Exhibit 10.5
LOAN AGREEMENT
by and among
THE ENTITIES SET FORTH ON EXHIBIT A,
collectively, as Borrower
and
GRAMERCY WAREHOUSE FUNDING I LLC
as Lender
$90,286,551 Floating Rate Mortgage Loan
Dated: May 9, 2006
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
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Page |
Certain Definitions |
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1 |
ARTICLE II
LOAN TERMS; REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BORROWER
Section 2.01 |
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The Loan |
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26 |
Section 2.02 |
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Representations, Warranties and Covenants of Borrower |
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26 |
Section 2.03 |
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Further Acts, etc. |
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36 |
Section 2.04 |
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Cross Default; Cross Collateralization |
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36 |
Section 2.05 |
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Representations and Warranties as to the Projects |
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38 |
Section 2.06 |
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Removal of Lien |
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43 |
Section 2.07 |
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Cost of Defending and Upholding this Agreement and the Lien of .the Mortgages |
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44 |
Section 2.08 |
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Use of the Projects |
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44 |
Section 2.09 |
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Financial Reports |
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44 |
Section 2.10 |
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Litigation |
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47 |
Section 2.11 |
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Updates of Representations |
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47 |
Section 2.12 |
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Condominium Provisions |
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47 |
ARTICLE III
INSURANCE AND CASUALTY RESTORATION
Section 3.01 |
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Insurance Coverage |
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51 |
Section 3.02 |
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Policy Terms |
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53 |
Section 3.03 |
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Assignment of Policies |
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55 |
Section 3.04 |
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Casualty Restoration |
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56 |
Section 3.05 |
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Compliance with Insurance Requirements |
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60 |
Section 3.06 |
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Event of Default During Restoration |
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61 |
Section 3.07 |
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Application of Proceeds to Debt Reduction |
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62 |
i
ARTICLE IV
IMPOSITIONS
Section 4.01 |
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Payment of Impositions, Utilities and Taxes, etc. |
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62 |
Section 4.02 |
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Deduction from Value |
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63 |
Section 4.03 |
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No Joint Assessment |
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63 |
Section 4.04 |
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Right to Contest |
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63 |
Section 4.05 |
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No Credits on Account of the Debt |
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64 |
Section 4.06 |
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Documentary Stamps |
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64 |
ARTICLE V
CENTRAL CASH MANAGEMENT
Section 5.01 |
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Cash Flow |
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64 |
Section 5.02 |
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Establishment of Accounts |
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65 |
Section 5.03 |
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Permitted Investments |
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66 |
Section 5.04 |
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Servicing Fees |
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66 |
Section 5.05 |
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Monthly Funding of Sub-Accounts and Escrow Accounts |
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66 |
Section 5.06 |
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Payment of Basic Carrying Costs |
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68 |
Section 5.07 |
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Reletting Reserve Escrow Account |
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68 |
Section 5.08 |
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Recurring Replacement Reserve Escrow Account |
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69 |
Section 5.09 |
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Liquidity Reserve Escrow Account |
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70 |
Section 5.10 |
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Rate Cap Agreement |
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71 |
Section 5.11 |
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[Reserved] |
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71 |
Section 5.12 |
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Performance of Engineering Work |
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72 |
Section 5.13 |
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Loss Proceeds |
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72 |
Section 5.14 |
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Accrued Lease Liability Escrow Account |
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73 |
Section 5.15 |
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Lease Termination Payment Escrow Account |
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74 |
Section 5.16 |
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REIT Limitations on Investment of Sums in Escrow Accounts |
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74 |
ARTICLE VI
CONDEMNATION
Section 6.01 |
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Condemnation |
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75 |
ARTICLE VII
LEASING AND MANAGEMENT
Section 7.01 |
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Leases |
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76 |
Section 7.02 |
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Management of Projects |
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78 |
ii
ARTICLE VIII
MAINTENANCE AND REPAIR
Section 8.01 |
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Maintenance and Repair of the Projects; Alterations; Replacement of Equipment |
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79 |
ARTICLE IX
TRANSFER OR ENCUMBRANCE OF THE PROJECTS
Section 9.01 |
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Other Encumbrances |
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81 |
Section 9.02 |
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No Transfer |
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81 |
Section 9.03 |
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Due on Sale |
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81 |
Section 9.04 |
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Transfer of Projects; Loan Assumption |
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82 |
ARTICLE X
CERTIFICATES
Section 10.01 |
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Estoppel Certificates |
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84 |
ARTICLE XI
NOTICES
Section 11.01 |
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Notices |
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85 |
ARTICLE XII
INDEMNIFICATION
Section 12.01 |
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Indemnification Covering Projects |
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86 |
ARTICLE XIII
DEFAULTS
Section 13.01 |
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Events of Default |
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87 |
Section 13.02 |
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Remedies |
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89 |
Section 13.03 |
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Payment of Debt After Default |
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90 |
Section 13.04 |
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Possession of the Projects |
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91 |
Section 13.05 |
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Interest After Default |
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91 |
Section 13.06 |
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Borrowers Actions After Default |
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91 |
Section 13.07 |
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Control by Lender After Default |
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91 |
Section 13.08 |
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Right to Cure Defaults |
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91 |
iii
Section 13.09 |
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Late Payment Charge |
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92 |
Section 13.10 |
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Recovery of Sums Required to Be Paid |
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92 |
Section 13.11 |
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Marshalling and Other Matters |
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92 |
Section 13.12 |
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Tax Reduction Proceedings |
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93 |
Section 13.13 |
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General Provisions Regarding Remedies |
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93 |
ARTICLE XIV
COMPLIANCE WITH REQUIREMENTS
Section 14.01 |
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Compliance with Legal Requirements |
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93 |
Section 14.02 |
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Compliance with Recorded Documents; No Future Grants |
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94 |
ARTICLE XV
PREPAYMENT
Section 15.01 |
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Prepayment |
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93 |
Section 15.02 |
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Release of Project |
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94 |
ARTICLE XVI
ENVIRONMENTAL COMPLIANCE
Section 16.01 |
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Covenants, Representations and Warranties |
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96 |
ARTICLE XVII
COOPERATION; SECONDARY MARKET TRANSACTION
Section 17.01 |
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Cooperation |
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100 |
Section 17.02 |
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Use of Information |
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101 |
Section 17.03 |
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Borrower Obligations Regarding Disclosure Documents |
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101 |
Section 17.04 |
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Borrower Indemnity Regarding Filings |
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102 |
Section 17.05 |
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Indemnification Procedure |
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103 |
Section 17.06 |
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Contribution |
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103 |
Section 17.07 |
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Rating Surveillance |
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103 |
Section 17.08 |
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Severance of Loan |
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104 |
ARTICLE XVIII
MISCELLANEOUS
Section 18.01 |
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Right of Entry |
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104 |
Section 18.02 |
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Cumulative Rights |
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104 |
Section 18.03 |
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Liability |
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104 |
iv
Section 18.04 |
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Exhibits Incorporated |
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105 |
Section 18.05 |
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Severable Provisions |
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105 |
Section 18.06 |
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Duplicate Originals |
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105 |
Section 18.07 |
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No Oral Change |
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105 |
Section 18.08 |
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Waiver of Counterclaim, Etc |
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105 |
Section 18.09 |
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Headings; Construction of Documents; etc |
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105 |
Section 18.10 |
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Sole Discretion of Lender |
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105 |
Section 18.11 |
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Waiver of Notice |
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106 |
Section 18.12 |
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Binding Effect |
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106 |
Section 18.13 |
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Applicable Law |
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106 |
Section 18.14 |
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Intentionally Deleted |
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107 |
Section 18.15 |
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Actions and Proceedings |
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107 |
Section 18.16 |
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Usury Laws |
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107 |
Section 18.17 |
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Remedies of Borrower |
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107 |
Section 18.18 |
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Offsets, Counterclaims and Defenses |
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107 |
Section 18.19 |
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No Merger |
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108 |
Section 18.20 |
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Restoration of Rights |
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108 |
Section 18.21 |
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Waiver of Statute of Limitations |
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108 |
Section 18.22 |
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Intentionally Deleted |
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108 |
Section 18.23 |
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Application of Default Rate Not a Waiver |
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108 |
Section 18.24 |
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Intentionally Deleted |
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108 |
Section 18.25 |
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No Joint Venture or Partnership |
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108 |
Section 18.26 |
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Time of the Essence |
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108 |
Section 18.27 |
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Borrowers Obligations Absolute |
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108 |
Section 18.28 |
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Publicity |
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109 |
Section 18.29 |
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Intentionally Deleted |
|
109 |
Section 18.30 |
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Intentionally Deleted |
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109 |
Section 18.31 |
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Establishment of Working Capital Account |
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109 |
Section 18.32 |
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Exculpation |
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109 |
v
EXHIBITS |
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EXHIBIT A |
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Description of Projects |
EXHIBIT B |
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Summary Of Reserves |
EXHIBIT B-1 |
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Square Footages of the Projects |
EXHIBIT C |
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Required Engineering Work |
EXHIBIT D |
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Initial Allocated Loan Amount |
EXHIBIT E |
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Environmental Reports |
EXHIBIT F |
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List of Permitted Fund Managers |
EXHIBIT G |
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Schedule of Liabilities (Section 2.02(g)(xiii)) |
EXHIBIT H |
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Schedule of Outstanding Work Obligations under Space Leases (Section 2.05(o)(iv)) |
EXHIBIT I |
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Schedule of Collective Bargaining Agreements (Section 2.02(u)) |
EXHIBIT J |
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Form of Cash Flow Statement (Section 2.09(c)) |
vi
LOAN AGREEMENT
This LOAN AGREEMENT (this Agreement) is made as of the 9th day of May, 2006, by and between the entities set forth on Exhibit A attached hereto and made a part hereof, each of which is a Delaware limited liability company and each of which has its chief executive office c/o Mack-Cali Realty Corp., 11 Commerce Drive, Cranford, New Jersey 07016, Attention: Mitchell Hersh (collectively, hereinafter referred to as Borrower), jointly and severally, and Gramercy Warehouse Funding I LLC, a Delaware limited liability company, having an address at 420 Lexington Avenue, New York, New York 10170, Attention: Robert Foley (hereinafter referred to as Lender).
W I T N E S S E T H:
WHEREAS, Borrower has requested from Lender, and Lender has agreed to make to Borrower upon the terms and conditions set forth herein, a loan (hereinafter referred to as the Loan) in the principal amount of NINETY MILLION TWO HUNDRED EIGHTY-SIX THOUSAND FIVE HUNDRED FIFTY-ONE and NO/100 DOLLARS ($90,286,551.00)] (hereinafter referred to as the Loan Amount), which Loan is evidenced by that certain Promissory Note, of even date herewith (together with any supplements, amendments, modifications or extensions thereof, hereinafter referred to as the Note) given by Borrower, as maker, to Lender, as payee and is secured by, among other things, the Mortgages (as hereinafter defined).
NOW THEREFORE, in consideration of the making of the Loan and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree as follows:
For all purposes of this Agreement, except as otherwise expressly provided or unless the context clearly indicates a contrary intent:
(i) the capitalized terms defined in this Section have the meanings assigned to them in this Section, and include the plural as well as the singular;
(ii) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; and
(iii) the words herein, hereof, and hereunder and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision.
401K Plan Assets shall mean only those specific assets that are required to be transferred, and are actually so transferred, by Borrower, in its capacity as an employer, to a separate trust account maintained for the benefit of its employees that are participating in a so-called 401K plan, by reason of the deferral of compensation otherwise payable to such employees participating in such plan.
75 Agreement shall mean that certain agreement between Lender and the JV Member relating to the payment to Lender of certain distributions of cash flow from the 75 Property.
75 Property shall mean the property owned by 75 Livingston SPE LLC and located at 75 Livingston Avenue, Roseland, New Jersey.
Acceptable Substitute Guarantor shall have the meaning ascribed thereto in the definition of Permitted Entity Transfers.
Accrued Lease Liability Escrow Account shall mean an Escrow Account established and maintained pursuant to Section 5.14 hereof.
Accrued Lease Liability Expenses shall mean any monetary obligations of Borrower payable with respect to Leases existing as of the date hereof.
ACH shall have the meaning set forth in Section 5.01 hereof.
Actual Net Cash Flow shall mean Net Operating Income from all of the Projects, computed on a trailing twelve (12)month basis, and including, for the purpose of such calculation, available interest reserves under the Loan for the succeeding twelve (12)month period. The Actual Net Cash Flow shall be calculated by Borrower and shall be subject to the review and approval of Lender in its reasonable discretion.
Adjusted Net Cash Flow shall mean Pro-Forma Net Operating Income projected over the twelve (12)month period subsequent to the date of calculation less Pro-Forma Capital Expenditures. The Adjusted Net Cash Flow shall be calculated by Borrower and shall be subject to the review and approval of Lender in its reasonable discretion.
Affiliate of any specified Person shall mean any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such specified Person.
Allocated Loan Amount shall mean the portion of the Loan Amount allocated, for purposes of a Release, to each Project, as set forth on Exhibit D hereto.
Annual Budget shall mean an annual budget submitted by Borrower to Lender in accordance with the terms of Section 2.09 hereof.
Appraisal shall mean the appraisal(s) of the Projects and all supplemental reports or updates thereto previously delivered to Lender in connection with the Loan, and any new or updated appraisal(s) prepared after the date hereof pursuant to the terms hereof, all of
2
which shall conform to the standards set forth in the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.
Appraiser shall mean the Person(s) who prepared the Appraisal (with respect to the Appraisals delivered to Lender in connection with the closing of the Loan) or such other independent, third party M.A.I. appraiser reasonably approved by Lender.
Approved Annual Budget shall mean each Annual Budget approved by Lender in accordance with terms hereof.
Approved Manager Standard shall mean the standard of business operations, practices and procedures customarily employed by entities (together with their Affiliates) having a senior executive with at least seven (7) years experience in the management of commercial office buildings which manage not less than five (5) properties having an aggregate leasable square footage of not less than ten (10) million leasable square feet.
Architect shall have the meaning set forth in Section 3.04(b)(i) hereof.
Assignment shall mean, collectively, the Assignments of Leases and Rents and Security Deposits of even date herewith relating to the Projects given by Borrower to Lender.
Assignment of Rate Cap shall mean that certain Collateral Assignment of Interest Rate Hedge Agreement, dated as of the date hereof, executed by Borrower in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
Bank shall mean the bank, trust company, savings and loan association or savings bank designated by Lender, in its sole and absolute discretion, in which the Central Account shall be located.
Bankruptcy Code shall mean 11 U.S.C. §101 et seq., as amended from time to time.
Basic Carrying Costs shall mean the sum of the following costs associated with the Projects: (a) Impositions and (b) insurance premiums which, for the purposes of this Agreement, shall be equal to the product of (i) $0.25 and (ii) the annual amount of the gross rentable square footage of each Project, as set forth on Exhibit B-1. Lender reserves the right to adjust the amount of the annual insurance premiums included in the Basic Carrying Costs if, in Lenders reasonable judgment, after prior notice to and discussion with Borrower, the amount being escrowed would be insufficient to purchase the insurance coverage on the Projects that is required under this Agreement.
Basic Carrying Costs Escrow Account shall mean the Escrow Account maintained pursuant to Section 5.06 hereof.
Basic Carrying Costs Monthly Installment shall mean Lenders estimate of one-twelfth (1/12th) of the annual amount for Basic Carrying Costs. Basic Carrying Costs Monthly Installment shall also include, if required by Lender, a sum of money which, together with such
3
monthly installments, will be sufficient to make the payment of each such Basic Carrying Cost at least thirty (30) days prior to the date initially due. Should such Basic Carrying Costs not be ascertainable at the time any monthly deposit is required to be made, the Basic Carrying Costs Monthly Installments shall be determined by Lender in its reasonable discretion on the basis of the aggregate Basic Carrying Costs for the prior Fiscal Year or month or the prior payment period for such cost. As soon as the Basic Carrying Costs are fixed for the then current Fiscal Year, month or period, the next ensuing Basic Carrying Costs Monthly Installment shall be adjusted to reflect any deficiency or surplus in prior monthly payments. If at any time during the term of the Loan Lender reasonably determines that there will be insufficient funds in the Basic Carrying Costs Escrow Account to make payments when they become due and payable, Lender shall have the right to adjust the Basic Carrying Costs Monthly Installment such that there will be sufficient funds to make such payments.
Basic Carrying Costs Sub-Account shall mean the Sub-Account of the Central Account established pursuant to Section 5.02 into which the Basic Carrying Costs Monthly Installment shall be deposited.
Borrower shall mean Borrower named herein and any successor to the obligations of Borrower.
Budget shall have the meaning set forth in Section 5.07 hereof.
Business Day shall mean any day other than (a) a Saturday or Sunday, or (b) a day on which banking and savings and loan institutions in the State of New York are authorized or obligated by law or executive order to be closed, or at any time during which the Loan is an asset of a Secondary Market Transaction, the cities, states and/or commonwealths used in the comparable definition of Business Day in the Secondary Market Transaction documents.
By-Laws shall have the meaning set forth in Section 2.12.
Capital Expenditures shall mean for any period, the amount expended for items capitalized under GAAP including expenditures for building improvements or major repairs, leasing commissions and tenant improvements.
Cash Expenses shall mean for any period, the Operating Expenses for the Projects as set forth in an Approved Annual Budget to the extent that such expenses are actually incurred or to be incurred by Borrower minus payments into the Basic Carrying Costs Sub-Account, the Debt Service Payment Sub-Account and the Recurring Replacement Reserve Sub-Account.
Central Account shall mean an Eligible Account, maintained at the Bank, in the name of Lender or its successors or assigns (as secured party) as may be designated by Lender.
Clearing Account shall mean, collectively, the Eligible Accounts, maintained at the Clearing Bank, in the name of Lender or its successors or assigns (as secured party) as may be designated by Lender.
4
Clearing Account Agreement shall mean collectively, those certain Clearing Account Agreements by and among Borrower, Lender and Clearing Bank dated as of the date hereof.
Clearing Bank shall mean Bank of America.
Closing Date shall mean the date of the Note.
Code shall mean the Internal Revenue Code of 1986, as amended and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto.
Condemnation Proceeds shall mean all of the proceeds in respect of any Taking or purchase in lieu thereof.
Condominium shall have the meaning set forth in Section 2.12.
Condominium Act shall have the meaning set forth in Section 2.12.
Contractual Obligation shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of the property owned by it is bound.
Control means, when used with respect to any specific Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person whether through ownership of voting securities, beneficial interests, by contract or otherwise. The definition is to be construed to apply equally to variations of the word Control including Controlled, Controlling or Controlled by.
Creditor shall have the meaning set forth in Section 2.04(b).
Credit Tenant shall mean a tenant under a Space Lease which has a long term unsecured senior debt rating of (a) BBB- or better as issued by Standard & Poors or (b) Baa3 or better as issued by Moodys.
Current Month shall mean each Interest Accrual Period.
Debt shall mean the outstanding principal amount set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums due to Lender in respect of the Loan under the Note, this Agreement, the Mortgages or any other Loan Document.
Debtor shall have the meaning set forth in Section 2.04(b).
Debt Service shall mean the amount of interest and principal payments due and payable in accordance with the Note during an applicable period.
5
Debt Service Coverage Ratio shall mean the quotient obtained by dividing (a) Actual Net Cash Flow for the specified period by (b) Pro-Forma Debt Service with respect to such period.
Debt Service Payment Sub-Account shall mean the Sub-Account of the Central Account established pursuant to Section 5.02 hereof into which the Required Debt Service Payment shall be deposited.
Declaration shall have the meaning set forth in Section 2.12.
Default shall mean any Event of Default or event which would constitute an Event of Default if all requirements in connection therewith for the giving of notice, the lapse of time, and the happening of any further condition, event or act, had been satisfied.
Default Rate shall mean the lesser of (a) the highest rate allowable at law and (b) three percent (3%) above the interest rate set forth in the Note.
Default Rate Interest shall mean, to the extent the Default Rate becomes applicable, interest in excess of the interest which would have accrued on (a) the principal amount of the Loan which is outstanding from time to time and (b) any accrued but unpaid interest, if the Default Rate was not applicable.
Development Laws shall mean all applicable subdivision, zoning, environmental protection, wetlands protection, or land use laws or ordinances, and any and all applicable rules and regulations of any Governmental Authority promulgated thereunder or related thereto.
Disclosure Document shall have the meaning set forth in Section 17.02 hereof.
Eligible Account shall mean a segregated account which is either (a) an account or accounts maintained with a federal or state chartered depository institution or trust company the long term unsecured debt obligations of which are rated by each of the Rating Agencies (or, if not rated by Fitch, Inc. (Fitch), otherwise acceptable to Fitch, as confirmed in writing that such account would not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to any certificates issued in connection with a Secondary Market Transaction) in its highest rating category at all times (or, in the case of the Basic Carrying Costs Escrow Account, the long term unsecured debt obligations of which are rated at least AA (or its equivalent)) by each of the Rating Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as confirmed in writing that such account would not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to any certificates issued in connection with a Secondary Market Transaction) or, if the funds in such account are to be held in such account for less than thirty (30) days, the short term obligations of which are rated by each of the Rating Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as confirmed in writing that such account would not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to any certificates issued in connection with a Secondary Market Transaction) in its highest rating category at all times or (b) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered
6
depository institution is subject to regulations substantially similar to 12 C.F.R. § 9.10(b), having in either case a combined capital and surplus of at least $100,000,000 and subject to supervision or examination by federal and state authority, or otherwise acceptable (as evidenced by a written confirmation from each Rating Agency that such account would not, in and of itself, cause a downgrade, qualification or withdrawal of the then current ratings assigned to any certificates issued in connection with a Secondary Market Transaction) to each Rating Agency, which may be an account maintained by Lender or its agents. Eligible Accounts shall bear interest (other than the Basic Carrying Costs Sub-Account and Basic Carrying Costs Escrow Account) for the benefit of Borrower and shall be taxable to Borrower and shall be added to and disbursed in the same manner and under the same conditions as the principal sum on which said interest accrued. The title of each Eligible Account shall indicate that the funds held therein are held in trust for the uses and purposes set forth herein.
