LOAN AGREEMENT

by and among

731 RETAIL ONE LLC and 731 COMMERCIAL LLC

as Borrower

THE LENDERS PARTY HERETO

as Lenders,

and

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

__________________________________

J.P. MORGAN SECURITIES LLC

and

LANDESBANK BADEN-WÜRTTEMBERG, NEW YORK BRANCH

are the Joint Book Runners and Lead Arrangers

__________________________________

 

Date:   As of August 5, 2015

Loan Agreement (731 Commercial) 8-4-2015

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                                                                                                                                    Page
No.                                                           

ARTICLE 1  CERTAIN DEFINITIONS…………………………………………………....1

 

Section 1.1     Certain Definitions……………………………………………………….....1

Section 2.2     Types of Loans………….…………………………………………………30

 

ARTICLE 2 LOAN TERMS………………………………………………………….……30

 

Section 2.1     The Commitments, Loans and Notes……………………………………...30

Section 2.2     Funding of Borrowings……………………………………………….……31

Section 2.3     Interes Elections …………………………………………………………...32

Section 2.4     Repayment of Loans; Evidence of Debt…………………………………...33

Section 2.5     Prepayment of  Loan……………………………………………………….34

Section 2.6     Interest………………………………………………………………….…..34

Section 2.7     Alternate Rate of Interest…………………………………………………..35

Section 2.8     Increased Costs……………………………………………………………..35

Section 2.9     Break Funding Payments…………………………………………………....36

Section 2.10    Electronic Notices…………………………………………………….........37

Section 2.11    Additional Interest…………………………………………………………38

Section 2.12    Taxes…………………………………………………………………......38

Section 2.13    Payments Generally; Pro Rate Treatment; Sharing of
Set-offs…………....41

Section 2.14    Mitigation Obligations; Replacement of Lenders…………………………42

Section 2.15    Extension Options…………………………………………………………43

Section 2.16    Use of Proceeds…………………………………………………………..45

Section 2.17    Administrative Agent Fee………………………………………………...45

 

ARTICLE 3 INSURANCE AND CONDEMNATION……………………………………..45

 

Section 3.1     Insurance…………………………………………………………………..45

Section 3.2     Use and Application of Net Proceeds………………………………….….50

Section 3.3     Casualty and Condemnation………………………………………………56

 

ARTICLE 4 CASH MANAGEMENT…………………………………………………….56

 

Section 4.1     Restricted Account………………………………………………………………56

Section 4.2     Cash Management Account……………………………………………………..57

Section 4.3     Reserve Funds and Security Account Generally…………………………….......61

Section 4.4     Debt Service Coverage Radio…………………………………………………...62

 

ARTICLE 5 ENVIRONMENTAL MATTERS…………………………………………………..63

 

Section 5.1     Certain Definitions……………………………………………………………....63

Section 5.2     Representations and Warranties on Environment
Matters………………….…...64

Section 5.3     Covenants on Environmental Matters……………………………………….…..64

Section 5.4    Allocation of Risks and Indemnity…………………………………………….…65

Section 5.5    No Waiver……………………………………………………………….………66

i

--------------------------------------------------------------------------------

 

                                                                                                                                                  
 Page

 

ARTICLE 6 LEASING MATTERS…………………………………………………………………….66

 

Section 6.1   Representations and Warranties on Leases……………………………………………..66

Section 6.2  Approval Rights; Security Deposits…………………………………………………..….67

Section 6.3 Covenants……………………………………………………………………………...…67

Section 6.4 Tenat Estoppels…………………………………………………………………………..67

Section 6.5 Subordination, Non-Disturbance and Attornment
Agreements………………………......68

 

ARTICLE 7 REPRESENTATIONS AND WARRANTIES…………………………………………...68

 

   Section 7.1     Organization and Power……………………………………………………………….68

Section 7.2     Validity of Loan Documents…………………………………………………………..68

Section 7.3     Liabilities; Litigation…………………………………………………………………..68

Section 7.4    Taxes and Assessments………………………………………………………………...69

Section 7.5    Other Agreements; Defaults…………………………………………………………....69

Section 7.6    Compliance with Law…………………………………………………………………..69

Section 7.7     Location of Borrower…………………………………………………………………..70

Section 7.8     ERISA………………………………………………………………………………….70

Section 7.9     Margin Stock…………………………………………………………………………...70

Section 7.10   Tax Filings……………………………………………………………………………..70

Section 7.11   Solvency………………………………………………………………………………..70

Section 7.12   Full and Accurate Disclosure ………………………………………………………….70

Section 7.13   Management Agreements………………………………………………………………71

Section 7.14   No Conflicts……………………………………………………………………………71

Section 7.15   Title…………………………………………………………………………………….71

Section 7.16    Use of Project………………………………………………………………………….71

Section 7.17    Flood Zone…………………………………………………………………………….72

Section 7.18    Insurance………………………………………………………………………………72

Section 7.19    Certificate of Occupancy; Licenses…………………………………………………...72

Section 7.20    Physical Condition…………………………………………………………………….72

Section 7.21    Boundaries…………………………………………………………………………......72

Section 7.22    Separate Lots…………………………………………………………………………..73

Section 7.23    Filing and Recording Taxes…………………………………………………………...73

Section 7.24    Investment Company Act……………………………………………………………..73

Section 7.25    Foreign Assets Control Regulations, Etc……………………………………………...73

Section 7.26    Organizational Structure………………………………………………………………74

Section 7.27    Anti-Corruption Laws and Sanctions………………………………………………….74

Section 7.28    Guarantor Net Worth and Liquidity…………………………………………………...74

Section 7.29    Condominium………………………………………………………………………….74

 

ARTICLE 8 FINANCIAL REPORTING………………………………………………………………..75

 

Section 8.1     Borrower’s Financial Statements……………………………………………………….75

Section 8.2    Guarantor’s Financial Statements……………………………………………………….76

Section 8.3    Other Information……………………………………………………………………….76

Section 8.4     Annual Budget………………………………………………………………………….76

Section 8.5     Audits…………………………………………………………………………………...77

 

ii

--------------------------------------------------------------------------------

 

                                                                                                                                                  
Page

 

 

ARTICLE 9 COVENANTS……………………………………………………………………………77

 

Section 9.1    Due on Sale and Encumbrance; Permitted Transfers…………………………………77

Section 9.2    Property Taxes………………………………………………………………………...79

Section 9.3    Control; Management………………………………….……………………………...80

Section 9.4    Operation; Maintenance; Inspection…………………………………………………..81

Section 9.5     Taxes on Security……………………………………………………………………..81  

Section 9.6     Legal Existence; Name, Etc…………………………………………………………..81

Section 9.7    Transactions with Affiliates………………………………………………………..….82 

Section 9.8     Limitation on Other Debt……………………………………………………………..82

Section 9.9     Further Assurances……………………………………………………………………82

Section 9.10   Estoppel Certificates………………………………………………………………….82

Section 9.11   Notice of Certain Events……………………………………………………………...83

Section 9.12    Indemnification………………………………………………………………………83

Section 9.13    Payment for Labor and Materials……………………………………………………83

Section 9.14    Alterations…………………………………………………………………………...84

Section 9.15    Hedge Agreements…………………………………………………………………..85

Section 9.16    Handicapped Access…………………………………………………………………88

Section 9.17    Zoning… ……………………………………………………………………………88

Section 9.18    ERISA ……………………………………………………..………………………..89

Section 9.19    Books and Records; Inspection Rights……………………………………………...89

Section 9.20    Foreign Assets Control Regulations…………………………………………………89

Section 9.21   Appraisals…………………………………………………………………………….89

Section 9.22   Restricted Payments…………………………………………………………………..89

Section 9.23   Business Organization Documents…………………………………………………...90

Section 9.24   Agreements Affecting the Project……………………………………………………90

Section 9.25   Anti-Corruption Laws………………………………………………………………..90

Section 9.26   Guarantor Financial Covenants………………………………………………………90

Section 9.27   Condominium Estoppel………………………………………………………………90

Section 9.28   Condominium Charges Deposit….…………………………………………………..91

Section 9.29   Condominium Covenants…………………………………………………………….91     

 

ARTICLE 10 EVENTS OF DEFAULT………………………………...…………………….94

 

Section 10.1   Payments……………………………………………………………………………...94

Section 10.2   Insurance……………………………………………………………………………...94

Section 10.3   Single Purpose Entity…………………………………………………………………95

Section 10.4   Property Taxes………………………………………………………………………...95

Section 10.5   Sale, Encumbrance, Etc……………………………………………………………….95

Section 10.6   Representations and Warranties………………………………………………………95

Section 10.7   Various Covenants…………………………………………………………………….95

Section 10.8   Involuntary Bankruptcy or Other Proceeding…………………………………………96

Section 10.9   Voluntary Petitions, Etc……………………………………………………………….96

Section 10.10  Dissolution……………………………………………………………………………96

Section 10.11  Judgments…………………………………………………………………………….96                      

Section 10.12  Security……………..………………………………………………………………...97

Section 10.13  Guarantor Documents…………………….…………………………………………..97

Section 10.14  Hedge Agreement; Guaranty of Interest……………………………………………...97

iii

--------------------------------------------------------------------------------

 

                                                                                                                                               
Page

Section 10.15  Condominium Covenants………………………………………….……………..…97

Section 10.16  Covenants…………………………………………………………….…………..…98

ARTICLE 11 REMEDIES

Section 11.1  Remedies – Insolvency Events………………………………………………..….…98

Section 11.2  Remedies – Other Events……………………………………………………..….....98

Section 11.3  Administrative Agent’s Right to Perform the
Obligations…………………………..99

Section 11.4  Application of Funds Received by Administrative
Agent…………………………...99

 

ARTICLE 12 MISCELLANEOUS……………………………………………………….………100

 

Section 12.1   Notices………………………………………………………………………..……100

Section 12.2   Amendments, Waivers, Etc……………………………………………….……..…101

Section 12.3   Limitation on Interest……………………………………………………………….102

Section 12.4   Invalid Provisions…………………………………………………………………...103

Section 12.5   Reimbursement of Expenses………………………………………………………...103

Section 12.6   Approvals; Third Parties; Conditions………………………………………………..104

Section 12.7   Lenders and Administrative Agent Not in Control; No
Partnership………………...105

Section 12.8   Time of the Essence………………………………………………………………….105

Section 12.9   Successors and Assigns……………………………………………………………....105

Section 12.10 Intentionally Omitted…………………………………………………………………105

Section 12.11
Waivers……………………………………………………………………………….105                          

Section 12.12 Cumulative Rights……………………………………………………………………106

Section 12.13 Singular and Plural……………………………………………………………………106

Section 12.14 Phrases…………………………………………………………………………………106

Section 12.15 Exhibits and Schedules          ………………………………………………………….106

Section 12.16 Titles of Articles, Sections and Subsections…………………………………………..106

Section 12.17 Promotional Material…………………………………………………………………..106

Section 12.18 Survival………………………………………………………………………………...107

Section 12.19 WAIVER OF JURY TRIAL…………………………………………………………..107

Section 12.20 Governing Law………………………………………………………………………...107

Section 12.21 Entire Agreement………………………………………………………………………108

Section 12.22 Counterparts……………………………………………………………………………109

Section 12.23 Assignments and Participations..……………………………………………………….109

Section 12.24 Brokers…………………………………………………………………………………112

Section 12.25 Right of Set-off…………………………………………………………………………112

Section 12.26 Limitation on Liability of Administrative Agent’s and the Lenders’

                       Officers, Employees, etc…………………………………………………………….....113

Section 12.27 Cooperation with Syndication………………….....…………………………………....113

Section 12.28 WAIVER OF SPECIAL DAMAGES………………………………………………....114

Section 12.29 USA PATRIOT ACT NOTIFICATION……………………………………………...114

Section 12.30 Assignment of Mortgage and Notes……………………………………………….......114

 

ARTICLE 13 RECOURSE……………………………………………………………………………..114

 

Section 13.1  Recourse………………………………………………………………………………114

 

ARTICLE 14 ADMINISTRATIVE AGENT……………………………………………………..…....115

 

Section 14.1  Appointment………………………………………………………………………..…115

iv

--------------------------------------------------------------------------------

 

                                                                                                                                                   
Page

Section 14.2 Capacity as Lender……………………………………………………………………115

Section 14.3 Duties and Obligations………………………………………………………………...115

Section 14.4 Reliance……………………………………………………………………………….116

Section 14.5 Sub-Agents……………………………………………………………………………116

Section 14.6 Resignation……………………………………………………………………………116

Section 14.7 Independent Credit Analysis………………………………………………………….117

Section 14.8 Lender Actions Against Collateral……………………………………………………117

Section 14.9 Lender Reply Period………………………………………………………………….117

Section 14.10 Foreclosure………………………………………………………………………….118

Section 14.11 Defaulting Lender…………………………………………………………………...119

Section 14.12 Borrower’s Rights…………………………………………………………………..121

Section 14.13 Indemnification by the Lenders…………………………………………………......121

 

 

 

LIST OF EXHIBITS AND SCHEDULES

EXHIBIT A                -           LEGAL DESCRIPTION OF PROJECT

EXHIBIT B                -           FORM OF NOTE

EXHIBIT C                -           FORM OF ASSIGNMENT AND ASSUMPTION

EXHIBIT D                -           FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT

EXHIBIT E                -           FORM OF TENANT NOTICE LETTER

EXHIBIT F                -           FORM OF TERMINATION LETTER

EXHIBIT G                -           FORM OF HEDGE AGREEMENT PLEDGE

EXHIBIT H                -           FORM OF INTEREST ELECTION REQUEST

EXHIBIT I                 -           FORM OF RESTRICTED COLLATERAL LETTER

EXHIBIT J                 -           FORM OF LEASE

EXHIBIT K                -           FORM OF INTEREST GUARANTY

SCHEDULE 1            -           COMMITMENTS

SCHEDULE 2            -           LEASING GUIDELINES

SCHEDULE 2.1         -           CONDITIONS TO CLOSING

SCHEDULE 3            -           BORROWER ACCOUNT

SCHEDULE 7.26       -           ORGANIZATIONAL CHART

SCHEDULE 9.7         -           AGREEMENTS WITH BORROWER’S AFFILIATES

v

--------------------------------------------------------------------------------

 

LOAN AGREEMENT

This LOAN AGREEMENT (this “Agreement”) is entered into as of August 5, 2015
among 731 RETAIL ONE LLC (“731 Retail”), a Delaware limited liability company,
and 731 COMMERCIAL LLC (“731 Commercial”), a Delaware limited liability company
(731 Retail and 731 Commercial are jointly, severally and collectively, the
“Borrower”); each of the lenders that is a signatory hereto identified under the
caption “LENDER” on the signature pages hereof and each lender that becomes a
“Lender” after the date hereof pursuant to Section 12.23(2) (individually, a
“Lender” and, collectively, the “Lenders”); and JPMORGAN CHASE BANK, N.A., as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, “Administrative Agent”).

ARTICLE 1

CERTAIN DEFINITIONS

SECTION 1.1            CERTAIN DEFINITIONS.

As used herein, the following terms have the meanings indicated:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“Access Laws” has the meaning assigned in Section 9.16(1).

“Additional Collateral” means, collectively, any additional collateral hereafter
deposited with and held by Administrative Agent pursuant to Section 2.15,
Section 3.2(2)(a)(viii), Section 4.4 and/or any other provision of this
Agreement.  Any Additional Collateral deposited with Administrative Agent shall
constitute additional collateral for the Indebtedness, and Administrative Agent
shall have the right at any time after the occurrence and during the continuance
of an Event of Default to apply the same to the payment of the Indebtedness in
the order and amounts provided for in Section 11.4.  Any Additional Collateral
held by Administrative Agent at the time of payment in full of the Indebtedness
shall either (a) be promptly returned or released (as applicable) to Borrower
after the Indebtedness has been paid in full, or (b) if requested by the
Borrower, applied in reduction of the amounts owed in respect of the Loans.

“Additional Interest” means any and all amounts which may become due and payable
by Borrower in accordance with the terms and provisions of any Hedge Agreement
provided by Administrative Agent or a Lender which is secured by the Mortgage in
accordance with Section 9.15, including, without limitation, any and all
breakage costs, liquidated damages or other amounts payable to Administrative
Agent or a Lender pursuant to such Hedge Agreement upon the occurrence of a
default under such Hedge Agreement.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any

1

--------------------------------------------------------------------------------

 

Interest Period, the rate per annum (rounded upward, if necessary, to the next
1/1,000 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by
(b) the Statutory Reserve Rate.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by Administrative Agent, each of which shall be delivered by
Administrative Agent to Borrower upon request.

“Affiliate” means with respect to any Person, another Person that directly or
indirectly Controls, or is under common Control with, or is Controlled by, such
Person.  Notwithstanding the foregoing, no individual shall be an Affiliate
solely by reason of his or her being a director, officer, trustee or employee of
Borrower.

“Agreement” means this Loan Agreement, as amended from time to time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%; provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate
at approximately 11:00 a.m. London time on such day.  Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Adjusted LIBO Rate, respectively. If the Alternate Base Rate is
being used as an alternate rate of interest pursuant to Section 2.7 hereof, then
the Alternate Base Rate shall be the greater of clauses (a) and (b) above and
shall be determined without reference to clause (c) above.

“ALX/VNO Transfer” has the meaning assigned in Section 9.1(3).

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to Borrower or its Affiliates from time to time
concerning or relating to bribery or corruption

“Anti-Terrorism Order” means Executive Order No. 13224, 66 Fed. Reg. 49,079
(2001), issued by the President of the United States of America (Executive Order
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism).

“Applicable Margin” means with respect to Eurodollar Borrowings, 1.40% per
annum, and with respect to ABR Borrowings, 0.40% per annum.

“Appraisal” means an “as-is” appraisal prepared by an Appraiser, which appraisal
must be (i) prepared in accordance with the Uniform Standards of Appraisal
Practice as adopted by the Appraisal Standards Board of the Appraisal Foundation
and (ii) reviewed as to form and content and approved by Administrative Agent,
in its reasonable judgment.

“Appraised Value” means the “as is” value of the Project, as set forth in the
most current Appraisal.

2

­

--------------------------------------------------------------------------------

 

“Appraised Value Shortfall” means the difference between the outstanding
principal amount of the Loans (less the sum of (i) the amount, if any, of any
Additional Collateral then held by Administrative Agent pursuant to the terms of
Section 2.15 or otherwise, provided that if any Additional Collateral is also
held for any purpose other than in accordance with Section 2.15, notwithstanding
any conditions for the earlier release of such Additional Collateral, such
Additional Collateral shall continue to be held or applied in accordance with
the terms of Section 2.15 and (ii) the amount, if any, of any Restricted
Collateral then held by Administrative Agent) and the maximum principal amount
of the Loans that would satisfy the extension condition contained in Section
2.15(9), taking into account the then current Appraised Value as set forth in
the then most recent Appraisal.

“Appraiser” means a “state certified general appraiser” as such term is defined
and construed under applicable regulations and guidelines issued pursuant to
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989, which appraiser must have been licensed and certified by the applicable
Governmental Authority having jurisdiction in the State, and which appraiser
shall have been directly engaged by Administrative Agent or its agent, and
approved by Borrower (such approval not to be unreasonably withheld).

“Approved Annual Budget” means an annual or partial-year budget approved by
Administrative Agent pursuant to Section 8.4.

“Approved Extraordinary Expense” means an Extraordinary Expense which has been
approved by Administrative Agent.

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in its ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

“Approved Operating Expenses” means Operating Expenses, capital expenditures and
leasing costs which are set forth in an Approved Annual Budget.  Notwithstanding
the foregoing, an Operating Expense, capital expenditure or leasing cost payable
to an Affiliate of Borrower or Guarantor shall not constitute an Approved
Operating Expense unless the agreement with such Affiliate is set forth on
Schedule 9.7 or the terms of the agreement with such Affiliate have been
approved in writing by Administrative Agent in its reasonable discretion.

“Assignment and Assumption” means an Assignment and Assumption, duly executed by
the parties thereto, in substantially the form of Exhibit C hereto and consented
to by (if and to the extent applicable) Administrative Agent and Borrower in
accordance with Section 12.23(2).

“Assignment/Gap Documents” means, collectively, (i) an Assignment of Mortgage
and other documents relating to (x) the assignment to Administrative Agent (on
behalf of the Lenders) of the existing mortgage(s) and the promissory note(s)
secured thereby evidencing and securing the mortgage loan encumbering the
Project as of the Closing Date and

3

 

--------------------------------------------------------------------------------

 

(y) the terminations of the assignment of leases and rents, UCC financing
statements and special lockbox deposit agreement relating to such mortgage loan
as of the Closing Date, and (ii) a “gap” mortgage and a “gap” promissory note
made by Borrower in favor of Administrative Agent (on behalf of the Lenders) in
an amount equal to the difference between $350,000,000 and the outstanding
principal amount of such mortgage loan as of the Closing Date.

“Assignment of Leases and Rents” means that certain Assignment of Leases and
Rents of even date herewith, executed by Borrower in favor of Administrative
Agent for the benefit of the Lenders, as the same may be modified, amended
and/or supplemented and in effect from time to time.

“Assignments of Management Agreement” means, that certain Assignment of
Management Agreement and Subordination of Management Fees, dated the date
hereof, by Borrower in favor of Administrative Agent (on behalf of the Lenders)
and consented to by the Manager as same may be modified, amended and/or
supplemented and in effect from time to time.

“Award” means any compensation paid by any Governmental Authority to Borrower in
connection with a Condemnation in respect of all or any part of the Project.

“Bankruptcy Code” means Title 11 of the United States Code, as amended from time
to time and any successor statute thereto.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any such proceeding
or appointment, provided that a Bankruptcy Event shall not result solely by
virtue of any ownership interest, or the acquisition of any ownership interest,
in such Person by a Governmental Authority or instrumentality thereof, provided,
further, that such ownership interest does not result in or provide such Person
with immunity from the jurisdiction of courts within the United States or from
the enforcement of judgments or writs of attachment on its assets or permit such
Person (or such Governmental Authority or instrumentality) to reject, repudiate,
disavow or disaffirm any contracts or agreements made by such Person.

“Bankruptcy Party” has the meaning assigned in Section 10.8.

“Basel III” means the various recommendations for capital and liquidity
standards issued by the Bank for International Settlement’s Basel Committee on
Banking Supervision known informally as “Basel III,” as amended, modified and
supplemented and in effect from time to time.

“Bloomberg Lease” means that certain Agreement of Lease, dated as of April 30,
2001, between Seven Thirty One Limited Partnership, as landlord, and Bloomberg
L.P., as tenant, as the same may be amended from time to time.

“Borrower Account” means the account specified in Schedule 3, as such account

                                                                    

4

 

--------------------------------------------------------------------------------

 

information may be changed from time to time by written notice from Borrower to
Administrative Agent.

“Borrowing” means a portion or portions of the Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar
Borrowings, as to which a single Interest Period is in effect.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar
Borrowing, the term “Business Day” shall also exclude any day on which banks are
not open for dealings in Dollar deposits in the London interbank market.

“Business Organization Documents” means, with respect to any Person, (i) in the
case of a partnership, the certificate of partnership and the partnership
agreement of such Person, (ii) in the case of a corporation, the articles or
certificate of incorporation and the bylaws of such Person, and (iii) in the
case of a limited liability company, the certificate of formation or articles of
organization, as the case may be, and operating agreement of such Person.

“Bylaws” shall mean those certain “Bylaws” annexed as an exhibit to the
Condominium Declaration providing for the operation of the Condominium, as the
same may be amended, supplemented, replaced or otherwise modified from time to
time.

“Cash Management Account” has the meaning set forth in Section 4.2(1).

“Cash Management Bank” has the meaning set forth in Section 4.2(1).

“Cash Management Commencement Date” means any date on which a Cash Management
Period commences.

“Cash Management Period” means any of the following periods:

(1)               ANY PERIOD COMMENCING ON THE DATE THAT A DSCR TRIGGER EVENT
HAS OCCURRED AND ENDING ON THE DATE THAT SUCH DSCR TRIGGER EVENT IS NO LONGER IN
EFFECT; OR

(2)               ANY PERIOD COMMENCING ON THE OCCURRENCE OF ANY EVENT OF
DEFAULT AND ENDING ON THE DATE WHEN ALL EVENTS OF DEFAULT HAVE BEEN FULLY CURED.

“Cash Management Reserve Fund” has the meaning assigned to such term in Section
4.2(3).

“Casualty” has the meaning specified in Section 3.3(a).

“Casualty Consultant” has the meaning assigned to such term in Section
3.2(2)(c).

“Casualty Retainage” has the meaning assigned to such term in Section 3.2(2)(d).

                                                                    

5

­

--------------------------------------------------------------------------------

 

“Change in Law” means the occurrence, after the date of this Agreement or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement, of: (a) the adoption of any law, rule, regulation or treaty, (b)
any change in any law, rule, regulation or treaty or in the interpretation or
application thereof by any Governmental Authority or (c) compliance by any
Lender (or, for purposes of Section 2.8(2), by any lending office of such Lender
or by such Lender’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement; provided that notwithstanding
anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder, issued in connection therewith or in implementation thereof, and
(ii) all requests, rules, guidelines and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall be deemed to be a “Change
in Law”, regardless of the date enacted, adopted, issued or implemented.

“Closing Date” means the date of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commitment” means, as to each Lender, the obligation of such Lender to make
Loans pursuant to this Agreement in an aggregate principal amount up to but not
exceeding the amount set forth opposite the name of such Lender on Schedule 1
(as such schedule may be updated from time to time by Administrative Agent to
reflect any assignments by Lenders of all or portions of their Loans) under the
caption “Commitment” or, in the case of a Person that becomes a Lender pursuant
to an assignment permitted under Section 12.23(2), as specified in the
respective instrument of assignment pursuant to which such assignment is
effected.  The aggregate principal amount of the Commitments is $350,000,000.

“Commitment Percentage” means, as to each Lender, the percentage that such
Lender’s Commitment is of the aggregate amount of the Commitments of all
Lenders, as set forth opposite the name of such Lender on Schedule 1 (as such
schedule may be updated from time to time by Administrative Agent to reflect any
assignments by Lenders of all or portions of their Loans) under the caption
“Commitment Percentage” or, in the case of a Person that becomes a Lender
pursuant to an assignment permitted under Section 12.23(2), as specified in the
respective instrument of assignment pursuant to which such assignment is
effected.

“Common Elements” shall have the meaning set forth in the Condominium Documents.

“Condemnation” means a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of the Project, or
any interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting the Project or any part thereof.

“Condemnation Proceeds” has the meaning assigned to such term in Section

                                                                    

6

 

--------------------------------------------------------------------------------

 

3.2(2).

“Condominium” shall mean the condominium regime created pursuant to the
Condominium Documents, including, without limitation, all Common Elements and
Units, and commonly known as the Beacon Court Condominium located at 731
Lexington Avenue, New York, New York.

“Condominium Act” shall mean the provisions of Article 9-B of the Real Property
Law of the State of New York, as the same may be amended from time to time, and
all regulations with respect thereto, now or hereafter promulgated.

“Condominium Board” shall mean, collectively, (A) the “Condominium Board” (as
described in the Condominium Declaration) managing the Condominium by virtue of
the Condominium Act, and the Condominium Documents, on behalf of all the owners
of the Units comprising the Condominium, and (B) the “Retail Board” (as
described in the Condominium Declaration) managing the “Retail Units” (as
described in the Condominium Documents) on behalf of the owners of the Retail
Units.

“Condominium Charges” shall mean all common charges, special assessments,
operating costs and other amounts imposed on the Project and/or Borrower
pursuant to the Condominium Documents.

“Condominium Charges Reserve Account” shall have the meaning set forth in
Section 4.2(4)(c).

“Condominium Declaration” shall mean that certain Amended and Restated
Declaration of Beacon Court Condominium made under the Condominium Act dated as
of February 8, 2005, and recorded on March 9, 2005 in the Office of the City
Register of The City of New York, County of New York, in CRFN 2005 0000139245 as
the same may hereafter from time to time be modified, amended, restated,
replaced or supplemented.

 “Condominium Documents” shall mean, collectively, one or more or all of the
Condominium Declaration, the Bylaws and the Tax Lot Documents, as the context
may require.

 “Condominium Proxy” shall mean the irrevocable proxy given by Borrower to
Administrative Agent in connection with the Loan.

 “Consolidation Agreement” means the Consolidation, Modification and Extension
Agreement of even date herewith, executed by Borrower and Administrative Agent
(on behalf of the Lenders), in the consolidated principal amount of
$350,000,000.

“Contingent Guaranty Obligations” means, as to Guarantor, any contingent
obligation of the Guarantor arising as a result of any guarantees for principal
indebtedness made or issued by Guarantor to or for the benefit of any Person,
provided that the amount of the Contingent Guaranty Obligations shall exclude
any guaranteed indebtedness which was already deducted from assets or included
in liabilities in calculating Net Worth.

“Control” means, with respect to any Person, the ability to direct the
management

                                                                    

7

 

--------------------------------------------------------------------------------

 

of such Person, whether by contract, voting rights or otherwise, and Control
shall not be deemed absent solely because a non-managing member, partner or
shareholder shall have veto rights with respect to major decisions.

“De Minimis Amounts” has the meaning assigned to such term in the Environmental
Indemnity.

“Debt” means, for any Person, without duplication:  (a) all indebtedness of such
Person for borrowed money, for amounts drawn under a letter of credit, or for
the deferred purchase price of property for which such Person or its assets is
liable (other than trade payables incurred in the ordinary course of business),
(b) all unfunded amounts under a loan agreement, letter of credit, or other
credit facility for which such Person would be liable, if such amounts were
advanced under the credit facility, (c) all amounts required to be paid by such
Person as a guaranteed payment to partners, members (or other equity holders) or
a preferred or special dividend, including any mandatory redemption of shares or
interests, (d) all indebtedness guaranteed by such Person, directly or
indirectly, (e) all obligations under leases that constitute capital leases for
which such Person is liable, and (f) all obligations of such Person under
interest rate swaps, caps, floors, collars and other interest hedge agreements,
in each case whether such Person is liable contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which obligations such Person
otherwise assures a creditor against loss.

“Debt Service (Cash Management Test)” means, as of any date of determination, an
amount equal to the product of the outstanding principal amount of the Loans on
such date (less the amount, if any, of any Additional Collateral then held by
Administrative Agent pursuant to the terms of Section 2.15, Section
3.2(2)(a)(viii) and/or Section 4.4), and the greater of (a) a debt constant
calculated using the actual interest rate on the Loans as of such date and
assuming a 30-year amortization schedule and (b) 6.14% per annum.

“Debt Service (Extension Test)” means, as of any date of determination, an
amount equal to the product of the outstanding principal amount of the Loans on
such date (less the sum of (i) the amount, if any, of any Additional Collateral
then held by Administrative Agent pursuant to the terms of Section 2.15 and (ii)
the amount, if any, of any Restricted Collateral then held by Administrative
Agent), and the greater of (a) a debt constant calculated using the actual
interest rate on the Loans as of such date and assuming a 30-year amortization
schedule, (b) 6.44% per annum, and (c) a debt constant calculated using the
10-year yield on United States Treasury securities as of such date plus 2.50%
per annum and assuming a 30-year amortization schedule.

“Debt Service Coverage Ratio” means, as of the applicable DSCR Calculation Date,
the ratio of (i) the Net Operating Income for the twelve-month period ending on
such DSCR Calculation Date (for purposes of this calculation, Net Operating
Income shall (A) include on a pro forma annualized basis (x) any increase in
Rent payable under a Permitted Lease scheduled to occur within twelve (12)
months after the DSCR Calculation Date and (y) the Rent payable under a
Permitted Lease if no free rent period is accruing or if the remaining free rent
period under such Lease is not greater than six (6) months as of the DSCR
Calculation Date, provided that the term of such Lease has commenced, and (B)
exclude the Rent paid under any Permitted Lease which has expired or been
terminated as of such DSCR Calculation Date or

                                                                    

8

 

--------------------------------------------------------------------------------

 

which is scheduled to expire or terminate within nine (9) months after such DSCR
Calculation Date (unless a replacement or extension of such Lease is executed)
or where the tenant thereunder has been delinquent in paying its base rent
thereunder for more than 60 days as of such DSCR Calculation Date) to (ii) (x)
with respect to the calculation of the Debt Service Coverage Ratio under Section
2.15, Debt Service (Extension Test) as of such DSCR Calculation Date or (y)
otherwise, Debt Service (Cash Management) as of such DSCR Calculation Date.  The
Debt Service Coverage Ratio shall be determined by Administrative Agent in its
reasonable discretion based upon the most recent reports required to have been
submitted by Borrower under Section 8.1 (or, if no such reports have been so
submitted, such other information as Administrative Agent shall determine in its
sole discretion exercised in good faith).  For the avoidance of doubt, if any
Lease is not a Permitted Lease as of a DSCR Calculation Date solely because
Borrower failed to request Administrative Agent’s prior written consent thereto
if required in accordance with this Agreement, such Lease shall be deemed to
constitute a Permitted Lease for purposes of the calculation of Net Operating
Income above if Administrative Agent subsequently provides (or is deemed to
provide) its written consent thereto.

“Debt Service Reserve Account” has the meaning set forth in Section 4.2(4).

“Debt Yield” means, as of the last day of the calendar quarter immediately
preceding the Closing Date, the ratio (expressed as a percentage) of (i)
annualized Net Operating Income as of such date to (ii) $350,000,000.

“Default Rate” means a rate per annum equal to (i) in the case of overdue
principal of a Borrowing, three percent (3%) plus the rate otherwise applicable
to such Borrowing as provided in Section 2.6(1) or (2) or (ii) in the case of
any other amount, three percent (3%) plus the rate applicable to ABR Borrowings
as provided in Section 2.6(1); provided, however, that in no event shall the
Default Rate exceed the maximum rate allowed by applicable law.

“Defaulting Lender” means any Lender that (a) has failed, within five (5)
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Loans or (ii) pay over to Administrative Agent or any other Lender any
other amount required to be paid by it hereunder, unless, in the case of clause
(i) above, such Lender notifies Administrative Agent in writing that such
failure is the result of such Lender’s good faith determination that a condition
precedent to funding (specifically identified and including the particular
default, if any) has not been satisfied, (b) has notified Borrower,
Administrative Agent or any other Lender in writing, or has made a public
statement to the effect, that it does not intend or expect to comply with any of
its funding obligations under this Agreement (unless such writing or public
statement indicates that such position is based on such Lender’s good faith
determination that a condition precedent (specifically identified and including
the particular default, if any) to funding a Loan under this Agreement cannot be
satisfied) or generally under other agreements in which it commits to extend
credit, (c) has failed, within three (3) Business Days after request by
Administrative Agent or any other Lender, acting in good faith, to provide a
certification in writing from an authorized officer of such Lender that it will
comply with its obligations (and is financially able to meet such obligations)
to fund prospective Loans under this Agreement, provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon Administrative
Agent’s or such other Lenders’ receipt of such certification in form and
substance

                                                                    

9

­

--------------------------------------------------------------------------------

 

satisfactory to it and Administrative Agent, or (d) has become the subject of a
Bankruptcy Event.

“Derivative Risk Equivalent” means, in respect of any one or more Hedge
Agreements, the potential termination cost of such Hedge Agreement(s) as a
result of a default thereunder, as reasonably determined by Administrative
Agent.

“Dollars” and “$” means lawful money of the United States of America.

“DSCR Calculation Certificate” has the meaning set forth in Section 8.1(3).

“DSCR Calculation Date” means the last day of each calendar quarter, the first
such DSCR Calculation Date being September 30, 2015.

“DSCR Shortfall (Cash Management Test)” means the difference between (i) the
outstanding principal amount of the Loans (less the amount, if any, of any
Additional Collateral then held by Administrative Agent pursuant to the terms of
Section 2.15, Section 3.2(2)(a)(viii), Section 4.4 and/or any other provision of
this Agreement provided that such Additional Collateral is not specifically
reserved in accordance herein for the payment of any cost or expense) and (ii)
the maximum principal amount of the Loans that would not result in a DSCR
Trigger Event under Section 4.4, as determined by Administrative Agent in its
reasonable discretion.

“DSCR Shortfall (Extension Test)” means the difference between (i) the
outstanding principal amount of the Loans (less the sum of (x) the amount, if
any, of any Additional Collateral then held by Administrative Agent pursuant to
the terms of Section 2.15 and (y) the amount, if any, of any Restricted
Collateral then held by Administrative Agent) and (ii) the maximum principal
amount of the Loans that would satisfy the extension condition set forth in
Section 2.15(5), as determined by Administrative Agent in its reasonable
discretion.

“DSCR Trigger Event” has the meaning assigned to in Section 4.4.

“Eligible Assignee” means any of (i) a commercial bank organized under the laws
of the United States, or any state thereof, and having (x) total assets in
excess of $1,000,000,000 and (y) a combined capital and surplus of at least
$250,000,000; (ii) a commercial bank organized under the laws of any other
country which is a member of the Organization of Economic Cooperation and
Development (“OECD”), or a political subdivision of any such country, and having
(x) total assets in excess of $1,000,000,000 and (y) a combined capital and
surplus of at least $250,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of OECD; (iii) a life insurance company organized
under the laws of any state of the United States, or organized under the laws of
any country and licensed as a life insurer by any state within the United States
and having admitted assets of at least $1,000,000,000; (iv) a nationally
recognized investment banking company or other financial institution in the
business of making loans secured by real estate, or an Affiliate thereof (other
than Borrower or Guarantor or any Person which is directly or indirectly an
Affiliate of Borrower or Guarantor) organized under the laws of any state of the
United States, and licensed or qualified to conduct such business under the laws
of any such state and having (1) total assets of at least $1,000,000,000 and
(2) a net worth of at least $250,000,000; (v) an Approved Fund; or (vi) or a
Related Entity of

                                                                    

10

­

--------------------------------------------------------------------------------

 

JPMCB or any other Lender.

“Eligible Account”:  Either (i) an account or accounts maintained with an
Eligible Bank or (ii) a Trust Account.

“Eligible Bank” shall mean The Bank of New York Mellon Trust Company N.A. or any
other bank that (i) satisfies the Rating Criteria and (ii) insures the deposits
hereunder through the Federal Deposit Insurance Corporation.

“Environmental Claim” has the meaning assigned in Section 5.1(1).

“Environmental Indemnity” means that certain Environmental Indemnity Agreement
of even date herewith, executed by Borrower and Guarantor in favor of
Administrative Agent and each of the Lenders, as the same may be modified,
amended and/or supplemented and in effect from time to time.

“Environmental Laws” has the meaning assigned in Section 5.1(2).

“Environmental Liens” has the meaning assigned in Section 5.3(4).

“Environmental Loss” has the meaning assigned in Section 5.1(4).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute.

“Eurodollar”, when used in reference to any Borrowing, refers to whether such
Borrowing is bearing interest at the Fixed Rate determined by reference to the
Adjusted LIBO Rate.

“Event of Default” has the meaning assigned in Article 10.

“Excess Alterations Costs” has the meaning assigned in Section 9.14(3).

“Excess Cash Flow Account” has the meaning set forth in Section 4.2(4).

 “Excluded Taxes” means, with respect to any payment made by Borrower under this
Agreement or any other Loan Document, any of the following Taxes imposed on or
with respect to a Recipient:

(a)                income or franchise Taxes imposed on (or measured by) net
income by the United States of America, or by the jurisdiction under the laws of
which such Recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located;

(b)               any branch profits Taxes imposed by the United States of
America or any similar Taxes imposed by any other jurisdiction in which such
Recipient is located;

(c)                Other Connection Taxes;

                                                                    

11

 

--------------------------------------------------------------------------------

 

(d)               Taxes attributable to such Recipient’s failure to comply with
Section 2.12(6); and

(e)                U.S. Federal withholding Taxes resulting from any law in
effect (including FATCA) on the date on which (i) such Recipient acquires its
applicable ownership interest in the Loan or Commitment (other than a Recipient
acquiring its applicable ownership interest pursuant to Section 2.14(2)) or (ii)
such Recipient changes its lending office, except in each case to the extent
that, pursuant to Section 2.12, amounts with respect to such Taxes were payable
either to such Recipient’s assignor immediately before such Recipient became a
Recipient with respect to its applicable ownership interest in the Loan or
Commitment or to such Recipient immediately before it changed its lending
office).

“Existing Leases” means all Leases in effect as of the Closing Date.

“Extension Fee” means (i) in the case of the extension of the Maturity Date to
the First Extended Maturity Date, ten hundredths of one percent (0.10%) of the
aggregate amount of the Loans outstanding and to be extended as of the Initial
Maturity Date and (ii) in the case of the extension of the Maturity Date to the
Second Extended Maturity Date, ten hundredths of one percent (0.10%) of the
aggregate amount of the Loans outstanding and to be extended as of the First
Extended Maturity Date.

“Extension Notice” has the meaning set forth in Section 2.15(2).

“Extraordinary Expense” means an operating expense or capital expenditure with
respect to the Project that is not set forth on the Approved Annual Budget.
During any Cash Management Period, Borrower shall deliver promptly to
Administrative Agent a reasonably detailed explanation of such proposed
Extraordinary Expense for the prior written approval of Administrative Agent
(which approval shall not be unreasonably withheld, delayed or conditioned),
unless such Extraordinary Expense is to prevent imminent damage to any portion
of the Project or imminent danger to the health or safety of any of the
occupants of, or persons in the vicinity of, the Project, in which case
Administrative Agent’s prior written approval shall not be required, provided
that Borrower shall be required to obtain Administrative Agent’s written
approval (which approval shall not be unreasonably withheld, delayed or
conditioned) as soon as reasonably possible after such Extraordinary Expense has
been incurred.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/1,000 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/1,000 of 1%) of the quotations for such day for such

                                                                    

12

­

--------------------------------------------------------------------------------

 

transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by it.

“Fee Letters” means, collectively, the letter agreements dated July 28, 2015 by
and among JPMCB, J.P. Morgan Securities LLC and Borrower.

“First Extended Maturity Date” means August 5, 2021.

“Fitch” means Fitch, Inc.

“Fixed Rate” means, with respect to a Eurodollar Borrowing for the relevant
Interest Period, the sum of the applicable Adjusted LIBO Rate plus the
Applicable Margin.

“Floating Rate” means, for any day, a per annum rate of interest equal to the
sum of the Alternate Base Rate plus the Applicable Margin.

“Future Commitment” has the meaning assigned in Section 14.11(d).

“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statement by such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as to the date of determination,
consistently applied.

“General Assignment” means that certain Assignment of Management, Maintenance,
Service, Operating, Brokerage and Leasing Contracts, Property Rights, Permits
and other Property Agreements of even date herewith, executed by Borrower in
favor of Administrative Agent for the benefit of the Lenders, as the same may be
modified, amended and/or supplemented and in effect from time to time.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

“Guarantor” means Alexanders, Inc., a Delaware corporation, together with its
permitted successors by merger, consolidation or transfer of all or
substantially all of its assets in accordance with Section 9.1(3).

“Guarantor’s Consolidated Financial Statements” means the consolidated balance
sheet and related consolidated statements of operations, changes in equity and
cash flows, and footnotes thereto, of Guarantor, in each case prepared in
accordance with GAAP and, to the extent Guarantor is required to file them, as
filed with the United Stated Securities and Exchange Commission as reports
required to be delivered to the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended.

                                                                    

13

­

--------------------------------------------------------------------------------

 

“Guarantor’s Minimum Liquid Assets” means $30,000,000.

“Guarantor’s Minimum Net Worth” means $300,000,000.

“Guaranty” means the instruments of guaranty, if any, now or hereafter in effect
from Guarantor to Administrative Agent (on behalf of the Lenders).

“Hazardous Materials” has the meaning assigned in Section 5.1.

“Hedge Agreement” means any transaction (including an agreement with respect
thereto) now existing or hereafter entered into by Borrower which is a swap,
forward, future or derivative transaction or option or an interest rate cap or
similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions, as
the same may be modified, amended and/or supplemented and in effect from time to
time in accordance with Section 9.15.

“Hedge Agreement Pledge” means any Interest Rate Protection Product Assignment
and Security Agreement, executed by Borrower (or the Affiliate of Borrower which
is a party to the Hedge Agreement in question) to Administrative Agent (for the
benefit of the Lenders) pursuant to the terms of this Agreement, which Interest
Rate Protection Product Assignment and Security Agreement shall (x) be either
(i) substantially in the form attached hereto as Exhibit G with such changes as
shall be agreed upon by Administrative Agent in its reasonable discretion or
(ii) another form which shall be acceptable to Administrative Agent in its
reasonable discretion and (y) grant a security interest in Borrower’s right,
title and interest in and to any Hedge Agreement (or such Affiliate’s right,
title and interest in and to any Hedge Agreement as the same relates to Borrower
and/or the Project), as such Interest Rate Protection Product Assignment and
Security Agreement may be modified, amended and/or supplemented and in effect
from time to time.

“Improvements” has the meaning assigned in the Consolidation Agreement.

“Indebtedness” has the meaning assigned in the Consolidation Agreement.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by Borrower under this Agreement or any other
Loan Document and (b) Other Taxes.

“Independent Manager” means a natural person who is not and will not be while
serving and has not been during the five years preceding his or her initial
appointment to such position any of the following: (a) a shareholder (or other
equity owner) of, or an officer, director (other than in its capacity as
Independent Manager), partner, member or employee of, the entity which is
required under this Agreement to be a Single Purpose Entity or any of its
respective shareholders, partners, members, subsidiaries or Affiliates (other
than a nationally recognized company that routinely provides professional
independent managers or directors and that also provides lien search and other
similar services to such entity or any of its equityholders or Affiliates in the
ordinary course of business, it being hereby acknowledged and agreed that CT

                                                                    

14

--------------------------------------------------------------------------------

 

Corporation Staffing, Inc. satisfies such criteria), (b) a customer of, or
supplier to, or other Person who derives any of its purchases or revenues from
its activities with, such entity or any of its respective shareholders,
partners, members, subsidiaries or Affiliates, (c) a Person who Controls or is
under common Control with any such shareholder, officer, director, partner,
member, employee supplier, customer or other Person, or (d) a member of the
immediate family of any such shareholder, officer, director, partner, member,
employee, supplier, customer or other Person.  A natural person who satisfies
the foregoing definition other than clause (b) above shall not be disqualified
from serving as an Independent Manager of such entity because of fees collected
for serving as such if such individual is an independent director provided by a
nationally recognized company that provides professional independent directors
and managers, it being hereby acknowledged and agreed that CT Corporation
Staffing, Inc. satisfies such criteria.  Any resignation, removal or replacement
of any Independent Manager shall not be effective without (i) prior written
notice to Administrative Agent (which such prior written notice must be given on
the earlier of five (5) days or three (3) Business Days prior to the applicable
resignation, removal or replacement) and (ii) evidence that such Independent
Manager has been replaced with a new Independent Manager satisfying the
requirements set forth above (which such evidence must accompany such notice to
Administrative Agent).

“Initial Maturity Date” means August 5, 2020.

“Insurance Proceeds” has the meaning assigned to such term in Section 3.2(2).

“Insurance Reserve Account” has the meaning set forth in Section 4.2(4)(b).

“Interest Election Request” means a request by Borrower to convert or continue a
Borrowing in accordance with Section 2.3.

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as Borrower may elect; provided, that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.

“Interest Rate Hedge Period” has the meaning assigned to such term in Section
9.15(1).

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded  to the same number of decimal places as the LIBO Screen Rate)
determined by Administrative Agent (which determination shall be conclusive and
binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the

                                                                    

15

­

--------------------------------------------------------------------------------

 

LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is
available) that is shorter than the Impacted Interest Period and (b) the LIBO
Screen Rate for the shortest period (for which the LIBO Screen Rate is
available) that exceeds the Impacted Interest Period, in each case, at such time

“JPM Securities” means J.P. Morgan Securities LLC.

“JPMCB” means JPMorgan Chase Bank, N.A.

“JPMCB Counterparty” means JPMCB and/or any of its Related Entities.

“Lead Arrangers” means, collectively, J.P. Morgan Securities LLC and Landesbank
Baden-Württemberg, New York Branch.

“Lease” means any lease, sublease, license or other agreement between Borrower
(or its predecessors) and a Lessee (or its predecessors), now or hereafter
existing, under the terms of which such Lessee other than Borrower has or
acquires any right to occupancy or use of the Project, or any part thereof, or
interest therein, together with any and all extensions, renewals, modifications
and replacements thereof, and all guarantees of such Lessee’s obligations
thereunder, whether now in existence or hereafter arising.

“Lease Modification” has the meaning assigned in Schedule 2.

“Leasing Guidelines” means the leasing guidelines attached hereto as Schedule 2.

“Lender Reply Period” has the meaning assigned to such term in Section 14.9.

“Lessee” means the lessee, sublessee, licensee, tenant or other person having
the right to occupy or use all or any part of the Project under a Lease.

“LIBO Rate” means, with respect to any Eurodollar Advance for any Interest
Period, the London interbank offered rate administered by the ICE Benchmark
Administration (or any other Person that takes over the administration of such
rate for U.S. Dollars) for a period equal in length to such Interest Period as
displayed on pages LIBOR01 or LIBOR02 of the Reuters Screen or, in the event
such rate does not appear on a Reuters page or screen, on any successor or
substitute page on such screen that displays such rate, or on the appropriate
page of such other information service that publishes such rate as shall be
selected by Administrative Agent from time to time in its reasonable discretion
(in each case, the “LIBO Screen Rate”) at approximately 11:00 a.m., London time,
two (2) Business Days prior to the commencement of such Interest Period;
provided, that, if any LIBO Screen Rate shall be less than zero, such rate shall
be deemed to be zero for purposes of this Agreement and provided, further, if
the LIBO Screen Rate shall not be available at such time for Interest Period (an
“Impacted Interest Period”), then the LIBO Rate shall be the Interpolated Rate,
provided, that, if any Interpolated Rate shall be less than zero, such rate
shall be deemed to be zero for purposes of this Agreement.

“LIBO Screen Rate” has the meaning assigned to such term in the definition of
“LIBO Rate”.

                                                                    

16

­

--------------------------------------------------------------------------------

 

“Licenses” has the meaning assigned in Section 7.20.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit or preferential arrangement, encumbrance, lien (statutory or other), or
other security agreement or security interest of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement and any capital or financing lease having substantially the same
economic effect as any of the foregoing.

“Liquid Assets” means, with respect to Guarantor or any Qualified Guarantor, on
any date, the sum of (i) the value of all cash and cash equivalents (including
municipal bonds, investment grade corporate bonds, and U.S. Treasuries) owned by
Guarantor or such Qualified Guarantor, as the case may be, on such date and held
by Guarantor or such Qualified Guarantor, as the case may be, in unrestricted
and unencumbered domestic accounts, (ii) Guarantor’s or such Qualified
Guarantor’s, as the case may be, share of all cash and cash equivalents
(including municipal bonds, investment grade corporate bonds, and U.S.
Treasuries) owned by entities controlled by Guarantor or such Qualified
Guarantor, as the case may be, on such date and held by such entities in
unrestricted and unencumbered domestic accounts, provided that Guarantor’s or
such Qualified Guarantor’s, as the case may be, share of such cash and cash
equivalents may be legally distributed to Guarantor or such Qualified Guarantor,
as the case may be, without violating any trust agreement or other agreement to
which such entities are bound, (iii) any and all available and undrawn funds
under bank lines of credit in favor of Guarantor or such Qualified Guarantor, as
the case may be, but less the amount of any outstanding obligations relating to
any unsecured credit facilities, and (iv) the value of all uncalled capital
commitments of any investors in Guarantor or such Qualified Guarantor, as the
case may be, less the principal amount outstanding under any subscription lines
of credit, all as determined by Administrative Agent which determination shall
be conclusive in the absence of manifest error.

“Loans” means the loans to be made by the Lenders to Borrower under this
Agreement and all other amounts evidenced or secured by the Loan Documents.

“Loan Amount” means the lowest of (i) $350,000,000, (ii) sixty percent (60%) of
the Appraised Value based on the Appraisal obtained in connection with the
closing of the Loans and (iii) the maximum amount which results in a Debt Yield
of 7.5%. Administrative Agent and the Lenders hereby confirm that the Loan
Amount is $350,000,000.

“Loan Documents” means (a) this Agreement, (b) the Notes, (c) the Guaranty,
(d) the Mortgage including the Consolidation Agreement, (e) the Assignment of
Leases and Rents, (f) the General Assignment, (g) the Security Agreement, (h)
the Assignments of Management Agreement, (i) the Environmental Indemnity,
(j) any Hedge Agreement Pledge, (k) Uniform Commercial Code financing
statements, (l) the Fee Letters, (m) the Assignment/Gap Documents, (n) the
Restricted Account Agreement, (o) all other agreements or instruments executed
by or on behalf of Borrower or Guarantor in favor of Administrative Agent (for
the benefit of the Lenders) and/or the Lenders evidencing, securing, governing
or otherwise pertaining to the Loans, and (p) all amendments, modifications,
renewals, substitutions and replacements of any of the foregoing; provided,
however, that Hedge Agreements shall not constitute Loan Documents.

                                                                    

17

­

--------------------------------------------------------------------------------

 

“Major Alteration” has the meaning assigned in Section 9.14(1).

“Major Lease” has the meaning assigned in Schedule 2.

“Management Agreement” means, individually or collectively as the context may
require, Management Agreement (Commercial) and Management Agreement (Retail).

“Management Agreement (Commercial)” means, that certain Management Agreement
dated as of the date hereof between Manager and Borrower with respect to the
management of the restaurant portion of the Project by the Manager together with
any management agreements entered into with future Managers in accordance with
the terms of this Agreement.

“Management Agreement (Retail)” means, that certain Management Agreement dated
as of July 6, 2003 between Manager and Borrower with respect to the management
of the retail portion of the Project by the Manager together with any management
agreements entered into with future Managers in accordance with the terms of
this Agreement. 

“Manager” means Alexander’s Management LLC, which is the manager of the Project
under the Management Agreements, together with any successor property managers
appointed for the Project in accordance with the terms of this Agreement. 

“Material Adverse Change” means a material adverse change, as reasonably
determined by Administrative Agent, on: (a) the financial condition and/or
operations of (i) the Project, or (ii) the Borrower; or (b) the value of the
Project; or (c) the status of title to, or the lien of the Mortgage upon, the
Project.

“Material Adverse Effect” means a material adverse effect, as reasonably
determined by Administrative Agent, on: (a) the financial condition and/or
operations of (i) the Project, or (ii) the Borrower; or (b) the value of the
Project; or (c) the status of title to, or the lien of the Mortgage upon, the
Project.

“Maturity Date” means the earlier of (a) the Initial Maturity Date, as the same
may be extended pursuant to the terms of Section 2.15, or (b) any earlier date
on which all of the Loans are required to be paid in full, by acceleration or
otherwise, under this Agreement or any of the other Loan Documents.

“Monthly Condominium Charges Deposit” has the meaning assigned to such term in
Section 9.28.

“Monthly Debt Service Payment Amount” means, as of any Payment Date, an amount
equal to the scheduled monthly payment of interest on the Loans due and payable
on such Payment Date.

“Monthly Insurance Premium Deposit” has the meaning assigned to such term in
Section 3.1(8).

“Monthly Tax Deposit” has the meaning assigned to such term in Section 9.2(2).

                                                                    

18

 

--------------------------------------------------------------------------------

 

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” means, collectively, the mortgages which have been consolidated,
modified and extended pursuant to the Consolidation Agreement, covering the
Project, and any amendments, modifications, renewals, substitutions,
consolidations, severances and replacements thereof.

“Mortgaged Property” has the meaning assigned thereto in the Consolidation
Agreement.

“Multi-Asset Person” has the meaning assigned in Section 9.1(3).

“Net Operating Income” means the amount by which Operating Revenues exceed
Operating Expenses.

“Net Proceeds” has the meaning assigned to such term in Section 3.2(2).

“Net Proceeds Deficiency” has the meaning assigned to such term in Section
3.2(2)(f).

“Net Worth” means, with respect to Guarantor or any Qualified Guarantor, on any
date, an amount equal to the difference between the sum of (1) (i) an amount
calculated by capitalizing the trailing 12-months of net operating income (as
determined in accordance with GAAP, but excluding Guarantor’s or such Qualified
Guarantor’s, as the case may be, general and administrative expenses) for each
property owned or leased (but excluding the Project) by Guarantor or such
Qualified Guarantor, as the case may be, using a 6% capitalization rate and (ii)
the Guarantor’s or such Qualified Guarantor’s, as the case may be, Liquid Assets
and marketable securities, less (2) any outstanding debt secured by the fee and
leasehold interest in connection with each such property and any corporate debt
and other GAAP liabilities (provided that such GAAP liabilities shall not be
subject to any “mark-to-market” accounting) of Guarantor or such Qualified
Guarantor, as the case may be.

“New Lease” has the meaning assigned in Schedule 2.

“Non-Defaulting Lender” means any Lender that is not a Defaulting Lender.

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“Notes” means the promissory notes of even date herewith referred to in
Section 2.1(4)(a) and all promissory notes delivered in substitution or exchange
therefor, in each case as the same may be consolidated, replaced, severed,
modified, amended or extended from time to time.

“Operating Expenses” means with respect to the period in question, all expenses
actually incurred by Borrower during such period in connection with the
operation, management, maintenance, repair and use of the Project, as determined
on an accrual basis, and except as otherwise set forth in this definition, in
accordance with GAAP.  Operating Expenses shall include (x) property management
fees in an amount not to exceed the greater of (a) two percent

                                                                    

19

 

--------------------------------------------------------------------------------

 

(2%) of Gross Revenues for such period and (b) the actual amounts payable under
the Management Agreement for such period and (y) reserves in an annualized
amount equal to $0.25 per rentable square foot of the Project.  Operating
Expenses shall not include (i) any leasing costs, such as leasing commissions,
tenant allowances and attorneys’ fees, (ii) any expenditure that is required to
be capitalized under GAAP, (iii) depreciation and amortization, (iv) income
taxes or other impositions in the nature of income taxes, (v) costs related to
obtaining or refinancing the Loans, transferring of all or any part of the
Premises or obtaining Insurance Proceeds or Condemnation Proceeds, (vi) debt
service in respect of the Loans, (viii) any expense paid directly by any tenant
(unless such expense is an obligation of Borrower) or any Person other than
Borrower, (ix) payments from or to any reserve account, and (x) any items of
expense which would be considered an “Operating Expense” pursuant to the
provisions above, but is paid directly by a Lessee.

“Operating Revenues” means with respect to the period in question, all actual
revenues of Borrower during such period from the use, ownership and operation of
the Project.  Operating Revenues shall include (a) all Rents and other amounts
payable as Rent to Borrower by any Lessee under a Permitted Lease, including the
rental revenue and expense recoveries recognized on a GAAP basis from tenants
under Permitted Leases (excluding any adjustment for straight-line rent), and
any license agreements, occupancy agreements, concession agreements or other
agreements related to the Project, (b) business interruption or rent insurance
proceeds to the extent allocable to the applicable period and (c) any and all
other amounts which in accordance with GAAP are included in Borrower’s annual
financial statements as operating income attributable to the Project.  Operating
Revenues shall not include (i) any Insurance Proceeds or Condemnation Proceeds
(other than business interruption or rent insurance proceeds and only to the
extent allocable to the applicable period), (ii) any item of income otherwise
includable in Operating Revenue but paid directly to a Person other than
Borrower, provided that such item of income is for the payment of an expense and
such expense is otherwise excluded from the definition of Operating Expenses
above, (iii) security deposits received from Lessees, until applied in
accordance with the terms of the related Lease, (iv) Rents from a Lessee under
any Lease which is not a Permitted Lease, (v) termination payments paid under
any Lease in connection with the termination thereof (except to the extent
applied on a pro rata basis over the non-terminable portion of the Lease term)
and (vi) refunds of income taxes or of any other impositions in the nature of
income taxes.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Taxes (other than a connection arising from such
Recipient having executed, delivered, enforced, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, or engaged in any other transaction pursuant to, this Agreement
or any other Loan Document).

“Other Taxes” means any present or future stamp or documentary, intangible,
recording, filing or similar excise or property Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, or from the registration, receipt or perfection of a security
interest under, or otherwise with respect to, this Agreement or any other Loan
Document, except any such Taxes that are Other Connection Taxes imposed with
respect to an assignment or participation.

                                                                    

20

--------------------------------------------------------------------------------

 

“Otherwise Rated Insurer” shall have the meaning assigned in Section 3.1(2).

“Participant” has the meaning assigned in Section 12.23(3).

“Payment Date” means the fifth (5th) day of each calendar month.

“Permitted Encumbrances” means (a) Liens and security interests granted pursuant
to the Loan Documents, (b) the items set forth on Schedule B of the Title
Policy, (c) any Lien, if any, for Property Taxes which are not yet due or
delinquent or are the subject of a permitted contest pursuant to this Agreement,
(d) statutory liens for labor or materials filed against the Project that are
the subject of a permitted contest pursuant to this Agreement, (e) any
easements, restrictions, covenants, reservations and rights-of-ways granted by
Borrower after the date hereof in accordance with Section 9.1(4), (f) the
Condominium Documents, (g) any Lien filed against equipment leased pursuant to
equipment leases permitted under this Agreement, (h) Permitted Leases and (i)
subordination, non-disturbance and attornment agreements executed by
Administrative Agent with respect to Permitted Leases; and (j) the Option (as
defined in the Bloomberg Lease) in favor of the tenant as set forth in Article
36 of the Bloomberg Lease (a true and complete copy of which Borrower represents
it has delivered to the Administrative Agent).

“Permitted Leases” means, collectively, (i) the Existing Leases, (ii) any Lease
entered into after the date hereof which is in compliance with the Leasing
Guidelines and (iii) any other Lease entered into after the date hereof which is
approved or deemed approved by Required Lenders in accordance with the terms of
this Agreement.

“Person” means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee, estate, limited liability
company, unincorporated organization, real estate investment trust, government
or any agency or political subdivision thereof, or any other form of entity.

“Policy” shall have the meaning assigned in Section 3.1(2).

“Post-Foreclosure Plan” has the meaning assigned in Section 14.10.

“Posted Reserves” has the meaning set forth in Section 4.2(5)(g).

“Potential Default” means the occurrence of any event or condition which, with
the giving of notice, the passage of time, or both, would constitute an Event of
Default.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMCB as its prime rate; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.  The Prime Rate is a reference rate and is not necessarily the lowest
rate.

“Prohibited Person” means any Person:

(A)                LISTED IN THE ANNEX TO, OR OTHERWISE SUBJECT TO THE
PROVISIONS OF, THE EXECUTIVE ORDER NO. 13224 ON TERRORIST FINANCING, EFFECTIVE
SEPTEMBER 24, 2001, AND

 

                                                                    

21

­

--------------------------------------------------------------------------------

 

RELATING TO BLOCKING PROPERTY AND PROHIBITING TRANSACTIONS WITH PERSONS WHO
COMMIT, THREATEN TO COMMIT, OR SUPPORT TERRORISM (THE “EXECUTIVE ORDER”);

(B)               THAT IS OWNED OR CONTROLLED BY, OR ACTING FOR OR ON BEHALF OF,
ANY PERSON OR ENTITY THAT IS LISTED TO THE ANNEX TO, OR IS OTHERWISE SUBJECT TO
THE PROVISIONS OF, THE EXECUTIVE ORDER;

(C)                WITH WHOM ANY LENDER IS PROHIBITED FROM DEALING OR OTHERWISE
ENGAGING IN ANY TRANSACTION BY ANY TERRORISM OR MONEY LAUNDERING LAW, INCLUDING
THE EXECUTIVE ORDER;

(D)               WHO IS KNOWN TO BORROWER TO COMMIT, THREATEN OR CONSPIRE TO
COMMIT OR SUPPORT “TERRORISM”, AS DEFINED IN THE EXECUTIVE ORDER;

(E)                THAT IS NAMED AS A “SPECIALLY DESIGNATED NATIONAL AND BLOCKED
PERSON” ON THE MOST CURRENT LIST PUBLISHED BY THE U.S. TREASURY DEPARTMENT
OFFICE OF FOREIGN ASSETS CONTROL AT ITS OFFICIAL WEBSITE,
HTTP://WWW.TREAS.GOV.OFAC/T11SDN.PDF OR AT ANY REPLACEMENT WEBSITE OR OTHER
REPLACEMENT OFFICIAL PUBLICATION OF SUCH LIST; OR

(F)                WHO IS KNOWN TO BORROWER TO BE AN AFFILIATE OF OR AFFILIATED
WITH A PERSON LISTED ABOVE.

“Project” means the real property described in Exhibit A and all buildings and
other improvements now or hereafter located thereon constituting Retail Unit 1
(Tax Lot 1001) and Retail Unit 2 (Tax Lot 1209) together with the appurtenant
interest in the Common Elements of the Beacon Court Condominium located at 731
Lexington Avenue, New York, New York, containing as of the date hereof
approximately 161,000 net rentable square feet of space, and all related
facilities, amenities, fixtures, and personal property owned by Borrower.

“Property Taxes” has the meaning assigned to such term in Section 9.2(1).

“Qualified Guarantor” has the meaning assigned to such term in the definition of
“Qualified Guaranty”.

“Qualified Guarantor Requirements” means that, with respect to any Qualified
Guarantor, either (A) the long-term unsecured debt rating of such Qualified
Guarantor is not less than “BBB-“ from S&P or “Baa3” from Moody’s or (B) the
Liquid Assets and Net Worth of such Qualified Guarantor is equal to or greater
than the Guarantor’s Minimum Liquid Assets and Guarantor’s Minimum Net Worth,
respectively.

