9) of Section 4.01 (d), or, in
cases where none of the foregoing exists, to the level of building
standard in accordance with industry practices, as conclusively
determined by the Engineering Consultant, provided such determination
is made on a reasonable basis.
6.06. Brokers. Indemnify Administrative Agent and Lenders against claims
of brokers (other than brokers engaged solely by Administrative Agent or
Lenders) arising by reason of the execution hereof or the consummation of the
transactions contemplated hereby.
6.07. Intentionally Omitted.
6.08. Management and Leasing of Premises. Cause a Person affiliated with
Vornado Realty, L.P. to serve as property manager and leasing agent for the
Premises and keep in full force and effect and not modify the management and/or
leasing agreement(s) approved pursuant to paragraph (15) of Section 4.01
(d), without Administrative Agent's prior written consent, not to be
unreasonably withheld, delayed or conditioned.
6.09. Maintenance, Management, Service and Leasing Contracts. Deliver to
Administrative Agent, as and when executed, certified copies of all (i)
management and leasing contracts entered into with respect to the Premises,
each of which shall be entered into with a party, and on terms and conditions,
reasonably acceptable to Administrative Agent and (ii) all maintenance and
service contracts with respect to the Premises providing for payments to the
service provider in excess of $100,000 per year, each of which shall be on
commercially reasonable terms; and contemporaneously with entering into each
such contract described in clause (i) or (ii) above, at Administrative Agent's
option, use reasonable efforts to cause the service provider under each such
contract to deliver to Administrative Agent, a "will-serve" letter, on
Adminstrative Agent's standard form, pursuant to which such service provider
shall undertake, inter alia, to continue performance on Lenders' behalf in the
event of a Default without additional cost (other than sums owed pursuant to
such contract for services thereafter rendered to or for Administrative Agent
or Lenders at its or their request).
6.10. Administration Fee. Pay to Administrative Agent, for its own
account, an administration fee, payable in advance in quarterly installments of
$6,250, on the date hereof (prorated for a partial calendar quarter) and on
the first day of each January, April, July and October hereafter until the Loan
is repaid in full (it being understood that such quarterly administration fee
shall be non-refundable once paid).
6.11. Reporting Requirements. Furnish to Administrative Agent (it being
understood that Administrative Agent shall provide to each Lender):
(1) Annual Financial Statements. As soon as available and in any
event within one hundred twenty (120) days after the end of the fiscal
year of Borrower, Financial Statements of Borrower, as of the end of and
for such fiscal year, certified by the principal financial or accounting
officer of Borrower, in reasonable detail, stating in comparative form
the respective figures for the preceding fiscal year;
(2) Monthly Financial Statements. As soon as available and in any
event within twenty (20) days after the end of each month, Financial
Statements of Borrower, as of the end of and for such month, certified by
the principal financial or accounting officer of Borrower, in reasonable
detail and stating in comparative form the respective figures for the
corresponding date and period in the preceding fiscal year;
(3) Certificate of No Default. Within twenty (20) days after the
end of each calendar quarter, a certificate of the principal financial or
accounting officer of Borrower, stating that such officer knows of no
Default or Event of Default which has occurred and is continuing, or, if
any such Default or Event of Default has occurred and is continuing,
specifying the nature and period of existence thereof and what action
Borrower has taken or proposes to take with respect thereto;
(4) Notice of Litigation. Promptly after the commencement and
knowledge thereof, notice of all actions, suits and proceedings before
any court or arbitrator or any Governmental Authorities, affecting
Borrower or all or any part of the Mortgaged Property;
(5) Intentionally Omitted.
(6) Leasing Reports and Property Information. Quarterly, (i) a
current certified (by Borrower) leasing status report with respect to
the Premises and a certified (by Borrower) rent roll containing the
names of all lessees of the Premises, the terms of their respective
leases, the spaces occupied and the rentals payable thereunder,
together with copies, certified (by Borrower) to be true and complete,
of such leases as may be requested by Administrative Agent and (ii) a
tenant sales report summary for the retail tenants in the Improvements;
(7) Quarterly Net Operating Income Statement and Coverage Ratio
Computation. Within twenty-five (25) days after the end of each
calendar quarter, a statement of Net Operating Income for such quarter
and a computation of the Coverage Ratio for such quarter, accompanied
by such supporting documentation as Administrative Agent may reasonably
request;
(8) Monthly Net Cash Flow Statement. On or before the 20th day of
each month, a statement of Net Cash Flow for the immediately preceding
month, accompanied by such supporting documentation as Administrative
Agent may reasonably request; and
(9) General Information. Promptly, such other information
respecting the condition or operations, financial or otherwise, of
Borrower or the Premises as Administrative Agent or any Lender may from
time to time reasonably request.
6.12. Interest Rate Hedging. Execute and deliver to Administrative
Agent, in the event that Borrower enters into any interest rate hedging
agreement with respect to the Loan, an assignment, as security for the
Loan, in form reasonably satisfactory to Administrative Agent, of Borrower's
rights thereunder to Administrative Agent, for the benefit of Lenders. It
is understood that any profit (or loss) in connection with the early
termination of any such hedging agreement shall belong to (or be the
responsibility of) Borrower.
ARTICLE VII
ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS
7.01. Appointment, Powers and Immunities of Administrative Agent. Each
Lender hereby irrevocably appoints and authorizes Administrative Agent to act
as its agent hereunder and under any other Loan Document with such powers as
are specifically delegated to Administrative Agent by the terms of this
Agreement and any other Loan Document, together with such other powers as are
reasonably incidental thereto. Administrative Agent shall perform its
obligations under this Agreement and the other Loan Documents in good faith
according to the same standard of care as that customarily exercised by
Administrative Agent in administering its own real estate loans. Administrative
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement and any other Loan Document or required by Law, and shall not
by reason of this Agreement be a fiduciary or trustee for any Lender except to
the extent that Administrative Agent acts as an agent with respect to the
receipt or payment of funds. Administrative Agent shall not be responsible to
Lenders for any recitals, statements, representations or warranties made by
Borrower or any officer, partner or official of Borrower or any other Person
contained in this Agreement or any other Loan Document, or in any certificate
or other document or instrument referred to or provided for in, or received by
any of them under, this Agreement or any other Loan Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Loan Document or any other document or
instrument referred to or provided for herein or therein, for the perfection or
priority of any lien securing the obligations hereunder or thereunder or for
any failure by Borrower to perform any of its obligations hereunder or
thereunder. Administrative Agent may employ agents and attorneys-in-fact and
shall not be responsible, except as to money or securities received by it or
its authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither Administrative
Agent nor any of its directors, officers, employees or agents shall be liable
or responsible for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith, except for its or their own gross negligence or willful misconduct.