Eligibility Requirements means, with respect to any Person, that such Person (i) has total assets (in name or under management) in excess of $600,000,000 and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholders equity of $250,000,000 and (ii) is regularly engaged in the business of making or owning commercial real estate loans (including mezzanine loans) or operating commercial properties.
Engineer shall have the meaning set forth in Section 3.04(b)(i) hereof.
Engineering Escrow Account shall mean an Escrow Account established and maintained pursuant to Section 5.12 hereof relating to payments for any Required Engineering Work.
Environmental Indemnity Agreement shall mean that certain Hazardous Substances Indemnity Agreement of even date herewith by and among Borrower and Guarantor in favor of Lender.
Environmental Report shall mean the environmental audit report(s) for the Projects and any supplements or updates thereto, previously delivered to Lender in connection with the Loan, which documents are set forth on Exhibit E attached hereto.
Environmental Statute shall mean any applicable local, state or federal law, rule or regulation pertaining to environmental regulation, contamination or clean up, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601 et seq. and 40 CFR §302.1 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §1251 et seq. and 40 CFR §116.1 et seq.), those relating to lead based paint, and the Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.), and the regulations promulgated pursuant to said laws, all as amended.
Equipment shall have the meaning set forth in each of the Mortgages.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and, as of the relevant date, any
7
subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
ERISA Affiliate shall mean any corporation or trade or business that is a member of any group of organizations (a) described in Section 414(b) or (c) of the Code of which Borrower or Guarantor is a member and (b) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which Borrower or Guarantor is a member.
Escrow Account shall mean each of the Liquidity Reserve Escrow Account, Engineering Escrow Account, Basic Carrying Costs Escrow Account, the Recurring Replacement Reserve Escrow Account, the Reletting Reserve Escrow Account, the Accrued Lease Liability Escrow Account, and, if established, the Lease Termination Payment Escrow Account, each of which shall be an Eligible Account or book entry sub-account of an Eligible Account.
Event of Default shall have the meaning set forth in Section 13.01 hereof.
Exchange Act shall have the meaning set forth in Section 17.02 hereof.
Exit Fee shall mean, with respect to any payment, repayment or prepayment of all or any portion of the Principal Amount, including, but not limited to, the payment of any Release Amount, an amount equal to one-quarter of one percent (0.25%) of the Principal Amount being paid, repaid or prepaid.
Extraordinary Expense shall mean an extraordinary operating expense or capital expense not set forth in the Approved Annual Budget or allotted for in the Recurring Replacement Reserve Sub-Account.
First Interest Accrual Period shall have the meaning set forth in the Note.
Fiscal Year shall mean the twelve (12) month period commencing on January 1 and ending on December 31 during each year of the term of this Agreement, or such other fiscal year of Borrower as Borrower may select from time to time with the prior written consent of Lender, which shall not be unreasonably withheld, conditioned or delayed.
Fixtures shall have the meaning set forth in the Mortgages.
GAAP shall mean generally accepted accounting principles in effect from time to time in the United States of America, consistently applied.
Governmental Authority shall mean, with respect to any Person, any U.S. federal or State government or other political subdivision thereof and any entity, including any regulatory or administrative authority or court, exercising executive, legislative, judicial, regulatory or administrative or quasi administrative functions of or pertaining to government, and any arbitration board or tribunal, in each case having jurisdiction over such applicable
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Person or such Persons property and any stock exchange on which shares of capital stock of such Person are listed or admitted for trading.
Guarantor shall mean, collectively, Mack-Cali Realty L.P. and SL Green Operating Partnership, L.P. and any other Person now or hereafter guaranteeing, in whole or in part, the obligations of Borrower under the Loan Documents.
Guaranty shall mean the guaranties executed by Guarantor with respect to the Loan, and, if applicable, the guaranties executed and delivered by any successor guarantor, which guaranties shall be in the form of the Guaranty executed and delivered on the date hereof, mutatis mutandis.
Hazardous Material shall mean all hazardous, toxic or harmful substances, wastes, materials, pollutants or contaminants (including, without limitation, asbestos, lead based paint, polychlorinated biphenyls, petroleum products, flammable explosives, radioactive materials, infectious substances or raw materials which include hazardous constituents) or any other substances or materials which are included under or regulated by Environmental Statutes.
Impositions shall mean all taxes (including, without limitation, all real estate, ad valorem, sales (including those imposed on lease rentals), use, single business, gross receipts, value added, intangible, transaction, privilege or license or similar taxes), assessments (including, without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not commenced or completed within the term of this Agreement), ground rents, water, sewer or other rents and charges, excises, levies, fees (including, without limitation, license, permit, inspection, authorization and similar fees), and all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Projects and/or any Rent (including all interest and penalties thereon), which at any time prior to, during or in respect of the term hereof may be assessed or imposed on or in respect of or be a lien upon (a) Borrower (including, without limitation, all franchise, single business or other taxes imposed on Borrower for the privilege of doing business in the jurisdictions in which the Projects or any other collateral delivered or pledged to Lender in connection with the Loan are located) or Lender, (b) the Projects or any part thereof or any Rents therefrom or any estate, right, title or interest therein, or (c) any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in connection with the Projects, or any part thereof, or the leasing or use of the Projects, or any part thereof, or the acquisition or financing of the acquisition of the Projects, or any part thereof, by Borrower.
Improvements shall have the meaning set forth in the Mortgages.
Indemnified Parties shall have the meaning set forth in Section 12.01 hereof.
Independent shall mean, when used with respect to any Person, a Person who (a) is in fact independent, (b) does not have any direct financial interest or any material indirect financial interest in Borrower, or in any Affiliate of Borrower or any constituent partner, shareholder, member or beneficiary of Borrower, (c) is not connected with Borrower or any Affiliate of Borrower or any constituent partner, shareholder, member or beneficiary of Borrower
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as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions and (d) is not a member of the immediate family of a Person defined in (b) or (c) above. Whenever it is herein provided that any Independent Persons opinion or certificate shall be provided, such opinion or certificate shall state that the Person executing the same has read this definition and is Independent within the meaning hereof.
Initial Engineering Deposit shall equal the amount set forth on Exhibit B attached hereto and made a part hereof.
Initial Reletting Reserve Deposit shall equal the amount set forth on Exhibit B attached hereto and made a part hereof.
Insolvency Opinion shall have the meaning set forth in Section 2.02(g)(xix) hereof.
Institutional Lender shall mean any of the following Persons: (a) any bank, savings and loan association, savings institution, trust company or national banking association, acting for its own account or in a fiduciary capacity, (b) any charitable foundation, (c) any insurance company or pension and/or annuity company, (d) any fraternal benefit society, (e) any pension, retirement or profit sharing trust or fund within the meaning of Title I of ERISA or for which any bank, trust company, national banking association or investment adviser registered under the Investment Advisers Act of 1940, as amended, is acting as trustee or agent, (f) any investment company or business development company, as defined in the Investment Company Act of 1940, as amended, (g) any small business investment company licensed under the Small Business Investment Act of 1958, as amended, (h) any broker or dealer registered under the Securities Exchange Act of 1934, or any investment adviser registered under the Investment Adviser Act of 1940, as amended, (i) any government, any public employees pension or retirement system, or any other government agency supervising the investment of public funds, or (j) any other entity all of the equity owners of which are Institutional Lenders; provided that each of said Persons shall have net assets in excess of $1,000,000,000 and a net worth in excess of $500,000,000, be in the business of making commercial mortgage loans, secured by properties of like type, size and value as the Projects and have a long term credit rating which is not less than BBB- (or its equivalent) from the Rating Agency.
Insurance Proceeds shall mean all of the proceeds received under the insurance policies required to be maintained by Borrower pursuant to Article III hereof.
Insurance Requirements shall mean all terms of any insurance policy required by this Agreement, all requirements of the issuer of any such policy, and all regulations and then current standards applicable to or affecting each Project or any use or condition thereof, which may, at any time, be recommended by the Board of Fire Underwriters, if any, having jurisdiction over any Project, or such other Person exercising similar functions.
Interest Accrual Period shall have the meaning set forth in the Note.
Interest Rate shall have the meaning set forth in the Note.
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Intra-Obligor Loan and Intra-Obligor Loans shall have the meanings set forth in Section 2.04(b).
Intra-Obligor Loan Amount shall have the meaning set forth in Section 2.04(b).
Issuer shall have the meaning set forth in Section 17.03 hereof.
Issuer Group shall have the meaning set forth in Section 17.03 hereof.
JV Member shall mean Mack-Green-Gale LLC, a Delaware limited liability company. Lender acknowledges that the name of JV Member may be changed, provided that written notice of such change is given to Lender within ten (10) Business Days after such change is effected.
Late Charge shall have the meaning set forth in Section 13.09 hereof.
Lease Termination Payment Escrow Account shall mean the Escrow Account, if any, maintained (to the extent established) pursuant to Section 5.15 hereof relating to the payment of certain amounts more specifically provided for therein.
Leases shall have the meaning set forth in the Mortgages.
Legal Requirement shall mean as to any Person, the certificate of incorporation, by laws, certificate of limited partnership, agreement of limited partnership or other organization or governing documents of such Person, and any law, statute, order, ordinance, judgment, decree, injunction, treaty, rule or regulation (including, without limitation, Environmental Statutes, Development Laws and Use Requirements) or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Lender shall mean the Lender named herein and its successors or assigns.
Liabilities shall have the meaning set forth in Section 12.01 hereof.
LIBOR Margin shall have the meaning set forth in the Note.
LIBOR Rate shall have the meaning set forth in the Note.
Liquidity Reserve Escrow Account shall mean the Escrow Account maintained pursuant to Section 5.09 hereof.
Liquidity Reserve Expenses shall have the meaning set forth in Section 5.09(a) hereof.
Loan shall have the meaning set forth in the Recitals hereto.
Loan Amount shall have the meaning set forth in the Recitals hereto.
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Loan Documents shall mean this Agreement, the Note, the Mortgages, the Clearing Account Agreement, the Guaranty, the Environmental Indemnity Agreement, the Assignment, the Assignment of Rate Cap, and any and all other agreements, instruments, certificates or documents executed and delivered by Borrower or any Affiliate of Borrower in connection with the Loan.
Loan Year shall mean each 365 day period (or 366 day period if the month of February in a leap year is included) commencing on the first day of the month following the Closing Date (provided, however, that the first Loan Year shall also include the period from the Closing Date to the end of the month in which the Closing Date occurs).
Lockout Date shall mean November 9, 2006.
Loss Proceeds shall mean, collectively, all Insurance Proceeds and all Condemnation Proceeds.
Major Space Lease shall mean any Space Lease of a tenant and/or Affiliate of such tenant where such tenant and/or such Affiliate (a) leases, in the aggregate, the greater of (y) 15,000 gross rentable square feet of space in a Project, and (z) ten (10%) of the gross rentable square feet of space in a Project, or (b) is an Affiliate of Borrower or Guarantor.
Management Agreement shall have the meaning set forth in Section 7.02 hereof.
Manager shall mean the Person(s), other than Borrower, which manages one or more Projects on behalf of Borrower. As of the date hereof, the Projects are managed by The Gale Company LLC, an Affiliate of MCRLP.
Manager Certification shall have the meaning set forth in Section 2.09(d) hereof.
Material Adverse Effect shall mean any event or condition that has a material adverse effect on (a) the Projects, unless the context otherwise requires, considered in the aggregate, (b) the business, prospects, profits, management, operations or condition (financial or otherwise) of Borrower, unless the context otherwise requires, considered in the aggregate, (c) the enforceability, validity and, if applicable, perfection or priority of the lien of any Loan Document or (d) the ability of Borrower to perform any material obligations under any Loan Document.
Maturity, when used with respect to the Note, shall mean the Maturity Date set forth in the Note or such other date pursuant to the Note on which the final payment of principal, and premium, if any, on the Note becomes due and payable as therein or herein provided, whether at Stated Maturity or by declaration of acceleration, or otherwise.
Maturity Date shall mean the Maturity Date set forth in the Note.
MCC shall mean Mack-Cali Realty Corporation, a Maryland corporation.
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MCRLP shall mean Mack-Cali, L.P., a Delaware limited partnership.
MCRLP Borrower shall mean, as the context shall require, either or both of (a) JV Member or (b) SLG Gale PE II LLC, in such Persons capacity as the borrower of Permitted MCRLP Financing.
Mortgage shall mean one of, and Mortgages shall mean, collectively, the Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filings of even date herewith from each Borrower encumbering the Project that such Borrower owns.
Multiemployer Plan shall mean a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been, or were required to have been, made by Borrower, Guarantor or any ERISA Affiliate and which is covered by Title IV of ERISA.
Net Capital Expenditures shall mean for any period the amount by which Capital Expenditures during such period exceeds reimbursements for such items during such period from any fund established pursuant to the Loan Documents.
Net Operating Income shall mean in each Fiscal Year or portion thereof during the term hereof, Operating Income less Operating Expenses.
Note shall have the meaning set forth in the Recitals hereto.
OFAC List means the list of specially designated nationals and blocked persons subject to financial sanctions that is maintained by the U.S. Treasury Department, Office of Foreign Assets Control and accessible through the internet website www.treas.gov/ofac/t11sdn.pdf.
Officers Certificate shall mean a certificate delivered to Lender by Borrower which is signed on behalf of Borrower by an authorized representative of Borrower which states that the items set forth in such certificate are true, accurate and complete in all material respects.
Operating Expenses shall mean, in each Fiscal Year or portion thereof during the term hereof or other period of determination, all expenses directly attributable to the operation, repair and/or maintenance of the Projects constituting security for the Debt including, without limitation, (a) Impositions, (b) insurance premiums, (c) management fees, whether or not actually paid, equal to the greater of the actual management fees and three percent (3%) of annual base or fixed Rent due under the Leases and (d) costs attributable to the operation, repair and maintenance of the systems for heating, ventilating and air conditioning the Improvements and actually paid for by Borrower. Operating Expenses shall not include interest, principal and premium, if any, due under the Note or otherwise in connection with the Debt, income taxes, any capital improvement costs, any non-cash charge or expense such as
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depreciation or amortization or any item of expense otherwise includable in Operating Expenses which is paid directly by any tenant except real estate taxes paid directly to any taxing authority by any tenant.
Operating Income shall mean, in each Fiscal Year or portion thereof during the term hereof or other period of determination, all revenue derived by Borrower arising from the Projects, including, without limitation, rental revenues (whether denominated as basic rent, additional rent, escalation payments, electrical payments or otherwise) and other fees and charges payable pursuant to Leases or otherwise in connection with the Projects, and business interruption, rent or other similar insurance proceeds. Operating Income shall not include (a) Insurance Proceeds (other than proceeds of rent, business interruption or other similar insurance allocable to the applicable period) and Condemnation Proceeds (other than Condemnation Proceeds arising from a temporary taking or the use and occupancy of all or part of a Project allocable to the applicable period), or interest accrued on such Condemnation Proceeds, (b) proceeds of any financing, (c) proceeds of any sale, exchange or transfer of a Project or any part thereof or interest therein, (d) capital contributions or loans to Borrower or an Affiliate of Borrower, (e) any item of income otherwise includable in Operating Income but paid directly by any tenant to a Person other than Borrower except for real estate taxes paid directly to any taxing authority by any tenant, (f) any other extraordinary, non-recurring revenues, (g) Rent paid by or on behalf of any lessee under a Space Lease in whole or partial consideration for the termination of any Space Lease, with the exception of the Amortized Termination Payment Amount (as defined below), which shall be included in Operating Income or (h) sales tax rebates from any Governmental Authority. For the purposes of this Agreement, the Amortized Termination Payment Amount shall mean that portion of such termination payment which is equal to the product of (i) the allocable monthly amount of such termination payment, which itself is equal to the quotient obtained by dividing (A) the total amount of such termination payment by (B) the number of months remaining in what was the unexpired term of the Space Lease in question (i.e., prior to termination) and (ii) the number of months of such unexpired term that occur during the applicable Fiscal Year or portion thereof with respect to which such calculation is being made.
Origination Fee shall have the meaning set forth in Section 2.01(c).
Partners shall have the meaning set forth in Section 18.32.
Payment Date shall have the meaning set forth in the Note.
PBGC shall mean the Pension Benefit Guaranty Corporation established under ERISA, or any successor thereto.
Permitted Encumbrances shall have the meaning set forth in Section 2.05(a) hereof.
Permitted Entity Transfers shall mean:
(i) (A) the sale of securities evidencing ownership of MCC and SLG listed and traded on any public exchange and/or (B) Transfers (in one or more transactions) of limited partnership interests in Gale SLG NJ Operating Partnership, L.P. comprising not more than 4%
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in the aggregate of the total indirect ownership interest in Borrower and/or (C) Transfers of limited partnership interests in MCRLP and/or SLGOP provided, that (1) such Transfers described in clauses (B) and (C) of this subsection (i), shall not result in either (I) a change in Control of Borrower (it being agreed that, for the purposes of this definition of Permitted Entity Transfers, a change of Control of Borrower will not be deemed to have occurred provided that, after any such Transfer, either MCC or SLG retains Control of Borrower), or (II) the transferee, together with its Affiliates, increasing its direct or indirect interest in Borrower, to an amount which equals or exceeds 49% of the direct or indirect ownership interests in Borrower;
(ii) any transaction in the nature of a reorganization, restructuring, sale, merger or combination involving MCC or SLG, provided, that, with respect to any such reorganization, restructuring, sale, merger or combination, (1) after giving effect thereto, (A) Borrower is Controlled, directly or indirectly, by SLG or MCC (or any Affiliate of either thereof which is Controlled by SLG or MCC) and (B) neither SLG nor MCC shall have Transferred more than 49%, in the aggregate, of their respective direct or indirect interests in Borrower, unless, if the requirements of clause (A) and/or (B) are not satisfied, (x) the surviving entity of such transaction, which is the transferee of the direct or indirect interests in Borrower, shall be a Qualified Transferee, (y) to the extent that the same will result in a change in Control of Borrower or results in the transferee, together with its Affiliates, increasing its direct or indirect interest in Borrower to an amount which equals or exceeds 49% of the ownership interests in Borrower, Borrower shall have delivered to Lender, at least ten (10) Business Days prior to the effective date of the transactions resulting in such change in Control or increase in ownership interests, a new Insolvency Opinion reflecting the same, in form, content and substance, and issued by legal counsel, reasonably acceptable to Lender and the Rating Agency, if required by the Rating Agency; and (z) the entity which is proposed to succeed MCRLP or SLGOP, as the case may be, as Guarantor under the Guaranty has, at the time such new Guaranty is executed and delivered, and maintains while the applicable Guaranty is effective, a net worth of not less than $250,000,000.00 (of which $50,000,000.00 consists of liquid assets) (such entity described in this clause (z), an Acceptable Substitute Guarantor);
(iii) Transfers between SLG and/or MCC (and their respective Affiliates owning direct or indirect interests in Borrower) of direct or indirect interests in Borrower; and
(iv) Transfers by each of MCC and SLG to its respective Affiliates, provided that, at all times after such Transfer, such Affiliate remains Controlled by such transferor and such transferor owns, directly or indirectly, at least 25% of such Affiliate that is the transferee of such interests.
In addition, in connection with any transaction that would otherwise constitute a Permitted Entity Transfer, it shall be a condition precedent to the consummation thereof that (a) at the time of consummation thereof, there shall exist no Default or Event of Default (provided that the conditions set forth in this clause (a) and clause (c) below shall not apply with respect to a Permitted Entity Transfer described in subsection (i) above, but not otherwise described in subsection (ii) above), i.e., sales of publicly traded securities may be consummated without prior notice and notwithstanding the existence of a Default or Event of Default, unless such sales are being consummated in connection with a reorganization, restructuring, sale, merger or combination described in subsection (ii) above, (b) to the extent that any such Transfer causes
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the transferee, together with its Affiliates, to acquire Control of Borrower or to increase its direct or indirect interest in Borrower, to an amount which equals or exceeds 49% of the ownership interests in Borrower, Borrower shall have delivered to Lender, at least ten (10) Business Days prior to the effective date of any such Transfer, a new Insolvency Opinion reflecting such Transfer, in form, content and substance, and issued by legal counsel, reasonably acceptable to Lender and the Rating Agencies; (c) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer not less than ten (10) days prior to the date of such Transfer and (d) Borrower and Sole Member shall continue to comply with requirements of Sections 2.02(g), 2.02(t) and 2.02(w) hereof.
Permitted Fund Manager means any Person that on the date of determination is one of the entities listed on Exhibit F or any other nationally-recognized manager of investment funds investing in debt or equity interests relating to commercial real estate, provided such entity is (i) investing through a fund with committed capital of at least $250,000,000 and (ii) not subject to a Proceeding.
Permitted Investments shall mean any one or more of the following obligations or securities payable on demand or having a scheduled maturity on or before the Business Day preceding the date upon which such funds are required to be drawn, and having at all times the required ratings, if any, provided for in this definition, unless each Rating Agency shall have confirmed in writing to Lender that a lower rating would not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to any Securities (the Certificates): (a) any Money Market Account (but not any Money Market Account structured as a regulated investment company as defined under Section 851 of the Code) so long as the Fund is rated AAA M or AAA M-G by each Rating Agency (or, if not rated by any Rating Agency other than S&P, otherwise acceptable to such Rating Agency or Agencies, as applicable, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to any Securities); and (b) provided the requirements of Section 5.16 hereof are and remain satisfied, such other obligations as are acceptable as Permitted Investments to each Rating Agency, as confirmed in writing to Lender, that such obligations would not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to any Securities; provided, however, that (i) the investments must have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by Standard & Poors, the investments must not have an r highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity; and provided, further, that, with respect to each investment described above, in the judgment of Lender, such instrument continues to qualify as a cash flow investment pursuant to Code Section 860G(a)(6) earning a passive return in the nature of interest and that no instrument or security shall be a Permitted Investment if (y) such instrument or security evidences a right to receive only interest payments or (z) the right to receive principal and interest payments derived from the underlying investment provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying investment. Without limiting the foregoing, a Permitted Investment shall not include any obligation or investment that does not constitute cash, a cash item or Government securities within the meaning of Section 856(c)(4)(A) of the Code.