 “Qualified Guaranty” means a guaranty in form and substance reasonably
satisfactory to Administrative Agent from either (i) Guarantor, so long as
Guarantor complies with Guarantor’s Minimum Liquid Assets and Guarantor’s
Minimum Net Worth requirements, or (ii) another guarantor designated by Borrower
which satisfies either of the Qualified Guarantor Requirements (each a
“Qualified Guarantor”). If, at any time after the execution and delivery to
Administrative Agent of a Qualified Guaranty, a Qualified Guarantor shall fail
satisfy any of the Qualified Guarantor Requirements, then  Borrower shall,
within ten (10) Business Days after request from Administrative Agent, either
(i) provide a replacement Qualified

                                                                    

22

­

--------------------------------------------------------------------------------

 

Guarantor which satisfies either of the Qualified Guarantor Requirements, or
(ii) deposit cash or a Qualified Letter of Credit with Administrative Agent in
the amount that is the subject of such Qualified Guaranty, or (iii) if such
Qualified Guarantor has executed the guaranty of interest as contemplated by
Section 9.15(4) hereof, then, with respect thereto, provide either (A) a Hedge
Agreement satisfying the requirements of Section 9.15 hereof or (B) a
replacement Qualified Guarantor which satisfies either of the Qualified
Guarantor Requirements and has executed a guaranty of interest in accordance
with Section 9.15(4).

“Qualified Letter of Credit” means an irrevocable standby letter of credit in
form and substance reasonably satisfactory to Administrative Agent from a bank
that satisfies the Rating Criteria.  If at any time after the delivery to
Administrative Agent of a Qualified Letter of Credit the issuer of such
Qualified Letter of Credit shall no longer satisfy the Rating Criteria, Borrower
shall, within ten (10) Business Days after request from Administrative Agent,
either (i) cause a replacement Qualified Letter of Credit with a bank satisfying
the Rating Criteria to be delivered to Administrative Agent or (ii) deposit cash
or, if permitted under the relevant provisions of this Agreement, deliver a
Qualified Guaranty with Administrative Agent, in the stated amount of such
Qualified Letter of Credit.

“Qualified Manager” means either (i) Guarantor, VRLP or an Affiliate of
Guarantor or VRLP or (ii) a reputable property manager with not less than five
(5) years’ experience managing properties similar in class and size to the
Project in New York City or a similar metropolitan area which include properties
(excluding the Project) containing in the aggregate not less than 2,000,000 net
rentable square feet of space.

“Rating Criteria” with respect to any Person shall mean that (i) the short-term
unsecured debt obligations or commercial paper of which are rated at least A-1
by S&P, P-1 by Moody’s and F-1 by Fitch, if deposits are held in the account for
a period of less than 30 days or (ii) the long-term unsecured debt obligations
of which are rated at least “A” by S&P and Fitch and “A2” by Moody’s, if
deposits are held in the account for a period of 30 days or more.

“Recipient” means, as applicable, (a) Administrative Agent and (b) any Lender
(and, in the case of a Lender that is classified as a partnership for U.S.
Federal tax purposes, a Person treated as the beneficial owner thereof for U.S.
Federal tax purposes).

“REIT” means Vornado Realty Trust, a Maryland real estate investment trust,
together with its successors by merger, consolidation or transfer of all or
substantially all of its assets in accordance with Section 9.1(3).

“Related Entity” means, as to any Person, (a) any Affiliate of such Person;
(b) any other Person into which, or with which, such Person is merged,
consolidated or reorganized,  or which is otherwise a  successor to such Person
by operation of law, or which acquires all or substantially all of the assets of
such Person; (c) any other Person which is a successor to the business
operations of such Person and engages in substantially the same activities; or
(d) any Affiliate of the Persons described in clauses (b) and (c) of this
definition.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person

                                                                    

23

 

--------------------------------------------------------------------------------

 

and such Person’s Affiliates.

“Rent” means the rents, additional rents and other consideration payable to
Borrower by the Lessee under the terms of a Lease.

“Required DSCR” means 1.10:1.00.

“Required Lenders” means Lenders holding at least 67% of the aggregate
outstanding principal amount of the Loans or, if no Loans shall have been made,
at least 67% of the Commitments.

“Required Lenders Threshold Amount” means $20,000,000.

“Requisite Leasing Approval Lenders” means (i) at such time as three (3) Lenders
(including Administrative Agent) each hold 33.33% of the Loans, then two (2) of
such three (3) Lenders, (ii) at such time as any two (2) Lenders (excluding
Administrative Agent) each hold 33.33% or more of the Loans, then Administrative
Agent plus one of the Lenders holding 33.33% or more of the Loans, (iii) at such
time as any one Lender (other than Administrative Agent) holds 33.33% or more of
the Loans, then Administrative Agent plus the Lender that holds 33.33% or more
of the Loans, and (iv) at such time as no Lender holds 33.33% or more of the
Loans, then Administrative Agent solely.

“Reserve Account Collateral” has the meaning assigned in Section 4.3(1).

“Responsible Person” means, with respect to any Person, the chief financial
officer or controller of such Person (or its parent company) or any other
officer of such Person (or its parent company) reasonably acceptable to
Administrative Agent.

“Restoration” means the repair and restoration of the Project after a Casualty
or Condemnation to be at least equal in general utility and quality to the
condition the Project was in immediately prior to such Casualty or Condemnation
(subject to any restrictions on Borrower’s ability to do so imposed by any
applicable law), with such alterations as may be approved by Administrative
Agent (to the extent such approval is required under the terms of this
Agreement), such approval not to be unreasonably withheld, delayed or
conditioned.

“Restricted Account” has the meaning set forth in Section 4.1(1).

“Restricted Account Agreement” means that certain Special Lockbox Deposit
Agreement of even date herewith among Borrower, Administrative Agent and The
Bank of New York Mellon Trust Company N.A. (or any successor Restricted Account
Bank).

“Restricted Account Bank” has the meaning set forth in Section 4.1(1).

“Restricted Collateral” shall mean any Additional Collateral held by
Administrative Agent pursuant to the terms of Section 3.2(a)(viii) and/or
Section 4.4 and/or any amounts on deposit in the Excess Cash Flow Account which
Borrower has elected to designate as “Restricted Collateral” in a Restricted
Collateral Letter executed and delivered by Borrower to Administrative Agent. 
Notwithstanding anything to the contrary set forth in this Agreement, no

                                                                    

24

­

--------------------------------------------------------------------------------

 

Restricted Collateral shall be released to Borrower until payment in full of the
Indebtedness; provided, however, that Borrower shall have the right to direct
Administrative Agent in writing to apply any cash held by Administrative Agent
as Restricted Collateral to the prepayment of the outstanding principal balance
of the Loans in accordance with and subject to the terms of Section 2.5.

“Restricted Collateral Letter” shall mean a letter substantially in the form of
Exhibit I appropriately completed and duly executed and delivered by Borrower to
Administrative Agent.

“Restricted Payment” means, as to Borrower, (i) any dividend or other
distribution, direct or indirect, on account of any shares of capital stock or
other equity interest in Borrower now or hereafter outstanding, including,
without limitation, any distribution to Sole Member, whether in cash or
otherwise, or (iii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition, direct or indirect, of any shares of any class of
Capital Stock or other equity interest in Borrower now or hereafter outstanding.

“Sanctioned Country” means, at any time, a country or territory which is itself
the subject or target of any Sanctions.

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC or the U.S.
Department of State, (b) any Person operating, organized or resident in a
Sanctioned Country or (c) an Affiliate of any such Person.

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by the U.S. government, including
those administered by OFAC or the U.S. Department of State.

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc.

“Second Extended Maturity Date” means August 5, 2022.

“Security Agreement” means that certain UCC Security Agreement of even date
herewith, executed by Borrower in favor of Administrative Agent for the benefit
of the Lenders, as the same may be modified, amended and/or supplemented and in
effect from time to time.

“Security Documents” means collectively, the Mortgage, the Assignment of Leases
and Rents, the General Assignment, the Security Agreement, any Hedge Agreement
Pledge, and all Uniform Commercial Code financing statements required by this
Agreement, the Mortgage, the Assignment of Leases and Rents, the General
Assignment, the Security Agreement or any Hedge Agreement Pledge to be filed
with respect to the applicable security interests.

“Security Trustee” has the meaning assigned in Section 12.23(7).

“Single Purpose Entity” means a corporation, limited partnership or limited

                                                                    

25

­

--------------------------------------------------------------------------------

 

liability company which at all times on and after the date hereof, unless
otherwise approved in writing by Administrative Agent:

(A)                IS ORGANIZED SOLELY FOR THE PURPOSE OF ACQUIRING, DEVELOPING,
OWNING, HOLDING, SELLING, LEASING, TRANSFERRING, EXCHANGING, MANAGING, FINANCING
AND OPERATING THE PROJECT AND, IN THE CASE OF 731 COMMERCIAL, OWNING, MANAGING
AND DISPOSING OF THE LIMITED LIABILITY COMPANY INTERESTS IN 731 RETAIL AND 731
RESTAURANT LLC, A DELAWARE LIMITED LIABILITY COMPANY (“RESTAURANT LLC”) AND
TRANSACTING ANY AND ALL LAWFUL BUSINESS THAT IS INCIDENT, NECESSARY AND
APPROPRIATE TO ACCOMPLISH THE FOREGOING;

(B)               IS NOT ENGAGED AND WILL NOT ENGAGE IN ANY BUSINESS UNRELATED
TO THE PURPOSES DESCRIBED IN CLAUSE (A) ABOVE;

(C)                DOES NOT OWN AND WILL NOT OWN ANY ASSETS OTHER THAN THOSE
RELATED TO THE PURPOSES DESCRIBED IN CLAUSE (A) ABOVE;

(D)               HAS NOT ENGAGED, SOUGHT OR CONSENTED TO AND WILL NOT ENGAGE
IN, SEEK OR CONSENT TO ANY DISSOLUTION, WINDING UP, LIQUIDATION, CONSOLIDATION,
MERGER, SALE OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS, TRANSFER OF PARTNERSHIP
OR MEMBERSHIP INTERESTS (IF SUCH ENTITY IS A GENERAL PARTNER IN A LIMITED
PARTNERSHIP OR A MEMBER IN A LIMITED LIABILITY COMPANY), EXCEPT AS EXPRESSLY
PERMITTED PURSUANT TO SECTION 9.1, OR ANY AMENDMENT OF ITS ARTICLES OF
INCORPORATION, BYLAWS, LIMITED PARTNERSHIP CERTIFICATE, LIMITED PARTNERSHIP
AGREEMENT, ARTICLES OF ORGANIZATION, CERTIFICATE OF FORMATION OR OPERATING
AGREEMENT (AS APPLICABLE) WITH RESPECT TO THE MATTERS SET FORTH IN THIS
DEFINITION;

(E)                IF SUCH ENTITY IS (I) A LIMITED LIABILITY COMPANY, HAS
ARTICLES OF ORGANIZATION, A CERTIFICATE OF FORMATION AND/OR AN OPERATING
AGREEMENT, AS APPLICABLE, (II) A LIMITED PARTNERSHIP, HAS A CERTIFICATE OF
LIMITED PARTNERSHIP AND LIMITED PARTNERSHIP AGREEMENT, OR (III) A CORPORATION,
HAS A CERTIFICATE OF INCORPORATION OR ARTICLES OF INCORPORATION, THAT IN EACH
CASE PROVIDE THAT SUCH ENTITY (A) WILL NOT DISSOLVE, MERGE, LIQUIDATE OR
CONSOLIDATE; (B) WILL NOT SELL ALL OR SUBSTANTIALLY ALL OF ITS ASSETS OR THE
ASSETS OF ANY OTHER ENTITY IN WHICH IT HAS A DIRECT OR INDIRECT LEGAL OR
BENEFICIAL OWNERSHIP INTEREST, EXCEPT AS EXPRESSLY PERMITTED PURSUANT TO SECTION
9.1; (C) WILL NOT ENGAGE IN ANY OTHER BUSINESS ACTIVITY, OR AMEND ITS
ORGANIZATIONAL DOCUMENTS WITH RESPECT TO THE MATTERS SET FORTH IN THIS
DEFINITION, WITHOUT IN EACH CASE THE CONSENT OF ADMINISTRATIVE AGENT; AND (D)
SHALL NOT FILE A BANKRUPTCY OR INSOLVENCY PETITION OR OTHERWISE INSTITUTE
INSOLVENCY PROCEEDINGS WITH RESPECT TO ITSELF OR TO ANY OTHER ENTITY IN WHICH IT
HAS A DIRECT OR INDIRECT LEGAL OR BENEFICIAL OWNERSHIP INTEREST OR IS THE DIRECT
OR INDIRECT GENERAL PARTNER OR MANAGER WITHOUT THE AFFIRMATIVE VOTE OF ALL OF
THE MEMBERS, PARTNERS OR DIRECTORS (AS APPLICABLE) OF THE ENTITY;

(F)                IS AND WILL REMAIN (TO THE EXTENT CASH FLOW FROM THE PROJECT
IS SUFFICIENT TO PAY ALL BORROWER EXPENSES) SOLVENT AND PAY ITS DEBTS AND
LIABILITY (INCLUDING, AS APPLICABLE, SHARED PERSONNEL AND OVERHEAD EXPENSES)
FROM ITS ASSETS AS THE SAME SHALL BECOME DUE, AND IS MAINTAINING AND WILL
MAINTAIN (TO THE EXTENT CASH FLOW FROM THE PROJECT IS SUFFICIENT TO PAY ALL
BORROWER EXPENSES) ADEQUATE CAPITAL FOR THE NORMAL OBLIGATIONS REASONABLY
FORESEEABLE IN A BUSINESS OF ITS SIZE AND CHARACTER AND IN LIGHT OF ITS

                                                                    

26

­

--------------------------------------------------------------------------------

 

CONTEMPLATED BUSINESS OPERATIONS; PROVIDED THAT NOTHING IN THE FOREGOING SHALL
REQUIRE THE DIRECT OR INDIRECT OWNERS OF BORROWER TO MAKE CAPITAL CONTRIBUTIONS
TO BORROWER;

(G)               HAS MAINTAINED AND WILL MAINTAIN ITS ACCOUNTS, BOOKS AND
RECORDS SEPARATE FROM ANY OTHER PERSON; PROVIDED, HOWEVER, THAT (A) BORROWER’S
FINANCIAL POSITION, ASSETS, RESULTS OF OPERATIONS AND CASH FLOWS MAY BE INCLUDED
IN A CONSOLIDATED FINANCIAL STATEMENT OF AN AFFILIATE OF BORROWER, PROVIDED THAT
(I) ANY SUCH CONSOLIDATED FINANCIAL STATEMENT OF AN AFFILIATE OF BORROWER
CONTAINS A NOTE INDICATING THAT BORROWER AND ITS AFFILIATES ARE SEPARATE LEGAL
ENTITIES (OR A SIMILAR STATEMENT IS CONTAINED IN SUCH AFFILIATE’S SECURITIES AND
EXCHANGE COMMISSION 10-K FILINGS) AND IT IS SUCH AFFILIATE’S PRACTICE TO DELIVER
ITS FINANCIAL STATEMENTS TOGETHER WITH SUCH FILINGS AND (II) SUCH ASSETS SHALL
BE LISTED ON BORROWER’S OWN SEPARATE BALANCE SHEET AND (B) ALL AMOUNTS PAID TO
BORROWER MAY BE DEPOSITED INTO A CENTRALIZED CASH MANAGEMENT ACCOUNT (CONTROLLED
BY AN AFFILIATE OF BORROWER AS AN AGENT) ON BEHALF OF BORROWER AND VARIOUS OTHER
ENTITIES THAT ARE AFFILIATES OF BORROWER, AS AND WHEN RECEIVED, PROVIDED THAT
ALL AMOUNTS DEPOSITED INTO SUCH CENTRALIZED ACCOUNT FOR THE BENEFIT OF BORROWER
ARE CLEARLY SEGREGATED, FOR ACCOUNTING PURPOSES, FROM THE REVENUES AND EXPENSES
OF ALL OTHER PERSONS;

(H)               EXCEPT AS DESCRIBED IN CLAUSE (G) ABOVE, HAS NOT COMMINGLED
AND WILL NOT COMMINGLE ITS FUNDS OR ASSETS WITH THOSE OF ANY OTHER PERSON;

(I)                 EXCEPT AS DESCRIBED IN CLAUSE (G) ABOVE, HAS HELD AND WILL
HOLD ITS ASSETS IN ITS OWN NAME;

(J)                 HAS NOT INCURRED AND WILL NOT INCUR ANY DEBT OTHER THAN (A)
THE LOANS AND OTHER INDEBTEDNESS AND (B) TRADE AND OPERATIONAL DEBT WHICH IS (I)
INCURRED IN THE ORDINARY COURSE OF BUSINESS, (II) NOT SECURED BY A LIEN ON THE
PROJECT, (III) NOT MORE THAN SIXTY (60) DAYS PAST DUE (EXCEPT WHERE BORROWER
SHALL BE DISPUTING THE SAME PROMPTLY, DILIGENTLY AND IN GOOD FAITH) AND (IV) NOT
EVIDENCED BY A NOTE, AND (C) AMOUNTS DUE UNDER EQUIPMENT LEASES (TREATED AS
CAPITAL LEASES IN ACCORDANCE WITH GAAP), PROVIDED THAT AT ALL TIMES DURING THE
TERM OF THE LOANS, THE MAXIMUM AMOUNT OUTSTANDING UNDER THE EQUIPMENT LEASES
DESCRIBED UNDER CLAUSE (C) OF THIS SUBSECTION (J) AND UNDER THE ITEMS DESCRIBED
UNDER CLAUSE (B) OF THIS SUBSECTION (J) SHALL NOT EXCEED, IN THE AGGREGATE,
$5,000,000, PROVIDED FURTHER THAT SUCH AMOUNT SHALL NOT INCLUDE ANY AMOUNTS
INCURRED BY BORROWER IN CONNECTION WITH (X) CAPITAL EXPENDITURES, (Y) TENANT
IMPROVEMENT WORK OR LEASING COMMISSIONS AND (Z) HEDGE AGREEMENTS.  NO DEBT OF
THE BORROWER, OTHER THAN THE LOANS AND THE EQUIPMENT LEASES PERMITTED HEREUNDER,
MAY BE SECURED (SUBORDINATE OR PARI PASSU) BY THE PROJECT;

(K)               HAS NOT AND WILL NOT ASSUME OR GUARANTEE OR BECOME OBLIGATED
FOR THE DEBTS OF ANY OTHER PERSON OR HOLD OUT ITS CREDIT AS BEING AVAILABLE TO
SATISFY THE OBLIGATIONS OF ANY OTHER PERSON;

(L)                 HAS NOT AND WILL NOT ACQUIRE OBLIGATIONS OR SECURITIES OF
ITS MEMBERS OR SHAREHOLDERS OR ANY OTHER AFFILIATE;

 

 

                                                                   

27

--------------------------------------------------------------------------------

 

(M)             EXCEPT IN CONNECTION WITH THE LOANS, HAS NOT PLEDGED AND WILL
NOT PLEDGE ITS ASSETS FOR THE BENEFIT OF ANY OTHER PERSON;

(N)               HAS CONDUCTED BUSINESS, HELD ITSELF OUT AND IDENTIFIED ITSELF
AND WILL CONDUCT BUSINESS, HOLD ITSELF OUT AND IDENTIFY ITSELF AS A SEPARATE AND
DISTINCT ENTITY UNDER ITS OWN NAME OR IN A NAME FRANCHISED OR LICENSED TO IT BY
A PERSON OTHER THAN AN AFFILIATE OF BORROWER AND NOT AS A DIVISION OR PART OF
ANY OTHER PERSON;

(O)               HAS NOT AND WILL NOT HAVE ANY OBLIGATION TO INDEMNIFY ITS
PARTNERS, OFFICERS, DIRECTORS OR MEMBERS, AS THE CASE MAY BE, UNLESS SUCH
OBLIGATION IS FULLY SUBORDINATED TO THE INDEBTEDNESS AND WILL NOT CONSTITUTE A
CLAIM AGAINST IT IN THE EVENT THAT, AFTER PAYMENT OF THE INDEBTEDNESS, CASH FLOW
IS INSUFFICIENT TO PAY SUCH OBLIGATION;

(P)               IF SUCH ENTITY IS A CORPORATION, IT IS REQUIRED TO CONSIDER
THE INTERESTS OF ITS CREDITORS IN CONNECTION WITH ALL CORPORATE ACTIONS;

(Q)               SHALL NOT, WITHOUT THE PRIOR, UNANIMOUS AFFIRMATIVE VOTE OF AT
LEAST TWO (2) INDEPENDENT MANAGERS OF SUCH ENTITY, (I) PETITION OR OTHERWISE
INSTITUTE BANKRUPTCY, REORGANIZATION OR INSOLVENCY PROCEEDINGS OR OTHERWISE SEEK
ANY RELIEF UNDER THE BANKRUPTCY CODE OR ANY LAWS RELATING TO THE RELIEF FROM
DEBTS OR THE PROTECTION OF DEBTORS GENERALLY, (II) SEEK OR CONSENT TO THE
APPOINTMENT OF A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, SEQUESTRATOR,
CUSTODIAN OR OTHER SIMILAR OFFICIAL FOR THE BENEFIT OF THE CREDITORS OF SUCH
ENTITY OR ALL OR ANY PORTION OF SUCH ENTITY’S PROPERTIES, (III) MAKE ANY
ASSIGNMENT FOR THE BENEFIT OF CREDITORS, OR (IV) TAKE ANY ACTION IN FURTHERANCE
OF ANY OF THE FOREGOING; AND

(R)                 HAS AT LEAST TWO (2) INDEPENDENT MANAGERS.

“Site Assessment” means an environmental engineering report for the Project
prepared by an engineer engaged by Borrower at its expense and approved by
Administrative Agent, and in a manner reasonably satisfactory to Administrative
Agent, based upon an investigation relating to and making appropriate inquiries
concerning the existence of Hazardous Materials on or about the Project, and the
past or present discharge, disposal, release or escape of any such substances,
all consistent with good customary and commercial practice.

“Sole Member” means 731 Commercial Holding LLC, a Delaware limited liability
company.

“Special Advance” has the meaning assigned in Section 14.11(c).

“State” means the State of New York.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors of the Federal Reserve System to which the
Lenders are subject, with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of
the Board).  Such reserve percentages shall include those imposed pursuant to
such

                                                                    

28

­

--------------------------------------------------------------------------------

 

Regulation D.  Eurodollar Borrowings shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time under such Regulation D or any comparable regulation.  The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.

“Subaccounts” has the meaning assigned in Section 4.2(4).

“Syndication” has the meaning set forth in Section 12.27.

“Tax Reserve Account” has the meaning set forth in Section 4.2(4)(a).

“Taxes” means any present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto. 

“Tax Lot Drawings” refers to the floor plans for the Condominium recorded
immediately following the Condominium Declaration on March 9, 2005 as CRFN
2005000139246, as the same may be modified, amended, replaced or supplemented
from time to time.

“Terrorism Premium Limit” has the meaning assigned to such term in Section
3.1(1).

“Third-Party Counterparty” has the meaning assigned to such term in Section
9.15(1).

“Third-Party Hedge Agreement” has the meaning assigned to such term in Section
9.15(6).

“Threshold Amount” means $10,000,000.

“Title Company” means, collectively Commonwealth Land Title Insurance Company
and each of the co-insurers that have executed the co-insurance endorsement to
the Title Policy.

“Title Policy” means an ALTA Lender’s Policy of Title Insurance in form and
substance satisfactory to Administrative Agent issued by the Title Company in
the amount of $350,000,000 insuring the Mortgage as a first priority lien on the
Project, containing such endorsements and affirmative insurance and with such
co-insurance and re-insurance as Administrative Agent may reasonably require,
excepting only such items as shall be reasonably acceptable to Administrative
Agent.

“Transactions” means the execution, delivery and performance by Borrower of this
Agreement and the other Loan Documents, the borrowing of Loans and the use of
the proceeds thereof.

“Trust Account” shall mean a segregated trust account maintained by a corporate

                                                                    

29­

--------------------------------------------------------------------------------

 

trust department of a federal depository institution or a state chartered
depository institution subject to regulations regarding fiduciary funds on
deposit similar to Title 12 of the Code of Federal Regulations §9.10(B) which
has corporate trust powers and is acting in its fiduciary capacity.

“Type” has the meaning assigned in Section 1.2.

“Unit” or “Units” shall mean any condominium units created pursuant to the
Condominium Documents

“U.S. Person” means a “United States person” within the meaning of Section
7701(a)(30) of the Code.

“U.S. Tax Certificate” has the meaning assigned in Section 2.12(6)(b)(iv).

“VRLP” means Vornado Realty L.P., a Delaware limited partnership, together with
its successors by merger, consolidation or transfer of all or substantially all
of its assets in accordance with Section 9.1(3).

“Withholding Agent” means Borrower or Administrative Agent.

SECTION 1.2            TYPES OF LOANS.

Loans hereunder are distinguished by “Type”.  “Type”, when used in reference to
any Borrowing, refers to whether the rate of interest on such Borrowing is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

ARTICLE 2

LOAN TERMS

SECTION 2.1            THE COMMITMENTS, LOANS AND NOTES.

(1)               LOANS.  SUBJECT TO AND UPON THE TERMS AND CONDITIONS OF THIS
AGREEMENT, EACH LENDER SEVERALLY AGREES TO MAKE, AND BORROWER AGREES TO BORROW,
A LOAN IN DOLLARS IN A PRINCIPAL AMOUNT EQUAL TO THE AMOUNT OF THE COMMITMENT OF
SUCH LENDER.  THE LOANS SHALL BE FUNDED IN ONE (1) ADVANCE ON THE CLOSING DATE
UPON BORROWER’S SATISFACTION (OR ADMINISTRATIVE AGENT’S AND THE LENDERS’ WAIVER)
OF THE CONDITIONS DESCRIBED IN SCHEDULE 2.1.  THE LENDERS AND ADMINISTRATIVE
AGENT AGREE THAT UPON THE DISBURSEMENT BY ADMINISTRATIVE AGENT OF THE LOAN
AMOUNT TO BORROWER, ALL OF THE CONDITIONS TO CLOSING DESCRIBED IN SCHEDULE 2.1
SHALL BE DEEMED SATISFIED OR WAIVED BY ADMINISTRATIVE AGENT AND THE LENDERS
(ALTHOUGH THE FOREGOING SHALL NOT BE DEEMED A WAIVER OF ANY REPRESENTATIONS,
WARRANTIES OR COVENANTS SET FORTH IN OTHER PROVISIONS OF THE LOAN DOCUMENTS THAT
MAY RELATE TO THE SAME SUBJECT MATTER AS THE FOREGOING CONDITIONS).

(2)               LENDING OFFICES.  THE LOANS OF EACH LENDER SHALL BE MADE AND
MAINTAINED AT SUCH LENDER’S OFFICE FOR BORROWINGS OF SUCH TYPE.

 

                                                                    

30

--------------------------------------------------------------------------------

 

(3)               SEVERAL OBLIGATIONS.  THE FAILURE OF ANY LENDER TO MAKE ANY
LOAN TO BE MADE BY IT ON THE DATE SPECIFIED THEREFOR SHALL NOT RELIEVE ANY OTHER
LENDER OF ITS OBLIGATION TO MAKE ITS LOAN, BUT NEITHER ANY LENDER NOR
ADMINISTRATIVE AGENT SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER TO
MAKE A LOAN TO BE MADE BY SUCH OTHER LENDER.

(4)               NOTES.

(A)                LOAN NOTES.  THE LOAN MADE BY EACH LENDER SHALL BE EVIDENCED
BY A SINGLE PROMISSORY NOTE OF BORROWER SUBSTANTIALLY IN THE FORM OF EXHIBIT B,
PAYABLE TO SUCH LENDER IN A PRINCIPAL AMOUNT EQUAL TO ITS COMMITMENT AS
ORIGINALLY IN EFFECT AND OTHERWISE DULY COMPLETED.

(B)               SUBSTITUTION, EXCHANGE AND SUBDIVISION OF NOTES.  NO LENDER
SHALL BE ENTITLED TO HAVE ITS NOTES SUBSTITUTED OR EXCHANGED FOR ANY REASON, OR
SUBDIVIDED FOR PROMISSORY NOTES OF LESSER DENOMINATIONS, EXCEPT IN CONNECTION
WITH A PERMITTED ASSIGNMENT OF ALL OR ANY PORTION OF SUCH LENDER’S LOAN AND
NOTES PURSUANT TO SECTION 12.23 (AND, IF REQUESTED BY ANY LENDER, BORROWER
AGREES TO SO SUBSTITUTE OR EXCHANGE ANY NOTES AND ENTER INTO NOTE SPLITTER
AGREEMENTS IN CONNECTION THEREWITH, PROVIDED THAT THE FOREGOING SHALL BE AT NO
COST OR EXPENSE TO BORROWER (OTHER THAN ITS OWN EXPENSES INCURRED IN CONNECTION
THEREWITH AND EXPENSES PAYABLE BY BORROWER IN ACCORDANCE WITH SECTION 12.5) AND
SHALL NOT RESULT IN ANY INCREASE IN BORROWER’S LIABILITIES OR OBLIGATIONS, OR
ANY DECREASE IN BORROWER’S RIGHTS, UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS).

(C)                LOSS, THEFT, DESTRUCTION OR MUTILATION OF NOTES.  IN THE
EVENT OF THE LOSS, THEFT OR DESTRUCTION OF ANY NOTE, UPON BORROWER’S RECEIPT OF
A REASONABLY SATISFACTORY INDEMNIFICATION AGREEMENT EXECUTED IN FAVOR OF
BORROWER BY THE HOLDER OF SUCH NOTE, OR IN THE EVENT OF THE MUTILATION OF ANY
NOTE, UPON THE SURRENDER OF SUCH MUTILATED NOTE BY THE HOLDER THEREOF TO
BORROWER, BORROWER SHALL EXECUTE AND DELIVER TO SUCH HOLDER A NEW REPLACEMENT
NOTE IN LIEU OF THE LOST, STOLEN, DESTROYED OR MUTILATED NOTE.

SECTION 2.2            FUNDING OF BORROWINGS.

(1)               EACH LENDER SHALL MAKE EACH LOAN TO BE MADE BY IT HEREUNDER ON
THE PROPOSED DATE THEREOF BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS BY
12:00 NOON, NEW YORK CITY TIME, TO THE ACCOUNT OF ADMINISTRATIVE AGENT MOST
RECENTLY DESIGNATED BY IT FOR SUCH PURPOSE BY NOTICE TO THE LENDERS. 
ADMINISTRATIVE AGENT WILL MAKE SUCH LOANS AVAILABLE TO BORROWER BY DISBURSING
THE SAME AS AUTHORIZED AND DIRECTED IN WRITING BY BORROWER.

(2)               UNLESS ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM A
LENDER PRIOR TO THE PROPOSED DATE OF ANY BORROWING THAT SUCH LENDER WILL NOT
MAKE AVAILABLE TO ADMINISTRATIVE AGENT SUCH LENDER’S SHARE OF SUCH BORROWING,
ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH SHARE AVAILABLE
ON SUCH DATE IN ACCORDANCE WITH SUBSECTION (1) OF THIS SECTION AND MAY, IN
RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE TO BORROWER A CORRESPONDING
AMOUNT. IN SUCH EVENT, IF A LENDER HAS NOT IN FACT MADE ITS SHARE OF THE
APPLICABLE BORROWING AVAILABLE TO ADMINISTRATIVE AGENT, ADMINISTRATIVE AGENT
SHALL BE ENTITLED TO RECOVER SUCH CORRESPONDING AMOUNT FROM SUCH LENDER.  IF
SUCH LENDER DOES NOT PAY SUCH CORRESPONDING AMOUNT IMMEDIATELY UPON
ADMINISTRATIVE AGENT’S DEMAND THEREFOR,

 

                                                                  

31

--------------------------------------------------------------------------------

 

ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY BORROWER AND BORROWER SHALL
IMMEDIATELY PAY SUCH CORRESPONDING AMOUNT TO ADMINISTRATIVE AGENT. 
ADMINISTRATIVE AGENT SHALL ALSO BE ENTITLED TO RECOVER FROM SUCH LENDER OR
BORROWER, AS THE CASE MAY BE, INTEREST ON SUCH CORRESPONDING AMOUNT IN RESPECT
OF EACH DAY FROM THE DATE SUCH CORRESPONDING AMOUNT WAS MADE AVAILABLE BY
ADMINISTRATIVE AGENT TO BORROWER, TO THE DATE SUCH CORRESPONDING AMOUNT IS
RECOVERED BY ADMINISTRATIVE AGENT, AT A RATE PER ANNUM EQUAL TO (I) IN THE CASE
OF SUCH LENDER, THE GREATER OF THE FEDERAL FUNDS EFFECTIVE RATE AND A RATE
DETERMINED BY ADMINISTRATIVE AGENT IN ACCORDANCE WITH BANKING INDUSTRY RULES ON
INTERBANK COMPENSATION OR (II) IN THE CASE OF BORROWER, THE INTEREST RATE
APPLICABLE TO A ONE-MONTH EURODOLLAR BORROWING.  IF SUCH LENDER PAYS SUCH AMOUNT
TO ADMINISTRATIVE AGENT, THEN SUCH AMOUNT SHALL CONSTITUTE SUCH LENDER’S LOAN
INCLUDED IN SUCH BORROWING.

SECTION 2.3            INTEREST ELECTIONS. 

(1)               EACH BORROWING INITIALLY SHALL BE AN ABR BORROWING UNLESS
BORROWER HAS ELECTED A EURODOLLAR BORROWING AS PROVIDED HEREIN.  THEREAFTER,
BORROWER MAY ELECT TO CONVERT A BORROWING TO A DIFFERENT TYPE OR TO CONTINUE
SUCH BORROWING AND, IN THE CASE OF A EURODOLLAR BORROWING, MAY ELECT INTEREST
PERIODS THEREFOR, ALL AS PROVIDED HEREIN.  BORROWER MAY ELECT DIFFERENT OPTIONS
WITH RESPECT TO DIFFERENT PORTIONS OF THE AFFECTED BORROWING, IN WHICH CASE EACH
SUCH PORTION SHALL BE ALLOCATED RATABLY AMONG THE LENDERS, AND EACH SUCH PORTION
SHALL BE CONSIDERED A SEPARATE BORROWING.

(2)               TO MAKE AN ELECTION PURSUANT TO THIS SECTION, BORROWER SHALL
NOTIFY ADMINISTRATIVE AGENT OF SUCH ELECTION BY ELECTRONIC COMMUNICATION AS
PROVIDED IN SECTION 2.10 (I) IN THE CASE OF A EURODOLLAR BORROWING, NOT LATER
THAN 3:00 P.M., NEW YORK CITY TIME, THREE (3) BUSINESS DAYS BEFORE THE DATE OF
THE PROPOSED BORROWING OR (II) IN THE CASE OF AN ABR BORROWING, NOT LATER THAN
11:00 A.M., NEW YORK CITY TIME, ONE (1) BUSINESS DAY BEFORE THE DATE OF THE
PROPOSED BORROWING.  EACH SUCH INTEREST ELECTION REQUEST SHALL BE IRREVOCABLE
AND SHALL BE SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT H (OR SUCH
OTHER FORM AS ADMINISTRATIVE AGENT SHALL PROVIDE TO BORROWER FROM TIME TO TIME,
PROVIDED THAT SIMILARLY SITUATED BORROWERS OF ADMINISTRATIVE AGENT SHALL BE
REQUIRED TO USE SUCH FORM) AND SIGNED BY BORROWER OR COMMUNICATED VIA ELECTRONIC
COMMUNICATION BY BORROWER TO ADMINISTRATIVE AGENT PURSUANT TO SECTION 2.10.

(3)               EACH INTEREST ELECTION REQUEST SHALL SPECIFY THE FOLLOWING
INFORMATION:

(I)                 THE BORROWING TO WHICH SUCH INTEREST ELECTION REQUEST
APPLIES AND, IF DIFFERENT TYPES AND INTEREST PERIODS ARE BEING ELECTED WITH
RESPECT TO DIFFERENT PORTIONS THEREOF, THE PORTIONS THEREOF TO BE ALLOCATED TO
EACH RESULTING BORROWING (IN WHICH CASE THE INFORMATION TO BE SPECIFIED PURSUANT
TO CLAUSES (III) AND (IV) BELOW SHALL BE SPECIFIED FOR EACH RESULTING
BORROWING);

(II)               THE EFFECTIVE DATE OF THE ELECTION MADE PURSUANT TO SUCH
INTEREST ELECTION REQUEST, WHICH SHALL BE A BUSINESS DAY;

(III)             WHETHER THE RESULTING BORROWING IS TO BE AN ABR BORROWING OR A
EURODOLLAR BORROWING; AND

                                                                    

32

--------------------------------------------------------------------------------

 

(IV)             IF THE RESULTING BORROWING IS A EURODOLLAR BORROWING, THE
INTEREST PERIOD TO BE APPLICABLE THERETO AFTER GIVING EFFECT TO SUCH ELECTION,
WHICH SHALL BE A PERIOD CONTEMPLATED BY THE DEFINITION OF THE TERM “INTEREST
PERIOD”.  IF ANY SUCH INTEREST ELECTION REQUEST REQUESTS A EURODOLLAR BORROWING
BUT DOES NOT SPECIFY AN INTEREST PERIOD, THEN BORROWER SHALL BE DEEMED TO HAVE
SELECTED AN INTEREST PERIOD OF ONE-MONTH DURATION.

(4)               PROMPTLY FOLLOWING RECEIPT OF AN INTEREST ELECTION REQUEST,
ADMINISTRATIVE AGENT SHALL ADVISE EACH LENDER OF THE DETAILS THEREOF AND OF SUCH
LENDER’S PORTION OF EACH RESULTING BORROWING.

(5)               BORROWINGS OF MORE THAN ONE TYPE MAY BE OUTSTANDING AT THE
SAME TIME; PROVIDED THAT THERE SHALL NOT AT ANY TIME BE MORE THAN A TOTAL OF
FIVE (5) EURODOLLAR BORROWINGS OUTSTANDING. EACH EURODOLLAR BORROWING SHALL BE
IN AN AMOUNT NOT LESS THAN $500,000.  NO INTEREST PERIOD MAY BE ELECTED THAT
WOULD END AFTER THE THEN EXISTING MATURITY DATE.

(6)               IF BORROWER FAILS TO DELIVER A TIMELY INTEREST ELECTION
REQUEST WITH RESPECT TO A EURODOLLAR BORROWING PRIOR TO THE END OF THE INTEREST
PERIOD APPLICABLE THERETO, THEN, UNLESS SUCH BORROWING IS REPAID AS PROVIDED
HEREIN, AT THE END OF SUCH INTEREST PERIOD SUCH BORROWING SHALL BE CONVERTED TO
AN ABR BORROWING.  NOTWITHSTANDING ANY CONTRARY PROVISION HEREOF, IF AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, ADMINISTRATIVE AGENT MAY REQUIRE, BY
NOTICE TO BORROWER, THAT (I) NO OUTSTANDING BORROWING MAY BE CONVERTED TO OR
CONTINUED AS A EURODOLLAR BORROWING AND (II) UNLESS REPAID, EACH EURODOLLAR
BORROWING SHALL BE CONVERTED TO AN ABR BORROWING AT THE END OF THE INTEREST
PERIOD APPLICABLE THERETO.

SECTION 2.4            REPAYMENT OF LOANS; EVIDENCE OF DEBT.

(1)               BORROWER HEREBY UNCONDITIONALLY PROMISES TO PAY TO
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH LENDER THE THEN UNPAID PRINCIPAL
AMOUNT OF EACH LOAN ON THE MATURITY DATE.

(2)               EACH LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL
PRACTICE AN ACCOUNT OR ACCOUNTS EVIDENCING THE INDEBTEDNESS OF BORROWER TO SUCH
LENDER RESULTING FROM EACH LOAN MADE BY SUCH LENDER, INCLUDING THE AMOUNTS OF
PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDER FROM TIME TO TIME
HEREUNDER.

(3)               ADMINISTRATIVE AGENT SHALL MAINTAIN ACCOUNTS IN WHICH IT SHALL
RECORD (I) THE AMOUNT OF EACH LOAN MADE HEREUNDER, THE TYPE THEREOF AND THE
INTEREST PERIOD APPLICABLE THERETO, (II) THE AMOUNT OF ANY PRINCIPAL OR INTEREST
DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM BORROWER TO EACH LENDER
HEREUNDER AND (III) THE AMOUNT OF ANY SUM RECEIVED BY ADMINISTRATIVE AGENT
HEREUNDER FOR THE ACCOUNT OF THE LENDERS AND EACH LENDER’S SHARE THEREOF.

(4)               THE ENTRIES MADE IN THE ACCOUNTS MAINTAINED PURSUANT TO
SUBSECTIONS (2) OR (3) OF THIS SECTION SHALL BE PRIMA FACIE EVIDENCE (ABSENT
MANIFEST ERROR) OF THE EXISTENCE AND AMOUNTS OF THE OBLIGATIONS RECORDED
THEREIN; PROVIDED THAT THE FAILURE OF ANY LENDER OR ADMINISTRATIVE AGENT TO
MAINTAIN SUCH ACCOUNTS OR ANY ERROR THEREIN SHALL NOT IN ANY MANNER AFFECT THE
OBLIGATION OF BORROWER TO REPAY THE LOANS IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT.

 

                                                                    

33

--------------------------------------------------------------------------------

 

SECTION 2.5            PREPAYMENT OF LOAN.

(1)               BORROWER SHALL HAVE THE RIGHT AT ANY TIME AND FROM TIME TO
TIME TO PREPAY ANY BORROWING IN WHOLE OR IN PART, SUBJECT TO PRIOR NOTICE IN
ACCORDANCE WITH SUBSECTION (2) OF THIS SECTION.

(2)               BORROWER SHALL NOTIFY ADMINISTRATIVE AGENT BY WRITTEN
ELECTRONIC COMMUNICATION AS PROVIDED IN SECTION 2.10 OF ANY PREPAYMENT HEREUNDER
(I) IN THE CASE OF PREPAYMENT OF A EURODOLLAR BORROWING, NOT LATER THAN 11:00
A.M., NEW YORK CITY TIME, FIVE (5) BUSINESS DAYS BEFORE THE DATE OF PREPAYMENT,
OR (II) IN THE CASE OF PREPAYMENT OF AN ABR BORROWING, NOT LATER THAN 11:00
A.M., NEW YORK CITY TIME, ONE (1) BUSINESS DAY BEFORE THE DATE OF PREPAYMENT. 
EACH SUCH NOTICE SHALL SPECIFY THE PREPAYMENT DATE AND THE PRINCIPAL AMOUNT OF
EACH BORROWING OR PORTION THEREOF TO BE PREPAID.  ANY PREPAYMENT NOTICE GIVEN TO
LENDER BY BORROWER PURSUANT TO THE PRECEDING SENTENCE MAY BE RESCINDED BY
BORROWER UPON DELIVERY OF WRITTEN NOTICE TO LENDER NOT LESS THAN TWO (2)
BUSINESS DAYS PRIOR TO THE PREPAYMENT DATE SPECIFIED IN THE PREPAYMENT NOTICE
BEING RESCINDED AND PROVIDED ALL REASONABLE OUT-OF-POCKET COSTS AND EXPENSES OF
ADMINISTRATIVE AGENT AND THE LENDERS IN CONNECTION WITH THE RESCISSION OF SUCH
PREPAYMENT SHALL BE PAID BY BORROWER PROMPTLY AFTER DEMAND. PROMPTLY FOLLOWING
RECEIPT OF ANY SUCH REQUEST, ADMINISTRATIVE AGENT SHALL ADVISE THE LENDERS OF
THE CONTENTS THEREOF.  PREPAYMENTS SHALL BE ACCOMPANIED BY ACCRUED INTEREST ON
THE AMOUNT PREPAID TO THE EXTENT REQUIRED UNDER SECTION 2.6(4). IN ADDITION,
BORROWER SHALL PAY ALL OTHER AMOUNTS DUE UNDER SECTION 2.9 (BREAK FUNDING
PAYMENTS) IN CONNECTION WITH SUCH PREPAYMENT ON THE DATE OF PREPAYMENT IN
ACCORDANCE WITH THE TERMS THEREOF.

(3)               NO AMOUNTS PREPAID OR REPAID SHALL BE READVANCED.

SECTION 2.6            INTEREST. 

(1)               EACH ABR BORROWING SHALL BEAR INTEREST AT THE FLOATING RATE.

(2)               EACH EURODOLLAR BORROWING SHALL BEAR INTEREST AT THE FIXED
RATE FOR THE INTEREST PERIOD IN EFFECT FOR SUCH BORROWING.

(3)               NOTWITHSTANDING THE FOREGOING, IF (X) ANY PRINCIPAL OF OR
INTEREST ON THE LOAN OR ANY FEE OR OTHER AMOUNT PAYABLE BY BORROWER HEREUNDER IS
NOT PAID WHEN DUE, WHETHER AT STATED MATURITY, UPON ACCELERATION OR OTHERWISE,
AND (Y) SUCH FAILURE TO PAY RESULTS IN AN EVENT OF DEFAULT (I.E., ANY NOTICE OR
CURE PERIODS WITH RESPECT TO SUCH PAYMENT HAVE EXPIRED), THEN SUCH OVERDUE
AMOUNT SHALL BEAR INTEREST AT THE DEFAULT RATE FROM THE DATE SUCH AMOUNT WAS
REQUIRED TO HAVE BEEN PAID BY BORROWER.

(4)               ACCRUED INTEREST ON EACH BORROWING SHALL BE PAYABLE IN ARREARS
ON EACH PAYMENT DATE FOR SUCH BORROWING AND UPON MATURITY OF THE LOAN; PROVIDED
THAT (I) INTEREST ACCRUED PURSUANT TO SUBSECTION (3) OF THIS SECTION SHALL BE
PAYABLE ON DEMAND, (II) IN THE EVENT OF ANY REPAYMENT OR PREPAYMENT OF ANY
BORROWING, ACCRUED INTEREST ON THE PRINCIPAL AMOUNT REPAID OR PREPAID SHALL BE
PAYABLE ON THE DATE OF SUCH REPAYMENT OR PREPAYMENT AND (III) IN THE EVENT OF
ANY CONVERSION OF ANY EURODOLLAR BORROWING PRIOR TO THE END OF THE CURRENT
INTEREST PERIOD THEREFOR, ACCRUED INTEREST ON SUCH BORROWING SHALL BE PAYABLE ON
THE EFFECTIVE DATE OF SUCH CONVERSION.

 

                                                                    

34

--------------------------------------------------------------------------------

 

(5)               ALL INTEREST HEREUNDER SHALL BE COMPUTED ON THE BASIS OF A
YEAR OF 360 DAYS, AND IN EACH CASE SHALL BE PAYABLE FOR THE ACTUAL NUMBER OF
DAYS ELAPSED (INCLUDING THE FIRST DAY BUT EXCLUDING THE LAST DAY).  THE
APPLICABLE FIXED RATE OR FLOATING RATE SHALL BE DETERMINED BY ADMINISTRATIVE
AGENT AND SUCH DETERMINATION SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.

SECTION 2.7            ALTERNATE RATE OF INTEREST.

If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(A)                ADMINISTRATIVE AGENT REASONABLY DETERMINES THAT ADEQUATE AND
REASONABLE MEANS DO NOT EXIST FOR ASCERTAINING THE ADJUSTED LIBO RATE FOR SUCH
INTEREST PERIOD; OR

(B)               THE REQUIRED LENDERS REASONABLY DETERMINE THAT THE ADJUSTED
LIBO RATE OR THE LIBO RATE, AS APPLICABLE, FOR SUCH INTEREST PERIOD WILL NOT
ADEQUATELY AND FAIRLY REFLECT THE COST TO SUCH LENDERS OF MAKING OR MAINTAINING
THEIR LOANS INCLUDED IN SUCH BORROWING FOR SUCH INTEREST PERIOD;

then Administrative Agent shall give notice thereof to Borrower and the Lenders
by telephone or facsimile as promptly as practicable thereafter and, until
Administrative Agent notifies Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, (i) any Interest Election Request
that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) any request
for a new Eurodollar Borrowing shall be made as an ABR Borrowing.

SECTION 2.8                        INCREASED COSTS.

(1)               IF ANY LENDER DETERMINES IN GOOD FAITH THAT ANY CHANGE IN LAW
SHALL:

(I)                 IMPOSE, MODIFY OR DEEM APPLICABLE ANY RESERVE, SPECIAL
DEPOSIT OR SIMILAR REQUIREMENT AGAINST ASSETS OF, DEPOSITS WITH OR FOR THE
ACCOUNT OF, OR CREDIT EXTENDED BY, ANY LENDER (EXCEPT ANY SUCH RESERVE
REQUIREMENT REFLECTED IN THE ADJUSTED LIBO RATE);

(II)               IMPOSE ON ANY LENDER OR THE LONDON INTERBANK MARKET ANY OTHER
CONDITION AFFECTING THIS AGREEMENT OR EURODOLLAR BORROWINGS MADE BY SUCH LENDER;
OR

(III)             SUBJECT ANY RECIPIENT TO ANY TAXES WITH RESPECT TO THIS
AGREEMENT OR ANY EURODOLLAR BORROWING MADE BY SUCH RECIPIENT (EXCEPT FOR (A)
INDEMNIFIED TAXES, (B) EXCLUDED TAXES AND (C) OTHER CONNECTION TAXES ON GROSS OR
NET INCOME, PROFITS OR RECEIPTS (INCLUDING VALUE-ADDED OR SIMILAR TAXES));

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making or maintaining any Eurodollar Borrowing
(or of maintaining its obligation to make any such Eurodollar Borrowing) or to
increase the cost or to reduce the amount of any sum received or receivable by
such Lender or such other Recipient hereunder (whether of principal, interest or
otherwise), then, upon request of such Lender and delivery to Borrower of the
certificate contemplated in Section 2.8(3), Borrower will pay to such Lender or
such other Recipient,  as  the  case may  be,  such  additional amount  or
amounts as will compensate such

35

--------------------------------------------------------------------------------

 

Lender or such other Recipient, as the case may be, for such additional costs
incurred or reduction suffered.

(2)               IF ANY LENDER REASONABLY DETERMINES IN GOOD FAITH THAT ANY
CHANGE IN LAW REGARDING CAPITAL REQUIREMENTS HAS THE EFFECT OF REDUCING THE RATE
OF RETURN ON SUCH LENDER’S CAPITAL OR ON THE CAPITAL OF SUCH LENDER’S HOLDING
COMPANY, IF ANY, AS A CONSEQUENCE OF THIS AGREEMENT OR THE LOANS MADE BY SUCH
LENDER TO A LEVEL BELOW THAT WHICH SUCH LENDER OR SUCH LENDER’S HOLDING COMPANY
COULD HAVE ACHIEVED BUT FOR SUCH CHANGE IN LAW (TAKING INTO CONSIDERATION SUCH
LENDER’S POLICIES AND THE POLICIES OF SUCH LENDER’S HOLDING COMPANY WITH RESPECT
TO CAPITAL ADEQUACY), THEN, UPON REQUEST OF SUCH LENDER AND DELIVERY TO BORROWER
OF THE CERTIFICATE CONTEMPLATED IN SECTION 2.8(3), BORROWER WILL PAY TO SUCH
LENDER SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL COMPENSATE SUCH LENDER OR SUCH
LENDER’S HOLDING COMPANY FOR ANY SUCH REDUCTION SUFFERED.

(3)               A CERTIFICATE OF A LENDER SETTING FORTH THE AMOUNT OR AMOUNTS
NECESSARY TO COMPENSATE SUCH LENDER OR ITS HOLDING COMPANY, AS THE CASE MAY BE,
AS SPECIFIED IN SUBSECTION (1) OR (2) OF THIS SECTION SHALL BE DELIVERED TO
BORROWER AND SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.  BORROWER SHALL PAY SUCH
LENDER THE AMOUNT SHOWN AS DUE ON ANY SUCH CERTIFICATE WITHIN TEN (10) BUSINESS
DAYS AFTER RECEIPT THEREOF.

(4)               FAILURE OR DELAY ON THE PART OF ANY LENDER TO DEMAND
COMPENSATION PURSUANT TO THIS SECTION SHALL NOT CONSTITUTE A WAIVER OF SUCH
LENDER’S RIGHT TO DEMAND SUCH COMPENSATION; PROVIDED THAT BORROWER SHALL NOT BE
REQUIRED TO COMPENSATE A LENDER PURSUANT TO THIS SECTION FOR ANY INCREASED COSTS
OR REDUCTIONS INCURRED MORE THAN 30 DAYS PRIOR TO THE DATE THAT SUCH LENDER
NOTIFIES BORROWER OF THE CHANGE IN LAW GIVING RISE TO SUCH INCREASED COSTS OR
REDUCTIONS AND OF SUCH LENDER’S INTENTION TO CLAIM COMPENSATION THEREFOR;
PROVIDED FURTHER THAT, IF THE CHANGE IN LAW GIVING RISE TO SUCH INCREASED COSTS
OR REDUCTIONS IS REQUIRED TO BE APPLIED RETROACTIVELY AND SUCH LENDER HAS
NOTIFIED BORROWER WITHIN 30 DAYS OF ITS KNOWLEDGE OF SUCH CHANGE IN LAW, THEN
THE 30-DAY PERIOD REFERRED TO ABOVE SHALL BE EXTENDED TO INCLUDE THE PERIOD OF
RETROACTIVE EFFECT THEREOF.

(5)               NOTWITHSTANDING ANYTHING IN THIS SECTION 2.8 TO THE CONTRARY,
BORROWER SHALL NOT BE REQUIRED TO PAY ANY AMOUNTS TO A LENDER PURSUANT TO THIS
SECTION 2.8 UNLESS SUCH LENDER IS IMPOSING A SIMILAR CHARGE ON, OR OTHERWISE
SIMILARLY ENFORCING ITS AGREEMENTS WITH, ITS OTHER SIMILARLY SITUATED BORROWERS.

(6)               IF ANY LENDER DETERMINES, IN ITS REASONABLE DISCRETION
EXERCISED IN GOOD FAITH, THAT IT HAS RECEIVED A REFUND OF ANY AMOUNTS AS TO
WHICH IT HAS BEEN PAID BY BORROWER PURSUANT TO THIS SECTION 2.8, IT SHALL PAY TO
BORROWER AN AMOUNT EQUAL TO SUCH REFUND (BUT ONLY TO THE EXTENT OF THE PAYMENTS
MADE BY BORROWER UNDER THIS SECTION), NET OF ALL ACTUAL OUT-OF-POCKET REASONABLE
EXPENSES OF SUCH LENDER AND WITHOUT INTEREST (OTHER THAN ANY INTEREST PAID BY
THE RELEVANT GOVERNMENTAL AUTHORITY WITH RESPECT TO SUCH REFUND).

SECTION 2.9            BREAK FUNDING PAYMENTS.

In the event of (a) the payment of any principal of any Eurodollar Borrowing
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of

                                                                    

36

--------------------------------------------------------------------------------

 

Default), (b) the conversion of any Eurodollar Borrowing other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Borrowing on the date specified in
any notice delivered pursuant hereto (except if any prepayment notice is
rescinded by Borrower by a subsequent notice sent pursuant Section 2.5(2),
unless such loss, cost or expense was incurred prior to Borrower giving such
subsequent notice), or (d) the assignment of any Eurodollar Borrowing other than
on the last day of the Interest Period applicable thereto as a result of a
request by Borrower pursuant to Section 2.14, then, in any such event, Borrower
shall compensate each Lender for its actual loss, cost and expense attributable
to such event.  In the case of a Eurodollar Borrowing, such actual loss, cost or
expense to any Lender shall be conclusively deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Borrowing had
such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Borrowing, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Borrowing), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the
eurodollar market.  A certificate of any Lender setting forth any amount or
amounts that any Lender is entitled to receive pursuant to this Section shall be
delivered to Borrower and shall be conclusive absent manifest error.  Borrower
shall pay such Lender the amount shown as due on any such certificate within ten
(10) Business Days after receipt thereof.

SECTION 2.10        ELECTRONIC NOTICES. 

(1)               INTEREST ELECTION REQUESTS UNDER SECTION 2.3 AND NOTICES OF
PREPAYMENTS UNDER SECTION 2.5 MAY BE MADE BY ELECTRONIC COMMUNICATION (INCLUDING
EMAIL AND INTERNET OR INTRANET WEBSITES) PURSUANT TO PROCEDURES REASONABLY
APPROVED BY ADMINISTRATIVE AGENT.  SUCH APPROVAL MAY BE LIMITED TO PARTICULAR
NOTICES OR COMMUNICATIONS.

(2)               UNLESS ADMINISTRATIVE AGENT OR A LENDER OTHERWISE PRESCRIBES,
(I) NOTICES AND OTHER COMMUNICATIONS SENT TO AN E-MAIL ADDRESS OF SUCH
RECIPIENTS SHALL BE DEEMED RECEIVED UPON THE SENDER’S RECEIPT OF AN
ACKNOWLEDGEMENT FROM THE INTENDED RECIPIENT (SUCH AS BY THE “RETURN RECEIPT
REQUESTED” FUNCTION, AS AVAILABLE, RETURN E-MAIL OR OTHER WRITTEN
ACKNOWLEDGEMENT), PROVIDED THAT IF SUCH NOTICE OR OTHER COMMUNICATION IS NOT
SENT DURING THE NORMAL BUSINESS HOURS OF THE RECIPIENT, SUCH NOTICE OR
COMMUNICATION SHALL BE DEEMED TO HAVE BEEN SENT AT THE OPENING OF BUSINESS ON
THE NEXT BUSINESS DAY FOR THE RECIPIENT, AND (II) NOTICES OR COMMUNICATIONS
POSTED TO AN INTERNET OR INTRANET WEBSITE SHALL BE DEEMED RECEIVED UPON THE
“RECEIPT” BY THE INTENDED RECIPIENT AT ITS E-MAIL ADDRESS AS DESCRIBED IN THE
FOREGOING CLAUSE (I) OF NOTIFICATION THAT SUCH NOTICE OR COMMUNICATION IS
AVAILABLE AND IDENTIFYING THE WEBSITE ADDRESS THEREFOR.

(3)               ANY PARTY HERETO MAY CHANGE ITS ADDRESS OR TELECOPIER NUMBER
OR EMAIL ADDRESS FOR NOTICES AND OTHER COMMUNICATIONS HEREUNDER BY NOTICE TO THE
OTHER PARTIES HERETO GIVEN IN ACCORDANCE WITH SECTION 12.1.

 

                                                                    

37

--------------------------------------------------------------------------------

 

SECTION 2.11        ADDITIONAL INTEREST.

Borrower shall compensate Administrative Agent or any Lender providing a Hedge
Agreement for any Additional Interest that may be payable thereunder in
accordance with the terms of such Hedge Agreement.

SECTION 2.12        TAXES.

(1)               WITHHOLDING OF TAXES; GROSS-UP.  EACH PAYMENT BY BORROWER
UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE MADE WITHOUT
WITHHOLDING FOR ANY TAXES, UNLESS SUCH WITHHOLDING IS REQUIRED BY ANY LAW.  IF
ANY WITHHOLDING AGENT DETERMINES, IN ITS SOLE DISCRETION EXERCISED IN GOOD
FAITH, THAT IT IS SO REQUIRED TO WITHHOLD TAXES, THEN SUCH WITHHOLDING AGENT MAY
SO WITHHOLD AND SHALL TIMELY PAY THE FULL AMOUNT OF WITHHELD TAXES TO THE
RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.  WITHOUT
DUPLICATION OF ANY AMOUNTS PAYABLE BY BORROWER UNDER SECTION 2.8, IF SUCH TAXES
ARE INDEMNIFIED TAXES, THEN THE AMOUNT PAYABLE BY BORROWER SHALL BE INCREASED AS
NECESSARY SO THAT, NET OF SUCH WITHHOLDING (INCLUDING SUCH WITHHOLDING
APPLICABLE TO ADDITIONAL AMOUNTS PAYABLE UNDER THIS SECTION), THE APPLICABLE
RECIPIENT RECEIVES THE AMOUNT IT WOULD HAVE RECEIVED HAD NO SUCH WITHHOLDING
BEEN MADE.

(2)               PAYMENT OF OTHER TAXES BY BORROWER.  BORROWER SHALL TIMELY PAY
ANY OTHER TAXES TO THE RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH
APPLICABLE LAW.

(3)               EVIDENCE OF PAYMENTS.  AS SOON AS PRACTICABLE AFTER ANY
PAYMENT OF INDEMNIFIED TAXES BY BORROWER TO A GOVERNMENTAL AUTHORITY, BORROWER
SHALL DELIVER TO ADMINISTRATIVE AGENT THE ORIGINAL OR A CERTIFIED COPY OF A
RECEIPT ISSUED BY SUCH GOVERNMENTAL AUTHORITY EVIDENCING SUCH PAYMENT, A COPY OF
THE RETURN REPORTING SUCH PAYMENT OR OTHER EVIDENCE OF SUCH PAYMENT REASONABLY
SATISFACTORY TO ADMINISTRATIVE AGENT.

(4)               INDEMNIFICATION BY BORROWER.  BORROWER SHALL INDEMNIFY EACH
RECIPIENT FOR ANY INDEMNIFIED TAXES THAT ARE PAID OR PAYABLE BY SUCH RECIPIENT
IN CONNECTION WITH THIS AGREEMENT (INCLUDING AMOUNTS PAYABLE UNDER THIS
SECTION 2.12(4)) AND ANY REASONABLE EXPENSES ARISING THEREFROM OR WITH RESPECT
THERETO, WHETHER OR NOT SUCH INDEMNIFIED TAXES WERE CORRECTLY OR LEGALLY IMPOSED
OR ASSERTED BY THE RELEVANT GOVERNMENTAL AUTHORITY.  THE INDEMNITY UNDER THIS
SECTION 2.12(4) SHALL BE PAID WITHIN TEN (10) BUSINESS DAYS AFTER THE RECIPIENT
DELIVERS TO BORROWER A CERTIFICATE STATING THE AMOUNT OF ANY INDEMNIFIED TAXES
SO PAYABLE BY SUCH RECIPIENT.  SUCH CERTIFICATE SHALL BE CONCLUSIVE OF THE
AMOUNT SO PAYABLE ABSENT MANIFEST ERROR.  SUCH RECIPIENT SHALL DELIVER A COPY OF
SUCH CERTIFICATE TO ADMINISTRATIVE AGENT.  IN THE CASE OF ANY LENDER MAKING A
CLAIM UNDER THIS SECTION 2.12(4) ON BEHALF OF ANY OF ITS BENEFICIAL OWNERS, AN
INDEMNITY PAYMENT UNDER THIS SECTION 2.12(4) SHALL BE DUE ONLY TO THE EXTENT
THAT SUCH LENDER IS ABLE TO ESTABLISH THAT, WITH RESPECT TO THE APPLICABLE
INDEMNIFIED TAXES, SUCH BENEFICIAL OWNERS SUPPLIED TO THE APPLICABLE PERSONS
SUCH PROPERLY COMPLETED AND EXECUTED DOCUMENTATION NECESSARY TO CLAIM ANY
APPLICABLE EXEMPTION FROM, OR REDUCTION OF, SUCH INDEMNIFIED TAXES.  FAILURE OR
DELAY ON THE PART OF ANY LENDER TO DEMAND AMOUNTS DUE PURSUANT TO THIS
SECTION 2.12(4) SHALL NOT CONSTITUTE A WAIVER OF SUCH LENDER’S RIGHT TO DEMAND
SUCH INDEMNITY; PROVIDED THAT BORROWER SHALL NOT BE REQUIRED TO INDEMNIFY A
LENDER PURSUANT TO THIS SECTION 2.12(4) FOR ANY INDEMNIFIED TAXES UNLESS SUCH
LENDER NOTIFIES BORROWER WITHIN 30 DAYS OF SUCH LENDER’S OBTAINING KNOWLEDGE OF
SUCH INDEMNIFIED TAXES.  NOTWITHSTANDING ANYTHING IN

 

                                                                    

38

--------------------------------------------------------------------------------

 

THIS SECTION 2.12 TO THE CONTRARY, BORROWER SHALL NOT BE REQUIRED TO PAY ANY
AMOUNTS TO A LENDER PURSUANT TO THIS SECTION 2.12 UNLESS THE APPLICABLE LENDER
IS IMPOSING A SIMILAR CHARGE ON, OR OTHERWISE SIMILARLY ENFORCING ITS AGREEMENTS
WITH, ITS OTHER SIMILARLY SITUATED BORROWERS.

(5)               INDEMNIFICATION BY THE LENDERS.  EACH LENDER SHALL SEVERALLY
INDEMNIFY ADMINISTRATIVE AGENT FOR ANY TAXES (BUT, IN THE CASE OF ANY
INDEMNIFIED TAXES, ONLY TO THE EXTENT THAT BORROWER HAS NOT ALREADY INDEMNIFIED
ADMINISTRATIVE AGENT FOR SUCH INDEMNIFIED TAXES AND WITHOUT LIMITING THE
OBLIGATION OF BORROWER TO DO SO) AND BORROWER FOR ANY EXCLUDED TAXES, IN EACH
CASE ATTRIBUTABLE TO SUCH LENDER THAT ARE PAID OR PAYABLE BY ADMINISTRATIVE
AGENT OR BORROWER IN CONNECTION WITH THIS AGREEMENT AND ANY REASONABLE EXPENSES
ARISING THEREFROM OR WITH RESPECT THERETO.  THE INDEMNITY UNDER THIS
SECTION 2.12(5) SHALL BE PAID WITHIN TEN (10) BUSINESS DAYS AFTER ADMINISTRATIVE
AGENT OR BORROWER DELIVERS TO THE APPLICABLE LENDER A CERTIFICATE STATING THE
AMOUNT OF TAXES OR EXCLUDED TAXES SO PAID OR PAYABLE BY ADMINISTRATIVE AGENT OR
BORROWER.  SUCH CERTIFICATE SHALL BE CONCLUSIVE OF THE AMOUNT SO PAID OR PAYABLE
ABSENT MANIFEST ERROR.

(6)               STATUS OF LENDERS.