7.02. Reliance By Administrative Agent. Administrative Agent shall be
entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by Administrative Agent.
Administrative Agent may deem and treat each Lender as the holder of its Note
an interest in the Loan for all purposed hereof and shall not be required to
deal with any Person who has acquired a Participation in the Loan from a
Lender. As to any matters not expressly provided for by this Agreement or any
other Loan Document, Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, in accordance with instructions signed
by the Majority Lenders, and such instructions of the Majority Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of
Lenders and any other holder of all or any portion of the Loan or Participation
therein.
7.03. Defaults. Administrative Agent shall not be deemed to have
knowledge of the occurrence of a Default or of an Event of Default unless
Administrative Agent has actual knowledge thereof or has received notice from a
Lender or Borrower specifying such Default or Event of Default and stating that
such notice is a "Notice of Default." In the event that Administrative Agent
has such actual knowledge or receives such a notice of the occurrence of a
Default or Event of Default, Administrative Agent shall give prompt notice
thereof to Lenders. Administrative Agent shall promptly send to each Lender a
copy of any notice of a Default or Event of Default that Administrative Agent
sends to Borrower. Administrative Agent, following consultation with Lenders,
shall (subject to Section 7.07) take such action with respect to such
Default or Event of Default which is continuing as shall be directed by the
Majority Lenders; provided that, unless and until Administrative Agent shall
have received such directions, Administrative Agent may take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem to be in the best interest of Lenders. In no event
shall Administrative Agent be required to take any such action which it
determines to by contrary to Law.
7.04. Rights of Administrative Agent as Lender. With respect to its Note
and interest in the Loan, Administrative Agent in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as Administrative Agent
and the terms "Lender" and "Lenders" shall include Administrative Agent in
its capacity as a Lender. Administrative Agent and its affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to
(on a secured or unsecured basis), and generally engage in any kind of
banking, trust or other business with Borrower (and any affiliates of
Borrower) as if it were not acting as Administrative Agent.
7.05. Sharing of Costs by Lenders; Indemnification of Administrative
Agent. Each Lender agrees to pay its ratable share, based on the respective
outstanding principal balances under its Note and the other Notes, of any
expenses incurred (and not paid or reimbursed by Borrower after demand for
payment is made by Administrative Agent) by or on behalf of Lenders in
connection with any Default or Event of Default, including, without limitation,
costs of enforcement of the Loan Documents and any advances to pay taxes or
insurance premiums or otherwise to preserve the lien of the Mortgage or to
preserve or protect the Mortgaged Property. In the event a Lender fails to pay
its share of expenses as aforesaid, and all or a portion of such unpaid amount
is paid by Administrative Agent and/or one or more of the other Lenders, then
the defaulting Lender shall reimburse Administrative Agent and/or the other
Lender(s) for the portion of such unpaid amount paid by it or them, as the case
may be, together with interest thereon at the Prime Based Rate from the date of
payment by Administrative Agent and/or the other Lender(s). In addition, each
Lender agrees to reimburse and indemnify Administrative Agent (to the extent it
is not paid by on or behalf of Borrower, after demand for payment is made by
Administrative Agent, under Section 8.13 or under the applicable provisions of
any other Loan Document, but without limiting the obligation of Borrower under
said Section 8.13 or such provisions), for such Lender's ratable share, based
upon the respective outstanding principal balances under its Note and the other
Notes, of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in any way relating to or arising out of this Agreement,
any other Loan Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which Borrower is obligated to pay under
Section 8.13) or under the applicable provisions of any other Loan Document or
the enforcement of any of the terms hereof or thereof or of any such other
documents or instruments; provided that no Lender shall be liable for (i) any
of the foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified or (ii) any loss of principal or
interest with respect to Administrative Agent's Note or interest in the Loan.
7.06. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender agrees that it has independently and without reliance on Administrative
Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own analysis of the collateral for the Loan
and of the credit of Borrower, and its own decision to enter into this
Agreement, and that it will, independently and without reliance upon
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any other Loan Document. Administrative Agent shall not be required to keep
itself informed as to the performance or observance by Borrower of this
Agreement or any other Loan Document or any other document referred to or
provided for herein or therein or to inspect the properties (including, without
limitation, the Premises) or books of Borrower. Except for notices, reports
and other documents and information expressly required to be furnished to
Lenders by Administrative Agent hereunder, Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of Borrower
(or any affiliate of Borrower) which may come into the possession of
Administrative Agent or any of its affiliates. Administrative Agent shall not
be required to file this Agreement, any other Loan Document or any document or
instrument referred to herein or therein, for record or give notice of this
Agreement, any other Loan Document or any document or instrument referred to
herein or therein, to anyone.
7.07. Failure of Administrative Agent to Act. Except for action expressly
required of Administrative Agent hereunder, Administrative Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it
shall have received further assurances (which may include cash collateral) of
the indemnification obligations of Lenders under Section 7.05 in respect of
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.
7.08. Resignation or Removal of Administrative Agent. Administrative
Agent may resign on at least sixty (60) days' written notice to Lenders and
Borrower or upon the occurrence of an Event of Default. Administrative Agent
may be removed at any time with cause by the Super-Majority Lenders, provided
that Borrower and the other Lenders shall be promptly notified thereof. Upon
such resignation or removal of Administrative Agent, the Super-Majority Lenders
shall have the right to appoint a successor Administrative Agent, which
successor Administrative Agent shall (provided there exists no Event of
Default) be subject to Borrower's approval, such approval not to be
unreasonably withheld or delayed. If no successor Administrative Agent shall
have been so appointed by the Super-Majority Lenders, and shall have accepted
such appointment, within twenty (20) days after the resignation or the
Super-Majority Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative Agent, which shall be one of Lenders, within ten (10) days. The
Super-Majority Lenders or the retiring Administrative Agent, as the case may
be, shall upon the appointment of a successor Administrative Agent promptly so
notify Borrower and the other Lenders. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the
provisions of this Article VII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as Administrative Agent.
7.09. Amendments Concerning Agency Function. Notwithstanding anything to
the contrary contained in this Agreement, Administrative Agent shall not be
bound by any waiver, amendment, supplement or modification of this Agreement or
any other Loan Document which affects its duties, rights, and/or function
hereunder or thereunder unless it shall have given its prior written consent
thereto.
7.10. Liability of Administrative Agent. Administrative Agent shall not
have any liabilities or responsibilities to Borrower on account of the failure
of any Lender to perform its obligations hereunder or to any Lender on account
of the failure of Borrower to perform its obligations hereunder or under any
other Loan Document.