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Permitted MCRLP Financing shall mean: the loans, if originated, (a) in the maximum amount of $10,000,000.00, made by Mack-Cali Ventures L.L.C. or a Controlled Affiliate thereof (MCRLP Lender) to JV Member and (b) in the maximum amount of $3,725,000.00, made by such MCRLP Lender, to SLG Gale PE II LLC, and (1) in the case of the loan to JV Member, is unsecured, and (2) in the case of the loan to SLG Gale PE II LLC, may be secured by, inter alia, a pledge of SLG Gale PE II LLCs indirect membership interests in JV Member; provided that (i) the principal amounts of such loans do not exceed the amounts set forth above, (ii) no Default or Event of Default shall be continuing at the time such debt is incurred, (iii) such loan shall not mature earlier than the Loan, (iv) the loans are, at all times, held by MCRLP or an Affiliate thereof that is at all times Controlled by MCC, (v) Borrower shall pay all reasonable out-of-pocket expenses of Lender associated with the Permitted MCRLP Financing, including the cost of any review of the loan documents and the negotiation of the subordination and standstill agreement described below, (vi) such MCRLP Lender shall not be entitled to enter into any intercreditor agreement with Lender and shall have no rights whatsoever with respect to the Loan, the Borrower or against Lender, (vii) MCRLP Lender will not be permitted to receive and shall within one (1) Business Day of receipt remit to Lender or as Lender directs any payments on account of the Permitted MCRLP Financing unless (A) all current payments under the Loan have been paid in full and (B) all Operating Expenses and other costs incurred with respect to the operation, maintenance, repair and improvement of the Projects then due and payable have been paid in full, (viii) the Permitted MCRLP Financing shall not constitute a claim against JV Member, except to the extent JV Member has cash available to pay such Permitted MCRLP Financing and (ix) prior to the closing of such Permitted MCRLP Financing, such MCRLP Lender enters into a subordination and standstill agreement, with respect to each of the loans, in form and substance reasonably acceptable to Lender and MCRLP Lender, which agreement shall provide, among other things, that, provided that the holder of the loans is and at all times remains MCRLP Lender or a Qualified Transferee, Lender will permit the holder of the loans to exercise its rights under such loans, if an Event of Default occurs under the Loan, to assume control over (A) the JV Member, in the case of the loan to JV Member or (B) the Projects, in the case of the loan to SLG Gale PE II LLC. In all cases, the terms and documentation of any Permitted MCRLP Financing shall be subject to the approval of Lender in its reasonable discretion.
Permitted Transfers shall mean: (i) Space Leases entered into in accordance with Section 7.01 hereof; (ii) a Permitted Encumbrance; (iii) provided that no Default or Event of Default shall then exist, a Transfer of up to 49%, in the aggregate, of the direct or indirect interests in Borrower or Sole Member to any Person provided that (A) such Transfer shall not (x) cause the transferee, together with its Affiliates, to acquire Control of Borrower or Sole Member or to increase its direct or indirect interest in Borrower or Sole Member to an amount which equals or exceeds 49% of the ownership interest in the Borrower or Sole Member or (y) result in Borrower or Sole Member no longer being Controlled by either (1) MCC and/or SLG or (2) (A) MCC or (B) SLG, in either case, sharing Control with a Qualified Transferee, (B) after giving effect to such Transfer, MCC (together with unrelated limited partners in Gale SLG NJ Operating Partnership, L.P. (NJOP) owning, for this purpose, not more than 4% of such equity interests) and/or SLG (together with unrelated limited partners in NJOP owning, for this purpose, not more than 4% of such equity interests), shall continue to own more than 50% of all equity interests (direct or indirect) in Borrower and Sole Member and there shall not be a change in Control of the Borrower or Sole Member, (C) Borrower shall give Lender notice of such
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Transfer together with copies of all instruments effecting such Transfer not less than ten (10) days prior to the date of such Transfer and (D) Borrower and Sole Member shall continue to comply with requirements of Sections 2.02(g), 2.02(t) and 2.02(w) hereof; (iv) a Permitted Entity Transfer or (v) a Release pursuant to Section 15.02.
Person shall mean any individual, corporation, limited liability company, partnership, joint venture, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.
Plan shall mean an employee benefit or other plan established or maintained by Borrower, Guarantor or any ERISA Affiliate during the five-year period ended prior to the date of this Agreement or to which Borrower, Guarantor or any ERISA Affiliate makes, is obligated to make or has, within the five year period ended prior to the date of this Agreement, been required to make contributions (whether or not covered by Title IV of ERISA or Section 302 of ERISA or Section 401(a) or 412 of the Code), other than a Multiemployer Plan.
Principal Amount shall mean the Loan Amount as such amount may be reduced from time to time pursuant to the terms of this Agreement, the Note or the other Loan Documents.
Principal Payments shall mean all payments of principal, if any, made pursuant to the terms of the Note.
Proceeding shall mean any case, proceeding or other action under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors.
Pro-Forma Capital Expenditures shall mean, for purposes of calculating Adjusted Net Cash Flow, an amount equal to (a) the number of square feet comprising the Total GLA multiplied by (b) $0.35.
Pro-Forma Debt Service shall mean, with respect to a period of calculation, an amount equal to the greater of (a) Debt Service and (b) the Stressed Debt Service.
Pro-Forma Net Operating Income shall mean Pro-Forma Operating Income less Pro-Forma Operating Expenses.
Pro-Forma Operating Expenses shall mean projected annualized Operating Expenses based on a trailing twelve (12)-month period as reasonably adjusted by Lender (upwards, but not downwards) to take into account, among other things, (a) anticipated increases or decreases, as the case may be, in Operating Expenses including, without limitation, real estate taxes and insurance which shall be included at their respective stabilized and recurring levels and (b) exclusions for non-recurring and capital expenses.
Pro-Forma Operating Income shall mean projected annualized Operating Income based on the most recent Rent Roll and such other information as is required to be delivered by Borrower pursuant to Section 2.09 hereof, as reasonably adjusted by Lender (a) to
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include only fixed rents from tenants in occupancy with a remaining term under their respective Space Lease of at least twelve (12) months or, as to tenants in occupancy with a remaining term of less than twelve (12) months, only those tenants which have not notified the applicable Borrower in writing of their decision to not renew or extend their Space Lease beyond the then termination date thereof, unless a replacement tenant has executed a letter of intent for such space at market rates or better; (b) to exclude Rents from temporary or month to month tenants; (c) to exclude Rents from tenants operating under bankruptcy protection and which have not affirmed their respective Leases; (d) to exclude Rents from any tenant which is an Affiliate of Borrower or Guarantor other than Leases to affiliated property managers aggregating not more than [4,000] square feet per Project at market rates; (e) to exclude Rents from any tenant which is more than three (3) months delinquent in payment of base or fixed rent; (f) to include reimbursements, not in excess of corresponding expense items, based on a trailing 12-month period; (g) to include any Rent from a Credit Tenant under its Space Lease (whether or not in occupancy of its space) provided that the remaining initial term of such Space Lease (exclusive of any extensions) is for a period of twelve (12) months or longer; (h) to include other income on a case-by-case basis but only to the extent it is reasonably determined by Lender to be both stabilized and recurring; (i) to include any free Rent or abated Rent with respect to tenants that are in occupancy provided, that, such free or abated Rent shall only be included for maximum period of ninety (90) days; and (j) to reflect a vacancy and credit loss allowance equal to the greater of: (y) the actual vacancy loss for each Project or (z) 10% of total revenues for such Project.
Prohibited Person means any Person identified on the OFAC List or any other Person with whom a U.S. Person may not conduct business or transactions by prohibition of Federal law or Executive Order of the President of the United States of America.
Project shall mean one of, and Projects shall mean the collective group of, the parcels of real property and Improvements thereon owned by a Borrower and encumbered by a Mortgage, together with all rights pertaining to such real property and Improvements, and all other collateral for the Loan applicable to such parcels of real property and Improvements, respectively, as more particularly described in the granting clauses of the Mortgages and referred to therein as the Mortgaged Property. Each Project, as identified by its street address, and the applicable Borrower that is the owner of each Project is set forth on Exhibit A attached hereto. Any reference to the Projects shall be deemed to be a reference to the Projects, as a collective whole, and to the all of the Projects on an individual basis.
Property Agreements shall mean all agreements, grants of easements and/or rights-of-way, reciprocal easement agreements, permits, declarations of covenants, conditions and restrictions, disposition and development agreements, planned unit development agreements, management or parking agreements, party wall agreements or other instruments affecting a Project, which, either individually or in the aggregate with all other agreements affecting a particular Project, are material in nature, but not including any brokerage agreements, management agreements, service contracts, Space Leases or the Loan Documents.
Provided Information shall have the meaning set forth in Section 17.01 hereof.
Qualified Transferee means one or more of the following:
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(A) a real estate investment trust, bank, saving and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity or plan, provided that any such Person referred to in this clause (A) satisfies the Eligibility Requirements;
(B) an investment company, money management firm or qualified institutional buyer within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an institutional accredited investor within the meaning of Regulation D under the Securities Act of 1933, as amended, provided that any such Person referred to in this clause (B) satisfies the Eligibility Requirements;
(C) an institution substantially similar to any of the foregoing entities described in clauses (A) or (B) that satisfies the Eligibility Requirements;
(D) any entity Controlling, Controlled by, under common Control with, any of the entities described in clause (A), (B), (C) or (F) of this definition;
(E) [RESERVED];
(F) an investment fund, limited liability company, limited partnership or general partnership where a Permitted Fund Manager or an entity that is otherwise a Qualified Transferee under clauses (A), (B), (C) or (D) of this definition acts as the general partner, managing member or fund manager and at least 50% of the equity interests in such investment vehicle are owned, directly or indirectly, by one or more entities that are otherwise Qualified Transferees under clauses (A), (B), (C) or (D) of this definition; provided, however, that so long as the organizational documents of the applicable investment fund, limited liability company, limited partnership or general partnership vest all managerial control in a Permitted Fund Manager, then the other Persons owning equity interests in such investment vehicle shall not be required to satisfy the conditions set forth in clause (ii) of the definition of Eligibility Requirements relating to the nature of their business experience but shall nonetheless be required to satisfy the conditions set forth in clause (i) of the definition of Eligibility Requirements;
(G) any Person which is a Qualified Transferee (pursuant to the foregoing clauses) but is acting in any agency capacity in connection with a lending syndicate, so long as at least fifty-one percent (51%) or more of the lenders in the lending syndicate (by then current loan balance) are Qualified Transferees (pursuant to the foregoing clauses); or
(H) any other Person for which the Rating Agencies have issued a Rating Comfort Letter.
Solely for purposes of this definition of Qualified Transferee, Control shall mean the ownership, directly or indirectly, in the aggregate of more than fifty percent (50%) of the beneficial ownership interests of an entity and the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity, whether through the ability to exercise voting power, by contract or otherwise. Controlled by, Controlling and under common Control with shall have the respective correlative meaning thereto. For purposes of this definition, if more than one Qualified Transferee owns (directly or
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indirectly), more than fifty percent (50%) of the beneficial ownership interests of an entity and one or more of the Qualified Transferees possess the power to direct or cause the direction of the management or policies of the entity, whether through the ability to exercise voting power, by contract or otherwise, even though each such Qualified Transferee individually owns less than fifty percent (50%) of such beneficial interests, such entity shall be deemed to be Controlled by a Qualified Transferee.
Rate Cap Agreement shall mean that certain interest rate cap agreement (together with the confirmation and schedules relating thereto) with a notional amount which shall not at any time be less than the Principal Amount and a LIBOR Rate strike price equal to seven percent (7.0%), entered into by Borrower in accordance with the terms hereof or of the other Loan Documents and any interest rate cap agreements subsequently entered into in replacement or substitution therefor by Borrower with respect to the Loan, including, without limitation, the Replacement Rate Cap Agreement.
Rating Agency shall mean Standard & Poors Ratings Services, Inc., a division of The McGraw-Hill Company, Inc. (Standard & Poors), Fitch and Moodys Investors Service, Inc. (Moodys), collectively, and any successor to any of them; provided, however, that at any time after a Secondary Market Transaction, Rating Agency or Rating Agencies shall mean those of the foregoing rating agencies that from time to time rate the securities issued in connection with such Secondary Market Transaction.
Rating Comfort Letter shall mean a letter issued by each of the applicable Rating Agencies which confirms that the taking of the action referenced therein will not result in any qualification, withdrawal or downgrading of any existing ratings of Securities created in a Secondary Market Transaction.
Recurring Replacement Expenditures shall mean expenditures related to capital repairs, replacements and improvements performed at the Projects from time to time.
Recurring Replacement Monthly Installment shall mean the amount per month set forth on Exhibit B attached hereto and made a part hereof, it being agreed that no Recurring Replacement Monthly Installment shall be payable with respect to a Project after the same has been Released.
Recurring Replacement Reserve Escrow Account shall mean the Escrow Account maintained pursuant to Section 5.08 hereof relating to the payment of Recurring Replacement Expenditures.
Recurring Replacement Reserve Sub-Account shall mean the Sub-Account of the Central Account established pursuant to Section 5.02 hereof into which the Recurring Replacement Monthly Installment shall be deposited.
Registration Statement shall have the meaning set forth in Section 17.03 hereof.
Release and Released shall have the meanings set forth in Section 15.02.
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Release Amount shall mean, with respect to each Project that is Released pursuant to Section 15.02 hereof, an amount equal to one hundred ten percent (110%) of the Allocated Loan Amount of such Project.
Reletting Expenditures shall mean all reasonable and actual out-of-pocket expenditures payable to bona-fide third parties or to the Manager incurred by Borrower relating to reletting of space at the Projects and in connection with any brokerage commissions due and payable (including override commissions), or any improvements and replacements required to be made by Borrower (or reasonable and actual out-of-pocket expenditures paid to tenants in connection with any improvements and replacements made by tenants at the Projects) under the terms of any Lease to prepare the relevant space for occupancy by the tenant thereunder (including performing base building standard work for such space).
Reletting Reserve Escrow Account shall mean the Escrow Account maintained pursuant to Section 5.07 hereof relating to the payment of Reletting Expenditures and which shall be initially funded with the Initial Reletting Reserve Deposit.
Reletting Reserve Monthly Installment shall mean the amount set forth on Exhibit B attached hereto and made a part hereof, it being agreed that no Recurring Replacement Monthly Installment shall be payable with respect to a Project after the same has been Released.
Reletting Reserve Sub-Account shall mean the Sub-Account of the Central Account established pursuant to Section 5.02 hereof into which the Reletting Reserve Monthly Installment shall be deposited.
REMIC shall mean a real estate mortgage investment conduit within the meaning of Section 860D of the Code.
Rents shall mean all rents, rent equivalents, moneys payable as damages (including payments by reason of the rejection of a Lease in a proceeding under the Bankruptcy Code) or in lieu of rent or rent equivalents, royalties (including all oil and gas or other mineral royalties and bonuses), income, fees, receivables, receipts, revenues, deposits (including security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other payment and consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower or any of its agents or employees from any and all sources arising from or attributable to the Projects and the Improvements, including all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of the Projects and Insurance Proceeds, if any, from business interruption or other loss of income insurance.
Rent Roll shall have the meaning set forth in Section 2.05 (o) hereof.
Replacement Rate Cap Agreement shall have the meaning set forth in Section 5.10 hereof.
Required Debt Service Payment shall mean, as of any Payment Date, (a) the amount of interest and principal, if any, then due and payable pursuant to the Note, together with
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any other sums due thereunder, including, without limitation, any prepayments required to be made or for which notice has been given under this Agreement, Default Rate Interest and premium, if any, paid in accordance therewith plus (b) reasonable out-of-pocket fees incurred by Lender in connection with its administration and servicing of the Central Account or fees payable to Servicer pursuant to Section 5.04 hereof.
Required Engineering Work shall mean the immediate engineering and/or environmental remediation work set forth on Exhibit C attached hereto and made a part hereof.
Required Special Servicer Rating means (i) a rating of CSS1 in the case of Fitch, Inc., (ii) on the Standard & Poors list of approved special servicers in the case of Standard & Poors and (iii) in the case of Moodys, such special servicer is acting as special servicer in a commercial mortgage loan securitization that was rated by Moodys within the twelve (12) month period prior to the date of determination, and Moodys has not downgraded or withdrawn the then-current rating on any class of commercial mortgage securities or placed any class of commercial mortgage securities on watch citing the continuation of such special servicer as special servicer of such commercial mortgage securities.
Retention Amount shall have the meaning set forth in Section 3.04(b)(vii) hereof.
Scheduled Release Date shall have the meaning set forth in Section 15.04 hereof.
Secondary Market Transaction shall have the meaning set forth in Section 17.01 hereof.
Securities shall have the meaning set forth in Section 17.01 hereof.
Securities Act shall have the meaning set forth in Section 17.02 hereof.
Security Deposit Account shall have the meaning set forth in Section 5.01 hereof.
Single Purpose Entity shall mean a corporation, partnership, joint venture, limited liability company, trust or unincorporated association, which is formed or organized solely for the purpose of holding, directly, an ownership interest in a Project, does not engage in any business unrelated to such Project, does not have any assets other than those related to its interest in such Project or any indebtedness other than as permitted by this Agreement or the other Loan Documents, has its own separate books and records and has its own accounts, in each case which are separate and apart from the books and records and accounts of any other Person, holds itself out as being a Person separate and apart from any other Person and which otherwise satisfies the criteria of the Rating Agency, as in effect on the Closing Date, for a special-purpose bankruptcy-remote entity.
SLG shall mean SL Green Realty Corp., a Maryland corporation.
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SLGOP shall mean SL Green Operating Partnership, L.P., a Delaware limited partnership.
Sole Member shall mean Gale SLG NJ Mezz LLC, a Delaware limited liability company.
Solvent shall mean, as to any Person, that (a) the sum of the assets of such Person, at a fair valuation, exceeds its liabilities, including contingent liabilities, (b) such Person has sufficient capital with which to conduct its business as presently conducted and as proposed to be conducted and (c) such Person has not incurred debts, and does not intend to incur debts, beyond its ability to pay such debts as they mature. For purposes of this definition, debt means any liability on a claim, and claim means (a) a right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (b) a right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured. With respect to any such contingent liabilities, such liabilities shall be computed in accordance with GAAP at the amount which, in light of all the facts and circumstances existing at the time, represents the amount which can reasonably be expected to become an actual or matured liability.
Space Leases shall mean any Lease or sublease thereunder (including, without limitation, any Major Space Lease) or any other agreement providing for the use and occupancy of a portion of a Project, as the same may be amended, renewed or supplemented.
Special Transfer shall have the meaning set forth in Section 9.04 hereof.
Standard Lease Form shall mean, as the context shall require, either of the two (2) standard forms of Lease submitted to Lender, in connection with the closing of the Loan, and identified by Borrower as Borrowers standard forms of Lease.
State shall mean any of the states which are members of the United States of America.
Stated Maturity, when used with respect to the Note or any installment of interest and/or principal payment thereunder, shall mean the date specified in the Note as the fixed date on which a payment of all or any portion of principal and/or interest is due and payable.
Stressed Debt Service shall mean an amount calculated by Lender equal to the constant payment of interest that would be due during a period of calculation upon an assumed interest only loan having (i) a principal balance equal to the Principal Amount as of the date of such calculation, and (ii) an interest rate equal to nine (9%) percent.
Sub-Accounts shall have the meaning set forth in Section 5.02 hereof.
Substantial Casualty shall have the meaning set forth in Section 3.04 hereof.
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Supplemental Disbursement Date shall have the meaning set forth in Section 5.05 hereof.
Taking shall mean a condemnation or taking pursuant to the lawful exercise of the power of eminent domain.
TRIA shall mean the Terrorism Risk Insurance Act of 2002, as the same may be amended or otherwise modified.
Total GLA shall mean the total gross leasable area of the Projects, including all Space Leases.
Transfer shall mean the conveyance, assignment, sale, mortgaging, encumbrance, pledging, hypothecation, granting of a security interest in, granting of options with respect to, or other disposition of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) all or any portion of any legal or beneficial interest (a) in all or any portion of any Project or (b) in any Person having a legal or beneficial ownership in Borrower, and shall also include, without limitation to the foregoing, the following: an installment sales agreement wherein Borrower agrees to sell a Project or any part thereof or any interest therein for a price to be paid in installments; an agreement by Borrower leasing all or substantially all of a Project to one or more Persons pursuant to a single or related transactions, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrowers right, title and interest in and to any Leases or any Rent; any instrument subjecting a Project to a condominium regime or transferring ownership to a cooperative corporation; and the dissolution or termination of Borrower or the merger or consolidation of Borrower with any other Person.
UCC shall mean the Uniform Commercial Code as in effect in the State in which the Project is located.
Underwriters shall have the meaning set forth in Section 17.03 hereof.
Underwriter Group shall have the meaning set forth in Section 17.03 hereof.
Unscheduled Payments shall mean (a) all Loss Proceeds that Borrower has elected or is required to apply to the repayment of the Debt pursuant to this Agreement, the Note or any other Loan Documents, (b) any funds representing a voluntary or involuntary principal prepayment other than scheduled Principal Payments and (c) any Net Proceeds.