(A)                ANY LENDER THAT IS ENTITLED TO AN EXEMPTION FROM, OR
REDUCTION OF, ANY APPLICABLE WITHHOLDING TAX WITH RESPECT TO ANY PAYMENTS UNDER
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL DELIVER TO BORROWER AND
ADMINISTRATIVE AGENT, AT THE TIME OR TIMES PRESCRIBED BY LAW OR REASONABLY
REQUESTED BY BORROWER OR ADMINISTRATIVE AGENT, SUCH PROPERLY COMPLETED AND
EXECUTED DOCUMENTATION PRESCRIBED BY LAW OR REASONABLY REQUESTED BY BORROWER OR
ADMINISTRATIVE AGENT AS WILL PERMIT SUCH PAYMENTS TO BE MADE WITHOUT, OR AT A
REDUCED RATE OF, WITHHOLDING.  IN ADDITION, ANY LENDER, IF REQUESTED BY BORROWER
OR ADMINISTRATIVE AGENT, SHALL DELIVER SUCH OTHER DOCUMENTATION PRESCRIBED BY
LAW OR REASONABLY REQUESTED BY BORROWER OR ADMINISTRATIVE AGENT AS WILL ENABLE
BORROWER OR ADMINISTRATIVE AGENT TO DETERMINE WHETHER OR NOT SUCH LENDER IS
SUBJECT TO BACKUP WITHHOLDING OR INFORMATION REPORTING REQUIREMENTS. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE PRECEDING TWO SENTENCES, THE
COMPLETION, EXECUTION AND SUBMISSION OF SUCH DOCUMENTATION (OTHER THAN SUCH
DOCUMENTATION SET FORTH IN SECTIONS 2.12(6)(B) AND (C) BELOW) SHALL NOT BE
REQUIRED IF IN THE LENDER’S REASONABLE JUDGMENT SUCH COMPLETION, EXECUTION OR
SUBMISSION WOULD SUBJECT SUCH LENDER TO ANY MATERIAL UNREIMBURSED COST OR
EXPENSE OR WOULD MATERIALLY PREJUDICE THE LEGAL OR COMMERCIAL POSITION OF SUCH
LENDER, PROVIDED THAT ANY TAX REQUIRED TO BE WITHHELD OR OTHERWISE PAYABLE AS A
RESULT OF SUCH LENDER’S FAILURE TO PROVIDE DOCUMENTATION PURSUANT TO ITS RIGHTS
UNDER THIS SENTENCE SHALL BE AN EXCLUDED TAX (AND NOT AN INDEMNIFIED TAX).  UPON
THE REASONABLE REQUEST OF BORROWER OR ADMINISTRATIVE AGENT, ANY LENDER SHALL
UPDATE ANY FORM OR CERTIFICATION PREVIOUSLY DELIVERED PURSUANT TO THIS
SECTION 2.12(6).  IF ANY FORM OR CERTIFICATION PREVIOUSLY DELIVERED PURSUANT TO
THIS SECTION EXPIRES OR BECOMES OBSOLETE OR INACCURATE IN ANY RESPECT WITH
RESPECT TO A LENDER, SUCH LENDER SHALL PROMPTLY (AND IN ANY EVENT WITHIN TEN
(10) DAYS AFTER SUCH EXPIRATION, OBSOLESCENCE OR INACCURACY) NOTIFY BORROWER AND
ADMINISTRATIVE AGENT IN WRITING OF SUCH EXPIRATION, OBSOLESCENCE OR INACCURACY
AND UPDATE THE FORM OR CERTIFICATION IF IT IS LEGALLY ELIGIBLE TO DO SO.

(B)               WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IF BORROWER
IS A U.S. PERSON, EACH LENDER SHALL, IF IT IS LEGALLY ELIGIBLE TO DO SO, DELIVER
TO BORROWER AND ADMINISTRATIVE AGENT (IN SUCH NUMBER OF COPIES REASONABLY
REQUESTED BY BORROWER AND

 

                                                                    

39

--------------------------------------------------------------------------------

 

ADMINISTRATIVE AGENT) ON OR PRIOR TO THE DATE ON WHICH SUCH LENDER BECOMES A
PARTY HERETO, DULY COMPLETED AND EXECUTED COPIES OF WHICHEVER OF THE FOLLOWING
IS APPLICABLE:

(I)                 IN THE CASE OF A LENDER THAT IS A U.S. PERSON, IRS FORM W-9
CERTIFYING THAT SUCH LENDER IS EXEMPT FROM U.S. FEDERAL BACKUP WITHHOLDING TAX;

(II)               IN THE CASE OF A NON-U.S. LENDER CLAIMING THE BENEFITS OF AN
INCOME TAX TREATY TO WHICH THE UNITED STATES IS A PARTY (1) WITH RESPECT TO ANY
PAYMENTS OF INTEREST UNDER THIS AGREEMENT, IRS FORM W-8BEN ESTABLISHING AN
EXEMPTION FROM, OR REDUCTION OF, U.S. FEDERAL WITHHOLDING TAX PURSUANT TO THE
“INTEREST” ARTICLE OF SUCH TAX TREATY AND (2) WITH RESPECT TO ANY OTHER
APPLICABLE PAYMENTS UNDER THIS AGREEMENT, IRS FORM W-8BEN ESTABLISHING AN
EXEMPTION FROM, OR REDUCTION OF, U.S. FEDERAL WITHHOLDING TAX PURSUANT TO THE
“BUSINESS PROFITS” OR “OTHER INCOME” ARTICLE OF SUCH TAX TREATY;

(III)             IN THE CASE OF A NON-U.S. LENDER FOR WHOM PAYMENTS UNDER THIS
AGREEMENT CONSTITUTE INCOME THAT IS EFFECTIVELY CONNECTED WITH SUCH LENDER’S
CONDUCT OF A TRADE OR BUSINESS IN THE UNITED STATES, IRS FORM W-8ECI;

(IV)             IN THE CASE OF A NON-U.S. LENDER CLAIMING THE BENEFITS OF THE
EXEMPTION FOR PORTFOLIO INTEREST UNDER SECTION 881(C) OF THE CODE BOTH (1) IRS
FORM W-8BEN AND (2) A CERTIFICATE (A “U.S. TAX CERTIFICATE”) TO THE EFFECT THAT
SUCH LENDER IS NOT (A) A “BANK” WITHIN THE MEANING OF SECTION 881(C)(3)(A) OF
THE CODE, (B) A “10 PERCENT SHAREHOLDER” OF BORROWER WITHIN THE MEANING OF
SECTION 881(C)(3)(B) OF THE CODE, (C) A “CONTROLLED FOREIGN CORPORATION”
DESCRIBED IN SECTION 881(C)(3)(C) OF THE CODE AND (D) CONDUCTING A TRADE OR
BUSINESS IN THE UNITED STATES WITH WHICH THE RELEVANT INTEREST PAYMENTS ARE
EFFECTIVELY CONNECTED;

(V)               IN THE CASE OF A NON-U.S. LENDER THAT IS NOT THE BENEFICIAL
OWNER OF PAYMENTS MADE UNDER THIS AGREEMENT (INCLUDING A PARTNERSHIP OR A
PARTICIPATING LENDER) (1) AN IRS FORM W-8IMY ON BEHALF OF ITSELF AND (2) THE
RELEVANT FORMS PRESCRIBED IN CLAUSES (I), (II), (III), (IV) AND (VI) OF THIS
SUBSECTION (B) THAT WOULD BE REQUIRED OF EACH SUCH BENEFICIAL OWNER OR PARTNER
OF SUCH PARTNERSHIP IF SUCH BENEFICIAL OWNER OR PARTNER WERE A LENDER; PROVIDED,
HOWEVER, THAT IF THE LENDER IS A PARTNERSHIP AND ONE OR MORE OF ITS PARTNERS ARE
CLAIMING THE EXEMPTION FOR PORTFOLIO INTEREST UNDER SECTION 881(C) OF THE CODE,
SUCH LENDER MAY PROVIDE A U.S. TAX CERTIFICATE ON BEHALF OF SUCH PARTNERS; OR

(VI)             ANY OTHER FORM PRESCRIBED BY LAW AS A BASIS FOR CLAIMING
EXEMPTION FROM, OR A REDUCTION OF, U.S. FEDERAL WITHHOLDING TAX TOGETHER WITH
SUCH SUPPLEMENTARY DOCUMENTATION NECESSARY TO ENABLE BORROWER OR ADMINISTRATIVE
AGENT TO DETERMINE THE AMOUNT OF TAX (IF ANY) REQUIRED BY LAW TO BE WITHHELD.

(C)                IF A PAYMENT MADE TO A LENDER UNDER THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT WOULD BE SUBJECT TO U.S. FEDERAL WITHHOLDING TAX IMPOSED BY
FATCA IF SUCH LENDER WERE TO FAIL TO COMPLY WITH THE APPLICABLE REPORTING
REQUIREMENTS OF FATCA (INCLUDING THOSE CONTAINED IN  SECTION  1471(B) OR
 1472(B) OF  THE CODE, AS APPLICABLE),  SUCH LENDER SHALL

 

                                                                    

40

--------------------------------------------------------------------------------

 

DELIVER TO THE WITHHOLDING AGENT, AT THE TIME OR TIMES PRESCRIBED BY LAW AND AT
SUCH TIME OR TIMES REASONABLY REQUESTED BY THE WITHHOLDING AGENT, SUCH
DOCUMENTATION PRESCRIBED BY APPLICABLE LAW (INCLUDING AS PRESCRIBED BY SECTION
1471(B)(3)(C)(I) OF THE CODE) FOR THE WITHHOLDING AGENT TO COMPLY WITH ITS
OBLIGATIONS UNDER FATCA, TO DETERMINE THAT SUCH LENDER HAS COMPLIED WITH SUCH
LENDER’S OBLIGATIONS UNDER FATCA OR TO DETERMINE THE AMOUNT TO DEDUCT AND
WITHHOLD FROM SUCH PAYMENT.

(7)               TREATMENT OF CERTAIN REFUNDS.  IF ANY PARTY RECEIVES A REFUND
OF ANY TAXES AS TO WHICH IT HAS BEEN INDEMNIFIED PURSUANT TO THIS SECTION 2.12
(INCLUDING ADDITIONAL AMOUNTS PAID PURSUANT TO THIS SECTION 2.12), IT SHALL PAY
TO THE INDEMNIFYING PARTY AN AMOUNT EQUAL TO SUCH REFUND (BUT ONLY TO THE EXTENT
OF INDEMNITY PAYMENTS MADE UNDER THIS SECTION WITH RESPECT TO THE TAXES GIVING
RISE TO SUCH REFUND), NET OF ALL ACTUAL OUT-OF-POCKET REASONABLE EXPENSES
(INCLUDING ANY TAXES) OF SUCH INDEMNIFIED PARTY AND WITHOUT INTEREST (OTHER THAN
ANY INTEREST PAID BY THE RELEVANT GOVERNMENTAL AUTHORITY WITH RESPECT TO SUCH
REFUND).  SUCH INDEMNIFYING PARTY, UPON THE REQUEST OF SUCH INDEMNIFIED PARTY,
SHALL REPAY TO SUCH INDEMNIFIED PARTY THE AMOUNT PAID TO SUCH INDEMNIFIED PARTY
PURSUANT TO THE PREVIOUS SENTENCE (PLUS ANY PENALTIES, INTEREST OR OTHER CHARGES
IMPOSED BY THE RELEVANT GOVERNMENTAL AUTHORITY) IN THE EVENT SUCH INDEMNIFIED
PARTY IS REQUIRED TO REPAY SUCH REFUND TO SUCH GOVERNMENTAL AUTHORITY. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 2.12(7), IN NO EVENT
WILL ANY INDEMNIFIED PARTY BE REQUIRED TO PAY ANY AMOUNT TO ANY INDEMNIFYING
PARTY PURSUANT TO THIS SECTION 2.12(7) IF SUCH PAYMENT WOULD PLACE SUCH
INDEMNIFIED PARTY IN A LESS FAVORABLE POSITION (ON A NET AFTER-TAX BASIS) THAN
SUCH INDEMNIFIED PARTY WOULD HAVE BEEN IN IF THE INDEMNIFICATION PAYMENTS OR
ADDITIONAL AMOUNTS GIVING RISE TO SUCH REFUND HAD NEVER BEEN PAID.  THIS
SECTION 2.12(7) SHALL NOT BE CONSTRUED TO REQUIRE ANY INDEMNIFIED PARTY TO MAKE
AVAILABLE ITS TAX RETURNS (OR ANY OTHER INFORMATION RELATING TO ITS TAXES WHICH
IT DEEMS CONFIDENTIAL) TO THE INDEMNIFYING PARTY OR ANY OTHER PERSON.

(8)               SURVIVAL.  EACH PARTY’S OBLIGATIONS UNDER THIS SECTION 2.12
SHALL SURVIVE ANY ASSIGNMENT OF RIGHTS BY, OR THE REPLACEMENT OF, A LENDER AND
THE REPAYMENT, SATISFACTION OR DISCHARGE OF ALL OTHER OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

SECTION 2.13        PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS.

(1)               BORROWER SHALL MAKE EACH PAYMENT REQUIRED TO BE MADE BY IT
HEREUNDER (WHETHER OF PRINCIPAL, INTEREST, FEES OR OF AMOUNTS PAYABLE UNDER
SECTION 2.8, 2.9 OR 2.12, OR OTHERWISE) PRIOR TO 2:00 P.M., NEW YORK CITY TIME,
ON THE DATE WHEN DUE, IN IMMEDIATELY AVAILABLE FUNDS, WITHOUT SETOFF OR
COUNTERCLAIM. ANY AMOUNTS RECEIVED AFTER SUCH TIME ON ANY DATE MAY, IN THE
DISCRETION OF ADMINISTRATIVE AGENT, BE DEEMED TO HAVE BEEN RECEIVED ON THE NEXT
SUCCEEDING BUSINESS DAY FOR PURPOSES OF CALCULATING INTEREST THEREON. ALL SUCH
PAYMENTS SHALL BE MADE TO ADMINISTRATIVE AGENT AT ITS OFFICES AT JPMORGAN CHASE
BANK, N.A., 201 NORTH CENTRAL AVENUE, FLOOR 14, PHOENIX, ARIZONA 85004, ATTN:
LOAN SERVICING, TELECOPY NO. (602) 221-1116, EXCEPT THAT PAYMENTS PURSUANT TO
SECTIONS 2.8, 2.9, 2.12, 9.5 AND 12.5 SHALL BE MADE DIRECTLY TO THE PERSONS
ENTITLED THERETO.  ADMINISTRATIVE AGENT SHALL DISTRIBUTE ANY SUCH PAYMENTS
RECEIVED BY IT FOR THE ACCOUNT OF ANY OTHER PERSON TO THE APPROPRIATE RECIPIENT
PROMPTLY FOLLOWING RECEIPT THEREOF. IF ANY PAYMENT HEREUNDER SHALL BE DUE ON A
DAY THAT IS NOT A BUSINESS DAY, THE DATE FOR PAYMENT SHALL BE EXTENDED TO THE
NEXT SUCCEEDING BUSINESS DAY, AND, IN THE CASE OF ANY

 

                                                                    

41­

--------------------------------------------------------------------------------

 

PAYMENT ACCRUING INTEREST, INTEREST THEREON SHALL BE PAYABLE TO THE NEXT
SUCCEEDING BUSINESS DAY. ALL PAYMENTS HEREUNDER SHALL BE MADE IN DOLLARS.

(2)               IF AT ANY TIME INSUFFICIENT FUNDS ARE RECEIVED BY AND
AVAILABLE TO ADMINISTRATIVE AGENT TO PAY FULLY ALL AMOUNTS OF PRINCIPAL,
INTEREST AND FEES THEN DUE HEREUNDER, SUCH FUNDS SHALL BE APPLIED (I) FIRST,
TOWARDS PAYMENT OF INTEREST AND FEES THEN DUE HEREUNDER, RATABLY AMONG THE
PARTIES ENTITLED THERETO IN ACCORDANCE WITH THE AMOUNTS OF INTEREST AND FEES
THEN DUE TO SUCH PARTIES, AND (II) SECOND, TOWARDS PAYMENT OF PRINCIPAL THEN DUE
HEREUNDER, RATABLY AMONG THE PARTIES ENTITLED THERETO IN ACCORDANCE WITH THE
AMOUNTS OF PRINCIPAL THEN DUE TO SUCH PARTIES.

(3)               UNLESS ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM
BORROWER PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO ADMINISTRATIVE AGENT
FOR THE ACCOUNT OF THE LENDERS THAT BORROWER WILL NOT MAKE SUCH PAYMENT,
ADMINISTRATIVE AGENT MAY ASSUME THAT BORROWER HAS MADE SUCH PAYMENT ON SUCH DATE
IN ACCORDANCE HEREWITH AND MAY, IN RELIANCE UPON SUCH ASSUMPTION, DISTRIBUTE TO
THE LENDERS, THE AMOUNT DUE. IN SUCH EVENT, IF BORROWER HAS NOT IN FACT MADE
SUCH PAYMENT, THEN EACH OF THE LENDERS, SEVERALLY AGREES TO REPAY TO
ADMINISTRATIVE AGENT FORTHWITH ON DEMAND THE AMOUNT SO DISTRIBUTED TO SUCH
LENDER WITH INTEREST THEREON, FOR EACH DAY FROM AND INCLUDING THE DATE SUCH
AMOUNT IS DISTRIBUTED TO IT TO BUT EXCLUDING THE DATE OF PAYMENT TO
ADMINISTRATIVE AGENT, AT THE GREATER OF THE FEDERAL FUNDS EFFECTIVE RATE AND A
RATE REASONABLY DETERMINED BY ADMINISTRATIVE AGENT IN ACCORDANCE WITH BANKING
INDUSTRY RULES ON INTERBANK COMPENSATION.

(4)               IF ANY LENDER SHALL FAIL TO MAKE ANY PAYMENT REQUIRED TO BE
MADE BY IT PURSUANT TO SECTION 2.2(2), 2.13(3) OR 14.13, THEN ADMINISTRATIVE
AGENT MAY, IN ITS DISCRETION (NOTWITHSTANDING ANY CONTRARY PROVISION HEREOF),
APPLY ANY AMOUNTS THEREAFTER RECEIVED BY ADMINISTRATIVE AGENT FOR THE ACCOUNT OF
SUCH LENDER TO SATISFY SUCH LENDER’S OBLIGATIONS UNDER SUCH SECTIONS UNTIL ALL
SUCH UNSATISFIED OBLIGATIONS ARE FULLY PAID.

SECTION 2.14        MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

(1)               IF ANY LENDER REQUESTS COMPENSATION UNDER SECTION 2.8, OR IF
BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY LENDER OR ANY
GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO SECTION 2.12,
THEN SUCH LENDER SHALL USE REASONABLE EFFORTS TO DESIGNATE A DIFFERENT LENDING
OFFICE FOR FUNDING OR BOOKING ITS LOANS HEREUNDER OR TO ASSIGN ITS RIGHTS AND
OBLIGATIONS HEREUNDER TO ANOTHER OF ITS OFFICES, BRANCHES OR AFFILIATES, IF, IN
THE JUDGMENT OF SUCH LENDER, SUCH DESIGNATION OR ASSIGNMENT (I) WOULD ELIMINATE
OR REDUCE THE AMOUNTS PAYABLE PURSUANT TO SECTION 2.8 OR 2.12, AS THE CASE MAY
BE, IN THE FUTURE AND (II) WOULD NOT SUBJECT SUCH LENDER TO ANY UNREIMBURSED
ACTUAL COST OR EXPENSE THAT WOULD OTHERWISE BE DISADVANTAGEOUS TO SUCH LENDER
AND NOT OTHERWISE OFFSET AGAINST ANY AMOUNTS SAVED.  BORROWER HEREBY AGREES TO
PAY ALL REASONABLE ACTUAL COSTS AND EXPENSES INCURRED BY ANY LENDER IN
CONNECTION WITH ANY SUCH DESIGNATION OR ASSIGNMENT.

(2)               IF ANY LENDER REQUESTS COMPENSATION UNDER SECTION 2.8, OR IF
BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY LENDER OR ANY
GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO SECTION 2.12,
OR IF ANY LENDER DEFAULTS IN ITS OBLIGATION TO FUND LOANS HEREUNDER, THEN
BORROWER MAY, AT ITS SOLE EXPENSE AND EFFORT, UPON NOTICE TO SUCH LENDER

 

                                                                    

42

--------------------------------------------------------------------------------

 

AND ADMINISTRATIVE AGENT, REQUIRE SUCH LENDER TO ASSIGN AND DELEGATE, WITHOUT
RECOURSE (IN ACCORDANCE WITH AND SUBJECT TO THE RESTRICTIONS CONTAINED IN
SECTION 12.23), ALL ITS INTERESTS, RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT
TO AN ASSIGNEE THAT SHALL ASSUME SUCH OBLIGATIONS (WHICH ASSIGNEE MAY BE ANOTHER
LENDER, IF A LENDER ACCEPTS SUCH ASSIGNMENT); PROVIDED THAT (I) WITH RESPECT TO
ANY REPLACEMENT ASSIGNEE THAT IS NOT THEN A LENDER, ADMINISTRATIVE AGENT SHALL
HAVE CONSENTED TO SUCH LENDER, WHICH CONSENT SHALL NOT UNREASONABLY BE WITHHELD,
DELAYED OR CONDITIONED, (II) SUCH LENDER SHALL HAVE RECEIVED PAYMENT OF AN
AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL OF ITS LOANS, ACCRUED INTEREST
THEREON, ACCRUED FEES AND ALL OTHER AMOUNTS THEN PAYABLE TO IT HEREUNDER, FROM
THE ASSIGNEE (TO THE EXTENT OF SUCH OUTSTANDING PRINCIPAL AND ACCRUED INTEREST
AND FEES) OR BORROWER (IN THE CASE OF ALL OTHER AMOUNTS) AND (III) IN THE CASE
OF ANY SUCH ASSIGNMENT RESULTING FROM A CLAIM FOR COMPENSATION UNDER SECTION 2.8
OR PAYMENTS REQUIRED TO BE MADE PURSUANT TO SECTION 2.12, SUCH ASSIGNMENT WILL
RESULT IN A REDUCTION IN SUCH COMPENSATION OR PAYMENTS.  BORROWER SHALL NOT BE
RESPONSIBLE FOR ANY LOSS INCURRED BY AN ASSIGNING LENDER AS A RESULT OF SUCH
ASSIGNMENT, EXCEPT THAT BORROWER SHALL BE RESPONSIBLE FOR (X) THE REASONABLE
OUT-OF-POCKET LEGAL EXPENSES OF SUCH LENDER AND (Y) UNLESS SUCH LENDER IS BEING
REPLACED AS A RESULT OF BEING A DEFAULTING LENDER, THE FEE PAYABLE TO
ADMINISTRATIVE AGENT PURSUANT TO SECTION 12.23(2)(D) AND ANY AMOUNT PAYABLE TO
SUCH LENDER UNDER SECTION 2.9 (BREAK FUNDING PAYMENTS).  A LENDER SHALL NOT BE
REQUIRED TO MAKE ANY SUCH ASSIGNMENT AND DELEGATION IF, PRIOR THERETO, AS A
RESULT OF A WAIVER BY SUCH LENDER OR OTHERWISE, THE CIRCUMSTANCES ENTITLING
BORROWER TO REQUIRE SUCH ASSIGNMENT AND DELEGATION CEASE TO APPLY.

SECTION 2.15        EXTENSION OPTIONS.

Borrower shall have the option to extend the Maturity Date to the First Extended
Maturity Date and Second Extended Maturity Date, respectively, upon satisfaction
of the following terms and conditions with respect to each such extension:

(1)               NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AT
THE TIME THE APPLICABLE EXTENSION OPTION IS EXERCISED AND ON THE DATE THAT THE
APPLICABLE EXTENSION PERIOD IS COMMENCED;

(2)               BORROWER SHALL NOTIFY ADMINISTRATIVE AGENT IN WRITING OF ITS
ELECTION TO EXTEND THE MATURITY DATE AS AFORESAID NO LATER THAN SIXTY (60) DAYS
FOR THE FIRST EXTENSION OPTION AND THIRTY (30) DAYS FOR THE SECOND EXTENSION
OPTION, BUT NO SOONER IN EACH CASE THAN ONE HUNDRED TWENTY (120) DAYS, PRIOR TO
THE THEN APPLICABLE MATURITY DATE (THE “EXTENSION NOTICE”).  EACH EXTENSION
NOTICE SHALL BE REVOCABLE BY BORROWER, PROVIDED THAT BORROWER SHALL PAY WITHIN
TEN (10) BUSINESS DAYS AFTER DEMAND ALL OF ADMINISTRATIVE AGENT’S AND THE
LENDERS’ REASONABLE OUT‑OF‑POCKET COSTS AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, AMOUNTS PAYABLE UNDER SECTION 2.9 (BREAK FUNDING PAYMENTS)) INCURRED
IN CONNECTION WITH BORROWER’S EXERCISE OF ITS ELECTION TO EXTEND THE MATURITY
DATE AND ITS SUBSEQUENT REVOCATION OF THE EXTENSION NOTICE;

(3)               BORROWER SHALL PAY TO ADMINISTRATIVE AGENT FOR THE PRO RATA
ACCOUNT OF THE LENDERS THE EXTENSION FEE ON OR PRIOR TO THE CURRENT MATURITY
DATE;

(4)               BORROWER SHALL HAVE DELIVERED TO ADMINISTRATIVE AGENT ON OR
PRIOR TO THE COMMENCEMENT OF THE APPLICABLE EXTENSION PERIOD, A CERTIFICATE
EXECUTED BY A

 

                                                                    

43­

--------------------------------------------------------------------------------

 

RESPONSIBLE PERSON OF BORROWER IN FORM REASONABLY ACCEPTABLE TO ADMINISTRATIVE
AGENT CERTIFYING THAT EACH OF THE REPRESENTATIONS AND WARRANTIES OF BORROWER
CONTAINED IN THE LOAN DOCUMENTS ARE TRUE, COMPLETE AND CORRECT IN ALL MATERIAL
RESPECTS AS OF THE DATE OF SUCH EXTENSION EXCEPT TO THE EXTENT SUCH
REPRESENTATIONS AND WARRANTIES ARE MATTERS WHICH BY THEIR NATURE CAN NO LONGER
BE TRUE AND CORRECT AS A RESULT OF THE PASSAGE OF TIME OR CHANGES IN FACT OR ANY
OTHER MATTER EITHER DISCLOSED TO OR APPROVED IN WRITING BY ADMINISTRATIVE AGENT
OR PERMITTED TO BE TAKEN IN ACCORDANCE WITH THE TERMS OF THE LOAN DOCUMENTS;

(5)               GUARANTOR SHALL HAVE DELIVERED TO ADMINISTRATIVE AGENT ON OR
PRIOR TO THE COMMENCEMENT OF THE APPLICABLE EXTENSION PERIOD, A CERTIFICATE
EXECUTED BY A RESPONSIBLE PERSON OF GUARANTOR IN FORM REASONABLY ACCEPTABLE TO
ADMINISTRATIVE AGENT CONSENTING TO THE REQUESTED EXTENSION, REAFFIRMING EACH OF
THE LOAN DOCUMENTS EXECUTED BY GUARANTOR AND CERTIFYING THAT EACH OF THE
REPRESENTATIONS AND WARRANTIES OF GUARANTOR CONTAINED IN THE LOAN DOCUMENTS ARE
TRUE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE OF SUCH
CERTIFICATE EXCEPT TO THE EXTENT SUCH REPRESENTATIONS AND WARRANTIES ARE MATTERS
WHICH BY THEIR NATURE CAN NO LONGER BE TRUE AND CORRECT AS A RESULT OF THE
PASSAGE OF TIME OR CHANGES IN FACT OR ANY OTHER MATTER EITHER DISCLOSED TO OR
APPROVED IN WRITING BY ADMINISTRATIVE AGENT OR PERMITTED TO BE TAKEN IN
ACCORDANCE WITH THE TERMS OF THE LOAN DOCUMENTS;

(6)               ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A COMPLETED STANDARD
FLOOD HAZARD DETERMINATION FORM AND IF THE PROJECT IS LOCATED IN A FEMA
DESIGNATED FLOOD HAZARD AREA, BORROWER’S SIGNED RECEIPT OF REQUIRED NOTICES AND
EVIDENCE THAT THE FLOOD INSURANCE REQUIRED IN THE LOAN DOCUMENTS IS IN PLACE FOR
THE IMPROVEMENTS AND ALL CONTENTS, IF APPLICABLE, IN FORM, SUBSTANCE AND AMOUNT
REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT;

(7)               THE DEBT SERVICE COVERAGE RATIO AS OF THE DSCR CALCULATION
DATE IMMEDIATELY PRECEDING THE INITIAL MATURITY DATE SHALL BE EQUAL TO OR
GREATER THAN 1.20:1;

(8)               THE DEBT SERVICE COVERAGE RATIO AS OF THE DSCR CALCULATION
DATE IMMEDIATELY PRECEDING THE FIRST EXTENDED MATURITY DATE, SHALL BE EQUAL TO
OR GREATER THAN 1.30:1;

(9)               AS A CONDITION TO THE EXERCISE BY BORROWER OF ITS OPTION TO
EXTEND THE MATURITY DATE TO THE FIRST EXTENDED MATURITY DATE  AND AS A CONDITION
TO THE EXERCISE BY BORROWER OF ITS OPTION TO EXTEND THE MATURITY DATE TO THE
SECOND EXTENDED MATURITY DATE, THE OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS AS
OF THE INITIAL MATURITY DATE SHALL NOT EXCEED SIXTY FIVE PERCENT (65%) OF THE
APPRAISED VALUE BASED ON A NEW APPRAISAL OBTAINED BY ADMINISTRATIVE AGENT NOT
EARLIER THAN SIXTY (60) DAYS PRIOR TO THE INITIAL MATURITY DATE.  ADMINISTRATIVE
AGENT SHALL ENGAGE AN APPRAISER TO PREPARE SUCH NEW APPRAISAL PROMPTLY AFTER
ADMINISTRATIVE AGENT’S RECEIPT OF THE EXTENSION NOTICE; AND

(10)           BORROWER SHALL HAVE PAID ALL REASONABLE OUT-OF-POCKET COSTS AND
EXPENSES OF ADMINISTRATIVE AGENT INCURRED IN CONNECTION WITH THE EXTENSION OF
THE LOANS (INCLUDING BUT NOT LIMITED TO THE REASONABLE FEES AND EXPENSES OF
COUNSEL) BILLED AS OF THE

 

                                                                    

44­

--------------------------------------------------------------------------------

 

CURRENT MATURITY DATE (BUT NOTHING HEREIN IS INTENDED TO RELIEVE BORROWER’S
OBLIGATION TO PAY ALL REASONABLE OUT-OF-POCKET COSTS AND EXPENSES BILLED AFTER
THE CURRENT MATURITY DATE).

Notwithstanding the foregoing, in the event that Borrower is unable to satisfy
the extension conditions set forth in clauses (7), (8) and/or (9) above,
Borrower shall have the option of satisfying same by either (at Borrower’s
option) (x) making a payment, on or prior to the commencement of the applicable
extension period, to reduce the outstanding principal amount of the Loans in
such amount as shall cause such conditions to be satisfied (which prepayment
shall be governed by the terms of Section 2.5); or (y) posting on or prior to
the commencement of the applicable extension period, cash or a Qualified Letter
of Credit in an amount equal to the DSCR Shortfall (Extension Test) (in order to
satisfy the extension condition set forth in clauses (7) or (8) and/or the
Appraised Value Shortfall (in order to satisfy the extension condition set forth
in clause (9)).  All collateral deposited with Administrative Agent pursuant to
this Section shall be deemed Additional Collateral, and shall be promptly
returned to Borrower after (i) the Indebtedness has been paid in full or (ii)
with respect to collateral deposited to satisfy the extension condition set
forth in clause (7), if to the extent such Additional Collateral is not required
in order for Borrower to continue to meet the conditions to exercising its
option to extend the Maturity Date to the Second Extended Maturity Date
(including, without limitation, the requirement that the Debt Service Coverage
Ratio shall be equal to or greater than 1.30:1).  All calculations to be made
under this Section shall be made by Administrative Agent reasonably and in good
faith and shall be conclusive and binding on Borrower so long as the same are
made in accordance with the terms of this Agreement.

SECTION 2.16        USE OF PROCEEDS.

Borrower shall use the proceeds of the Loans (i) to refinance the existing
indebtedness of Borrower secured by the Project, (ii) to pay costs and expenses
incurred in connection with the closing of the Loans and (iii) for working
capital and distributions to Borrower and its parent entities.

SECTION 2.17        ADMINISTRATIVE AGENT FEE.

Borrower shall pay to Administrative Agent, for its own account, on the Closing
Date and thereafter during the term of the Loans an annual administrative agent
fee in accordance with the terms of the Fee Letters.

ARTICLE 3

INSURANCE AND CONDEMNATION

SECTION 3.1            INSURANCE.

(1)               BORROWER SHALL OBTAIN AND MAINTAIN, OR CAUSE TO BE MAINTAINED,
POLICIES FOR BORROWER AND THE PROJECT PROVIDING AT LEAST THE FOLLOWING
COVERAGES:

 

 

                                                                    

45

--------------------------------------------------------------------------------

 

(A)                COMMERCIAL GENERAL LIABILITY INSURANCE WITH LIMITS OF NOT
LESS THAN $1,000,000 PER OCCURRENCE FOR BODILY INJURY INCLUDING DEATH, PERSONAL
INJURY AND PROPERTY DAMAGE AND $2,000,000 IN THE AGGREGATE FOR THE POLICY PERIOD
(WHICH INSURANCE SHALL PROVIDE THAT DEFENSE COSTS ARE IN ADDITION TO POLICY
LIMITS), (WITH DEDUCTIBLES REASONABLY ACCEPTABLE TO ADMINISTRATIVE AGENT), AND
EXTENDED TO COVER:  (A) CONTRACTUAL LIABILITY AS PROVIDED IN THE STANDARD
INSURANCE SERVICE OFFICE (ISO) POLICY FORM OR ITS EQUIVALENT WITH NO EXCLUSIONS
OR LIMITATIONS TO CONTRACTUAL LIABILITY, (B) PRODUCTS & COMPLETED OPERATIONS
COVERAGE, SUCH COVERAGE TO APPLY FOR TWO YEARS FOLLOWING COMPLETION OF
CONSTRUCTION, (C) WAIVER OF SUBROGATION AGAINST ALL PARTIES NAMED ADDITIONAL
INSURED, (D) SEVERABILITY OF INTEREST PROVISION, AND (E) PERSONAL INJURY &
ADVERTISERS LIABILITY;

(B)               AUTOMOBILE LIABILITY INCLUDING COVERAGE ON OWNED, HIRED, AND
NON-OWNED AUTOMOBILES AND OTHER VEHICLES, IF USED IN CONNECTION WITH THE
PERFORMANCE OF THE WORK, WITH BODILY INJURY AND PROPERTY DAMAGE LIMITS OF NOT
LESS THAN $1,000,000 PER ACCIDENT COMBINED SINGLE LIMIT, WITH A WAIVER OF
SUBROGATION AGAINST ALL PARTIES NAMED AS ADDITIONAL INSURED;

(C)                UMBRELLA/EXCESS LIABILITY IN EXCESS OF COMMERCIAL GENERAL
LIABILITY, AUTOMOBILE LIABILITY AND EMPLOYERS’ LIABILITY COVERAGES WHICH IS AT
LEAST AS BROAD AS THESE UNDERLYING POLICIES WITH A LIMIT OF LIABILITY OF
$50,000,000; PROVIDED, HOWEVER, THAT IF AGGREGATE LIMITS ARE SHARED WITH OTHER
LOCATIONS, THE AMOUNT OF SUCH INSURANCE TO BE PROVIDED SHALL BE NOT LESS THAN
$100,000,000, WITH NOT LESS THAN $25,000,000 OF SUCH AMOUNT REASONABLY ALLOCABLE
TO THE PROJECT;

(D)               ALL-RISK PROPERTY (SPECIAL CAUSE OF LOSS) INSURANCE,
INCLUDING, WITHOUT LIMITATION, COVERAGE FOR LOSS OR DAMAGE TO THE PROPERTY AND
IMPROVEMENTS BY FIRE AND OTHER PERILS INCLUDING WINDSTORM, EARTHQUAKE/EARTH
MOVEMENT AND MALICIOUS MISCHIEF, BUILDING ORDINANCE EXTENSION ENDORSEMENT
(INCLUDING COST OF DEMOLITION, INCREASED COSTS OF CONSTRUCTION AND THE VALUE OF
THE UNDAMAGED PORTION OF THE BUILDING AND SOFT COSTS COVERAGE), AND BOILER AND
MACHINERY COVERAGE (IF SEPARATE POLICY, THAT POLICY MUST INCLUDE LOSS OF RENTS
OR BUSINESS INTERRUPTION COVERAGE), AS SPECIFIED BY ADMINISTRATIVE AGENT.  THE
POLICY SHALL BE IN AN AMOUNT NOT LESS THAN THE FULL INSURABLE VALUE ON A
REPLACEMENT COST BASIS OF THE INSURED IMPROVEMENTS AND PERSONAL PROPERTY RELATED
THERETO (WITHOUT DEDUCTION FOR DEPRECIATION).  DURING ANY CONSTRUCTION PERIOD,
SUCH POLICY SHALL BE WRITTEN IN THE SO-CALLED “BUILDER'S RISK COMPLETED VALUE
NON-REPORTING FORM” WITH NO COINSURANCE REQUIREMENT AND SHALL CONTAIN A
PROVISION GRANTING THE INSURED PERMISSION TO OCCUPY PRIOR TO COMPLETION.  SUCH
POLICY SHALL NOT CONTAIN AN EXCLUSION FOR TERRORIST LOSSES.  HOWEVER, IF SUCH AN
EXCLUSION EXISTS IN THE ALL-RISK POLICY, A SEPARATE TERRORISM POLICY COVERING
CERTIFIED ACTS OF TERRORISM MUST BE EVIDENCED TO ADMINISTRATIVE AGENT IN AN
AMOUNT EQUAL TO THE FULL REPLACEMENT COST OF THE IMPROVEMENTS, OR THE
OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS, WHICHEVER IS LESS.  THIS POLICY MUST
ALSO LIST ADMINISTRATIVE AGENT AS MORTGAGEE AND LOSS PAYEE.  NOTWITHSTANDING THE
FOREGOING, BORROWER SHALL NOT BE REQUIRED TO PROVIDE INSURANCE COVERING
CERTIFIED ACTS OF TERRORISM IN THE LIMITS PROVIDED ABOVE IF THE PREMIUM FOR SUCH
INSURANCE SHALL EXCEED THE TERRORISM PREMIUM LIMIT, BUT SHALL BE REQUIRED TO
PROVIDE SUCH INSURANCE TO THE EXTENT THAT THE SAME IS AVAILABLE AT THE TERRORISM
PREMIUM LIMIT.

 

                                                                    

46

--------------------------------------------------------------------------------

 

AS USED HEREIN, THE TERM “TERRORISM PREMIUM LIMIT” SHALL MEAN A PREMIUM AT A
RATE OF $0.10 PER $100 APPLIED TO THE LESSER OF (I) THE OUTSTANDING PRINCIPAL
BALANCE OF THE LOANS AND (II) THE FULL REPLACEMENT COST OF THE IMPROVEMENTS AND
PERSONAL PROPERTY RELATED THERETO AND THE REQUIRED BUSINESS INCOME VALUE. 
BORROWER MAY USE ITS CAPTIVE INSURANCE COMPANY (DIRECTLY OR INDIRECTLY OWNED BY
GUARANTOR) TO INSURE LOSSES, DAMAGES, COSTS, EXPENSES, CLAIMS AND LIABILITIES
RELATED TO ACTS OF TERRORISM, BUT ONLY IF, AND FOR SO LONG AS, (A) SUCH CAPTIVE
INSURANCE COMPANY IS LICENSED AS A CAPTIVE INSURANCE COMPANY, (B) COVERAGE FOR
ANY LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM MAY BE SUBSIDIZED BY THE
UNITED STATES GOVERNMENT ESTABLISHED BY THE TERRORISM RISK INSURANCE PROGRAM
REAUTHORIZATION ACT (“TRIPRA”) OF 2015 AND AS AMENDED, (C) SUCH CAPTIVE
INSURANCE COMPANY SHALL PURCHASE REINSURANCE FOR THE REMAINING BALANCE OF
COVERED TERRORISM LOSSES WITH INSURERS MEETING THE RATING REQUIREMENTS PROVIDED
IN SECTION 3.1(2), (D) SUCH CAPTIVE INSURANCE COMPANY SHALL BE RESPONSIBLE FOR
ANY DEDUCTIBLE BELOW THE TRIPRA THRESHOLD, (E) ADMINISTRATIVE AGENT HAS BEEN
PROVIDED WITH THE FINANCIAL STATEMENTS OF SUCH CAPTIVE INSURANCE COMPANY, WHICH
FINANCIAL STATEMENTS MUST DEMONSTRATE THAT SUCH CAPTIVE INSURANCE COMPANY SHALL
HAVE THE FINANCIAL WHEREWITHAL TO MEET ITS OBLIGATIONS UNDER SUCH INSURANCE
POLICY, AS DETERMINED BY THE LICENSING AUTHORITY OF THE STATE WHERE IT IS
DOMICILED, AND (F) SUCH CAPTIVE INSURANCE COMPANY MUST MEET ANY APPLICABLE
REQUIREMENTS UNDER TRIPRA;

(E)                WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY INSURANCE IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE IN WHICH THE WORK IS TO BE
PERFORMED OR OF THE STATE IN WHICH BORROWER IS OBLIGATED TO PAY COMPENSATION TO
EMPLOYEES ENGAGED IN THE PERFORMANCE OF THE WORK.  THE POLICY LIMIT UNDER THE
EMPLOYER'S LIABILITY INSURANCE SECTION SHALL NOT BE LESS THAN $1,000,000.00 FOR
ANY ONE ACCIDENT, DISEASE EACH EMPLOYEE AND DISEASE POLICY LIMIT;

(F)                IF THE PROJECT, OR ANY PART THEREOF, LIES WITHIN A “SPECIAL
FLOOD HAZARD AREA” AS DESIGNATED ON MAPS PREPARED BY THE DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT, A NATIONAL FLOOD INSURANCE ASSOCIATION, STANDARD FLOOD
INSURANCE POLICY, PLUS INSURANCE FROM A PRIVATE INSURANCE CARRIER IF NECESSARY
AND COMMERCIALLY AVAILABLE, FOR THE DURATION OF THE LOANS IN THE AMOUNT OF THE
FULL INSURABLE VALUE OF THE IMPROVEMENTS, OR THE AMOUNT OF THE LOANS, WHICHEVER
IS LESS;

(G)               RENT LOSS OR BUSINESS INTERRUPTION INSURANCE AGAINST LOSS OF
INCOME (INCLUDING, BUT NOT LIMITED TO, RENT, COST REIMBURSEMENTS AND ALL OTHER
AMOUNTS PAYABLE BY TENANTS UNDER LEASES OR OTHERWISE DERIVED BY BORROWER FROM
THE OPERATION OF THE PROJECT) ARISING OUT OF DAMAGE TO OR DESTRUCTION OF THE
IMPROVEMENTS BY FIRE OR OTHER PERIL INSURED AGAINST UNDER EACH POLICY.  THE
AMOUNT OF THE POLICY SHALL BE IN THE AMOUNT EQUAL TO ONE YEAR’S PROJECTED
RENTALS OR GROSS REVENUE; AND

(H)               SUCH OTHER TYPES AND AMOUNTS OF INSURANCE WITH RESPECT TO THE
PROJECT AND THE OPERATION THEREOF WHICH ARE COMMONLY MAINTAINED AND COMMERCIALLY
AVAILABLE IN THE CASE OF OTHER PROPERTY AND BUILDINGS SIMILAR TO THE PROJECT IN
NATURE, USE, LOCATION, HEIGHT, OWNERSHIP, AND TYPE OF CONSTRUCTION, AS MAY FROM
TIME TO TIME BE REASONABLY REQUIRED BY ADMINISTRATIVE AGENT UPON NOT LESS THAN
TEN (10) BUSINESS DAYS’

                                                                    

47

­

--------------------------------------------------------------------------------

 

ADVANCE NOTICE TO BORROWER, WHICH INSURANCE MAY INCLUDE, WITHOUT LIMITATION,
ERRORS AND OMISSIONS INSURANCE WITH RESPECT TO THE CONTRACTORS, ARCHITECTS AND
ENGINEERS.

(2)               EACH INSURANCE POLICY REQUIRED HEREUNDER (EACH A “POLICY” AND
COLLECTIVELY, THE “POLICIES”) SHALL BE ISSUED BY AN INSURANCE COMPANY APPROVED
BY ADMINISTRATIVE AGENT, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD. 
ADMINISTRATIVE AGENT ACKNOWLEDGES THAT AN INSURANCE COMPANY ELIGIBLE TO DO
BUSINESS IN THE STATE WHERE THE PROJECT IS LOCATED HAVING A RATING OF “BBB” OR
BETTER BY S&P OR “A-/IX” OR BETTER BY A.M. BEST CO., IN BEST’S RATING GUIDE
SHALL BE ACCEPTABLE TO ADMINISTRATIVE AGENT, PROVIDED, HOWEVER, THAT IF ANY
INSURANCE REQUIRED HEREUNDER IS PROVIDED BY A SYNDICATE, THEN ONLY 60% OF THE
MEMBERS OF THE SYNDICATE (OR 75% IF FIVE (5) OR FEWER INSURANCE COMPANIES
COMPRISE THE SYNDICATE) MUST SATISFY THE FOREGOING RATING REQUIREMENT. 
NOTWITHSTANDING THE FOREGOING, BORROWER SHALL BE PERMITTED TO MAINTAIN THE
REQUIRED INSURANCE POLICIES WITH INSURERS THAT DO NOT MEET THE FOREGOING RATING
REQUIREMENT (AN “OTHERWISE RATED INSURER”), PROVIDED THAT BORROWER OBTAINS A
SO-CALLED “CUT-THROUGH” ENDORSEMENT (I.E., AN ENDORSEMENT WHICH PERMITS RECOVERY
AGAINST THE PROVIDER OF SUCH ENDORSEMENT) REASONABLY ACCEPTABLE TO
ADMINISTRATIVE AGENT WITH RESPECT TO AN OTHERWISE RATED INSURER FROM AN
INSURANCE COMPANY WHICH MEETS THE RATINGS REQUIREMENT SET FORTH ABOVE.

(3)               ALL POLICIES SHALL (I) NAME “JPMORGAN CHASE BANK, N.A., AS
ADMINISTRATIVE AGENT, ANY AND ALL SUBSIDIARIES AND THEIR SUCCESSORS AND/OR
ASSIGNS, AS THEIR INTERESTS MAY APPEAR” AS ADDITIONAL INSUREDS ON ALL LIABILITY
INSURANCE AND AS MORTGAGEE AND LOSS PAYEE ON ALL ALL-RISK PROPERTY, FLOOD
INSURANCE AND RENT LOSS OR BUSINESS INTERRUPTION INSURANCE, (II) BE ENDORSED TO
SHOW THAT BORROWER’S INSURANCE SHALL BE PRIMARY AND ALL INSURANCE CARRIED BY
ADMINISTRATIVE AGENT OR ANY LENDER IS STRICTLY EXCESS AND SECONDARY AND SHALL
NOT CONTRIBUTE WITH BORROWER’S INSURANCE, (III) PROVIDE THAT ADMINISTRATIVE
AGENT IS TO RECEIVE THIRTY (30) DAYS (EXCEPT TEN (10) DAYS FOR NON-PAYMENT OF
PREMIUM) WRITTEN NOTICE PRIOR TO CANCELLATION, (IV) BE EVIDENCED BY A
CERTIFICATE OF INSURANCE TO BE PROVIDED TO ADMINISTRATIVE AGENT ALONG WITH A
COPY OF THE POLICY FOR THE ALL–RISK PROPERTY COVERAGE WITHIN FIVE (5) BUSINESS
DAYS AFTER RECEIPT AND APPROVAL BY BORROWER, (V) INCLUDE EITHER POLICY OR BINDER
NUMBERS ON THE CURRENT EDITION OF THE APPROPRIATE ACORD FORM OR ITS EQUIVALENT,
AND (VI) BE IN FORM AND AMOUNTS AS REQUIRED HEREIN OR OTHERWISE REASONABLY
ACCEPTABLE TO ADMINISTRATIVE AGENT.  NOT LESS THAN FIVE (5) DAYS PRIOR TO THE
EXPIRATION DATES OF THE POLICIES THERETOFORE FURNISHED TO ADMINISTRATIVE AGENT 
PURSUANT TO SECTION 3.1(1), BORROWER SHALL DELIVER CERTIFICATES OF INSURANCE OR
BINDERS FOR RENEWAL POLICIES ACCOMPANIED BY EVIDENCE SATISFACTORY TO
ADMINISTRATIVE AGENT OF PAYMENT OF THE PREMIUMS DUE AS REQUIRED THEREUNDER.

(4)               ALL POLICIES PROVIDED FOR IN SECTION 3.1(1) SHALL CONTAIN
CLAUSES OR ENDORSEMENTS TO THE EFFECT THAT:

(I)                 WITH RESPECT TO PROPERTY, FLOOD, BOILER AND MACHINERY,
BUILDER’S RISK AND BUSINESS INTERRUPTION POLICIES, NO ACT OR NEGLIGENCE OF
BORROWER, OR ANYONE ACTING FOR BORROWER, OR FAILURE TO COMPLY WITH THE
PROVISIONS OF ANY POLICY WHICH MIGHT OTHERWISE RESULT IN A FORFEITURE OF THE
INSURANCE OR ANY PART THEREOF, SHALL IN ANY WAY AFFECT THE VALIDITY OR
ENFORCEABILITY OF THE INSURANCE INSOFAR AS ADMINISTRATIVE AGENT IS CONCERNED;

(II)               EACH POLICY SHALL NOT BE CANCELLED WITHOUT AT LEAST 30 DAYS’
(EXCEPT 10 DAYS’ FOR NON-PAYMENT OF PREMIUM) WRITTEN NOTICE TO ADMINISTRATIVE
AGENT; AND

 

                                                                    

48­

--------------------------------------------------------------------------------

 

(III)             ADMINISTRATIVE AGENT SHALL NOT BE LIABLE FOR ANY INSURANCE
PREMIUMS THEREON OR SUBJECT TO ANY ASSESSMENTS THEREUNDER.

(5)               ANY INSURANCE REQUIRED TO BE MAINTAINED PURSUANT TO THIS
SECTION MAY BE EVIDENCED BY BLANKET INSURANCE POLICIES COVERING THE PROJECT AND
OTHER PROPERTIES OR ASSETS OF BORROWER OR ITS AFFILIATES, PROVIDED THAT ANY SUCH
POLICY SHALL IN ALL OTHER RESPECTS MATERIALLY COMPLY WITH THE REQUIREMENTS OF
THIS SECTION.

(6)               IF AT ANY TIME ADMINISTRATIVE AGENT IS NOT IN RECEIPT OF
WRITTEN EVIDENCE THAT ALL INSURANCE REQUIRED HEREUNDER IS IN FULL FORCE AND
EFFECT, ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT, FOLLOWING AT LEAST FIVE (5)
DAYS WRITTEN NOTICE TO BORROWER (OR UPON WRITTEN NOTICE TO BORROWER, IF ANY
INSURANCE REQUIRED TO MAINTAINED HEREUNDER SHALL NOT BE IN FULL FORCE AND EFFECT
OR SHALL BE DUE TO EXPIRE WITHIN ONE (1) BUSINESS DAY), TO TAKE SUCH ACTION AS
ADMINISTRATIVE AGENT DEEMS NECESSARY TO PROTECT ITS AND THE LENDERS’ INTEREST IN
THE PROJECT, INCLUDING, WITHOUT LIMITATION, THE OBTAINING OF SUCH INSURANCE
COVERAGE AS ADMINISTRATIVE AGENT IN ITS REASONABLE DISCRETION DEEMS APPROPRIATE
(BUT NOT MORE THAN THE INSURANCE REQUIRED TO BE MAINTAINED BY BORROWER PURSUANT
TO THIS AGREEMENT), PROVIDED THAT ADMINISTRATIVE AGENT SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO PROVIDE IN SUCH FORCED PLACED INSURANCE THAT THE
APPLICABLE INSURANCE POLICIES WILL BE TERMINABLE AND THE PREMIUMS THEREUNDER
REFUNDABLE FOR ANY PERIOD OF TIME IN WHICH SUCH POLICIES ARE NOT IN EFFECT, AND
ALL ACTUAL EXPENSES INCURRED BY ADMINISTRATIVE AGENT IN CONNECTION WITH SUCH
ACTION OR IN OBTAINING SUCH INSURANCE AND KEEPING IT IN EFFECT SHALL BE PAID BY
BORROWER TO ADMINISTRATIVE AGENT WITHIN TEN (10) BUSINESS DAYS AFTER DEMAND
THEREFOR, AND UNTIL PAID SHALL BE SECURED BY THE MORTGAGE AND SHALL BEAR
INTEREST AT THE DEFAULT RATE.

(7)               IN THE EVENT OF A FORECLOSURE OF THE MORTGAGE, OR OTHER
TRANSFER OF TITLE TO THE PROJECT IN EXTINGUISHMENT IN WHOLE OR IN PART OF THE
LOANS, ALL RIGHT, TITLE AND INTEREST OF BORROWER IN AND TO THE POLICIES THEN IN
FORCE (OTHER THAN ANY SUCH POLICIES EVIDENCED BY BLANKET INSURANCE POLICIES
COVERING THE PROJECT AND OTHER PROPERTIES OR ASSETS OF BORROWER OR ITS
AFFILIATES) AND ALL PROCEEDS PAYABLE THEREUNDER SHALL THEREUPON VEST IN THE
PURCHASER AT SUCH FORECLOSURE OR ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE
LENDERS OR OTHER TRANSFEREE IN THE EVENT OF SUCH OTHER TRANSFER OF TITLE.

(8)               DURING ANY CASH MANAGEMENT PERIOD, SUBJECT TO SECTION 3.1(9),
BORROWER SHALL BE REQUIRED TO DEPOSIT WITH ADMINISTRATIVE AGENT ON EACH PAYMENT
DATE ONE-TWELFTH OF THE AMOUNT SUFFICIENT TO DISCHARGE THE OBLIGATIONS UNDER
THIS SECTION 3.1 (CONSIDERED ON AN ANNUAL BASIS) WHEN THEY BECOME DUE (THE
“MONTHLY INSURANCE PREMIUM DEPOSIT”).  THE DETERMINATION OF THE AMOUNT SO
PAYABLE AND OF THE FRACTIONAL PART THEREOF TO BE DEPOSITED WITH ADMINISTRATIVE
AGENT WITH EACH INSTALLMENT, SO THAT THE AGGREGATE OF SUCH DEPOSIT SHALL BE
SUFFICIENT FOR THIS PURPOSE, SHALL BE MADE BY ADMINISTRATIVE AGENT IN ITS
REASONABLE DISCRETION. SUCH AMOUNTS SHALL BE HELD BY ADMINISTRATIVE AGENT AND
APPLIED TO THE PAYMENT OF THE OBLIGATIONS IN RESPECT TO WHICH SUCH AMOUNTS WERE
DEPOSITED ON OR BEFORE THE RESPECTIVE DATES ON WHICH THE SAME OR ANY OF THEM
WOULD BECOME DELINQUENT OR, DURING THE EXISTENCE OF AN EVENT OF DEFAULT, AT THE
OPTION OF ADMINISTRATIVE AGENT AND SUBJECT TO APPLICABLE LAW, TO THE PAYMENT OF
THE INDEBTEDNESS IN THE ORDER AND AMOUNTS PROVIDED FOR IN SECTION 11.4.  IF ONE
MONTH PRIOR TO THE DUE DATE OF ANY OF THE AFOREMENTIONED OBLIGATIONS THE AMOUNTS
THEN ON DEPOSIT THEREFOR SHALL BE INSUFFICIENT FOR THE PAYMENT OF SUCH
OBLIGATIONS IN FULL, BORROWER SHALL WITHIN TEN (10) BUSINESS

 

                                                                    

49

--------------------------------------------------------------------------------

 

DAYS AFTER DEMAND THEREFOR DEPOSIT THE AMOUNT OF THE DEFICIENCY WITH
ADMINISTRATIVE AGENT.  NOTHING HEREIN CONTAINED SHALL BE DEEMED TO AFFECT ANY
RIGHT OR REMEDY OF ADMINISTRATIVE AGENT AND THE LENDERS UNDER THIS AGREEMENT OR
ANY STATUTE OR RULE OF LAW TO PAY ANY SUCH AMOUNT AND TO ADD TO THE INDEBTEDNESS
THE AMOUNT SO PAID TOGETHER WITH INTEREST AT THE DEFAULT RATE.

(9)               NOTWITHSTANDING THE PROVISIONS OF SECTION 3.1(8), BORROWER
SHALL NOT BE REQUIRED TO DEPOSIT FUNDS WITH ADMINISTRATIVE AGENT PURSUANT TO
SECTION 3.1(8) (X) IF AND TO THE EXTENT THAT BORROWER IS MAINTAINING THE
INSURANCE REQUIRED TO BE MAINTAINED PURSUANT TO THIS SECTION 3.1 BY BLANKET
INSURANCE POLICIES SATISFYING THE REQUIREMENTS OF SECTION 3.1(5) OR (Y) PROVIDED
THAT NO EVENT OF DEFAULT THEN EXISTS, IF BORROWER SHALL DEPOSIT WITH
ADMINISTRATIVE AGENT, WITHIN TEN (10) BUSINESS DAYS AFTER A CASH MANAGEMENT
COMMENCEMENT DATE, EITHER (I) CASH OR A QUALIFIED LETTER OF CREDIT IN AN AMOUNT
EQUAL TO TWELVE TIMES THE MONTHLY INSURANCE PREMIUM DEPOSIT, AS REASONABLY
DETERMINED BY ADMINISTRATIVE AGENT, OR (II) A QUALIFIED GUARANTY PURSUANT TO
WHICH THE GUARANTOR THEREUNDER SHALL AGREE TO DEPOSIT INTO THE INSURANCE PREMIUM
SUBACCOUNT ON OR BEFORE THE DATE WHICH IS TEN (10) BUSINESS DAYS BEFORE THE DUE
DATE FOR THE PAYMENT OF ANY INSURANCE PREMIUM THE AMOUNT THAT WOULD HAVE BEEN
HELD ON DEPOSIT IN THE INSURANCE PREMIUM SUBACCOUNT AT SUCH TIME BUT FOR THE
PROVISIONS OF THIS SECTION 3.1(9).  ANY CASH OR QUALIFIED LETTER OF CREDIT
DEPOSITED WITH ADMINISTRATIVE AGENT PURSUANT TO THIS SECTION SHALL CONSTITUTE
ADDITIONAL COLLATERAL FOR THE INDEBTEDNESS, AND ADMINISTRATIVE AGENT SHALL HAVE
THE RIGHT AT ANY TIME AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT TO APPLY THE SAME (X) TO DISCHARGE THE OBLIGATIONS UNDER THIS
SECTION 3.1 WHEN THEY BECOME DUE AND/OR (Y) TO THE PAYMENT OF THE INDEBTEDNESS
IN THE ORDER AND AMOUNTS PROVIDED FOR IN SECTION 11.4.  ANY COLLATERAL HELD BY
ADMINISTRATIVE AGENT PURSUANT TO THIS SECTION AT THE TIME OF PAYMENT IN FULL OF
THE INDEBTEDNESS SHALL BE PROMPTLY RETURNED TO BORROWER AFTER THE INDEBTEDNESS
HAS BEEN PAID IN FULL.

SECTION 3.2            USE AND APPLICATION OF NET PROCEEDS.

The following provisions shall apply in connection with the Restoration of the
Project:

(1)               IF THE NET PROCEEDS SHALL BE LESS THAN THE THRESHOLD AMOUNT
AND THE COSTS OF COMPLETING THE RESTORATION SHALL BE LESS THAN THRESHOLD AMOUNT,
THE NET PROCEEDS WILL BE DISBURSED BY ADMINISTRATIVE AGENT TO BORROWER UPON
RECEIPT, PROVIDED THAT (A) NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING
AND (B) BORROWER DELIVERS TO ADMINISTRATIVE AGENT A WRITTEN UNDERTAKING TO
EXPEDITIOUSLY COMMENCE AND TO SATISFACTORILY COMPLETE WITH DUE DILIGENCE THE
RESTORATION IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

(2)               IF THE NET PROCEEDS ARE EQUAL TO OR GREATER THAN THRESHOLD
AMOUNT OR THE COSTS OF COMPLETING THE RESTORATION ARE EQUAL TO OR GREATER THAN
THRESHOLD AMOUNT, ADMINISTRATIVE AGENT SHALL MAKE THE NET PROCEEDS AVAILABLE FOR
THE RESTORATION IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 3.2(2).  THE
TERM “NET PROCEEDS” SHALL MEAN:  (I) THE NET AMOUNT OF ALL INSURANCE PROCEEDS
RECEIVED BY ADMINISTRATIVE AGENT PURSUANT TO SECTION 3.1(1)(D), (F) AND (H) AS A
RESULT OF SUCH DAMAGE OR DESTRUCTION, AFTER DEDUCTION OF ITS REASONABLE
OUT-OF-POCKET COSTS AND EXPENSES (INCLUDING, BUT NOT LIMITED TO, REASONABLE
COUNSEL FEES), IF ANY, IN COLLECTING SAME (“INSURANCE PROCEEDS”), OR (II) THE
NET AMOUNT OF THE AWARD, AFTER DEDUCTION OF ITS REASONABLE COSTS AND EXPENSES

 

                                                                    

50

--------------------------------------------------------------------------------

 

(INCLUDING, BUT NOT LIMITED TO, REASONABLE COUNSEL FEES), IF ANY, IN COLLECTING
SAME (“CONDEMNATION PROCEEDS”), WHICHEVER THE CASE MAY BE.

(A)                THE NET PROCEEDS SHALL BE MADE AVAILABLE TO BORROWER FOR
RESTORATION PROVIDED THAT EACH OF THE FOLLOWING CONDITIONS ARE MET:

(I)                 NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING;

(II)               (1) IN THE EVENT THE NET PROCEEDS ARE INSURANCE PROCEEDS,
LESS THAN FIFTY PERCENT (50%) OF THE TOTAL FLOOR AREA OF THE IMPROVEMENTS HAS
BEEN DAMAGED, DESTROYED OR RENDERED UNUSABLE AS A RESULT OF SUCH CASUALTY OR (2)
IN THE EVENT THE NET PROCEEDS ARE CONDEMNATION PROCEEDS, LESS THAN TEN PERCENT
(10%) OF THE LAND CONSTITUTING THE PROJECT IS TAKEN, AND SUCH CONDEMNATION DOES
NOT MAKE IT IMPRACTICABLE, IN ADMINISTRATIVE AGENT’S REASONABLE JUDGMENT, AFTER
RESTORATION, TO OPERATE THE PROJECT AS AN ECONOMICALLY VIABLE WHOLE;

(III)             AT LEAST SIXTY PERCENT (60%) OF THE TOTAL RENTABLE SPACE IN
THE PROJECT WHICH HAS BEEN DEMISED UNDER LEASES IN EFFECT AS OF THE DATE OF SUCH
CASUALTY OR CONDEMNATION, AS APPLICABLE (DETERMINED BY REFERENCE TO THE TOTAL
RENTABLE SPACE AT THE PROJECT AT THE TIME OF SUCH CASUALTY OR CONDEMNATION, AS
APPLICABLE) SHALL REMAIN IN FULL FORCE AND EFFECT DURING AND AFTER THE
COMPLETION OF THE RESTORATION, NOTWITHSTANDING THE OCCURRENCE OF ANY SUCH
CASUALTY OR CONDEMNATION, AS APPLICABLE;

(IV)             BORROWER SHALL COMMENCE THE RESTORATION AS SOON AS REASONABLY
PRACTICABLE AND SHALL DILIGENTLY PURSUE THE SAME TO SATISFACTORY COMPLETION IN
COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE LAWS, INCLUDING, WITHOUT
LIMITATION, ALL APPLICABLE ENVIRONMENTAL LAWS;

(V)               ADMINISTRATIVE AGENT SHALL BE REASONABLY SATISFIED THAT ANY
OPERATING DEFICITS, INCLUDING ALL SCHEDULED PAYMENTS OF INTEREST UNDER THE
NOTES, WHICH WILL BE INCURRED WITH RESPECT TO THE PROJECT AS A RESULT OF THE
OCCURRENCE OF ANY SUCH CASUALTY OR CONDEMNATION, WHICHEVER THE CASE MAY BE, WILL
BE COVERED OUT OF (1) THE NET PROCEEDS, (2) THE INSURANCE COVERAGE REFERRED TO
IN SECTION 3.1(1)(G), OR (3) BY OTHER FUNDS OF BORROWER OR AN AFFILIATE THEREOF;

(VI)             ADMINISTRATIVE AGENT SHALL BE REASONABLY SATISFIED THAT THE
RESTORATION WILL BE SUBSTANTIALLY COMPLETED SO THAT THE TENANTS CAN LEGALLY AND
PHYSICALLY OCCUPY THEIR SPACE WITHIN NINETY (90) DAYS PRIOR TO THE MATURITY
DATE;

(VII)           THE PROJECT AND THE USE THEREOF AFTER THE RESTORATION WILL BE IN
COMPLIANCE, IN ALL MATERIAL RESPECTS, WITH AND PERMITTED UNDER, ALL APPLICABLE
LAWS;

 

 

                                                                    

51

--------------------------------------------------------------------------------

 

(VIII)         ADMINISTRATIVE AGENT SHALL BE REASONABLY SATISFIED THAT THE DEBT
SERVICE COVERAGE RATIO AFTER THE COMPLETION OF THE RESTORATION SHALL BE EQUAL TO
OR GREATER THAN THE LESSER OF (X) THE REQUIRED DSCR AND (Y) THE DEBT SERVICE
COVERAGE RATIO IMMEDIATELY PRIOR TO THE CASUALTY OR CONDEMNATION, AS APPLICABLE;
PROVIDED, HOWEVER, THAT IF SUCH DEBT SERVICE COVERAGE RATIO SHALL BE LESS THAN
THE DEBT SERVICE COVERAGE RATIO REQUIRED PURSUANT TO THIS CLAUSE (VIII),
BORROWER SHALL BE ENTITLED TO SATISFY THE REQUIREMENT OF THIS CLAUSE (VIII) BY
EITHER (AT BORROWER’S OPTION) (A) MAKING A PAYMENT IN REDUCTION OF THE
OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS IN SUCH AMOUNT AS SHALL CAUSE SUCH
DEBT SERVICE COVERAGE RATIO TO EQUAL THE REQUIRED AMOUNT OR (B) DEPOSITING WITH
ADMINISTRATIVE AGENT CASH OR A QUALIFIED LETTER OF CREDIT IN SUCH AMOUNT AS
SHALL CAUSE SUCH DEBT SERVICE COVERAGE RATIO TO EQUAL THE REQUIRED AMOUNT (AFTER
TAKING INTO ACCOUNT THE AMOUNT OF SUCH ADDITIONAL COLLATERAL).  ANY COLLATERAL
DEPOSITED WITH ADMINISTRATIVE AGENT PURSUANT TO CLAUSE (B) ABOVE SHALL BE DEEMED
ADDITIONAL COLLATERAL.  ALL CALCULATIONS TO BE MADE UNDER THIS CLAUSE (VIII)
SHALL BE MADE BY ADMINISTRATIVE AGENT REASONABLY AND IN GOOD FAITH AND SHALL BE
CONCLUSIVE AND BINDING ON BORROWER SO LONG AS THE SAME ARE MADE IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT.  IF ANY ADDITIONAL COLLATERAL IS PROVIDED TO
ADMINISTRATIVE AGENT PURSUANT TO CLAUSE (B) ABOVE, AND AFTER THE COMPLETION OF
THE RESTORATION FOR AT LEAST TWO (2) CONSECUTIVE CALENDAR QUARTERS THE DEBT
SERVICE COVERAGE RATIO SHALL BE EQUAL TO OR GREATER THAN THE LESSER OF (X) THE
REQUIRED DSCR AND (Y) THE DEBT SERVICE COVERAGE RATIO IMMEDIATELY PRIOR TO THE
CASUALTY OR CONDEMNATION, AS APPLICABLE, WITHOUT TAKING INTO ACCOUNT THE
ADDITIONAL COLLATERAL THEN HELD BY ADMINISTRATIVE AGENT PURSUANT TO CLAUSE (B)
ABOVE, THEN ADMINISTRATIVE AGENT SHALL RELEASE SUCH ADDITIONAL COLLATERAL TO
BORROWER WITHIN TEN (10) DAYS AFTER BORROWER’S WRITTEN REQUEST THEREFOR AND
ADMINISTRATIVE AGENT’S CONFIRMATION OF THE SATISFACTION OF BORROWER’S COMPLIANCE
WITH SUCH CONDITION, PROVIDED THAT NO EVENT OF DEFAULT THEN EXISTS AND EXCEPT TO
THE EXTENT SUCH ADDITIONAL COLLATERAL CONSTITUTES RESTRICTED COLLATERAL; AND IN
ADDITION, IF ANY CASH IS DEPOSITED WITH ADMINISTRATIVE AGENT PURSUANT TO THIS
CLAUSE (VIII), ADMINISTRATIVE AGENT SHALL, DURING A CASH MANAGEMENT PERIOD
(UNLESS AN EVENT OF DEFAULT THEN EXISTS AND EXCEPT TO THE EXTENT SUCH FUNDS
CONSTITUTE RESTRICTED COLLATERAL), RELEASE PORTIONS THEREOF TO PAY OPERATING
EXPENSES, CAPITAL EXPENDITURES AND LEASING COSTS PROVIDED FOR IN THE APPROVED
ANNUAL BUDGET AND APPROVED EXTRAORDINARY EXPENSES INCURRED BY BORROWER IN
CONNECTION WITH THE PROJECT FROM TIME TO TIME (BUT NOT MORE FREQUENTLY THAN ONCE
PER MONTH), WITHIN TEN (10) DAYS AFTER BORROWER’S WRITTEN REQUEST THEREFOR AND
ADMINISTRATIVE AGENT’S RECEIPT AND APPROVAL OF DOCUMENTATION EVIDENCING THE
COSTS AND EXPENSES INCLUDED IN SUCH REQUEST.