7.11. Transfer of Agency Function. Without the consent of Borrower or
any Lender, Administrative Agent may at any time or from time to time transfer
its functions as Administrative Agent hereunder to any of its offices wherever
located in the United States, provided that Administrative Agent shall promptly
notify Borrower and Lenders thereof.
7.12. Non-Receipt of Funds by Administrative Agent. Unless
Administrative Agent shall have received notice from a Lender or Borrower
(either one as appropriate being the "Payor") prior to the date on which such
Lender is to make payment hereunder to Administrative Agent of Loan proceeds or
Borrower is to make payment to Administrative Agent, as the case may be (either
such payment being a "Required Payment"), which notice shall be effective
upon receipt, that the Payor will not make the Required Payment in full to
Administrative Agent, Administrative Agent may assume that the Required Payment
has been made in full to Administrative Agent on such date, and Administrative
Agent in its sole discretion may, but shall not be obligated to, in reliance
upon such assumption, make the amount thereof available to the intended
recipient on such date. If and to the extent the Payor shall not have in fact
so made the Required Payment in full to Administrative Agent, the recipient of
such payment shall repay to Administrative Agent forthwith on demand such
amount made available to it together with interest thereon, for each day from
the date such amount was so made available by Administrative Agent until the
date Administrative Agent recovers such amount, at the Federal Funds Rate
7.13. Withholding Taxes. Each Lender represents that it is entitled to
receive any payments to be made to it hereunder without the withholding of any
tax and will furnish to Administrative Agent such forms, certifications,
statements and other documents as Borrower or Administrative Agent may
reasonably request from time to time to evidence such Lender's exemption from
the withholding of any tax imposed by any jurisdiction or to enable
Administrative Agent to comply with any applicable Laws relating thereto.
Without limiting the effect of the foregoing, if any Lender is not created or
organized under the Laws of the United States or any state thereof, such Lender
will furnish to Administrative Agent Form 4224 or Form 1001 of the Internal
Revenue Service, or such other forms, certifications, statements or documents,
duly executed and completed by such Lender, as evidence of such Lender's
exemption from the withholding of United States tax with respect thereto.
Administrative Agent shall not be obligated to make any payments hereunder to
such Lender in respect of the Loan until such Lender shall have furnished to
Administrative Agent the requested form, certification, statement or document.
On Borrower's request, Administrative Agent shall deliver to Borrower copies of
the documents delivered to Administrative Agent to evidence Lenders' exemption
from withholding.
7.14. Sharing of Payments among Lenders. If a Lender shall obtain
payment of any principal of its Note or of interest thereon through the
exercise of any right of setoff, banker's lien, counterclaim, or by any other
means (including direct payment), and such payment results in such Lender
receiving a greater payment than it would have been entitled to had such
payment been paid directly to Administrative Agent for disbursement to Lenders,
then such Lender shall promptly purchase for cash from the other Lenders
Participations in the Loan in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all Lenders shall
share ratably the benefit of such payment. To such end Lenders shall make
appropriate adjustments among themselves (by the resale of Participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.
Borrower agrees that any Lender so purchasing a Participation in the Loan may
exercise all rights of setoff, banker's lien, counterclaim or similar rights
with respect to such Participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness of Borrower.
7.15. Possession of Documents. Each Lender shall maintain possession of
its own Note. Administrative Agent shall hold all other Loan Documents and
related documents in its possession and maintain separate records and accounts
with respect to the Loan, reflecting the interests of Lenders in the Loan, and
shall permit Lenders and their representatives access at all reasonable times
to inspect such Loan Documents, related documents, records and accounts.
ARTICLE VIII
GENERAL CONDITIONS AND PROVISIONS
8.01. Intentionally Omitted.
8.02. No Third-Party Beneficiaries. This Agreement is solely for the
benefit of Lenders, Administrative Agent and Borrower. All conditions of the
obligations of Lenders hereunder are imposed solely and exclusively for the
benefit of Lenders and may be freely waived or modified in whole or in part by
Lenders at any time if in their sole discretion they deem it advisable to do
so, and no Person other than Borrower (provided, however, that all conditions
have been satisfied) shall have standing to require Lenders to disburse the
Loan or to be a beneficiary of this Agreement.
8.03. Documentation, etc. Satisfactory. All documentation and
proceedings deemed by Administrative Agent or Lenders' Counsel to be necessary
or required in connection herewith and the documents relating hereto shall be
subject to the prior approval of, and satisfactory to, both of them as to form
and substance. In addition, the Persons responsible for the execution and
delivery of, and signatories to, all of such documentation, shall be acceptable
to, and subject to the approval of, Administrative Agent and Lenders' Counsel.
Administrative Agent or Lenders' Counsel shall receive copies certified if
requested by either of them, of all documents which they may require in
connection with the transactions contemplated hereby.
8.04. Administrative Agent's Determination Conclusive. Administrative
Agent shall, at all times, be free to independently establish to its
satisfaction and in its absolute discretion the existence or nonexistence of
any fact or facts the existence or nonexistence of which is a condition hereof.
8.05. Notices. Except as expressly provided otherwise, all notices,
demands, consents, approvals and statements required or permitted hereunder
shall be in writing and shall be deemed to have been sufficiently given or
served for all purposes when presented personally, three (3) Business Days
after mailing by registered or certified mail, postage prepaid, or one (1)
Business Day after delivery to a nationally recognized overnight courier
service providing evidence of the date of delivery, addressed to a party at its
address on the signature page hereof or of the applicable Assignment and
Assumption Agreement, or at such other address of which a party shall have
notified the party given such notice in writing in accordance with the
foregoing requirements.
8.06. Amendments and Waivers. No amendment or material waiver of any
provision of this Agreement or any other Loan Document, nor consent to any
material departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the party against whom such
amendment, waiver or consent is sought to be enforced (it being understood,
however, that the signatures of the Super-Majority Lenders and, solely for
purposes of its acknowledgment thereof, Administrative Agent, shall be
sufficient to bind Lenders to any such amendment, waiver or consent), and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all Lenders, do any of
the following; (i) reduce the principal of, or interest on, the Notes or any
fees due hereunder or any other amount due hereunder or under any Loan
Document; (ii) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees due hereunder or under any Loan Document;
(iii) change the definition of Majority Lenders or Super-Majority Lenders; (iv)
release any material portion of the Mortgaged Property or other collateral for
the Loan other than in accordance with the Loan Documents; (v) amend this
Section or any other provision requiring the consent of all Lenders; or (vi)
release, in whole or in part, any obligor. Without limiting the foregoing,
acceptance by Administrative Agent or Lenders of any sum required to be paid
pursuant hereto or any other Loan Document, after its due date, or in an amount
less than the sum then due, shall not constitute a waiver by Administrative
Agent or Lenders of their right to require prompt payment when due of all other
such sums or to declare a default or to exercise such other rights provided
herein or in the other Loan Documents for such late or reduced payment.