Use Requirements shall mean any and all building codes, permits, certificates of occupancy or compliance, laws, regulations, or ordinances (including, without limitation, health, pollution, fire protection, medical and day-care facilities, waste product and sewage disposal regulations), restrictions of record, easements, reciprocal easements, declarations or other agreements affecting the use of a Project or any part thereof.
Welfare Plan shall mean an employee welfare benefit plan as defined in Section 3(1) of ERISA established or maintained by Borrower, Guarantor or any ERISA Affiliate or that covers any current or former employee of Borrower, Guarantor or any ERISA Affiliate.
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Work shall have the meaning set forth in Section 3.04(a)(i) hereof.
Yield Maintenance Premium shall have the meaning set forth in Section 13.03 hereof.
LOAN TERMS;
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BORROWER
Section 2.01 The Loan. (a) Lender is making a loan (the Loan) to Borrower on the date hereof, in the Principal Amount of $90,286,551.00, which shall mature on the Maturity Date. Borrower acknowledges receipt of the Loan, the proceeds of which are being and shall be used to (i) refinance the existing debt encumbering the Projects, (ii) fund certain of the Escrow Accounts, and (iii) pay transaction costs. No excess proceeds may be distributed to the direct or indirect members of Borrower. No amount repaid in respect of the Loan may be reborrowed.
Section 2.02 Representations, Warranties and Covenants of Borrower. Borrower represents, warrants and covenants to Lender (each of which representations shall, as the context requires, refer to each entity comprising Borrower and to each Project and shall be deemed made by each such Borrower with respect to each such Project):
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Section 2.03 Further Acts, etc. Borrower will, at the cost of Borrower, and without expense to Lender, execute and deliver to Lender upon demand such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the collateral at any time securing or intended to secure the Debt and/or for the better and more effective carrying out of the intents and purposes of the Loan Documents, as Lender shall, from time to time, reasonably require, provided that the same does not (y) increase the rights of Lender or (z) increase the obligations or decrease the rights of Borrower or Guarantor under the Loan Documents. Borrower hereby authorizes Lender, if Borrower fails to execute within five (5) Business Days after request, to execute in the name of Borrower or without the signature of Borrower to the extent Lender may lawfully do so, one or more financing statements, chattel mortgages or comparable security instruments to evidence more effectively the liens of the Mortgages upon the Projects. Borrower grants to Lender an irrevocable power of attorney coupled with an interest for the purpose of, protecting, perfecting, preserving and realizing upon the interests granted pursuant to the Mortgages or to effect the intent of this Agreement, all as fully and effectually as Borrower might or could do; provided, however, that Lender will not exercise such powers of attorney unless (i) Borrower fails to execute any of the foregoing within five (5) Business Days after it receives written request from Lender to do so, or (ii) an Event of Default then exists; and Borrower hereby ratifies all that Lender shall lawfully do or cause to be done by virtue hereof. Upon receipt of an affidavit of an officer of Lender as to the loss, theft, destruction or mutilation of the Note or any other Loan Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of such Note or other applicable Loan Document, Borrower will issue, in lieu thereof, a replacement Note or other applicable Loan Document, dated the date of such lost, stolen, destroyed or mutilated Note or other Loan Document in the same principal amount thereof and otherwise of like tenor.
Section 2.04 Cross Default; Cross Collateralization.
(a) Each Borrower acknowledges that Lender has made the Loan to Borrowers upon the security of their collective interest in the Projects and in reliance upon the aggregate of the Projects taken together being of greater value as collateral security than the sum of the Projects taken separately. Each Borrower agrees that the Mortgages are and will be cross-collateralized and cross-defaulted with each other so that (i) an Event of Default under any of the Mortgages shall constitute an Event of Default under the other Mortgages which secures the
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Note; (ii) an Event of Default under the Note or this Agreement shall constitute an Event of Default under each Mortgage; and (iii) each Mortgage shall constitute security for the Note as if a single blanket lien were placed on all of the Projects as security for the Note. Each Borrower covenants and agrees that in the case of an Event of Default (i) Lender shall have the right to pursue all of its rights and remedies in one proceeding, or separately and independently in separate proceedings from time to time, as mortgagee, in its sole and absolute discretion, shall determine from time to time, (ii) Lender is not required to either marshal assets, sell any individual Project in any inverse order of alienation, or be subject to any one action or election of remedies law or rule, (iii) the exercise by Lender of any remedies against any one Project will not impede Lender from subsequently or simultaneously exercising remedies against any other Project and (iv) all liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Projects and all Projects have been foreclosed, sold and/or otherwise realized upon in satisfaction of the Loan.
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Section 2.05 Representations and Warranties as to the Projects. Borrower represents and warrants with respect to the Projects as of the date hereof as follows (each of which representations shall, as the context requires, refer to each entity comprising Borrower and to each Project and shall be deemed made by each such Borrower with respect to each such Project):
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thereon or of any termination or threatened termination of any policy of insurance or bond. No portion of any Project is located in an area of special flood hazard, as that term is defined in the regulations of the Federal Insurance Administration, Department of Housing and Urban Development, under the National Flood Insurance Act of 1968, as amended (24 CFR § 1909.1) or Borrower has obtained the flood insurance required by Section 3.01(a)(vi) hereof. No Project lies in a 100 year flood plain that has been identified by the Secretary of Housing and Urban Development or any other Governmental Authority or, if it does, Borrower has obtained the flood insurance required by Section 3.01(a)(vi) hereof.
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Section 2.06 Removal of Lien.
(a) Borrower shall, at its expense, maintain each Mortgage as a first lien on the Projects encumbered thereby and shall keep the Projects free and clear of all liens and encumbrances of any kind and nature other than the Permitted Encumbrances. Borrower shall, within thirty (30) days following the filing thereof, promptly discharge of record, by bond or otherwise, any such liens and, promptly upon request by Lender, shall deliver to Lender evidence reasonably satisfactory to Lender of the discharge thereof.
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Section 2.07 Cost of Defending and Upholding this Agreement and the Lien of .the Mortgages If any action or proceeding is commenced to which Lender is made a party relating to the Loan Documents and/or the Projects or Lenders interest therein or in which it becomes necessary to defend or uphold the lien of the Mortgages or the terms of this Agreement or any other Loan Document, Borrower shall, promptly after demand, reimburse Lender for all reasonable out-of-pocket expenses (including, without limitation, reasonable attorneys fees and disbursements) incurred by Lender in connection therewith, and such sum, together with interest thereon at the Default Rate from and after such demand until fully paid, shall constitute a part of the Debt.
Section 2.08 Use of the Projects. Borrower will use, or cause to be used, the Projects for such use as is permitted pursuant to applicable Legal Requirements including, without limitation, under the certificate of occupancy applicable to each such Project. Borrower shall not suffer or permit the Projects or any portion thereof to be used by the public, any tenant, or any Person not subject to a Lease, in a manner as is reasonably likely to impair Borrowers title to any of the Projects, or in such manner as may give rise to a claim or claims of adverse usage or adverse possession by the public, or of implied dedication of any of the Projects or any part thereof.
Section 2.09 Financial Reports.
(a) Borrower will keep and maintain or will cause to be kept and maintained on a Fiscal Year basis, in accordance with GAAP (or such other accounting basis reasonably acceptable to Lender) consistently applied, proper and accurate books, federal income tax returns (subject to Section 2.09(i) hereof), records and accounts reflecting (i) all of the financial affairs of Borrower and (ii) all items of income and expense in connection with the operation of the Projects or in connection with any services, equipment or furnishings provided in connection with the operation thereof, to the extent realized by Borrower. Lender shall have the right from time to time at all times during normal business hours upon not less than three (3) Business Days prior notice to examine such books, federal income tax returns (subject to Section 2.09(i) hereof), records and accounts at the office of Borrower or other Person maintaining such books, federal income tax returns (subject to Section 2.09(i) hereof), records and accounts and to make such copies or extracts thereof as Lender shall desire. After the occurrence of an Event of Default, Borrower shall pay any costs and expenses incurred by Lender to examine Borrowers
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and Guarantors accounting records with respect to the Projects, as Lender shall determine to be necessary or appropriate in the protection of Lenders interest.
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Section 2.10 Litigation. Borrower will give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened (in writing) against Borrower which might have a Material Adverse Effect.
Section 2.11 Updates of Representations. Borrower shall deliver to Lender within ten (10) Business Days after the request of Lender an Officers Certificate updating all of the representations and warranties contained in this Agreement and the other Loan Documents and certifying that all of the representations and warranties contained in this Agreement and the other Loan Documents, as updated pursuant to such Officers Certificate, are true, accurate and complete as of the date of such Officers Certificate.
Section 2.12 Condominium Provisions. With respect to each Project that is comprised of condominium units (each such Project, a Condominium), Borrower hereby represents and warrants, and covenants and agrees, as follows:
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In the event that any of the foregoing shall occur and continue beyond any applicable grace and notice periods, Borrower may cure any such default by causing, in accordance with the terms and provisions of this Agreement and the other Loan Documents, the Release of the affected Project within 90 days thereafter. Notwithstanding the foregoing provisions of this Section 2.12, (i) for so long as all of the Condominium units are owned by the Borrower, Borrower shall not be required to comply with the provisions of subsection (c) above and (ii) Borrower shall be permitted to terminate the Condominium, provided that (A) the lien of the Mortgage on the subject Project is not adversely affected thereby, (B) Borrower provides to Lender evidence reasonably satisfactory to Lender that the title policy insuring the lien of Lenders mortgage on the subject Project remains in full force and effect notwithstanding such termination of the Condominium, (C) Borrower delivers to Lender not less than thirty (30) days prior written notice of Borrowers intention to terminate such Condominium, (D) such termination of the Condominium shall not adversely affect or otherwise diminish Lenders rights under this Agreement or the other Loan Documents and (E) Borrower executes and delivers to Lender, promptly following request therefor, such documents as Lender shall reasonably require confirming the continued validity and effectiveness of this Agreement and the other Loan Documents.
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INSURANCE AND CASUALTY RESTORATION
Section 3.01 Insurance Coverage. Borrower shall, at its expense, maintain the following insurance coverages with respect to the each Project during the term of this Agreement:
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Section 3.02 Policy Terms.
(a) All insurance required by this Article III shall be in the form (other than with respect to Sections 3.01(a)(vi) and (vii) above when insurance in those two sub-sections is placed with a governmental agency or instrumentality on such agencys forms) and amount and with deductibles as, from time to time, shall be reasonably acceptable to Lender, under valid and enforceable policies issued by financially responsible insurers authorized to do business in the State where the Projects are located, with a general policyholders service rating of not less than A and a financial rating of not less than A:X as rated in the most currently available Bests Insurance Reports (or the equivalent, if such rating system shall hereafter be altered or replaced) and shall have a claims paying ability rating and/or financial strength rating, as applicable, of not less than A (or its equivalent), or such lower claims paying ability rating and/or financial strength rating, as applicable, as Lender shall, in its sole and absolute discretion, consent to, from
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a Rating Agency (one of which after a Secondary Market Transaction in which Standard & Poors rates any securities issued in connection with such Secondary Market Transaction, shall be Standard & Poors), with an exception for Factory Mutual subject to it maintaining its S&P rating of BBB and AM Best rating of A+XV. If either rating for Factory Mutual is lowered, Borrower must replace Factory Mutual within 60 days with other insurers that meet the requirements set forth in this Agreement. Borrowers failure to effect such replacement timely shall constitute an Event of Default under this Agreement. Certified copies of all insurance policies or certificates (the form and substance of which must be reasonably satisfactory to Lender) evidencing such policies shall be promptly delivered to and held by Lender. All such policies (except policies for workers compensation) shall name Lender, its successors and/or assigns as an additional named insured, shall provide for loss payable to Lender, its successors and/or assigns and shall contain (or have attached): (i) standard non-contributory mortgagee endorsement or its equivalent relating, inter alia, to recovery by Lender notwithstanding the negligent or willful acts or omissions of Borrower; (ii) a waiver of subrogation endorsement as to Lender; (iii) an endorsement indicating that neither Lender nor Borrower shall be or be deemed to be a co-insurer with respect to any casualty risk insured by such policies and shall provide for a deductible per loss of an amount not more than the lesser of (x) that which is customarily maintained by owners of similar properties similarly situated and (y) five percent (5%) of the Actual Net Cash Flow, and (iv) a provision that such policies shall not be canceled, terminated, denied renewal or amended, including, without limitation, any amendment reducing the scope or limits of coverage, without at least thirty (30) days prior written notice to Lender in each instance. Notwithstanding the foregoing provisions of clause (iii) above, Lender agrees that, in lieu of a deductible under its general liability insurance policy, Borrower may include in such policy a self-insured retention in an amount not to exceed $150,000.00 per occurrence, with an aggregate cap of $2,000,000.00 per policy period. Not less than ten (10) days prior to the expiration dates of the insurance policies obtained pursuant to this Agreement, originals or certified copies of renewals of such policies (or certificates evidencing such renewals) bearing notations evidencing the payment of premiums or accompanied by other reasonable evidence of such payment (which premiums shall not be paid by Borrower through or by any financing arrangement which would entitle an insurer to terminate a policy) shall be delivered by Borrower to Lender. Borrower shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss, with any insurance required under this Article III.
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Section 3.03 Assignment of Policies.
(a) Borrower hereby assigns to Lender the proceeds of all insurance (other than workers compensation and liability insurance) obtained pursuant to this Agreement, all of which proceeds shall be payable to Lender as collateral and further security for the payment of the Debt and the performance of Borrowers obligations hereunder and under the other Loan Documents, and Borrower hereby authorizes and directs the issuer of any such insurance to make payment of such proceeds directly to Lender, except as provided in Section 3.04(a)(ii) below. Except as otherwise expressly provided in Section 3.04 or elsewhere in this Article III, Lender shall have the option, in its discretion, and without regard to the adequacy of its security, to apply all or any part of the proceeds it may receive pursuant to this Article in such manner as Lender may elect to any one or more of the following: (i) the payment of the Debt, whether or not then due, in any proportion or priority as Lender, in its discretion, may elect, (ii) the repair or restoration of the affected Project, (iii) the cure of any Event of Default or (iv) the reimbursement of the costs and expenses of Lender incurred pursuant to the terms hereof in connection with the recovery of the Insurance Proceeds. Nothing herein contained shall be deemed to excuse Borrower from repairing or maintaining the Projects as provided in this Agreement or restoring all damage or destruction to the Projects, regardless of the sufficiency of the Insurance Proceeds, and the application or release by Lender of any Insurance Proceeds shall not cure or waive any Default or notice of Default.
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Section 3.04 Casualty Restoration.
(a) (i) In the event of any material damage to or destruction of a Project (or any part thereof), Borrower shall give prompt written notice to Lender (which notice shall set forth Borrowers good faith estimate of the cost of repairing or restoring such damage or destruction, or if Borrower cannot reasonably estimate the anticipated cost of restoration, Borrower shall nonetheless give Lender prompt notice of the occurrence of such damage or destruction, and will diligently proceed to obtain estimates to enable Borrower to quantify the anticipated cost and time required for such restoration, whereupon Borrower shall promptly notify Lender of such good faith estimate) and, provided that restoration does not violate any Legal Requirements, Borrower shall promptly commence and diligently prosecute to completion the repair, restoration or rebuilding of the Project so damaged or destroyed to a condition such that the Project shall be at least equal in value to that immediately prior to the damage to the extent practicable, in full compliance with all Legal Requirements and the provisions of all Leases, and in accordance with Section 3.04(b) below. Such repair, restoration or rebuilding of the affected Project are sometimes hereinafter collectively referred to as the Work.
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be paid out from time to time to Borrower as the Work progresses (less any out-of-pocket cost to Lender of recovering and paying out such proceeds, including, without limitation, reasonable attorneys fees and costs allocable to inspecting the Work and the plans and specifications therefor) subject to Section 5.13 hereof and to all of the following conditions:
(i) An Independent architect or engineer selected by Borrower and reasonably acceptable to Lender (an Architect or Engineer) or a Person otherwise reasonably acceptable to Lender, shall have delivered to Lender a certificate estimating the cost of completing the Work, and, if the amount set forth therein is more than the sum of the amount of Insurance Proceeds then being held by Lender in connection with a casualty and amounts agreed to be paid as part of a final settlement under the insurance policy upon or before completion of the Work, Borrower shall have delivered to Lender (A) cash collateral in an amount equal to such excess, (B) an unconditional, irrevocable, clean sight draft letter of credit, in form, substance and issued by a bank reasonably acceptable to Lender, in the amount of such excess and draws on such letter of credit shall be made by Lender to make payments pursuant to this Article III following exhaustion of the Insurance Proceeds therefore, (C) a completion bond in form, substance and issued by a surety company reasonably acceptable to Lender, or (D) such other collateral as shall be reasonably acceptable to Lender.
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Section 3.05 Compliance with Insurance Requirements. Borrower promptly shall comply with, and shall cause the Projects to comply with, all Insurance Requirements, even if such compliance requires structural changes or improvements or would result in interference with the use or enjoyment of any of the Projects or any portion thereof provided a Borrower shall have a right to contest in good faith and with diligence such Insurance Requirements provided (a) no Event of Default shall exist during such contest and such contest shall not subject any of the Projects or any portion thereof to any lien or affect the priority of the lien of the related Mortgage, (b) failure to comply with such Insurance Requirements will not subject Lender or
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any of its agents, employees, officers or directors to any civil or criminal liability, (c) such contest will not cause any reduction in insurance coverage, (d) such contest shall not affect the ownership, use or occupancy of any of the Projects, (e) none of the Projects or any part thereof or any interest therein shall not be in any danger of being sold, forfeited or lost by reason of such contest by Borrower, (f) Borrower has given Lender prompt notice of such contest and, upon request by Lender from time to time, notice of the status of such contest by Borrower and/or information of the continuing satisfaction of the conditions set forth in clauses (a) through (e) of this Section 3.05, (g) upon a final determination of such contest, Borrower shall promptly comply with the requirements thereof, and (h) prior to and during such contest, Borrower shall furnish to Lender security satisfactory to Lender, in its reasonable discretion, against loss or injury by reason of such contest or the non-compliance with such Insurance Requirement (and if such security is cash, Lender shall deposit the same in an interest-bearing account and interest accrued thereon, if any, shall be deemed to constitute a part of such security for purposes of this Agreement and the Mortgages, but Lender (i) makes no representation or warranty as to the rate or amount of interest, if any, which may accrue thereon and shall have no liability in connection therewith and (ii) shall not be deemed to be a trustee or fiduciary with respect to its receipt of any such security and any such security may be commingled with other monies of Lender). If Borrower shall use any of the Projects or any portion thereof in any manner which could permit the insurer to cancel any insurance required to be provided hereunder, Borrower immediately shall obtain a substitute policy which shall satisfy the requirements of this Agreement and which shall be effective on or prior to the date on which any such other insurance policy shall be canceled. Borrower shall not by any action or omission invalidate any insurance policy required to be carried hereunder unless such policy is replaced as aforesaid, or materially increase the premiums on any such policy above the normal premium charged for such policy. Borrower shall cooperate with Lender in obtaining for Lender the benefits of any insurance proceeds lawfully or equitably payable to Lender in connection with the transaction contemplated hereby.
Section 3.06 Event of Default During Restoration. Notwithstanding anything to the contrary contained in this Agreement including, without limitation, the provisions of this Article 3, if an Event of Default exists (a) at the time of any casualty affecting a Project or any part thereof, or (b) at any time during any Work, or (c) at any time that Lender is holding or is entitled to receive any Insurance Proceeds pursuant to this Agreement, then Lender shall have no obligation to make such proceeds available for Work and Lender shall have the right and option, to be exercised in its sole and absolute discretion and election, with respect to the Insurance Proceeds, either to retain and apply such proceeds in reimbursement for the actual costs, fees and expenses incurred by Lender in accordance with the terms hereof in connection with the adjustment of the loss and any balance toward payment of the Debt in such priority and proportions as Lender, in its sole discretion, shall deem proper, or towards the Work, upon such terms and conditions as Lender shall determine, or to cure such Event of Default, or to any one or more of the foregoing as Lender, in its sole and absolute discretion, may determine. If Lender shall receive and retain such Insurance Proceeds, the lien of the Mortgages shall be reduced only by the amount thereof received, after reimbursement to Lender of expenses of collection, and actually applied by Lender in reduction of the principal sum payable under the Note in accordance with the Note.
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Section 3.07 Application of Proceeds to Debt Reduction.
(a) No damage to any Project, or any part thereof, by fire or other casualty whatsoever, whether such damage be partial or total, shall relieve Borrower from its liability to pay in full the Debt and to perform its obligations under this Agreement and the other Loan Documents.
Section 4.01 Payment of Impositions, Utilities and Taxes, etc.
(a) Borrower shall pay or cause to be paid all Impositions at least five (5) Business Days prior to the date upon which any fine, penalty, interest or cost for nonpayment is imposed, and furnish to Lender, upon request, receipted bills of the appropriate taxing authority or other documentation reasonably satisfactory to Lender evidencing the payment thereof. If Borrower shall fail to pay any Imposition in accordance with this Section and is not contesting or causing a contesting of such Imposition in accordance with Section 4.04 hereof, or if there are insufficient funds in the Basic Carrying Costs Escrow Account to pay any Imposition, Lender shall have the right, but shall not be obligated, to pay that Imposition, and Borrower shall repay to Lender, on demand, any amount paid by Lender, with interest thereon at the Default Rate from the date of the advance thereof to the date of repayment, and such amount shall constitute a portion of the Debt secured by the Mortgages.