(IX)             SUCH CASUALTY OR CONDEMNATION, AS APPLICABLE, DOES NOT RESULT
IN THE TOTAL AND PERMANENT (FOLLOWING THE RESTORATION) LOSS OF ACCESS TO THE
PROJECT OR THE RELATED IMPROVEMENTS;

 

                                                                    

52

--------------------------------------------------------------------------------

 

(X)               BORROWER SHALL DELIVER, OR CAUSE TO BE DELIVERED, TO
ADMINISTRATIVE AGENT A SIGNED DETAILED BUDGET APPROVED IN WRITING BY BORROWER’S
ARCHITECT OR ENGINEER STATING THE ENTIRE COST OF COMPLETING THE RESTORATION,
WHICH BUDGET SHALL BE REASONABLY ACCEPTABLE TO ADMINISTRATIVE AGENT;

(XI)             THE NET PROCEEDS TOGETHER WITH ANY CASH OR QUALIFIED LETTER OF
CREDIT DEPOSITED BY BORROWER WITH ADMINISTRATIVE AGENT PURSUANT TO SECTION
3.2(2)(F) ARE SUFFICIENT IN ADMINISTRATIVE AGENT’S REASONABLE DISCRETION TO
COVER THE COST OF THE RESTORATION; AND

(XII)           THE MANAGEMENT AGREEMENT IN EFFECT AS OF THE DATE OF THE
OCCURRENCE OF SUCH CASUALTY OR CONDEMNATION, WHICHEVER THE CASE MAY BE, SHALL
(1) REMAIN IN FULL FORCE AND EFFECT DURING THE RESTORATION AND SHALL NOT
OTHERWISE TERMINATE AS A RESULT OF THE CASUALTY OR CONDEMNATION OR THE
RESTORATION OR (2) IF TERMINATED, SHALL HAVE BEEN REPLACED WITH A REPLACEMENT
MANAGEMENT AGREEMENT WITH A NEW MANAGER SATISFYING THE REQUIREMENTS OF SECTION
9.3, PRIOR TO THE OPENING OR REOPENING OF THE PROJECT OR ANY PORTION THEREOF FOR
BUSINESS WITH THE PUBLIC.

(B)               THE NET PROCEEDS SHALL BE HELD BY ADMINISTRATIVE AGENT (WITH
ANY INTEREST EARNED ON SUCH PROCEEDS TO BE AVAILABLE TO BORROWER TO THE SAME
EXTENT AS NET PROCEEDS ARE MADE AVAILABLE PURSUANT TO THE TERMS OF THIS SECTION
3.2) AND, UNTIL DISBURSED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 3.2,
SHALL CONSTITUTE ADDITIONAL SECURITY FOR THE LOANS AND OTHER OBLIGATIONS UNDER
THE LOAN DOCUMENTS.  THE NET PROCEEDS SHALL BE DISBURSED BY ADMINISTRATIVE AGENT
TO, OR AS DIRECTED BY, BORROWER FROM TIME TO TIME DURING THE COURSE OF THE
RESTORATION, UPON RECEIPT OF EVIDENCE REASONABLY SATISFACTORY TO ADMINISTRATIVE
AGENT THAT (A) ALL MATERIALS INSTALLED AND WORK AND LABOR PERFORMED (EXCEPT TO
THE EXTENT THAT THEY ARE TO BE PAID FOR OUT OF THE REQUESTED DISBURSEMENT) IN
CONNECTION WITH THE RESTORATION HAVE BEEN PAID FOR IN FULL (LESS CASUALTY
RETAINAGE), AND (B) THERE EXIST NO NOTICES OF PENDENCY, STOP ORDERS, MECHANIC’S
OR MATERIALMAN’S LIENS OR NOTICES OF INTENTION TO FILE SAME, OR ANY OTHER LIENS
OR ENCUMBRANCES OF ANY NATURE WHATSOEVER ON THE PROJECT WHICH HAVE NOT EITHER
BEEN FULLY BONDED TO THE REASONABLE SATISFACTION OF ADMINISTRATIVE AGENT AND
DISCHARGED OF RECORD OR IN THE ALTERNATIVE FULLY INSURED TO THE REASONABLE
SATISFACTION OF ADMINISTRATIVE AGENT BY THE TITLE COMPANY.

(C)                ALL PLANS AND SPECIFICATIONS REQUIRED IN CONNECTION WITH THE
RESTORATION, THE COST OF WHICH IS GREATER THAN THE THRESHOLD AMOUNT, SHALL BE
SUBJECT TO PRIOR REVIEW AND ACCEPTANCE (WHICH SHALL NOT BE UNREASONABLY
WITHHELD, CONDITIONED OR DELAYED) IN ALL MATERIAL RESPECTS BY ADMINISTRATIVE
AGENT AND BY AN INDEPENDENT CONSULTING ENGINEER SELECTED BY ADMINISTRATIVE AGENT
(THE “CASUALTY CONSULTANT”).  AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF
ANY EVENT OF DEFAULT, ADMINISTRATIVE AGENT SHALL HAVE THE USE OF THE PLANS AND
SPECIFICATIONS AND ALL PERMITS, LICENSES AND APPROVALS REQUIRED OR OBTAINED IN
CONNECTION WITH THE RESTORATION.  THE IDENTITY OF THE CONTRACTORS,
SUBCONTRACTORS

 

                                                                    

53­

--------------------------------------------------------------------------------

 

AND MATERIALMEN ENGAGED IN THE RESTORATION, THE COST OF WHICH IS GREATER THAN
THE THRESHOLD AMOUNT, AS WELL AS THE CONTRACTS UNDER WHICH THEY HAVE BEEN
ENGAGED, SHALL BE SUBJECT TO PRIOR REVIEW AND ACCEPTANCE (WHICH SHALL NOT BE
UNREASONABLY WITHHELD, CONDITIONED OR DELAYED) BY ADMINISTRATIVE AGENT AND THE
CASUALTY CONSULTANT.  ALL REASONABLE OUT-OF-POCKET COSTS AND EXPENSES INCURRED
BY ADMINISTRATIVE AGENT IN CONNECTION WITH MAKING THE NET PROCEEDS AVAILABLE FOR
THE RESTORATION, INCLUDING, WITHOUT LIMITATION, REASONABLE COUNSEL FEES AND
DISBURSEMENTS AND THE CASUALTY CONSULTANT’S FEES, SHALL BE PAID BY BORROWER.

(D)               IN NO EVENT SHALL ADMINISTRATIVE AGENT BE OBLIGATED TO MAKE
DISBURSEMENTS OF THE NET PROCEEDS IN EXCESS OF AN AMOUNT EQUAL TO THE COSTS
ACTUALLY INCURRED FROM TIME TO TIME FOR WORK IN PLACE AS PART OF THE
RESTORATION, AS CERTIFIED BY THE CASUALTY CONSULTANT, MINUS THE CASUALTY
RETAINAGE.  THE TERM “CASUALTY RETAINAGE” SHALL MEAN AN AMOUNT EQUAL TO TEN
PERCENT (10%) OF THE COSTS ACTUALLY INCURRED FOR WORK IN PLACE AS PART OF THE
RESTORATION, AS CERTIFIED BY THE CASUALTY CONSULTANT, UNTIL THE RESTORATION HAS
BEEN COMPLETED.  THE CASUALTY RETAINAGE SHALL IN NO EVENT, AND NOTWITHSTANDING
ANYTHING TO THE CONTRARY SET FORTH ABOVE IN THIS SECTION 3.2(2), BE LESS THAN
THE AMOUNT ACTUALLY HELD BACK BY BORROWER FROM CONTRACTORS, SUBCONTRACTORS AND
MATERIALMEN ENGAGED IN THE RESTORATION (BUT SHALL NOT BE DUPLICATIVE OF SUCH
AMOUNTS ACTUALLY HELD BACK BY BORROWER).  THE CASUALTY RETAINAGE SHALL NOT BE
RELEASED UNTIL THE CASUALTY CONSULTANT CERTIFIES TO ADMINISTRATIVE AGENT THAT
THE RESTORATION HAS BEEN COMPLETED IN ACCORDANCE WITH THE PROVISIONS OF THIS
SECTION 3.2 AND THAT ALL APPROVALS NECESSARY FOR THE RE-OCCUPANCY AND USE OF THE
PROJECT HAVE BEEN OBTAINED FROM ALL APPROPRIATE GOVERNMENTAL AUTHORITIES, AND
ADMINISTRATIVE AGENT RECEIVES EVIDENCE REASONABLY SATISFACTORY TO ADMINISTRATIVE
AGENT THAT THE COSTS OF THE RESTORATION HAVE BEEN PAID IN FULL OR WILL BE PAID
IN FULL OUT OF THE CASUALTY RETAINAGE; PROVIDED, HOWEVER, THAT ADMINISTRATIVE
AGENT WILL RELEASE THE PORTION OF THE CASUALTY RETAINAGE BEING HELD WITH RESPECT
TO ANY CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN ENGAGED IN THE RESTORATION AS OF
THE DATE UPON WHICH THE CASUALTY CONSULTANT CERTIFIES TO ADMINISTRATIVE AGENT
THAT THE CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN HAS SATISFACTORILY COMPLETED
ALL WORK AND HAS SUPPLIED ALL MATERIALS IN ACCORDANCE WITH THE PROVISIONS OF THE
CONTRACTOR’S, SUBCONTRACTOR’S OR MATERIALMAN’S CONTRACT, THE CONTRACTOR,
SUBCONTRACTOR OR MATERIALMAN DELIVERS THE LIEN WAIVERS AND EVIDENCE OF PAYMENT
IN FULL OF ALL SUMS DUE TO THE CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN AS MAY
BE REASONABLY REQUESTED BY ADMINISTRATIVE AGENT OR BY THE TITLE COMPANY, AND
RECEIVES AN ENDORSEMENT TO THE TITLE POLICY INSURING THE CONTINUED PRIORITY OF
THE LIEN OF THE MORTGAGE AND EVIDENCE OF PAYMENT OF ANY PREMIUM PAYABLE FOR SUCH
ENDORSEMENT.  IF REQUIRED BY ADMINISTRATIVE AGENT, THE RELEASE OF ANY SUCH
PORTION OF THE CASUALTY RETAINAGE SHALL BE APPROVED BY THE SURETY COMPANY, IF
ANY, WHICH HAS ISSUED A PAYMENT OR PERFORMANCE BOND WITH RESPECT TO THE
CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN.

(E)                ADMINISTRATIVE AGENT SHALL NOT BE OBLIGATED TO MAKE
DISBURSEMENTS OF THE NET PROCEEDS MORE FREQUENTLY THAN ONCE EVERY CALENDAR
MONTH.

 

                                                                    

54­

--------------------------------------------------------------------------------

 

(F)                IF AT ANY TIME THE NET PROCEEDS OR THE UNDISBURSED BALANCE
THEREOF SHALL NOT, IN THE REASONABLE OPINION OF ADMINISTRATIVE AGENT, IN
CONSULTATION WITH THE CASUALTY CONSULTANT, IF ANY, BE SUFFICIENT TO PAY IN FULL
THE BALANCE OF THE COSTS WHICH ARE REASONABLY ESTIMATED BY THE CASUALTY
CONSULTANT TO BE INCURRED IN CONNECTION WITH THE COMPLETION OF THE RESTORATION,
BORROWER SHALL DEPOSIT THE DEFICIENCY (THE “NET PROCEEDS DEFICIENCY”), EITHER IN
CASH OR A QUALIFIED LETTER OF CREDIT OR A QUALIFIED GUARANTY, WITH
ADMINISTRATIVE AGENT BEFORE ANY FURTHER DISBURSEMENT OF THE NET PROCEEDS SHALL
BE MADE.  ANY NET PROCEEDS DEFICIENCY DEPOSITED WITH ADMINISTRATIVE AGENT SHALL
BE HELD BY ADMINISTRATIVE AGENT (WITH ANY INTEREST EARNED THEREON TO BE
AVAILABLE TO BORROWER TO THE SAME EXTENT AS THE NET PROCEEDS DEFICIENCY IS MADE
AVAILABLE PURSUANT TO THE TERMS OF THIS SECTION 3.2) AND SHALL BE DISBURSED FOR
COSTS ACTUALLY INCURRED IN CONNECTION WITH THE RESTORATION ON THE SAME
CONDITIONS APPLICABLE TO THE DISBURSEMENT OF THE NET PROCEEDS, AND UNTIL SO
DISBURSED PURSUANT TO THIS SECTION 3.2 SHALL CONSTITUTE ADDITIONAL SECURITY FOR
THE LOANS AND OTHER OBLIGATIONS UNDER THE LOAN DOCUMENTS.

(G)               THE EXCESS, IF ANY, OF THE NET PROCEEDS AND THE REMAINING
BALANCE, IF ANY, OF THE NET PROCEEDS DEFICIENCY DEPOSITED WITH ADMINISTRATIVE
AGENT AFTER THE CASUALTY CONSULTANT CERTIFIES TO ADMINISTRATIVE AGENT THAT THE
RESTORATION HAS BEEN COMPLETED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION
3.2 AND THE RECEIPT BY ADMINISTRATIVE AGENT OF EVIDENCE REASONABLY SATISFACTORY
TO ADMINISTRATIVE AGENT THAT ALL COSTS INCURRED IN CONNECTION WITH THE
RESTORATION HAVE BEEN PAID IN FULL, SHALL BE REMITTED BY ADMINISTRATIVE AGENT TO
BORROWER, PROVIDED NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND SHALL BE
CONTINUING.  WITHOUT LIMITATION OF THE FOREGOING, ANY REMAINING NET PROCEEDS
DEFICIENCY DEPOSITED WITH ADMINISTRATIVE AGENT PURSUANT THIS SECTION 3.2 SHALL
BE PROMPTLY RETURNED TO BORROWER AFTER THE INDEBTEDNESS HAS BEEN PAID IN FULL.

(3)               ALL NET PROCEEDS NOT REQUIRED (I) TO BE MADE AVAILABLE FOR THE
RESTORATION OR (II) TO BE RETURNED TO BORROWER AS EXCESS NET PROCEEDS PURSUANT
TO SECTION 3.2(2)(G) MAY BE RETAINED AND APPLIED BY ADMINISTRATIVE AGENT TOWARD
THE PAYMENT OF THE LOANS (WITHOUT ANY PREPAYMENT PREMIUM) WHETHER OR NOT THEN
DUE AND PAYABLE IN THE ORDER AND AMOUNTS PROVIDED FOR IN SECTION 11.4, OR, AT
THE SOLE AND ABSOLUTE DISCRETION OF ADMINISTRATIVE AGENT, THE SAME MAY BE PAID,
EITHER IN WHOLE OR IN PART, TO BORROWER FOR SUCH PURPOSES AS ADMINISTRATIVE
AGENT SHALL APPROVE, IN ITS SOLE AND ABSOLUTE DISCRETION.  IF ADMINISTRATIVE
AGENT SHALL BE ENTITLED TO APPLY EXCESS NET PROCEEDS TOWARD THE PAYMENT OF THE
LOANS, ADMINISTRATIVE AGENT SHALL NOT UNREASONABLY WITHHOLD ITS CONSENT TO ANY
REQUEST FROM BORROWER TO DELAY SUCH PAYMENT OF THE LOANS UNTIL THE EXPIRATION OF
A THEN EXISTING INTEREST PERIOD, PROVIDED THAT NO EVENT OF DEFAULT THEN EXISTS. 
IF ADMINISTRATIVE AGENT SHALL RECEIVE AND RETAIN NET PROCEEDS, THE LIEN OF THE
MORTGAGE SHALL BE REDUCED ONLY BY THE AMOUNT THEREOF RECEIVED AND RETAINED BY
ADMINISTRATIVE AGENT AND ACTUALLY APPLIED BY ADMINISTRATIVE AGENT IN REDUCTION
OF THE LOANS.

(4)               NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE
PROVISIONS OF THIS SECTION 3.2 ARE SUBJECT TO THE PROVISIONS OF THE CONDOMINIUM
DOCUMENTS GOVERNING APPLICATIONS OF INSURANCE PROCEEDS.

 

                                                                    

55

--------------------------------------------------------------------------------

 

SECTION 3.3            CASUALTY AND CONDEMNATION.

(A)                IF THE PROJECT SHALL BE DAMAGED OR DESTROYED, IN WHOLE OR IN
PART, BY FIRE OR OTHER CASUALTY (A “CASUALTY”), BORROWER SHALL GIVE PROMPT
NOTICE OF SUCH DAMAGE TO ADMINISTRATIVE AGENT AND SHALL PROMPTLY COMMENCE AND
DILIGENTLY PROSECUTE THE COMPLETION OF THE RESTORATION OF THE PROJECT.  BORROWER
SHALL PAY ALL COSTS OF SUCH RESTORATION WHETHER OR NOT SUCH COSTS ARE COVERED BY
INSURANCE (PROVIDED THAT, IF NET PROCEEDS ARE REQUIRED TO BE MADE AVAILABLE TO
BORROWER FOR RESTORATION PURSUANT TO THE TERMS OF SECTION 3.2, THEY ARE MADE
AVAILABLE TO BORROWER FOR RESTORATION).  ADMINISTRATIVE AGENT MAY, BUT SHALL NOT
BE OBLIGATED TO, MAKE PROOF OF LOSS IF NOT MADE DILIGENTLY BY BORROWER.

(B)               BORROWER SHALL PROMPTLY GIVE ADMINISTRATIVE AGENT NOTICE OF
THE ACTUAL OR THREATENED (IN WRITING) COMMENCEMENT OF ANY PROCEEDING FOR THE
CONDEMNATION OF ALL OR ANY PART OF THE PROJECT AND SHALL DELIVER TO
ADMINISTRATIVE AGENT COPIES OF ANY AND ALL PAPERS SERVED IN CONNECTION WITH SUCH
PROCEEDINGS.  ADMINISTRATIVE AGENT MAY PARTICIPATE IN ANY SUCH PROCEEDINGS IF
THE AMOUNT OF CONDEMNATION PROCEEDS IS REASONABLY EXPECTED TO EXCEED THE
THRESHOLD AMOUNT, AND BORROWER SHALL, FROM TIME TO TIME, DELIVER TO
ADMINISTRATIVE AGENT ALL INSTRUMENTS REASONABLY REQUESTED BY IT TO PERMIT SUCH
PARTICIPATION.  BORROWER SHALL, AT ITS EXPENSE, DILIGENTLY PROSECUTE ANY SUCH
PROCEEDINGS, AND SHALL CONSULT WITH ADMINISTRATIVE AGENT, ITS ATTORNEYS AND
EXPERTS, AND COOPERATE WITH THEM IN THE CARRYING ON OR DEFENSE OF ANY SUCH
PROCEEDINGS.  NOTWITHSTANDING ANY TAKING BY ANY PUBLIC OR QUASI PUBLIC AUTHORITY
THROUGH CONDEMNATION OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO, ANY TRANSFER
MADE IN LIEU OF OR IN ANTICIPATION OF THE EXERCISE OF SUCH TAKING), BORROWER
SHALL CONTINUE TO PAY THE LOANS AT THE TIME AND IN THE MANNER PROVIDED FOR ITS
PAYMENT IN THE NOTES AND IN THIS AGREEMENT AND THE LOANS SHALL NOT BE REDUCED
UNTIL ANY AWARD SHALL HAVE BEEN ACTUALLY RECEIVED AND APPLIED BY ADMINISTRATIVE
AGENT, AFTER THE DEDUCTION OF REASONABLE OUT-OF-POCKET EXPENSES OF COLLECTION,
TO THE REDUCTION OR DISCHARGE OF THE LOANS.  ADMINISTRATIVE AGENT AND THE
LENDERS SHALL NOT BE LIMITED TO THE INTEREST PAID ON THE AWARD BY THE CONDEMNING
AUTHORITY BUT SHALL BE ENTITLED TO RECEIVE OUT OF THE AWARD INTEREST AT THE RATE
OR RATES PROVIDED HEREIN OR IN THE NOTES.  IF THE PROJECT OR ANY PORTION THEREOF
IS TAKEN BY A CONDEMNING AUTHORITY, BORROWER SHALL, PROMPTLY COMMENCE AND
DILIGENTLY PROSECUTE THE RESTORATION OF THE PROJECT AND OTHERWISE COMPLY WITH
THE PROVISIONS OF SECTION 3.2.  IF THE PROJECT IS SOLD THROUGH A FORECLOSURE OR
SIMILAR PROCEEDING PRIOR TO THE RECEIPT BY ADMINISTRATIVE AGENT OF THE AWARD,
ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT, WHETHER OR NOT A DEFICIENCY JUDGMENT
ON THE NOTES SHALL HAVE BEEN SOUGHT, RECOVERED OR DENIED, TO RECEIVE THE AWARD,
OR A PORTION THEREOF SUFFICIENT TO PAY THE LOANS.

ARTICLE 4

CASH MANAGEMENT

SECTION 4.1            RESTRICTED ACCOUNT.

(1)               ESTABLISHMENT OF RESTRICTED ACCOUNT.  PURSUANT TO THE
RESTRICTED ACCOUNT AGREEMENT, BORROWER SHALL ESTABLISH AND MAINTAIN AT ALL TIMES
ONE OR MORE ELIGIBLE ACCOUNTS (COLLECTIVELY, THE “RESTRICTED ACCOUNT”) AT THE
BANK OF NEW YORK MELLON TRUST COMPANY,

 

                                                                    

56­

--------------------------------------------------------------------------------

 

N.A. OR AT SUCH OTHER ELIGIBLE BANK AS SHALL BE SELECTED FROM TIME TO TIME BY
BORROWER AND REASONABLY APPROVED BY ADMINISTRATIVE AGENT, WHICH APPROVAL SHALL
NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED UNLESS AN EVENT OF DEFAULT
THEN EXISTS (THE “RESTRICTED ACCOUNT BANK”).  THE RESTRICTED ACCOUNT SHALL BE IN
THE NAME OF BORROWER FOR THE BENEFIT OF ADMINISTRATIVE AGENT, ON BEHALF OF THE
LENDERS, PROVIDED THAT BORROWER SHALL BE THE OWNER OF ALL FUNDS ON DEPOSIT IN
SUCH ACCOUNTS FOR FEDERAL AND APPLICABLE STATE AND LOCAL TAX PURPOSES AND THE
RESTRICTED ACCOUNT SHALL BE ASSIGNED THE TAX IDENTIFICATION NUMBER OF BORROWER. 

(2)               CONTROL OF RESTRICTED ACCOUNT.  THE RESTRICTED ACCOUNT SHALL
BE UNDER THE SOLE AND EXCLUSIVE DOMINION AND CONTROL OF ADMINISTRATIVE AGENT
AND, EXCEPT AS MAY BE EXPRESSLY PERMITTED BY ADMINISTRATIVE AGENT PURSUANT TO
THE RESTRICTED ACCOUNT AGREEMENT, NEITHER BORROWER, MANAGER NOR ANY OTHER PARTY
CLAIMING ON BEHALF OF, OR THROUGH, BORROWER OR MANAGER SHALL HAVE ANY RIGHT TO
TRANSFER, WITHDRAW, ACCESS OR OTHERWISE DIRECT THE DISPOSITION OF FUNDS ON
DEPOSIT IN THE RESTRICTED ACCOUNT OR HAVE ANY OTHER RIGHT OR POWER WITH RESPECT
TO THE RESTRICTED ACCOUNT.

(3)               RESTRICTED ACCOUNT BANK’S FEES.  BORROWER AGREES TO TIMELY PAY
THE CUSTOMARY FEES AND EXPENSES OF THE RESTRICTED ACCOUNT BANK IN CONNECTION
WITH THE RESTRICTED ACCOUNT, AS SUCH FEES AND EXPENSES ARE ESTABLISHED FROM TIME
TO TIME.

(4)               DEPOSITS.  BORROWER SHALL, OR SHALL CAUSE MANAGER TO, DEPOSIT
ALL RENTS AND OTHER OPERATING REVENUES INTO THE RESTRICTED ACCOUNT IMMEDIATELY
UPON RECEIPT.  BORROWER SHALL SEND A NOTICE, SUBSTANTIALLY IN THE FORM OF
EXHIBIT E, TO ALL TENANTS UNDER EXISTING LEASES ON THE CLOSING DATE, AND TO ALL
TENANTS UNDER FUTURE LEASES SIMULTANEOUSLY WITH THE EXECUTION OF SUCH LEASES, IN
EACH CASE DIRECTING TENANTS TO PAY ALL RENTS AND OTHER SUMS DUE UNDER THEIR
LEASES DIRECTLY INTO THE RESTRICTED ACCOUNT.  UNTIL DEPOSITED INTO THE
RESTRICTED ACCOUNT, ANY RENTS AND OTHER OPERATING REVENUES HELD BY BORROWER OR
MANAGER SHALL BE DEEMED TO BE COLLATERAL FOR THE LOANS AND SHALL BE HELD IN
TRUST BY THEM FOR THE BENEFIT OF ADMINISTRATIVE AGENT (ON BEHALF OF THE LENDERS)
AND SHALL NOT BE COMMINGLED WITH ANY OTHER FUNDS OR PROPERTY OF BORROWER.  ANY
AND ALL INCOME ACCRUING ON THE RESTRICTED ACCOUNT SHALL BE PERIODICALLY ADDED TO
THE PRINCIPAL AMOUNT ON DEPOSIT IN THE RESTRICTED ACCOUNT AND SHALL BE HELD,
DISBURSED AND APPLIED IN THE SAME MANNER AS THE OTHER AMOUNTS ON DEPOSIT THEREIN
IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

(5)               DISBURSEMENTS.  SO LONG AS ADMINISTRATIVE AGENT SHALL NOT
NOTIFY RESTRICTED ACCOUNT BANK THAT A CASH MANAGEMENT PERIOD IS IN EFFECT, THE
RESTRICTED ACCOUNT BANK SHALL TRANSFER ON EACH BUSINESS DAY ALL AVAILABLE FUNDS
THEN ON DEPOSIT IN THE RESTRICTED ACCOUNT TO THE BORROWER ACCOUNT, AS PROVIDED
IN THE RESTRICTED ACCOUNT AGREEMENT.  IF, HOWEVER, ADMINISTRATIVE AGENT SHALL
NOTIFY RESTRICTED ACCOUNT BANK THAT A CASH MANAGEMENT PERIOD IS IN EFFECT,
RESTRICTED ACCOUNT BANK SHALL TRANSFER ON EACH BUSINESS DAY ALL AVAILABLE FUNDS
THEN ON DEPOSIT IN THE RESTRICTED ACCOUNT TO THE CASH MANAGEMENT ACCOUNT, AS
PROVIDED IN THE RESTRICTED ACCOUNT AGREEMENT.

SECTION 4.2            CASH MANAGEMENT ACCOUNT.

(1)               ESTABLISHMENT OF CASH MANAGEMENT ACCOUNT.  BORROWER SHALL
ESTABLISH AND MAINTAIN AT ALL TIMES AT THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., OR AT SUCH OTHER ELIGIBLE BANK AS SHALL BE SELECTED FROM TIME TO
TIME BY BORROWER AND REASONABLY APPROVED

 

                                                                    

57­

--------------------------------------------------------------------------------

 

BY ADMINISTRATIVE AGENT, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD,
DELAYED OR CONDITIONED UNLESS AN EVENT OF DEFAULT THEN EXISTS (IN SUCH CAPACITY,
THE “CASH MANAGEMENT BANK”), AN ELIGIBLE ACCOUNT FROM AND AFTER THE COMMENCEMENT
OF A CASH MANAGEMENT PERIOD (THE “CASH MANAGEMENT ACCOUNT”).  THE CASH
MANAGEMENT ACCOUNT SHALL BE IN THE NAME OF BORROWER FOR THE BENEFIT OF
ADMINISTRATIVE AGENT, ON BEHALF OF THE LENDERS, PROVIDED THAT BORROWER SHALL BE
THE OWNER OF ALL FUNDS ON DEPOSIT IN SUCH ACCOUNTS FOR FEDERAL AND APPLICABLE
STATE AND LOCAL TAX PURPOSES AND THE CASH MANAGEMENT ACCOUNT SHALL BE ASSIGNED
THE TAX IDENTIFICATION NUMBER OF BORROWER.

(2)               CONTROL OF CASH MANAGEMENT ACCOUNT.  THE CASH MANAGEMENT
ACCOUNT (INCLUDING ALL SUBACCOUNTS) SHALL BE UNDER THE SOLE AND EXCLUSIVE
DOMINION AND CONTROL OF ADMINISTRATIVE AGENT AND NEITHER BORROWER, MANAGER NOR
ANY OTHER PARTY CLAIMING ON BEHALF OF, OR THROUGH, BORROWER OR MANAGER SHALL
HAVE ANY RIGHT TO TRANSFER, WITHDRAW, ACCESS OR OTHERWISE DIRECT THE DISPOSITION
OF FUNDS ON DEPOSIT IN THE CASH MANAGEMENT ACCOUNT OR HAVE ANY OTHER RIGHT OR
POWER WITH RESPECT TO THE CASH MANAGEMENT ACCOUNT.

(3)               DEPOSITS.  ALL AMOUNTS DEPOSITED INTO THE CASH MANAGEMENT
ACCOUNT (INCLUDING THE SUBACCOUNTS) SHALL BE COLLECTIVELY REFERRED TO HEREIN AS
THE “CASH MANAGEMENT RESERVE FUND”.  ANY AND ALL INCOME ACCRUING ON THE CASH
MANAGEMENT ACCOUNT SHALL BE PERIODICALLY ADDED TO THE PRINCIPAL AMOUNT ON
DEPOSIT IN THE CASH MANAGEMENT ACCOUNT AND SHALL BE HELD, DISBURSED AND APPLIED
IN THE SAME MANNER AS THE OTHER AMOUNTS ON DEPOSIT THEREIN IN ACCORDANCE WITH
THE TERMS OF THIS AGREEMENT.

(4)               SUBACCOUNTS.  ADMINISTRATIVE AGENT SHALL MAINTAIN THE
FOLLOWING SUBACCOUNTS OF THE CASH MANAGEMENT ACCOUNT (COLLECTIVELY, THE
“SUBACCOUNTS”), WHICH SUBACCOUNTS SHALL BE MAINTAINED ON A LEDGER-ENTRY BASIS:

(A)                TAX RESERVE ACCOUNT.  A SUB-ACCOUNT OF THE CASH MANAGEMENT
ACCOUNT INTO WHICH, ON EACH PAYMENT DATE DURING A CASH MANAGEMENT PERIOD
(SUBJECT TO SECTION 9.2(3), SHALL BE TRANSFERRED FROM THE CASH MANAGEMENT
ACCOUNT THE MONTHLY TAX DEPOSIT (THE “TAX RESERVE ACCOUNT”);

(B)               INSURANCE RESERVE ACCOUNT.  A SUBACCOUNT OF THE CASH
MANAGEMENT ACCOUNT INTO WHICH, ON EACH PAYMENT DATE DURING A CASH MANAGEMENT
PERIOD (SUBJECT TO SECTION 3.1(9)), SHALL BE TRANSFERRED FROM THE CASH
MANAGEMENT ACCOUNT THE MONTHLY INSURANCE PREMIUM DEPOSIT (THE “INSURANCE RESERVE
ACCOUNT”);

(C)                CONDOMINIUM CHARGES RESERVE ACCOUNT.  A SUBACCOUNT OF THE
CASH MANAGEMENT ACCOUNT INTO WHICH, ON EACH PAYMENT DATE DURING A CASH
MANAGEMENT PERIOD, SHALL BE TRANSFERRED FROM THE CASH MANAGEMENT ACCOUNT THE
MONTHLY CONDOMINIUM CHARGES DEPOSIT (THE “CONDOMINIUM CHARGES RESERVE ACCOUNT”);

(D)               DEBT SERVICE RESERVE ACCOUNT.  A SUBACCOUNT OF THE CASH
MANAGEMENT ACCOUNT INTO WHICH, ON EACH PAYMENT DATE DURING A CASH MANAGEMENT
PERIOD, SHALL BE TRANSFERRED FROM THE CASH MANAGEMENT ACCOUNT THE MONTHLY DEBT
SERVICE PAYMENT AMOUNT, ANY INTEREST ACCRUING AT THE DEFAULT RATE, AND ANY
COSTS, FEES

 

                                                                    

58­

--------------------------------------------------------------------------------

 

AND EXPENSES THEN DUE AND PAYABLE TO ADMINISTRATIVE AGENT PURSUANT TO THE LOAN
DOCUMENTS (THE “DEBT SERVICE RESERVE ACCOUNT”); AND

(E)                EXCESS CASH FLOW ACCOUNT.  A SUBACCOUNT OF THE CASH
MANAGEMENT ACCOUNT INTO WHICH, ON EACH PAYMENT DATE DURING A CASH MANAGEMENT
PERIOD, SHALL BE DEPOSITED FROM THE CASH MANAGEMENT ACCOUNT THE AMOUNT DESCRIBED
IN SECTION 4.2(5)(J) (THE “EXCESS CASH FLOW ACCOUNT”).

(5)               DISBURSEMENTS.  DURING ANY CASH MANAGEMENT PERIOD,
ADMINISTRATIVE AGENT SHALL (SUBJECT, HOWEVER, TO THE RIGHTS OF ADMINISTRATIVE
AGENT PURSUANT TO SECTION 4.2(7) UPON THE OCCURRENCE AND DURING THE CONTINUANCE
OF AN EVENT OF DEFAULT) DISBURSE AND/OR ALLOCATE TO SUBACCOUNTS, AS APPLICABLE,
ALL AVAILABLE AMOUNTS DEPOSITED INTO THE CASH MANAGEMENT ACCOUNT ON EACH PAYMENT
DATE IN THE FOLLOWING AMOUNTS AND ORDER OF PRIORITY:

(A)                FIRST, TO THE BORROWER ACCOUNT IN AN AMOUNT EQUAL TO THE
APPROVED OPERATING EXPENSES, UNLESS BORROWER HAS DELIVERED TO ADMINISTRATIVE
AGENT CASH, A QUALIFIED LETTER OF CREDIT OR A QUALIFIED GUARANTY IN ACCORDANCE
WITH SECTION 9.2(3) AND/OR SECTION 3.1(9), AS APPLICABLE (COLLECTIVELY, THE
“POSTED RESERVES”) AND ADMINISTRATIVE AGENT HAS NOT DRAWN ON SUCH POSTED
RESERVES FOR PAYMENT OF SUCH AMOUNTS, IN WHICH CASE SUCH AMOUNTS SHALL BE
DISBURSED TO BORROWER UNDER THIS CLAUSE (A) PROVIDED THAT NO EVENT OF DEFAULT
THEN EXISTS) FOR THE MONTH IN WHICH THE NEXT PAYMENT DATE OCCURS; PROVIDED THAT
THE AMOUNT DISBURSED TO THE BORROWER ACCOUNT PURSUANT TO THIS CLAUSE (A) SHALL
BE USED BY BORROWER SOLELY TO PAY THE APPROVED OPERATING EXPENSES FOR SUCH MONTH
(BORROWER AGREEING THAT, IN THE EVENT THAT SUCH APPROVED OPERATING EXPENSES
EXCEED THE ACTUAL OPERATING EXPENSES FOR SUCH MONTH, SUCH EXCESS AMOUNTS SHALL
BE REMITTED BY BORROWER TO THE CASH MANAGEMENT ACCOUNT PRIOR TO THE NEXT
SUCCEEDING PAYMENT DATE OR CREDITED BY ADMINISTRATIVE AGENT AGAINST THE
SUCCEEDING MONTH’S APPROVED OPERATING EXPENSES);

(B)               SECOND, SUBJECT TO SECTION 9.2(3), TO THE TAX RESERVE ACCOUNT
AN AMOUNT EQUAL TO THE MONTHLY TAX DEPOSIT;

(C)                THIRD, SUBJECT TO SECTION 3.1(9), TO THE INSURANCE RESERVE
ACCOUNT AN AMOUNT EQUAL TO THE MONTHLY INSURANCE PREMIUM DEPOSIT;

(D)               FOURTH, TO THE CONDOMINIUM CHARGES RESERVE ACCOUNT, AN AMOUNT
EQUAL TO THE MONTHLY CONDOMINIUM CHARGES DEPOSIT;

(E)                FIFTH, TO RESTRICTED ACCOUNT BANK, FUNDS SUFFICIENT TO PAY
THE FEES AND EXPENSES OF RESTRICTED ACCOUNT BANK THEN DUE AND PAYABLE WITH
RESPECT TO THE RESTRICTED ACCOUNT AND THE ADMINISTRATION THEREUNDER AND NOT
OTHERWISE PAID BY BORROWER;

(F)                SIXTH, TO THE DEBT SERVICE RESERVE ACCOUNT, AN AMOUNT EQUAL
TO ANY INTEREST ACCRUING AT THE DEFAULT RATE;

(G)               SEVENTH, TO THE DEBT SERVICE RESERVE ACCOUNT, AN AMOUNT EQUAL
TO THE MONTHLY DEBT SERVICE PAYMENT AMOUNT;

 

                                                                    

59­

--------------------------------------------------------------------------------

 

(H)               EIGHTH, TO THE DEBT SERVICE RESERVE ACCOUNT, AN AMOUNT EQUAL
TO ANY COSTS, FEES AND EXPENSES DUE AND PAYABLE TO ADMINISTRATIVE AGENT PURSUANT
TO THE LOAN DOCUMENTS;

(I)                 NINTH, TO THE BORROWER ACCOUNT IF NO EVENT OF DEFAULT THEN
EXISTS OR AT ADMINISTRATIVE AGENT’S OPTION IF AN EVENT OF DEFAULT THEN EXISTS,
AN AMOUNT EQUAL TO THE APPROVED EXTRAORDINARY EXPENSES FOR THE MONTH IN WHICH
THE NEXT PAYMENT DATE OCCURS; PROVIDED THAT THE AMOUNT DISBURSED TO BORROWER’S
ACCOUNT PURSUANT TO THIS CLAUSE (I) SHALL BE USED BY BORROWER SOLELY TO PAY THE
APPROVED EXTRAORDINARY EXPENSES FOR SUCH MONTH (BORROWER AGREEING THAT, IN THE
EVENT THAT SUCH APPROVED EXTRAORDINARY EXPENSES EXCEED THE ACTUAL EXTRAORDINARY
EXPENSES FOR SUCH MONTH, SUCH EXCESS AMOUNTS SHALL BE REMITTED BY BORROWER TO
THE CASH MANAGEMENT ACCOUNT PRIOR TO THE NEXT SUCCEEDING PAYMENT DATE); AND

(J)                 TENTH, THE AMOUNTS REMAINING AFTER PAYMENT OF THE ITEMS SET
FORTH IN CLAUSES (A) THROUGH (I) ABOVE, AS APPLICABLE, TO THE EXCESS CASH FLOW
ACCOUNT TO BE HELD AS ADDITIONAL COLLATERAL FOR THE INDEBTEDNESS UNTIL THE CASH
MANAGEMENT PERIOD SHALL HAVE TERMINATED OR THE INDEBTEDNESS SHALL BE PAID IN
FULL (WHICHEVER FIRST OCCURS).

(6)               WITHDRAWALS FROM SUBACCOUNTS.  ADMINISTRATIVE AGENT SHALL
DISBURSE FUNDS IN THE APPLICABLE SUBACCOUNTS SET FORTH BELOW AS FOLLOWS:

(A)                DISBURSEMENTS FROM THE TAX RESERVE ACCOUNT.  ADMINISTRATIVE
AGENT SHALL DISBURSE FUNDS ON DEPOSIT IN THE TAX RESERVE ACCOUNT FOR THE PAYMENT
OF PROPERTY TAXES IN ACCORDANCE WITH SECTION 9.2(2);

(B)               DISBURSEMENTS FROM THE INSURANCE RESERVE ACCOUNT. 
ADMINISTRATIVE AGENT SHALL DISBURSE FUNDS ON DEPOSIT IN THE INSURANCE RESERVE
ACCOUNT FOR THE PAYMENT OF INSURANCE PREMIUMS IN ACCORDANCE WITH SECTION 3.1(8);

(C)                DISBURSEMENTS FROM THE CONDOMINIUM CHARGES RESERVE ACCOUNT. 
ADMINISTRATIVE AGENT SHALL DISBURSE FUNDS ON DEPOSIT IN THE CONDOMINIUM CHARGES
RESERVE ACCOUNT FOR THE PAYMENT OF CONDOMINIUM CHARGES IN ACCORDANCE WITH
SECTION 9.28; AND

(D)               DISBURSEMENTS FROM THE DEBT SERVICE RESERVE ACCOUNT. 
ADMINISTRATIVE AGENT SHALL DISBURSE FUNDS ON DEPOSIT IN THE DEBT SERVICE RESERVE
ACCOUNT TO ADMINISTRATIVE AGENT AND/OR THE LENDERS, AS APPLICABLE, ON EACH
PAYMENT DATE FOR THE PAYMENT OF THE MONTHLY DEBT SERVICE AMOUNT, ANY INTEREST
ACCRUING AT THE DEFAULT RATE THEN DUE AND PAYABLE, AND ANY COSTS, FEES AND
EXPENSES DUE AND PAYABLE TO ADMINISTRATIVE AGENT AND/OR THE LENDERS PURSUANT TO
THE LOAN DOCUMENTS.

(7)               RIGHTS ON EVENT OF DEFAULT.  NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT, ADMINISTRATIVE AGENT, AT ITS OPTION, MAY FROM TIME TO TIME,
WITHOUT NOTICE TO BORROWER (EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW),
WITHDRAW ALL OF THE CASH MANAGEMENT RESERVE FUNDS (INCLUDING, WITHOUT
LIMITATION, ALL FUNDS IN THE EXCESS CASH FLOW ACCOUNT) AND APPLY SUCH FUNDS TO
PAYMENT OF THE INDEBTEDNESS IN THE ORDER AND AMOUNTS PROVIDED FOR IN SECTION
11.4.

 

                                                                    

60

--------------------------------------------------------------------------------

 

ADMINISTRATIVE AGENT’S RIGHT TO WITHDRAW AND APPLY SUCH FUNDS SHALL BE IN
ADDITION TO ALL OTHER RIGHTS AND REMEDIES PROVIDED TO ADMINISTRATIVE AGENT ON
BEHALF OF THE LENDERS UNDER THE LOAN DOCUMENTS OR APPLICABLE LAW.

(8)               RELEASE.  ANY AND ALL FUNDS HELD IN THE CASH MANAGEMENT
RESERVE FUND (INCLUDING THE SUBACCOUNTS) AND NOT APPLIED AS PROVIDED SUBSECTIONS
(5), (6) AND (7) ABOVE, EXCLUDING ANY SUCH FUNDS WHICH CONSTITUTE RESTRICTED
COLLATERAL, SHALL BE RELEASED TO BORROWER PROMPTLY AFTER THE DATE ON WHICH A
CASH MANAGEMENT PERIOD SHALL NO LONGER EXIST.  IN ADDITION, ANY AND ALL FUNDS
HELD IN THE CASH MANAGEMENT RESERVE FUND (INCLUDING THE SUBACCOUNTS) AND NOT
APPLIED AS PROVIDED SUBSECTIONS (5), (6) AND (7) ABOVE AT THE TIME OF PAYMENT IN
FULL OF THE INDEBTEDNESS SHALL BE RELEASED TO BORROWER PROMPTLY AFTER THE
INDEBTEDNESS HAS BEEN PAID IN FULL.

(9)               BORROWER NOT RELEASED.  NOTHING IN THIS ARTICLE 4 SHALL LIMIT,
REDUCE OR OTHERWISE AFFECT BORROWER’S OBLIGATIONS TO MAKE PAYMENTS OF THE
MONTHLY INTEREST PAYMENT AND, IF APPLICABLE, PRINCIPAL PAYMENT THEN DUE UNDER
THE NOTES.

SECTION 4.3            RESERVE FUNDS AND SECURITY ACCOUNTS GENERALLY.

(1)               GRANT OF SECURITY INTEREST.  BORROWER HEREBY GRANTS A
PERFECTED FIRST PRIORITY SECURITY INTEREST IN FAVOR OF ADMINISTRATIVE AGENT FOR
THE RATABLE BENEFIT OF THE LENDERS IN THE RESTRICTED ACCOUNT, THE CASH
MANAGEMENT ACCOUNT (INCLUDING ALL SUBACCOUNTS) AND THE CASH MANAGEMENT RESERVE
FUND AND ALL FINANCIAL ASSETS AND OTHER PROPERTY AND SUMS AT ANY TIME HELD,
DEPOSITED OR INVESTED THEREIN, AND ALL SECURITY ENTITLEMENTS AND INVESTMENT
PROPERTY RELATING THERETO, TOGETHER WITH ANY INTEREST OR OTHER EARNINGS THEREON,
AND ALL PROCEEDS THEREOF, WHETHER ACCOUNTS, GENERAL INTANGIBLES, CHATTEL PAPER,
DEPOSIT ACCOUNTS, INSTRUMENTS, DOCUMENTS OR SECURITIES (COLLECTIVELY, “RESERVE
ACCOUNT COLLATERAL”), TOGETHER WITH ALL RIGHTS OF A SECURED PARTY WITH RESPECT
THERETO (EVEN IF NO FURTHER DOCUMENTATION IS REQUESTED BY ADMINISTRATIVE AGENT
OR THE LENDERS OR EXECUTED BY BORROWER).

(2)               BORROWER COVENANTS AND AGREES:

(A)       to do all acts that may be reasonably necessary to maintain, preserve
and protect Reserve Account Collateral;

(B)       to pay promptly when due, all material taxes, assessments, charges,
encumbrances and liens now or hereafter imposed upon or affecting any Reserve
Account Collateral (provided that Borrower shall be permitted to contest any
such taxes and assessments, subject to compliance with the general requirements
of Section 9.2(1) as applicable to such taxes and assessments);

(C)       to appear in and defend any action or proceeding which may materially
and adversely affect Borrower’s title to or Administrative Agent’s interest in
the Reserve Account Collateral;

(D)       other than to Administrative Agent pursuant to this Agreement, not to
transfer, assign, sell, surrender, encumber, mortgage, hypothecate, or otherwise
dispose of any of the Reserve Account Collateral or rights or interests therein,
and to keep the Reserve Account Collateral free of all levies and security
interests or other liens

                                                                    

61

--------------------------------------------------------------------------------

 

or charges except the security interest in favor of Administrative Agent granted
hereunder;

(E)       to account fully for and promptly deliver to Administrative Agent, in
the form received, all documents, chattel paper, instruments and agreements
constituting the Reserve Account Collateral hereunder, endorsed to
Administrative Agent or in blank, as requested by Administrative Agent, and
accompanied by such powers as appropriate and until so delivered all such
documents, instruments, agreements and proceeds shall be held by Borrower in
trust for Administrative Agent, separate from all other property of Borrower;
and

(F)       from time to time upon request by Administrative Agent, to furnish
such further assurances of Borrower’s title with respect to the Reserve Account
Collateral, execute such written agreements, or do such other acts, all as may
be reasonably necessary to effectuate the purposes of this agreement or as may
be required by law, or in order to perfect or continue the first-priority lien
and security interest of Administrative Agent in the Reserve Account Collateral.

SECTION 4.4            DEBT SERVICE COVERAGE RATIO.

For purposes of this Agreement, a “DSCR Trigger Event” shall occur if the Debt
Service Coverage Ratio as of two (2) consecutive DSCR Calculation Dates shall be
less than the Required DSCR, and shall continue in effect until such time as (i)
the Debt Service Coverage Ratio as of two (2) consecutive DSCR Calculation Dates
shall be equal to or greater than the Required DSCR or (ii) when the amount on
deposit in the Excess Cash Flow Account equals or exceeds an amount equal to the
DSCR Shortfall (Cash Management Test).  Notwithstanding the foregoing, a DSCR
Trigger Event shall not be deemed to have occurred if Borrower shall deposit
with Administrative Agent, not later than ten (10) days after Administrative
Agent shall notify Borrower that a DSCR Trigger Event has occurred cash or a
Qualified Letter of Credit in an amount equal to the DSCR Shortfall (Cash
Management Test).  All collateral deposited with Administrative Agent pursuant
this Section shall be deemed Additional Collateral.  All calculations to be made
under this Section 4.4 shall be made by Administrative Agent reasonably and in
good faith and shall be conclusive and binding on Borrower so long as the same
are made in accordance with the terms of this Agreement.  Any Additional
Collateral held by Administrative Agent pursuant to this Section 4.4 at the time
of payment in full of the Indebtedness shall be promptly returned or released
(as applicable) to Borrower after the Indebtedness has been paid in full.  If
any Additional Collateral is provided to Administrative Agent pursuant to this
Section 4.4, and thereafter for at least two (2) consecutive calendar quarters
the Debt Service Coverage Ratio shall be equal to or greater than the Required
DSCR without taking into account the Additional Collateral then held by
Administrative Agent pursuant to this Section 4.4, then Administrative Agent
shall release such Additional Collateral to Borrower within ten (10) days after
Borrower’s written request therefor and Administrative Agent’s confirmation of
the satisfaction of Borrower’s compliance with such condition, provided that no
Event of Default then exists and except to the extent such Additional Collateral
constitutes Restricted Collateral.  In addition, if any cash is deposited with
Administrative Agent pursuant to this Section 4.4, Administrative Agent shall,
during a Cash Management Period (unless an Event of Default then exists and
except to the extent such funds constitute Restricted

                                                                    

62­

--------------------------------------------------------------------------------

 

Collateral), release portions thereof to pay Operating Expenses, capital
expenditures and leasing costs provided for in the Approved Annual Budget and
Approved Extraordinary Expenses incurred by Borrower in connection with the
Project from time to time (but not more frequently than once per month), within
ten (10) days after Borrower’s written request therefor and Administrative
Agent’s receipt and approval of documentation evidencing the costs and expenses
included in such request.

ARTICLE 5

ENVIRONMENTAL MATTERS

SECTION 5.1            CERTAIN DEFINITIONS.

As used herein, the following terms have the meanings indicated:

(1)               “ENVIRONMENTAL CLAIM” MEANS, WITH RESPECT TO ANY PERSON, ANY
WRITTEN NOTICE, NOTIFICATION, CLAIM, ADMINISTRATIVE, REGULATORY OR JUDICIAL
ACTION, SUIT, JUDGMENT, DEMAND OR OTHER WRITTEN COMMUNICATION BY ANY PERSON OR
GOVERNMENTAL AUTHORITY ALLEGING OR ASSERTING LIABILITY WITH RESPECT TO BORROWER
OR THE PROJECT, WHETHER FOR DAMAGES, CONTRIBUTION, INDEMNIFICATION, COST
RECOVERY, COMPENSATION, INJUNCTIVE RELIEF, INVESTIGATORY, RESPONSE, REMEDIATION,
DAMAGES TO NATURAL RESOURCES, PERSONAL INJURIES, FINES OR PENALTIES ARISING OUT
OF, BASED ON OR RESULTING FROM (I) THE PRESENCE, USE OR RELEASE INTO THE
ENVIRONMENT OF ANY HAZARDOUS MATERIALS ORIGINATING AT OR FROM, OR OTHERWISE
AFFECTING, THE PROJECT OR (II) ANY FACT, CIRCUMSTANCE, CONDITION OR OCCURRENCE
FORMING THE BASIS OF ANY VIOLATION, OR ALLEGED VIOLATION, OF ANY ENVIRONMENTAL
LAW BY BORROWER.

(2)               “ENVIRONMENTAL LAWS” MEANS ANY FEDERAL, STATE OR LOCAL LAW
(WHETHER IMPOSED BY STATUTE, OR ADMINISTRATIVE OR JUDICIAL ORDER, OR COMMON
LAW), NOW OR HEREAFTER ENACTED, GOVERNING HEALTH, SAFETY, INDUSTRIAL HYGIENE,
THE ENVIRONMENT OR NATURAL RESOURCES, OR HAZARDOUS MATERIALS, INCLUDING, SUCH
LAWS GOVERNING OR REGULATING THE USE, GENERATION, STORAGE, REMOVAL, RECOVERY,
TREATMENT, HANDLING, TRANSPORT, DISPOSAL, CONTROL, DISCHARGE OF, OR EXPOSURE TO,
HAZARDOUS MATERIALS.

(3)               “ENVIRONMENTAL LIENS” HAS THE MEANING ASSIGNED TO SUCH TERM IN
SECTION 5.3(4).

(4)               “ENVIRONMENTAL LOSS” MEANS ANY LOSSES, DAMAGES, COSTS, FEES,
EXPENSES, CLAIMS, SUITS, JUDGMENTS, AWARDS, LIABILITIES (INCLUDING BUT NOT
LIMITED TO STRICT LIABILITIES), OBLIGATIONS, DEBTS, DIMINUTIONS IN VALUE, FINES,
PENALTIES, CHARGES, COSTS OF REMEDIATION (WHETHER OR NOT PERFORMED VOLUNTARILY),
AMOUNTS PAID IN SETTLEMENT, LITIGATION COSTS, REASONABLE ATTORNEYS’ FEES AND
EXPENSES, ENGINEERS’ FEES, ENVIRONMENTAL CONSULTANTS’ FEES, AND INVESTIGATION
COSTS (INCLUDING BUT NOT LIMITED TO COSTS FOR SAMPLING, TESTING AND ANALYSIS OF
SOIL, WATER, AIR, BUILDING MATERIALS, AND OTHER MATERIALS AND SUBSTANCES WHETHER
SOLID, LIQUID OR GAS), BUT EXCLUDING LOST PROFITS OR CONSEQUENTIAL DAMAGES, OF
WHATEVER KIND OR NATURE, AND WHETHER OR NOT INCURRED IN CONNECTION WITH ANY
JUDICIAL OR ADMINISTRATIVE PROCEEDINGS, ACTIONS, CLAIMS, SUITS, JUDGMENTS OR
AWARDS, RELATING TO

 

                                                                    

63

--------------------------------------------------------------------------------

 

HAZARDOUS MATERIALS, ENVIRONMENTAL CLAIMS, ENVIRONMENTAL LIENS AND VIOLATION OF
ENVIRONMENTAL LAWS.

(5)               “HAZARDOUS MATERIALS” MEANS (A) PETROLEUM OR CHEMICAL
PRODUCTS, WHETHER IN LIQUID, SOLID, OR GASEOUS FORM, OR ANY FRACTION OR
BY‑PRODUCT THEREOF, (B) ASBESTOS OR ASBESTOS‑CONTAINING MATERIALS,
(C) POLYCHLORINATED BIPHENYLS (PCBS), (D) RADON GAS, (E) UNDERGROUND STORAGE
TANKS, (F) ANY EXPLOSIVE OR RADIOACTIVE SUBSTANCES, (G) LEAD OR LEAD-BASED
PAINT, OR (H) ANY OTHER SUBSTANCE, MATERIAL, WASTE OR MIXTURE WHICH IS OR SHALL
BE LISTED, DEFINED, OR OTHERWISE DETERMINED BY ANY GOVERNMENTAL AUTHORITY TO BE
HAZARDOUS, TOXIC, DANGEROUS OR OTHERWISE REGULATED, CONTROLLED OR GIVING RISE TO
LIABILITY UNDER ANY ENVIRONMENTAL LAWS.

SECTION 5.2            REPRESENTATIONS AND WARRANTIES ON ENVIRONMENTAL MATTERS.

Borrower represents and warrants to Administrative Agent and the Lenders that,
to Borrower’s knowledge, except as set forth in the Site Assessment, (1) no
Hazardous Material is now or was formerly used, stored, generated, manufactured,
installed, treated, discharged, disposed of or otherwise present at or about the
Project or any property adjacent to the Project (except for De Minimis Amounts),
(2) all material permits, licenses, approvals and filings required by
Environmental Laws have been obtained, and the use, operation and condition of
the Project do not, and did not previously, violate any Environmental Laws in
any material respect, (3) no outstanding civil, criminal or administrative
action, suit, claim, hearing, investigation or proceeding has been brought
against Borrower or a prior owner of the Project or (to Borrower’s knowledge)
been threatened, nor have any settlements been reached by Borrower or a prior
owner of the Project that remain unpaid, nor have any outstanding Liens been
imposed on the Project, in each case concerning Hazardous Materials or
Environmental Laws and (4) no underground storage tanks exist at the Project.

SECTION 5.3            COVENANTS ON ENVIRONMENTAL MATTERS.

(1)               BORROWER SHALL (A) SUBJECT TO BORROWER’S RIGHT TO CONTEST
PURSUANT TO SECTION 9.4, COMPLY STRICTLY AND IN ALL MATERIAL RESPECTS WITH
APPLICABLE ENVIRONMENTAL LAWS; (B) NOTIFY ADMINISTRATIVE AGENT IMMEDIATELY UPON
BORROWER’S DISCOVERY OF ANY SPILL, DISCHARGE, RELEASE OR PRESENCE OF ANY
HAZARDOUS MATERIAL AT, UPON, UNDER, WITHIN, CONTIGUOUS TO OR OTHERWISE AFFECTING
THE PROJECT WHICH WOULD REASONABLY BE EXPECTED TO LEAD TO AN ENVIRONMENTAL CLAIM
AGAINST BORROWER, ADMINISTRATIVE AGENT OR ANY OF THE LENDERS; (C) PROMPTLY
REMOVE SUCH HAZARDOUS MATERIALS AND REMEDIATE THE PROJECT IN COMPLIANCE IN ALL
MATERIAL RESPECTS WITH ENVIRONMENTAL LAWS (SUBJECT TO BORROWER’S RIGHT TO
CONTEST PURSUANT TO SECTION 9.4); AND (D) PROMPTLY FORWARD TO ADMINISTRATIVE
AGENT COPIES OF ALL ORDERS, NOTICES, PERMITS, APPLICATIONS OR OTHER WRITTEN
COMMUNICATIONS AND REPORTS RECEIVED BY BORROWER IN CONNECTION WITH ANY SPILL,
DISCHARGE, RELEASE OR THE PRESENCE OF ANY HAZARDOUS MATERIAL AT THE PROJECT OR
THE VIOLATION OF ENVIRONMENTAL LAWS BY BORROWER WHICH WOULD REASONABLY BE
EXPECTED TO LEAD TO AN ENVIRONMENTAL CLAIM AGAINST BORROWER, ADMINISTRATIVE
AGENT OR ANY OF THE LENDERS.

(2)               BORROWER SHALL NOT CAUSE, SHALL PROHIBIT ANY OTHER PERSON
WITHIN THE CONTROL OF BORROWER FROM CAUSING, AND SHALL USE PRUDENT, COMMERCIALLY
REASONABLE EFFORTS TO PROHIBIT OTHER PERSONS (INCLUDING TENANTS) FROM CAUSING,
(A) ANY SPILL, DISCHARGE OR RELEASE, OR THE

 

                                                                    

64

--------------------------------------------------------------------------------

 

USE, STORAGE, GENERATION, MANUFACTURE, INSTALLATION, OR DISPOSAL, OF ANY
HAZARDOUS MATERIALS AT, UPON, UNDER, WITHIN OR ABOUT THE PROJECT OR THE
TRANSPORTATION OF ANY HAZARDOUS MATERIALS TO OR FROM THE PROJECT (EXCEPT FOR DE
MINIMIS AMOUNTS) OR (B) ANY UNDERGROUND STORAGE TANKS TO BE INSTALLED AT THE
PROJECT.

(3)               BORROWER SHALL PROVIDE TO ADMINISTRATIVE AGENT, A SITE
ASSESSMENT AS MAY BE REQUIRED PURSUANT TO THE TERMS OF SECTION 5(A) OF THE
ENVIRONMENTAL INDEMNITY.

(4)               ENVIRONMENTAL NOTICES.  BORROWER SHALL PROMPTLY PROVIDE NOTICE
TO ADMINISTRATIVE AGENT OF:

(A)                ALL ENVIRONMENTAL CLAIMS ASSERTED OR THREATENED IN WRITING
AGAINST BORROWER OR THE PROJECT, OR ANY OTHER PARTY OCCUPYING THE PROJECT OR ANY
PORTION THEREOF (TO THE EXTENT THE SAME IS RELATED TO SUCH OTHER PARTY’S
ACTIVITIES AT THE PROJECT), WHICH, IN ALL SUCH CASES, BECOME KNOWN TO BORROWER;

(B)               THE DISCOVERY BY BORROWER OF ANY OCCURRENCE OR CONDITION ON
THE PROJECT OR ON ANY REAL PROPERTY ADJOINING OR IN THE VICINITY OF THE PROJECT
WHICH WOULD REASONABLY BE EXPECTED TO LEAD TO AN ENVIRONMENTAL CLAIM AGAINST
BORROWER, ADMINISTRATIVE AGENT OR ANY OF THE LENDERS;

(C)                THE COMMENCEMENT OR COMPLETION OF ANY REMEDIATION AT THE
PROJECT; AND

(D)               ANY LIEN OR OTHER ENCUMBRANCE IMPOSED ON THE PROJECT PURSUANT
TO ANY ENVIRONMENTAL LAW (AN “ENVIRONMENTAL LIEN”).

In connection therewith, Borrower shall transmit to Administrative Agent copies
of any citations, orders, notices or other written communications received by
Borrower from any Person and any notices, reports or other written
communications submitted by Borrower to any Governmental Authority with respect
to the matters described above.

SECTION 5.4            ALLOCATION OF RISKS AND INDEMNITY.