8.07. Assignment Participation. Any Lender may at any time grant to one
or more banks or other institution (each a "Participant") participating
interests in its Pro Rata Share of the loan (the "Participations"). In the
event of any such grant by a Lender of a Participation to a Participant, such
Lender shall remain responsible for the performance of its obligations
hereunder, and Borrower and Administrative Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations hereunder. Any agreement pursuant to which any Lender may grant a
Participation shall provide that such Lender shall retain the sole right and
responsibility to enforce the obligations of Borrower hereunder and under any
other Loan Document, including, without limitation the right to approve any
amendment, modification or waiver of any provision of this Agreement or any
other Loan Document; provided that such participation agreement may provide
that such Lender will not agree to any modification, amendment or waiver of
this Agreement described in clauses (i) through (vi) of Section 8.06
without the consent of the Participant.
Each Lender agrees to provide Borrower with notice of all Participation's
sold by such Lender. Borrower agrees to provide all assistance reasonably
requested by a Lender to enable such Lender to sell Participation's as
aforesaid, or make assignments of its interest in the Loan as hereinafter
provided in this Section; provided, however, that Borrower shall not be
required to incur any material cost in connection therewith.
A Lender may at any time assign (1) to any bank or other institution with
the acknowledgment of Administrative Agent and (provided there exists no Event
of Default) the consent of Borrower, which consent shall not be unreasonably
withheld or delayed (such assignee, a "Consented Assignee"), or (2) to one or
more banks or other institutions which are subsidiaries of a Lender or of the
parent of a Lender (it being understood that Borrower's consent (which shall in
no event to be unreasonably withheld or delayed and shall in no event be
required during the existence of an Event of Default) shall be required for an
assignment to a subsidiary or parent of a Lender only if such assignment would
result in the payment of Additional Costs or other sums pursuant to Section
3.01 to such Lender's subsidiary or parent in excess of what would be payable
to such Lender) (each Consented Assignee pursuant to clause (1) or parent or
subsidiary bank or institution pursuant to clause (2), an "Assignee") all or a
proportionate part of all of its rights and obligations under this Agreement
and its Note, and such Assignee shall assume rights and obligations, pursuant
to an Assignment and Assumption Agreement executed by such Assignee and the
assigning Lender, provided that, after giving effect to such assignment, in
each case, the Assignee's portion of the Loan and, in the case of a partial
assignment of a Lender's interest, the assigning Lender's portion of the loan
will each be equal to or greater than $5,000,000. Upon (i) execution and
delivery of such instrument, (ii) payment by such Assignee to the assigning
Lender of an amount equal to the purchase price agreed between such Lender and
such Assignee and (iii) payment by such Assignee to Administrative Agent of a
fee, of Administrative Agent's own account, in the amount of $2,500, on account
of Administrative Agent's fees and expenses in connection with such assignment,
such Assignee shall be a party to this Agreement and shall have all the rights
and obligations of a Lender as set forth in such Assignment and Assumption
Agreement, and the assigning Lender shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this paragraph, substitute notes, in the form of EXHIBIT B, shall be issued to
the assigning Lender and Assignee by Borrower, in exchange for the return of
the original Note. All such substitute notes shall constitute "Notes" and the
obligations evidenced by such substitute notes shall constitute obligations
secured by the Mortgage. In connection with Borrower's execution of substitute
notes as aforesaid, Borrower shall deliver to Administrative Agent evidence,
satisfactory to Administrative Agent, of all requisite partnership/corporate
action to authorize Borrower's execution and delivery of the substitute notes
and any related documents. If the Assignee is not incorporated under the Laws
of the United States of America or a state thereof, it shall, prior to the
first date on which interest or fees are payable hereunder for its account,
deliver to Borrower and Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in
accordance with Section 7.13.
Any Lender may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Lender from its obligations hereunder.
Borrower recognizes that in connection with a Lender's selling of
Participation's or making of assignments, any or all documentation, financial
statements, appraisals and other data, or copies thereof, relevant to Borrower
or the Loan may be exhibited to and retained by any such Participant or
Assignee or prospective Participant or Assignee. A Lender's delivery of any
financial statements and appraisals to any such Participant or Assignee or
prospective Participant or Assignee shall be done on a confidential basis.
8.08. Setoff. Borrower agrees that, in addition to (and without
limitation of) any right of setoff, bankers' lien or counterclaim any lender
may otherwise have, each Lender shall be entitled, at its option, to offset
balances (general or special, time or demand, provision or final) held by it
for the account of Borrower at any of such Lender's offices (other than
balances representing tenant security deposits or escrows held by Borrower)
against any amount payable by Borrower to such Lender hereunder or under any
other Loan Document which is not paid when due (regardless of whether such
balances are then due to Borrower), in which case it shall promptly notify
Borrower and Administrative Agent thereof; provided that such Lender's failure
to give such notice shall not affect the validity thereof. Payments by
Borrower hereunder or under the other Loan Documents shall be made without
setoff or counterclaim.
8.09. Successors and Assigns. Except as herein provided, this Agreement
shall be binding upon and inure to the benefit of Borrower, Administrative
Agent and Lenders and their respective heirs, personal representatives,
successors and assigns. Notwithstanding the foregoing, Borrower may not
assign, transfer or set over to another, in whole or in part, all or any part
of its benefits, rights, duties and obligations hereunder, including, but not
limited to, performance of and compliance with conditions hereof and the right
to receive the proceeds of the Loan.
8.10. Severability. The provisions hereof are intended to be severable.
Any provisions hereof, or the application thereof to any person or
circumstance, which, for any reason, in whole or in part, 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 (or the remaining portions of such
provision) or the application thereof to any other Person or circumstance, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision (or portion thereof) or the
application thereof to any Person or circumstance in any other jurisdiction.
8.11. Non-Waiver; Remedies Cumulative. No failure or delay on
Administrative Agent's or any Lender's part in exercising any right, remedy,
power or privilege (hereinafter in this Section, each a "Remedy") hereunder or
under any of the other Loan Documents shall operate as a waiver of any such
Remedy or shall be deemed to constitute Administrative Agent's or any Lender's
acquiescence in any default by Borrower under any of said documents. A waiver
by Administrative Agent or any Lender of any Remedy hereunder or under any of
the other Loan Documents on any one occasion shall not be construed as a bar to
any other or future exercise thereof or of any other Remedy. The Remedies
provided in said documents are cumulative, may be exercised singly or
concurrently and are not exclusive of any Remedies provided therein or by law.