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Section 4.02 Deduction from Value. In the event of the passage after the date of this Agreement of any Legal Requirement deducting from the value of the Projects for the purpose of taxation, any lien thereon or changing in any way the Legal Requirements now in force for the taxation of this Agreement and/or the Debt for federal, state or local purposes, or the manner of the operation of any such taxes so as to adversely affect the interest of Lender, or impose any tax or other charge on any Loan Document, then Borrower will pay such tax, with interest and penalties thereon, if any, within the statutory period. In the event the payment of such tax or interest and penalties by Borrower would be unlawful, or taxable to Lender or unenforceable or provide the basis for a defense of usury, then in any such event, Lender shall have the option, by written notice of not less than one hundred twenty (120) days, to declare the Debt immediately due and payable, with no prepayment fee or charge of any kind.
Section 4.03 No Joint Assessment. Borrower shall not consent to or initiate the joint assessment of any Project (a) with any other real property constituting a separate tax lot and Borrower represents and covenants that each Project is and shall remain one or more separate tax lots or (b) with any portion of such Project which may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to such Project as a single lien.
Section 4.04 Right to Contest. Borrower shall have the right, after prior notice to Lender, at its sole expense, to contest by appropriate legal proceedings diligently conducted in good faith, without cost or expense to Lender or any of its agents, employees, officers or directors, the validity, amount or application of any Imposition or any charge described in Section 4.01(b), provided that (a) no Event of Default shall exist during such proceedings and such contest shall not (unless Borrower shall comply with clause (d) of this Section 4.04) subject any of the Projects or any portion thereof to any lien or affect the priority of the lien of any Mortgage, (b) failure to pay such Imposition or charge will not subject Lender or any of its agents, employees, officers or directors to any civil or criminal liability, (c) the contest suspends enforcement of the Imposition or charge (unless Borrower first pays the Imposition or charge), (d) prior to and during such contest, Borrower shall furnish to Lender security satisfactory to Lender, in its reasonable discretion, against loss or injury by reason of such contest or the non-payment of such Imposition or charge (and if such security is cash, Lender may deposit the same in an interest-bearing account and interest accrued thereon, if any, shall be deemed to constitute a part of such security for purposes of this Agreement and the Mortgages, but Lender (i) makes no representation or warranty as to the rate or amount of interest, if any, which may accrue thereon and shall have no liability in connection therewith and (ii) shall not be deemed to be a trustee or fiduciary with respect to its receipt of any such security and any such security may be commingled with other monies of Lender), (e) such contest shall not materially and adversely affect the ownership, use or occupancy of any of the Projects, (f) none of the Projects or any part thereof or any interest therein shall not be in any danger of being sold, forfeited or lost by reason of such contest by Borrower, (g) Borrower has given Lender notice of the commencement of
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such contest and upon request by Lender, from time to time, notice of the status of such contest by Borrower and/or confirmation of the continuing satisfaction of clauses (a) through (f) of this Section 4.04, and (h) upon a final determination of such contest, Borrower shall promptly comply with the requirements thereof. Upon completion of any contest, Borrower shall immediately pay the amount due, if any, and deliver to Lender proof of the completion of the contest and payment of the amount due, if any, following which Lender shall return the security, if any, deposited with Lender pursuant to clause (d) of this Section 4.04. Borrower shall not pay any Imposition in installments unless permitted by applicable Legal Requirements, and shall, upon the request of Lender, deliver copies of all notices and bills relating to any Imposition or other charge covered by this Article IV to Lender.
Section 4.05 No Credits on Account of the Debt. Borrower will not claim or demand or be entitled to any credit or credits on account of the Debt for any part of the Impositions assessed against any of the Projects or any part thereof and no deduction shall otherwise be made or claimed from the taxable value of any of the Projects, or any part thereof, by reason of this Agreement or the Debt. In the event such claim, credit or deduction shall be required by Legal Requirements, Lender shall have the option, by written notice of not less than thirty (30) days, to declare the Debt immediately due and payable, and Borrower hereby agrees to pay such amounts not later than one hundred twenty (120) days after such notice.
Section 4.06 Documentary Stamps. If, at any time, the United States of America, any State or Commonwealth thereof or any subdivision of any such State shall require revenue or other stamps to be affixed to the Note, any of the Mortgages, this Agreement or any other Loan Document, or impose any other tax or charges on the same, Borrower will pay the same, with interest and penalties thereon, if any.
Section 5.01 Cash Flow. Borrower hereby acknowledges and agrees that (a) the Rents (which for the purposes of this Section 5.01 shall not include security deposits from tenants under Leases held by Borrower and not applied towards Rent) derived from the Projects, (b) Loss Proceeds and (c) all proceeds of the Rate Cap Agreement shall be utilized (i) to fund the Basic Carrying Costs Sub-Account, (ii) to pay all amounts to become due and payable under the Note by funding the Debt Service Payment Sub-Account, (iii) to fund the Recurring Replacement Reserve Sub-Account and (iv) to fund the Reletting Reserve Sub-Account. Borrower shall cause Manager to collect all security deposits from tenants under valid Leases, which shall be held by Manager, as agent for Borrower, in accordance with applicable law and, if in cash, and required by Legal Requirements to be maintained in a segregated account, in a segregated demand deposit bank account at Signature Bank, or such other commercial or savings bank or banks as may be selected by Borrower and reasonably satisfactory to Lender (the Security Deposit Account). Borrower shall notify Lender of any security deposits held as letters of credit and, upon Lenders request, such letters of credit shall be promptly delivered to Lender. Borrower shall have no right to withdraw funds from the Security Deposit Account; provided that, except during the continuance of an Event of Default, Borrower may withdraw funds from the Security Deposit Account to refund or apply security deposits as required or
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permitted by the Leases or by applicable Legal Requirements. During the continuance of an Event of Default, all withdrawals from the Security Deposit Account must be approved by Lender, which approval shall not be withheld (and shall be granted promptly) if a refund or application of such security deposits is required by the Leases or by the applicable Legal Requirements. Borrower shall cause all Rent which is due and payable to Borrower pursuant to the terms of the Leases (other than security deposits under valid Leases which are held in the Security Deposit Account) to be paid through automated clearing house funds (ACH), by Federal wire or by check directly to the Clearing Account. Pursuant to the Clearing Account Agreement, Borrower shall cause the Clearing Account Bank to transfer on each Business Day all available funds on deposit in the Clearing Account to the Central Account. Borrower shall give each tenant under a Lease an irrevocable direction in the form of Exhibit E attached hereto and made a part hereof to deliver all rent payments made by tenants and other payments constituting Rent directly to the Clearing Account and shall deliver copies of such letters to Lender, together with an Officers Certificate certifying that such letters were mailed to each tenant under the Leases promptly after the Closing Date. If, notwithstanding the foregoing, any Rent is received by Borrower or Manager, then (a) such amounts shall be held in trust for the benefit, and as the property, of Lender, (b) such amounts shall not be commingled with any other funds or property of Borrower or Manager and (c) Borrower or Manager shall deposit such amounts in the Clearing Account within three (3) Business Days of receipt. Upon execution of any Space Lease after the Closing Date, Borrower shall deliver to Lender a copy of the irrevocable direction letter referred to above, the receipt of which has been acknowledged by the tenant under such Space Lease. Lender may elect for Cause to change the financial institution in which the Clearing Account and Central Account shall be maintained; however, Lender shall give Borrower not fewer than five (5) Business Days prior notice of such change. All fees and charges of the bank(s) in which the Clearing Account and Central Account is located shall be paid by Borrower. For purposes of this Section 5.01, Cause shall mean (i) any financial institution which maintains the Clearing Account or the Central Account shall be in default of the Clearing Account Agreement or any other agreement relating to the Clearing Account and/or the Central Account, (ii) Lender reasonably determines that the financial condition of such financial institution has deteriorated materially, or (iii) an Event of Default shall have occurred and be continuing.
Section 5.02 Establishment of Accounts. Lender has established the Escrow Accounts (except the Lease Termination Payment Escrow Account which, to the extent of the payment by any tenant of any Lease Termination Payments, will be established by Lender) and the Central Account in the name of Lender as secured party. The Escrow Accounts, the Central Account and the Clearing Account shall be under the sole dominion and control of Lender and funds held therein shall not constitute trust funds. Borrower hereby irrevocably directs and authorizes Lender to withdraw funds from the Central Account, Clearing Account and the Escrow Accounts, all in accordance with the terms and conditions of this Agreement. Borrower shall have no right of withdrawal in respect of the Clearing Account, Central Account or the Escrow Accounts. Each transfer of funds to be made hereunder shall be made only to the extent that funds are on deposit in the Central Account or the affected Sub-Account or Escrow Account, and Lender shall have no responsibility to make additional funds available in the event that funds on deposit are insufficient. The Central Account shall contain the Basic Carrying Costs Sub-Account, the Debt Service Payment Sub-Account, the Recurring Replacement Reserve Sub-Account, the Reletting Reserve Sub-Account and the Bank Fees Sub-Account, each of which
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accounts shall be Eligible Accounts or book-entry sub-accounts of an Eligible Account (each a Sub-Account and collectively, the Sub-Accounts) to which certain funds shall be allocated and from which disbursements shall be made pursuant to the terms of this Agreement. Sums held in the Escrow Accounts may be commingled with other monies held by Lender.
Section 5.03 Permitted Investments. All sums deposited into the Liquidity Reserve Escrow Account, the Recurring Replacement Reserve Escrow Account, the Reletting Reserve Escrow Account, the Engineering Escrow Account and the Accrued Lease Liability Escrow Account may be invested in Permitted Investments; however, Borrower acknowledges that Lender makes no representation or warranty as to the rate of return earned thereon. Lender shall not have any liability for any loss in investments of funds in such Escrow Accounts and no such loss shall affect Borrowers obligation to fund, or liability for funding, the Central Account and each Sub-Account and Escrow Account, as the case may be. Borrower agrees that Lender shall include all such earnings on the aforesaid Escrow Accounts as income of Borrower (and, if Borrower is a partnership, limited liability company or other pass-through entity, the partners, members or beneficiaries of Borrower, as the case may be) for federal and applicable state and local tax purposes. All interest paid or other earnings on funds deposited into the Escrow Accounts made hereunder shall be deposited into the Central Account and shall be allocated to the Liquidity Reserve Escrow Account, the Recurring Replacement Reserve Escrow Account, the Reletting Reserve Escrow Account or the Accrued Lease Liability Escrow Account, as applicable. Borrower shall pay all costs, fees and expenses incurred in connection with the establishment and maintenance of, or the disbursement from any of the foregoing Escrow Accounts, which sums shall be due and payable by Borrower upon demand and may be deducted by Lender from amounts on deposit in the Central Account or the Escrow Accounts.
Section 5.04 Servicing Fees. At the option of Lender, the Loan may be serviced by Lender or by a servicer (the Servicer) selected by Lender and Lender may delegate all or any portion of its responsibilities under this Agreement to the Servicer. Borrower shall pay all servicing fees of Servicer pursuant to the Servicers then standard conditions and rates or of Lender, if Lender is servicing the Loan on its own behalf, in any case, not to exceed two basis points (i.e., 0.02%) per annum paid on the aggregate balance of the Principal Amount computed on the basis of the actual number of days elapsed in a 360 day year.
Section 5.05 Monthly Funding of Sub-Accounts and Escrow Accounts.
(a) On or before each Payment Date during the term of the Loan, commencing on the first (1st) Payment Date occurring after the month in which the Loan is initially funded, Borrower shall pay, or cause to be paid to the Central Account the following: the Basic Carrying Costs Monthly Installment, the Required Debt Service Payment, the Recurring Replacement Reserve Monthly Installment and the Reletting Reserve Monthly Installment, pursuant to clauses (i) through (v) of this Section 5.05(a) and all funds transferred or deposited into the Central Account shall be allocated among the Sub-Accounts as follows and in the following priority:
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Provided that (I) no Event of Default has occurred and (II) Lender has received the Managers Certification referred to in Section 2.09(d) hereof for the most recent period for which the same is due, Lender agrees that in each Current Month any amounts deposited into or remaining in the Central Account after the Sub-Accounts have been funded in accordance with clauses (i) through (vi) above with respect to the Current Month and any periods prior thereto, shall be disbursed by Lender on the Payment Date in such Current Month to Borrower. In addition, on the date (the Supplemental Disbursement Date) that is two (2) weeks after each Payment Date, provided that no Event of Default has occurred, Lender agrees that any amounts deposited in the Central Account since such preceding Payment Date, which amounts exceed the amounts required to be funded into the Sub-Accounts in accordance with clauses (i) through (vi) above with respect to the succeeding month (i.e., the month following the Current Month), shall be disbursed by Lender to Borrower on the Supplemental Disbursement Date. During the existence of an Event of Default, no funds held in the Central Account shall be distributed to Borrower, and Lender shall have the right to apply all or any portion of the funds held in the Central Account or any Sub-Account or any Escrow Account to the Debt in Lenders sole discretion.
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Section 5.06 Payment of Basic Carrying Costs. Subject to the following provisions of this Section 5.06, Borrower hereby agrees to pay all Basic Carrying Costs (without regard to the amount of money in the Basic Carrying Costs Sub-Account or the Basic Carrying Costs Escrow Account). Provided that no Event of Default has occurred, Lender shall make payment of the Basic Carrying Costs out of the Basic Carrying Costs Escrow Account before same shall be delinquent, provided, however, that if there are not sufficient funds available in the Basic Carrying Costs Escrow Account, Lender shall not be obligated to release funds to pay any Basic Carrying Costs, unless Borrower demonstrates to Lenders reasonable satisfaction that Borrower has paid or will pay any such deficiency. Upon Lenders request, Borrower shall furnish Lender with bills and all other documents necessary, as reasonably determined by Lender, for the payment of the Basic Carrying Costs which are then due and payable. Borrowers obligation to pay (or cause Lender to pay) Basic Carrying Costs pursuant to this Agreement shall include, to the extent permitted by applicable law, Impositions resulting from future changes in law which impose upon Lender an obligation to pay any property taxes or other Impositions. Notwithstanding the foregoing provisions of this Section 5.06, Lender acknowledges that Borrower has advised Lender that Borrower maintains a blanket insurance policy to cover the Projects and pays the premiums for such policy in advance. Upon presentation to Lender of evidence reasonably satisfactory to Lender of the payment of such premiums, provided that no Event of Default has occurred, Lender agrees to release to Borrower from the Basic Carrying Costs Escrow Account (to the extent of funds on deposit therein) funds in an amount required to reimburse Borrower for the premiums so paid.
Provided that no Event of Default shall exist, all funds deposited into the Basic Carrying Costs Escrow Account shall be held by Lender pursuant to the provisions of this Agreement and shall be applied in payment of Basic Carrying Costs in accordance with the terms hereof. Should an Event of Default exist, the sums on deposit in the Basic Carrying Costs Sub-Account and the Basic Carrying Costs Escrow Account may be applied by Lender in payment of any Basic Carrying Costs or may be applied to the payment of the Debt or any other charges affecting all or any portion of any of the Projects as Lender in its sole discretion may determine; provided, however, that no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender as herein provided.
Section 5.07 Reletting Reserve Escrow Account. Borrower hereby agrees to pay all Reletting Expenditures (without regard to the amount of money then available in the Reletting Reserve Escrow Account or the Reletting Reserve Sub-Account). Upon the execution of any Space Lease with respect to which Borrower is obligated to undertake or pay for any Reletting Expenditures, Borrower shall submit to Lender (a) a budget (a Budget) outlining in reasonable detail all of the material expenses relating to said Reletting Expenditures, (b) with respect to a Lease other than a Major Space Lease, a copy of the signed Lease to which said Reletting Expenditures relate which is otherwise in compliance with the provisions of this Agreement, (c) a copy of the plans and specifications for the proposed Reletting Expenditures (to the extent applicable), and (d) an Officers Certificate with respect to the items referred to in clauses (a) through (c) and, as applicable, setting forth an anticipated completion date for the Reletting Expenditures (other than leasing commissions). Thereafter, provided that no Event of
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Default shall exist and that Lender has received a written request from Borrower for payment or reimbursement of any costs incurred in connection with any Reletting Expenditures or a portion thereof, together with (i) copies of bills for such Reletting Expenditures and, if requested by Lender with respect to any single line item costing in excess of $10,000.00, unconditional lien waivers (other than conditioned upon payment of the amount requested), (ii) a statement from an Architect or Engineer, indicating that the Reletting Expenditures or portion thereof in question have been completed in compliance with all Legal Requirements, and (iii) such other documentation as may be reasonably requested by Lender to establish that the Reletting Expenditures (other than leasing commissions) or portion thereof which are the subject of such request have been completed, all of which are reasonably acceptable in form and substance to Lender, Lender shall disburse within five (5) Business Days after such request to Borrower the amount requested in connection with such Reletting Expenditures. Borrower may make a request for disbursement of sums from the Reletting Reserve Escrow Account no more than twice during any month and any request shall be in a minimum amount of $25,000 (except for the final disbursement, which may be less than $25,000). With respect to any Reletting Expenditures that constitute brokerage commissions, upon the receipt of (x) copies of bills for such Reletting Expenditures and (y) with respect to each Lease other than a Major Space Lease, a copy of the signed Lease to which said Reletting Expenditures relate which Lease is in compliance with the provisions of this Agreement, Lender shall disburse to Borrower the amount requested to pay for such Reletting Expenditures out of the Reletting Reserve Escrow Account. Lender shall not be required to make any disbursements out of the Reletting Reserve Escrow Account if an Event of Default shall exist, if more than two such requests are made in any month or if sufficient funds are not available in the Reletting Reserve Sub-Account. Provided that no Event of Default shall exist, all funds deposited into the Reletting Reserve Escrow Account shall be held by Lender pursuant to the provisions of this Agreement and shall be applied in payment of Reletting Expenditures. Should an Event of Default exist, the sums on deposit in the Reletting Reserve Escrow Account may be applied by Lender in payment of any Reletting Expenditures or may be applied to the payment of the Debt or any other charges affecting all or any portion of the Projects, as Lender, in its sole discretion, may determine; provided, however, that no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender as herein provided.
In addition to the amount set forth on Exhibit B hereto as the initial deposit to the Reletting Reserve Escrow Account and the Reletting Monthly Installment, Borrower shall pay to Lender for deposit in the Reletting Reserve Escrow Account all funds received by Borrower from tenants in connection with the cancellation of any Leases, including, but not limited to, any cancellation fees, penalties, tenant improvements, leasing commissions or other charges (together Lease Termination Payments). Provided that no Default or Event of Default then exists, Lender agrees to hold such Lease Termination Payments in the Lease Termination Payment Escrow Account for disbursement pursuant to Section 5.15 hereof.
Section 5.08 Recurring Replacement Reserve Escrow Account. Borrower hereby agrees to pay all Recurring Replacement Expenditures with respect to each of the Projects (without regard to the amount of money then available in the Recurring Replacement Reserve Sub-Account or the Recurring Replacement Reserve Escrow Account). Provided that Lender has received written notice from Borrower at least five (5) Business Days prior to the due date of any payment relating to Recurring Replacement Expenditures and not more frequently than once
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each month, and further provided that no Event of Default exists, that there are sufficient funds available in the Recurring Replacement Reserve Escrow Account and Borrower shall have theretofore furnished Lender with copies of bills, invoices and other documentation as may be reasonably required by Lender to establish that the Recurring Replacement Expenditures which are the subject of such request represent amounts due for completed or partially completed capital work and improvements performed at the Projects, Lender shall promptly make such payments out of the Recurring Replacement Reserve Escrow Account.
Provided that no Event of Default shall exist, all funds deposited into the Recurring Replacement Reserve Escrow Account shall be held by Lender pursuant to the provisions of this Agreement and shall be applied in payment of Recurring Replacement Expenditures. Should an Event of Default exist, the sums on deposit in the Recurring Replacement Reserve Sub-Account and the Recurring Replacement Reserve Escrow Account may be applied by Lender in payment of any Recurring Replacement Expenditures or may be applied to the payment of the Debt or any other charges affecting all or any portion of the Projects, as Lender in its sole discretion may determine; provided, however, that no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender as herein provided.
Section 5.09 Liquidity Reserve Escrow Account.
(a) On the Closing Date, Borrower shall deposit $2,000,000.00 with Lender as a deposit to the Liquidity Reserve Escrow Account. All funds on deposit in the Liquidity Reserve Escrow Account shall be held by Lender pursuant to the provisions of this Agreement. Amounts in the Liquidity Reserve Escrow Account are to be used solely for the purpose of paying (i) Cash Expenses, (ii) Debt Service and (iii) any other costs and expenses of owning and operating the Projects that have been approved by Lender, which approval shall not be unreasonably withheld, conditioned or delayed (collectively, the Liquidity Reserve Expenses), provided, however, that under no circumstances shall amounts on deposit in the Liquidity Reserve Escrow Account be used to pay Capital Expenditures.
(b) So long as no Event of Default exists, and Lender shall have received (i) a Manager Certification with respect to all preceding Interest Accrual Periods and (ii) bills and any other documents reasonably requested by Lender evidencing the Liquidity Reserve Expenses the payment of which is being requested by Borrower, Lender shall disburse on each Payment Date from the balance on deposit in the Liquidity Reserve Escrow Account the amount necessary for Borrower to pay, in full, the Liquidity Reserve Expenses payable during the month ending on the day preceding the Payment Date in question, to the extent that the revenues generated by the Projects remaining after the payments required under clauses (i) (vi) of Section 5.05(a) hereof (to the extent that funds generated are sufficient for the payment thereof) are insufficient to pay the Liquidity Reserve Expenses due on such Payment Date (each such shortfall, the Monthly Shortfall). Borrower acknowledges that Lender has no obligation to disburse more than (y) the remaining balance of the Liquidity Reserve Escrow Account if such amount is less than the full payment due or (z) the amount of the Monthly Shortfall in question, whichever is less. Notwithstanding the foregoing, neither the insufficiency of the undisbursed balance of, nor the unavailability of, the Liquidity Reserve Escrow Account is intended to, and shall therefore not, constitute a limitation on Borrowers obligation to pay all Liquidity Reserve Expenses, any other
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Operating Expenses and all other costs and expenses relating to the Mortgaged Property as and when the same become due and payable, it being understood and agreed that if, on any Payment Date, there shall have occurred and be continuing any Event of Default or the undisbursed balance of the Liquidity Reserve Escrow Account shall be insufficient to make any portion of such payment, Borrower shall nevertheless be obligated to make each such payment in full as and when due.