As between Borrower, Administrative Agent and the Lenders, all risk of loss
associated with non-compliance with Environmental Laws, or with the presence of
any Hazardous Material at, upon, within, contiguous to or otherwise affecting
the Project, shall lie solely with Borrower.  Accordingly, Borrower shall bear
all risks and costs associated with any Environmental Loss, damage or liability
therefrom, including all costs of removal of Hazardous Materials or other
remediation required by this Agreement or any of the other Loan Documents or by
law.  Borrower shall indemnify, defend and hold Administrative Agent and the
Lenders harmless from and against all loss, liabilities, damages, claims, costs
and expenses (including reasonable costs of defense) arising out of or
associated, in any way, with the non-compliance with Environmental Laws, or the
existence of Hazardous Materials in, on, or about the Project, or a breach of
any representation, warranty or covenant contained in this Article 5, whether
based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute or common law, including those arising from the joint,
concurrent, or comparative negligence of Administrative Agent and the Lenders;
provided, however, Borrower shall not be liable under

                                                                    

65­

--------------------------------------------------------------------------------

 

such indemnification to the extent such loss, liability, damage, claim, cost or
expense (i) is caused or created by Administrative Agent’s or any Lender’s gross
negligence or willful misconduct (ii) arises from events or conditions first
occurring after Administrative Agent or any of the Lenders acquires title to the
Project and which (a) were not at all undertaken, caused, contributed to,
authorized or permitted by Borrower, Guarantor or their respective Affiliates
(including any of their respective employees, agents, contractors,
subcontractors, tenants and invitees) and (b) do not relate and are not
attributable to any conduct occurring or conditions existing at the Project
prior to such acquisition of title.  Borrower’s obligations under this
Section 5.4 (x) shall arise upon the discovery of the presence of any Hazardous
Material, whether or not any Governmental Authority has taken or threatened any
action in connection with the presence of any Hazardous Material, and whether or
not the existence of any such Hazardous Material or potential liability on
account thereof is disclosed in the Site Assessment and (y) shall continue
notwithstanding the repayment of the Loans or any transfer or sale of any right,
title and interest in the Project (by foreclosure, deed in lieu of foreclosure
or otherwise); provided, however, that if the Loans are repaid in full or
Administrative Agent or any of the Lenders or any of their designees or a
purchaser at a foreclosure sale obtains title to the Project (by foreclosure,
deed in lieu of foreclosure or otherwise), Borrower’s obligations under this
Section 5.4 shall terminate upon the earlier of (A) the date that Borrower
delivers a new Site Assessment indicating that the Project is free and clear of
all Hazardous Materials (except for any Hazardous Materials (1) to the extent
disclosed pursuant to the Site Assessment delivered to Administrative Agent in
connection with the closing of the Loans or (2) introduced at the Project as a
result of Administrative Agent’s or any Lender’s gross negligence or willful
misconduct) and (B) the date that is five (5) years after the date of such
repayment or acquisition of title to the Project, provided that Borrower’s
obligations under this Section 5.4 shall survive as to any claims, actions,
litigation or other proceedings that are then pending or subject to further
appeal as of such fifth anniversary.

SECTION 5.5            NO WAIVER.

Notwithstanding any provision in this Article 5 or elsewhere in the Loan
Documents, or any rights or remedies granted by the Loan Documents,
Administrative Agent and the Lenders do not waive and expressly reserve all
rights and benefits now or hereafter accruing to Administrative Agent and/or any
Lenders under the “security interest” or “secured creditor” exception under
applicable Environmental Laws, as the same may be amended.  No action taken by
Administrative Agent and/or any Lender pursuant to the Loan Documents shall be
deemed or construed to be a waiver or relinquishment of any such rights or
benefits under the “security interest exception”.

ARTICLE 6

LEASING MATTERS

SECTION 6.1            REPRESENTATIONS AND WARRANTIES ON LEASES.

Borrower represents and warrants to Administrative Agent and the Lenders with
respect to Leases that, except as described in the rent roll or the tenant
estoppel certificates delivered to

                                                                   

66

--------------------------------------------------------------------------------

 

Administrative Agent in connection with the closing of the Loans: (1) to
Borrower’s knowledge, the rent roll delivered to Administrative Agent is true
and correct in all material respects, and the Leases are valid and in and full
force and effect; (2) the Leases are in writing, and there are no oral
agreements with respect thereto; (3) the copies of the Leases delivered to
Administrative Agent are true and complete in all material respects; (4) to
Borrower’s knowledge, neither the landlord nor any tenant is in default under
any of the Leases in any material respect (other than a default by the tenant
under the Lease with NYLC, LLC (the “LeCirque Lease)); (5) Borrower has no
knowledge of any notice of termination or default with respect to any Lease
(other than a notice of default given by Borrower to the tenant under the Le
Cirque Lease); (6) Borrower has not assigned or pledged any of the Leases, the
Rents or any interests therein except to Administrative Agent (on behalf of the
Lenders) and except for such previous assignments as shall have been terminated;
(7) no tenant or other party has an unexpired option (or right of first refusal)
to purchase all or any portion of the Project; and (8) no tenant has prepaid
more than one month’s rent in advance (excluding (i) security deposits and last
month’s rent as are permitted by applicable law and are commercially reasonable
in the prevailing market and (ii) other charges collected in accordance with the
terms of the applicable Lease).

SECTION 6.2            APPROVAL RIGHTS; SECURITY DEPOSITS.

Schedule 2 attached hereto and incorporated by reference herein sets forth the
approval rights of Administrative Agent with respect to Leases.  Borrower shall
hold, in trust, all tenant security deposits in a segregated account, and, to
the extent required by applicable law, shall not commingle any such funds with
any other funds of Borrower.  Within ten (10) Business Days after Administrative
Agent’s request, Borrower shall furnish to Administrative Agent a statement of
all tenant security deposits, and copies of all Leases not previously delivered
to Administrative Agent, certified by Borrower as being true and correct.

SECTION 6.3            COVENANTS.

Borrower (1) shall promptly perform all of its obligations under the Leases,
except to the extent such non-performance would not reasonably be expected to
materially and adversely impact the value of, or income from, the Project;
(2) shall enforce all of the obligations of tenants under the Leases, except to
the extent the failure to enforce such obligations would not reasonably be
expected to materially and adversely impact the value of, or income from, the
Project; (3) shall promptly furnish to Administrative Agent any written notice
of default or termination received by Borrower from any tenant, and any written
notice of default or termination given by Borrower to any tenant; (4) shall not
collect any rents for more than thirty (30) days in advance of the time when the
same shall become due (excluding (i) security deposits and last month’s rent as
are permitted by applicable law and are commercially reasonable in the
prevailing market and (ii) other charges collected in accordance with the terms
of the applicable Lease); (5) shall not enter into any ground lease or master
lease of all or any part of the Project; and (6) shall not further assign or
encumber any Lease.

SECTION 6.4            TENANT ESTOPPELS.

At Administrative Agent’s reasonable request from time to time, Borrower shall
use its commercially reasonable efforts to obtain and furnish to Administrative
Agent written estoppels

                                                                    

67

--------------------------------------------------------------------------------

 

in form and substance reasonably satisfactory to Administrative Agent, executed
by tenants under Leases in the Project and confirming the term, rent, and other
provisions and matters relating to the Leases reasonably requested by
Administrative Agent, provided that Administrative Agent shall not be permitted
to request an estoppel from any tenant more than once in any twelve-month period
(except during the continuance of an Event of Default).

SECTION 6.5            SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENTS.

At Borrower’s request, Administrative Agent shall enter into subordination,
non-disturbance and attornment agreements, substantially in the form of Exhibit
D (except for such changes thereto as a tenant may reasonably request and
Administrative Agent shall reasonably approve) or, in the case of a national
retail tenant, in such tenant’s standard form of subordination, non-disturbance
and attornment agreement, subject to Administrative Agent’s reasonable review
and approval), with respect to any Permitted Lease.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Administrative Agent and the Lenders that:

SECTION 7.1            ORGANIZATION AND POWER.

Each of Borrower and Guarantor is duly organized, validly existing and in good
standing under the laws of the state of its formation or existence, and is in
compliance in all material respects with legal requirements applicable to doing
business in the State, except, in the case of Guarantor, to the extent such
non-compliance would not reasonably be expected to have a Material Adverse
Effect.  Borrower is not a “foreign person” within the meaning of § 1445(f)(3)
of the Internal Revenue Code.

SECTION 7.2            VALIDITY OF LOAN DOCUMENTS.

The execution, delivery and performance by Borrower and Guarantor of the Loan
Documents to which each is a party: (1) are duly authorized and do not require
the consent or approval of any other party or Governmental Authority which has
not been obtained; and (2) will not violate any law or result in the imposition
of any Lien upon the assets of Borrower or Guarantor, except as contemplated by
the Loan Documents.  The Loan Documents to which each of Borrower and Guarantor
are a party constitute the legal, valid and binding obligations of Borrower and
Guarantor (as applicable), enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, or similar laws generally
affecting the enforcement of creditors’ rights.

SECTION 7.3            LIABILITIES; LITIGATION.

(1)               THE FINANCIAL STATEMENTS DELIVERED BY BORROWER AND GUARANTOR
ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE OF SUCH FINANCIAL
STATEMENTS.  THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN THE FINANCIAL
CONDITION OF BORROWER SINCE THE DATE OF SUCH MOST

 

                                                                    

68

--------------------------------------------------------------------------------

 

RECENTLY DELIVERED FINANCIAL STATEMENTS.  THERE ARE NO MATERIAL LIABILITIES
(FIXED OR CONTINGENT) AFFECTING THE PROJECT OR BORROWER EXCEPT AS DISCLOSED IN
BORROWER’S FINANCIAL STATEMENTS.  EXCEPT AS DISCLOSED IN SUCH FINANCIAL
STATEMENTS, THERE IS NO LITIGATION, ADMINISTRATIVE PROCEEDING, INVESTIGATION OR
OTHER LEGAL ACTION (INCLUDING ANY PROCEEDING UNDER ANY STATE OR FEDERAL
BANKRUPTCY OR INSOLVENCY LAW) PENDING OR, TO THE KNOWLEDGE OF BORROWER,
THREATENED, AGAINST THE PROJECT OR BORROWER WHICH IF ADVERSELY DETERMINED WOULD
HAVE A MATERIAL ADVERSE EFFECT OR IS NOT OTHERWISE COVERED BY INSURANCE.

(2)               NEITHER BORROWER NOR GUARANTOR IS CONTEMPLATING EITHER THE
FILING OF A PETITION BY IT UNDER STATE OR FEDERAL BANKRUPTCY OR INSOLVENCY LAWS
OR THE LIQUIDATION OF ALL OR A MAJOR PORTION OF ITS ASSETS OR PROPERTY, AND
BORROWER DOES NOT HAVE KNOWLEDGE OF ANY PERSON CONTEMPLATING THE FILING OF ANY
SUCH PETITION AGAINST BORROWER OR GUARANTOR.

SECTION 7.4            TAXES AND ASSESSMENTS.

The Project is comprised of one or more parcels, each of which constitutes a
separate tax lot and none of which constitutes a portion of any other tax lot. 
There are no pending or, to Borrower’s knowledge, proposed, special or other
assessments for public improvements or otherwise affecting the Project, nor are
there any contemplated improvements to the Project that may result in such
special or other assessments.

SECTION 7.5            OTHER AGREEMENTS; DEFAULTS.

Borrower is not a party to any agreement or instrument or subject to any court
order, injunction, permit, or restriction which would cause a Material Adverse
Effect.  Borrower is not in violation of any agreement to which it is a party
which violation would have a Material Adverse Effect.

SECTION 7.6            COMPLIANCE WITH LAW.

(1)               BORROWER HAS ALL REQUISITE MATERIAL LICENSES, PERMITS,
FRANCHISES, QUALIFICATIONS, CERTIFICATES OF OCCUPANCY OR OTHER GOVERNMENTAL
AUTHORIZATIONS TO OWN, LEASE AND OPERATE THE PROJECT AND CARRY ON ITS BUSINESS,
AND THE PROJECT IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE
LEGAL REQUIREMENTS AND IS FREE OF STRUCTURAL DEFECTS, AND ALL BUILDING SYSTEMS
CONTAINED THEREIN ARE IN GOOD WORKING ORDER, SUBJECT TO ORDINARY WEAR AND TEAR. 
THE PROJECT DOES NOT CONSTITUTE, IN WHOLE OR IN PART, A LEGALLY NON‑CONFORMING
USE UNDER APPLICABLE LEGAL REQUIREMENTS;

(2)               NO CONDEMNATION HAS BEEN COMMENCED OR, TO BORROWER’S
KNOWLEDGE, IS CONTEMPLATED WITH RESPECT TO ALL OR ANY PORTION OF THE PROJECT OR
FOR THE RELOCATION OF ROADWAYS PROVIDING ACCESS TO THE PROJECT; AND

(3)               THE PROJECT HAS ADEQUATE RIGHTS OF ACCESS TO PUBLIC WAYS AND
IS SERVED BY ADEQUATE WATER, SEWER, SANITARY SEWER AND STORM DRAIN FACILITIES. 
ALL PUBLIC UTILITIES NECESSARY OR CONVENIENT TO THE FULL USE AND ENJOYMENT OF
THE PROJECT ARE LOCATED IN THE PUBLIC RIGHT-OF-WAY ABUTTING THE PROJECT, AND ALL
SUCH UTILITIES ARE CONNECTED SO AS TO SERVE THE PROJECT WITHOUT PASSING OVER
OTHER PROPERTY, EXCEPT TO THE EXTENT SUCH OTHER PROPERTY IS SUBJECT TO A
PERPETUAL EASEMENT FOR SUCH UTILITY BENEFITING THE PROJECT.  ALL ROADS NECESSARY
FOR THE FULL UTILIZATION OF THE PROJECT

 

                                                                    

69

--------------------------------------------------------------------------------

 

FOR ITS CURRENT PURPOSE HAVE BEEN COMPLETED AND DEDICATED TO PUBLIC USE AND
ACCEPTED BY ALL GOVERNMENTAL AUTHORITIES.

SECTION 7.7            LOCATION OF BORROWER.

Borrower’s principal place of business and chief executive offices are located
at the address stated in Section 12.1.

SECTION 7.8            ERISA.

Borrower has not established any pension plan for employees which would cause
Borrower to be subject to ERISA.

SECTION 7.9            MARGIN STOCK.

No part of proceeds of the Loans will be used by Borrower for purchasing or
acquiring any “margin stock” within the meaning of Regulations T, U or X of the
Board of Governors of the Federal Reserve System.

SECTION 7.10        TAX FILINGS.

Borrower is a disregarded entity for tax purposes and has paid or made adequate
provision for the payment of all federal, state and local taxes, charges and
assessments payable by Borrower.

SECTION 7.11        SOLVENCY.

The fair saleable value of Borrower’s assets exceeds and will, immediately
following the making of the Loans, exceed Borrower’s total liabilities,
including, without limitation, subordinated, unliquidated, disputed and
contingent liabilities.  The fair saleable value of Borrower’s assets is and
will, immediately following the making of the Loans, be greater than Borrower’s
probable liabilities, including the maximum amount of its contingent liabilities
on its Debts as such Debts become absolute and matured.  Borrower’s assets do
not and, immediately following the making of the Loans will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted.  Borrower does not intend to, and does not believe that it
will, incur Debts and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such Debts as they mature (taking into
account the timing and amounts of cash to be received by Borrower and the
amounts to be payable on or in respect of obligations of Borrower).

SECTION 7.12        FULL AND ACCURATE DISCLOSURE.

No statement of fact made by or on behalf of Borrower in this Agreement or in
any of the other Loan Documents or in any certificate, statement or
questionnaire delivered by Borrower in connection with the Loans contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading.  There
is no fact presently known to Borrower which has not been disclosed to
Administrative Agent

                                                                    

70

--------------------------------------------------------------------------------

 

which materially and adversely affects, nor would reasonably be expected to
materially and adversely affect, the Project or the business, operations or
financial condition of Borrower.

SECTION 7.13        MANAGEMENT AGREEMENTS.

The Management Agreements are the only management agreement to which Borrower is
a party that are in effect with respect to the operation, management or leasing
of the Project.  The copy of each Management Agreement delivered to
Administrative Agent is a true and correct copy, and such agreement has not been
amended or modified.  None of the parties to such agreement is in default under
such agreement in any material respect.

SECTION 7.14        NO CONFLICTS.

The execution, delivery and performance of this Agreement and the other Loan
Documents by Borrower will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any Lien (other than pursuant to the Loan Documents) upon any
of the property or assets of Borrower pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, operating agreement or other agreement
or instrument to which Borrower is a party or by which any of Borrower’s
property or assets is subject, nor will such action result in any violation of
the provisions of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Borrower or any of
Borrower’s properties or assets, and any consent, approval, authorization,
order, registration or qualification of or with any court or any such regulatory
authority or other governmental agency or body required for the execution,
delivery and performance by Borrower of this Agreement or any other Loan
Documents has been obtained and is in full force and effect.

SECTION 7.15        TITLE.

Borrower has good, marketable and insurable title to the Project, free and clear
of all Liens whatsoever, except for the Permitted Encumbrances and such other
Liens as are permitted pursuant to the Loan Documents.  The Mortgage creates
(and upon the recordation thereof and of any related financing statements there
will be perfected) (1) a valid Lien on the Project, subject only to Permitted
Encumbrances, and (2) security interests in and to, and collateral assignments
of, all personality (including the Leases), all in accordance with the terms
thereof, in each case subject only to any applicable Permitted Encumbrances and
such other Liens as are permitted pursuant to the Loan Documents.  There are no
claims for payment for work, labor or materials affecting the Project which are
or may become a Lien prior to, or of equal priority with, the Liens created by
the Loan Documents.  None of the Permitted Encumbrances, individually or in the
aggregate, materially interfere with the benefits of the security intended to be
provided by the Mortgage and this Agreement, or materially and adversely impair
the use or operations of  the Project or Borrower’s ability to pay its
obligations in a timely manner.

SECTION 7.16        USE OF PROJECT.

The Project is being, and will continue to be, used exclusively for commercial,
retail and rental and other appurtenant and related uses.

 

                                                                    

71

--------------------------------------------------------------------------------

 

SECTION 7.17        FLOOD ZONE.

No portion of the Improvements is located in an area identified by the Secretary
of Housing and Urban Development or any successor thereto as an area having
special flood hazards pursuant to the National Flood Insurance Act of 1968, the
Flood Disaster Protection Act of 1973 or the National Flood Insurance Act of
1994, as amended, or any successor law. 

SECTION 7.18        INSURANCE.

Borrower has obtained and has delivered to Administrative Agent certificates of
insurance reflecting the insurance coverages, amounts and other insurance
requirements set forth in this Agreement.  Borrower has not, and to Borrower’s
knowledge, no Person has done, by act or omission, anything which would
materially impair the coverage of any such Policy.

SECTION 7.19        CERTIFICATE OF OCCUPANCY; LICENSES.

All certifications, permits, licenses and approvals, including without
limitation, certificates of occupancy and/or temporary certificates of
occupancy, required for the legal use, occupancy and operation of the Project as
a commercial rental project (collectively, the “Licenses”) have been obtained
and are in full force, except to the extent that such failure would not
reasonably be expected to materially and adversely affect the use of, or
operations at, the Project, and will continue to be maintained.  It is
acknowledged and agreed that the Project is being operated with a temporary
certificate of occupancy, which Borrower shall cause to be maintained, renewed
and/or extended on a timely basis from time to time and/or cause the issuance of
a permanent certificate of occupancy for the use and occupancy of the Project in
replacement thereof.  The use being made of the Project is and shall be in
conformity in all material respects with the certificates of occupancy issued
for the Project from time to time.

SECTION 7.20        PHYSICAL CONDITION.

To Borrower’s knowledge and except as specifically disclosed in the physical
conditions report delivered to Administrative Agent in connection with the
closing of the Loans, the Project, including, without limitation, all buildings,
improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and repair
in all material respects; to Borrower’s knowledge and except as specifically
disclosed in the physical conditions report delivered to Administrative Agent in
connection with the closing of the Loans, there exists no structural or other
material defects or damages in the Project, whether latent or otherwise, and
Borrower has not received written notice from any insurance company or bonding
company of any defects or inadequacies in the Project, or any part thereof,
which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.

SECTION 7.21        BOUNDARIES.

To the best of Borrower’s knowledge and in reliance on, and except as otherwise
specifically disclosed in, the survey provided in connection with the closing of
the Loans, all of

                                                                    

72­

--------------------------------------------------------------------------------

 

the Improvements lie wholly within the boundaries and building restriction lines
of the Project, and no improvements on adjoining properties encroach upon the
Project, and no Improvements encroach upon or violate any easements or other
encumbrances upon the Project, so as to materially adversely affect the value or
marketability of the Project, except those which are insured against by the
Title Policy.

SECTION 7.22        SEPARATE LOTS.

The Project is comprised of two (2) commercial condominium Units which
constitute two (2) separate tax lots and does not constitute a portion of any
other tax lot not a part of the Project.

SECTION 7.23        FILING AND RECORDING TAXES.

All transfer taxes, deed stamps, intangible taxes or other amounts in the nature
of transfer taxes required to be paid by any Person under applicable legal
requirements currently in effect in connection with the transfer of the Project
to Borrower or any transfer of a controlling interest in Borrower have been
paid.  All mortgage, mortgage recording, stamp, intangible or other similar tax
required to be paid by any Person under applicable legal requirements currently
in effect in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents, including,
without limitation, the Mortgage, have been paid and, under current legal
requirements, the Mortgage is enforceable in accordance with its terms by
Administrative Agent or any subsequent holder thereof (on behalf of the
Lenders), subject to applicable bankruptcy, insolvency or similar laws generally
affecting the enforcement of creditors’ rights.

SECTION 7.24        INVESTMENT COMPANY ACT.

Borrower is not (1) an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended; (2) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended; or (3) subject to any other federal or state law or regulation which
purports to restrict or regulate its ability to borrow money.

SECTION 7.25        FOREIGN ASSETS CONTROL REGULATIONS, ETC. 

(1)               NEITHER THE EXECUTION AND DELIVERY OF THE NOTES AND THE OTHER
LOAN DOCUMENTS BY BORROWER NOR THE USE OF THE PROCEEDS OF THE LOANS, WILL
VIOLATE THE TRADING WITH THE ENEMY ACT, AS AMENDED, OR ANY OF THE FOREIGN ASSETS
CONTROL REGULATIONS OF THE UNITED STATES TREASURY DEPARTMENT (31 CFR,
SUBTITLE B, CHAPTER V, AS AMENDED) OR THE ANTI-TERRORISM ORDER OR ANY ENABLING
LEGISLATION OR EXECUTIVE ORDER RELATING TO ANY OF THE SAME.  WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, BORROWER (A) DOES NOT AND WILL NOT BECOME A
BLOCKED PERSON DESCRIBED IN SECTION 1 OF THE ANTI-TERRORISM ORDER AND (B) TO ITS
KNOWLEDGE, DOES NOT ENGAGE AND WILL NOT ENGAGE IN ANY DEALINGS OR TRANSACTIONS
OR BE OTHERWISE ASSOCIATED WITH ANY SUCH BLOCKED PERSON.

 

 

                                                                    

73

--------------------------------------------------------------------------------

 

(2)               EACH PARTNER OR MEMBER OR OTHER DIRECT OR INDIRECT PRINCIPAL
OF BORROWER (EXCLUDING ANY DIRECT OR INDIRECT OWNERS OF GUARANTOR) SHALL BE AT
ALL TIMES DURING THE TERM OF THE LOANS AN ENTITY OR PERSON WHICH IS NOT A
PROHIBITED PERSON.

SECTION 7.26        ORGANIZATIONAL STRUCTURE.

(1)               BORROWER HAS HERETOFORE DELIVERED TO ADMINISTRATIVE AGENT TRUE
AND COMPLETE COPIES OF THE ORGANIZATIONAL DOCUMENTS OF 731 RETAIL ONE LLC, 731
COMMERCIAL LLC, SOLE MEMBER AND GUARANTOR.  THE SOLE MEMBER OF 731 RETAIL ONE
LLC ON THE  CLOSING DATE IS 731 COMMERCIAL LLC, AND THE SOLE MEMBER OF 731
COMMERCIAL LLC ON THE CLOSING DATE IS THE SOLE MEMBER.  731 RETAIL ONE LLC IS
THE OWNER OF RETAIL UNIT 1.  731 COMMERCIAL LLC IS THE OWNER OF RETAIL UNIT 2.

(2)               THE SOLE MEMBER OF THE SOLE MEMBER IS GUARANTOR. 

(3)               SCHEDULE 7.26 CONTAINS A TRUE AND ACCURATE OWNERSHIP CHART OF
BORROWER (EXCEPT AS OTHERWISE INDICATED ON SUCH OWNERSHIP CHART).

SECTION 7.27        ANTI-CORRUPTION LAWS AND SANCTIONS.

Borrower has implemented and maintains in effect policies and procedures
designed to ensure compliance by Borrower, its Affiliates and their respective
directors, officers, employees and agents with Anti-Corruption Laws and
applicable Sanctions, and Borrower, its Affiliates and their respective
directors and officers and, to the knowledge of Borrower, their respective
employees and agents, are in compliance with Anti-Corruption Laws and applicable
Sanctions in all material respects. None of (i) Borrower, any Affiliate or any
of their respective directors, officers or employees, or (ii) to the knowledge
of Borrower, any agent of Borrower or any Affiliate that will act in any
capacity in connection with or benefit from the Transactions or any other
transactions contemplated hereby, is a Sanctioned Person.  No Transactions will
violate Anti-Corruption Laws or applicable Sanctions.

SECTION 7.28        GUARANTOR NET WORTH AND LIQUIDITY.

As of the date hereof, Guarantor has a Net Worth greater than the Guarantor’s
Minimum Net Worth and Liquid Assets greater than Guarantor’s Minimum Liquid
Assets.

SECTION 7.29        CONDOMINIUM. 

The Condominium has been validly formed and is validly existing under the
Condominium Act.

 

 

                                                                    

74

--------------------------------------------------------------------------------

 

ARTICLE 8

FINANCIAL REPORTING

SECTION 8.1            BORROWER’S FINANCIAL STATEMENTS.

Borrower shall maintain a standard system of accounting on a GAAP basis
consistently applied, and furnish or cause to be furnished to Administrative
Agent all of the following, which, in the case of Borrower’s financial
statements, must be substantially in the form of the financial statements
previously delivered to Administrative Agent or otherwise reasonably
satisfactory in form and content to Administrative Agent (it being agreed that
Administrative Agent shall deliver copies of the following to the Lenders
promptly after Administrative Agent’s receipt thereof and Borrower shall have no
liability for Administrative Agent’s failure to deliver any of the following
items to the Lenders):

(1)               ANNUAL FINANCIAL STATEMENTS.  NO LATER THAN 120 DAYS AFTER THE
END OF EACH FISCAL YEAR, A COPY OF BORROWER’S ANNUAL UNAUDITED FINANCIAL
STATEMENTS CONSISTING OF A BALANCE SHEET, STATEMENT OF OPERATIONS AND CASH FLOW
STATEMENT, AS OF THE END OF AND FOR SUCH FISCAL YEAR, CERTIFIED BY A RESPONSIBLE
PERSON OF BORROWER TO BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS TO THE BEST
OF HIS OR HER KNOWLEDGE, ALL PREPARED IN ACCORDANCE WITH GAAP.

(2)               QUARTERLY FINANCIAL STATEMENTS.  NO LATER THAN 45 DAYS AFTER
THE END OF EACH CALENDAR QUARTER, A CERTIFICATE EXECUTED BY A RESPONSIBLE PERSON
OF BORROWER ATTACHING COPIES OF THE BALANCE SHEET AND STATEMENT OF OPERATIONS
AND A TRAILING TWELVE MONTH FINANCIAL STATEMENT, EACH PREPARED IN ACCORDANCE
WITH GAAP, TOGETHER WITH (1) A CURRENT RENT ROLL FOR THE PROJECT SETTING FORTH
THE NAME OF EACH TENANT AT THE PROJECT, THE NUMBER OF SQUARE FEET COMPRISING THE
SPACE LEASED TO EACH SUCH TENANT AND THE LOCATION ON THE PROJECT OF SUCH SPACE,
THE AMOUNT OF RENT PAID BY EACH SUCH TENANT AND THE EXPIRATION DATE OF THE LEASE
FOR EACH SUCH TENANT, (2) A RENT ARREARAGE REPORT AND (3) NOTICES WITH RESPECT
TO ANY NEW LEASES OR ANY LEASES IN DEFAULT.  THE CERTIFICATE EXECUTED BY THE
RESPONSIBLE PERSON OF BORROWER SHALL CERTIFY THAT, TO THE BEST OF HIS OR HER
KNOWLEDGE, (I) ALL SUCH STATEMENTS, RENT ROLLS AND REPORTS ATTACHED TO THE
CERTIFICATE ARE TRUE AND CORRECT, IN ALL MATERIAL RESPECTS, AS OF THE DATE OF
THE CERTIFICATE AND (II) TO THE BEST OF SUCH RESPONSIBLE PERSON’S KNOWLEDGE, NO
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR, IF ANY EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, SPECIFYING THE NATURE AND EXTENT THEREOF AND ANY
ACTIONS TAKEN OR PROPOSED TO BE TAKEN WITH RESPECT TO SUCH EVENT OF DEFAULT.

(3)               DSCR CALCULATION CERTIFICATE.  AS SOON AS AVAILABLE, BUT IN
ANY EVENT NOT LATER THAN THE DATE ON WHICH THE QUARTERLY FINANCIAL STATEMENTS
ARE REQUIRED TO BE DELIVERED PURSUANT TO SECTION 8.1(2), A STATEMENT IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT, CERTIFIED BY A
RESPONSIBLE PERSON OF BORROWER TO BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
TO THE BEST OF HIS OR HER KNOWLEDGE, SETTING FORTH THE CALCULATIONS OF NET
OPERATING INCOME AND DEBT SERVICE COVERAGE RATIO AS OF THE LAST DAY OF SUCH
CALENDAR QUARTER AND CONTAINING SUCH BACK-UP INFORMATION AND DOCUMENTATION
(INCLUDING, WITHOUT LIMITATION, A DESCRIPTION OF EACH PERMITTED LEASE THEN IN
EFFECT WHICH

 

                                                                    

75

--------------------------------------------------------------------------------

 

IS BEING INCLUDED IN NET OPERATING INCOME ON A PRO FORMA BASIS AND NOT
PREVIOUSLY DESCRIBED IN A PRIOR DSCR CALCULATION CERTIFICATE AND THE ACTUAL AND
ANNUALIZED OPERATING REVENUE DERIVED FROM PERMITTED LEASES) AS ADMINISTRATIVE
AGENT SHALL REASONABLY REQUIRE (A “DSCR CALCULATION CERTIFICATE”).

(4)               MONTHLY EXPENSE STATEMENTS.  DURING A CASH MANAGEMENT PERIOD,
NO LATER THAN TWELVE (12) BUSINESS DAYS AFTER THE END OF EACH CALENDAR MONTH, A
CERTIFICATE EXECUTED BY A RESPONSIBLE PERSON OF BORROWER, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT, (I) SETTING FORTH THE ACTUAL
OPERATING EXPENSES AND ACTUAL EXTRAORDINARY EXPENSES PAID BY BORROWER DURING
SUCH MONTH AND (II) COMPARING SUCH ACTUAL OPERATING EXPENSES AND ACTUAL
EXTRAORDINARY EXPENSES WITH THE APPROVED OPERATING EXPENSES AND APPROVED
EXTRAORDINARY EXPENSES FOR SUCH MONTH.  THE CERTIFICATE EXECUTED BY THE
RESPONSIBLE PERSON OF BORROWER SHALL CERTIFY THAT, TO THE BEST OF HIS OR HER
KNOWLEDGE, THE INFORMATION INCLUDED IN SUCH CERTIFICATE IS TRUE AND CORRECT, IN
ALL MATERIAL RESPECTS, AS OF THE DATE OF THE CERTIFICATE.

SECTION 8.2            GUARANTOR’S FINANCIAL STATEMENTS.

Borrower shall furnish or cause to be furnished to Administrative Agent as soon
as available, but in any event within 120 days after the end of each fiscal
year, Guarantor’s Consolidated Financial Statements as of the end of and for
such fiscal year, audited by Guarantor’s accountants. In addition, Borrower
shall furnish or cause to be furnished to  the Administrative Agent, no later
than 45 days after the end of each calendar quarter, a certificate executed by a
Responsible Person of Guarantor setting forth in reasonable detail a statement
of Guarantor’s Net Worth and Liquid Assets.

SECTION 8.3            OTHER INFORMATION.

Borrower shall deliver to Administrative Agent such reasonable additional
information regarding Borrower and the Project within thirty (30) days after
Administrative Agent’s request therefor (or other reasonable amount of time,
depending on the nature of the request and the availability of the requested
information).

SECTION 8.4            ANNUAL BUDGET.

During a Cash Management Period, Borrower will provide to Administrative Agent
and the Lenders at least thirty (30) days prior to the commencement of each
calendar year, the proposed annual operating, capital expenditures and leasing
costs budget for the Project for such year presented on a monthly and annual
basis.  In addition, Borrower shall provide to Administrative Agent and the
Lenders within ten (10) days after the commencement of a Cash Management Period
the proposed operating, capital expenditures and leasing costs budget for the
balance of the then current calendar year presented on a monthly basis.  Each
such budget provided during a Cash Management Period or as a result of the
commencement of a Cash Management Period shall be subject to the review and
approval by the Requisite Leasing Approval Lenders (not to be unreasonably
withheld, delayed or conditioned), and shall not take effect until approved by
Administrative Agent.  During a Cash Management Period, until such time as
Administrative Agent shall approve a proposed annual budget, the most recent
Approved

                                                                    

76

--------------------------------------------------------------------------------

 

Annual Budget shall apply; provided that such Approved Annual Budget shall be
adjusted to reflect actual increases in Property Taxes, insurance premiums and
expenses required to be incurred by Borrower, as landlord, under any Permitted
Lease.

SECTION 8.5            AUDITS.

Administrative Agent shall have the right after the occurrence and during the
continuance of an Event of Default to choose and appoint a certified public
accountant to perform financial audits with respect to the Project as it deems
necessary, at Borrower’s expense.

ARTICLE 9

COVENANTS

Borrower covenants and agrees with Administrative Agent and the Lenders as
follows:

SECTION 9.1            DUE ON SALE AND ENCUMBRANCE; PERMITTED TRANSFERS.

(1)               SUBJECT TO THE PROVISIONS OF SECTIONS 9.1(2) AND 9.1(3),
WITHOUT THE PRIOR WRITTEN CONSENT OF ADMINISTRATIVE AGENT AND THE LENDERS (TO
THE EXTENT REQUIRED UNDER SECTION 12.2), EXCEPT AS PERMITTED UNDER THIS
AGREEMENT, (A) BORROWER SHALL NOT SELL, LEASE, EXCHANGE, CONVEY, TRANSFER,
MORTGAGE, ASSIGN, PLEDGE OR ENCUMBER, EITHER VOLUNTARILY OR INVOLUNTARILY (OR
ENTER INTO AN AGREEMENT TO DO SO UNLESS SUCH AGREEMENT IS EXPRESSLY SUBJECT TO
THE REPAYMENT OF THE LOANS IN FULL OR THE OBTAINING OF THE CONSENT OF
ADMINISTRATIVE AGENT AND THE LENDERS, AS APPLICABLE), ANY RIGHT, TITLE OR
INTEREST OF BORROWER IN AND TO THE PROJECT OR ANY PORTION THEREOF, EXCEPTING,
HOWEVER, THE TRANSFER OR DISPOSAL OF BUILDING EQUIPMENT AND/OR PERSONAL PROPERTY
THAT IS NO LONGER NECESSARY IN CONNECTION WITH THE OPERATION OR USE OF THE
PROJECT; AND (B) NEITHER BORROWER NOR ANY OTHER PERSON HAVING A DIRECT OR
INDIRECT OWNERSHIP OR BENEFICIAL INTEREST IN BORROWER SHALL SELL, EXCHANGE,
CONVEY, TRANSFER, MORTGAGE, ASSIGN, PLEDGE OR ENCUMBER (INCLUDING, WITHOUT
LIMITATION, IN CONNECTION WITH ANY “MEZZANINE FINANCING”), EITHER VOLUNTARILY OR
INVOLUNTARILY (OR ENTER INTO AN AGREEMENT TO DO SO), ANY DIRECT OR INDIRECT
OWNERSHIP INTEREST IN BORROWER.

(2)               A TRANSFER OF THE PROJECT TO A SUCCESSOR BORROWER ASSUMING IN
WRITING ALL OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS (IN WHICH CASE THE
CURRENT BORROWER SHALL BE RELEASED FROM ALL OF ITS OBLIGATIONS UNDER THE LOAN
DOCUMENTS, PROVIDED THAT GUARANTOR SHALL REAFFIRM IN WRITING ALL OF ITS
OBLIGATIONS UNDER THE LOAN DOCUMENTS TO WHICH IT IS A PARTY, AND THE SUCCESSOR
BORROWER SHALL BE DEEMED THE “BORROWER” UNDER THE LOAN DOCUMENTS) OR A TRANSFER
(BUT NOT A MORTGAGE, PLEDGE, HYPOTHECATION, ENCUMBRANCE OR GRANT OF SECURITY
INTEREST IN) OF UP TO 50% OF NON-CONTROLLING DIRECT OR INDIRECT BENEFICIAL
INTERESTS IN BORROWER SHALL BE PERMITTED WITHOUT ADMINISTRATIVE AGENT’S OR THE
LENDERS’ CONSENT, PROVIDED IN EACH CASE THAT (I) BORROWER SHALL NOTIFY
ADMINISTRATIVE AGENT IN WRITING THEREOF NOT LESS THAN THIRTY (30) DAYS PRIOR TO
THE OCCURRENCE THEREOF, (II) IMMEDIATELY PRIOR TO SUCH TRANSFER, NO EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, (III) SUBSEQUENT TO SUCH
TRANSFER, THE SUCCESSOR BORROWER OR BORROWER, AS APPLICABLE, WILL BE A SINGLE
PURPOSE ENTITY, (IV) SUBSEQUENT TO SUCH TRANSFER, GUARANTOR, VRLP OR THE REIT
SHALL CONTINUE TO CONTROL THE SUCCESSOR BORROWER OR THE BORROWER, AS APPLICABLE,
AND DIRECTLY OR INDIRECTLY OWN AT LEAST 50% OF THE BENEFICIAL INTERESTS THEREIN,
(V)

 

                                                                    

77­

--------------------------------------------------------------------------------

 

SUCH TRANSFER DOES NOT RESULT IN A VIOLATION OF SECTION 7.25, (VI) IF AS A
RESULT OF SUCH TRANSFER ANY TRANSFEREE DIRECTLY OR INDIRECTLY OWNS A 10% OR
GREATER OWNERSHIP INTEREST IN BORROWER, ADMINISTRATIVE AGENT HAS RECEIVED SUCH
SEARCHES AND OTHER INFORMATION REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT
AS THE LENDERS MAY DEEM NECESSARY IN ORDER TO COMPLY WITH ADMINISTRATIVE
AGENT’S  AND SUCH LENDER’S “KNOW YOUR CUSTOMER” AND OTHER APPLICABLE REGULATORY
AND BANK REQUIREMENTS, AND (VII) SUCH TRANSFER DOES NOT CAUSE THE PROPOSED
TRANSFEREE TO EXCEED THE EXPOSURE LIMITS OF ADMINISTRATIVE AGENT AND THE LENDERS
(AS DETERMINED BY ADMINISTRATIVE AGENT AND THE LENDERS, RESPECTIVELY, IN THEIR
SOLE DISCRETION) (PROVIDED THAT IF ADMINISTRATIVE AGENT SHALL NOT NOTIFY
BORROWER OF SAME WITHIN TEN (10) DAYS OF BORROWER’S REQUEST THEREFOR, THE
REQUIREMENTS OF THIS CLAUSE (VIII) SHALL BE DEEMED SATISFIED).  PROMPTLY
FOLLOWING RECEIPT BY ADMINISTRATIVE AGENT OF ANY NOTICE FROM BORROWER PURSUANT
TO THIS SECTION 9.1(2), ADMINISTRATIVE AGENT SHALL ADVISE THE LENDERS OF THE
CONTENTS THEREOF.

(3)               NOTHING CONTAINED IN THE LOAN DOCUMENTS SHALL IN ANY WAY
RESTRICT OR PROHIBIT, NOR SHALL ANY NOTICE TO OR CONSENT OF ADMINISTRATIVE AGENT
OR THE LENDERS BE REQUIRED IN CONNECTION WITH (I) ANY PLEDGE OF DIRECT OR
INDIRECT EQUITY INTERESTS IN, AND/OR RIGHT TO DISTRIBUTIONS FROM, GUARANTOR,
VRLP, THE REIT OR ANY MULTI-ASSET PERSON OR ANY OF THEIR AFFILIATES (OTHER THAN
BORROWER) TO SECURE A LOAN TO ANY SUCH PERSONS THAT IS SECURED BY ALL OR A
SUBSTANTIAL PORTION OF ANY SUCH PERSON’S ASSETS, (II) THE TRANSFER OR ISSUANCE
OF ANY SECURITIES OR ANY DIRECT OR INDIRECT INTERESTS IN ANY DIRECT OR INDIRECT
OWNER OF BORROWER, IN EITHER CASE, WHOSE SECURITIES ARE PUBLICLY TRADED ON A
NATIONAL EXCHANGE (INCLUDING GUARANTOR, VRLP AND THE REIT) (REGARDLESS WHETHER
SUCH TRANSFER OR ISSUANCE IS OF PUBLICLY TRADED SECURITIES OR INTERESTS) OR ANY
PERSON WHO DIRECTLY OR INDIRECTLY HOLDS SUCH SECURITIES OR INTERESTS OR WHO IS A
MULTI-ASSET PERSON, PROVIDED THAT, AFTER SUCH TRANSFER, GUARANTOR, VLRP OR THE
REIT SHALL CONTINUE TO CONTROL BORROWER, (III) THE MERGER OR CONSOLIDATION OF
GUARANTOR, VRLP OR THE REIT WITH OR INTO ANY OTHER PERSON OR THE SALE OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF GUARANTOR, VRLP OR THE REIT (EACH, AN
“ALX/VNO TRANSFER” AND, COLLECTIVELY, “ALX/VNO TRANSFERS”); PROVIDED, HOWEVER,
THAT, IN THE EVENT THAT ANY ALX/VNO TRANSFER OR SERIES OF ALX/VNO TRANSFERS
(OTHER THAN THE SALE OF PUBLICLY TRADED SECURITIES IN GUARANTOR, VRLP OR THE
REIT) SHALL RESULT IN BORROWER CEASING TO BE CONTROLLED BY GUARANTOR, VRLP OR
THE REIT, THEN ADMINISTRATIVE AGENT’S AND THE LENDERS’ PRIOR WRITTEN CONSENT
(NOT TO BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED) SHALL BE REQUIRED IN
CONNECTION WITH SUCH ALX/VNO TRANSFER UNLESS AFTER GIVING EFFECT TO SUCH ALX/VNO
TRANSFER, GUARANTOR (OR THE SUCCESSOR ENTITY THERETO) SHALL BE A PERSON THAT HAS
AND PROVIDES SUBSTANTIALLY AT LEAST THE SAME EXPERIENCE AND EXPERTISE AS
GUARANTOR PRIOR TO SUCH TRANSFER, MERGER OR CONSOLIDATION IN CONDUCTING BUSINESS
OF THE NATURE CURRENTLY CONDUCTED BY GUARANTOR IN RESPECT OF THE PROJECT’S TYPE,
OR (IV) ANY ISSUANCE OR TRANSFER OF INDIRECT INTERESTS IN BORROWER TO OR BETWEEN
ACCOMMODATION HOLDERS OF ANY DIRECT OR INDIRECT OWNER OF BORROWER ORGANIZED AS A
REAL ESTATE INVESTMENT TRUST OR A TRANSFER OF DIRECT INTERESTS IN BORROWER TO A
REAL ESTATE INVESTMENT TRUST CONTROLLED BY AND AT LEAST NINETY PERCENT (90%)
OWNED BY GUARANTOR OR THE REIT.  FOR PURPOSES OF THIS SECTION 9.1, “MULTI-ASSET
PERSON” MEANS A PERSON IN RESPECT OF WHICH THE NET OPERATING INCOME FROM THE
PROJECT (OR SUCH PORTION THEREOF ALLOCABLE TO SUCH PERSON) REPRESENTS LESS THAN
50% OF SUCH PERSON’S AGGREGATE GROSS INCOME.

(4)               BORROWER MAY, WITHOUT THE CONSENT OF ADMINISTRATIVE AGENT OR
THE LENDERS, (A) MAKE IMMATERIAL TRANSFERS OF PORTIONS OF THE PROJECT TO
GOVERNMENTAL AUTHORITIES FOR DEDICATION OR PUBLIC USE AND (B) GRANT EASEMENTS,
RESTRICTIONS, COVENANTS, RESERVATIONS AND RIGHTS-OF-WAY (INCLUDING RECIPROCAL
EASEMENTS AND OPERATING AGREEMENTS) IN THE ORDINARY COURSE OF

 

                                                                    

78

--------------------------------------------------------------------------------

 

BUSINESS FOR ACCESS, WATER AND SEWER LINES, TELEPHONE OR OTHER FIBER OPTIC OR
OTHER DATA TRANSMISSION LINES, ELECTRIC LINES OR OTHER UTILITIES, COMMON AREAS
OR FOR OTHER PURPOSES CUSTOMARY FOR PROPERTIES SIMILAR TO THE PROJECT, PROVIDED
THAT NO SUCH TRANSFER, CONVEYANCE OR ENCUMBRANCE SET FORTH IN THE FOREGOING
CLAUSE (A) OR (B) WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT. IN CONNECTION WITH ANY TRANSFER PERMITTED PURSUANT TO THIS SECTION
9.1(4), ADMINISTRATIVE AGENT SHALL EXECUTE AND DELIVER ANY INSTRUMENT REASONABLY
NECESSARY OR APPROPRIATE, IN THE CASE OF THE TRANSFERS REFERRED TO IN CLAUSE (A)
ABOVE, TO RELEASE THE PORTION OF THE PROJECT AFFECTED THEREBY FROM THE LIEN OF
THE MORTGAGE OR, IN THE CASE OF CLAUSE (B) ABOVE, TO SUBORDINATE THE LIEN OF THE
MORTGAGE TO SUCH EASEMENTS, RESTRICTIONS, COVENANTS, RESERVATIONS AND
RIGHTS-OF-WAY OR OTHER SIMILAR GRANTS UPON RECEIPT BY ADMINISTRATIVE AGENT OF
(I) A COPY OF THE INSTRUMENT OR INSTRUMENTS OF TRANSFER; (II) A CERTIFICATE FROM
A RESPONSIBLE PERSON OF BORROWER STATING (X) WITH RESPECT TO ANY SUCH TRANSFER,
THE CONSIDERATION, IF ANY, BEING PAID FOR SUCH TRANSFER AND (Y) THAT SUCH
TRANSFER WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; AND
(III) THE REIMBURSEMENT OF ALL OF ADMINISTRATIVE AGENT’S REASONABLE
OUT-OF-POCKET COSTS AND EXPENSES INCURRED IN CONNECTION WITH SUCH TRANSFER. 
BORROWER SHALL HAVE DELIVERED TO ADMINISTRATIVE AGENT ALL DOCUMENTARY DELIVERIES
REQUIRED PURSUANT TO THIS SECTION 9.1(4) AT LEAST FIFTEEN (15) DAYS PRIOR TO THE
REQUESTED EFFECTIVE DATE OF SUCH PROPOSED TRANSFER (EXCEPT AS ADMINISTRATIVE
AGENT MAY IN ITS REASONABLE DISCRETION SHORTEN SUCH PERIOD).

SECTION 9.2            PROPERTY TAXES.

(1)               EXCEPT TO THE EXTENT BORROWER HAS TIMELY DELIVERED THE MONTHLY
TAX DEPOSITS TO ADMINISTRATIVE AGENT PURSUANT TO SUBSECTION (2) BELOW, BORROWER
SHALL PAY BEFORE ANY FINE, PENALTY, INTEREST OR COST MAY BE ADDED THERETO, AND
SHALL NOT ENTER INTO ANY AGREEMENT TO DEFER, ANY REAL ESTATE TAXES AND
ASSESSMENTS, FRANCHISE TAXES AND CHARGES, AND OTHER GOVERNMENTAL CHARGES THAT
MAY BECOME A LIEN UPON THE PROJECT OR BECOME PAYABLE DURING THE TERM OF THE
LOANS (COLLECTIVELY, THE “PROPERTY TAXES”), AND WILL PROMPTLY FURNISH
ADMINISTRATIVE AGENT WITH EVIDENCE OF SUCH PAYMENT.  BORROWER SHALL NOT SUFFER
OR PERMIT THE JOINT ASSESSMENT OF THE PROJECT WITH ANY OTHER REAL PROPERTY
CONSTITUTING A SEPARATE TAX LOT OR WITH ANY OTHER REAL OR PERSONAL PROPERTY. 
NOTWITHSTANDING THE FOREGOING, BORROWER MAY, AT ITS OWN EXPENSE, CONTEST BY
APPROPRIATE LEGAL PROCEEDING, PROMPTLY INITIATED AND CONDUCTED IN GOOD FAITH AND
WITH DUE DILIGENCE, THE AMOUNT OR VALIDITY OR APPLICATION IN WHOLE OR IN PART OF
ANY PROPERTY TAXES, PROVIDED THAT (A) NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, (B) EITHER SUCH PROCEEDING SHALL SUSPEND THE COLLECTION OF SUCH
PROPERTY TAXES FROM BORROWER AND FROM THE PROJECT OR BORROWER SHALL HAVE PAID
ALL OF SUCH PROPERTY TAXES UNDER PROTEST, AND (C) NEITHER THE PROJECT NOR ANY
PART THEREOF OR INTEREST THEREIN WILL BE IN DANGER OF BEING SOLD, FORFEITED,
TERMINATED, CANCELLED OR LOST DUE TO SUCH CONTEST.  BORROWER SHALL PROMPTLY
DELIVER TO ADMINISTRATIVE AGENT NOTICE OF ANY SUCH CONTEST.

(2)               DURING ANY CASH MANAGEMENT PERIOD, SUBJECT TO SECTION 9.2(3),
BORROWER SHALL BE REQUIRED TO DEPOSIT WITH ADMINISTRATIVE AGENT ON EACH PAYMENT
DATE ONE-TWELFTH OF THE AMOUNT SUFFICIENT TO DISCHARGE THE OBLIGATIONS UNDER
THIS SECTION 9.2 (CONSIDERED ON AN ANNUAL BASIS) WHEN THEY BECOME DUE (THE
“MONTHLY TAX DEPOSIT”). THE DETERMINATION OF THE AMOUNT SO PAYABLE AND OF THE
FRACTIONAL PART THEREOF TO BE DEPOSITED WITH ADMINISTRATIVE AGENT, SO THAT THE
AGGREGATE OF SUCH DEPOSIT SHALL BE SUFFICIENT FOR THIS PURPOSE, SHALL BE MADE BY
ADMINISTRATIVE AGENT IN ITS REASONABLE DISCRETION. SUCH AMOUNTS SHALL BE HELD BY
ADMINISTRATIVE AGENT AND APPLIED TO THE PAYMENT OF THE OBLIGATIONS IN RESPECT TO
WHICH SUCH AMOUNTS WERE DEPOSITED ON OR

 

                                                                    

79

--------------------------------------------------------------------------------

 

BEFORE THE RESPECTIVE DATES ON WHICH THE SAME OR ANY OF THEM WOULD BECOME
DELINQUENT OR, DURING THE EXISTENCE OF AN EVENT OF DEFAULT, AT THE OPTION OF
ADMINISTRATIVE AGENT AND SUBJECT TO APPLICABLE LAW, TO THE PAYMENT OF THE
INDEBTEDNESS IN THE ORDER AND AMOUNTS PROVIDED FOR IN SECTION 11.4.  IF ONE
MONTH PRIOR TO THE DUE DATE OF ANY OF THE OBLIGATIONS UNDER THIS SECTION 9.2 THE
AMOUNTS THEN ON DEPOSIT THEREFOR SHALL BE INSUFFICIENT FOR THE PAYMENT OF SUCH
OBLIGATIONS IN FULL, BORROWER WITHIN TEN (10) BUSINESS DAYS AFTER DEMAND SHALL
DEPOSIT THE AMOUNT OF THE DEFICIENCY WITH ADMINISTRATIVE AGENT. NOTHING HEREIN
CONTAINED SHALL BE DEEMED TO AFFECT ANY RIGHT OR REMEDY OF ADMINISTRATIVE AGENT
AND THE LENDERS UNDER THIS AGREEMENT OR ANY STATUTE OR RULE OF LAW TO PAY ANY
SUCH AMOUNT AND TO ADD TO THE INDEBTEDNESS THE AMOUNT SO PAID TOGETHER WITH, TO
THE EXTENT NOT PAID WHEN DUE, INTEREST AT THE DEFAULT RATE.

(3)               NOTWITHSTANDING THE PROVISIONS OF SECTION 9.2(2), PROVIDED
THAT NO EVENT OF DEFAULT THEN EXISTS, BORROWER SHALL NOT BE REQUIRED TO DEPOSIT
FUNDS WITH ADMINISTRATIVE AGENT PURSUANT TO SECTION 9.2(2) IF BORROWER SHALL
DEPOSIT WITH ADMINISTRATIVE AGENT, WITHIN TEN (10) BUSINESS DAYS AFTER A CASH
MANAGEMENT COMMENCEMENT DATE, EITHER (I) CASH OR A QUALIFIED LETTER OF CREDIT IN
AN AMOUNT EQUAL TO TWELVE TIMES THE MONTHLY TAX DEPOSIT, AS REASONABLY
DETERMINED BY ADMINISTRATIVE AGENT, OR (II) A QUALIFIED GUARANTY PURSUANT TO
WHICH THE GUARANTOR THEREUNDER SHALL AGREE TO DEPOSIT INTO THE TAX RESERVE
SUBACCOUNT ON OR BEFORE THE DATE WHICH IS TEN (10) BUSINESS DAYS BEFORE THE DUE
DATE FOR THE PAYMENT OF ANY PROPERTY TAXES THE AMOUNT THAT WOULD HAVE BEEN HELD
ON DEPOSIT IN THE TAX RESERVE SUBACCOUNT AT SUCH TIME BUT FOR THE PROVISIONS OF
THIS SECTION 9.2(3).  ANY CASH OR QUALIFIED LETTER OF CREDIT DEPOSITED WITH
ADMINISTRATIVE AGENT PURSUANT TO THIS SECTION SHALL CONSTITUTE ADDITIONAL
COLLATERAL FOR THE INDEBTEDNESS, AND ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT
AT ANY TIME AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT TO APPLY THE SAME (X) TO DISCHARGE THE OBLIGATIONS UNDER THIS SECTION
9.2 WHEN THEY BECOME DUE AND/OR (Y) TO THE PAYMENT OF THE INDEBTEDNESS IN THE
ORDER AND AMOUNTS PROVIDED FOR IN SECTION 11.4.  ANY COLLATERAL HELD BY
ADMINISTRATIVE AGENT PURSUANT TO THIS SECTION AT THE TIME OF PAYMENT IN FULL OF
THE INDEBTEDNESS SHALL BE PROMPTLY RETURNED TO BORROWER AFTER THE INDEBTEDNESS
HAS BEEN PAID IN FULL.

SECTION 9.3            CONTROL; MANAGEMENT.

Borrower shall not terminate, replace or appoint any Manager or terminate or
materially amend any Management Agreement without Administrative Agent’s prior
written approval, which approval shall not be unreasonably withheld, delayed or
conditioned provided that no Event of Default then exists, provided, however,
that Borrower shall be permitted to replace a Manager with a new Manager without
Administrative Agent’s prior written consent, provided that (i) no Event of
Default then exists, (ii) the new Manager is either Guarantor, an Affiliate of
Guarantor or a Qualified Manager and (iii) the new Management Agreement is
substantially similar in all material respects to the existing Management
Agreements.  In addition, with respect to any Manager which is Guarantor or an
Affiliate of Guarantor, if such Manager shall no longer be Guarantor or an
Affiliate of Guarantor or the REIT, such change shall require Administrative
Agent’s approval.  If at any time Administrative Agent consents to the
appointment of a new Manager or Administrative Agent’s consent thereto is not
required as set forth above, Borrower shall, and shall cause such new Manager
to, execute an Assignment of Management Agreement in substantially the form
entered into as of the date hereof.  Borrower shall perform all of its
covenants, agreements and obligations under the Management Agreements in all
material respect.

 

                                                                    

80

--------------------------------------------------------------------------------

 

SECTION 9.4            OPERATION; MAINTENANCE; INSPECTION.

(1)               BORROWER SHALL OBSERVE AND COMPLY WITH ALL LEGAL REQUIREMENTS
APPLICABLE TO THE OWNERSHIP, USE AND OPERATION OF THE PROJECT EXCEPT TO THE
EXTENT THAT SUCH NON-COMPLIANCE WOULD NOT REASONABLY BE EXPECTED TO MATERIALLY
AND ADVERSELY AFFECT THE USE OF, OR OPERATIONS AT, THE PROJECT. BORROWER
SHALL MAINTAIN THE PROJECT IN GOOD CONDITION (REASONABLE WEAR AND TEAR EXCEPTED)
AND REPAIR ANY DAMAGE OR CASUALTY IN ACCORDANCE WITH SECTION 3.3. 
NOTWITHSTANDING THE FOREGOING, BORROWER MAY, AT ITS OWN EXPENSE, CONTEST BY
APPROPRIATE LEGAL PROCEEDING, PROMPTLY INITIATED AND CONDUCTED IN GOOD FAITH AND
WITH DUE DILIGENCE, THE AMOUNT OR VALIDITY OR APPLICATION IN WHOLE OR IN PART OF
ANY LEGAL REQUIREMENT, PROVIDED THAT (A) NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, (B) EITHER SUCH PROCEEDING SHALL SUSPEND THE COLLECTION OF ANY
AMOUNTS DUE IN RESPECT OF SUCH LEGAL REQUIREMENT FROM BORROWER OR FROM THE
PROJECT OR SUCH AMOUNT IS BONDED OR PROVISION REASONABLY SATISFACTORY TO
ADMINISTRATIVE AGENT FOR THE PROTECTION OF THE LENDERS’ INTEREST IN THE PROJECT
IS OTHERWISE MADE, AND (C) NEITHER THE PROJECT NOR ANY PART THEREOF OR INTEREST
THEREIN IS IN IMMINENT DANGER OF BEING SOLD, FORFEITED, TERMINATED, CANCELLED OR
LOST.  BORROWER SHALL PROMPTLY DELIVER TO ADMINISTRATIVE AGENT NOTICE OF ANY
SUCH CONTEST.

(2)               BORROWER SHALL PERMIT ADMINISTRATIVE AGENT AND THE LENDERS AND
THEIR AGENTS, REPRESENTATIVES AND EMPLOYEES, UPON REASONABLE PRIOR NOTICE TO
BORROWER, AND AT REASONABLE TIMES DURING NORMAL BUSINESS HOURS, TO INSPECT THE
PROJECT AND (AT THE SOLE COST AND EXPENSE OF ADMINISTRATIVE AGENT AND THE
LENDERS EXCEPT TO THE EXTENT PROVIDED IN SECTION 5(A) OF THE ENVIRONMENTAL
INDEMNITY) CONDUCT SUCH ENVIRONMENTAL AND ENGINEERING STUDIES AS ADMINISTRATIVE
AGENT MAY REQUIRE, PROVIDED SUCH INSPECTIONS AND STUDIES DO NOT MATERIALLY
INTERFERE WITH THE USE AND OPERATION OF THE PROJECT OR VIOLATE IN ANY MATERIAL
RESPECT THE PROVISIONS OF ANY LEASE.

SECTION 9.5            TAXES ON SECURITY.

Borrower shall pay all Taxes, charges, filing, registration and recording fees,
excises and levies payable with respect to the Notes or the Liens created or
secured by the Loan Documents, other than Excluded Taxes.  If there shall be
enacted any law after the Closing Date deducting the Loans from the value of the
Project for the purpose of taxation and which imposes a tax, either directly or
indirectly, on the Loans or Lenders’ interest in the Project (other than
Excluded Taxes), Borrower will pay the tax, with interest and penalties thereon,
if any. If Administrative Agent is advised by counsel chosen by it that the
payment of tax by Borrower pursuant to this Section 9.5 would be unlawful, then
Administrative Agent shall have the option by written notice of not less than
one hundred twenty (120) days to declare the Loans immediately due and payable.

SECTION 9.6            LEGAL EXISTENCE; NAME, ETC.

Borrower shall preserve and keep in full force and effect (i) its existence as a
Single Purpose Entity, and (ii) its entity status, franchises, rights and
privileges under the laws of the state of its formation, and all material
licenses, permits and qualifications applicable to the ownership, use and
operation of the Project.  Borrower shall not wind up, liquidate, dissolve,
reorganize, merge, or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of all or substantially all of its assets,
or acquire all or substantially all of the

                                                                    

81

--------------------------------------------------------------------------------

 

assets of the business of any Person except as otherwise permitted by the terms
of this Agreement.  Borrower shall conduct business only in its own name and
shall not change its name, or organizational form, or the location of its chief
executive office or principal place of business unless Borrower (a) shall have
obtained the prior written consent of Administrative Agent to such change, which
consent shall not be unreasonably withheld, delayed or conditioned, and (b)
shall have taken all actions necessary or requested by Administrative Agent to
file or amend any financing statement or continuation statement to assure
perfection and continuation of perfection of security interests under the Loan
Documents.

SECTION 9.7            TRANSACTIONS WITH AFFILIATES.

Without the prior written consent of Administrative Agent, Borrower shall not
engage in any transaction affecting the Project with an Affiliate of Borrower or
Guarantor, unless such transaction is on terms that are no less favorable to
Borrower than would be obtained in a comparable arm’s length transaction with an
unrelated third party, it being agreed that the agreements with Affiliates of
Borrower as of the date hereof which are listed on Schedule 9.7, are hereby
deemed to comply with this Section 9.7.

SECTION 9.8            LIMITATION ON OTHER DEBT.

Borrower shall not, without the prior written consent of Administrative Agent
and the Required Lenders, incur any Debt other than as permitted in the
definition of “Single Purpose Entity” appearing in Section 1.1.

SECTION 9.9            FURTHER ASSURANCES.

Borrower shall promptly execute and deliver, or cause to be executed and
delivered, all such other documents, agreements and instruments as
Administrative Agent may reasonably request to further evidence and more fully
describe the collateral for the Loans, to correct any omissions in the Loan
Documents as to the description of the collateral, to perfect, protect or
preserve any Liens created under any of the Loan Documents, or to make any
recordings, file any notices, or obtain any consents, as may be necessary or
appropriate in connection therewith , provided that the foregoing shall in no
event impose any additional liability or obligations (other than as set forth in
Section 12.5) on, nor reduce the rights or remedies of, Borrower.

SECTION 9.10        ESTOPPEL CERTIFICATES.

Borrower, within twenty (20) days after request (but no more than twice during
any twelve-month period, unless during the continuance of an Event of Default),
shall furnish to Administrative Agent a written statement, duly acknowledged,
setting forth, to the best of Borrower’s knowledge, the amount of accrued but
unpaid interest on the Loans and the outstanding principal balance of the Loans,
the date to which interest has been paid, whether any offsets or defenses exist
against the Loans and, if any are alleged to exist, the nature thereof in
detail, and such other factual matters with respect to Borrower, the Project or
the Loans as Administrative Agent may reasonably request.

 

                                                                    

82

--------------------------------------------------------------------------------

 

SECTION 9.11        NOTICE OF CERTAIN EVENTS.

Borrower shall promptly notify Administrative Agent of (1) any Event of Default
of which Borrower has knowledge, together with a detailed statement of the steps
being taken to cure such Event of Default; (2) any event or condition that has
or is likely to have a Material Adverse Effect of which Borrower has knowledge;
and (3) any threatened (in writing) or pending legal, judicial or regulatory
proceedings, including any dispute between Borrower and any Governmental
Authority, affecting Borrower or the Project which, if determined adversely to
Borrower, would have a Material Adverse Effect.

SECTION 9.12        INDEMNIFICATION.

Borrower shall indemnify, defend and hold Administrative Agent, the Lead
Arrangers and each Lender harmless from and against any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever,
including the reasonable fees and actual expenses of their third party counsel,
which may be imposed upon, asserted against or incurred by any of them relating
to or arising out of the following prior to the earliest of (1) the acceptance
by Administrative Agent or any Lender or any of their respective designees of a
deed in lieu of foreclosure with respect to the Project, (2) any such
indemnified party or its designee taking possession or control of the Project or
(3) the foreclosure of the Mortgage:  (a) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about any of the
Project or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways, (b) any inspection, review
or testing of or with respect to the Project, (c) any investigative,
administrative, mediation, arbitration, or judicial proceeding, whether or not
Administrative Agent or any Lender is designated a party thereto, commenced or
threatened at any time (including after the repayment of the Loans) in any way
related to the execution, delivery or performance of any Loan Document or to the
Project (except for disputes between or among Administrative Agent, any Lender
or any Lead Arranger), (d) any proceeding instituted by any Person claiming a
Lien (other than Administrative Agent or any Lender), and (e) any brokerage
commissions or finder’s fees claimed by any broker or other party engaged or
claimed to be engaged by Borrower in connection with the Loans, the Project, or
any of the transactions contemplated in the Loan Documents, except in each case
to the extent any of the foregoing is caused by Administrative Agent’s, any Lead
Arranger’s or any Lender’s gross negligence or willful misconduct.

SECTION 9.13        PAYMENT FOR LABOR AND MATERIALS.

Borrower will pay when due on a timely basis, all lawful claims and demands of
mechanics, materialmen, laborers, and others which, if unpaid, would result in,
or permit the creation of, a Lien on the Project or any part thereof (other than
a Permitted Encumbrance), and in general do or cause to be done everything
reasonably necessary so that the Lien of the Mortgage shall be fully preserved,
subject to the Permitted Encumbrances, all at the cost of Borrower and without
expense to Administrative Agent or the Lenders.   Notwithstanding the foregoing,
Borrower may, at its own expense, contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any claims or demands
described above, provided that (a) no

                                                                    

83

--------------------------------------------------------------------------------

 

Event of Default has occurred and is continuing, (b) either such proceeding
shall suspend the collection of such claims or demands from Borrower and from
the Project or the imposition of any such Lien is bonded or provision reasonably
satisfactory to Administrative Agent for the protection of the Lenders’ interest
in the Project is otherwise made, and (c) neither the Project nor any part
thereof or interest therein is in imminent danger of being sold, forfeited,
terminated, cancelled or lost.  Borrower shall promptly deliver to
Administrative Agent notice of any such contest.

SECTION 9.14        ALTERATIONS.