8.12. Certain Waivers. Borrower hereby irrevocably and unconditionally
waives (i) promptness and diligence; (ii) notice of any actions taken by
Administrative Agent or any Lender hereunder or under any other Loan Document
or any other agreement or instrument relating thereto except to the extent
otherwise provided herein, (iii) all notices (other than notices specifically
provided for herein or in the other Loan Documents), demands and protests, and
all other formalities of every kind in connection with the enforcement of
Borrower's obligations hereunder and under the other Loan Documents, the
omission of or delay in which, but for the provisions of this Section, might
constitute grounds for relieving Borrower of any of its obligations hereunder
or under the other Loan Documents, (iv) any requirement that Administrative
Agent or any Lender protect, secure, perfect or insure any lien on any
collateral for the Loan or exhaust any right or take any action against
Borrower or any other Person or against any collateral for the Loan, (v) any
right or claim of right to cause a marshaling of Borrower's assets and (vi) all
rights of subrogation or contribution, whether arising by contract or operation
of law or otherwise by reason of payment by Borrower pursuant hereto or to the
other Loan Documents. BORROWER FURTHER HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR ON
BEHALF OF ADMINISTRATIVE AGENT OR LENDERS WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR OTHERWISE IN RESPECT OF THE LOAN, ANY AND EVERY RIGHT BORROWER MAY
HAVE TO (W) INJUNCTIVE RELIEF, (X) A TRIAL BY JURY, (Y) INTERPOSE ANY
COUNTERCLAIM THEREIN, OTHER THAN A COMPULSORY COUNTERCLAIM, AND (Z) HAVE THE
SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING.
NOTHING CONTAINED IN THE IMMEDIATELY PRECEDING SENTENCE SHALL PREVENT OR
PROHIBIT BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST
ADMINISTRATIVE AGENT OR LENDERS WITH RESPECT TO ANY ASSERTED CLAIM, INCLUDING
AN ACTION OF INJUNCTIVE RELIEF.
8.13. Expenses; Indemnification. Borrower covenants and agrees to pay
all reasonable out-of pocket costs, expenses and charges (including, without
limitation, all fees and charges of engineers, appraisers, the Engineering
Consultant and Lenders' Counsel) incurred by Administrative Agent or any Lender
in connection with (i) the preparation for and consummation of the transactions
contemplated hereby or for the performance hereof and of the other Loan
Documents and (ii) the enforcement hereof or of any or all of the other Loan
Documents; provided, however, that Borrower shall not be responsible for (1)
the fees and expenses of legal counsel for Lenders other than UBS (except fees
and expenses, following the occurrence of an Event of Default, in connection
with the enforcement hereof and the other Loan Documents) and (2) costs,
expenses and charges incurred by Administrative Agent and Lenders in connection
with the administration or syndication of the Loan (other than the
administration fee required by Section 6.10 and the reasonable fees and
expenses of Lenders' Counsel in connection with the administration of the
Loan). In connection with clauses (i) and (1) above, Lenders agree, to the
extent practicable, to appoint a single counsel and local counsel, selected by
Administrative Agent, to act on behalf of all Lenders in connection with the
enforcement of the Loan Documents. If Borrower fails to pay promptly any
costs, charges or expense required to be paid by it as aforesaid, and
Administrative Agent or any Lender pays such costs, charges or expenses,
Borrower shall reimburse Administrative Agent or such Lender, as appropriate,
on demand for the amounts so paid, together with interest thereon at the
Default Rate. Borrower further agrees to indemnify Administrative Agent and
each Lender and their respective directors, of officers, employees and agents
from, and hold each of them harmless against, (x) any and all losses arising
out of or by reason of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other proceedings
(including any threatened investigation or litigation or other proceedings)
relating to any actual or proposed use by Borrower of the proceeds of the Loan,
including, without limitation, the fees and disbursements of counsel incurred
in connection with any such investigation, litigation or other proceedings and
(y) any and all claims, actions, suits, proceedings, costs, expenses, losses,
damages and liabilities of any kind, including in tort, penalties and interest,
arising out or by reason of any matter relating, directly or indirectly, to the
Mortgage or the ownership, condition, development, construction, sale, rental
or financing of the Premises or Improvements or any part thereof (but
excluding any such losses, liabilities, claims, damages or expenses incurred
solely by reason of the gross negligence or willful misconduct of the party to
be indemnified). The obligations of Borrower under this Section shall survive
the repayment of all amounts due under or in connection with any of the Loan
Documents and the termination of the Loan.
8.14. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
8.15. Lenders' Right to Terminate. In the event Borrower shall not have
satisfied the conditions precedent to its entitlement to the disbursement of
the Loan proceeds hereunder within thirty (30) days of the date hereof, the
Majority Lenders shall have the absolute right, at their option, to terminate
Lenders' obligations to Borrower under this Agreement and the loan commitment
represented hereby. In the event of such termination, the Majority Lenders
shall direct Administrative Agent to send notice thereof to the other Lenders
and Borrower.
8.16. Governing Low; Jurisdiction. This Agreement and the rights and
obligations of the parties hereunder shall in all respects be governed by, and
construed and enforced in accordance with, the Laws of the State of New York
(without giving effect to New York's principles of conflicts of law). Borrower,
Administrative Agent and each Lender hereby irrevocable submit to
Administrative Agent and each Lender hereby irrevocably submit to the
non-exclusive jurisdiction of any New York State or Federal court sitting in
The City of New York (or any county in New York State where any portion of the
Mortgaged Property is located) over any suit, action or proceeding arising out
of or relating to this Agreement, and Borrower hereby agrees and consents that,
in addition to any methods of service of process provided for under applicable
law, all service of process in any such suit, action or proceeding in any New
York State or Federal court sitting in The City of New York (or such other
county in New York State) may be made by certified or registered mail, return
receipt requested, directed to Borrower at the address indicated on the cover
page hereof, and service so made shall be complete upon Borrower's receipt or
refusal of delivery thereof.
8.17. Integration. The Loan Documents constitute the entire agreement
among Administrative Agent, Borrower and Lenders relating to the transactions
contemplated thereby (except with respect to agreements among Lenders or with
Administrative Agent relating solely to compensation, consideration and the
syndication of the Loan) and supersede any prior oral or written statements or
agreements with respect to such transactions.