(c) Should an Event of Default exist, the sums on deposit in the Liquidity Reserve Escrow Account may be applied by Lender in payment of any Operating Expenses for any of the Projects or may be applied to the payment of the Debt or any other charges affecting all or any portion of any of the Projects as Lender, in its sole discretion, may determine; provided, however, that no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender as herein provided.
Section 5.11 [Reserved].
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Section 5.12 Performance of Engineering Work.
(a) Borrower shall promptly commence and diligently thereafter pursue to completion (without regard to the amount of money then available in the Engineering Escrow Account) the Required Engineering Work prior to the six (6) month anniversary of the Closing Date. After Borrower completes an item of Required Engineering Work, Borrower may submit to Lender an invoice therefor with, if requested by Lender, lien waivers (which may be conditioned upon payment) and a statement from the Engineer, reasonably acceptable to Lender, indicating that the portion of the Required Engineering Work in question has been completed in compliance with all Legal Requirements, and Lender shall, within twenty (20) days thereafter, although in no event more frequently than once each month, pay (or reimburse) such amount to Borrower from the Engineering Escrow Account; provided, however, that Borrower shall not be paid (or reimbursed) more than the amount set forth on Exhibit C hereto as the amount allocated to the portion of the Required Engineering Work for which reimbursement is sought.
Section 5.13 Loss Proceeds. In the event of a casualty to any Project, unless Lender elects, or is required pursuant to Article III hereof to make all of the Insurance Proceeds available to Borrower for restoration, Lender and Borrower shall cause all such Insurance Proceeds to be paid by the insurer directly to the Central Account, whereupon Lender shall, after deducting Lenders reasonable costs of recovering and paying out such Insurance Proceeds, including without limitation, reasonable attorneys fees, apply same to reduce the Debt in accordance with the terms of the Note; provided, however, that if Lender elects, is required to elect or is deemed to have elected, to make the Insurance Proceeds available for restoration, all Insurance Proceeds in respect of rent loss, business interruption or similar coverage shall be maintained in the Central Account, to be applied by Lender in the same manner as Rent received with respect to the operation of the Projects; provided, further, however, that in the event that the Insurance Proceeds with respect to such rent loss, business interruption or similar insurance policy are paid in one or more lump sums in advance, Lender shall hold such Insurance Proceeds in a segregated interest-bearing escrow account, which shall be an Eligible Account, shall estimate, in Lenders reasonable discretion, the number of months required for Borrower to restore the damage caused by the casualty, shall divide the aggregate rent loss, business interruption or similar Insurance Proceeds by such number of months, and shall disburse from such bank account into the Central Account each month during the performance of such restoration such monthly installment of said Insurance Proceeds. In the event that Insurance
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Proceeds are to be applied toward restoration, Lender shall hold such funds in a segregated bank interest-bearing account at the Bank, which shall be an Eligible Account, and shall disburse same in accordance with the provisions of Section 3.04 hereof. Unless Lender elects, or is required pursuant to Section 6.01 hereof to make all of the Condemnation Proceeds available to Borrower for restoration, Lender and Borrower shall cause all such Condemnation Proceeds to be paid to the Central Account, whereupon Lender shall, after deducting Lenders reasonable costs of recovering and paying out such Condemnation Proceeds, including without limitation, reasonable attorneys fees, apply same to reduce the Debt in accordance with the terms of the Note; provided, however, that any Condemnation Proceeds received in connection with a temporary Taking shall be maintained in the Central Account, to be applied by Lender in the same manner as Rent received with respect to the operation of the Projects; provided, further, however, that in the event that the Condemnation Proceeds of any such temporary Taking are paid in a lump sum in advance, Lender shall hold such Condemnation Proceeds in a segregated interest-bearing bank account, which shall be an Eligible Account, shall estimate, in Lenders reasonable discretion, the number of months that the Project shall be affected by such temporary Taking, shall divide the aggregate Condemnation Proceeds in connection with such temporary Taking by such number of months, and shall disburse from such bank account into the Central Account each month during the pendency of such temporary Taking such monthly installment of said Condemnation Proceeds. In the event that Condemnation Proceeds are to be applied toward restoration, Lender shall hold such funds in a segregated interest-bearing bank account at the Bank, which shall be an Eligible Account, and shall disburse same in accordance with the provisions of Section 3.04 hereof. If any Loss Proceeds are received by Borrower, such Loss Proceeds shall be received in trust for Lender, shall be segregated from other funds of Borrower, and shall be forthwith paid into the Central Account, or paid to Lender to hold in a segregated interest-bearing bank account at the Bank, in each case to be applied or disbursed in accordance with the foregoing. Any Loss Proceeds (other than proceeds of business interruption, loss of rents or a temporary taking) made available to Borrower for restoration in accordance herewith, to the extent not used by Borrower in connection with, or to the extent they exceed the cost of, such restoration, shall be deposited into the Central Account, whereupon Lender shall apply the same to reduce the Debt in accordance with the terms of the Note.
Section 5.14 Accrued Lease Liability Escrow Account. Borrower has deposited in the Accrued Lease Liability Escrow Account, on the date hereof, the amount set forth on Exhibit B hereto for payment of Accrued Lease Liability Expenses. Provided that no Event of Default shall exist, Lender shall, from time to time after the written request of Borrower, but not more than once in any month, disburse to the Borrower or, at Lenders option with respect to any single payment to a tenant or other payee in excess of $100,000.00, directly to the appropriate tenant or other payee, the amount of the Accrued Lease Liability Expenses due and payable to such tenant or other payee pursuant to the express terms of such tenants Lease or the agreement with such other payee, as the case may be. Any such request by Borrower for disbursement of funds held in the Accrued Lease Liability Escrow Account shall be accompanied by an Officers Certificate stating that such requested amount is then due and payable under the applicable tenants Lease. From and after the date upon which all of the obligations under the Leases with respect to which the Accrued Lease Liability Escrow Account has been established have been fully performed, Borrower may submit a written request, which request shall be delivered with an Officers Certification reasonably satisfactory to Lender confirming that all such obligations under all such Leases have been so fully performed, and Lender shall, within ten (10) days
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thereafter, disburse any balance of the Accrued Lease Liability Escrow Account to Borrower. Should an Event of Default exist, the sums on deposit in the Accrued Lease Liability Escrow Account may be applied by Lender in payment of any Accrued Lease Liability Expenses or may be applied to the payment of the Debt or any other charges affecting all or any portion of the Property, as Lender, in its sole discretion, shall determine; provided, however, that no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender as herein provided.
Section 5.15 Lease Termination Payment Escrow Account. Borrower may request a disbursement from the Lease Termination Payment Escrow Account no more than one (1) time per calendar month for one or more of the following uses: (i) for the payment of Reletting Expenditures (in which event such funds shall be distributed in accordance with Section 5.07 hereof); (ii) for the payment of Debt Service on the Note to the extent that Lender has reasonably determined on any Payment Date that there are insufficient funds in the Debt Service Payment Sub-Account to pay the then owing Required Debt Service Payment; or (iii) for the payment of Cash Expenses to the extent that Lender has reasonably determined on any Payment Date that there are insufficient funds in the Central Account, after the Sub-Accounts have been funded in accordance with clauses (i) through (vi) of Section 5.05 hereof, to pay for the Cash Expenses for the Current Month pursuant to the related Approved Annual Budget. Should an Event of Default exist, the sums on deposit in the Lease Termination Payment Escrow Account may be applied by Lender in payment of any Operating Expenses for any of the Projects or may be applied to the payment of the Debt or any other charges affecting all or any portion of any of the Projects as Lender, in its sole discretion, may determine; provided, however, that no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender as herein provided.
Section 5.16 REIT Limitations on Investment of Sums in Escrow Accounts.
(a) Notwithstanding anything herein to the contrary, Lender hereby acknowledges the status of each of MCC and SLG as a real estate investment trust (REIT) and Lender agrees that it shall only invest amounts held in the Escrow Accounts in a manner that is not inconsistent with the status of each of MCC and SLG as a REIT and which will not cause MCC and SLG to fail: (a) the annual gross income tests set forth in Section 856(c)(2) and (3) of the Code; and (b) the quarterly assets tests set forth in Section 856(c)(4) of the Code and which minimizes federal, state and local income and excise taxes incurred by MCC or SLG or any of their respective Affiliates, including taxes under Section 857(b), 860(c) and 4981 of the Code.
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Section 6.01 Condemnation.
(a) Borrower shall notify Lender promptly of the commencement or threat of any Taking of all or any portion of a Project. Lender is hereby irrevocably appointed as Borrowers attorney-in-fact, coupled with an interest, with exclusive power to collect, receive and retain the proceeds of any such Taking in accordance with the terms of this Agreement, Borrower shall not make any compromise or settlement in connection with such proceedings without the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed (except during the existence of an Event of Default, in which event Borrowers approval shall not be required), provided, however, that Borrower may, without Lenders consent, compromise or settle any such proceeding with respect to Condemnation Proceeds in an amount less than five percent (5%) of the Allocated Loan Amount of the affected Project. Borrower shall execute and deliver to Lender any and all instruments reasonably required in connection with any such proceeding promptly after request therefor by Lender. All Condemnation Proceeds are hereby assigned to and shall be paid to Lender. If any Condemnation shall result in the actual constructive loss of fifteen percent (15%) or more of the fair market value of any Project, Lender shall have the option, in Lenders sole discretion, to apply such Condemnation Proceeds (less any cost to Lender of recovering and paying out such proceeds, including, without limitation, reasonable attorneys fees and disbursements and costs allocable to inspecting any repair, restoration or rebuilding work and the plans and specifications therefor), toward the payment of the Debt or to allow such proceeds to be used for the Work; provided, however, with respect to any other Condemnation, Lender shall make such proceeds available to Borrower for restoration in accordance with Section 3.04(b). In the event Lender elects or is required to make Condemnation Proceeds available to be used toward the restoration or rebuilding of the affected Project to a usable whole, such Condemnation Proceeds shall be disbursed in the manner and subject to the conditions set forth in Section 3.04(b) hereof. Any excess proceeds remaining after completion of such restoration or rebuilding shall be applied to the repayment of the Debt. If the Condemnation Proceeds are used to reduce the Debt, they shall be applied in accordance with the provisions of the Note with no prepayment fee or charge of any kind. In addition, in the event that Lender shall elect to apply such Condemnation Proceeds to reduce the Debt, (i) the Allocated Loan Amount of the affected Project shall be reduced on a dollar for dollar basis with the amount of proceeds so applied, (ii) Borrower shall have the right, notwithstanding whether the Lockout Date has or has not occurred, to cause a Release of such Project and (iii) in connection with such Release, the Release Amount shall be the Allocated Loan Amount of such Project as so reduced. Borrower shall promptly execute and deliver all instruments requested by Lender for the purpose of confirming the assignment of the Condemnation Proceeds to Lender.
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Section 7.01 Leases.
(a) Borrower shall deliver copies of all Space Leases, and amendments, modifications and renewals thereof entered into after the date hereof, to Lender. All new Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and, except for Space Leases with the Manager not in excess of 4,000 square feet with respect to any Project, shall be arms-length transactions. Borrower has delivered to Lender, and Lender has approved, standard forms of Space Lease for the Projects, which provide that they are subordinate to the Loan and that the lessees thereunder will attorn to Lender.
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Section 7.02 Management of Projects.
(a) Borrower shall manage the Projects or cause the Projects to be managed in accordance with the Approved Manager Standard.
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Section 8.01 Maintenance and Repair of the Projects; Alterations; Replacement of Equipment. Borrower hereby covenants and agrees:
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TRANSFER OR ENCUMBRANCE OF THE PROJECTS
Section 9.01 Other Encumbrances. Borrower shall not further encumber or permit the further encumbrance in any manner (whether by grant of a pledge, security interest or otherwise) of the Projects or any part thereof or interest therein, including, without limitation, of the Rents therefrom. In addition, Borrower shall not further encumber and shall not permit the further encumbrance in any manner (whether by grant of a pledge, security interest or otherwise) of Borrower or any direct or indirect interest in Borrower, except for the Permitted MCRLP Financing, if any, and as expressly permitted pursuant to this Agreement.
Section 9.02 No Transfer. Borrower acknowledges that Lender has examined and relied on the expertise of Borrower, MCC and SLG, in owning and operating properties such as the Projects in agreeing to make the Loan and will continue to rely on Borrowers ownership of the Projects as a means of maintaining the value of the Projects as security for repayment of the Debt and Borrower acknowledges that Lender has a valid interest in maintaining the value of the Projects. Borrower shall not Transfer, nor permit any Transfer, other than a Permitted Transfer, without the prior written consent of Lender, which consent Lender may withhold in its sole and absolute discretion. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon a Transfer, other than a Permitted Transfer, without Lenders consent. This provision shall apply to every Transfer other than a Permitted Transfer, regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Section 9.03 Due on Sale. Lender may declare the Debt immediately due and payable upon any Transfer, other than a Permitted Transfer, without Lenders consent without regard to whether any impairment of its security or any increased risk of default hereunder can be demonstrated. This provision shall apply to every Transfer, other than a Permitted Transfer, of the Projects or any part thereof or interest in the Projects or in Borrower or Sole Member regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer of the Projects or interest in Borrower or Sole Member.
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Section 9.04 Transfer of Projects; Loan Assumption. Notwithstanding the foregoing set forth in Sections 9.02 and 9.03, neither Lenders consent nor a Rating Comfort Letter shall be required for, and Borrower shall have the one-time right to effect, a sale or transfer of (a) fee title to all of the Projects or (b) 100% of the direct and/or indirect ownership interests in the Borrower, in either case in a single transaction (Special Transfer) to a Qualified Transferee, provided that Borrower satisfies the following conditions:
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no Event of Default or event which with the giving of notice or the passage of time would constitute an Event of Default shall have occurred and remain uncured; |
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Lender shall have received from Borrower not less than thirty (30) days prior written notice of the proposed sale or transfer; |
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Lender shall have received information satisfactory to it regarding such Qualified Transferees compliance with the Patriot Act; |
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such Qualified Transferee and its property manager shall have sufficient experience in the ownership and management of properties similar to the Projects, and Lender shall be provided with reasonable evidence thereof (and Lender reserves the right to reasonably withhold approval of the substitution of the property manager); |
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such Qualified Transferee shall have executed and delivered to Lender an assumption agreement in form and substance acceptable to Lender, evidencing such Qualified Transferees agreement to abide and be bound by the terms of the Note, the Mortgage and the other Loan Documents, together with such legal opinions and title insurance endorsements as may be reasonably requested by Lender; |
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Lender shall have received evidence satisfactory to it (which shall include a legal non-consolidation opinion reasonably acceptable to (A) prior to a Secondary Market Transaction, Lender or (B) after a Secondary Market Transaction, the Rating Agency) that the single-purpose nature and bankruptcy remoteness of Borrower and its shareholders, partners or members, as the case may be, following such transfers are in accordance with the standards of the Rating Agency; |
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Lender shall have received on or prior to the date of the sale or transfer (A) an application fee in the amount of $5,000.00 and (B) the payment of all actual out-of-pocket costs and expenses incurred by Lender and, if applicable, the Rating Agency, in connection with such assumption (including reasonable attorneys fees and costs); |
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such Qualified Transferee is a Single Purpose Entity that complies with the representations and covenants set forth in Section 2.02(g), Section 2.02(t) and Section 2.02(w) hereof; |
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Borrower and the Qualified Transferee execute and cause to be filed in such public records as Lender deems appropriate, without any cost or expense to Lender, new financing statements or financing statement amendments and any additional documents reasonably requested by Lender to grant, reaffirm or continue the liens and security interests held by Lender under the Loan Documents; |
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Borrower causes to be delivered to Lender, without any cost or expense to Lender, such property and liability insurance endorsements or certificates and other similar materials as Lender may reasonably deem necessary at the time of the Special Transfer, all in form and substance reasonably satisfactory to Lender; |
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Borrower executes and delivers to Lender, without any cost or expense to Lender, a release of Lender, its officers, directors, employees and agents, from all claims and liability relating to the transactions evidenced by the Loan Documents through and including the date of the closing of the Special Transfer, which agreement shall be in form and substance reasonably satisfactory to Lender and shall be binding upon the Qualified Transferee; |
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Subject to the provisions of Section 18.32 hereof, such Special Transfer is not construed so as to relieve Borrower of any personal liability under the Note or any of the other Loan Documents for any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Special Transfer and Borrower executes, without any cost or expense to Lender, such documents and agreements as Lender shall reasonably require to evidence and effectuate the ratification of said personal liability. Borrower shall be released from and relieved of any personal liability under the Note or any of the other Loan Documents for any acts or events occurring or obligations arising after the closing of such Special Transfer which are not caused by or arising out of any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Special Transfer; |
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An Acceptable Substitute Guarantor shall have assumed the Guaranty or shall have executed a replacement guaranty substantially similar to the Guaranty and such successor Guarantor executes such documents as may be reasonably required by Lender to evidence such assumption. The original Guarantor shall be released from and relieved of any of its obligations under any indemnity or guaranty executed in connection with the Loan for any acts or events occurring or obligations arising after the closing of such Special Transfer which are not caused by or arising out of any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Special Transfer; |
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the Qualified Transferee shall assume the obligations of Borrower under any management agreements pertaining to the Projects, or shall cause the new manager and management agreement to satisfy the requirements of Section 7.02 hereof, as applicable; |
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the Qualified Transferee shall furnish an opinion of counsel reasonably satisfactory to Lender that the acquisition of the Projects and the assumption of the Loan and the Loan Documents by Qualified Transferee and, to the extent applicable, successor Guarantor, were validly authorized, and duly executed and delivered, and constitute the legal, valid and binding obligations of Qualified Transferee and such successor Guarantor, enforceable against each of them in accordance with their respective terms, and with respect to such other matters as Lender may reasonably require; |
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the Qualified Transferee shall provide Lender with fully executed copies of (A) deeds covering the Projects, (B) bills of sale covering the personal property with respect to each Project and (C) assignments and assumption agreements (in respect of the Leases) in form and substance reasonably satisfactory to Lender; and |
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Buyer shall provide Lender a Rate Cap Agreement reasonably satisfactory to Lender and satisfying the provisions of Section 5.10 hereof (in which case Lender shall release the Borrowers then-existing Rate Cap Agreement to Borrower), which requirement may also be satisfied by the assumption by Buyer of the Rate Cap Agreement in place on the date hereof or any extension or replacement thereof delivered pursuant to Section 5.10 hereof. |
Section 10.01 Estoppel Certificates.
(a) After request by Lender, Borrower, within fifteen (15) days and at its expense, will furnish Lender with a statement, duly acknowledged and certified, setting forth (i) the amount of the original principal amount of the Note, and the unpaid principal amount of the Note, (ii) the rate of interest of the Note, (iii) the date payments of interest and/or principal were last paid, (iv) any offsets or defenses to the payment of the Debt, and if any are alleged, the nature thereof, (v) that the Note and this Agreement have not been modified or if modified, giving particulars of such modification and (vi) no Default by Borrower exists or if such Default by Borrower exists, the nature thereof, the period of time it has existed, and the action being taken to remedy such Default.
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Section 11.01 Notices. Any notice, demand, statement, request or consent made hereunder shall be in writing and delivered personally or sent to the party to whom the notice, demand or request is being made by Federal Express or other nationally recognized overnight delivery service, as follows and shall be deemed given when delivered personally or one (1) Business Day after being deposited with Federal Express or such other nationally recognized delivery service:
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To Lender, at the address first written above, |
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with a copy to: |
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Solomon and Weinberg LLP |
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900 Third Avenue |
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New York, New York 10022 |
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Attention: Gary S. Kleinman, Esq. |
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If to Borrower: |
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To Borrower, at the address first written above, |
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with a copy to: |
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Greenbaum Rowe Smith & Davis LLP |
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99 Wood Avenue South |
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Iselin, New Jersey 08830 |
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Attention: Martin Dollinger, Esq. |
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with a further copy to : |
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Greenberg Traurig LLP |
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200 Park Avenue |
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New York, New York 10166 |
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Attention: Joseph Kishel, Esq. |
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or such other address as either Borrower or Lender shall hereafter specify by not less than ten (10) days prior written notice as provided herein; provided, however, that notwithstanding any provision of this Article to the contrary, such notice of change of address shall be deemed given only upon actual receipt thereof. Rejection or other refusal to accept or the inability to deliver because of changed addresses of which no notice was given as herein required shall be deemed to be receipt of the notice, demand, statement, request or consent.