(1)               BORROWER SHALL OBTAIN ADMINISTRATIVE AGENT’S PRIOR WRITTEN
CONSENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR
DELAYED, TO ANY ALTERATIONS TO ANY IMPROVEMENTS IF THE ESTIMATED COSTS OF ALL
THEN UNAPPROVED ALTERATIONS BEING CONDUCTED BY BORROWER AT ANY ONE TIME SHALL
EXCEED THE THRESHOLD AMOUNT; PROVIDED, HOWEVER, THAT NO APPROVAL SHALL BE
REQUIRED FOR (AND THE CALCULATION OF THE THRESHOLD AMOUNT SHALL EXCLUDE) ANY
ALTERATIONS (I) REQUIRED BY APPLICABLE LAW OR (II) SUBJECT TO PARAGRAPH D OF
SCHEDULE 2, REQUIRED PURSUANT TO ANY PERMITTED LEASE (ANY ALTERATION WHICH IS
SUBJECT TO ADMINISTRATIVE AGENT’S CONSENT HEREUNDER IS HEREIN REFERRED TO AS A
“MAJOR ALTERATION”). ANY REQUEST FOR ADMINISTRATIVE AGENT’S APPROVAL OF A MAJOR
ALTERATION SHALL BE DELIVERED TO ADMINISTRATIVE AGENT TOGETHER WITH ALL
MATERIALS REASONABLY NECESSARY FOR ADMINISTRATIVE AGENT TO EVALUATE SUCH
REQUEST, AND SHALL CONTAIN A LEGEND IN CAPITALIZED BOLD LETTERS ON THE TOP OF
THE COVER TRANSMITTAL STATING:  “THIS IS A REQUEST FOR CONSENT TO A MAJOR
ALTERATION.  ADMINISTRATIVE AGENT’S RESPONSE IS REQUIRED WITHIN TEN (10)
BUSINESS DAYS.  ADMINISTRATIVE AGENT’S FAILURE TO RESPOND WITHIN SUCH TIME
PERIOD SHALL RESULT IN ADMINISTRATIVE AGENT’S CONSENT BEING DEEMED TO HAVE BEEN
GRANTED.”  IN THE EVENT THAT ADMINISTRATIVE AGENT FAILS TO RESPOND TO SUCH
REQUEST WITHIN TEN (10) BUSINESS DAYS AFTER DELIVERY TO ADMINISTRATIVE AGENT OF
SUCH REQUEST, INCLUDING ALL MATERIALS REASONABLY NECESSARY FOR ADMINISTRATIVE
AGENT TO EVALUATE SUCH REQUEST, BY EITHER GRANTING ITS CONSENT OR WITHHOLDING
ITS CONSENT (AND, IN THE CASE OF WITHHOLDING CONSENT, STATING THE GROUNDS
THEREFOR IN REASONABLE DETAILS), THEN ADMINISTRATIVE AGENT’S CONSENT SHALL BE
DEEMED TO HAVE BEEN GRANTED.

(2)               PROMPTLY FOLLOWING RECEIPT BY ADMINISTRATIVE AGENT OF ANY SUCH
REQUEST FOR CONSENT TO A MAJOR ALTERATION FROM BORROWER, ADMINISTRATIVE AGENT
SHALL SUPPLY TO THE LENDERS A COPY THEREOF.  NOTWITHSTANDING ANYTHING IN THIS
SECTION 9.14 TO THE CONTRARY, THE PRIOR WRITTEN CONSENT OF THE REQUIRED LENDERS
SHALL BE REQUIRED IF THE ESTIMATED COSTS OF ALL THEN UNAPPROVED ALTERATIONS
BEING CONDUCTED BY BORROWER AT SUCH TIME SHALL EXCEED THE REQUIRED LENDERS
THRESHOLD AMOUNT; PROVIDED, HOWEVER, THAT THE APPROVAL OF THE REQUIRED LENDERS
SHALL NOT BE REQUIRED FOR (AND THE CALCULATION OF THE REQUIRED LENDERS THRESHOLD
AMOUNT SHALL EXCLUDE) ANY ALTERATIONS (I) REQUIRED BY APPLICABLE LAW OR (II)
SUBJECT TO PARAGRAPH D OF SCHEDULE 2, REQUIRED PURSUANT TO ANY PERMITTED LEASE.
THE REQUIRED LENDERS’ CONSENT TO ANY ALTERATIONS REQUIRING THEIR CONSENT SHALL
NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.  IN THE EVENT THAT THE
REQUIRED LENDERS FAIL TO RESPOND TO SUCH REQUEST WITHIN TEN (10) BUSINESS DAYS
AFTER DELIVERY TO THE LENDERS OF SUCH REQUEST, INCLUDING ALL MATERIALS
REASONABLY NECESSARY FOR THE LENDERS TO EVALUATE SUCH REQUEST, BY EITHER
GRANTING THEIR CONSENT OR WITHHOLDING THEIR CONSENT (AND, IN THE CASE OF
WITHHOLDING CONSENT, STATING THE GROUNDS THEREFOR IN REASONABLE DETAILS), THEN
THE REQUIRED LENDERS’ CONSENT SHALL BE DEEMED TO HAVE BEEN GRANTED.

 

                                                                    

84

--------------------------------------------------------------------------------

 

(3)               IF AND TO THE EXTENT THAT THE TOTAL COSTS OF ALL ALTERATIONS
REQUIRED BY LAW AND PARAGRAPH D OF SCHEDULE 2 AT THE PROJECT BEING CONDUCTED BY
BORROWER AT ANY TIME (EXCLUSIVE OF ANY ALTERATIONS FOR WHICH BORROWER IS BEING
REIMBURSED BY TENANTS PURSUANT TO THEIR RESPECTIVE LEASES) EXCEED THE THRESHOLD
AMOUNT (THE AMOUNT BY WHICH SUCH ALTERATIONS HAS EXCEEDED THE THRESHOLD AMOUNT
BEING HEREIN REFERRED TO AS THE “EXCESS ALTERATIONS COSTS”), BORROWER SHALL
DEPOSIT WITH ADMINISTRATIVE AGENT, AS SECURITY FOR THE PAYMENT OF THE EXCESS
ALTERATIONS COSTS, EITHER (I) CASH OR A QUALIFIED LETTER OF CREDIT IN THE AMOUNT
OF THE EXCESS ALTERATIONS COSTS OR (II) A QUALIFIED GUARANTY IN AN AMOUNT
GUARANTYING PAYMENT OF THE EXCESS ALTERATIONS COSTS.  IF ANY SUCH CASH OR
QUALIFIED LETTER OF CREDIT IS PROVIDED TO ADMINISTRATIVE AGENT PURSUANT TO THIS
SECTION 9.14, AND BORROWER SHALL THEREAFTER PROVIDE TO ADMINISTRATIVE AGENT
EVIDENCE REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT THAT THE THEN UNPAID
EXCESS ALTERATIONS COSTS SHALL BE LESS THAN THE AMOUNT OF SUCH CASH OR QUALIFIED
LETTER OF CREDIT OR QUALIFIED GUARANTY THEN HELD BY ADMINISTRATIVE AGENT, THEN
PROVIDED THAT NO EVENT OF DEFAULT EXISTS, ADMINISTRATIVE AGENT SHALL, UPON
BORROWER’S WRITTEN REQUEST FROM TIME TO TIME (BUT NOT MORE FREQUENTLY THAN ONCE
PER MONTH), RELEASE SUCH CASH OR RELEASE OR MODIFY SUCH QUALIFIED LETTER OF
CREDIT TO BORROWER OR RELEASE OR MODIFY THE QUALIFIED GUARANTY TO THE EXTENT
THAT THE SAME HAS EXCEEDED THE THEN UNPAID EXCESS ALTERATIONS COSTS WITHIN TEN
(10) DAYS AFTER BORROWER’S REQUEST THEREFOR AND ADMINISTRATIVE AGENT’S
CONFIRMATION OF THE AMOUNT OF THE THEN UNPAID EXCESS ALTERATION COSTS.  WITHOUT
LIMITATION OF THE FOREGOING, ALL COLLATERAL HELD BY ADMINISTRATIVE AGENT
PURSUANT TO THIS SECTION 9.14(3) AT THE TIME OF PAYMENT IN FULL OF THE
INDEBTEDNESS SHALL BE PROMPTLY RETURNED OR RELEASED (AS APPLICABLE) TO BORROWER
AFTER THE INDEBTEDNESS HAS BEEN PAID IN FULL.

SECTION 9.15        HEDGE AGREEMENTS.

(1)               BORROWER (OR AN AFFILIATE OF BORROWER) MAY (AT ITS OPTION),
SUBJECT TO SECTION 9.15(3), OBTAIN A HEDGE AGREEMENT IN A NOTIONAL AMOUNT EQUAL
TO ALL OR ANY PORTION OF THE AGGREGATE COMMITMENTS WITH (I) ADMINISTRATIVE AGENT
OR A LENDER OR (II) ONE OR MORE OTHER BANKS OR INSURANCE COMPANIES (EACH A
“THIRD-PARTY COUNTERPARTY”).  EACH HEDGE AGREEMENT OBTAINED BY BORROWER (OR AN
AFFILIATE OF BORROWER) PURSUANT TO THIS SECTION 9.15 SHALL (A) REQUIRE MONTHLY
FIXED RATE AND FLOATING RATE PAYMENTS, (B) BE BASED ON A LIBO RATE OF INTEREST
HAVING SUCCESSIVE INTEREST PERIODS OF ONE MONTH (AN “INTEREST RATE HEDGE
PERIOD”), (C) BE WITH A COUNTERPARTY WHICH IS EITHER (X) ADMINISTRATIVE AGENT, A
LEAD ARRANGER OR WELLS FARGO BANK, N.A. OR (Y) A PERSON WHOSE LONG-TERM
UNSECURED DEBT OBLIGATIONS ARE RATED AT LEAST “A-” BY S&P OR ITS EQUIVALENT BY
MOODY’S OR FITCH AT THE TIME OF ENTRY INTO SUCH HEDGE AGREEMENT, AND (D)
OTHERWISE BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO ADMINISTRATIVE
AGENT AND CONFORM TO MARKET STANDARDS FOR SUCH HEDGE AGREEMENTS.

(2)               IN THE EVENT OF ANY DOWNGRADE, WITHDRAWAL OR QUALIFICATION OF
THE LONG-TERM UNSECURED RATING OF THE COUNTERPARTY TO ANY HEDGE AGREEMENT OTHER
THAN ADMINISTRATIVE AGENT OR A LEAD ARRANGER BELOW “A-” BY S&P OR ITS EQUIVALENT
BY MOODY’S OR FITCH, BORROWER SHALL EITHER (I) REPLACE (OR CAUSE ITS AFFILIATE
TO REPLACE) SUCH HEDGE AGREEMENT WITH A REPLACEMENT HEDGE AGREEMENT MEETING THE
REQUIREMENTS OF THIS SECTION 9.15 OR (II) CAUSE THE COUNTERPARTY TO PROVIDE A
GUARANTY OF ITS OBLIGATIONS UNDER THE HEDGE AGREEMENT FROM A PARENT OR AFFILIATE
MEETING THE RATINGS REQUIREMENTS OF THIS SECTION 9.15 NOT LATER THAN FIFTEEN
(15) BUSINESS DAYS AFTER LEARNING OF SUCH DOWNGRADE, WITHDRAWAL OR
QUALIFICATION.

 

                                                                    

85

--------------------------------------------------------------------------------

 

(3)               IF NOT PREVIOUSLY OBTAINED, BORROWER SHALL OBTAIN (OR CAUSE
ITS AFFILIATE TO OBTAIN) A HEDGE AGREEMENT IN A NOTIONAL AMOUNT EQUAL TO 100% OF
THE THEN OUTSTANDING PRINCIPAL BALANCE OF THE LOANS WITH ADMINISTRATIVE AGENT, A
LENDER OR A THIRD-PARTY COUNTERPARTY THAT SHALL HAVE THE EFFECT OF CAPPING THE
ONE-MONTH LIBO RATE AT 4.25% PER ANNUM, NOT LATER THAN TEN (10) BUSINESS DAYS
FOLLOWING RECEIPT OF NOTICE FROM ADMINISTRATIVE AGENT THAT THE WEEKLY AVERAGE
ONE-MONTH LIBO RATE SHALL EXCEED 3.00% FOR A PERIOD OF FOUR (4) CONSECUTIVE
WEEKS.  FOR PURPOSES OF THIS SECTION 9.15(3), THE “WEEKLY AVERAGE ONE-MONTH LIBO
RATE” FOR ANY WEEK SHALL BE THE AVERAGE OF THE DAILY ONE-MONTH LIBO RATES FOR
THE BUSINESS DAYS IN SUCH WEEK.  ANY SUCH HEDGE AGREEMENT MAY HAVE A TERM
EXPIRING PRIOR TO THE MATURITY DATE, PROVIDED, HOWEVER, THAT (I) THE TERM OF
SUCH HEDGE AGREEMENT SHALL NOT EXPIRE SOONER THAN THE EARLIER TO OCCUR OF ONE
(1) YEAR FROM THE EFFECTIVE DATE THEREOF AND THE MATURITY DATE AND (II) IF ANY
HEDGE AGREEMENT REQUIRED PURSUANT TO THIS SECTION 9.15(3) SHALL EXPIRE PRIOR TO
THE MATURITY DATE, BORROWER SHALL OBTAIN (OR CAUSE ITS AFFILIATE TO OBTAIN) AN
ADDITIONAL HEDGE AGREEMENT SATISFYING THE REQUIREMENTS OF THIS SECTION 9.15(3)
IN THE EVENT THAT THE WEEKLY AVERAGE ONE-MONTH LIBO RATE SHALL EXCEED 3.00% FOR
THE PERIOD OF FOUR (4) CONSECUTIVE WEEKS ENDING IMMEDIATELY PRIOR TO TEN (10)
BUSINESS DAYS PRIOR TO THE EXPIRATION OF SUCH HEDGE AGREEMENT OR AT ANY TIME
THEREAFTER, NOT LATER THAN TEN (10) BUSINESS DAYS FOLLOWING RECEIPT OF NOTICE
FROM ADMINISTRATIVE AGENT THAT THE WEEKLY AVERAGE ONE-MONTH LIBO RATE HAS
EXCEEDED 3.00% FOR SUCH PERIOD OF FOUR (4) CONSECUTIVE WEEKS.

(4)               NOTWITHSTANDING THE FOREGOING, IN LIEU OF OBTAINING A HEDGE
AGREEMENT HAVING THE EFFECT OF CAPPING THE ONE-MONTH LIBO RATE AT A FIXED RATE
OF 4.25% PER ANNUM AS AND WHEN REQUIRED TO DO SO HEREUNDER, BORROWER MAY, AT ITS
OPTION, ELECT TO PROVIDE FOR THE BENEFIT OF THE LENDERS EITHER (I) A GUARANTY OF
INTEREST IN THE FORM ATTACHED ON EXHIBIT K HERETO OR OTHERWISE IN FORM AND
SUBSTANCE SATISFACTORY TO ADMINISTRATIVE AGENT FROM THE GUARANTOR OR ANOTHER
QUALIFIED GUARANTOR GUARANTYING PAYMENT OF INTEREST ON THE LOANS FOR ANY
INTEREST EXCEEDING 4.25% PER ANNUM, OR (II) A HEDGE AGREEMENT HAVING THE EFFECT
OF CAPPING THE ONE-MONTH LIBO RATE AT A FIXED RATE GREATER THAN 4.25% PER ANNUM
(SUCH HIGHER FIXED RATE, THE “HIGHER RATE”) AND A GUARANTY OF INTEREST IN FORM
AND SUBSTANCE SATISFACTORY TO ADMINISTRATIVE AGENT FROM THE GUARANTOR OR ANOTHER
QUALIFIED GUARANTOR GUARANTYING PAYMENT OF INTEREST ON THE LOANS FOR ANY
INTEREST THAT EXCEEDS 4.25% PER ANNUM BUT IS LESS THAN THE HIGHER RATE.

(5)               ALL OF BORROWER’S (OR ITS AFFILIATE’S) OBLIGATIONS UNDER ANY
HEDGE AGREEMENT PROVIDED BY ADMINISTRATIVE AGENT AND THE LENDERS ON A PRO RATA
BASIS (ACCORDING TO THEIR RELATIVE COMMITMENTS) MAY BE SECURED BY THE LIEN OF
THE MORTGAGE ON A PARI PASSU BASIS WITH THE LOANS AND OTHER SUMS EVIDENCED OR
SECURED BY THE LOAN DOCUMENTS, PROVIDED THAT TO THE EXTENT SUCH HEDGING
AGREEMENT IS AN INTEREST RATE SWAP OR SIMILAR INSTRUMENT (I.E., NOT AN INTEREST
RATE CAP), (I) THE SUM OF THE AGGREGATE COMMITMENTS AND THE DERIVATIVE RISK
EQUIVALENT FOR SUCH HEDGE AGREEMENT, AS REASONABLY PROJECTED BY ADMINISTRATIVE
AGENT, SHALL NOT EXCEED (II) 60% OF THE APPRAISED VALUE AS SET FORTH IN THE THEN
MOST RECENT APPRAISAL.  IF ANY HEDGE AGREEMENT SHALL BE PROVIDED BY
ADMINISTRATIVE AGENT OR A LENDER, ALL OF THE LENDERS SHALL BE GIVEN AN
OPPORTUNITY BY ADMINISTRATIVE AGENT TO SHARE IN THE ECONOMICS OF SUCH HEDGE
AGREEMENT ON A PRO RATA BASIS.

(6)               ANY HEDGE AGREEMENT WITH A THIRD-PARTY COUNTERPARTY IS HEREIN
CALLED A “THIRD-PARTY HEDGE AGREEMENT”.  WITH RESPECT TO EACH THIRD-PARTY HEDGE
AGREEMENT, (I) BORROWER’S (OR ITS AFFILIATE’S) OBLIGATIONS THEREUNDER SHALL NOT
BE SECURED BY THE MORTGAGE AND

 

                                                                    

86

--------------------------------------------------------------------------------

 

SHALL NOT BE SECURED BY ANY LIEN ON OR IN ALL OR ANY PORTION OF THE COLLATERAL
UNDER THE SECURITY DOCUMENTS OR ON OR IN ANY DIRECT OR INDIRECT INTEREST IN
BORROWER; (II) THE THIRD-PARTY COUNTERPARTY PROVIDING SUCH THIRD-PARTY HEDGE
AGREEMENT MUST ENTER INTO A WRITTEN AGREEMENT WITH ADMINISTRATIVE AGENT
PROVIDING ADMINISTRATIVE AGENT WITH THE ABILITY TO CURE ANY BORROWER (OR ITS
AFFILIATE) DEFAULTS UNDER THE THIRD-PARTY HEDGE AGREEMENT (SO LONG AS THE
ONE-MONTH LIBO RATE SHALL THEN EXCEED 3.00%) AND TO MAINTAIN THE THIRD-PARTY
HEDGE AGREEMENT IN FULL FORCE AND EFFECT AFTER THE OCCURRENCE OF ANY DEFAULT OR
OTHER TERMINATION EVENT THEREUNDER CAUSED BY BORROWER (OR ITS AFFILIATE), WHICH
AGREEMENT MUST BE IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO ADMINISTRATIVE
AGENT AND SHALL IN NO EVENT OBLIGATE ADMINISTRATIVE AGENT TO PERFORM ANY OF
BORROWER’S (OR ITS AFFILIATE’S) OBLIGATIONS THEREUNDER; AND (III) BORROWER
SHALL, UPON REQUEST FROM ADMINISTRATIVE AGENT, OBTAIN AND DELIVER TO
ADMINISTRATIVE AGENT AN OPINION FROM COUNSEL (WHICH COUNSEL MAY BE IN-HOUSE
COUNSEL FOR THE THIRD-PARTY COUNTERPARTY) FOR THE THIRD-PARTY COUNTERPARTY IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT AND UPON
WHICH ADMINISTRATIVE AGENT, THE LENDERS AND THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS MAY RELY, EXCEPT IF THE THIRD PARTY HEDGE AGREEMENT IS FOR AN INTEREST
RATE SWAP, IN WHICH CASE BORROWER SHALL USE ITS COMMERCIALLY REASONABLY EFFORTS
TO OBTAIN SUCH OPINION.

(7)               IF BORROWER FAILS FOR ANY REASON OR CAUSE WHATSOEVER TO SECURE
A HEDGE AGREEMENT AS AND WHEN REQUIRED TO DO SO HEREUNDER, SUCH FAILURE SHALL
CONSTITUTE AN EVENT OF DEFAULT AND ADMINISTRATIVE AGENT SHALL BE ENTITLED TO
EXERCISE ALL RIGHTS AND REMEDIES AVAILABLE TO IT UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS OR OTHERWISE, INCLUDING THE RIGHT (BUT NOT THE OBLIGATION)
OF ADMINISTRATIVE AGENT TO SECURE OR OTHERWISE ENTER INTO ONE OR MORE HEDGE
AGREEMENTS (BUT NOT FOR LONGER THAN A ONE-YEAR TERM AND NOT FOR A LIBO RATE CAP
LOWER THAN 4.25%) WITH ITSELF OR A LENDER FOR AND ON BEHALF OF BORROWER WITHOUT
SUCH ACTION CONSTITUTING A CURE OF SUCH EVENT OF DEFAULT AND WITHOUT WAIVING
ADMINISTRATIVE AGENT’S OR LENDERS’ RIGHTS ARISING OUT OF OR IN CONNECTION WITH
SUCH EVENT OF DEFAULT.  IF ADMINISTRATIVE AGENT SHALL ENTER INTO A HEDGE
AGREEMENT WITH ITSELF OR A LENDER  IN ACCORDANCE WITH ITS RIGHT TO DO SO
PURSUANT TO THIS SUBSECTION (7), THEN BORROWER SHALL PAY ALL OF ADMINISTRATIVE
AGENT’S REASONABLE COSTS AND EXPENSES IN CONNECTION THEREWITH, INCLUDING ANY
FEES CHARGED BY THE APPLICABLE COUNTERPARTY AND REASONABLE ATTORNEYS’ FEES AND
DISBURSEMENTS.

(8)               IF, AFTER THE OCCURRENCE OF AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT, BORROWER (OR ITS AFFILIATE, WITH RESPECT TO AMOUNTS WHICH
WOULD BE DUE TO BORROWER HAD BORROWER ENTERED INTO SUCH HEDGE AGREEMENT) IS
ENTITLED TO RECEIVE A PAYMENT UNDER ANY HEDGE AGREEMENT UPON A TERMINATION
THEREOF, SUCH PAYMENT SHALL BE DELIVERED TO ADMINISTRATIVE AGENT AND APPLIED BY
ADMINISTRATIVE AGENT TO ANY AMOUNTS DUE TO ADMINISTRATIVE AGENT OR THE LENDERS
UNDER THE LOAN DOCUMENTS IN THE ORDER AND AMOUNTS PROVIDED FOR IN SECTION 11.4.

(9)               THE ECONOMIC AND OTHER BENEFITS OF EACH HEDGE AGREEMENT AND
ALL OF THE OTHER RIGHTS OF BORROWER (OR ITS AFFILIATE, WITH RESPECT TO AMOUNTS
WHICH WOULD BE DUE TO BORROWER HAD BORROWER ENTERED INTO SUCH HEDGE AGREEMENT)
THEREUNDER SHALL BE COLLATERALLY ASSIGNED TO ADMINISTRATIVE AGENT AS ADDITIONAL
SECURITY FOR THE LOANS, PURSUANT TO A HEDGE AGREEMENT PLEDGE TO BE EXECUTED AND
DELIVERED TO ADMINISTRATIVE AGENT SIMULTANEOUSLY WITH THE EXECUTION AND DELIVERY
OF SUCH HEDGE AGREEMENT.  EACH HEDGE AGREEMENT PLEDGE SHALL BE ACCOMPANIED BY
(I) UNIFORM COMMERCIAL CODE FINANCING STATEMENTS WITH RESPECT TO SUCH PLEDGE AND
(II) THE CONSENT AND AGREEMENT OF THE COUNTERPARTY THEREUNDER THAT IT WILL
CONTINUE TO PERFORM ITS OBLIGATIONS UNDER SUCH HEDGE AGREEMENT FOR THE BENEFIT
OF ADMINISTRATIVE AGENT AND THE

 

                                                                    

87

--------------------------------------------------------------------------------

 

LENDERS AFTER ENFORCEMENT OF AND/OR REALIZATION ON THE HEDGE AGREEMENT PLEDGE
AND AN ACKNOWLEDGEMENT THAT ADMINISTRATIVE AGENT SHALL NOT BE DEEMED TO HAVE
ASSUMED ANY OF THE OBLIGATIONS OR DUTIES OF BORROWER (OR ITS AFFILIATE) UNDER
ANY SUCH HEDGE AGREEMENT.

SECTION 9.16        HANDICAPPED ACCESS.

(1)               BORROWER (A) AGREES THAT IT SHALL USE COMMERCIALLY REASONABLE
EFFORTS TO ENSURE THAT THE PROJECT SHALL AT ALL TIMES COMPLY IN ALL MATERIAL
RESPECTS WITH THE REQUIREMENTS OF THE AMERICANS WITH DISABILITIES ACT OF 1990,
THE FAIR HOUSING AMENDMENTS ACT OF 1988, ALL STATE AND LOCAL LAWS AND ORDINANCES
RELATED TO HANDICAPPED ACCESS AND ALL RULES, REGULATIONS, AND ORDERS ISSUED
PURSUANT THERETO INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES
ACT ACCESSIBILITY GUIDELINES FOR BUILDINGS AND FACILITIES (COLLECTIVELY, “ACCESS
LAWS”) AND (B) HAS NO ACTUAL KNOWLEDGE THAT THE PROJECT FAILS TO COMPLY IN ANY
MATERIAL RESPECT WITH ANY ACCESS LAWS.

(2)               BORROWER AGREES TO GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT
OF THE RECEIPT BY BORROWER OF ANY WRITTEN COMPLAINTS RELATED TO VIOLATION OF ANY
ACCESS LAWS WITH RESPECT TO THE PROJECT AND OF THE COMMENCEMENT OF ANY
PROCEEDINGS OR INVESTIGATIONS WHICH RELATE TO COMPLIANCE WITH APPLICABLE ACCESS
LAWS.

SECTION 9.17        ZONING.

Borrower shall not, without Administrative Agent’s prior written consent, seek,
make, suffer, consent to or acquiesce in any change or variance in any zoning or
land use laws or other conditions of use of the Project or any portion thereof. 
Borrower shall not use or permit the use of any portion of the Project in any
manner that could result in such use becoming a non-conforming use under any
zoning or land use law or any other applicable law or modify any agreements
relating to zoning or land use matters or with the joinder or merger of lots for
zoning, land use or other purposes, without the prior written consent of
Administrative Agent.  Without limiting the foregoing, in no event shall
Borrower take any action that would materially reduce or impair access to the
Project from adjacent public roads.  Further, without Administrative Agent’s
prior written consent, Borrower shall not file or subject any part of the
Project to any declaration of condominium (other than the Condominium
Declaration) or co-operative or convert any part of the Project to a condominium
(other than pursuant to the Condominium Declaration), co-operative or other
direct or indirect form of multiple ownership and governance.

SECTION 9.18        ERISA.

Borrower shall not take any action, or omit to take any action, which would
reasonably be expected to (a) cause Borrower’s assets to constitute “plan
assets” for purposes of ERISA or the Code or (b) cause the transactions
contemplated by the Loan Documents to be a nonexempt prohibited transaction (as
such term is defined in Section 4975 of the Code or Section 406 of ERISA) that
would reasonably be expected to subject Administrative Agent and/or the Lenders,
on account of any Loan or execution of the Loan Documents hereunder, to any tax
or penalty on prohibited transactions imposed under Section 4975 of the Code or
Section 502(i) of ERISA.

 

                                                                    

88

--------------------------------------------------------------------------------

 

 

 

SECTION 9.19        BOOKS AND RECORDS; INSPECTION RIGHTS.

Borrower will, keep proper books of record and account in which true, complete
and correct entries are made of all dealings and transactions in relation to its
business and activities.  Borrower will permit any representatives designated by
Administrative Agent or any Lender, upon reasonable prior notice and reasonable
times during normal business hours (and without any disruption of any tenant’s
use or occupancy of the Project), to visit and inspect the Project and to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition of Borrower with its officers and (after the
occurrence and during the continuance of  any Event of Default) independent
accountants, all at such reasonable times and as often as reasonably requested.

SECTION 9.20        FOREIGN ASSETS CONTROL REGULATIONS.

Borrower shall not use the proceeds of the Loans in any manner that will violate
the Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or the Anti-Terrorism Order or any enabling legislation
or executive order relating to any of the same.  Without limiting the foregoing,
Borrower will not (a) become a blocked person described in Section 1 of the
Anti-Terrorism Order, (b) knowingly engage in any dealings or transactions or be
otherwise associated with any person who is known by Borrower or who (after such
inquiry as may be required by applicable law) should be known by Borrower to be
a blocked person, (c) be or become subject at any time to any applicable law, or
list of any government agency (including, without limitation, the U.S. Office of
Foreign Asset Control list) that prohibits or limits a Lender from making any
advance or extension of credit to Borrower or from otherwise conducting business
with Borrower, or (d) fail to provide documentary and other evidence of
Borrower's identity as may be reasonably requested by Administrative Agent at
any time to enable Administrative Agent to verify its identity or to comply with
any applicable law, including, without limitation, Section 326 of the USA
Patriot Act of 2001, 31 U.S.C. Section 5318.

SECTION 9.21        APPRAISALS.

Administrative Agent shall have the right to order new Appraisals of the Project
from time to time.  Each Appraisal is subject to review and approval by
Administrative Agent.  Borrower agrees to pay to Administrative Agent within ten
(10) Business Days after demand the cost and expense for such Appraisals if the
Appraisal is ordered after the occurrence of an Event of Default or is required
by applicable law or regulation.

SECTION 9.22        RESTRICTED PAYMENTS.

Borrower shall not declare or make any Restricted Payments during any Cash
Management Period.

 

                                                                    

89

--------------------------------------------------------------------------------

 

SECTION 9.23        BUSINESS ORGANIZATION DOCUMENTS.

Borrower shall not amend or otherwise modify its Business Organization Documents
if the same would have a Material Adverse Effect, it being agreed that Borrower
shall promptly deliver a true and correct copy of each such modification to
Administrative Agent.

SECTION 9.24        AGREEMENTS AFFECTING THE PROJECT.

(1)               SUBJECT TO THE PROVISIONS OF SECTION 9.1(5), BORROWER SHALL
NOT EXECUTE, RECORD OR FILE, OR CONSENT TO BE RECORDED OR FILED, AGAINST THE
PROJECT ANY DECLARATION OF EASEMENTS, RESTRICTIONS, SUBDIVISION MAP, SUBDIVISION
PLAN OR ANY OTHER MATERIAL AGREEMENT AFFECTING TITLE TO, AND RECORDED AGAINST,
THE PROJECT WITHOUT THE PRIOR WRITTEN CONSENT OF ADMINISTRATIVE AGENT, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED.

(2)               BORROWER SHALL NOT ENTER INTO, MODIFY, AMEND, TRANSFER,
ENCUMBER OR TERMINATE ANY SALES, BROKERAGE, EXCLUSIVE LEASING OR SUBLEASING
AGREEMENTS, PARKING, MAINTENANCE OR CONSULTING AGREEMENT WITH RESPECT TO ANY
PORTION OF THE PROJECT IF THE SAME WOULD HAVE A MATERIAL ADVERSE EFFECT,
PROVIDED THAT BORROWER SHALL, IN EACH CASE, PROMPTLY DELIVER TO ADMINISTRATIVE
AGENT A COPY OF THE DOCUMENTATION EFFECTUATING THE SAME, TOGETHER WITH, IN THE
CASE OF ANY SUCH AGREEMENT WITH AN AFFILIATE OF BORROWER OR GUARANTOR WHICH IS
NOT TERMINABLE UPON NOT MORE THAN THIRTY (30) DAYS’ NOTICE TO SUCH AFFILIATE, A
LETTER IN THE FORM OF EXHIBIT F ATTACHED HERETO FROM SUCH AFFILIATE.

SECTION 9.25        ANTI-CORRUPTION LAWS.

Borrower will maintain in effect and enforce policies and procedures designed to
ensure compliance by Borrower, its Subsidiaries and their respective directors,
officers, employers and agents with Anti-Corruption Laws and applicable
Sanctions.  Borrower shall not request any Transaction and Borrower shall not
use, and shall use reasonable efforts to ensure that its Affiliates and its or
their respective directors, officers, employees and agents shall not use, the
proceeds of the Transactions, (a) in furtherance of an offer, payment, promise
to pay, or authorization of the payment or giving of money, or anything else of
value, to any Person in violation of any Anti-Corruption Laws, (b) for the
purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, or
(c)  in any manner  that would result in the violation of  any Sanctions
applicable to any party hereto.

SECTION 9.26        GUARANTOR FINANCIAL COVENANTS.

Guarantor shall maintain at all times (i) Net Worth of not less than Guarantor’s
Minimum Net Worth and (ii) Liquid Assets of not less than Guarantor’s Minimum
Liquid Assets.

SECTION 9.27        CONDOMINIUM ESTOPPEL.

After request by Administrative Agent, Borrower shall within ten (10) Business
Days of such request, not more than once per year provided no Event of Default
has occurred and is continuing to deliver to Administrative Agent an estoppel
certificate or letter from the Condominium Board which shall include without
limitation (i) the amount of the unpaid

                                                                  

90

--------------------------------------------------------------------------------

 

Condominium Charges, if any, accrued against the Project pursuant to the
Condominium Documents, (ii) that the Condominium Documents have not been
modified or amended, or, if they have, a description of the modifications or
amendments, (iii) that all payments due and payable by Borrower under the
Condominium Documents have been paid in full,  and (iv) that neither the
Condominium Board nor Borrower is in default under the Condominium Documents or,
if either is in default, a detailed description of such default. 

SECTION 9.28        CONDOMINIUM CHARGES DEPOSIT.

During any Cash Management Period, Borrower shall be required to deposit with
Administrative Agent on each Payment Date one-twelfth of the amount sufficient
to discharge the obligations under Section 9.29 (considered on an annual basis)
when they become due (the “Monthly Condominium Charges Deposit”).  The
determination of the amount so payable and of the fractional part thereof to be
deposited with Administrative Agent with each installment, so that the aggregate
of such deposit shall be sufficient for this purpose, shall be made by
Administrative Agent in its reasonable discretion. Such amounts shall be held by
Administrative Agent and applied to the payment of the obligations in respect to
which such amounts were deposited on or before the respective dates on which the
same or any of them would become delinquent or, during the existence of an Event
of Default, at the option of Administrative Agent and subject to applicable law,
to the payment of the Indebtedness in the order and amounts provided for in
Section 11.4.  If one month prior to the due date of any of the aforementioned
obligations the amounts then on deposit therefor shall be insufficient for the
payment of such obligations in full, Borrower shall within ten (10) Business
Days after demand therefor deposit the amount of the deficiency with
Administrative Agent.  Nothing herein contained shall be deemed to affect any
right or remedy of Administrative Agent and the Lenders under this Agreement or
any statute or rule of law to pay any such amount and to add to the Indebtedness
the amount so paid together with interest at the Default Rate.

SECTION 9.29        CONDOMINIUM COVENANTS.

(A)                BORROWER SHALL (I) PERFORM ALL OF ITS OBLIGATIONS UNDER THE
CONDOMINIUM DOCUMENTS, EXCEPT WHERE THE FAILURE TO DO SO WOULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT AND (II) SUBJECT TO ITS RIGHT TO
CONTEST, IF ANY, UNDER THE CONDOMINIUM DOCUMENTS, PAY, WHEN DUE AND PAYABLE, ALL
CONDOMINIUM CHARGES. 

(B)               IF BORROWER SHALL DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF
ANY TERM, COVENANT OR CONDITION OF ANY OF THE CONDOMINIUM DOCUMENTS ON THE PART
OF BORROWER TO BE PERFORMED OR OBSERVED AND THE SAME WOULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, THEN, AFTER THE EXPIRATION OF ANY
APPLICABLE NOTICE AND CURE PERIODS PROVIDED FOR HEREIN AND WITHOUT LIMITING THE
GENERALITY OF THE OTHER PROVISIONS OF THE MORTGAGE AND THIS AGREEMENT AND
WITHOUT WAIVING OR RELEASING BORROWER FROM ANY OF ITS OBLIGATIONS HEREUNDER,
ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT, BUT SHALL BE UNDER NO OBLIGATION, TO
PAY ANY SUMS AND TO PERFORM ANY ACT OR TAKE ANY ACTION AS MAY BE APPROPRIATE TO
CAUSE ALL OF THE TERMS, COVENANTS AND CONDITIONS OF THE CONDOMINIUM DOCUMENTS ON
THE PART OF BORROWER, TO BE PERFORMED OR OBSERVED OR TO BE PROMPTLY PERFORMED OR
OBSERVED ON BEHALF OF BORROWER.  ADMINISTRATIVE AGENT AND ANY PERSON DESIGNATED
AS ADMINISTRATIVE AGENT’S AGENT BY ADMINISTRATIVE AGENT SHALL HAVE, AND ARE
HEREBY GRANTED, THE RIGHT TO ENTER UPON THE PROJECT AT ANY REASONABLE TIME, UPON
REASONABLE NOTICE AND

 

                                                                    

91

--------------------------------------------------------------------------------

 

FROM TIME TO TIME FOR THE PURPOSE OF TAKING ANY SUCH ACTION, AND ANY SUCH
AMOUNTS SO PAID BY ADMINISTRATIVE AGENT, AND THE REASONABLE OUT-OF-POCKET COST
OF SUCH ACTIONS BY ADMINISTRATIVE AGENT, SHALL BE REIMBURSED BY BORROWER WITHIN
FIVE (5) BUSINESS DAYS OF WRITTEN NOTICE TO BORROWER FROM ADMINISTRATIVE AGENT
AND IF NOT SO REIMBURSED SHALL BE ADDED TO THE INDEBTEDNESS AND SHALL BEAR
INTEREST AT THE DEFAULT RATE UNTIL REIMBURSED.

(C)                WITHOUT ADMINISTRATIVE AGENT’S PRIOR CONSENT (WHICH SHALL NOT
BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED), BORROWER SHALL NOT VOTE AT
ANY MEETING OF OWNERS OF UNITS OR PERMIT ITS REPRESENTATIVES ON THE CONDOMINIUM
BOARD TO VOTE, OR TAKE ANY ACTION WHATSOEVER, RESPECTING (I) ANY MATERIAL
MODIFICATION, CHANGE, SUPPLEMENT, ALTERATION OR AMENDMENT TO ANY OF THE
CONDOMINIUM DOCUMENTS, (II) THE REMOVAL OF A UNIT CONSTITUTING A PORTION OF THE
PROJECT FROM THE CONDOMINIUM, (III) ANY PARTITION OF ALL OR A PART OF THE
PROPERTY SUBJECT TO THE CONDOMINIUM DECLARATION, (IV) ANY WAIVER OR RELEASE OF
ANY MATERIAL RIGHTS OF BORROWER UNDER THE CONDOMINIUM DOCUMENTS OR ANY MATERIAL
INCREASE IN THE OBLIGATIONS OF BORROWER THEREUNDER, (V) ANY ADVERSE CHANGE IN
THE NATURE OF OR DECREASE IN THE AMOUNT OF ANY INSURANCE COVERING ALL OR A PART
OF THE PROJECT AND/OR THE COMMON ELEMENTS AND THE DISPOSITION OF ANY PROCEEDS
THEREOF WHICH WOULD CAUSE A VIOLATION OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, (VI) THE DISPOSITION OF ANY EXCESS INSURANCE OR CONDEMNATION
PROCEEDS, (VII) A RESPONSE TO OR ACTION UPON ANY CASUALTY, CONDEMNATION,
MATERIAL ALTERATION OR ANY OTHER MATTER WHICH REQUIRES ADMINISTRATIVE AGENT’S
APPROVAL HEREUNDER OR THE OTHER LOAN DOCUMENTS OR IS, IN EACH CASE, PROHIBITED
HEREUNDER OR THE OTHER LOAN DOCUMENTS UNLESS BORROWER SATISFIES THE RELEVANT
CONDITIONS UNDER THE LOAN DOCUMENTS APPLICABLE TO THE MATTER FOR WHICH
ADMINISTRATIVE AGENT’S APPROVAL IS REQUIRED HEREUNDER OR THE OTHER LOAN
DOCUMENTS, OR (VIII) THE ASSESSMENT OR LEVY OF ANY SPECIAL ASSESSMENT. 

(D)               BORROWER SHALL NOT TAKE (OR CAUSE TO BE TAKEN) ANY ACTION
UNDER THE CONDOMINIUM DOCUMENTS THAT WOULD BE REASONABLY EXPECTED TO RESULT IN
THE MORTGAGE NOT BEING “PERMITTED MORTGAGE” AND/OR ADMINISTRATIVE AGENT NOT
BEING A “PERMITTED MORTGAGEE” OF THE PROJECT WITHIN THE MEANING OF THE
CONDOMINIUM DECLARATION.

(E)                SUBJECT TO AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF
THE CONDOMINIUM PROXY, BORROWER HAS APPOINTED ADMINISTRATIVE AGENT AS BORROWER’S
TRUE AND LAWFUL ATTORNEY AND PROXY TO VOTE, CONSENT AND OTHERWISE ACT, ON BEHALF
OF BORROWER UNDER THE CONDOMINIUM DOCUMENTS, AS A UNIT OWNER WITH RESPECT TO
BORROWER’S OWNERSHIP OF THE UNITS CONSTITUTING THE PROJECT, AT ALL ANNUAL,
SPECIAL, AND OTHER MEETINGS OF THE UNIT OWNERS OF THE CONDOMINIUM (OR BY WRITTEN
CONSENT IN LIEU THEREOF) AND AT ANY OTHER TIME BORROWER IS REQUIRED TO VOTE,
CONSENT OR ACT AS A UNIT OWNER, INCLUDING WITHOUT LIMITATION, THE RIGHT TO
DESIGNATE, REMOVE, OR REPLACE THE MEMBERS AND OFFICERS OF THE CONDOMINIUM BOARD
THAT BORROWER IS ENTITLED TO DESIGNATE, REMOVE OR REPLACE.  PRIOR TO THE
OCCURRENCE OF AN EVENT OF DEFAULT, ADMINISTRATIVE AGENT’S RIGHTS UNDER THE
CONDOMINIUM PROXY SHALL ONLY BE EXERCISED IN CONNECTION WITH (I) ANY AMENDMENT
OR MODIFICATION TO A MATERIAL TERM OR PROVISION OF THE CONDOMINIUM DOCUMENTS
WHICH WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, (II) ANY
CASUALTY AND/OR CONDEMNATION AT THE PROJECT (INCLUDING, WITHOUT LIMITATION,
PURSUANT TO SECTION 6.3.4 AND ARTICLE 9 OF THE BYLAWS AND/OR (III) ANY VOTE TO
WITHDRAW THE PROJECT FROM THE PROVISIONS OF THE CONDOMINIUM ACT OF THE STATE OF
NEW YORK OR ANY TERMINATION OF THE CONDOMINIUM DOCUMENTS.  BORROWER SHALL NOT
REVOKE ANY CONDOMINIUM PROXY SO LONG AS THE LOAN IS OUTSTANDING.

 

                                                                    

92

--------------------------------------------------------------------------------

 

(F)                BORROWER, FOR AND ON BEHALF OF ITSELF AND ITS DIRECT AND
INDIRECT SUCCESSORS AND ASSIGNS AS THE OWNER OF THE UNITS WHICH COMPRISE THE
PROJECT, TO THE EXTENT PERMITTED BY LAW (I) IRREVOCABLY WAIVES, TO THE EXTENT
PERMITTED BY LAW, ANY APPLICABLE LAW WHICH GRANTS TO THE TRUSTEES, MEMBERS OR
MANAGERS OF THE CONDOMINIUM BOARD AND/OR THE OWNERS OF THE CONDOMINIUM UNITS
RIGHTS TO NET PROCEEDS DERIVED FROM THE UNIT(S) OWNED BY BORROWER IN THE EVENT
OF A CASUALTY OR A CONDEMNATION WHICH ARE INCONSISTENT WITH THE PROVISIONS OF
THIS AGREEMENT AND (II) EXPRESSLY AGREES TO THE APPLICATION OF THE NET PROCEEDS
RELATED TO THE UNIT(S) OWNED BY BORROWER IN ACCORDANCE WITH THE PROVISIONS OF
THIS AGREEMENT.

(G)               ON THE CLOSING DATE, BORROWER SHALL (OR SHALL CAUSE EACH
MEMBER OF THE CONDOMINIUM BOARD APPOINTED BY BORROWER TO) EXECUTE AND DELIVER TO
ADMINISTRATIVE AGENT AN UNDATED CONDITIONAL RESIGNATION (A “CONDITIONAL
RESIGNATION”), WHEREBY BORROWER (OR THE MEMBERS OF THE CONDOMINIUM BOARD
APPOINTED BY BORROWER) TENDERS ITS RESIGNATIONS FROM THE CONDOMINIUM BOARD AND
INSTRUCTS THE CONDOMINIUM BOARD THAT THE SUCCESSOR MEMBERS SHALL BE DESIGNATED
BY ADMINISTRATIVE AGENT, EFFECTIVE UPON WRITTEN NOTICE FROM ADMINISTRATIVE AGENT
TO THE CONDOMINIUM BOARD THAT AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING
BEYOND ANY APPLICABLE NOTICE AND/OR CURE PERIOD; IT BEING UNDERSTOOD AND AGREED
THAT SUCH NOTICE FROM ADMINISTRATIVE AGENT SHALL BE CONCLUSIVE EVIDENCE THAT AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING BEYOND ANY APPLICABLE NOTICE
AND/OR CURE PERIOD AND THE CONDOMINIUM BOARD MAY RELY ON SUCH NOTICE FROM
ADMINISTRATIVE AGENT WITHOUT ANY FURTHER INQUIRY OR INVESTIGATION.  UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT, ADMINISTRATIVE AGENT MAY, BY NOTICE TO
BORROWER, TENDER ANY CONDITIONAL RESIGNATION, NOW OR HEREAFTER DELIVERED IN
CONNECTION WITH THE LOAN TO THE CONDOMINIUM BOARD, WHEREUPON THE RESIGNATION OF
ANY SUCH MEMBER SHALL BECOME EFFECTIVE AND SUCCESSOR MEMBERS TO THE CONDOMINIUM
BOARD SHALL BE DESIGNATED BY ADMINISTRATIVE AGENT FOR SO LONG AS AN EVENT OF
DEFAULT IS CONTINUING, PROVIDED THAT UPON THE WAIVER OR CURE WHICH IS ACCEPTED
BY ADMINISTRATIVE AGENT OF THE EVENT OF DEFAULT, THE MEMBERS OF THE CONDOMINIUM
BOARD APPOINTED BY ADMINISTRATIVE AGENT SHALL IMMEDIATELY RESIGN FROM THE
CONDOMINIUM BOARD AND THE MEMBERS OF THE CONDOMINIUM BOARD APPOINTED BY BORROWER
SHALL BE REINSTATED. UPON THE RELEASE OF ANY UNIT FROM THE LIEN OF THE MORTGAGE,
ADMINISTRATIVE AGENT SHALL PROMPTLY RETURN ANY CONDITIONAL RESIGNATION WITH
RESPECT TO ANY CONDOMINIUM BOARD MEMBER APPLICABLE TO SUCH UNIT TO BORROWER AND
ANY SUCH MEMBER APPOINTED BY ADMINISTRATIVE AGENT SHALL IMMEDIATELY RESIGN FROM
THE CONDOMINIUM BOARD.

(H)               IN THE EVENT OF ANY REMOVAL OR RESIGNATION OF A MEMBER OF THE
CONDOMINIUM BOARD APPOINTED BY BORROWER, BORROWER SHALL PROMPTLY APPOINT A
SUCCESSOR MEMBER TO THE CONDOMINIUM BOARD WHO IS EITHER (I) APPROVED IN WRITING
BY ADMINISTRATIVE AGENT (SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED) OR (II) A PERSON EMPLOYED OR CONTROLLED BY GUARANTOR,
VRT, VRLP OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, AND CONCURRENTLY WITH SUCH
SUCCESSOR’S APPOINTMENT TO THE CONDOMINIUM BOARD, BORROWER SHALL DELIVER TO
ADMINISTRATIVE AGENT A CONDITIONAL RESIGNATION EXECUTED BY SUCH SUCCESSOR
MEMBER.

(I)                 BORROWER WILL DO ALL THINGS REASONABLY NECESSARY TO PRESERVE
AND TO KEEP UNIMPAIRED ITS MATERIAL RIGHTS, POWERS AND PRIVILEGES UNDER THE
CONDOMINIUM DOCUMENTS AND TO PREVENT THE TERMINATION OR EXPIRATION OF THE
CONDOMINIUM DOCUMENTS, OR THE WITHDRAWAL OF THE PROJECT FROM A CONDOMINIUM FORM
OF OWNERSHIP UNDER APPLICABLE LAW, TO THE END THAT BORROWER MAY ENJOY ALL OF THE
MATERIAL RIGHTS GRANTED TO IT AS A PARTY TO THE CONDOMINIUM DOCUMENTS.

                                                                    

93

--------------------------------------------------------------------------------

 

(a)                Borrower will:

                                                                                   (i)              
promptly notify Administrative Agent of the receipt by Borrower of any notice
from the Condominium Board or the owner of any other Unit not owned by Borrower,
asserting or claiming a default by Borrower under the Condominium Documents or
lack of compliance by Borrower with the Condominium Documents, in each case
where such assertion or claim, or the alleged default or lack of compliance,
would reasonably be expected to result in a Material Adverse Effect;

                                                                                   (ii)              
promptly notify Administrative Agent of the receipt by Borrower of any notice or
request from the Condominium Board or the owner of any other Unit not owned by
Borrower of the termination or purported termination of the Condominium
Documents or to withdraw the Project from the Condominium pursuant to applicable
law or to seek any action for partition; and

                                                                                   (iii)              
promptly cause a copy of each notice or request described in clauses (i) or (ii)
above received by Borrower from the Condominium Board or the owner of any other
Unit not owned by Borrower, or from a holder of any mortgage or deed of trust on
such other Unit, to be delivered to Administrative Agent.  Borrower will permit
Administrative Agent to participate in any such partition or withdrawal
proceeding to the extent permitted by law and the Condominium Documents (but
Administrative Agent shall not be obligated so to do).  Borrower will promptly
deliver to Administrative Agent a copy of each notice, pleading, brief and
preliminary, interim and final determination or decision and other papers
received by it in each such partition or withdrawal proceeding.

ARTICLE 10

EVENTS OF DEFAULT

Each of the following shall constitute an “Event of Default” under the Loans:

SECTION 10.1        PAYMENTS.

Borrower’s failure to (i) pay any regularly scheduled installment of principal
or interest within five (5) days after the same becomes due and payable or any
other amount due under the Loan Documents within five (5) days after the same
becomes due and payable (unless the Loan Documents expressly provide for any
longer period of time for any such other amount), or (ii) pay the entire
principal amount of the Loans, together with all accrued interest and other
amounts due under the Loan Documents at the Maturity Date, whether by
acceleration or otherwise.

SECTION 10.2        INSURANCE.

Borrower’s failure to maintain or cause to be maintained insurance as required
under Section 3.1 of this Agreement (except to the extent Administrative Agent
is obligated to disburse funds from the Insurance Reserve Account to pay for
such insurance under this Agreement,

                                                                    

94

--------------------------------------------------------------------------------

 

Administrative Agent  has sufficient funds in the Insurance Reserve Account to
make such payment and Administrative Agent  fails to make such payment).

SECTION 10.3        SINGLE PURPOSE ENTITY.

If Borrower violates any of the provisions set forth clause (a) or (d) of the
definition of “Single Purpose Entity” and such violation is not cured within ten
(10) Business Days of the date that Administrative Agent delivers notice to
Borrower of such violation.

SECTION 10.4        PROPERTY TAXES.

Subject to Borrower’s contest right herein, if any of the Property Taxes are not
paid before any fine, penalty, interest or cost may be added thereto (except to
the extent Administrative Agent is obligated to disburse funds from the Tax
Reserve Account to pay for such Property Taxes under this Agreement,
Administrative Agent has sufficient funds in the Tax Reserve Account to make
such payment and Administrative Agent fails to make such payment).

SECTION 10.5        SALE, ENCUMBRANCE, ETC.

The sale, lease, exchange, conveyance, transfer, mortgage, assignment, pledge or
encumbrance of any part or all of the Project, or any interest therein, or of
any direct or indirect interest in Borrower, in violation of Section 9.1. 
Notwithstanding the foregoing, the existence of any Lease which is not a
Permitted Lease, other than a master lease or ground lease of all or a
substantial portion of the Project, shall not be subject to this Section 10.5,
but shall instead be subject to Section 10.16.

SECTION 10.6        REPRESENTATIONS AND WARRANTIES.

Any representation or warranty made in any Loan Document proves to be untrue in
any material respect when made or deemed made, and such failure of such
representation or warranty to be true is not cured by Borrower within thirty
(30) days after Administrative Agent gives notice to Borrower thereof, provided
that if such Potential Default is not curable within such 30-day period then
Borrower shall have an additional reasonable period to cure same not to exceed
60 days (i.e., 90 days in all), provided that Borrower has commenced to cure
such Potential Default during the initial 30-day period and is at all times
diligently and continuously proceeding to cure such Potential Default and the
continuing existence of such Potential Default shall not have a Material Adverse
Effect.

SECTION 10.7        VARIOUS COVENANTS.

Borrower defaults under any of its obligations under Section 9.8 (limitations on
debt), Section 9.15 (hedge arrangements, but only to the extent of Borrower’s
failure to obtain (or to cause its Affiliate to obtain) either a Hedge Agreement
or Guaranty of interest, at Borrower’s option, when required thereunder) or
Section 9.18 (ERISA).

 

                                                                    

95

--------------------------------------------------------------------------------

 

SECTION 10.8        INVOLUNTARY BANKRUPTCY OR OTHER PROCEEDING.

Commencement of an involuntary case or other proceeding against Borrower or
Guarantor (each, a “Bankruptcy Party”) which seeks liquidation, reorganization
or other relief with respect to it or its debts or other liabilities under any
bankruptcy, insolvency or other similar law now or hereafter in effect or seeks
the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any of its property, and such involuntary case or other
proceeding shall remain undismissed or unstayed for a period of one hundred
twenty (120) days; or an order for relief against a Bankruptcy Party shall be
entered in any such case under the Federal Bankruptcy Code.

SECTION 10.9        VOLUNTARY PETITIONS, ETC.

Commencement by a Bankruptcy Party of a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its Debts or other liabilities under any bankruptcy, insolvency or other similar
law or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official for it or any of its property, or consent by a Bankruptcy
Party to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or the making by a Bankruptcy Party of a general assignment for the benefit of
creditors, or the failure by a Bankruptcy Party, or the admission by a
Bankruptcy Party in writing of its inability, to pay its debts generally as they
become due, or any action by a Bankruptcy Party to authorize or effect any of
the foregoing.

SECTION 10.10    DISSOLUTION.

Borrower or Guarantor shall be terminated, dissolved or liquidated (as a matter
of law or otherwise) or proceedings shall be commenced by any Person (including
Borrower or Guarantor) seeking the termination, dissolution or liquidation of
Borrower or Guarantor which, in the case of actions by Persons other than
Borrower or Guarantor or any of their Affiliates, shall continue unstayed and in
effect for a period of one hundred twenty (120) or more days.

SECTION 10.11    JUDGMENTS.

A final, unappealable judgment is entered against Borrower for the payment of
any Debt in excess of $2,000,000, which judgment shall continue for a period of
ten (10) consecutive Business Days without being vacated, discharged, satisfied,
or stayed or bonded pending appeal; or a judgment or judgments shall be entered
against Guarantor for the payment of money in excess of $1,000,000,000 in the
aggregate, which judgment or judgments shall continue for a period of thirty
(30) consecutive days without being vacated, discharged, satisfied, or stayed or
bonded pending appeal.

SECTION 10.12    SECURITY.

The Liens created by the Security Documents shall at any time not constitute a
valid and perfected first priority Lien (subject to the Permitted Encumbrances)
on the collateral intended to be covered thereby in favor of Administrative
Agent, free and clear of all other Liens (other than the Permitted
Encumbrances), or any of the Security Documents shall for whatever reason be

                                                                    

96

--------------------------------------------------------------------------------

 

terminated or cease to be in full force and effect, or the enforceability
thereof shall be contested by Borrower or Guarantor or any of their respective
Affiliates.  Notwithstanding the foregoing, (x) the existence of any Lien for
the performance of any work or the supply of any materials which encumbers the
Project or any part thereof shall not constitute an Event of Default under this
Section 10.12, provided that (i) Borrower shall be contesting such Lien in
accordance with Section 9.13 or (ii) such Lien shall be discharged from the
Project, as a result of bonding or otherwise, not later than forty five (45)
days after Borrower is notified of the existence of such Lien; and (y) the
existence of any Lease which is not a Permitted Lease, other than a master lease
or ground lease of all or a substantial portion of the Project, shall not be
subject to this Section 10.12, but shall instead be subject to Section 10.16.

SECTION 10.13    GUARANTOR DOCUMENTS.

Guarantor or any other guarantor shall (i) default under the Guaranty,
Environmental Indemnity or (if applicable) any Qualified Guaranty beyond any
applicable notice and grace period; or (ii) revoke in writing, or attempt to
revoke in writing, its obligations under the Guaranty, Environmental Indemnity
or (if applicable) any Qualified Guaranty.

SECTION 10.14    HEDGE AGREEMENT; GUARANTY OF INTEREST.

Borrower shall either (A) default under any Hedge Agreement required to be
maintained pursuant to this Agreement and such default is not cured within any
applicable notice and cure periods provided therein or waived in writing by the
counterparty thereto or (B) the guarantor under any Guaranty of interest that is
maintained pursuant to this Agreement shall default under such Guaranty; unless,
in either case, Borrower delivers to Administrative Agent, either (i) a
substitute Hedge Agreement satisfying the requirements of Section 9.15 of this
Agreement or (ii) a guaranty of interest in the form attached on Exhibit K and
otherwise satisfying the requirements of Section 9.15 of this Agreement. 

SECTION 10.15     CONDOMINIUM COVENANTS.

Borrower shall fail to pay any of the Condominium Charges to be paid by Borrower
pursuant to the Condominium Documents when the same are due and payable (taking
into account any applicable grace or cure periods granted to Borrower pursuant
to the Condominium Documents), except to the extent Administrative Agent is
obligated to disburse funds from the Condominium Charges Reserve Account to pay
for such insurance under this Agreement, Administrative Agent  has sufficient
funds in the Condominium Charges Reserve Account to make such payment and
Administrative Agent  fails to make such payment; or (ii) the Condominium Board
fails in accordance with the terms of the Condominium Documents (A) following at
least five (5) days written notice to Borrower (or upon written notice to
Borrower, if any such insurance shall not be in full force and effect or shall
be due to expire within one (1) Business Day), to keep the Common Elements
and/or the Project, as applicable, insured against the hazards specified in the
Condominium Documents in the amounts and pursuant to policies in the form
specified therein or (B) to pay, as and when the same becomes due and payable,
any charge or encumbrance which results in a Lien against the Project and such
Lien shall not be discharged, dismissed or bonded by the Condominium Board or
Borrower within forty-five (45) days of such imposition (provided that such
failure to cause such Lien to be discharged,

                                                                    

97

--------------------------------------------------------------------------------

 

dismissed or bonded shall not result in an Event of Default if Borrower or the
Condominium Board shall be contesting such Lien in accordance with Section
9.13), or (iii) without the prior written consent of Administrative Agent,
Borrower fails to comply with any terms of the Condominium Documents and the
Condominium Act beyond any applicable notice and grace periods and such failure
results in a Material Adverse Effect with respect to the Project, or (iv) the
Condominium is terminated without Administrative Agent’s prior written consent.

SECTION 10.16    COVENANTS.

Borrower’s failure to fully perform any and all covenants and agreements under
this Agreement or under any of the other Loan Documents, and, with respect to
covenants and agreements other than those specifically reference in this Article
10, or for which another cure period is provided, such failure is not cured by
Borrower within thirty (30) days after Administrative Agent gives notice to
Borrower thereof, provided that if such Potential Default is not curable within
such 30-day period then Borrower shall have an additional reasonable period to
cure same not to exceed 60 days (i.e., 90 days in all), provided that Borrower
has commenced to cure such Potential Default during the initial 30-day period
and is at all times diligently and continuously proceeding to cure such
Potential Default and the continuing existence of such Potential Default shall
not have a Material Adverse Effect.

ARTICLE 11

REMEDIES

SECTION 11.1        REMEDIES - INSOLVENCY EVENTS.

Upon the occurrence of any Event of Default described in Section 10.8 or 10.9,
the obligations of the Lenders to advance amounts hereunder shall immediately
terminate, and all amounts due under the Loan Documents immediately shall become
due and payable, all without written notice and without presentment, demand,
protest, notice of protest or dishonor, notice of intent to accelerate the
maturity thereof, notice of acceleration of the maturity thereof, or any other
notice of default of any kind, all of which are hereby expressly waived by
Borrower; provided, however, if the Bankruptcy Party under Section 10.8 or 10.9
is other than Borrower, then upon the occurrence of any Event of Default
described in Section 10.8 or 10.9, all amounts due under the Loan Documents
shall become immediately due and payable at Administrative Agent’s election, in
Administrative Agent’s sole and absolute discretion.

SECTION 11.2        REMEDIES - OTHER EVENTS.

Except as set forth in Section 11.1, while any Event of Default exists,
Administrative Agent may (1) by written notice to Borrower, declare the entire
amount of the Loans to be immediately due and payable without presentment,
demand, protest, notice of protest or dishonor, notice of intent to accelerate
the maturity thereof, notice of acceleration of the maturity thereof, or other
notice of default of any kind, all of which are hereby expressly waived by
Borrower, (2) terminate the obligation, if any, of the Lenders to advance
amounts hereunder, and (3) exercise all rights and remedies therefor under the
Loan Documents and at law or in equity.

 

                                                                    

98

--------------------------------------------------------------------------------

 

SECTION 11.3        ADMINISTRATIVE AGENT’S RIGHT TO PERFORM THE OBLIGATIONS.

If Borrower shall fail, refuse or neglect to make any payment or perform any act
required by the Loan Documents, then while any Event of Default exists, and
without notice to or demand upon Borrower and without waiving or releasing any
other right, remedy or recourse Administrative Agent or any Lender may have
because of such Event of Default, Administrative Agent may (but shall not be
obligated to) make such payment or perform such act for the account of and at
the expense of Borrower, and shall have the right to enter upon the Project for
such purpose and to take all such action thereon and with respect to the Project
as it may deem necessary or appropriate.  If Administrative Agent shall elect to
pay any sum due with reference to the Project pursuant to the immediately
preceding sentence, Administrative Agent may do so in reliance on any bill,
statement or assessment procured from the appropriate Governmental Authority or
other issuer thereof without inquiring into the accuracy or validity thereof. 
Similarly, in making any payments to protect the security intended to be created
by the Loan Documents during the continuance of an Event of Default,
Administrative Agent shall not be bound to inquire into the validity of any
apparent or threatened adverse title, Lien, encumbrance, claim or charge before
making an advance for the purpose of preventing or removing the same. 
Additionally, if any Hazardous Materials affect or threaten to affect the
Project, then, during the continuance of an Event of Default, Administrative
Agent may (but shall not be obligated to) give such notices and take such
actions as it deems necessary or advisable in order to abate the discharge of
any Hazardous Materials or remove the Hazardous Materials.  All sums paid by
Administrative Agent pursuant to this Section 11.3, together with interest
thereon at the Default Rate from the date of such payment or expenditure until
paid, shall constitute additions to the Loans, shall be secured by the Loan
Documents and shall be paid by Borrower to Administrative Agent upon demand.

SECTION 11.4        APPLICATION OF FUNDS RECEIVED BY ADMINISTRATIVE AGENT.

In the event that the entire amount of the Loans shall have been declared or
becomes due and payable pursuant to the provisions of this Article, any funds
received by Administrative Agent and the Lenders from or on behalf of Borrower
shall be applied by Administrative Agent and the Lenders in liquidation of the
Loans and the obligations of Borrower under the Loan Documents in the following
manner and order:

(I)                 FIRST, TO THE PAYMENT OF ALL COSTS OF COLLECTION INCURRED BY
ADMINISTRATIVE AGENT AND ALL COSTS AND EXPENSES RELATING TO THE ENFORCEMENT BY
ADMINISTRATIVE AGENT OF ANY OF THE LOAN DOCUMENTS, AND ANY COSTS OR EXPENSES
INCURRED BY ADMINISTRATIVE AGENT IN ACCORDANCE WITH SECTION 12.5;

(II)               SECOND, TO THE REPAYMENT OF ANY AND ALL SPECIAL ADVANCES;

(III)             THIRD, TO ALL COSTS AND EXPENSES INCURRED BY ANY OF THE
LENDERS PURSUANT TO SECTION 12.5;

(IV)             FOURTH, TO THE PAYMENT OF ANY FEES OR EXPENSES DUE
ADMINISTRATIVE AGENT, THE LEAD ARRANGERS AND WELLS FARGO BANK, N.A. FROM
BORROWER AS REQUIRED UNDER THE LOAN DOCUMENTS;

 

                                                                    

99

--------------------------------------------------------------------------------

 

(V)               FIFTH, TO THE PAYMENT OF ANY FEES DUE THE LENDERS FROM THE
BORROWER;

(VI)             SIXTH, TO THE PAYMENT PRO RATA OF ANY ACCRUED UNPAID INTEREST,
ADDITIONAL INTEREST PAYABLE UNDER ANY HEDGE AGREEMENT SECURED BY THE MORTGAGE IN
ACCORDANCE WITH SECTION 9.15(4), OR ANY AMOUNTS DUE TO THE LENDERS FROM BORROWER
PURSUANT TO SECTION 2.9 (BREAK FUNDING PAYMENTS);

(VII)           SEVENTH, TO THE PAYMENT PRO RATA OF PRINCIPAL OUTSTANDING ON THE
NOTES; AND

(VIII)         THE BALANCE TO THE PARTY LEGALLY ENTITLED TO THE SAME.