8.18. Tenant Improvement Cash Collateral Account. (a) Borrower, Lenders
and Administrative Agent acknowledge that, as a condition precedent to the
consummation of the Loan transaction, Borrower shall deposit the sum of
$2,000,000 into interest- bearing cash collateral account no. 203906 with
Administrative Agent (the "Account"). Sums in the Account, including sums
subsequently deposited pursuant to paragraph (c) below or Section 2.14, shall
be held and disbursed by Administrative Agent as hereinafter provided. Borrower
hereby asssigns the account and all sums therein, including interest thereon
and any sums deposited pursuant to Paragraph (c) below or Section 2.14, to
Administrative Agent, for the benefit of Lenders, as security for the payment
and performance of Borrower's obligations under the Loan, and acknowledges
that, until the Loan is repaid in full, Borrower shall have no right to such
sums except to the extent specifically provided for herein. Borrower further
acknowledges that Administrative Agent shall retain possession of all documents
evidencing the Account to perfect its security interest therein. Provided there
exists no Default or Event of Default (subject to the last sentence of this
paragraph (a)), Administrative Agent shall from time to time disburse sums from
the Account for (1) costs incurred by Borrower for leasing commissions, tenant
improvements, tenant allowances and tenant inducements, such as reimbursement
for tenant design costs and tenant moving costs (all of the foregoing,
collectively, "Leasing Commissions/Inducements") and (2) Borrower's legal fees
and expenses ("Legal Costs"), all in respect of leases, approved or deemed
approved by Administrative Agent (if such approval is required by this
Agreement), of the Premises upon receipt of (i) a written request in form
reasonably satisfactory to Administrative Agent certifying the purpose for
which the disbursement is to be made and (ii) such bills, receipts, invoices,
consents, licenses, permits and other back-up data as Administrative Agent may
reasonably request. Notwithstanding the foregoing, but subject to the
immediately following sentence, upon (x) the occurrence of an Event of Default
and (y) the commencement of an action to foreclose the Mortgage or the
appointment of a receiver of the Premises, Administrative Agent shall, at the
option of the Majority Lenders, apply any and all sums in the Account, if any,
to the immediate reduction of outstanding principal and/or accrued and unpaid
interest and/or other sums under the Notes, in such order and amounts as the
Majority Lenders shall elect. In the event that Borrower is obligated to pay
Leasing Commissions/Inducements or Legal Costs in connection with a leased
entered into prior to the occurrence of a Default or Event of Default and such
lease has been approved or deemed approved by Administrative Agent (if such
approval is required by this Agreement) or in connection with a lease entered
into during the existence of an Event of Default but which has specifically
been approved in writing by Administrative Agent, then, irrespective of the
existence or nonexistence of a Default or Event of Default, Administrative
Agent shall be required to disburse funds from the Account in respect of such
Leasing Commissions/Inducements or Legal Costs and shall not apply in reduction
of Borrower's obligations under the Loan as provided above that portion of the
funds in the Account required to pay such costs.
(b) In furtherance of the foregoing assignment, Administrative Agent is hereby
appointed Borrower's attorney-in-fact for the purpose of withdrawing any and
all sums from the Account. Borrower agrees to execute such further documents
(including UCC-1 financing statements) and do such further acts as
Administrative Agent may reasonably request to confirm or perfect the
assignment and security interests provided for in this Section.
(c) Borrower hereby covenants to make a payment no later than the 25th day of
each month, commencing with the first full calendar month after the date
hereof, for deposit in the Account, in an amount equal to Net Cash Flow for the
immediately preceding month, until the date (the "Deposit Threshold Date") that
the balance on deposit in the Account (including accrued interest and after
deducting any disbursements made pursuant to paragraph (a) above) equals the
Deposit Threshold (as defined below). If, at any time following the Deposit
Threshold Date, the amount on deposit in the Account exceeds the Deposit
Threshold plus the amount of any sums then on deposit in the Account which were
deposited in the Account pursuant to Section 2.14, Borrower shall be entitled
to the release of such excess to it from the Account (and amounts deposited in
the Account pursuant to Section 2.14 may be released from the Account in
accordance with standards of, and applied in accordance with, Section 2.14).
If, as of the 20th day of any month after the Deposit Threshold Date, the
balance in the Account is less than the Deposit Threshold, Borrower shall
again, and covenants to, make a payment, no later than the 25th day of such
month, for deposit into the Account, in an amount equal to Net Cash Flow for
the immediately preceding month. As used herein, the term "Deposit Threshold"
means the greater of (x) the Initial Deposit Threshold (as defined below) less
the aggregate amount actually expended by Borrower for Leasing
Commissions/Inducements and Legal Costs in connection with re-leasing the area
of the Improvements, constituting approximately 142,000 square feet in the
aggregate, currently covered by leases to Digital Equipment Corporation and
Smith Barney Inc. (the "Digital/Smith Barney Space") or (y) $2,000,000. The
"Initial Deposit Threshold" shall be $6,000,000, subject to reduction as
provided below. The Initial Deposit Threshold is the amount presently
estimated to be required for the re-leasing of the Digital/Smith Barney Space
(exclusive of Legal Costs). In the event that portions of the Digital/ Smith
Barney Space are released with the expenditure of less than a full allocable
share of the $6,000,000 estimated, then, subject to Administrative Agent's
reasonable approval, the Initial Deposit Threshold shall be reduced
correspondingly. If, as a result of any such reduction in the Initial Deposit
Threshold, the Deposit Threshold shall be reduced and the amount on deposit in
the Account shall exceed the Deposit Threshold plus the amount of any sums then
on deposit in the Account which were deposited in the Account pursuant to
Section 2.14, Borrower shall be entitled to the release to it of such excess
from the Account. To the extent that, as a result of disbursement of Legal
Costs from the Account, Administrative Agent reasonably determines that the
costs for which the Account was established will exceed the amount in the
Account, the Deposit Threshold shall be increased by the amount of such excess.