Section 12.01 Indemnification Covering Projects. In addition, and without limitation of any other provision of this Agreement or any other Loan Document, Borrower shall protect, indemnify and save harmless Lender and its successors and assigns, and each of their agents, employees, officers, directors, stockholders, partners and members (collectively, Indemnified Parties) for, from and against any claims, demands, penalties, fines, liabilities, settlements, losses damages, fees, costs and expenses of whatever kind or nature, known or unknown, contingent or otherwise, whether incurred or imposed within or outside the judicial process, including, without limitation, reasonable attorneys fees and disbursements imposed upon or incurred by or asserted against any of the Indemnified Parties (collectively, Liabilities) by reason of (a) ownership of this Agreement, the Assignment, the Projects or any part thereof or any interest therein or receipt of any Rents; (b) any accident, injury to or death of any person or loss of or damage to property occurring in, on or about the Projects or any part thereof or on the adjoining sidewalks, curbs, parking areas, streets or ways; (c) any use, nonuse or condition in, on or about, or possession, alteration, repair, operation, maintenance or management of, the Projects or any part thereof or on the adjoining sidewalks, curbs, parking areas, streets or ways; (d) any failure on the part of Borrower to perform or comply with any of the terms of this Agreement or the Assignment; (e) performance of any labor or services or the furnishing of any materials or other property in respect of the Projects or any part thereof; (f) any claim by brokers, finders or similar Persons claiming to be entitled to a commission in connection with any Lease or other transaction involving the Projects or any part thereof; (g) any Imposition including, without limitation, any Imposition attributable to the execution, delivery, filing, or recording of any Loan Document, Lease or memorandum thereof; (h) any lien or claim arising on or against the Projects or any part thereof under any Legal Requirement or any liability asserted against any of the Indemnified Parties with respect thereto; (i) any claim arising out of or in any way relating to any tax or other imposition on the making and/or recording of this Agreement, the Note or any of the other Loan Documents; (j) a Default under Sections 2.02(f) or 2.02(g) hereof, (k) the failure of any Person to file timely with the Internal Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may be required in connection with the Loan, or to supply a copy thereof in a timely fashion to the recipient of the proceeds of the Loan; or (l) the claims of any lessee or any Person acting through or under any lessee or otherwise arising under or as a consequence of any Lease. Notwithstanding the foregoing provisions of this Section 12.01 to the contrary, Borrower shall have no obligation to indemnify the Indemnified Parties pursuant to this Section 12.01 for liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses relative to the foregoing which result from Lenders, and its successors or assigns, willful misconduct
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or gross negligence. Any amounts payable to Lender by reason of the application of this Section 12.01 shall constitute a part of the Debt secured by this Agreement and the other Loan Documents and shall become immediately due and payable and shall bear interest at the Default Rate from the date the liability, obligation, claim, cost or expense is sustained by Lender, as applicable, until paid. The provisions of this Section 12.01 shall survive the termination of this Agreement whether by repayment of the Debt, foreclosure or delivery of a deed in lieu thereof, assignment or otherwise. In case any action, suit or proceeding is brought against any of the Indemnified Parties by reason of any occurrence of the type set forth in (a) through (l) above, Borrower shall, at Borrowers expense, resist and defend such action, suit or proceeding or will cause the same to be resisted and defended by counsel at Borrowers expense for the insurer of the liability or by counsel designated by Borrower (unless reasonably disapproved by Lender promptly after Lender has been notified of such counsel); provided, however, that nothing herein shall compromise the right of Lender (or any other Indemnified Party) to appoint its own counsel at Borrowers expense for its defense with respect to any action which, in the reasonable opinion of Lender or such other Indemnified Party, as applicable, presents a conflict or potential conflict between Lender or such other Indemnified Party that would make such separate representation advisable. Any Indemnified Party will give Borrower prompt notice after such Indemnified Party obtains actual knowledge of any potential claim by such Indemnified Party for indemnification hereunder. The Indemnified Parties shall not settle or compromise any action, proceeding or claim as to which it is indemnified hereunder without notice to Borrower.
Section 13.01 Events of Default. The Debt shall become immediately due at the option of Lender upon any one or more of the following events (Event of Default):
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Section 13.02 Remedies.
(a) Upon the occurrence and during the continuance of any Event of Default, Lender may, in addition to any other rights or remedies available to it hereunder or under any other Loan Document, at law or in equity, take such action, without notice or demand, as it reasonably deems advisable to protect and enforce its rights against Borrower and in and to the Projects including, but not limited to, the following actions, each of which may be pursued singly, concurrently or otherwise, at such time and in such order as Lender may determine, in its sole discretion, without impairing or otherwise affecting any other rights and remedies of Lender hereunder, at law or in equity to declare all or any portion of the unpaid Debt to be immediately due and payable; provided, however, that upon the occurrence of any of the events specified in Section 13.01(i), the entire Debt will be immediately due and payable without notice or demand or any other declaration of the amounts due and payable. Without limiting the generality of the foregoing, Borrower agrees that if an Event of Default is continuing, (i) to the extent permitted by applicable law, Lender is not, and shall not be, subject to any one action or election of remedies law or rule, and (ii) all Liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against all of the Projects, the Mortgages have been foreclosed, all of the Projects have been sold and/or otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full. To the extent permitted by applicable law, nothing contained in any Loan Document shall be construed as requiring Lender to resort to any portion of the Projects for the satisfaction of any of the Debt in preference or priority to any other portion, and Lender may seek satisfaction out of any Project or all Projects, in its discretion.
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Section 13.03 Payment of Debt After Default. If, following the occurrence of any Event of Default, Borrower shall tender payment of an amount sufficient to satisfy the Debt in whole or in part at any time prior to a foreclosure sale of the Projects, and if at the time of such tender prepayment of the principal balance of the Note is not permitted by the Note or this Agreement (i.e., such payment is tendered prior to the Lockout Date), Borrower shall, in addition to the entire Debt, also pay to Lender a sum equal to interest which would have accrued on the principal balance of the Note at an interest rate equal to the LIBOR Margin for the Note from the date of such tender to the Maturity Date (such sum, the Yield Maintenance Premium). If at the time of such tender, prepayment of the principal balance of the Note is permitted (i.e., on or after the Lockout Date), such tender by Borrower shall be deemed to be a voluntary prepayment of the principal balance of the Note.
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Section 13.04 Possession of the Projects. Upon the occurrence of any Event of Default hereunder and the acceleration of the Debt or any portion thereof, Borrower, if an occupant of any Project or any part thereof, upon demand of Lender, shall immediately surrender possession of such Project(s) (or the portion thereof so occupied) to Lender, and if Borrower is permitted to remain in possession, the possession shall be as a month to month tenant of Lender and, on demand, Borrower shall pay to Lender monthly, in advance, a reasonable rental for the space so occupied and in default thereof Borrower may be dispossessed. The covenants herein contained may be enforced by a receiver of the Projects or any part thereof. Nothing in this Section 13.04 shall be deemed to be a waiver of the provisions of this Agreement making the Transfer of the Projects or any part thereof without Lenders prior written consent an Event of Default.
Section 13.05 Interest After Default. If any amount due under the Note, this Agreement or any of the other Loan Documents is not paid within any applicable notice and grace period after same is due, whether such date is the stated due date, any accelerated due date or any other date or at any other time specified under any of the terms hereof or thereof, then, in such event, Borrower shall pay interest on the amount not so paid from and after the date on which such amount first becomes due at the Default Rate; and such interest shall be due and payable at such rate until the earlier of the cure of all Events of Default or the payment of the entire amount due to Lender, whether or not any action shall have been taken or proceeding commenced to recover the same or to foreclose this Agreement. All unpaid and accrued interest shall be secured by this Agreement as part of the Debt. Nothing in this Section 13.05 or in any other provision of this Agreement shall constitute an extension of the time for payment of the Debt.
Section 13.06 Borrowers Actions After Default. After the happening of any Event of Default and immediately upon the commencement of any action, suit or other legal proceedings by Lender to obtain judgment for the Debt, or of any other nature in aid of the enforcement of the Loan Documents, Borrower will (a) after receipt of notice of the institution of any such action, waive the issuance and service of process and enter its voluntary appearance in such action, suit or proceeding, and (b) if required by Lender, consent to the appointment of a receiver or receivers of the Projects or any part thereof and of all the earnings, revenues, rents, issues, profits and income thereof.
Section 13.07 Control by Lender After Default. Notwithstanding the appointment of any custodian, receiver, liquidator or trustee of Borrower, or of any of its property, or of the Projects or any part thereof, to the extent permitted by Legal Requirements, Lender shall be entitled to obtain possession and control of all property now and hereafter covered by this Agreement and the Assignment in accordance with the terms hereof.
Section 13.08 Right to Cure Defaults.
(a) During the existence of any Event of Default, Lender or its agents may, but without any obligation to do so and without notice to or demand on Borrower and without releasing Borrower from any obligation hereunder, make or do the same in such manner and to such extent as Lender may deem necessary to protect the security hereof. Lender and its agents are authorized to enter upon the Projects or any part thereof for such purposes, or appear in,
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defend, or bring any action or proceedings to protect Lenders interest in the Projects or any part thereof or to foreclose this Agreement or collect the Debt, and the cost and expense thereof (including reasonable attorneys fees to the extent permitted by law), with interest as provided in this Section 13.08, shall constitute a portion of the Debt and shall be immediately due and payable to Lender upon demand. All such costs and expenses incurred by Lender or its agents in remedying such Event of Default or in appearing in, defending, or bringing any such action or proceeding shall bear interest at the Default Rate, for the period from the date so demanded to the date of payment to Lender. All such costs and expenses incurred by Lender or its agents together with interest thereon calculated at the above rate shall be deemed to constitute a portion of the Debt and be secured by this Agreement.
Section 13.09 Late Payment Charge. If any portion of the Debt is not paid in full on or before the day on which it is due and payable hereunder, Borrower shall pay to Lender an amount equal to three percent (3%) of such unpaid portion of the Debt (Late Charge) to defray the expense incurred by Lender in handling and processing such delinquent payment, and such amount shall constitute a part of the Debt. The Late Charge shall not apply to the payment of the Principal Amount at Maturity.
Section 13.10 Recovery of Sums Required to Be Paid. Lender shall have the right from time to time to take action to recover any sum or sums which constitute a part of the Debt as the same become due and payable hereunder (after the expiration of any grace period or the giving of any notice herein provided, if any), without regard to whether or not the balance of the Debt shall be due, and without prejudice to the right of Lender thereafter to bring an action of foreclosure, or any other action, for a default or defaults by Borrower existing at the time such earlier action was commenced.
Section 13.11 Marshalling and Other Matters. Borrower hereby waives, to the fullest extent permitted by law, the benefit of all appraisement, valuation, stay, extension, reinstatement, redemption (both equitable and statutory) and homestead laws now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the Projects or any part
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thereof or any interest therein. Further, Borrower hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of any or all of the Mortgages on behalf of Borrower, whether equitable or statutory and on behalf of each and every Person acquiring any interest in or title to the Projects or any part thereof subsequent to the date of this Agreement and on behalf of all Persons to the fullest extent permitted by applicable law.
Section 13.12 Tax Reduction Proceedings. After an Event of Default, Borrower shall be deemed to have appointed Lender as its attorney-in-fact to seek a reduction or reductions in the assessed valuation of the Projects for real property tax purposes or for any other purpose and to prosecute any action or proceeding in connection therewith. This power, being coupled with an interest, shall be irrevocable for so long as any part of the Debt remains unpaid and any Event of Default shall exist.
Section 13.13 General Provisions Regarding Remedies
Section 14.01 Compliance with Legal Requirements.
(a) Borrower shall promptly comply in all material respects with all present and future Legal Requirements, foreseen and unforeseen, ordinary and extraordinary, whether
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requiring structural or nonstructural repairs or alterations including, without limitation, all zoning, subdivision, building, safety and environmental protection, land use and development Legal Requirements, all Legal Requirements which may be applicable to the curbs adjoining the Projects or to the use or manner of use thereof, and all rent control, rent stabilization and all other similar Legal Requirements relating to rents charged and/or collected in connection with the Leases. Borrower represents and warrants that each Project is in compliance in all material respects with all Legal Requirements as of the date hereof, no notes or notices of any uncured material violations of any Legal Requirements have been entered or received by Borrower and to Borrowers knowledge, there is no basis for the entering of such note or notices.
Section 14.02 Compliance with Recorded Documents; No Future Grants. Borrower shall promptly perform and observe or cause to be performed and observed, all of the material terms, covenants and conditions of all material Property Agreements and all things necessary to preserve intact and unimpaired any and all material appurtenances or other interests or rights affecting the Projects.
Section 15.01 Prepayment.
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Section 15.02 Release of Project. Borrower may obtain the release of one or more of the Projects from the lien of the applicable Mortgage and related Loan Documents (each a Release, and Released shall have the meaning correlative thereto) in connection with a prepayment permitted under, and made in accordance with, Section 15.01(b), provided that such Release may not occur until after the Lockout Date; provided, further, that, in each instance, each of the following conditions shall be satisfied:
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Section 17.01 Cooperation. Borrower shall, at the request of Lender, in connection with one or more sales or assignments of the Note or participations therein or securitizations of rated single or multi-class securities (the Securities) secured by or evidencing ownership interests in the Note and the Mortgages (each such sale, assignment, participation and/or securitization, a Secondary Market Transaction): (a) (i) provide such financial and other information with respect to the Projects, Borrower and its Affiliates, Manager and, to the extent in Borrowers possession, any tenants of the Projects, (ii) provide business plans and budgets relating to the Projects and (iii) perform or permit or cause to be performed or permitted such site inspection, appraisals, surveys, market studies, environmental reviews and reports, engineering reports and other due diligence investigations of the Projects, as may be reasonably requested from time to time by Lender or the Rating Agencies in connection with a Secondary Market Transaction or Exchange Act requirements (the items provided to Lender pursuant to this paragraph (a) being called the Provided Information), together, if customary, with appropriate verification of and/or consents to the Provided Information through letters of auditors or opinions of counsel of independent attorneys acceptable to Lender and the Rating Agencies; (b) cause
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counsel to render opinions as to non-consolidation and any other opinion customary in securitization transactions with respect to the Projects, Borrower and its Affiliates, which counsel and opinions shall be reasonably satisfactory to Lender and the Rating Agencies; (c) make such representations and warranties as of the closing date of any Secondary Market Transaction with respect to the Projects, Borrower and the Loan Documents as are customarily provided in such transactions and as may be reasonably requested by Lender or the Rating Agencies and consistent with the facts covered by such representations and warranties as they exist on the date thereof, including the representations and warranties made in the Loan Documents; (d) provide current certificates of good standing and qualification with respect to Borrower, its Affiliates and/or Guarantor from appropriate Governmental Authorities; and (e) execute such amendments to the Loan Documents and Borrowers organizational documents, as may be requested by Lender or the Rating Agencies or otherwise to effect a Secondary Market Transaction, provided that nothing contained in this subsection (e) shall (i) result in a material economic change in the transaction (ii) change the Maturity Date or the LIBOR Margin, except in connection with a bifurcation of the Loan which may result in varying LIBOR Margins, but which LIBOR Margins shall have a weighted average that equals the LIBOR Margin of the original Loan (which initial weighted average shall not change), except in the event of the application of Net Proceeds to the prepayment of the Loan, (iii) modify or amend any other material economic terms of the Loan, (iv) increase, in more than a de minimis manner, Borrowers obligations and liabilities or decrease in more than a de minimis manner, Borrowers rights under the Loan Documents, or (v) increase, in more than a de minimis manner, Lenders rights under the Loan Documents. Lender shall pay its own costs and expenses in connection with the foregoing and shall reimburse Borrower for any reasonable out-of-pocket costs and expenses incurred by Borrower in connection with actions taken by Borrower at Lenders request pursuant to this Section 17.01, other than Borrowers legal fees and expenses in connection with a Secondary Market Transaction (other than those attendant to a restructuring of the Loan, which reasonable fees and disbursements shall be reimbursed by Lender). Borrowers cooperation obligations set forth herein shall continue until the Loan has been paid in full.
Section 17.02 Use of Information. Borrower understands that all or any portion of the Provided Information and the Required Records may be included in disclosure documents in connection with a Secondary Market Transaction, including a prospectus or private placement memorandum (each, a Disclosure Document) and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the Securities Act), or the Securities and Exchange Act of 1934, as amended (the Exchange Act), or provided or made available to investors or prospective investors in the Securities, the Rating Agencies, and service providers or other parties relating to the Secondary Market Transaction. Lender shall provide Borrower a reasonable opportunity to review and comment on all Provided Information. If the Disclosure Document is required to be revised, Borrower shall cooperate with Lender in updating the Provided Information or Required Records for inclusion or summary in the Disclosure Document or for other use reasonably required in connection with a Secondary Market Transaction by providing all current information pertaining to Borrower, Manager and the Projects necessary to keep the Disclosure Document accurate and complete in all material respects with respect to such matters.
Section 17.03 Borrower Obligations Regarding Disclosure Documents. In connection with a Disclosure Document, Borrower shall: (a) if requested by Lender, certify in
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writing that Borrower has carefully examined those portions of such Disclosure Document, pertaining to Borrower, the Projects, Manager and the Loan which have been identified by Lender in writing as requiring Borrowers review (the Applicable Portions), and that such portions, to Borrowers knowledge, do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (b) indemnify (in a separate instrument of indemnity, if so requested by Lender) (i) any underwriter, syndicate member or placement agent (collectively, the Underwriters) retained by Lender or its issuing company affiliate (the Issuer) in connection with a Secondary Market Transaction, (ii) Lender and (iii) the Issuer that is named in the Disclosure Document or registration statement relating to a Secondary Market Transaction (the Registration Statement), and each of the Issuers directors, each of its officers who have signed the Registration Statement and each person or entity who controls the Issuer or the Lender within the meaning of Section 15 of the Securities Act or Section 30 of the Exchange Act (collectively within (iii), the Issuer Group), and each of its directors and each person who controls each of the Underwriters, within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the Underwriter Group) for any Liabilities to which Lender, the Issuer Group or the Underwriter Group may become subject (including reimbursing all of them for any reasonable legal or other expenses actually incurred in connection with investigating or defending the Liabilities) insofar as the Liabilities arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any of the Provided Information or in any of the Applicable Portions applicable to Borrower, Manager, the Projects or the Loan, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated in the Applicable Portions or necessary in order to make the statements in the Applicable Portions of such sections in light of the circumstances under which they were made, not misleading, provided, however, notwithstanding anything in this Article XVII to the contrary, that Borrower shall not be required to indemnify Lender, the Issuer Group or the Underwriter Group for any Liabilities relating to (i) untrue statements or omissions which Borrower identified to Lender in writing at the time of Borrowers examination of such Disclosure Document, or (ii) information contained in Provided Information reviewed but not prepared by Borrower, Guarantor or any of their respective Affiliates and not known by Borrower to be untrue or incorrect in any material respect.
Section 17.04 Borrower Indemnity Regarding Filings. In connection with filings under the Exchange Act, Borrower shall (i) indemnify Lender, the Issuer Group and the Underwriter Group for any Liabilities to which Lender, the Issuer Group or the Underwriter Group may become subject insofar as the Liabilities arise out of or are based upon the omission or alleged omission to state in the Provided Information a material fact required to be stated in the Provided Information in order to make the statements in the Provided Information, in light of the circumstances under which they were made not misleading and (ii) reimburse Lender, the Issuer Group or the Underwriter Group for any legal or other expenses actually incurred by Lender, Issuer Group or the Underwriter Group in connection with defending or investigating the Liabilities, provided, however, notwithstanding anything in this Article XVII to the contrary, that Borrower shall not be required to indemnify Lender, the Issuer Group or the Underwriter Group for any Liabilities relating to (i) untrue statements or omissions which Borrower identified to Lender in writing at the time of Borrowers examination of such Disclosure Document, or (ii) information contained in Provided Information reviewed but not prepared by Borrower,
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Guarantor or any of their respective Affiliates and not known by Borrower to be untrue or incorrect in any material respect.
Section 17.05 Indemnification Procedure. Promptly after receipt by an indemnified party under Section 17.03 or 17.04 of notice of the commencement of any action for which a claim for indemnification is to be made against Borrower, such indemnified party shall notify Borrower in writing of such commencement, but the omission to so notify Borrower will not relieve Borrower from any liability that it may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to Borrower. If any action is brought against any indemnified party, and it notifies Borrower of the commencement thereof, Borrower will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice of commencement, to assume the defense thereof with counsel satisfactory to such indemnified party in its reasonable discretion. After notice from Borrower to such indemnified party under this Section 17.05, Borrower shall not be responsible for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both Borrower and an indemnified party, and any indemnified party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or additional to those available to Borrower, then the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Borrower shall not be liable for the expenses of more than one separate counsel unless there are legal defenses available to it that are different from or additional to those available to another indemnified party.
Section 17.06 Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 17.03 or 17.04 is for any reason held to be unenforceable by an indemnified party in respect of any Liabilities (or action in respect thereof) referred to therein which would otherwise be indemnifiable under Section 17.03 or 17.04, Borrower shall contribute to the amount paid or payable by the indemnified party as a result of such Liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered: (i) the Issuer Groups and Borrowers relative knowledge and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances. Lender and Borrower hereby agree that it may not be equitable if the amount of such contribution were determined by pro rata or per capita allocation.
Section 17.07 Rating Surveillance. Lender will retain the Rating Agencies to provide rating surveillance services on Securities. The pro rata expenses of such surveillance will be paid for by Borrower based on the applicable percentage of such expenses determined by dividing the then outstanding Principal Amount by the then aggregate outstanding amount of the pool created in the Secondary Market Transaction which includes the Loan.
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Section 17.08 Severance of Loan. Lender shall have the right, at any time (whether prior to, in connection with, or after any Secondary Market Transaction), with respect to all or any portion of the Loan, to modify, split and/or sever all or any portion of the Loan as hereinafter provided. Without limiting the foregoing, Lender may (i) cause the Note and one or more of the Mortgages to be split into a first and second mortgage loans, (ii) create one or more senior and subordinate notes (e.g., an A/B, A/B/C or A/B/C/D structure), (iii) create multiple components of the Note or Notes (and allocate or reallocate the principal balance of the Loan among such components) or (iv) otherwise sever the Loan into two or more loans secured by mortgages and by pledges of membership interests (directly or indirectly) in Borrower (e.g., a senior loan/mezzanine loan structure), in each such case, in whatever proportion and whatever priority Lender determines; provided, however,in each such instance (a) the outstanding principal balance of all the Notes evidencing the Loan (or components of such Notes) immediately after the effective date of such modification equals the outstanding principal balance of the Loan immediately prior to such modification, (b) the weighted average of the LIBOR Margins for all such Notes (or components of such Notes) immediately after the effective date of such modification equals the LIBOR Margin of the original Note immediately prior to such modification, and (c) such restructuring of the Loan does not increase, in more than a de minimis manner, Lenders rights or Borrowers obligations and liabilities or decrease, in more than a de minimis manner, Borrowers rights under the Loan Documents. If requested by Lender, Borrower (and Borrowers constituent members, if applicable, and Guarantor) shall execute within ten (10) Business Days after such request, such documentation as Lender may reasonably request to evidence and/or effectuate any such modification or severance. Borrower agrees to cooperate with Lender in connection with the exercise of its rights under this Section 17.08, which cooperation shall be at no cost or expense to Lender, provided that all costs and expenses of Borrower for which Lender shall be responsible hereunder shall have been reasonably incurred by Borrower.