ARTICLE 12

MISCELLANEOUS

SECTION 12.1        NOTICES.

(1)               GENERALLY.  EXCEPT IN THE CASE OF NOTICES AND OTHER
COMMUNICATIONS PURSUANT TO SECTION 2.10 OR OTHERWISE EXPRESSLY PERMITTED TO BE
GIVEN HEREUNDER ELECTRONICALLY (AND SUBJECT TO SUBSECTION (2) BELOW), ALL
NOTICES AND OTHER COMMUNICATIONS PROVIDED FOR HEREIN SHALL BE IN WRITING AND
SHALL BE DELIVERED BY HAND OR OVERNIGHT COURIER SERVICE, MAILED BY CERTIFIED OR
REGISTERED MAIL OR SENT BY TELECOPY, AS FOLLOWS:

(A)                IF TO BORROWER, TO IT AT C/O VORNADO REALTY TRUST, 210 ROUTE
4 EAST, PARAMUS, NEW JERSEY 07652, ATTENTION: CHIEF FINANCIAL OFFICER (TELECOPY
NO. (201) 843-2198); WITH COPIES TO: (I) BORROWER AT C/O VORNADO REALTY TRUST,
888 SEVENTH AVENUE, NEW YORK, NEW YORK 10106, ATTENTION: CORPORATION COUNSEL
(TELECOPY NO. (212) 894-7996), (II) BORROWER AT C/O VORNADO REALTY TRUST, 888
SEVENTH AVENUE, NEW YORK, NEW YORK 10106, ATTENTION: EXECUTIVE VICE PRESIDENT:
CAPITAL MARKETS (TELECOPY NO. (212) 894-7035), AND (III) SULLIVAN & CROMWELL
LLP, 125 BROAD STREET, NEW YORK, NEW YORK 10004, ATTENTION: ARTHUR S. ADLER,
ESQ. (TELECOPY NO. (212) 291-9001);

(B)               IF TO ADMINISTRATIVE AGENT OR JPM SECURITIES, TO IT AT 270
PARK AVENUE, 45TH FLOOR, NEW YORK, NEW YORK 10017, ATTENTION: JOAN MATERA (VIA
EMAIL IN LIEU OF TELECOPY, AT JOAN.MATERA@JPMORGAN.COM), WITH COPIES TO (I)
ADMINISTRATIVE AGENT AT 10 SOUTH DEARBORN STREET, 7TH FLOOR (IL1-0010), CHICAGO,
ILLINOIS 60603, ATTENTION: LOAN ADMINISTRATION (TELECOPY NO. (312) 385-7101),
(II) ADMINISTRATIVE AGENT AT 4 NEW YORK PLAZA, NEW YORK, NEW YORK 10004,
ATTENTION: LANRE WILLIAMS, ESQ. (TELECOPY NO. (917) 849-0184), AND (III) EMMET,
MARVIN & MARTIN, LLP, 120 BROADWAY, 32ND FLOOR, NEW YORK, NEW YORK 10271,
ATTENTION:  JOHN P. UEHLINGER, ESQ. (TELECOPY NO. (212) 238-3100);

(C)                IF TO ANY LENDER (OTHER THAN ADMINISTRATIVE AGENT) OR ANY
LEAD ARRANGER (OTHER THAN JPM SECURITIES), TO IT AT ITS ADDRESS (OR TELECOPY
NUMBER) SET FORTH ON ITS SIGNATURE PAGE HERETO OR ON ITS SIGNATURE PAGE TO ITS
ASSIGNMENT AND ASSUMPTION (AS APPLICABLE); AND

 

                                                                    

100

--------------------------------------------------------------------------------

 

(D)               IF TO GUARANTOR, TO IT AT C/O ALEXANDERS, INC., 210 ROUTE 4
EAST, PARAMUS, NEW JERSEY 07652, ATTENTION: CHIEF FINANCIAL OFFICER (TELECOPY
NO. (201) 843-2198); WITH COPIES TO: (I) GUARANTOR AT C/O VORNADO REALTY TRUST,
888 SEVENTH AVENUE, NEW YORK, NEW YORK 10106, ATTENTION: CORPORATION COUNSEL
(TELECOPY NO. (212) 894-7996), (II) GUARANTOR AT C/O VORNADO REALTY TRUST, 888
SEVENTH AVENUE, NEW YORK, NEW YORK 10106, ATTENTION: EXECUTIVE VICE PRESIDENT:
CAPITAL MARKETS (TELECOPY NO. (212) 894-7035), AND (III) SULLIVAN & CROMWELL
LLP, 125 BROAD STREET, NEW YORK, NEW YORK 10004, ATTENTION: ARTHUR S. ADLER,
ESQ. (TELECOPY NO. (212) 291-9001).

(2)               ELECTRONIC NOTICES.  ADMINISTRATIVE AGENT OR BORROWER MAY, IN
ITS DISCRETION, AGREE TO ACCEPT NOTICES AND OTHER COMMUNICATIONS TO IT HEREUNDER
BY ELECTRONIC COMMUNICATIONS PURSUANT TO PROCEDURES APPROVED BY IT; PROVIDED
THAT APPROVAL OF SUCH PROCEDURES MAY BE LIMITED TO PARTICULAR NOTICES OR
COMMUNICATIONS. 

(3)               CHANGES IN ADDRESS.  ANY PARTY HERETO MAY CHANGE ITS ADDRESS
OR TELECOPY NUMBER FOR NOTICES AND OTHER COMMUNICATIONS HEREUNDER BY NOTICE TO
THE OTHER PARTIES HERETO.  ALL NOTICES AND OTHER COMMUNICATIONS GIVEN TO ANY
PARTY HERETO IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT SHALL BE DEEMED
TO HAVE BEEN GIVEN ON THE DATE OF RECEIPT.

SECTION 12.2        AMENDMENTS, WAIVERS, ETC.

(1)               SUBJECT TO ANY CONSENTS OF THE REQUIRED LENDERS OR ALL OF THE
LENDERS REQUIRED PURSUANT TO SECTIONS 12.2(2) AND 12.2(3), RESPECTIVELY, AND ANY
OTHER PROVISIONS OF THIS AGREEMENT AND ANY OTHER LOAN DOCUMENT WHICH EXPRESSLY
REQUIRE THE CONSENT, APPROVAL OR AUTHORIZATION OF THE REQUIRED LENDERS OR ALL OF
THE LENDERS, THIS AGREEMENT AND ANY OTHER LOAN DOCUMENT MAY BE AMENDED, MODIFIED
OR SUPPLEMENTED BY AN INSTRUMENT IN WRITING SIGNED BY BORROWER AND
ADMINISTRATIVE AGENT.

(2)               NOTWITHSTANDING ANYTHING IN SECTION 12.2(1) TO THE CONTRARY
(BUT SUBJECT TO THE PROVISIONS OF SECTION 12.2(3)), ADMINISTRATIVE AGENT WILL
NOT, WITHOUT THE WRITTEN CONSENT OF THE REQUIRED LENDERS (SUBJECT TO ANY
STANDARD OF REASONABILITY AS MAY BE EXPRESSLY SET FORTH IN THE LOAN DOCUMENTS),
(A) EXECUTE AND DELIVER ANY MATERIAL AMENDMENT, MODIFICATION OR SUPPLEMENT OF
THE LOAN DOCUMENTS OR ANY INSTRUMENT WAIVING OR CONSENTING TO A DEPARTURE FROM
ANY OF THE MATERIAL REQUIREMENTS OF THE LOAN DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, ANY MATERIAL AMENDMENT, MODIFICATION OR SUPPLEMENT OF, OR ANY WAIVER
OR DEPARTURE FROM ANY OF THE MATERIAL REQUIREMENTS OF, THE PROVISIONS OF SECTION
3.1 (INSURANCE) (OTHER THAN SECTION 3.1(1)(H)), SECTION 4.2 (CASH MANAGEMENT
ACCOUNT), SECTION 4.4 (DEBT SERVICE COVERAGE RATIO), SECTION 9.3 (CONTROL;
MANAGEMENT); SECTION 12.23 (ASSIGNMENTS AND PARTICIPATIONS), ARTICLE 14
(ADMINISTRATIVE AGENT), THE DEFINITIONS OF “ADDITIONAL COLLATERAL” (INCLUDING
THE FORMS OF ADDITIONAL COLLATERAL PERMITTED TO BE PROVIDED PURSUANT TO THIS
AGREEMENT), “ELIGIBLE ASSIGNEE”, “SINGLE PURPOSE ENTITY” AND “THRESHOLD AMOUNT”
SET FORTH IN SECTION 1.1, OR ANY PROVISIONS OF THE LOAN DOCUMENTS WHICH PURSUANT
TO THEIR EXPRESS TERMS REQUIRE THE REQUIRED LENDERS’ CONSENT; (B) AFTER THE
OCCURRENCE OF AN EVENT OF DEFAULT, (I) WAIVE ANY EVENT OF DEFAULT WHICH IS THE
SUBJECT OF ANY WRITTEN NOTICE OF DEFAULT GIVEN BY ADMINISTRATIVE AGENT TO
BORROWER; (II) DECLARE THE LOANS TO BE IMMEDIATELY DUE AND PAYABLE, OR RESCIND
ANY SUCH DECLARATION; (III) COMMENCE ANY ACTION TO FORECLOSE THE LIEN OF THE
MORTGAGE OR CONDUCT A FORECLOSURE SALE PURSUANT TO A POWER OF SALE; (IV) ACCEPT
A DEED IN LIEU OF FORECLOSURE; (V) SEEK THE APPOINTMENT OF

 

                                                                    

101

--------------------------------------------------------------------------------

 

A RECEIVER; (VI) FILE OR APPROVE ANY PLAN IN ANY BANKRUPTCY PROCEEDING INVOLVING
BORROWER, GUARANTOR OR THE PROJECT; (VII) COMMENCE ANY SUIT ON THE NOTE TO
COLLECT THE INDEBTEDNESS; OR (VIII) COMMENCE ANY SUIT ON THE GUARANTY OR (IF
APPLICABLE) ANY QUALIFIED GUARANTY TO COLLECT THE GUARANTEED AMOUNTS; OR (C)
AFTER ANY FORECLOSURE OF THE LIEN OF THE MORTGAGE OR ACCEPTANCE OF A DEED IN
LIEU OF FORECLOSURE, (I) ADOPT A POST-FORECLOSURE PLAN OR (II) APPOINT A
PROPERTY MANAGER FOR THE PROJECT OTHER THAN IN ACCORDANCE WITH SUCH APPROVED
POST-FORECLOSURE PLAN.

(3)               NOTWITHSTANDING ANYTHING IN SECTIONS 12.2(1) AND 12.2(2) TO
THE CONTRARY, ADMINISTRATIVE AGENT WILL NOT, WITHOUT THE CONSENT OF ALL OF THE
LENDERS (SUBJECT TO ANY STANDARD OF REASONABILITY AS MAY BE EXPRESSLY SET FORTH
IN THE LOAN DOCUMENTS), AGREE TO THE FOLLOWING: (A) REDUCE, OR FORGIVE ANY
PORTION OF, THE PRINCIPAL AMOUNT OF THE LOANS OR REDUCE THE INTEREST RATE
THEREON (OTHER THAN A REDUCTION OR WAIVER OF INTEREST ACCRUING AT THE DEFAULT
RATE, WHICH MAY BE REDUCED OR WAIVED BY THE REQUIRED LENDERS); (B) EXTEND ANY
STATED PAYMENT DATE FOR PRINCIPAL OF OR INTEREST ON THE LOANS PAYABLE TO SUCH
LENDER (EXCEPT FOR THE EXTENSIONS OF THE MATURITY DATE PROVIDED FOR IN SECTION
2.15); (C) RELEASE BORROWER, GUARANTOR OR ANY OTHER PARTY FROM LIABILITY UNDER
THE LOAN DOCUMENTS (EXCEPT FOR ANY RELEASE OF (I) BORROWER IN CONNECTION WITH A
TRANSFER OF THE PROJECT TO A SUCCESSOR BORROWER IN ACCORDANCE WITH SECTION
9.1(2), (II) ANY ASSIGNING LENDER PURSUANT TO SECTION 12.23 AND (III) ANY
RESIGNING ADMINISTRATIVE AGENT PURSUANT TO SECTION 14.6); (D) RELEASE OR
SUBORDINATE IN WHOLE OR IN PART ANY MATERIAL PORTION OF THE COLLATERAL GIVEN AS
SECURITY FOR THE LOANS (EXCEPT AS PROVIDED IN SECTIONS 9.1(4) AND 9.1(5)) (IT
BEING SPECIFICALLY ACKNOWLEDGED AND AGREED THAT THE EXCESS DEVELOPMENT RIGHTS DO
NOT CONSTITUTE COLLATERAL FOR THE LOANS); (E) MODIFY ANY OF THE PROVISIONS OF
THIS SECTION 12.2, THE DEFINITION OF “REQUIRED LENDERS” OR ANY OTHER PROVISION
IN THE LOAN DOCUMENTS SPECIFYING THE NUMBER OR PERCENTAGE OF LENDERS REQUIRED TO
WAIVE, AMEND OR MODIFY ANY RIGHTS THEREUNDER OR MAKE ANY DETERMINATION OR GRANT
ANY CONSENT THEREUNDER; (F) MODIFY THE TERMS OF ARTICLE 10; (G) CONSENT TO (I)
THE SALE, TRANSFER OR ENCUMBRANCE OF ANY PORTION OF THE PROJECT (OR ANY INTEREST
THEREIN) OR ANY DIRECT OR INDIRECT OWNERSHIP INTEREST THEREIN (EXCEPT FOR ANY
TRANSFER OF THE PROJECT TO A SUCCESSOR BORROWER IN ACCORDANCE WITH SECTION
9.1(2)) AND (II) THE INCURRENCE BY BORROWER OF ANY ADDITIONAL INDEBTEDNESS
SECURED BY THE PROJECT; OR (H) MODIFY THE REQUIREMENT SET FORTH IN THE SECOND
SENTENCE OF SECTION 3.1(1)(D) THAT THE INSURANCE DESCRIBED THEREIN BE MAINTAINED
ON A REPLACEMENT COST BASIS.

(4)               NOTWITHSTANDING ANYTHING TO CONTRARY CONTAINED IN THIS
AGREEMENT, ANY MODIFICATION OR SUPPLEMENT OF ARTICLE 14, OR OF ANY OF THE RIGHTS
OR DUTIES OF ADMINISTRATIVE AGENT HEREUNDER SHALL REQUIRE THE CONSENT OF
ADMINISTRATIVE AGENT.

SECTION 12.3        LIMITATION ON INTEREST.

It is the intention of the parties hereto to conform strictly to applicable
usury laws.  Accordingly, all agreements between Borrower, Administrative Agent
and the Lenders with respect to the Loans are hereby expressly limited so that
in no event, whether by reason of acceleration of maturity or otherwise, shall
the amount paid or agreed to be paid to Administrative Agent or any Lender or
charged by any Lender for the use, forbearance or detention of the money to be
lent hereunder or otherwise, exceed the maximum amount allowed by law.  If the
Loans would be usurious under applicable law (including the laws of the State
and the laws of the United States of America), then, notwithstanding anything to
the contrary in the Loan Documents: (1) the aggregate of all consideration which
constitutes interest under

                                                                    

102

--------------------------------------------------------------------------------

 

applicable law that is contracted for, taken, reserved, charged or received
under the Loan Documents shall under no circumstances exceed the maximum amount
of interest allowed by applicable law, and any excess shall be credited on the
Notes by the holders thereof (or, if the Notes have been paid in full, refunded
to Borrower); and (2) if maturity is accelerated by reason of an election by
Administrative Agent in accordance with the terms hereof, or in the event of any
prepayment, then any consideration which constitutes interest may never include
more than the maximum amount allowed by applicable law.  In such case, excess
interest, if any, provided for in the Loan Documents or otherwise, to the extent
permitted by applicable law, shall be amortized, prorated, allocated and spread
from the date of advance until payment in full so that the actual rate of
interest is uniform through the term hereof.  If such amortization, proration,
allocation and spreading is not permitted under applicable law, then such excess
interest shall be cancelled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the Notes (or, if the
Notes have been paid in full, refunded to Borrower).  The terms and provisions
of this Section 12.3 shall control and supersede every other provision of the
Loan Documents.  The Loan Documents are contracts made under and shall be
construed in accordance with and governed by the laws of the State, except that
if at any time the laws of the United States of America permit the Lenders to
contract for, take, reserve, charge or receive a higher rate of interest than is
allowed by the laws of the State (whether such federal laws directly so provide
or refer to the law of any state), then such federal laws shall to such extent
govern as to the rate of interest which the Lenders may contract for, take,
reserve, charge or receive under the Loan Documents.

SECTION 12.4        INVALID PROVISIONS.

If any provision of any Loan Document is held to be illegal, invalid or
unenforceable, such provision shall be fully severable; the Loan Documents shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part thereof; the remaining provisions thereof shall
remain in full effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance therefrom; and in lieu of such
illegal, invalid or unenforceable provision there shall be added automatically
as a part of such Loan Document a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible to be legal, valid and
enforceable.

SECTION 12.5        REIMBURSEMENT OF EXPENSES.

Borrower shall pay or reimburse Administrative Agent, the Lead Arrangers and/or
the Lenders on demand of the applicable party for: (1) all reasonable
out-of-pocket expenses (including, without limitation, reasonable attorneys’
fees, disbursements and other charges) incurred by Administrative Agent, the
Lead Arrangers and the Lenders in connection with the syndication of the Loans
(provided that Borrower shall not be responsible for such syndication costs
incurred after the Closing Date) to the extent that the same are incurred more
than three (3) months after the Closing Date), the preparation, negotiation,
execution and recording of the Loan Documents and the closing of the Loans,
including, without limitation, the reasonable out-of-pocket fees and expenses in
connection with the closing of the Loans of the appraiser, environmental,
engineering, insurance and other consultants engaged by Administrative Agent and
all reasonable out-of-pocket expenses of the Lenders (but not any post-closing
costs or expenses incurred by the Lenders) relating to the internal review of
appraisals, environmental

                                                                    

103

--------------------------------------------------------------------------------

 

reports, engineering reports, and the cost of credit searches, “know your
customer” due diligence, and public record searches, (2) all reasonable
out-of-pocket expenses (including, without limitation, reasonable attorneys’
fees, disbursements and other charges) incurred by Administrative Agent from
time to time in connection with the Loans, including the negotiation,
preparation, execution, delivery and administration of any consents, amendments,
waivers or other modifications to this Agreement and the other Loan Documents,
and (3) all out-of-pocket amounts expended, advanced or incurred by
Administrative Agent and the Lenders in connection with the enforcement of the
rights of Administrative Agent and the Lenders under this Agreement or any other
Loan Document or in connection with defending the rights and claims of
Administrative Agent and the Lenders under the Loan Documents or with respect to
the Project (by litigation or other proceeding), which amounts will include all
reasonable out-of-pocket court costs, attorneys’ fees and expenses, fees of
auditors and accountants, and investigation expenses as may be incurred by
Administrative Agent and the Lenders in connection with any such matters
(whether or not litigation is instituted); provided, however, that Borrower
shall not be liable for the payment of any such costs and expenses to the extent
the same arise (A) by reason of the gross negligence, illegal acts, fraud or
willful misconduct of Administrative Agent or any of the Lenders, (B) in any
other instance herein or in any other Loan Document that provides that the
matter in question is to be at the expense of Administrative Agent or any Lender
or at no cost to Borrower or words of similar import, (C) in connection with any
assignment, syndication or sale of participations in the Loans subsequent to the
Closing Date except as expressly set forth in clause (1) above, (D) in
connection with any dispute, proceeding, buy-sell or other matters as may arise
between or among Administrative Agent and/or one or more Lenders and/or one or
more Lead Arrangers, or (E) in connection with the execution of any note to
replace lost, destroyed or mutilated notes.  To the extent any amounts due under
this Section 12.5 are not paid by Borrower within ten (10) Business Days after
demand therefor by Administrative Agent, such amounts shall bear interest at the
Default Rate from the date such amounts shall be incurred until paid, and in any
event, all of such amounts shall secured by the Loan Documents.

SECTION 12.6        APPROVALS; THIRD PARTIES; CONDITIONS.

All approval rights retained or exercised by Administrative Agent and the
Lenders with respect to leases, contracts, plans, studies and other matters are
solely to facilitate the Lenders’ credit underwriting, and shall not be deemed
or construed as a determination that the Lenders have passed on the adequacy
thereof for any other purpose and may not be relied upon by any other Person. 
This Agreement is for the sole and exclusive use of Administrative Agent, the
Lenders and Borrower and may not be enforced, nor relied upon, by any Person
other than Administrative Agent, the Lenders and Borrower.  All conditions of
the obligations of Administrative Agent and the Lenders hereunder, including the
obligation to make advances, are imposed solely and exclusively for the benefit
of Administrative Agent and the Lenders, their successors and assigns, and no
other Person shall have standing to require satisfaction of such conditions or
be entitled to assume that the Lenders will refuse to make advances in the
absence of strict compliance with any or all of such conditions, and no other
Person shall, under any circumstances, be deemed to be a beneficiary of such
conditions, any and all of which may be freely waived in whole or in part by
Administrative Agent and the Lenders at any time in their sole and absolute
discretion.

                                                                   

104

--------------------------------------------------------------------------------

 

 

SECTION 12.7        LENDERS AND ADMINISTRATIVE AGENT NOT IN CONTROL; NO
PARTNERSHIP.

None of the covenants or other provisions contained in this Agreement shall, or
shall be deemed to, give Administrative Agent or any Lender the right or power
to exercise control over the affairs or management of Borrower, the power of
Administrative Agent and the Lenders being limited to the rights to exercise the
remedies referred to in the Loan Documents.  The relationship between Borrower
and the Lenders is, and at all times shall remain, solely that of debtor and
creditor.  No covenant or provision of the Loan Documents is intended, nor shall
it be deemed or construed, to create a partnership, joint venture, agency or
common interest in profits or income between Administrative Agent, the Lenders
and Borrower or to create an equity in the Project in Administrative Agent or
any Lender.  Administrative Agent and the Lenders neither undertake nor assume
any responsibility or duty to Borrower or to any other person with respect to
the Project or the Loans, except as expressly provided in the Loan Documents;
and: (1) neither Administrative Agent nor any Lender is, nor shall be construed
as, a partner, joint venturer, alter ego, manager, controlling person or other
business associate or participant of any kind of Borrower or its stockholders,
members, or partners and neither Administrative Agent nor any Lender intends to
ever assume such status; (2) no Lender or Administrative Agent shall in any
event be liable for any Debts, expenses or losses incurred or sustained by
Borrower; and (3) no Lender or Administrative Agent shall be deemed responsible
for or a participant in any acts, omissions or decisions of Borrower or its
stockholders, members, or partners.  Administrative Agent, the Lenders and
Borrower disclaim any intention to create any partnership, joint venture, agency
or common interest in profits or income between Administrative Agent, the
Lenders and Borrower, or to create an equity in the Project in Administrative
Agent or any Lender, or any sharing of liabilities, losses, costs or expenses.

SECTION 12.8        TIME OF THE ESSENCE.

Time is of the essence with respect to this Agreement.

SECTION 12.9        SUCCESSORS AND ASSIGNS.

Subject to the provisions of Section 12.23, this Agreement shall be binding upon
and inure to the benefit of Administrative Agent, the Lenders and Borrower and
the respective successors and permitted assigns.

SECTION 12.10    INTENTIONALLY OMITTED.

SECTION 12.11    WAIVERS.

No course of dealing on the part of Administrative Agent or any Lender, their
officers, employees, consultants or agents, nor any failure or delay by
Administrative Agent or any Lender with respect to exercising any right, power
or privilege of Administrative Agent or any Lender under any of the Loan
Documents, shall operate as a waiver thereof.

 

105­

--------------------------------------------------------------------------------

 

SECTION 12.12    CUMULATIVE RIGHTS.

Rights and remedies of Administrative Agent and the Lenders under the Loan
Documents shall be cumulative, and the exercise or partial exercise of any such
right or remedy shall not preclude the exercise of any other right or remedy.

SECTION 12.13    SINGULAR AND PLURAL.

Words used in this Agreement and the other Loan Documents in the singular, where
the context so permits, shall be deemed to include the plural and vice versa. 
The definitions of words in the singular in this Agreement and the other Loan
Documents shall apply to such words when used in the plural where the context so
permits and vice versa.

SECTION 12.14    PHRASES.

When used in this Agreement and the other Loan Documents, the phrase “including”
shall mean “including, but not limited to,” and except as qualified by the words
“reasonable” or “reasonably” (i) the phrases “satisfactory to any Lender” or
“satisfactory to Administrative Agent” shall mean in form and substance
satisfactory to such Lender or Administrative Agent, as the case may be, in all
respects, (ii) the phrases “with Lender’s consent”, “with Lender’s approval”,
“with Administrative Agent’s consent” or “with Administrative Agent’s approval”
shall mean such consent or approval at Lender’s or Administrative Agent’s, as
the case may be, discretion, and (iii) the phrases “acceptable to Lender” or
“acceptable to Administrative Agent” shall mean acceptable to Lender or
Administrative Agent, as the case may be, at such party’s sole and absolute
discretion.

SECTION 12.15    EXHIBITS AND SCHEDULES.

The exhibits and schedules attached to this Agreement are incorporated herein
and shall be considered a part of this Agreement for the purposes stated herein.

SECTION 12.16    TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS.

All titles or headings to articles, sections, subsections or other divisions of
this Agreement and the other Loan Documents or the exhibits hereto and thereto
are only for the convenience of the parties and shall not be construed to have
any effect or meaning with respect to the other content of such articles,
sections, subsections or other divisions, such other content being controlling
as to the agreement between the parties hereto.

SECTION 12.17    PROMOTIONAL MATERIAL.

All references to Administrative Agent or any Lender relating to the Loans
contained in any press release, advertisement or promotional material issued by
Borrower, Guarantor or any Affiliate thereof shall be approved in writing by
Administrative Agent and such Lender in advance of issuance, and all references
to Borrower, Guarantor or any Affiliate thereof relating to the Loans contained
in any press release, advertisement or promotional material issued by
Administrative Agent or any Lender or any Affiliate thereof shall be approved in
writing by Borrower in advance of issuance, provided, however, that no approval
shall be required if such

                                                                    

106

--------------------------------------------------------------------------------

 

reference is contained in any filing required to be made with the United Stated
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, or in any other filing required to be made with any
Governmental Authority.

SECTION 12.18    SURVIVAL.

Except as otherwise expressly stated in this Agreement, all of the obligations
of Borrower under the indemnification provisions of the Agreement and the other
Loan Documents (including, without limitation, the environmental indemnities
under Article 5, and the obligations under Sections 2.8, 2.9 and 2.12) shall
survive (a) the repayment in full of the Loans and the release of the Liens
evidencing or securing the Loans, (b) the transfer (by sale, foreclosure,
conveyance in lieu of foreclosure or otherwise) of any or all right, title and
interest in and to the Project to any party, whether or not an Affiliate of
Borrower, and (c) in the case of any Lender that may assign any interest in its
Commitment or Loans hereunder in accordance with the terms of this Agreement,
the making of such assignment, notwithstanding that such assigning Lender may
cease to be a “Lender” hereunder.

SECTION 12.19    WAIVER OF JURY TRIAL.

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

SECTION 12.20    GOVERNING LAW.

(1)        THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS WERE NEGOTIATED IN THE
STATE OF NEW YORK, AND MADE BY ADMINISTRATIVE AGENT AND LENDERS AND ACCEPTED BY
BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTES DELIVERED
PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE 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

                                                                    

107

--------------------------------------------------------------------------------

 

IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA.  TO THE
FULLEST EXTENT PERMITTED BY LAW, EACH OF BORROWER, ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AND THIS AGREEMENT 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.

(2)        ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ADMINISTRATIVE AGENT,
ANY LENDER OR BORROWER ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS MAY AT
ADMINISTRATIVE AGENT’S OPTION (WHICH DECISION SHALL BE MADE BY THE REQUIRED
LENDERS) BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,
COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.  BORROWER DOES
HEREBY DESIGNATE AND APPOINT THE CORPORATION TRUST COMPANY HAVING AN OFFICE
LOCATED AT 111 EIGHTH AVENUE, NEW YORK, NEW YORK 10011, AS ITS AUTHORIZED AGENT
TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY
BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT
IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT
SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER
IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE
OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF
NEW YORK.  BORROWER (A) SHALL GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT OF ANY
CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (B) MAY AT ANY TIME AND FROM
TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK,
NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON
AND ADDRESS FOR SERVICE OF PROCESS), AND (C) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW
YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

SECTION 12.21    ENTIRE AGREEMENT.

This Agreement and the other Loan Documents embody the entire agreement and
understanding between Administrative Agent, the Lenders and Borrower and
supersede all prior agreements and understandings between such parties relating
to the subject matter hereof and thereof.  Accordingly, the Loan Documents may
not be contradicted by evidence of prior,

                                                                    

108­

--------------------------------------------------------------------------------

 

contemporaneous, or subsequent oral agreements of the parties.  There are no
unwritten oral agreements between the parties. 

SECTION 12.22    COUNTERPARTS.

This Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which shall constitute one document.

SECTION 12.23    ASSIGNMENTS AND PARTICIPATIONS.

(1)               ASSIGNMENTS BY BORROWER.  BORROWER MAY NOT ASSIGN ANY OF ITS
RIGHTS OR OBLIGATIONS HEREUNDER OR UNDER THE NOTES WITHOUT THE PRIOR WRITTEN
CONSENT OF ALL OF THE LENDERS AND ADMINISTRATIVE AGENT OR AS PERMITTED HEREIN.

(2)               ASSIGNMENTS BY THE LENDERS.  EACH LENDER MAY ASSIGN ANY OF ITS
LOANS, ITS NOTES AND ITS COMMITMENT (BUT ONLY WITH THE CONSENT OF ADMINISTRATIVE
AGENT AND PROVIDED NO EVENT OF DEFAULT EXISTS, WITH THE CONSENT OF BORROWER, NOT
TO BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED); PROVIDED THAT:

(A)                NO SUCH CONSENT BY ADMINISTRATIVE AGENT OR BORROWER SHALL BE
REQUIRED IN THE CASE OF ANY ASSIGNMENT BY ANY LENDER TO ANOTHER LENDER OR AN
AFFILIATE OF SUCH LENDER OR SUCH OTHER LENDER (PROVIDED THAT IN THE CASE OF AN
ASSIGNMENT TO ANY SUCH AFFILIATE, THE ASSIGNING LENDER WILL NOT BE RELEASED FROM
ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND ADMINISTRATIVE AGENT MAY CONTINUE
TO DEAL ONLY WITH SUCH ASSIGNING LENDER AND FURTHER PROVIDED THAT SUCH
ASSIGNMENT SHALL NOT RESULT IN ANY INCREASED COSTS TO, OR OBLIGATIONS OF,
BORROWER HEREUNDER AS OF THE DATE OF SUCH ASSIGNMENT);

(B)               EXCEPT TO THE EXTENT ADMINISTRATIVE AGENT SHALL OTHERWISE
CONSENT, ANY SUCH PARTIAL ASSIGNMENT (OTHER THAN TO ANOTHER LENDER OR AN
AFFILIATE OF A LENDER) SHALL BE IN AN AMOUNT AT LEAST EQUAL TO $10,000,000
(UNLESS THE ENTIRE AMOUNT OF SUCH LENDER’S LOANS ARE THEN BEING ASSIGNED);

(C)                SUBJECT TO THE APPLICABLE LENDER’S COMPLIANCE WITH THE
PROVISIONS OF CLAUSE (B) ABOVE, ADMINISTRATIVE AGENT’S CONSENT TO AN ASSIGNMENT
SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED IF (I) SUCH
ASSIGNMENT IS MADE TO AN ELIGIBLE ASSIGNEE, AND (II) THE PROVISIONS OF CLAUSE
(D) HAVE BEEN SATISFIED;

(D)               UPON EXECUTION AND DELIVERY BY THE ASSIGNEE (EVEN IF ALREADY A
LENDER) TO BORROWER AND ADMINISTRATIVE AGENT OF AN ASSIGNMENT AND ASSUMPTION
HAVING THE COMMITMENT AND LOANS SPECIFIED IN SUCH INSTRUMENT, AND UPON CONSENT
THERETO BY ADMINISTRATIVE AGENT AND BORROWER TO THE EXTENT REQUIRED ABOVE, THE
ASSIGNEE SHALL HAVE, TO THE EXTENT OF SUCH ASSIGNMENT, THE OBLIGATIONS, RIGHTS
AND BENEFITS OF A LENDER HEREUNDER HOLDING THE COMMITMENT AND LOANS (OR PORTIONS
THEREOF) ASSIGNED TO IT (IN ADDITION TO THE COMMITMENT AND LOANS, IF ANY,
THERETOFORE HELD BY SUCH ASSIGNEE) AND THE ASSIGNING LENDER SHALL, TO THE EXTENT
OF SUCH ASSIGNMENT, BE RELEASED FROM THE COMMITMENT AND LOANS (OR PORTION
THEREOF) SO ASSIGNED (SUBJECT TO THE PROVISO CONTAINED IN CLAUSE (A) ABOVE). 
UPON EACH SUCH ASSIGNMENT THE ASSIGNING LENDER SHALL PAY ADMINISTRATIVE AGENT A
PROCESSING AND RECORDING FEE OF $3,500 AND THE REASONABLE FEES

                                                                    

109

--------------------------------------------------------------------------------

 

AND DISBURSEMENTS OF ADMINISTRATIVE AGENT’S COUNSEL INCURRED IN CONNECTION
THEREWITH; AND

(E)                NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, SO LONG AS
NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, ADMINISTRATIVE AGENT
(INCLUDING ANY SUCCESSOR ADMINISTRATIVE AGENT) SHALL NOT ASSIGN AND/OR GRANT
PARTICIPATIONS IN ITS COMMITMENT OR LOANS IF AFTER SUCH ASSIGNMENT AND/OR
PARTICIPATION IT WOULD THEN RETAIN A COMMITMENT AND LOANS OF LESS THAN 12.5% OF
THE TOTAL AMOUNT OF ALL COMMITMENTS AND LOANS.

(3)               PARTICIPATIONS.

(A)                A LENDER MAY SELL OR AGREE TO SELL TO ONE OR MORE OTHER
PERSONS (EACH A “PARTICIPANT”) A PARTICIPATION IN ALL OR ANY PART OF ANY LOANS
HELD BY IT, OR IN ITS COMMITMENT, PROVIDED (A) SUCH LENDER’S OBLIGATIONS UNDER
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL REMAIN UNCHANGED, (B) SUCH
LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES HERETO FOR THE
PERFORMANCE OF SUCH OBLIGATIONS, (C)  BORROWER, ADMINISTRATIVE AGENT  AND THE
OTHER LENDERS SHALL CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH LENDER IN
CONNECTION WITH SUCH LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS AND (D) SUCH PARTICIPATION SHALL NOT RESULT IN ANY
INCREASED COSTS TO, OR OBLIGATIONS OF, BORROWER HEREUNDER AS OF THE DATE OF SUCH
SALE.  IN NO EVENT SHALL A LENDER THAT SELLS A PARTICIPATION AGREE WITH THE
PARTICIPANT TO TAKE OR REFRAIN FROM TAKING ANY ACTION HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT EXCEPT THAT SUCH LENDER MAY AGREE WITH THE PARTICIPANT THAT
IT WILL NOT, WITHOUT THE CONSENT OF THE PARTICIPANT, AGREE TO (I) INCREASE OR
EXTEND THE TERM OF SUCH LENDER’S COMMITMENT, (II) EXTEND THE DATE FIXED FOR THE
PAYMENT OF PRINCIPAL OF OR INTEREST ON THE RELATED LOAN OR LOANS OR ANY PORTION
OF ANY FEE HEREUNDER PAYABLE TO THE PARTICIPANT, (III) REDUCE THE AMOUNT OF ANY
SUCH PAYMENT OF PRINCIPAL, (IV) REDUCE THE RATE AT WHICH INTEREST IS PAYABLE
THEREON, OR ANY FEE HEREUNDER PAYABLE TO THE PARTICIPANT, TO A LEVEL BELOW THE
RATE AT WHICH THE PARTICIPANT IS ENTITLED TO RECEIVE SUCH INTEREST OR FEE OR
(V) CONSENT TO ANY MODIFICATION, SUPPLEMENT OR WAIVER HEREOF OR OF ANY OF THE
OTHER LOAN DOCUMENTS TO THE EXTENT THAT THE SAME, UNDER SECTION 12.2, REQUIRES
THE CONSENT OF EACH LENDER.  SUBJECT TO SUBSECTION (3)(B) OF THIS SECTION 12.23,
BORROWER AGREES THAT EACH PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF
SECTIONS 2.8, 2.9 AND 2.12 TO THE SAME EXTENT AS IF IT WERE A LENDER AND HAD
ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO SUBSECTION (2) OF THIS SECTION
12.23 (PROVIDED THE LENDER FROM WHICH THE PARTICIPANT HAS ACQUIRED ITS INTEREST
COMPLIES WITH ANY REQUIREMENTS OF SUCH SECTIONS APPLICABLE TO SUCH LENDER).  TO
THE EXTENT PERMITTED BY LAW, EACH PARTICIPANT ALSO SHALL BE ENTITLED TO THE
BENEFITS OF THIS SECTION 12.23 AS THOUGH IT WERE A LENDER; PROVIDED THAT SUCH
PARTICIPANT AGREES TO BE SUBJECT TO THIS SECTION 12.23 AS THOUGH IT WERE A
LENDER.

(B)               A PARTICIPANT SHALL NOT BE ENTITLED TO RECEIVE ANY GREATER
PAYMENT UNDER SECTION 2.8, 2.9 OR 2.12 THAN THE APPLICABLE LENDER WOULD HAVE
BEEN ENTITLED TO RECEIVE WITH RESPECT TO THE PARTICIPATION SOLD TO SUCH
PARTICIPANT, UNLESS THE SALE OF THE PARTICIPATION TO SUCH PARTICIPANT IS MADE
WITH BORROWER’S PRIOR WRITTEN CONSENT.  A PARTICIPANT THAT IS A NON-U.S. PERSON
THAT WOULD BECOME A LENDER SHALL NOT BE ENTITLED TO THE BENEFITS OF SECTION 2.12
UNLESS BORROWER IS NOTIFIED OF THE PARTICIPATION SOLD TO SUCH PARTICIPANT AND
SUCH PARTICIPANT AGREES, FOR THE BENEFIT OF BORROWER, TO COMPLY WITH
SECTION 2.12 AS THOUGH IT WERE A LENDER.

 

                                                                    

110

--------------------------------------------------------------------------------

 

(4)               CERTAIN PLEDGES.  IN ADDITION TO THE ASSIGNMENTS AND
PARTICIPATIONS PERMITTED UNDER THE FOREGOING PROVISIONS OF THIS SECTION 12.23
(BUT WITHOUT BEING SUBJECT THERETO), ANY LENDER MAY (WITHOUT NOTICE TO BORROWER,
ADMINISTRATIVE AGENT OR ANY OTHER LENDER AND WITHOUT PAYMENT OF ANY FEE) ASSIGN
AND PLEDGE ALL OR ANY PORTION OF ITS LOANS AND ITS NOTES TO ANY FEDERAL RESERVE
BANK AS COLLATERAL SECURITY PURSUANT TO REGULATION A AND ANY OPERATING CIRCULAR
ISSUED BY SUCH FEDERAL RESERVE BANK, AND SUCH LOANS AND NOTES SHALL BE FULLY
TRANSFERABLE AS PROVIDED THEREIN.  NO SUCH ASSIGNMENT SHALL RELEASE THE
ASSIGNING LENDER FROM ITS OBLIGATIONS HEREUNDER.

(5)               PROVISION OF INFORMATION TO ASSIGNEES AND PARTICIPANTS.  A
LENDER MAY FROM TIME TO TIME FURNISH ANY INFORMATION CONCERNING BORROWER,
GUARANTOR OR ANY OF THEIR RESPECTIVE AFFILIATES OR THE PROJECT DELIVERED TO SUCH
LENDER PURSUANT TO THIS AGREEMENT TO ASSIGNEES AND PARTICIPANTS (INCLUDING
PROSPECTIVE ASSIGNEES AND PARTICIPANTS) SO LONG AS SUCH ASSIGNEE OR PARTICIPANT
(OR SUCH PROSPECTIVE ASSIGNEE OR PARTICIPANT), AS APPLICABLE, AGREES IN WRITING
TO COMPLY WITH THE CONFIDENTIALITY PROVISIONS SET FORTH HEREIN AND IN THE OTHER
LOAN DOCUMENTS.

(6)               NO ASSIGNMENTS TO BORROWER OR AFFILIATES.  ANYTHING IN THIS
SECTION 12.23 TO THE CONTRARY NOTWITHSTANDING, NO LENDER MAY ASSIGN OR
PARTICIPATE ANY INTEREST IN ANY LOAN HELD BY IT HEREUNDER TO BORROWER OR ANY OF
ITS AFFILIATES WITHOUT THE PRIOR WRITTEN CONSENT OF ADMINISTRATIVE AGENT AND
EACH LENDER.

(7)               GERMAN PFANDBRIEF LEGISLATION.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN THIS AGREEMENT, ANY LENDER MAY PLEDGE ITS LOAN TO A
TRUSTEE, ADMINISTRATOR, RECEIVER OR OTHER PERSON (OR THEIR RESPECTIVE NOMINEES,
AGENTS OR COLLATERAL AGENTS OR COLLATERAL TRUSTEES) (A “SECURITY TRUSTEE”) IN
CONNECTION WITH THE ISSUANCE OF COVERED MORTGAGE BONDS UNDER GERMAN PFANDBRIEF
LEGISLATION, AS SUCH LEGISLATION MAY BE AMENDED AND IN EFFECT FROM TIME TO TIME,
OR ANY SUBSTITUTE OR SUCCESSOR LEGISLATION OF A MORTGAGE POOL SECURING COVERED
MORTGAGE BONDS ISSUED BY A GERMAN MORTGAGE BANK, OR ANY OTHER PERSON MEETING THE
ELIGIBILITY REQUIREMENTS AND BEING PERMITTED TO ISSUE COVERED MORTGAGE BONDS,
UNDER GERMAN PFANDBRIEF LEGISLATION, AS SUCH LEGISLATION MAY BE AMENDED AND IN
EFFECT FROM TIME TO TIME, OR ANY SUBSTITUTE OR SUCCESSOR LEGISLATION.  BORROWER,
ADMINISTRATIVE AGENT AND THE LENDERS AGREE TO EXECUTE, WITHIN FIFTEEN (15)
BUSINESS DAYS AFTER WRITTEN REQUEST THEREFOR IS MADE BY ADMINISTRATIVE AGENT TO
BORROWER AND THE LENDERS, ANY DOCUMENTS OR ANY AMENDMENTS, AMENDMENTS AND
RESTATEMENTS AND/OR MODIFICATIONS TO ANY LOAN DOCUMENT (INCLUDING AMENDED,
AMENDED AND RESTATED AND/OR REPLACEMENT PROMISSORY NOTES) AND/OR ANY ESTOPPEL
CERTIFICATES FROM BORROWER REASONABLY REQUESTED BY ADMINISTRATIVE AGENT OR SUCH
PLEDGING LENDER IN ORDER TO MAKE THE LOAN DOCUMENTS ELIGIBLE UNDER GERMAN
PFANDBRIEF LEGISLATION, AS SUCH LEGISLATION MAY BE AMENDED AND IN EFFECT FROM
TIME TO TIME, OR ANY SUBSTITUTE OR SUCCESSOR LEGISLATION, WITHOUT CHARGE TO
BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS, PROVIDED THAT (I) SUCH
DOCUMENTS, AMENDMENTS, AMENDMENTS AND RESTATEMENTS, MODIFICATIONS AND/OR
ESTOPPEL CERTIFICATES DO NOT (A) EXPAND THE LIABILITY OR OBLIGATIONS OF
BORROWER, ADMINISTRATIVE AGENT AND/OR THE LENDERS UNDER THE LOAN DOCUMENTS OR
DIMINISH THE RIGHTS OF BORROWER, ADMINISTRATIVE AGENT AND/OR THE LENDERS UNDER
THE LOAN DOCUMENTS OR (B) EXPAND THE LIABILITY OR OBLIGATIONS OF ANY ASSIGNEE OF
A LENDER OR ANY PARTICIPANT UNDER THE LOAN DOCUMENTS OR DIMINISH THE RIGHTS OF
ANY ASSIGNEE OF A LENDER OR ANY PARTICIPANT UNDER THE LOAN DOCUMENTS; AND (II)
THE PLEDGING LENDER SHALL PAY ALL COSTS AND EXPENSES (INCLUDING REASONABLE
OUT-OF-POCKET ATTORNEY’S FEES AND DISBURSEMENTS)

 

                                                                    

111

--------------------------------------------------------------------------------

 

INCURRED BY BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS IN CONNECTION WITH
SUCH DOCUMENTS, AMENDMENTS, AMENDMENTS AND RESTATEMENTS, MODIFICATIONS AND/OR
ESTOPPEL CERTIFICATES.  NOTWITHSTANDING ANY PLEDGE PURSUANT TO THIS SECTION
12.23(7), (I) ADMINISTRATIVE AGENT SHALL CONTINUE TO DEAL SOLELY WITH THE
PLEDGING LENDER AND (II) THE PLEDGING LENDER SHALL NOT AGREE WITH THE PLEDGEE
THAT THE PLEDGING LENDER WILL NOT TAKE OR REFRAIN FROM TAKING ANY ACTION
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT WITHOUT THE PLEDGEE’S (OR ANY OTHER
PERSON’S) CONSENT; PROVIDED, HOWEVER, THAT AFTER ANY FORECLOSURE OF SUCH PLEDGE,
THE SECURITY TRUSTEE (RATHER THAN THE PLEDGING LENDER) SHALL HAVE THE SOLE RIGHT
AND POWER TO EXERCISE ANY AND ALL APPROVAL, CONSENT AND VOTING RIGHTS UNDER THE
LOAN DOCUMENTS WHICH RELATE TO THE PLEDGING LENDER’S LOAN, BUT ONLY TO THE
EXTENT THAT SUCH APPROVAL, CONSENT OR VOTING RIGHTS RELATE TO ANY OF THE MATTERS
REQUIRING THE CONSENT OF ALL OF THE LENDERS SET FORTH IN SECTION 12.2(3).

SECTION 12.24    BROKERS.

Borrower hereby represents to Administrative Agent and each Lender that Borrower
has not dealt with any broker, underwriters, placement agent, or finder in
connection with the transactions contemplated by this Agreement and the other
Loan Documents.  Borrower hereby agrees to indemnify and hold Administrative
Agent and each Lender harmless from and against any and all claims, liabilities,
costs and expenses of any kind in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein.

SECTION 12.25    RIGHT OF SET-OFF.

(1)               UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF
DEFAULT, EACH OF THE LENDERS IS, SUBJECT (AS BETWEEN THE LENDERS) TO THE
PROVISIONS OF SUBSECTION (3) OF THIS SECTION 12.25, HEREBY AUTHORIZED AT ANY
TIME AND FROM TIME TO TIME, WITHOUT NOTICE TO BORROWER (ANY SUCH NOTICE BEING
EXPRESSLY WAIVED BY BORROWER) AND TO THE FULLEST EXTENT PERMITTED BY LAW, TO
SET-OFF AND APPLY ANY AND ALL DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND,
PROVISIONAL OR FINAL) AT ANY TIME HELD, AND OTHER INDEBTEDNESS AT ANY TIME
OWING, BY SUCH LENDER IN ANY OF ITS OFFICES, IN DOLLARS OR IN ANY OTHER
CURRENCY, TO OR FOR THE CREDIT OR THE ACCOUNT OF BORROWER (BUT SPECIFICALLY
EXCLUDING GUARANTOR OR ANY OTHER AFFILIATE OF BORROWER) AGAINST ANY AND ALL OF
THE RESPECTIVE OBLIGATIONS OF BORROWER NOW OR HEREAFTER EXISTING UNDER THE LOAN
DOCUMENTS, IRRESPECTIVE OF WHETHER OR NOT SUCH LENDER OR ANY OTHER LENDER SHALL
HAVE MADE ANY DEMAND HEREUNDER AND ALTHOUGH SUCH OBLIGATIONS MAY BE CONTINGENT
OR UNMATURED AND SUCH DEPOSITS OR INDEBTEDNESS MAY BE UNMATURED.  EACH LENDER
HEREBY ACKNOWLEDGES THAT THE EXERCISE BY ANY LENDER OF OFFSET, SET-OFF, BANKER’S
LIEN, OR SIMILAR RIGHTS AGAINST ANY DEPOSIT OR OTHER INDEBTEDNESS OF BORROWER
WHETHER OR NOT LOCATED IN CALIFORNIA OR ANY OTHER STATE WITH CERTAIN LAWS
RESTRICTING LENDERS FROM PURSUING MULTIPLE COLLECTION METHODS, COULD RESULT
UNDER SUCH LAWS IN SIGNIFICANT IMPAIRMENT OF THE ABILITY OF ALL THE LENDERS TO
RECOVER ANY FURTHER AMOUNTS IN RESPECT OF THE LOAN.  THEREFORE, EACH LENDER
AGREES THAT NO LENDER SHALL EXERCISE ANY SUCH RIGHT OF SET-OFF, BANKER’S LIEN,
OR OTHERWISE, AGAINST ANY ASSETS OF BORROWER (INCLUDING ALL GENERAL OR SPECIAL,
TIME OR DEMAND, PROVISIONAL OR OTHER DEPOSITS AND OTHER INDEBTEDNESS OWING BY
SUCH LENDER TO OR FOR THE CREDIT OR THE ACCOUNT OF BORROWER) WITHOUT THE PRIOR
WRITTEN CONSENT OF ADMINISTRATIVE AGENT AND THE REQUIRED LENDERS. 

 

 

                                                                    

112­

--------------------------------------------------------------------------------

 

(2)               EACH LENDER SHALL PROMPTLY NOTIFY BORROWER AND ADMINISTRATIVE
AGENT AFTER ANY SUCH SET-OFF AND APPLICATION, PROVIDED THAT THE FAILURE TO GIVE
SUCH NOTICE SHALL NOT AFFECT THE VALIDITY OF SUCH SET-OFF AND APPLICATION.  THE
RIGHTS OF THE LENDERS UNDER THIS SECTION 12.25 ARE IN ADDITION TO OTHER RIGHTS
AND REMEDIES (INCLUDING OTHER RIGHTS OF SET-OFF) WHICH THE LENDERS MAY HAVE.

(3)               IF AN EVENT OF DEFAULT HAS RESULTED IN THE LOANS BECOMING DUE
AND PAYABLE PRIOR TO THE STATED MATURITY THEREOF, EACH LENDER AGREES THAT IT
SHALL TURN OVER TO ADMINISTRATIVE AGENT ANY PAYMENT (WHETHER VOLUNTARY OR
INVOLUNTARY, THROUGH THE EXERCISE OF ANY RIGHT OF SETOFF OR OTHERWISE) ON
ACCOUNT OF THE LOANS HELD BY IT IN EXCESS OF ITS RATABLE PORTION OF PAYMENTS ON
ACCOUNT OF THE LOANS OBTAINED BY ALL THE LENDERS.

SECTION 12.26    LIMITATION ON LIABILITY OF ADMINISTRATIVE AGENT’S AND THE
LENDERS’ OFFICERS, EMPLOYEES, ETC.

Any obligation or liability whatsoever of Administrative Agent or any Lender
which may arise at any time under this Agreement or any other Loan Document
shall be satisfied, if at all, out of Administrative Agent’s or such Lender’s
respective assets only.  No such obligation or liability shall be personally
binding upon, nor shall resort for the enforcement thereof be had to, the
property of any of Administrative Agent’s or any Lender’s shareholders,
directors, officers, employees or agents, regardless of whether such obligation
or liability is in the nature of contract, tort or otherwise.

SECTION 12.27    COOPERATION WITH SYNDICATION.

Borrower acknowledges that Lead Arrangers intend to syndicate a portion of the
Commitments to one or more Lenders (the “Syndication”) and in connection
therewith, Borrower will take all actions as Lead Arrangers and Wells Fargo
Bank, N.A. may reasonably request to assist Lead Arrangers and Wells Fargo Bank,
N.A. in their Syndication effort.  Without limiting the generality of the
foregoing, Borrower shall, as reasonably requested by the Lead Arrangers and
Wells Fargo Bank, N.A. (at no cost or expense to Borrower other than as set
forth in Section 12.5 and Borrower’s own costs and expenses), (i) facilitate the
review of the Loan and the Project by any prospective Lender; (ii) assist Lead
Arrangers and Wells Fargo Bank, N.A. and otherwise cooperate with Lead Arrangers
and Wells Fargo Bank, N.A. in the preparation of information offering materials
(which assistance may include reviewing and commenting on drafts of such
information materials and drafting portions thereof); (iii) deliver updated
information on Borrower and the Project; (iv) make representatives of Borrower
available to meet with prospective Lenders at tours of the Project and bank
meetings; (v) facilitate direct contact between the senior management and
advisors of Borrower and any prospective Lender; and (vi) provide Lead Arrangers
and Wells Fargo Bank, N.A. with all information reasonably deemed necessary by
them to complete the Syndication successfully.  Borrower agrees to take such
further action, in connection with documents and amendments to the Loan
Documents, as may reasonably be required to effect such Syndication, provided
that the same shall not result in any increase in Borrower’s liabilities or
obligations, or any decrease in Borrower’s rights, under this Agreement and the
other Loan Documents.

 

 

                                                                    

113

­

--------------------------------------------------------------------------------

 

SECTION 12.28    WAIVER OF SPECIAL DAMAGES.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY AGREES THAT IT SHALL NOT
ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ANY OTHER PARTY ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED
TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT
OF, THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE
TRANSACTIONS CONTEMPLATED HEREBY, THE LOANS OR THE USE OF THE PROCEEDS THEREOF.

SECTION 12.29    USA PATRIOT ACT NOTIFICATION.

Each Lender that is subject to the requirements of Section 326 of the USA
Patriot Act of 2001, 31 U.S.C. Section 5318, hereby notifies Borrower that
pursuant to the requirements of such Act, it is required to obtain, verify and
record information that identifies Borrower, which information includes the name
and address of Borrower and other information that will allow Administrative
Agent to identify Borrower in accordance with said Act.

SECTION 12.30    ASSIGNMENT OF MORTGAGE AND NOTES.

Administrative Agent and the Lenders each agrees to assign the Mortgage and the
Notes, upon reasonable written notice from Borrower, and upon payment in full of
the Loans at par, including, without limitation, all outstanding principal,
accrued and unpaid interest, any Additional Interest and any and all other
Indebtedness, at no cost or expense to Borrower (other than Administrative
Agent’s reasonable out-of-pocket attorneys’ fees and disbursements), to such
Person as Borrower shall designate, without recourse and without representation
or warranty, other than representations (i) that Administrative Agent, as
administrative agent for the Lenders, is the legal holder of the Mortgage and
has the authority to effect such assignment and that such Lender is the legal
holder of the Notes it is assigning and has the authority to effect such
assignment and (ii) as to the outstanding principal balance of the Loans at the
time of such assignment.  In connection therewith, in the event any of the
Lenders is unable to deliver any of its original Notes, such Lender shall
deliver a lost note affidavit and indemnity in respect thereof in a form
reasonably acceptable to such Lender and the assignee.

ARTICLE 13

RECOURSE

SECTION 13.1        RECOURSE.

This Agreement and the other Loan Documents are valid and binding full recourse
obligations of Borrower and shall be non-recourse to the Sole Member and to
Guarantor and to the partners, officers, directors, trustees, shareholders and
employees of Borrower, Sole Member and Guarantor, except that Guarantor (but not
its partners, officers, directors, trustees, shareholders or employees) shall
remain liable under the Guaranty, the Environmental Indemnity, and, to the
extent delivered in accordance with Section 9.15(4) hereof, the guaranty

                                                                    

114­

--------------------------------------------------------------------------------

 

of interest contemplated under such Section 9.15(4), to Administrative Agent and
the Lenders pursuant to the terms thereof.

ARTICLE 14

ADMINISTRATIVE AGENT

SECTION 14.1        APPOINTMENT.

Each of the Lenders hereby irrevocably appoints Administrative Agent as its
agent and authorizes Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to Administrative Agent by the terms
hereof, together with such actions and powers as are reasonably incidental
thereto.

SECTION 14.2        CAPACITY AS LENDER.

The bank serving as Administrative Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not Administrative Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with Borrower or Affiliate thereof as if it were not
Administrative Agent hereunder.

SECTION 14.3        DUTIES AND OBLIGATIONS.

Administrative Agent shall not have any duties or obligations except those
expressly set forth herein.  Without limiting the generality of the foregoing,
(a) Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Potential Default or Event of Default has
occurred and is continuing, (b) Administrative Agent shall not have any duty to
take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that
Administrative Agent is required to exercise in writing as directed by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in this Agreement or the other
Loan Documents), and (c) except as expressly set forth herein, Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Borrower or any of its
subsidiaries or Affiliates that is communicated to or obtained by the bank
serving as Administrative Agent or any of its Affiliates in any capacity. 
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in this Agreement or the other Loan Documents) or in the absence of its
own gross negligence or willful misconduct.  Administrative Agent shall be
deemed not to have knowledge of any Potential Default or Event of Default unless
and until written notice thereof is given to Administrative Agent by Borrower or
a Lender, and Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the

                                                                   

115

--------------------------------------------------------------------------------

 

validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document, (v) the
satisfaction of any condition set forth in this Agreement, other than to confirm
receipt of items expressly required to be delivered to Administrative Agent,
(vi) the value, sufficiency, creation, perfection or priority of any lien on the
Mortgaged Property, or (vii) the financial condition of Borrower or Guarantor.

SECTION 14.4        RELIANCE.

Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person.  Administrative Agent also
may rely upon any statement made to it orally or by telephone and believed by it
to be made by the proper Person, and shall not incur any liability for relying
thereon.  Administrative Agent may consult with legal counsel (who may be
counsel for Borrower), independent accountants and other experts selected by it,
and shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts.

SECTION 14.5        SUB-AGENTS.

Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by Administrative
Agent.  Administrative Agent and any such sub-agent may perform any and all its
duties and exercise its rights and powers through their respective Related
Parties.  The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.

SECTION 14.6        RESIGNATION.

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this Section, Administrative Agent may resign at any time by
notifying the Lenders and Borrower.  Upon any such resignation, the Required
Lenders shall have the right, in consultation with Borrower (provided that no
Event of Default then exists), to appoint a successor.  If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, or an Affiliate of any such bank. 
Upon the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent,
including, without limitation, Section 12.23(2)(e), and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between Borrower and such successor.  After Administrative Agent’s resignation
hereunder, the provisions of this Article and Section 12.5 shall continue in
effect for

                                                                    

116

--------------------------------------------------------------------------------

 

the benefit of such retiring Administrative Agent, its sub‑agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

SECTION 14.7        INDEPENDENT CREDIT ANALYSIS.

Each Lender acknowledges that it has, independently and without reliance upon
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender also acknowledges that it
will, independently and without reliance upon Administrative Agent or any other
Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, the other Loan Documents, any related
agreement or any document furnished hereunder or thereunder.

SECTION 14.8        LENDER ACTIONS AGAINST COLLATERAL.

Each Lender agrees that it will not take any action, nor institute any actions
or proceedings, with respect to Borrower’s obligations under this Agreement or
any other Loan Document, against Borrower, Guarantor or any other obligor under
this Agreement or the other Loan Documents or against any of the Mortgaged
Property (including, without limitation, set-off rights against Borrower)
without the consent of the Required Lenders.  With respect to any action by
Administrative Agent to enforce the rights and remedies of Administrative Agent
and the Lenders under this Agreement and the other Loan Documents, each Lender
hereby consents to the jurisdiction of the court in which such action is
maintained, and agrees to deliver its Notes to Administrative Agent to the
extent necessary to enforce the rights and remedies of Administrative Agent for
the benefit of the Lenders under the Mortgage in accordance with the provisions
hereof.  Each Lender agrees to indemnify each of the other Lenders for any loss
or damage suffered or cost incurred by such other Lender (including without
limitation, attorneys fees and expenses and other costs of defense) as a result
of the breach of this Section 14.8 by such Lender.

SECTION 14.9        LENDER REPLY PERIOD.

All communications from Administrative Agent to Lenders requesting Lenders’
determination, consent or approval, in each case to the extent required under
the terms of this Agreement, (i) shall be given in the form of a written notice
to each Lender, (ii) shall be accompanied by a description of the matter as to
which such determination, consent or approval is requested, (iii) shall include
a legend substantially as follows, printed in capital letters or boldface type:

“THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE.  FAILURE TO RESPOND WITHIN FIVE
(5) DAYS AFTER THE DELIVERY OF THIS COMMUNICATION SHALL CONSTITUTE A DEEMED
APPROVAL BY THE ADDRESSEE OF THE MATTER DESCRIBED ABOVE.”

and (iv) shall include Administrative Agent’s recommended course of action or
determination in respect thereof.  Each Lender shall reply promptly to any such
request, but in any event within

                                                                    

117

--------------------------------------------------------------------------------

 

five (5) days after the delivery of such request by Administrative Agent (the
“Lender Reply Period”).  Unless a Lender shall give written notice to
Administrative Agent that it objects to the recommendation or determination of
Administrative Agent (together with a written explanation of the reasons behind
such objection) within the Lender Reply Period, such Lender shall be deemed to
have approved of or consented to such recommendation or determination.  With
respect to decisions requiring the approval of the Required Lenders or all
Lenders, Administrative Agent shall timely submit any required written notices
to all Lenders and upon receiving the required approval or consent shall follow
the course of action or determination recommended by Administrative Agent or
such other course of action recommended by the Required Lenders or all of the
Lenders, as the case may be, and each non-responding Lender shall be deemed to
have concurred with such recommended course of action. 

SECTION 14.10    FORECLOSURE.

In the event that all or any portion of the Mortgaged Property is acquired by
Administrative Agent as the result of a foreclosure or acceptance of a deed or
assignment in lieu of foreclosure, or is retained in satisfaction of all or any
part of the Indebtedness, title to any such Mortgaged Property or any portion
thereof shall be held in the name of Administrative Agent or a subsidiary or
other designee of Administrative Agent, as nominee for the benefit of the
Lenders, or in an entity co-owned by the Lenders as determined by Administrative
Agent.  Administrative Agent shall prepare a recommended course of action for
such Mortgaged Property (the “Post-Foreclosure Plan”) and submit it to the
Lenders for approval by the Required Lenders.  In the event that Administrative
Agent does not obtain the approval of the Required Lenders to such
Post-Foreclosure Plan, any Lender shall be permitted to submit an alternative
Post-Foreclosure Plan to Administrative Agent, and Administrative Agent shall
submit any and all such additional Post-Foreclosure Plan(s) to the Lenders for
evaluation and the approval by the Required Lenders.  In accordance with the
approved Post-Foreclosure Plan, Administrative Agent shall manage, operate,
repair, administer, complete, construct, restore or otherwise deal with the
Mortgaged Property acquired and administer all transactions relating thereto,
including, without limitation, employing a management agent, leasing agent and
other agents, contractors and employees, including agents for the sale of such
Mortgaged Property, and the collecting of rents and other sums from such
Mortgaged Property and paying the expenses of such Mortgaged Property.  Upon
demand therefor from time to time, each Lender will contribute its ratable share
(based on their respective Commitments immediately prior to the termination
thereof) of all reasonable costs and expenses incurred by Administrative Agent
pursuant to the Post-Foreclosure Plan in connection with the construction,
operation, management, maintenance, leasing and sale of the Mortgaged Property. 
In addition, Administrative Agent shall render or cause to be rendered by the
managing agent, to each of the Lenders, monthly, an income and expense statement
for such Mortgaged Property, and each of the Lenders shall promptly contribute
its ratable share (based on their respective Commitments immediately prior to
the termination thereof) of any operating loss for the Mortgaged Property, and
such other expenses and operating reserves as Administrative Agent shall deem
reasonably necessary pursuant to and in accordance with the Post-Foreclosure
Plan.  To the extent there is net operating income from such Mortgaged Property,
Administrative Agent shall, in accordance with the Post-Foreclosure Plan,
determine the amount and timing of distributions to the Lenders.  All such
distributions shall be made to the Lenders in proportion to their respective
Commitments immediately prior to the termination thereof.  The Lenders
acknowledge that if title to any Mortgaged Property is

                                                                    

118

--------------------------------------------------------------------------------

 

obtained by Administrative Agent or its subsidiary or designee, or an entity
co-owned by the Lenders, such Mortgaged Property will not be held as a permanent
investment but will be disposed of as soon as practicable and within a time
period consistent with the regulations applicable to national banks for owning
real estate.  Administrative Agent shall undertake to sell such Mortgaged
Property at such price and upon such terms and conditions as the Required
Lenders shall reasonably determine to be most advantageous.  Any purchase money
mortgage or deed of trust taken in connection with the disposition of such
Mortgaged Property in accordance with the immediately preceding sentence shall
name Administrative Agent, as agent for the Lenders, as the beneficiary or
mortgagee.  In such case, Administrative Agent and the Lenders shall enter into
an agreement with respect to such purchase money mortgage defining the rights of
the Lenders in the same, which agreement shall be in all material respects
similar to the rights of the Lenders with respect to the Mortgaged Property. 
Lenders agree not to unreasonably withhold or delay their approval of a
Post-Foreclosure Plan or any third party offer to purchase the Mortgaged
Property.

SECTION 14.11    DEFAULTING LENDER.