8.19. Non-Recourse to Borrower's Partners. Anything herein or in any
other Loan Document or any certificate given in connection therewith or
pursuant thereto (the Loan Documents and each such certificate, collectively,
the "Relevant Documents") to the contrary notwithstanding, Lenders agree
that, for repayment of the Loan and the payment and performance of all of
Borrower's obligations under the Loan Documents or any claim based thereon or
otherwise in respect thereof, they will look solely to the Mortgaged Property
and the other assets of Borrower, and to such other collateral, if any, as may
now or hereafter be given to secure the Loan, and no property or assets of the
constituent partners of Borrower shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Lenders, or for
any payment required to be made under the Relevant Documents or for the
performance of any of the covenants or warranties contained in any of the
Relevant Documents or for any claim based thereon or in respect thereof;
provided, however that the foregoing provisions of this Section shall not (i)
constitute a waiver of any obligation evidenced or secured by the Note,
Mortgage or other Loan Documents, (ii) limit the right of Administrative
Agent and/or Lenders to name Borrower (and/or its general partners to the
extent the same are indispensable parties) as a party defendant in any action
or suit of judicial foreclosure and sale under the Mortgage so long as no
deficiency judgment shall be sought or enforced against the constituent
partners of Borrower, (iii) affect or limit in any way the validity or
enforceability of any separate guaranty or indemnity agreement hereafter given
of the benefit of Lenders in connection with the Loan or (iv) constitute a
waiver by Lenders of any rights to reimbursement for actual, or out-of-pocket,
losses, costs or expenses, or any other remedy at law or in equity, against
Borrower and its general partners by reason of (1) fraudulent acts or
omissions of Borrower, (2) willful misapplication of any insurance proceeds,
condemnation awards or tenant security deposits, arising, in any such case,
with respect to the Mortgaged Property or (3) failure to deliver, promptly
upon demand, tenant and other project files and original executed leases and
other agreements relating to occupancy, construction or operation.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as
of the day and year first above written.
TWO PARK COMPANY, a New York
general partnership
By: M/H Two Park Associates,
General Partner
By: Mendik Real Estate Limited Partnership,
a New York limited partnership, its
Managing General Partner
By: Mendik RELP Corporation
(f/k/a/ Mendik Corporation),
a New York Corporation,
General Partner
By: /s/ David Greenbaum
Name: David Greenbaum
Title: President
By: NY Real Estate Services 1 Inc.
(f/k/a Hutton Real Estate Services
XV, Inc.), a Delaware corporation,
General Partner
By: /s/ Kenneth L. Zakin
Name: Kenneth L. Zakin
Title: President
By: B&B Park Avenue, L.P., General Partner
By: Vornado B&B L.L.C., a general partner
By: /s/ Joseph Macnow
Name: Joseph Macnow
Title: Authorized Signatory
Address for notices:
330 Madison Avenue
New York, New York 10017
UNION BANK OF SWITZERLAND
(New York Branch)
(as Lender)
By: /s/ Joseph Bassil
Name: Joseph Bassil
Title: Vice President
By: /s/ Kenneth A. McIntyre, Jr.
Name: Kenneth A. McIntyre, Jr.
Title: Vice President
Address for notices and Applicable
Lending Office:
Union Bank of Switzerland
(New York Branch)
299 Park Avenue
New York, NY 10171-0026
Attention: Ms. Xiomara Martez
BAYERISCHE LANDESBANK CAYMAN
ISLANDS BRANCH
By: /s/ Wilfried Freudenberger
Name: Wilfried Freudenderger
Title: Executive Vice President
and General Manager
By: /s/ John Wain
Name: John Wain
Title: Vice President
Address for notices and Applicable
Lending Office:
560 Lexington Avenue
New York, NY 10022
Attention: Mr. John Wain
L-BANK LANDESKREDITBANK
BADEN-WURTTEMBERG
By: /s/ Elmar Foell
Name: Elmar Foell
Title: Loan Manager
By: /s/ Joachim Anker
Name: Joachim Anker
Title: Executive Vice President -
Corporate & Public Finance
Address for notices and Applicable
Lending Office:
SchloBplatz 10/12
D-76113
Karlsruhe
Germany
Attention: Mr. Elmar Foll
SUDWESTDEUTSCHE LANDESBANK GIROZENTRALE
By: /s/ Klaus Knoth
Name: Klaus Knoth
Title: Sr. Vice President
Address for notices and Applicable
Lending Office:
Am Hauptbahnhof 2
70173
Stuttgart
Germany
Attention: Mr. Andreas Oberem
UNION BANK OF SWITZERLAND
(New York Branch)
(as Administrative Agent)
By: /s/ Joseph Bassil
Name: Joseph Bassil
Title: Vice President
By: /s/ Kenneth A. McIntyre, Jr.
Name: Kenneth A. McIntyre, Jr.
Title: Vice President
Address for notices:
Union Bank of Switzerland
(New York Branch)
299 Park Avenue
New York, NY 10171-0026
Attention: Ms. Xiomara Martez
EXHIBIT A
Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of ___________________,
199__, among [NAME OF ASSIGNING BANK] ("Assignor"), [NAME OF ASSIGNEE]
("Assignee"), [NAME OF BORROWER], a _____________________________
("Borrower") and [NAME OF ADMINISTRATIVE AGENT], as administrative agent for
Lenders, as defined below (in such capacity, together with its successors in
such capacity, "Administrative Agent").
Preliminary Statement
1. This Assignment and Assumption Agreement (this "Agreement") relates
to the Term Loan Agreement (as the same may be amended from time to time, the
"Loan Agreement") dated ___________________, 199__ among Borrower, the lender
(s) party thereto (each a "Lender" and, collectively, "Lenders") and
Administrative Agent. All capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Loan Agreement.
2. Subject to the terms and conditions set forth in the Loan Agreement,
Assignor has made an Individual Loan Commitment to Borrower in an aggregate
principal amount of $ _____________ ("Assignor's Loan Commitment").
3. The aggregate outstanding principal amount under Assignor's Loan
Commitment at the commencement of business on the date hereof is
$_____________.
4. Assignor desires to assign to Assignee all of the rights of Assignor
under the Loan Agreement in respect of a portion of Assignor's Loan Commitment
and the loan made pursuant thereto, such portion being in an amount equal to
$_______________ (the "Assigned Loan and Commitment"), of which
$_______________ is currently outstanding; and Assignee desires to accept
assignment of such rights and assume the corresponding obligations from
Assignor on such terms.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Assignment. Assignor hereby assigns and sells to Assignee all
of the rights of Assignor under the Loan Agreement in and to the Assigned Loan
and Commitment, and Assignee hereby accepts such assignment from Assignor and
assumes all of the obligations of Assignor under the Loan Agreement with
respect to the Assigned Loan and Commitment. Upon the execution and delivery
hereof by Assignor, Assignee, Borrower and Administrative Agent and the payment
of the amount specified in Section 2 hereof required to be paid on the date
hereof, (1) Assignee shall, as of the commencement of business on the date
hereof, succeed to the rights and obligations of a Lender under the Loan
Agreement with an Individual Loan Commitment in an amount equal to the Assigned
Loan and Commitment, and (2) the Individual Loan Commitment of Assignor
shall, as of the commencement of business on the date hereof, be reduced
correspondingly and Assignor released from its obligations under the Loan
Agreement to the extent such obligations have been assumed by Assignee.