Section 18.01 Right of Entry. Lender and its agents shall have the right to enter and inspect the Projects or any part thereof at all reasonable times, subject to the rights of tenants, and, except in the event of an emergency, upon reasonable notice and to inspect Borrowers books and records and to make abstracts and reproductions thereof.
Section 18.02 Cumulative Rights. The rights of Lender under this Agreement shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others. No act of Lender shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision. Lender shall not be limited exclusively to the rights and remedies herein stated but shall be entitled, subject to the terms of this Agreement, to every right and remedy now or hereafter afforded by law.
Section 18.03 Liability. If Borrower consists of more than one Person, the obligations and liabilities of each such Person hereunder shall be joint and several.
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Section 18.04 Exhibits Incorporated. The information set forth on the cover hereof, and the Exhibits annexed hereto, are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.
Section 18.05 Severable Provisions. If any term, covenant or condition of the Loan Documents including, without limitation, the Note or this Agreement, is held to be invalid, illegal or unenforceable in any respect, such Loan Document shall be construed without such provision.
Section 18.06 Duplicate Originals. This Agreement may be executed in any number of duplicate originals and each such duplicate original shall be deemed to constitute but one and the same instrument.
Section 18.07 No Oral Change. The terms of this Agreement, together with the terms of the Note and the other Loan Documents constitute the entire understanding and agreement of the parties hereto and supersede all prior agreements, understandings and negotiations between Borrower and Lender with respect to the Loan. This Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act on the part of Borrower or Lender, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.
Section 18.08 Waiver of Counterclaim, Etc. BORROWER HEREBY WAIVES THE RIGHT TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT AGAINST IT BY LENDER OR ITS AGENTS, AND WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER OR IN ANY COUNTERCLAIM BORROWER MAY BE PERMITTED TO ASSERT HEREUNDER OR WHICH MAY BE ASSERTED BY LENDER OR ITS AGENTS, AGAINST BORROWER, OR IN ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE DEBT.
Section 18.09 Headings; Construction of Documents; etc. The table of contents, headings and captions of various paragraphs of this Agreement are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof. Each of Lender and Borrower acknowledges that it was represented by competent counsel in connection with the negotiation and drafting of this Agreement and the other Loan Documents and that neither this Agreement nor the other Loan Documents shall be subject to the principle of construing the meaning against the Person who drafted same.
Section 18.10 Sole Discretion of Lender. Whenever Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide that arrangements or terms are satisfactory or not satisfactory shall be in the sole discretion of Lender and shall be final and conclusive, except as may be otherwise specifically provided herein.
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Section 18.11 Waiver of Notice. Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or any other Loan Document specifically and expressly provides for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice.
Section 18.12 Binding Effect. All of the grants, covenants, terms, provisions and conditions herein shall be binding upon Borrower and shall inure to the benefit of Lender, subsequent holders of this Agreement and their successors and assigns. Without limitation to any provision hereof, the term Borrower shall include and refer to the borrower named herein, any subsequent owner of the Projects, and its respective heirs, executors, legal representatives, successors and assigns. The representations, warranties and agreements contained in this Agreement and the other Loan Documents are intended solely for the benefit of the parties hereto, shall confer no rights hereunder, whether legal or equitable, in any other Person and no other Person shall be entitled to rely thereon.
Section 18.13 Applicable Law. THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS (OTHER THAN WITH RESPECT TO LIENS AND SECURITY INTERESTS IN PROPERTY WHOSE PERFECTION AND PRIORITY IS COVERED BY ARTICLE 9 OF THE UCC (INCLUDING, WITHOUT LIMITATION, THE CENTRAL ACCOUNT AND THE RESERVE ACCOUNTS) WHICH SHALL BE GOVERNED BY THE LAW OF THE JURISDICTION APPLICABLE THERETO IN ACCORDANCE WITH SECTIONS 9-301 THROUGH 9-307 OF THE UCC AS IN EFFECT IN THE STATE OF NEW YORK) SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
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AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW EXCEPT AS SPECIFICALLY SET FORTH ABOVE.
Section 18.14 Intentionally Deleted.
Section 18.15 Actions and Proceedings. Lender has the right to appear in and defend any action or proceeding brought with respect to any Project in its own name or, if required by Legal Requirements or, if in Lenders reasonable judgment, it is necessary, in the name and on behalf of Borrower, which Lender believes will adversely affect the Projects or this Agreement and to bring any action or proceedings, in its name or in the name and on behalf of Borrower, which Lender, in its discretion, decides should be brought to protect its interest in the Projects.
Section 18.16 Usury Laws. This Agreement and the Note are subject to the express condition, and it is the expressed intent of the parties, that at no time shall Borrower be obligated or required to pay interest on the principal balance due under the Note at a rate which could subject the holder of the Note to either civil or criminal liability as a result of being in excess of the maximum interest rate which Borrower is permitted by law to contract or agree to pay. If by the terms of this Agreement or the Note, Borrower is at any time required or obligated to pay interest on the principal balance due under the Note at a rate in excess of such maximum rate, such rate of interest shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be computed at such maximum rate and all prior interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of the principal balance of the Note. No application to the principal balance of the Note pursuant to this Section 18.16 shall give rise to any requirement to pay any prepayment fee or charge of any kind due hereunder, if any.
Section 18.17 Remedies of Borrower. In the event that a claim or adjudication is made that Lender has acted unreasonably or unreasonably delayed acting in any case where by law or under the Note, this Agreement or the Loan Documents, it has an obligation to act reasonably or promptly, Lender shall not be liable for any monetary damages, and Borrowers remedies shall be limited to injunctive relief or declaratory judgment.
Section 18.18 Offsets, Counterclaims and Defenses. Any assignee of this Agreement, the Assignment and the Note shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to the Note, the Assignment or this Agreement which Borrower may otherwise have against any assignor of this Agreement, the Assignment and the Note and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon this Agreement, the Assignment or the Note and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.
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Section 18.19 No Merger. If Borrowers and Lenders estates become the same including, without limitation, upon the delivery of a deed by Borrower in lieu of a foreclosure sale, or upon a purchase of the Projects by Lender in a foreclosure sale, this Agreement and the lien by the Mortgage shall not be destroyed or terminated by the application of the doctrine of merger and in such event Lender shall continue to have and enjoy all of the rights and privileges of Lender as to the separate estates; and, as a consequence thereof, upon the foreclosure of the lien created by this Agreement, any Leases or subleases then existing and created by Borrower shall not be destroyed or terminated by application of the law of merger or as a result of such foreclosure unless Lender or any purchaser at any such foreclosure sale shall so elect. No act by or on behalf of Lender or any such purchaser shall constitute a termination of any Lease or sublease unless Lender or such purchaser shall give written notice thereof to such lessee or sublessee.
Section 18.20 Restoration of Rights. In case Lender shall have proceeded to enforce any right under this Agreement by foreclosure sale, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely, then, in every such case, Borrower and Lender shall be restored to their former positions and rights hereunder with respect to the Projects subject to the lien hereof.
Section 18.21 Waiver of Statute of Limitations. The pleadings of any statute of limitations as a defense to any and all obligations secured by this Agreement are hereby waived to the full extent permitted by Legal Requirements.
Section 18.22 Intentionally Deleted.
Section 18.23 Application of Default Rate Not a Waiver. Application of the Default Rate shall not be deemed to constitute a waiver of any Default or Event of Default or any rights or remedies of Lender under this Agreement, any other Loan Document or applicable Legal Requirements, or a consent to any extension of time for the payment or performance of any obligation with respect to which the Default Rate may be invoked.
Section 18.24 Intentionally Deleted.
Section 18.25 No Joint Venture or Partnership. Borrower and Lender intend that the relationship created hereunder be solely that of borrower and lender. Nothing herein is intended to create a joint venture, partnership, tenancy in common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in the Projects other than as a lender and mortgagee.
Section 18.26 Time of the Essence. Time shall be of the essence in the performance of all obligations of Borrower hereunder.
Section 18.27 Borrowers Obligations Absolute. Borrower acknowledges that Lender and/or certain Affiliates of Lender are engaged in the business of financing, owning, operating, leasing, managing, and brokering real estate and in other business ventures which may be viewed as adverse to or competitive with the business, prospect, profits, operations or condition (financial or otherwise) of Borrower. Except as set forth to the contrary in the Loan Documents, all sums payable by Borrower hereunder shall be paid without notice or demand,
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counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the obligations and liabilities of Borrower hereunder shall in no way be released, discharged, or otherwise affected (except as expressly provided herein) by reason of: (a) any damage to or destruction of or any Taking of the Projects or any portion thereof; (b) any restriction or prevention of or interference with any use of the Projects or any portion thereof; (c) any title defect or encumbrance or any eviction from the Projects or any portion thereof by title paramount or otherwise; (d) any bankruptcy proceeding relating to Borrower, Sole Member, or any guarantor or indemnitor, or any action taken with respect to this Agreement or any other Loan Document by any trustee or receiver of Borrower or Sole Member or any guarantor or indemnitor, or by any court, in any such proceeding; (e) any claim which Borrower has or might have against Lender; (f) any default or failure on the part of Lender to perform or comply with any of the terms hereof or of any other agreement with Borrower (except to the extent that such default or failure on the part of Lender is as a result of Lenders refusal to release funds from any Escrow Account in contravention of the terms and provisions of this Agreement and the other Loan Documents); or (g) any other occurrence whatsoever, whether similar or dissimilar to the foregoing, whether or not Borrower shall have notice or knowledge of any of the foregoing.
Section 18.28 Publicity. All promotional news releases, publicity or advertising by Manager, Borrower or their respective Affiliates through any media intended to reach the general public shall not refer to the Loan Documents or the financing evidenced by the Loan Documents, or to Lender or to any of its Affiliates without the prior written approval of Lender or such Affiliate, as applicable, in each instance, such approval not to be unreasonably withheld or delayed. Lender shall be authorized to provide information relating to the Projects, the Loan and matters relating thereto to rating agencies, underwriters, potential securities investors, auditors, regulatory authorities and to any Persons which may be entitled to such information by operation of law.
Section 18.29 Intentionally Deleted.
Section 18.30 Intentionally Deleted.
Section 18.31 Establishment of Working Capital Account. As a material inducement to Lender to enter into the transactions contemplated by this Agreement, Borrower represents and warrants to Lender that there has been established by JV Member, as of the date hereof, a working capital account in the amount of $2,000,000.00, which account is unencumbered and is intended to be used solely to make contributions to Borrower to fund costs and expenses relating to the Loan and the ownership and operation of the Projects.
Section 18.32 Exculpation. Notwithstanding anything herein or in any other Loan Document to the contrary, except as otherwise set forth in this Section 18.32 to the contrary, Lender shall not enforce the liability and obligation of Borrower or (a) if Borrower is a partnership, its constituent partners or any of their respective partners, (b) if Borrower is a trust, its beneficiaries or any of their respective Partners (as hereinafter defined), (c) if Borrower is a corporation, any of its shareholders, directors, principals, officers or employees, or (d) if Borrower is a limited liability company, any of its members (the Persons described in the foregoing clauses (a) - (d), as the case may be, are hereinafter referred to as the Partners) to
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perform and observe the obligations contained in this Agreement or any of the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower or the Partners, except that Lender may bring a foreclosure action, action for specific performance, or other appropriate action or proceeding against Borrower (but not its Partners) (including, without limitation, an action to obtain a deficiency judgment against Borrower) solely for the purpose of enabling Lender to realize upon (i) Borrowers interest in the Projects, (ii) the Rent to the extent (x) received by Borrower (or received by its Partners) after the occurrence of an Event of Default, or (y) distributed to Borrower (or its Partners, but only to the extent received by its Partners) during or with respect to any period for which Lender did not receive a Manager Certification accurate in all material respects confirming and certifying that all Operating Expenses with respect to the Projects which had accrued as of the applicable date of such Manager Certification had been paid (or if same had not been paid, that Manager had taken adequate reserves therefor) (all Rent covered by clauses (x) and (y) being hereinafter referred to as the Recourse Distributions) and (iii) any other collateral given to Lender under the Loan Documents (the collateral described in the foregoing clauses (i) - (iii) is hereinafter referred to as the Default Collateral); provided, however, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of any such Default Collateral. The provisions of this Section shall not, however,
(a) impair the validity of the Debt evidenced by the Note or in any way affect or impair the lien of the related Mortgage(s) or any of the other Loan Documents or the right of Lender to foreclose this Agreement following the occurrence of an Event of Default;
(b) impair the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement;
(c) affect the validity or enforceability of the Note, this Agreement, or any of the other Loan Documents, or impair the right of Lender to seek a personal judgment against the Guarantor in accordance with the Guaranty;
(d) impair the right of Lender to obtain the appointment of a receiver;
(e) impair the enforcement of the Assignment;
(f) impair the right of Lender to bring suit for a monetary judgment with respect to fraud or intentional material misrepresentation by Borrower, Guarantor, any Affiliate of either of them in connection with this Agreement, the Note or the other Loan Documents, and the foregoing provisions shall not modify, diminish or discharge the liability, if any, of Borrower with respect to same;
(g) impair the right of Lender to bring suit for a monetary judgment against Borrower or Guarantor (but not the Partners of Borrower) to obtain the Recourse Distributions received by Borrower or its Partners, to the extent of any such Recourse Distributions theretofore distributed to and received by Borrower or such Partners, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower or Guarantor with respect to same;
(h) impair the right of Lender to bring suit for a monetary judgment with respect to Borrowers misappropriation of tenant security deposits or Rent collected more than
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one (1) month in advance, and the foregoing provisions shall not modify, diminish or discharge the liability, if any, of Borrower with respect to same;
(i) impair the right of Lender to obtain Loss Proceeds due to Lender pursuant to this Agreement;
(j) impair the right of Lender to enforce the provisions of Sections 2.02(g), 12.01, 16.01, or 17.03 through 17.06, inclusive, of this Agreement, even after repayment in full by Borrower of the Debt or to bring suit for a monetary judgment against Borrower with respect to any obligation set forth in said Sections;
(k) prevent or in any way hinder Lender from exercising, or constitute a defense, or counterclaim, or other basis for relief in respect of the exercise of, any other remedy against any or all of the collateral securing the Note as provided in the Loan Documents;
(l) impair the right of Lender to bring suit for a monetary judgment with respect to any misapplication or conversion of Loss Proceeds, and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower or Guarantor with respect to same;
(m) impair the right of Lender to sue for, seek or demand a deficiency judgment against Borrower solely for the purpose of foreclosing the Projects or any part thereof, or realizing upon the Default Collateral; provided, however, that any such deficiency judgment referred to in this clause (m) shall be enforceable against Borrower only to the extent of any of the Default Collateral;
(n) impair the ability of Lender to bring suit for a monetary judgment with respect to damage, arson or physical waste to or of the Projects or with respect to any act or failure to act, by Borrower or any Affiliate of Borrower with respect to all or any portion of the Projects that constitutes gross negligence or willful misconduct;
(o) impair the right of Lender to bring a suit for a monetary judgment against Borrower in the event of the exercise of any right or remedy under any federal, state or local forfeiture laws resulting in the loss of the lien of any Mortgage, or the priority thereof, against all or any portion of the Projects;
(p) be deemed a waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt; or
(q) impair the right of Lender to bring suit for monetary judgment with respect to any losses resulting from any claims, actions or proceedings initiated by Borrower (or any Affiliate of Borrower) alleging that the relationship of Borrower and Lender is that of joint venturers, partners, tenants in common, joint tenants or any relationship other than that of debtor and creditor.
The provisions of this Section 18.32 shall be inapplicable to Borrower if (a) any proceeding, action, petition or filing with respect to Borrower or Sole Member under the Bankruptcy Code, or any similar state or federal law now or hereafter in effect relating to
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bankruptcy, reorganization or insolvency, or the arrangement or adjustment of debts, shall be filed by or consented to or acquiesced in by, Borrower, Guarantor, Sole Member or any Affiliate of any thereof, or if any such party shall aid, solicit, support or otherwise cooperate or collude in the making or commencement of any such proceeding, action, petition or filing, or if Borrower or Sole Member shall institute any proceeding for its dissolution or liquidation, or shall make an assignment for the benefit of creditors, (b) any voluntary Transfer in violation of Article IX shall occur, (c) Borrower shall voluntarily further encumber or permit the further encumbrance of, the Projects, or any of them, or of any direct or indirect interest in Borrower, in violation of Section 9.01, (d) Borrower, Sole Member or Guarantor or any of their respective Affiliates contest or in any material way intentionally interferes with, directly or indirectly (collectively, a Contest) any foreclosure action, UCC sale or other material remedy exercised by Lender upon the occurrence of any Event of Default, whether by making any motion, bringing any counterclaim, claiming any defense other than asserting a good-faith defense to any action brought by Lender, seeking any injunction or other restraint, commencing any action, or otherwise (provided that if any such Person obtains a non-appealable order successfully asserting a Contest, Borrower shall have no liability under this clause (d)), in which event Lender shall have recourse against all of the assets of Borrower including, without limitation, any right, title and interest of Borrower in and to the Projects and any Recourse Distributions received by the Partners of Borrower (but excluding the other assets of such Partners to the extent Lender would not have had recourse thereto other than in accordance with the provisions of this Section 18.32).
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, Borrower and Lender have duly executed this Agreement the day and year first above written.
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BORROWER: |
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ONE GRANDE SPE LLC, |
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a Delaware limited liability company |
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By: |
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/s/ Mitchell E. Hersh |
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Name: Mitchell E. Hersh |
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Title: Chief Executive Officer |
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1280 WALL SPE LLC, |
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a Delaware limited liability company |
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By: |
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/s/ Mitchell E. Hersh |
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Name: Mitchell E. Hersh |
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Title: Chief Executive Officer |
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10 SYLVAN SPE LLC, |
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a Delaware limited liability company |
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By: |
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/s/ Mitchell E. Hersh |
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Name: Mitchell E. Hersh |
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Title: Chief Executive Officer |
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5 INDEPENDENCE SPE LLC, |
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a Delaware limited liability company |
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By: |
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/s/ Mitchell E. Hersh |
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Name: Mitchell E. Hersh |
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Title: Chief Executive Officer |
[SIGNATURES CONTINUE ON NEXT PAGE]
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1 INDEPENDENCE SPE LLC, |
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a Delaware limited liability company |
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By: |
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/s/ Mitchell E. Hersh |
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Name: Mitchell E. Hersh |
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Title: Chief Executive Officer |
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3 BECKER SPE LLC, |
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a Delaware limited liability company |
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By: |
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/s/ Mitchell E. Hersh |
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Name: Mitchell E. Hersh |
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Title: Chief Executive Officer |
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[SIGNATURES CONTINUE ON NEXT PAGE]
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LENDER: |
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GRAMERCY WAREHOUSE FUNDING I LLC, |
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a Delaware limited liability company |
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By: |
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/s/ Robert R. Foley |
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Name: Robert R. Foley |
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Title: Chief Financial Officer |
EXHIBIT A
Owners and Projects
Owners |
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Projects |
New Jersey |
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One Grande SPE LLC |
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One Grande Commons, Bridgewater, New Jersey |
1280 Wall SPE LLC |
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1280 Wall Street, Lyndhurst, New Jersey |
10 Sylvan SPE LLC |
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10 Sylvan Way, Parsippany, New Jersey |
5 Independence SPE LLC |
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Five Independence Way, Princeton, New Jersey |
1 Independence SPE LLC |
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One Independence Way, Princeton, New Jersey |
3 Becker SPE LLC |
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3 Becker Farm Road, Roseland, New Jersey |
B-1
EXHIBIT B
Summary Of Reserves
Reserve Items |
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Initial Deposit |
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Monthly Installment |
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Basic Carrying Costs · Taxes |
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$ |
176,330.00 |
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$ |
176,330.00 |
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· Insurance Premiums |
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$ |
16,348.00 |
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$ |
16,348.00 |
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Initial Engineering Deposits · Immediate Repairs |
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$ |
-0- |
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N/A |
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Recurring Replacement Monthly Installment |
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$ |
-0- |
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[NOTE 1] |
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Reletting Expenses (to Reletting Reserve Escrow Account) |
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$ |
-0- |
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[NOTE 2] |
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Accrued Lease Liability Expenses (to Accrued Lease Liability Escrow Account) |
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$ |
1,849,951.07 |
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-0- |
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NOTE 1: $0.10 per gross rentable square foot of space in each Project (as set forth on Exhibit B-1 attached hereto) owned by Borrower, divided by 12.
NOTE 2: $0.25 per gross rentable square foot of space in each Project (as set forth on Exhibit B-1 attached hereto) owned by Borrower, divided by 12.
B-1-1
EXHIBIT B-1
Gross Rentable Square Footage of the Projects
Property |
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City |
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State |
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SF |
One Grande Commons |
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Bridgewater |
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NJ |
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198,376 |
1280 Wall Street |
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Lyndhurst |
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NJ |
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121,314 |
10 Sylvan Way |
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Parsippany |
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NJ |
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125,829 |
Five Independence Way |
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Princeton |
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NJ |
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113,376 |
One Independence Way |
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Princeton |
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NJ |
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111,979 |
3 Becker Farm Road |
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Roseland |
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NJ |
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113,837 |
TOTAL |
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784,711 |
C-1