Assignor represents and warrants to Assignee that Assignor owns the Assigned
Loan and Commitment free and clear of all liens and other encumbrances. Except
as provided in the immediately preceding sentence, the assignment provided for
herein shall be without representation or warranty by, or recourse to,
Assignor.
SECTION 2. Payments. As consideration for the assignment and sale
contemplated in Section 1 hereof, Assignee shall pay to Assignor on the date
hereof, in immediately available funds, and amount equal to the outstanding
principal amount under the Assigned Loan and Commitment recited in paragraph 4
of the Preliminary Statement above. Each of Assignor and Assignee hereby
agrees that if it receives an amount under the Loan Agreement which is for the
account of the other party hereto, it shall receive the same for the account of
such other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
SECTION 3. [Consent of Borrower and Acknowledgment by the Administrative
Agent;] Execution and Delivery of Note. [This Agreement is conditioned upon
the consent of Borrower and acknowledgment by Administrative Agent pursuant to
Section 8.07 of the Loan Agreement. The execution of this Agreement by
Borrower and Administrative Agent is evidence of this consent and
acknowledgment, respectively. Borrower has joined in this Agreement solely for
the purpose of acknowledging its agreement to the provisions of Section 1
hereof and this Section 3. [Only necessary if required by Section 8.07 of
the Loan Agreement] Pursuant to Section 8.07 of the Loan Agreement, Borrower
has agreed to execute and deliver Notes payable to the respective orders of
Assignee and Assignor to evidence the assignment and assumption provided for
herein. Assignee has designated as its Applicable Lending Office, and as its
address for notices, the office identified as such below.
SECTION 4. Non-Reliance on Assignor. Assignor makes no representation or
warranty in connection with, and shall have no responsibility with respect to,
the solvency, financial condition, or statements of Borrower or any other party
to any Loan Document, or the validity and enforceability of the obligation of
Borrower or any other party to a Loan Document in respect of the Loan Agreement
or any other Loan Document. Assignee acknowledges that it has, independently
and without reliance on Assignor, and based on such documents and information
as it has deemed appropriate, made its own analysis of the collateral for the
Loan, credit analysis of Borrower and decision to enter into this Agreement and
will continue to be responsible for making its own independent appraisal of the
collateral for the Loan and of the business, affairs and financial condition of
Borrower and the other parties to the Loan Documents.
SECTION 5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 6. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 7. Certain Representations and Agreements by Assignee. Reference
is made to Section 7.13 of the Loan Agreement. Assignee hereby represents that
it is entitled to receive any payments to be made to it under the Loan
Agreement or hereunder without the withholding of any tax and agrees to furnish
the evidence of such exemption as specified therein and otherwise to comply
with the provisions of said Section 7.13.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[NAME OF ASSIGNOR]
By: ___________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By: ____________________________________
Name:
Title:
Assignee's Applicable Lending
Office and Address for
Notices:
[Assignee]
[Address]
Attention: _______________________________
Telephone: (___) ____________
[NAME OF BORROWER]
By: _____________________________________
Name:
Title:
[NAME OF ADMINISTRATIVE AGENT]
By: _____________________________________
Name:
Title:
EXHIBIT B
Note
$______________ New York, New York
__________, 199__
For value received, [NAME OF BORROWER], A ______________ ("Maker")
hereby covenants and promises to pay to the order of [NAME OF LENDER] or its
successors or assigns (collectively, the "Bank"), at the principal office of
[NAME OF ADMINISTRATIVE AGENT] located at ________________________________
("Administrative Agent") for the account of the Applicable Lending Office at
the Bank, the principal sum of _______________________ Dollars ($__________).
in lawful money of the United States and in immediately available funds, in
accordance with the terms set forth in the Loan Agreement (as defined below).
Maker also covenants and promises to pay interest on the unpaid principal
balance hereof, for the period such balance is outstanding, in like money, at
said office for the account of said Applicable Lending Office, at the time and
at a rate per annum as provided in the Loan Agreement. The Loan Agreement and
Mortgage provide in certain cases for the accrual of interest at the Default
Rate.
This Note is one of the Notes referred to in the Term Loan Agreement dated
as of the date hereof (as the same may be amended or supplemented from time to
time, the "Loan Agreement") among Maker, as Borrower, the lenders named
therein (including the Bank), as Lenders, and Administrative Agent, as
Administrative Agent for Lenders. All of the terms, conditions and provisions
of the Loan Agreement are hereby incorporated by reference. All capitalized
terms used herein and not defined herein shall have the meanings given to them
in the Loan Agreement.
This Note is secured by the Mortgage which contains, among other things,
provisions for the acceleration of this Note upon the happening of certain
stated events. Reference to the Mortgage is hereby made for a description of
the "Mortgaged Property" encumbered thereby and the rights of Maker and
Lenders (including the Bank) with respect to such Mortgaged Property.
Maker agrees that it shall be bound by any agreement extending the time or
modifying the terms of payment set forth above and in the Loan Agreement, made
by or on behalf of Lenders and the owner or owners of the Mortgaged Property,
whether with or without notice to Maker, and Maker shall continue liable to pay
the amount due hereunder (but shall not be liable for any increased amount
unless it expressly so agrees in writing) in accordance with the terms set
forth herein and in the Loan Agreement, but with interest at a rate no greater
than the rate of interest provided therein, according to the terms of any such
agreement of extension or modification.
Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other
court proceeding (whether at the trial or appellate level), or should this Note
be placed in the hands of attorneys for collection upon default, Maker agrees
to pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect this Note, including
reasonable attorneys' fees and expenses.
All parties to this Note, whether principal, surety, guarantor or endorser,
hereby waive presentment for payment, demand, protest, notice of protest and
notice of dishonor.
This Note shall be governed by the laws of the State of New York, provided
that, as to the maximum lawful rate of interest which may be charged or
collected, if the laws applicable to the Bank permit it to charge or collect a
higher rate than the laws of the State of New York, then such law applicable to
the Bank shall apply to the Bank under this Note.
Anything herein to the contrary notwithstanding, the obligations of Maker
under this Note shall be subject to the limitation that payments of interest
shall not be required to the extent that receipt of any such payment by the
Bank would be contrary to provisions of law applicable to the Bank limiting the
maximum rate of interest that may be charged or collected by the Bank.
Recourse under this Note against Maker's constituent partners shall be
limited as set forth in Section 8.19 of the Loan Agreement.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the
date first above written.
[BORROWER]
By:___________________________________
Name:
Title:
This is to certify that this Note was executed in my presence on the date
hereof by the party(ies) whose signature(s) appear in the capacity(ies)
indicated.
__________________________________
Notary Public
My Commission expires:
__________________________________
Amount Balance
Date of Payment Outstanding Notation by