Notwithstanding any provision of this Agreement to the contrary, if a Lender
becomes a Defaulting Lender, the following provisions shall apply for so long as
such Lender is a Defaulting Lender;

(A)                SUSPENSION OF VOTING RIGHTS.  SUCH DEFAULTING LENDER SHALL
NOT HAVE THE RIGHT TO VOTE ON ANY ISSUE ON WHICH ANY VOTE OR APPROVAL IS
REQUIRED BY ANY LENDER HEREUNDER AND THE COMMITMENT OF SUCH DEFAULTING LENDER
SHALL NOT BE INCLUDED IN DETERMINING WHETHER THE REQUIRED LENDERS HAVE TAKEN OR
MAY TAKE ANY ACTION HEREUNDER.

(B)               TURN OVER OF PAYMENTS.  ALL AMOUNTS PAYABLE HEREUNDER TO THE
DEFAULTING LENDER IN RESPECT OF THE INDEBTEDNESS (WHETHER ON ACCOUNT OF
PRINCIPAL, INTEREST, FEES OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, INTEREST
PAYMENTS FROM INTEREST RESERVE ALLOCATIONS TO THE DEFAULTING LENDER AND ANY
AMOUNTS THAT WOULD OTHERWISE BE PAYABLE TO THE DEFAULTING LENDER PURSUANT TO
SECTION 2.13, BUT EXCLUDING SECTION 2.14(2)) SHALL BE PAID TO ADMINISTRATIVE
AGENT, RETAINED IN A SEGREGATE ACCOUNT AND, SUBJECT TO ANY APPLICABLE
REQUIREMENTS OF LAW, BE APPLIED AS FOLLOWS: (I) FIRST, TO THE PAYMENT OF ANY
AMOUNTS OWING BY THE DEFAULTING LENDER TO ADMINISTRATIVE AGENT HEREUNDER, (II)
SECOND, TO THE FUNDING OF ANY BORROWING IN RESPECT OF WHICH THE DEFAULTING
LENDER HAS FAILED TO FUND ITS PORTION AS REQUIRED BY THIS AGREEMENT, AS
DETERMINED BY ADMINISTRATIVE AGENT, (III) THIRD, TO THE PAYMENT OF ANY AMOUNTS
OWING BY THE DEFAULTING LENDER TO THE NON-DEFAULTING LENDERS HEREUNDER,
INCLUDING, WITHOUT LIMITATION, FOR ANY SPECIAL ADVANCE UNDER SUBSECTION (C) OF
THIS SECTION 14.11, AND (IV) FOURTH, TO THE DEFAULTING LENDER OR AS OTHERWISE
DIRECTED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT IF SUCH PAYMENT IS
(X) A PREPAYMENT OF THE PRINCIPAL AMOUNT OF ANY LOANS AND (Y) MADE AT A TIME
WHEN THE CONDITIONS SET FORTH IN SCHEDULE 2.1 ARE SATISFIED, SUCH PAYMENT SHALL
BE APPLIED SOLELY TO REPAY THE LOANS OF ALL NON-DEFAULTING LENDERS PRO RATA
PRIOR TO BEING APPLIED TO THE PREPAYMENT OF ANY LOANS OWED TO THE DEFAULTING
LENDER.

(C)                SPECIAL ADVANCES.  IF A LENDER FAILS TO FUND ITS PORTION OF
ANY BORROWING, IN WHOLE OR PART, WITHIN THREE (3) BUSINESS DAYS AFTER THE DATE
REQUIRED HEREUNDER AND ADMINISTRATIVE AGENT SHALL NOT HAVE FUNDED THE DEFAULTING
LENDER’S PORTION OF THE BORROWING

 

                                                                    

119­

--------------------------------------------------------------------------------

 

UNDER SECTION 2.2(2), ADMINISTRATIVE AGENT SHALL SO NOTIFY THE LENDERS, AND
WITHIN THREE (3) BUSINESS DAYS AFTER DELIVERY OF SUCH NOTICE, THE NON-DEFAULTING
LENDERS SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, IN THEIR RESPECTIVE, SOLE
AND ABSOLUTE DISCRETION, TO FUND ALL OR A PORTION OF SUCH DEFICIENCY (THE AMOUNT
SO FUNDED BY ANY SUCH NON-DEFAULTING LENDERS BEING REFERRED TO HEREIN AS A
“SPECIAL ADVANCE”) TO BORROWER.  IN SUCH EVENT, THE DEFAULTING LENDER AND
BORROWER SEVERALLY AGREE TO PAY TO ADMINISTRATIVE AGENT FOR PAYMENT TO THE
NON-DEFAULTING LENDERS MAKING THE SPECIAL ADVANCE, FORTHWITH ON DEMAND SUCH
AMOUNT WITH INTEREST THEREON, FOR EACH DAY FROM AND INCLUDING THE DATE SUCH
AMOUNT IS MADE AVAILABLE TO BORROWER TO BUT EXCLUDING THE DATE OF PAYMENT TO
ADMINISTRATIVE AGENT, AT (I) IN THE CASE OF THE DEFAULTING LENDER, THE GREATER
OF THE FEDERAL FUNDS EFFECTIVE RATE AND A RATE DETERMINED BY ADMINISTRATIVE
AGENT IN ACCORDANCE WITH BANKING INDUSTRY RULES ON INTERBANK COMPENSATION OR
(II) IN THE CASE OF BORROWER, THE INTEREST RATE APPLICABLE TO ABR LOANS.

(D)               OPTION TO PURCHASE FUTURE COMMITMENT.  THE NON-DEFAULTING
LENDERS SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, IN THEIR RESPECTIVE, SOLE
AND ABSOLUTE DISCRETION, TO ACQUIRE FOR NO CASH CONSIDERATION (PRO RATA, BASED
ON THE RESPECTIVE COMMITMENTS OF THOSE LENDERS ELECTING TO EXERCISE SUCH RIGHT),
THE DEFAULTING LENDER’S COMMITMENT TO FUND FUTURE LOANS (THE “FUTURE
COMMITMENT”).  UPON ANY SUCH PURCHASE OF THE DEFAULTING LENDER’S FUTURE
COMMITMENT, THE DEFAULTING LENDER’S SHARE IN FUTURE LOANS AND ITS RIGHTS UNDER
THE LOAN DOCUMENTS WITH RESPECT THERETO SHALL TERMINATE ON THE DATE OF PURCHASE,
AND THE DEFAULTING LENDER SHALL PROMPTLY EXECUTE ALL DOCUMENTS REASONABLY
REQUESTED TO SURRENDER AND TRANSFER SUCH INTEREST AND THE NON-DEFAULTING LENDERS
ACQUIRING SUCH RIGHTS SHALL BE OBLIGATED TO FUND THE DEFAULTING LENDER’S FUTURE
COMMITMENT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.  ANY PURCHASE OF A
DEFAULTING LENDER’S FUTURE COMMITMENT SHALL NOT AFFECT SUCH DEFAULTING LENDERS
RIGHTS AND OBLIGATIONS WITH RESPECT TO ITS COMMITMENT REGARDING LOANS PREVIOUSLY
ADVANCED BY SUCH DEFAULTING LENDER.

(E)                REPLACEMENT OF DEFAULTING LENDER.

(I)                 BY REQUIRED LENDERS.  THE REQUIRED LENDERS MAY, UPON NOTICE
TO THE DEFAULTING LENDER AND ADMINISTRATIVE AGENT, REQUIRE THE DEFAULTING LENDER
TO ASSIGN AND DELEGATE, WITHOUT RECOURSE (IN ACCORDANCE WITH AND SUBJECT TO THE
RESTRICTIONS CONTAINED IN SECTION 12.23) ALL ITS INTERESTS, RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT TO AN ASSIGNEE THAT SHALL ASSUME SUCH
OBLIGATIONS (WHICH ASSIGNEE MAY BE ANOTHER LENDER, IF A LENDER ACCEPTS SUCH
ASSIGNMENT); PROVIDED THAT (I) THE DEFAULTING LENDER SHALL HAVE RECEIVED PAYMENT
OF AN AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL OF ITS LOANS, ACCRUED INTEREST
THEREON, ACCRUED FEES AND ALL OTHER AMOUNTS PAYABLE TO IT HEREUNDER FROM THE
ASSIGNEE (TO THE EXTENT OF SUCH OUTSTANDING PRINCIPAL AND ACCRUED INTEREST AND
FEES) OR BORROWER (IN THE CASE OF ALL OTHER AMOUNTS); AND (II) ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED PAYMENT OF ANY AMOUNTS OWING BY SUCH DEFAULTING LENDER
TO ADMINISTRATIVE AGENT OR THE OTHER LENDERS UNDER THIS AGREEMENT.  THE
DEFAULTING LENDER SHALL NOT BE REQUIRED TO MAKE ANY SUCH ASSIGNMENT AND
DELEGATION IF, PRIOR THERETO, SUCH LENDER SHALL CEASE TO BE A DEFAULTING LENDER.

(II)               BY BORROWER.  IF THE LENDER HAS BECOME A DEFAULTING LENDER
DUE TO A FAILURE TO FUND ITS LOANS HEREUNDER, BORROWER MAY AT ITS OPTION REPLACE
DEFAULTING LENDER UNDER SECTION 2.14(2).

 

                                                                    

120­

--------------------------------------------------------------------------------

 

(F)                INDEMNIFICATION.  EACH DEFAULTING LENDER SHALL INDEMNIFY
ADMINISTRATIVE AGENT, EACH NON-DEFAULTING LENDER AND BORROWER FROM AND AGAINST
ANY LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATEVER WHICH
MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ADMINISTRATIVE AGENT, ANY
NON-DEFAULTING LENDER OR BORROWER WITH RESPECT TO THE LOAN DOCUMENTS IN ANY WAY
RELATING TO OR ARISING OUT OF SUCH LENDER’S STATUS AS A DEFAULTING LENDER.  THE
OBLIGATIONS OF THE DEFAULTING LENDER UNDER THIS CLAUSE (F) SHALL SURVIVE THE
PAYMENT OF THE INDEBTEDNESS, THE TERMINATION OF THIS AGREEMENT AND THE
DEFAULTING LENDER’S REVERSION TO A NON-DEFAULTING LENDER UNDER SUBSECTION (G) OF
THIS SECTION 14.11.

(G)               CEASING TO BE A DEFAULTING LENDER.  A LENDER SHALL CEASE TO BE
DEFAULTING LENDER ONLY UPON (I) THE PAYMENT OF ALL AMOUNTS DUE AND PAYABLE BY
DEFAULTING LENDER TO ADMINISTRATIVE AGENT OR ANY OTHER LENDER UNDER THIS
AGREEMENT; (II) THE PAYMENT OF ANY DAMAGES SUFFERED BY BORROWER AS A RESULT OF
SUCH DEFAULTING LENDER’S DEFAULT HEREUNDER (INCLUDING, WITHOUT LIMITATION,
INTEREST AT THE PRIME RATE PLUS 3% ON ANY PORTION OF DRAW REQUESTS FUNDED BY
BORROWER WITH EQUITY); (III) THE CONFIRMATION BY THE LENDER TO ADMINISTRATIVE
AGENT AND BORROWER IN WRITING THAT THE LENDER WILL COMPLY WITH ALL OF ITS
FUNDING OBLIGATIONS UNDER THIS AGREEMENT; AND (IV) THE CIRCUMSTANCES DESCRIBED
IN CLAUSE (D) OF THE DEFINITION OF “DEFAULTING LENDER” DO NOT EXIST.  AN
ASSIGNMENT BY A LENDER OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT SHALL
NOT IN AND OF ITSELF CAUSE THE LENDER TO CEASE TO BE A DEFAULTING LENDER.

SECTION 14.12    BORROWER’S RIGHTS.

Except for the provisions of this Article 14 which expressly grant Borrower any
rights, the provisions of this Article 14 are solely for the benefit of
Administrative Agent and the Lenders, and Borrower shall not have any rights to
rely on, enforce or consent to any waiver, modification or amendment of, any of
the provisions hereof; provided, however, that Borrower (a) acknowledges and
agrees to the limitations set forth in Section 12.2(1) on Administrative Agent’s
ability to act unilaterally with respect to this Agreement or the other Loan
Documents, and (b) agrees that Administrative Agent’s inability to deliver any
consent to, or approval of, an action requested by Borrower due to lack of
appropriate Lender consent where Lender consent is required in accordance with
the provisions of Section 12.2(1) shall not constitute an unreasonable
withholding or delay by Administrative Agent in the giving of such consent or
approval.  Notwithstanding the foregoing, Borrower shall be entitled to rely on
consents and approvals executed by Administrative Agent without investigation as
to the existence of proper Lender authorization. 

SECTION 14.13    INDEMNIFICATION BY THE LENDERS.

The Lenders agree to indemnify Administrative Agent (to the extent not
reimbursed under Section 12.5, but without limiting the obligations of Borrower
under Section 12.5) ratably in accordance with the aggregate principal amount of
the Loans held by the Lenders (or, if no Loans are at the time outstanding,
ratably in accordance with their respective Commitments), for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against Administrative Agent (including by
any Lender) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any

                                                                    

121

--------------------------------------------------------------------------------

 

other Loan Document or any other documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses that Borrower is obligated to pay
under Section 12.5, but excluding, unless a Event of Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents.

[Signature Pages Follow]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                    

122­

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement as of
the day and year first above written.

ADMINISTRATIVE AGENT:

JPMORGAN CHASE BANK, N.A.

 

 

 

 

 

By:

/s/ Joan Matera

 

 

Name:

Title:

Joan Matera 

Executive  Director    

 

 

 

 

 

                                                               

--------------------------------------------------------------------------------

 

 

[Signature page for Loan

Agreement continued]

 

 

 

LENDER:

JPMORGAN CHASE BANK, N.A.

 

 

 

 

 

By:

/s/ Joan Matera

 

 

Name:

Title:

Joan Matera

Executive Director

 

 

 

 

 

                                                                 

--------------------------------------------------------------------------------

 

 

[Signature page for Loan

Agreement continued]

 

 

 

LENDER:

WELLS FARGO BANK, N.A.

 

 

 

 

 

By:

/s/ Jeffrey L. Cirillo

 

 

Name:

Title:

Jeffrey L. Cirillo

Director

 

 

 

 

 

 

Address for Notices:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1901 Harrison Street, 2nd Floor

Oakland, CA 

94612

Attention:  Commercial Mortgage Servicing

Telecopy:  866-359-5352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S-6

 

--------------------------------------------------------------------------------

 

 

LENDER:                                                                                        LANDESBANK
BADEN-WURTTEMBERG, NEW
                                                                                                          YORK
Branch
 
 
                                                                                                             By:  
/s/ Andrew Fleming                       
                                                                                                                     Name:
Andrew Fleming
                                                                                                                    
Title:   Assistant Vice President
                                                                                                                                
Real Estate Finance Group 
   
                                                                                                             By:  
/s/ Lisa Komm                                 
                                                                                                                    Name:
Lisa Komm
                                                                                                                   
Title:   Vice President
                                                                                                                               
Real Estate Finance 
 
 

 

Address for Notices:

 

 

 

Landesbank Baden-Württemberg,  New York Branch

 

280 Park Avenue, 31st Floor, West Building

 

New York, NY  10017

 

Attention:

Lisa Komm

 

Telecopy:

212-584-1769

 

Email:

Lisa.Komm@LBBWUR.com

 

Phone:

212-584-1761

 

 

 

 

 

 

With copy to:

 

Landesbank Baden-Württemberg

 

AM Hauptbahnhof 2

 

70173 Stuttgart, Germany

 

Attention:

Sonja Bredow

 

Phone:

+49 (711) 127-74477

 

Email:

Sonja.Bredow@LBBW.de

  S-7

--------------------------------------------------------------------------------

 

[Signature page for Loan

Agreement continued]

 

BORROWER:

 

 

731 RETAIL ONE LLC,

a Delaware limited liability company,

 

 

By:

731 Commercial LLC,

a Delaware limited liability company

its sole member

 

 

 

By:

731 Commercial Holding LLC,

a Delaware limited liability company,

its sole member

 

 

 

 

By:

Alexander’s Inc.,

a Delaware corporation,

its sole member

 

 

 

 

 

 

 

 

 

By:

/s/ Alan J. Rice

 

 

 

 

 

Name:

Alan J. Rice

 

 

 

 

 

Title:

Secretary

 

 

731 COMMERCIAL LLC,

a Delaware limited liability company,

 

 

By:

731 Commercial Holding LLC,

a Delaware limited liability company

its sole member

 

 

 

By:

Alexander’s Inc.,

a Delaware corporation,

its sole member

 

 

 

 

 

 

 

By:

/s/ Alan J. Rice

 

 

 

 

Name:

Alan J. Rice

 

 

 

 

Title:

Secretary

S-8

--------------------------------------------------------------------------------

 

EXHIBIT A

LEGAL DESCRIPTION OF PROJECT

                                                                    

 

--------------------------------------------------------------------------------

 

Parcel No. 1 (Lot #1001):

THE Condominium Unit (the “Unit”) in the premises known as Beacon Court
Condominium and by the Street Number 151 East 58th Street, Borough of Manhattan,
City, County and State of New York, said Unit being designated and described as
“Retail Unit 1” in the Declaration (the “Declaration”) establishing a plan for
condominium ownership of said premises under Article 9-B of the Real Property
Law of the State of New York (the “Condominium Act”), dated December 4, 2003 and
recorded in the New York County Office of the Register of the City of New York
(the “City Register’s Office”) on February 3, 2004 under CRFN 2004000064392 as
Amended by Amended and Restated Declaration recorded 3/9/2005 under CRFN
2005000139245 and also designated as Tax Lot 1001 in Block 1313 of Section 5 of
the Borough of Manhattan on the Tax Map of the Real Property Assessment
Department of the City of New York and on the Floor Plans of said Building,
certified by Peter Claman, Registered Architect on January 29, 2004 and filed in
the Real Property Assessment Department of the City of New York on January 30,
2004, as Condominium Plan No. 1350 also filed in the City Register’s Office on
February 3, 2004 under CRFN 2004000064393.

 

TOGETHER with an undivided 12.5492% percentage interest in the General Common
Elements (as such terms is defined in the Declaration).

 

THE premises within which the Unit is located is more particularly described as:

 

ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County, City and State of New York, bounded and described
as follows:

 

BEGINNING at the corner formed by the intersection of the southerly side of
East 59th Street and the westerly side of Third Avenue;

 

RUNNING THENCE southerly along the westerly side of Third Avenue, 200 feet
10 inches to the northerly side of East 58th Street;

 

THENCE westerly along the northerly side of East 58th Street, 420 feet to the
easterly side of Lexington Avenue;

 

THENCE northerly along the easterly side of Lexington Avenue, 200 feet 10 inches
to the southerly side of East 59th Street;

 

THENCE easterly along the southerly side of East 59th Street, 420 feet to the
point or place of BEGINNING.

 

TOGETHER with the benefits and SUBJECT to the burdens of the Easements set forth
in the Deed made by Seven Thirty One Limited Partnership to 59th Street
Corporation, dated as of August 1, 2001 and recorded on August 8, 2001 in
Reel 3339 Page 1100.

                                                                    

 

--------------------------------------------------------------------------------

 

 

Parcel No. 2 (Lot #1209):

THE Condominium Unit (the “Unit”) in the premises known as Beacon Court
Condominium and by the Street Number 151 East 58th Street, Borough of Manhattan,
City, County and State of New York, said Unit being designated and described as
“Retail Unit 2” in the Declaration (the “Declaration”) establishing a plan for
condominium ownership of said premises under Article 943 of the Real Property
Law of the State of New York (the “Condominium Act”), dated December 4, 2003 and
recorded in the New York County Office of the Register of the City of New York
(the “City Register’s Office”) on February 3, 2004 under CRFN 2004000064392 as
Amended by Amended and Restated Declaration recorded 3/9/2005 under CRFN
2005000139245 and also designated as Tax Lot 1209 in Block 1313 of Section 5 of
the Borough of Manhattan on the Tax Map of the Real Property Assessment
Department of the City of New York and on the Floor Plans of said Building,
certified by Peter Claman, Registered Architect on January 29, 2004 and filed in
the Real Property Assessment Department of the City of New York on January 30,
2004, as Condominium Plan No. 1350 also filed in the City Register’s Office on
February 3, 2004 under CRFN 2004000064393.

 

TOGETHER with an undivided 0.7402% percentage interest in the General Common
Elements (as such terms is defined in the Declaration).

 

THE premises within which the Unit is located is more particularly described as:

 

ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County, City and State of New York, bounded and described
as follows:

 

BEGINNING at the corner formed by the intersection of the southerly side of
East 59th Street and the westerly side of Third Avenue;

 

RUNNING THENCE southerly along the westerly side of Third Avenue, 200 feet
10 inches to the northerly side of East 58th Street;

 

THENCE westerly along the northerly side of East 58th Street, 420 feet to the
easterly side of Lexington Avenue;

 

THENCE northerly along the easterly side of Lexington Avenue, 200 feet 10 inches
to the southerly side of East 59th Street;

 

THENCE easterly along the southerly side of East 59th Street, 420 feet to the
point or place of BEGINNING.

 

TOGETHER with the benefits and SUBJECT to the burdens of the Easements set forth
in the Deed made by Seven Thirty One Limited Partnership to 59th Street
Corporation, dated as of August 1, 2001 and recorded on August 8, 2001 in
Reel 3339 Page 1100.

                                                                 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

[Form of Note]

                                                                    

 

--------------------------------------------------------------------------------

 

PROMISSORY NOTE

$116,666,666.66                                                                                                                                                                                                                                                                                                                                                                                                                                 
August 5, 2015
                                                                                                                       
New York, New York

 

FOR VALUE RECEIVED, 731 RETAIL ONE LLC, a Delaware limited liability company,
and 731 COMMERCIAL LLC, a Delaware limited liability company (jointly, severally
and collectively, the “Borrower”), hereby promise to pay to WELLS FARGO BANK,
N.A. (the “Lender”), the principal sum of One Hundred Sixteen Million Six
Hundred Sixty Six Thousand Six Hundred Sixty Six and 66/100 ($116,666,666.66)
Dollars (or such lesser amount as shall equal the aggregate unpaid principal
amount of the Loans made by the Lender to Borrower under the Agreement), in
lawful money of the United States of America and in immediately available funds,
on the dates and in the principal amounts provided in the Agreement, and to pay
interest on the unpaid principal amount of each such Loan, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the
Agreement.

This Note is one of the Notes referred to in the Loan Agreement dated as of
August 5, 2015 (as modified, supplemented, extended and in effect from time to
time, the “Agreement”) among Borrower, the lenders party thereto (including the
Lender), JPMorgan Chase Bank, N.A., as Administrative Agent, and certain other
parties, and evidences Loans made by the Lender thereunder. Terms used but not
defined in this Note have the respective meanings assigned to them in the
Agreement.

The Agreement provides for the acceleration of the maturity of this Note upon
the occurrence of certain events and for prepayments of Loans upon the terms and
conditions specified therein.

Except as permitted by Sections 12.9 and 12.23 of the Agreement, this Note may
not be assigned by the Lender to any other Person.

This Note, together with the other Notes, amends and restates in their entirety
the terms and provisions of the promissory notes secured by the mortgages which
were consolidated, modified and extended pursuant to the Consolidation Agreement
(the “Prior Notes”). This Note, together with the other Notes, is given in
substitution for and shall constitute the restatement of and is intended to
evidence the same indebtedness as the Prior Notes. It is expressly understood
and agreed that in the event of any conflict between the terms of this Note and
the Prior Notes, the terms of this Note shall control.

                                                                   

--------------------------------------------------------------------------------

 

[Signature Page to Promissory Note – Wells Fargo Bank, N.A.]

 

This Note shall be governed by, and construed in accordance with, the law of the
State of New York without regard to conflicts of laws principles other than
Section 5-1401 of the General Obligations Law of the State of New York.

 

BORROWER:

 

731 RETAIL ONE LLC,
a Delaware limited liability company,

 

By:   731 Commercial LLC,
a Delaware limited liability company
its sole member

 

By:   731 Commercial Holding LLC,
a Delaware limited liability company,
its sole member

 

By:   Alexander’s Inc.,
a Delaware corporation,
its sole member

 

By:   /s/ Alan J. Rice                e
Name: Alan J. Rice
Title:

 

 

 

731 COMMERCIAL LLC,

a Delaware limited liability company,

 

By:   731 Commercial Holding LLC,
a Delaware limited liability company,
its sole member

 

By:   Alexander’s Inc.,
a Delaware corporation,
its sole member

 

By:   /s/ Alan J. Rice                    
Name: Alan J. Rice
Title:

 

 

 

 

                                                                   

­

--------------------------------------------------------------------------------

 

PROMISSORY NOTE

$116,666,666.67                                                                                                                                                                                                                                                                                                                                                                                                                                 
August 5, 2015
                                                                                                                       
New York, New York

 

FOR VALUE RECEIVED, 731 RETAIL ONE LLC, a Delaware limited liability company,
and 731 COMMERCIAL LLC, a Delaware limited liability company (jointly, severally
and collectively, the “Borrower”), hereby promise to pay to LANDESBANK
BADEN-WÜRTTEMBERG, NEW YORK BRANCH (the “Lender”), the principal sum of One
Hundred Sixteen Million Six Hundred Sixty Six Thousand Six Hundred Sixty Six and
67/100 ($116,666,666.66) Dollars (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Loans made by the Lender to Borrower
under the Agreement), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Agreement, and to pay interest on the unpaid principal amount of each
such Loan, in like money and funds, for the period commencing on the date of
such Loan until such Loan shall be paid in full, at the rates per annum and on
the dates provided in the Agreement.

This Note is one of the Notes referred to in the Loan Agreement dated as of
August 5, 2015 (as modified, supplemented, extended and in effect from time to
time, the “Agreement”) among Borrower, the lenders party thereto (including the
Lender), JPMorgan Chase Bank, N.A., as Administrative Agent, and certain other
parties, and evidences Loans made by the Lender thereunder. Terms used but not
defined in this Note have the respective meanings assigned to them in the
Agreement.

The Agreement provides for the acceleration of the maturity of this Note upon
the occurrence of certain events and for prepayments of Loans upon the terms and
conditions specified therein.

Except as permitted by Sections 12.9 and 12.23 of the Agreement, this Note may
not be assigned by the Lender to any other Person.

This Note, together with the other Notes, amends and restates in their entirety
the terms and provisions of the promissory notes secured by the mortgages which
were consolidated, modified and extended pursuant to the Consolidation Agreement
(the “Prior Notes”). This Note, together with the other Notes, is given in
substitution for and shall constitute the restatement of and is intended to
evidence the same indebtedness as the Prior Notes. It is expressly understood
and agreed that in the event of any conflict between the terms of this Note and
the Prior Notes, the terms of this Note shall control.

                                                                  

­

--------------------------------------------------------------------------------

 

[Signature Page to Promissory Note – Landesbank Baden – Württemberg, New York
Branch]

 

This Note shall be governed by, and construed in accordance with, the law of the
State of New York without regard to conflicts of laws principles other than
Section 5-1401 of the General Obligations Law of the State of New York.

 

BORROWER:

 

731 RETAIL ONE LLC,
a Delaware limited liability company,

 

By:   731 Commercial LLC,
a Delaware limited liability company
its sole member

 

By:   731 Commercial Holding LLC,
a Delaware limited liability company,
its sole member

 

By:   Alexander’s Inc.,
a Delaware corporation,
its sole member

 

By:   /s/ Alan J. Rice                  e   
Name: Alan J. Rice
Title:

 

 

 

731 COMMERCIAL LLC,

a Delaware limited liability company,

 

By:   731 Commercial Holding LLC,
a Delaware limited liability company,
its sole member

 

By:   Alexander’s Inc.,
a Delaware corporation,
its sole member

 

By:   /s/ Alan J. Rice                 e         
Name: Alan J. Rice
Title:

 

 

 

 

                                                                   

--------------------------------------------------------------------------------

 

PROMISSORY NOTE

$116,666,666.67                                                                                                                                                                                                                                                                                                                                                                                                                                 
August 5, 2015
                                                                                                                       
New York, New York

 

FOR VALUE RECEIVED, 731 RETAIL ONE LLC, a Delaware limited liability company,
and 731 COMMERCIAL LLC, a Delaware limited liability company (jointly, severally
and collectively, the “Borrower”), hereby promise to pay to JPMORGAN CHASE BANK,
N.A. (the “Lender”), the principal sum of One Hundred Sixteen Million Six
Hundred Sixty Six Thousand Six Hundred Sixty Six and 67/100 ($116,666,666.67)
Dollars (or such lesser amount as shall equal the aggregate unpaid principal
amount of the Loans made by the Lender to Borrower under the Agreement), in
lawful money of the United States of America and in immediately available funds,
on the dates and in the principal amounts provided in the Agreement, and to pay
interest on the unpaid principal amount of each such Loan, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the
Agreement.

This Note is one of the Notes referred to in the Loan Agreement dated as of
August 5, 2015 (as modified, supplemented, extended and in effect from time to
time, the “Agreement”) among Borrower, the lenders party thereto (including the
Lender), JPMorgan Chase Bank, N.A., as Administrative Agent, and certain other
parties, and evidences Loans made by the Lender thereunder. Terms used but not
defined in this Note have the respective meanings assigned to them in the
Agreement.

The Agreement provides for the acceleration of the maturity of this Note upon
the occurrence of certain events and for prepayments of Loans upon the terms and
conditions specified therein.

Except as permitted by Sections 12.9 and 12.23 of the Agreement, this Note may
not be assigned by the Lender to any other Person.

This Note, together with the other Notes, amends and restates in their entirety
the terms and provisions of the promissory notes secured by the mortgages which
were consolidated, modified and extended pursuant to the Consolidation Agreement
(the “Prior Notes”). This Note, together with the other Notes, is given in
substitution for and shall constitute the restatement of and is intended to
evidence the same indebtedness as the Prior Notes. It is expressly understood
and agreed that in the event of any conflict between the terms of this Note and
the Prior Notes, the terms of this Note shall control.

                                                                   

­

--------------------------------------------------------------------------------

 

[Signature Page to Promissory Note – JPMorgan Chase Bank, N.A.]

This Note shall be governed by, and construed in accordance with, the law of the
State of New York without regard to conflicts of laws principles other than
Section 5-1401 of the General Obligations Law of the State of New York.

 

BORROWER:

 

731 RETAIL ONE LLC,
a Delaware limited liability company,

 

By:   731 Commercial LLC,
a Delaware limited liability company
its sole member

 

By:   731 Commercial Holding LLC,
a Delaware limited liability company,
its sole member

 

By:   Alexander’s Inc.,
a Delaware corporation,
its sole member

 

By:   /s/ Alan J. Rice                  e        

Name: Alan J. Rice

Title:

 

 

 

731 COMMERCIAL LLC,

a Delaware limited liability company,

 

By:   731 Commercial Holding LLC,
a Delaware limited liability company,
its sole member

 

By:   Alexander’s Inc.,
a Delaware corporation,
its sole member

 

By:   /s/ Alan J. Rice                e
Name: Alan J. Rice
Title:

 

                                                                   

­

--------------------------------------------------------------------------------

 

EXHIBIT C
[Form of Assignment and Assumption]

 

ASSIGNMENT AND ASSUMPTION1

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Loan Agreement identified below (as amended, the
“Loan Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Loan Agreement, as of the Effective Date inserted by
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Loan Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and other rights of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Loan Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

1.

Assignor:

______________________________

2.

Assignee:

______________________________

3.

Borrower:

731 Retail One LLC and 731 Commercial LLC

4.

Administrative Agent:

JPMorgan Chase Bank, N.A., as Administrative agent under the Loan Agreement

5.

Loan Agreement:

Loan Agreement dated as of August 5, 2015 among 731 Retail One

 

 

 

 

 

 

 

 

               

                                                             

 

--------------------------------------------------------------------------------

1 The Assignor’s right to enter into this Assignment and Assumption may be
subject to the terms of a letter agreement from the Assignor to Administrative
Agent and Borrower.

--------------------------------------------------------------------------------

 

 

 

 

                                                                      LLC and
731 Commercial LLC, the Lenders parties thereto,

                                                                      JPMorgan
Chase Bank, N.A., as Administrative Agent, and certain

                                                                      other
parties

 

6.         Assigned Interest:

Facility Assigned

Aggregate Amount of Commitment/Loans for the Assignor

Amount of Commitment/Loans Assigned

Commitment Percentage of Assigned Commitment/Loans

$

$

%

 

Effective Date: _______________ ____, 20____ [TO BE INSERTED BY ADMINISTRATIVE
AGENT

AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE

REGISTER THEREFOR.]

 

 

 

 

     The Assignee agrees to deliver to Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower, Guarantor, and their Related Parties
or their respective securities) will be made available and who may receive such
information in accordance with the Assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

 

                      [NAME OF ASSIGNOR]

 

                                          
By:    __________________________      

                     
Name:                                                                                                     

Title:                                                                                                        

                                                                                                                                                                                                                           

 

ASSIGNEE

 

                     [NAME OF ASSIGNEE]

 

                                            By:   ____________________________

     Name

   Title:

                                                                                                                                                                                                     

 

                                                                   

­2

 

 

 

                                                           Address for Notices:

                                                          
____________________________________

                                                          
____________________________________

                                                          
____________________________________

                                                         
Attention:           ________________________

                                                         
Telecopy:           ________________________

 

 

                                                                   

3

 

--------------------------------------------------------------------------------

 

 

[Include if and to the extent applicable:]

Consented to:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By:                                                                 
Name:                                                 
Title:                                                   

731 RETAIL ONE LLC,
a Delaware limited liability company

By:                                                                 
Name:                                                 
Title:                                                   

731 COMMERCIAL LLC,
a Delaware limited liability company

By:                                                                 
Name:                                                 
Title:                                                   

 

                                                                   

4­

--------------------------------------------------------------------------------

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1.         Representations and Warranties.

1.1       Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Loan
Agreement or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of the Borrower, any of its
subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by Borrower, any of its
subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

1.2.      Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Loan Agreement, (ii) it
satisfies the requirements, if any, specified in the Loan Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Loan Agreement as a Lender thereunder and, to the extent
of the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Loan Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 8.1 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on Administrative Agent or any other Lender, and (v) if it is a Non-U.S. Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Loan Agreement, duly completed and
executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2.         Payments. From and after the Effective Date, Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.

                                                                   

5

­

--------------------------------------------------------------------------------

 

3.         General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

                                                                   

6

­

--------------------------------------------------------------------------------

 

EXHIBIT D
[Form of Subordination,
Non-Disturbance and Attornment Agreement]

                                                                    

--------------------------------------------------------------------------------

 

_______________________________________________________________________________________________________________________________________________________________________________________________

_____________________________________________________________________________________________

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Administrative Agent for the benefit of the Lenders

- and -

[TENANT]

 

_____________________________________________________________________________________________

 

SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT

_____________________________________________________________________________________________

 

Dated:                         ___________, 2015

Location:                     731 Lexington Avenue
New York, New York 10022

 

 

 

_____________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________________________________________________________

 

                                                           

--------------------------------------------------------------------------------

 

SUBORDINATION, NON-DISTURBANCE
   AND ATTORNMENT AGREEMENT   
(Lease)

This SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT is made as of
________ __, 2015 between [__________], a _______________ having an office at
________________ (together with its successors and assigns, the “Tenant”) and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association,
having an office at 270 Park Avenue, 45th floor, New York, New York 10017-2507
(together with its successors and assigns, “Administrative Agent”), as
Administrative Agent for the benefit of the Lenders (each a “Lender” and
collectively, together with each of their successors and assigns, the “Lenders”)
under that certain Loan Agreement hereinafter defined.

 

W I T N E S S E T H:

 

WHEREAS, 731 Commercial LLC, a Delaware limited liability company (the
“Landlord”), is the owner of certain real property located in the County, City
and State of New York, known as 731 Lexington Avenue, New York, New York 10022
(the “Premises”);

WHEREAS, the Premises is or is to be encumbered by one or more mortgages or
other similar security agreements (collectively, the “Mortgage”) in favor of or
to be assigned to Administrative Agent for the benefit of the Lenders pursuant
to the terms of a certain loan agreement to be entered into by and between
Landlord, Administrative Agent and the Lenders party thereto (the “Loan
Agreement”); and

WHEREAS, the Tenant is the holder of a leasehold estate in a portion of the
Premises under and pursuant to the provisions of a certain lease dated
__________ with Landlord [as modified, amended, extended, assigned or assumed as
follows: ____________________ ________________________________________
(collectively, the “Lease”); and

WHEREAS, the Tenant has agreed to subordinate the Lease to the Mortgage and to
the lien thereof and the Administrative Agent, on behalf of the Lenders, has
agreed to grant non-disturbance to the Tenant under the Lease on the terms and
conditions hereinafter set forth;

NOW THEREFORE, in consideration of Ten ($10) Dollars and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Administrative
Agent, on behalf of the Lenders, and the Tenant hereby covenant and agree as
follows:

1.                   The Tenant agrees that the Lease and all of the terms,
covenants and provisions thereof and all rights, remedies and options of the
Tenant thereunder are and shall at all times continue to be subject and
subordinate in all respects to the Mortgage and all of the terms, covenants and
provisions thereof and to the lien thereof and to any and all increases,
renewals, modifications, spreaders, consolidations, replacements and extensions
thereof, and to any and all sums secured thereby, with the same force and effect
as if the Mortgage had been executed, delivered and recorded prior to the
execution and delivery of the Lease.

2.                   The Administrative Agent, on behalf of the Lenders, agrees
that if any action or proceeding is commenced by the Administrative Agent,
either by itself or on behalf of the Lenders, to foreclose the Mortgage or to
sell the Premises, the Tenant shall not be named as a party in any such action
nor shall the Tenant be named a party in connection with any sale of the
Premises, provided that at the time of the commencement of any such action or
proceeding or at the time of any such sale (i) the term of the Lease shall have
commenced pursuant to the provisions thereof, (ii) the Tenant shall be in
possession of the premises demised under the Lease, (iii) the Lease shall be in
full force and effect, and (iv) the Tenant shall not be in default under any of
the terms, covenants or conditions of the Lease or of this Agreement on the part
of the Tenant to be observed or performed thereunder or hereunder, unless
applicable law requires the Tenant to be made a party thereto as a condition to
proceeding against the Landlord or protecting such

 

                                                                    

2

 

--------------------------------------------------------------------------------

 

rights and remedies. In the latter case, the Administrative Agent, either by
itself or on behalf of the Lenders, may join the Tenant as a defendant in such
action only for such purposes and not to terminate the Lease.

3.                   The Tenant agrees that if the Administrative Agent, the
Lenders, or any successors in interest to the Administrative Agent or the
Lenders shall become the owner of the Premises by reason of the foreclosure of
the Mortgage or the acceptance of a deed or assignment in lieu of foreclosure or
otherwise, the Lease shall not be terminated or affected thereby but shall
continue in full force and effect as a direct lease between the Administrative
Agent, as agent for the Lenders, and the Tenant upon all of the terms, covenants
and conditions set forth in the Lease and in that event the Tenant agrees to
attorn to the Administrative Agent, as agent for the Lenders, and the
Administrative Agent, on behalf of the Lenders, agrees to accept such
attornment, provided, however, that the provisions of the Mortgage shall govern
with respect to the disposition of any casualty insurance proceeds or
condemnation awards and the neither the Administrative Agent nor the Lenders
shall be:

(i)                  obligated to complete any construction work required to be
done by the Landlord pursuant to the provisions of the Lease or to reimburse the
Tenant for any construction work done by the Tenant;

(ii)                 liable for any accrued obligation of the Landlord, or for
any act or omission of the Landlord, whether prior to or after such foreclosure
or sale;

(iii)                liable under any indemnity provision of whatever nature
contained in the Lease, including, but not limited to, any environmental
indemnification;

(iv)               required to make any repairs to the Premises and/or to the
premises demised under the Lease as a result of fire or other casualty or by
reason of condemnation;

(v)                 required to make any capital improvements to the Premises
and/or to the premises demised under the Lease which the Landlord may have
agreed to make, but had not completed, or to perform or provide any services not
related to possession or quiet enjoyment of the premises demised under the
Lease;

(vi)               subject to any offsets, claims or counterclaims which shall
have accrued to the Tenant against the Landlord prior to the date on which the
Administrative Agent, either for itself or on behalf of the Lenders, or its
successor in interest shall become the owner of the Premises; nor

(vii)              liable for any security deposit or other monies not actually
received by the Administrative Agent.

4.                   The Tenant shall not, without the prior written consent of
the Administrative Agent (i) enter into any agreement amending, modifying or
terminating the Lease, (ii) prepay any of the rents, additional rents or other
sums due under the Lease for more than one (1) month in advance of the due date
thereof, (iii) voluntarily surrender the premises demised under the Lease or
terminate the Lease without cause or shorten the term thereof, or (iv) assign
the Lease or sublet the premises demised under the Lease or any part thereof;
and any such amendment, modification, termination, prepayment, voluntary
surrender, assignment or subletting, without the prior written consent of the
Administrative Agent shall not be binding on the Administrative Agent or the
Lenders.

5.                   The Tenant hereby represents and warrants to the
Administrative Agent and the Lenders that as of the date hereof:

(i)                   the Tenant is the owner and holder of the tenant’s
interest under the Lease,

(ii)                 a true and complete copy of the Lease has been delivered to
Landlord and the Lease has not been modified or amended,

3­

 

--------------------------------------------------------------------------------

 

(iii)                the Lease is in full force and effect and the term thereof
commenced on ______________________________, pursuant to the provisions thereof,

(iv)               the premises demised under the Lease have been completed and
the Tenant has taken possession of the same on a rent paying basis,

(v)                 neither the Tenant nor the Landlord is in default under any
of the terms, covenants or provisions of the Lease and the Tenant to the best of
its knowledge knows of no event which but for the passage of time or the giving
of notice or both would constitute an event of default by the Tenant or the
Landlord under the Lease,

(vi)               neither the Tenant nor the Landlord has commenced any action
or given or received any notice for the purpose of terminating the Lease,

(vii)              all rents, additional rents and other sums due and payable
under the Lease have been paid in full and no rents, additional rents or other
sums payable under the Lease have been paid for more than one (1) month in
advance of the due dates thereof, and

(viii)            there are no offsets or defenses to the payment of the rents,
additional rents, or other sums payable under the Lease.

6.                   The Tenant shall notify the Administrative Agent of any
default by the Landlord under the Lease or any other circumstance which would
entitle the Tenant to cancel or terminate the Lease or abate the rents,
additional rents or other sums payable thereunder, and agrees that,
notwithstanding any provisions of the Lease to the contrary, no notice of
cancellation, termination or abatement thereof shall be effective unless the
Administrative Agent shall have received notice of the default or other
circumstance giving rise to such cancellation, termination or abatement and
shall have failed within sixty (60) days after receipt of such notice to cure
such default or remedy such circumstance, or if such default cannot be cured
within sixty (60) days, shall have failed within sixty (60) days after receipt
of such notice to commence and to thereafter diligently pursue any action
necessary to cure such default or remedy such circumstance, as the case may be.

7.                   Anything herein or in the Lease to the contrary
notwithstanding, in the event that the Administrative Agent, either for itself
or on behalf of the Lenders, shall acquire title to the Premises, or shall
otherwise become liable for any obligations of the Landlord under the Lease,
neither the Administrative Agent nor the Lenders shall have any obligation, or
shall incur any liability, beyond the Administrative Agent’s then interest, if
any, in the Premises and the Tenant shall look exclusively to such interest of
the Administrative Agent, if any, in the Premises for the payment and discharge
of any obligations imposed upon the Administrative Agent or the Lenders
hereunder or under the Lease and the Administrative Agent and the Lenders are
hereby released or relieved of any other liability hereunder and under the
Lease. The Tenant agrees that with respect to any money judgment which may be
obtained or secured by the Tenant against the Administrative Agent or the
Lenders, the Tenant shall look solely to the estate or interest owned by the
Administrative Agent and the Lenders in the Premises and the Tenant will not
collect or attempt to collect any such judgment out of any other assets of the
Administrative Agent or the Lenders.

8.                   Any notice, request, demand, statement, authorization,
approval or consent made hereunder shall be in writing and shall be sent by
Federal Express, or other reputable courier service, or by postage pre-paid
registered or certified mail, return receipt requested, and shall be deemed
given when received or refused (as indicated on the receipt) and addressed as
follows:

If to the Administrative Agent:

JPMorgan Chase Bank, National Association, as Administrative Agent
Real Estate Banking
270 Park Avenue 45th Floor
New York, New York 10017
Attention: Joan Matera

                                                                    

4

--------------------------------------------------------------------------------

 

With a copy to:

JPMorgan Chase Bank, National Association
Legal Department
4 New York Plaza
New York, New York 10004
Attention: Lanre Williams, Esq.

 

and

 

Emmet, Marvin & Martin, LLP
120 Broadway 32nd Floor
New York, New York 10271
Attention: John P. Uehlinger, Esq.

If to the Tenant:

                                                                               
                                                                               
                                                                               
Attention:                                                             

With a copy to:

                                                                               
                                                                               
                                                                               
Attention:                                                             

it being understood and agreed that each party will use reasonable efforts to
send copies of any notices to the addresses marked “With a copy to” hereinabove
set forth; provided, however, that failure to deliver such copy or copies shall
have no consequence whatsoever to the effectiveness of any notice made to the
Tenant or the Administrative Agent. Each party may designate a change of address
by notice given, as hereinabove provided, to the other party, at least fifteen
(15) days prior to the date such change of address is to become effective.

 

9.                   This Agreement shall be binding upon and inure to the
benefit of the Administrative Agent, the Lenders, and the Tenant and their
respective successors and assigns.

10.                The term “Administrative Agent” as used herein shall include
the successors and assigns of the Administrative Agent and any person, party or
entity which shall become the owner of the Premises by reason of a foreclosure
of the Mortgage or the acceptance of a deed or assignment in lieu of foreclosure
or otherwise. The term “Lenders” as used herein shall mean and include the
present Lenders under the Loan Agreement and any such Lender’s successors and
assigns. The term “Landlord” as used herein shall mean and include the present
landlord under the Lease and such landlord’s predecessors and successors in
interest under the Lease. The term “Premises” as used herein shall mean the
Premises, the improvements now or hereafter located thereon and the estates
therein encumbered by the Mortgage.

11.                This Agreement may not be modified in any manner or
terminated except by an instrument in writing executed by the parties hereto.

12.                This Agreement shall be governed by and construed under the
laws of the State in which the Premises are located.

[No further text – signature page follows]

                                                                    

5

 

--------------------------------------------------------------------------------

 

 

 

IN WITNESS WHEREOF,the Administrative Agent and the Tenant have duly executed
this Subordination, Non-
Disturbance and Attornment Agreement as of the date first above written.

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Administrative Agent

By:                                                                                         
 
      Name:    
      Title:      

 

 

[TENANT],
a                                                                                                

 

By:                                                                                             
      Name:   
      Title:      

 

                                                                     6

 

--------------------------------------------------------------------------------

 

 

STATE OF NEW YORK       )
                                                  ) ss.:
COUNTY OF NEW YORK   )

On the _____ day of __________ in the year 2015 before me, the undersigned, a
notary public in and for said State, personally appeared ____________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that s/he executed the same in her/his capacity, and that by
her/his signature on the instrument, the individual, or the persons upon behalf
of which the individual acted, executed the instrument.

                                                                                                               
Notary Public

                                                                   

--------------------------------------------------------------------------------

 

 

STATE OF NEW YORK         )
                                                    ) ss.:
COUNTY OF NEW YORK     )

On the _____ day of __________ in the year 2015 before me, the undersigned, a
notary public in and for said State, personally appeared ____________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that s/he executed the same in her/his capacity, and that by
her/his signature on the instrument, the individual, or the persons upon behalf
of which the individual acted, executed the instrument.

                                                                                                               
Notary Public

                                                                    

 

--------------------------------------------------------------------------------

 

EXHIBIT E
[Form of Tenant Notice Letter]

                                                                  

--------------------------------------------------------------------------------

 

731 Retail one LLC
____________________
____________________
____________________

 

TENANT NOTICE LETTER

August , 2015

[Tenant Name]
[Tenant Address]
[City], [State] [Zip Code]

 

Re:       Payment Direction Letter for Retail Unit 1 of the Beacon Court
Condominium,
731 Lexington Avenue New York, New York (the “Property”)

 

Dear Tenant:

731 Retail One LLC, a Delaware limited liability company (“Borrower”), the owner
of the Property, has mortgaged the Property to JPMorgan Chase Bank, N.A., as
agent for itself and certain other lenders (together with its successors and
assigns, “Administrative Agent”) and has agreed that all rents due for the
Property will be paid directly to a bank selected by Borrower and approved by
Administrative Agent. Therefore, from and after the date hereof, all rent to be
paid by you under the Lease between Borrower and you (the “Lease”) should
continue to be sent directly to the following address:

 

                                    
                                    
                                     

 

All checks should continue to be made payable to “731 Retail One LLC”. The
Federal Tax Identification #_____________________ for payment purposes remains
the same. (See copy of W-9 Form1 attached.)

or by Wire/ACH transfer to:

Bank:                                                              
ABA No.:                                                       
Account No.:                                                  
Account Name:                                               

 

 

 

                                                                 

--------------------------------------------------------------------------------

1 [IF APPLICABLE:] The entity name listed on Line 2 is the legal owner of the
property and the name of the entity on your lease. However, this entity is a
disregarded entity for tax purposes and does not file its own tax return. The
entity listed on Line 2 is owned 100% by [__________ __________]
(“[____________________]”). Since the entity on Line 2 is a disregarded entity
for tax purposes, in order to correctly complete this W-9, the IRS requires us
to report [__________] on Line 1 as the owner, disclose the [        ]federal
employee tax identification number and [__________]’s status as a partnership.

--------------------------------------------------------------------------------

 

Tenant Notice Letter

Retail Unit 1 of the Beacon Court Condominium

Page 2 of 2

 

 

 

These payment instructions cannot be withdrawn or modified without the prior
written consent of Administrative Agent or its agent (“Servicer”), or pursuant
to a joint written instruction from Borrower and Administrative Agent or
Servicer. All rent payments must be delivered in accordance with this letter no
later than the day on which such amounts are due under the Lease.

If you have any questions concerning this letter, please contact _______________
of Borrower at (___) _______________ ext. ___ or _______________ of
Administrative Agent at _______________ or of Servicer at_______________. We
appreciate your cooperation in this matter.

 

 

731 RETAIL ONE LLC,

a Delaware limited liability company,

 

By:       731 Commercial LLC,
             a Delaware limited liability company

             its sole member

 

By:  731 Commercial Holding LLC,
a Delaware limited liability company,

        its sole member

 

By:  Alexander’s Inc.,

        a Delaware corporation,

        its sole member

By:                                                        
Name: 
Title:   

           

 

--------------------------------------------------------------------------------

 

731 COMMERCIAL LLC
____________________
____________________
____________________

 

TENANT NOTICE LETTER

  August , 2015

[Tenant Name]
[Tenant Address]
[City], [State] [Zip Code]

 

 

Re:       Payment Direction Letter for Retail Unit 2 of the Beacon Court
Condominium,
731 Lexington Avenue, New York, New York (the “Property")

 

Dear Tenant:

731 Commercial LLC, a Delaware limited liability company (“Borrower”), the owner
of the Property, has mortgaged the Property to JPMorgan Chase Bank, N.A., as
agent for itself and certain other lenders (together with its successors and
assigns, “Administrative Agent”) and has agreed that all rents due for the
Property will be paid directly to a bank selected by Borrower and approved by
Administrative Agent. Therefore, from and after the date hereof, all rent to be
paid by you under the Lease between Borrower and you (the “Lease”) should
continue to be sent directly to the following address:

                                   
                                   
                                     

 

All checks should continue to be made payable to “731 Commercial LLC”. The
Federal Tax Identification #____________________ for payment purposes remains
the same. (See copy of W-9 Form1 attached.)

 

or by Wire/ACH transfer to:

 

Bank:                                                              
ABA No.:                                                       
Account No.:                                                  
Account Name:                                               

 

 

 

 

                                                                 

 

--------------------------------------------------------------------------------

1 [IF APPLICABLE:] The entity name listed on Line 2 is the legal owner of the
property and the name of the entity on your lease. However, this entity is a
disregarded entity for tax purposes and does not file its own tax return. The
entity listed on Line 2 is owned 100% by [__________ __________]
(“[_______________]”). Since the entity on Line 2 is a disregarded entity for
tax purposes, in order to correctly complete this W-9, the IRS requires us to
report [__________] on Line 1 as the owner, disclose the [__________] federal
employee tax identification number and [__________]’s status as a partnership.

--------------------------------------------------------------------------------

 

Tenant Notice Letter

Retail Unit 2 of the Beacon Court Condominium

Page 2 of 2

 

 

These payment instructions cannot be withdrawn or modified without the prior
written consent of Administrative Agent or its agent (“Servicer”), or pursuant
to a joint written instruction from Borrower and Administrative Agent or
Servicer. All rent payments must be delivered in accordance with this letter no
later than the day on which such amounts are due under the Lease.

 

If you have any questions concerning this letter, please contact
____________________ of Borrower at (___) __________ ext. _____ or
____________________ of Administrative Agent at____________________ of Servicer
at ____________________ We appreciate your cooperation in this matter.

 

731 COMMERCIAL LLC,
a Delaware limited liability company,

 

By:       731 Commercial Holding LLC,
              a Delaware limited liability company,

              its sole member

 

By:  Alexander’s Inc.,
a Delaware corporation,

        its sole member

By:                                                        
Name: 
Title:   

                                                               

 

--------------------------------------------------------------------------------

 

EXHIBIT F
[Form of Termination Letter]

 

Date: _______________

JPMorgan Chase Bank, N.A., as Administrative Agent
270 Park Avenue, 45th Floor
New York, New York 10017
Attention: Joan Matera, Executive Director

Re:       Loan Agreement (the “Loan Agreement”) among JPMorgan Chase Bank, N.A.,
as Administrative Agent (the “Agent”), the lenders party thereto (the
“Lenders”), 731 Retail One LLC and 731 Commercial LLC (collectively, the
“Borrower”), and certain other parties, secured by a first mortgage on premises
known as Retail Unit 1 and Retail Unit 2 at the Beacon Court Condominium at
731 Lexington Avenue, New York, New York (the “Premises”)

Ladies/Gentlemen:

Reference is hereby made to that certain ____________________ (the “Agreement”),
dated ____________________ between the Borrower and the undersigned.

In consideration of the Lenders making the loans to the Borrower contemplated by
the Loan Agreement, the undersigned agrees that upon the occurrence of an Event
of Default (as defined in the Loan Agreement), the Agent may, upon notice to the
undersigned, terminate the Agreement without any liability or obligation on the
part of the Agent or the Lenders, such termination to be effective upon our
receipt of such notice.

We agree that our only recourse for any loss, cost, fee or expense due us, and
any damages claimed by us, or arising by reason of such termination, shall be
against Borrower. We agree to indemnify and hold harmless the Agent and the
Lenders for any loss, liability or claim arising against or incurred by the
Agent or any of the Lenders by reason of our failure to comply with any of the
terms of this letter.

This letter shall be construed under and in accordance with the laws of the
State of New York and shall run to the benefit of the Agent and the Lenders and
their respective successors and assigns. The undersigned hereby waives any right
it may have to a trial by jury in connection with any claims or proceedings
arising under this letter.

Very truly yours,

                                               

 

By: ______________________

      Name                                                         
      Title:                                                          

                                                                  

 

--------------------------------------------------------------------------------

 

EXHIBIT G
[Form of Hedge Agreement Pledge]

                                                                    

 

--------------------------------------------------------------------------------

 

FORM OF INTEREST RATE PROTECTION PRODUCT
ASSIGNMENT AND SECURITY AGREEMENT

This INTEREST RATE PROTECTION PRODUCT ASSIGNMENT AND SECURITY AGREEMENT
(hereinafter referred to as this “Agreement”), dated as of _______________,
201_, is made by 731 RETAIL ONE LLC, a Delaware limited liability company having
an address c/o Alexanders, Inc., 210 Route 4 East, Paramus, New Jersey 07652 and
731 COMMERCIAL LLC, a Delaware limited liability company having an address c/o
Alexanders, Inc., 210 Route 4 East, Paramus, New Jersey 07652 (“Borrower”), to
JPMORGAN CHASE BANK. N.A., a national banking association, as administrative
agent for the benefit of the Lenders under that certain Loan Agreement
hereinafter defined (together with its successors and/or assigns,
“Administrative Agent”).

WITNESSETH:

 

WHEREAS, Borrower has requested that the Lenders make, and Lenders have made, a
certain loan in the original principal amount of $350,000,000.00 (the “Loan”),
pursuant to a certain Loan Agreement dated as of August 5, 2015, by and among
Borrower, Administrative Agent and the Lenders and Lead Arrangers party thereto
(as the same may hereinafter be amended, modified or extended, the “Loan
Agreement”), evidenced by certain promissory notes dated of such date (as the
same may hereinafter be amended, modified or extended, the “Notes”) and secured
by certain mortgages which have been consolidated, modified and extended by a
certain Consolidation, Modification and Extension Agreement dated of such date
(as the foregoing may hereinafter be amended, modified or extended,
collectively, the “Mortgage”) encumbering the condominium units known as Retail
Unit 1 and Retail Unit 2 of the Beacon Court Condominium, 731 Lexington Avenue,
New York, New York 10022 (the “Premises”) (the Notes, the Loan Agreement, the
Mortgage, and all of the other documents executed and/or delivered by Borrower
or Guarantor in connection with the Loan, as the same may hereinafter be
amended, modified or extended, being herein referred to as the “Loan
Documents”).

WHEREAS, Borrower has arranged or may arrange for the acquisition of an interest
rate derivative, cap, swap and/or collar (the “Interest Rate Protection”)
pursuant to certain documents attached or to be attached as Exhibit “A” to this
Agreement (collectively, the “Swap Documents”);

WHEREAS, Administrative Agent has required, as a condition of the Lenders making
the Loan, that the Interest Rate Protection and the Swap Documents be assigned
to Administrative Agent, for itself and for the benefit of the Lenders, as
additional collateral security for the Notes and the loan evidenced thereby,
upon and subject to the terms and conditions set forth in this Agreement; and

WHEREAS, any capitalized term used herein and not otherwise defined shall have
the meaning ascribed to such term in the Loan Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings set
forth in this Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Borrower and Administrative
Agent, on behalf of the Lenders, agree as follows:

1.                   Incorporation of Recitals; Interpretation; Reference
Materials.

1.1.              Incorporation of Recitals. The recitals set forth above are,
by this reference, incorporated into and deemed a part of this Agreement.

1.2.              Interpretation. Words importing any gender include all
genders. The singular form of any word used in this Agreement shall include the
plural, and vice versa, unless the context otherwise requires. Words importing
persons include natural persons, firms, associations, partnerships and
corporations. The parties hereto acknowledge that each party and their
respective counsel have participated in the drafting and revision of this
Agreement. Accordingly, the parties agree that any rule of construction which
disfavors the drafting party shall not apply in the interpretation of this
Agreement or any statement or supplement or exhibit hereto.

                                                                   

 

--------------------------------------------------------------------------------

 

1.3.              Reference Materials. Sections mentioned by number only are the
respective sections of this Agreement so numbered. Reference to “this section”
or “this subsection” shall refer to the particular section or subsection in
which such reference appears. Any captions, titles or headings preceding the
text of any section and any table of contents or index attached to this
Agreement are solely for convenience of reference and shall not constitute part
of this Agreement or affect its meaning, construction or effect.

2.                   Collateral and Obligations; Further Assurances.

2.1.              Security Interest in Collateral. To further secure Borrower’s
obligations under the Loan Agreement, the Mortgage and the Notes (the
“Obligations”), Borrower hereby assigns, pledges and grants a security interest
to Administrative Agent, for the benefit of the Lenders, in and to all of
Borrower’s right, title and interest in and to the following (collectively, the
“Collateral”):

(a)                 the Interest Rate Protection and the Swap Documents;

(b)                 any and all moneys (collectively, “Payments”) payable to
Borrower, from time to time, pursuant to the Swap Documents by the counterparty
under the Swap Documents (the “Counterparty”);

(c)                 all rights of Borrower under any of the foregoing, including
all rights of Borrower to the Payments, contract rights and general intangibles
now existing or hereafter arising with respect to any or all of the foregoing;

(d)                 all rights, liens and security interests or guarantees now
existing or hereafter granted by the Counterparty or any other person to secure
or guaranty payment of the Payments due pursuant to the Swap Documents;

(e)                 all documents, writings, books, files, records and other
documents arising from or relating to any of the foregoing, whether now existing
or hereafter arising;

(f)                  all extensions, renewals and replacements of the foregoing,
including, without limitation, any similar hedge product delivered in
substitution for or replacement of the Interest Rate Protection; and

(g)                 all cash and non-cash proceeds and products of any of the
foregoing, including, without limitation, interest, dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed or distributable in respect of or in exchange for any or all of the
other Collateral.

3.                   Delivery of Swap Documents.

3.1.              Execution and Delivery of Swap Documents. Promptly after
Borrower has executed and delivered the Swap Documents to the Counterparty,
Borrower shall deliver to Administrative Agent fully-executed copies of such
Swap Documents to be held by Administrative Agent so long as the Notes remains
outstanding. True, complete and correct copies of the Swap Documents and all
amendments thereto, fully executed by all parties, shall be attached hereto as
Exhibit “A”. Borrower hereby represents and warrants to Administrative Agent and
the Lenders that there is no additional security for or any other arrangements
or agreements relating to the Swap Documents.

3.2.              Obligations Remain Absolute. Nothing contained herein shall
relieve Borrower of its primary obligation to pay all amounts due in respect of
its obligations under the Loan Agreement, the Notes, the Mortgage and the other
Loan Documents (as defined in the Loan Agreement).

 

                                                                   

- 2 -

--------------------------------------------------------------------------------

 

4.                   Representations and Warranties.

4.1.              Representations and Warranties of Borrower. Borrower
represents and warrants to Administrative Agent and the Lenders that, as of the
date hereof:

(i)                   it has all requisite power and authority to enter into
this Agreement and to carry out its obligations under this Agreement; the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by all
necessary action on the part of Borrower; this Agreement has been duly executed
and delivered by it and is the valid and binding obligation of Borrower,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws generally affecting the enforcement of
creditors’ rights;

(ii)                 neither the execution nor delivery of this Agreement nor
the performance by Borrower of its obligations under this Agreement, nor the
consummation of the transactions contemplated by this Agreement, will (a)
conflict with any of the Borrower’s organizational documents of Borrower; (b)
conflict with, result in a breach of, or constitute a default (or an event which
would, with the passage of time or the giving of notice or both, constitute a
default) under, or give rise to a right to terminate, amend, modify, abandon or
accelerate, any contract, agreement, promissory note, lease, indenture,
instrument or license to which Borrower is a party or by which Borrower’s assets
or properties may be bound or affected; (c) violate or conflict with and
federal, state or local law, statute, ordinance, rule, regulation, order,
judgment, decree or arbitration award which is either applicable to, binding
upon or enforceable against Borrower; (d) result in or require the creation or
imposition of any liens, security interests, options or other charges or
encumbrances (“Liens”) upon or with respect to the Collateral other than the
Liens created hereby; or (e) require the consent, approval, order or
authorization of, or the registration, declaration or filing with, any federal,
state or local government entity; and

(iii)                it is the legal and beneficial owner of, and has good and
marketable title to (and full right and authority to assign), the Collateral,
free and clear of all liens, subject to Permitted Encumbrances.

5.                   Maintenance; Administration of Swap.

5.1.              Compliance with Loan Documents. Borrower agrees to comply with
the provisions of the Loan Documents relating to obtaining and maintaining at
all applicable times the Interest Rate Protection satisfying the requirements of
the Loan Documents.

5.2.              Event of Default. Upon the occurrence and during the
continuance of any “Event of Default” under the Loan Agreement, Administrative
Agent shall have and may exercise the same rights, powers, and remedies with
respect to the Collateral that Borrower may exercise, which rights, powers, and
remedies are incorporated herein by this reference for all purposes. In
furtherance and not in limitation of the foregoing, upon the occurrence and the
continuance of an Event of Default, Administrative Agent shall have all rights,
remedies and recourses with respect to the Collateral granted in the Loan
Documents and any other instrument executed in connection therewith, or existing
at common law or equity (including specifically those granted by the Uniform
Commercial Code (the “Code”), the right of offset, the right to sell the
Collateral at public or private sale, and the right to receive distributions to
Borrower, and such rights and remedies (i) shall be cumulative and concurrent,
(ii) may be pursued separately, successively or concurrently against Borrower
and any other party obligated under the Obligations, or against the Collateral,
or any other security for the Obligations, at the sole discretion of
Administrative Agent, (iii) may be exercised as often as occasion therefor shall
arise, it being agreed by Borrower that the exercise or failure to exercise any
of same shall in no event be construed as a waiver or release thereof or of any
other right, remedy or recourse, and (iv) are intended to be and shall be,
nonexclusive.

                           If the proceeds of sale, collection or other
realization of or upon the Collateral are insufficient to cover the costs and
expenses of such realization and the payment in full of the Obligations,
Borrower shall remain liable for any deficiency.

                           Upon the occurrence and during the continuation of
any “Event of Default” under the Loan Agreement, in case of any sale by
Administrative Agent of any of the Collateral, which may be elected at the
option

                                                                 

- 3 -

--------------------------------------------------------------------------------

 

and in the complete discretion of Administrative Agent, the Collateral so sold
may be retained by Administrative Agent until the selling price is paid by the
purchaser, but Administrative Agent shall not incur any liability in case of
failure of the purchaser to take up and pay for the Collateral so sold. In case
of any such failure, such Collateral so sold may be again similarly sold. After
deducting all reasonable out-of-pocket costs and expenses of every kind
(including, without limitation, the reasonable attorneys’ fees and legal
expenses incurred by Administrative Agent), Administrative Agent shall apply the
residue of the proceeds of any sale or sales in accordance with the Loan
Agreement.

6.                   Miscellaneous Provisions.

6.1.              Termination. This Agreement shall terminate upon the later to
occur of (a) the Maturity Date (as defined in the Loan Agreement), (b) the
termination of the Swap Documents in accordance with their terms or in
accordance with the terms of the Loan Agreement, and (c) the date which is
ninety-one (91) days after the date on which all amounts due under the Loan
Documents have been paid in full, provided that during such ninety-one (91) day
period no Act of Bankruptcy (as defined below) shall have occurred. As used
herein, “Act of Bankruptcy” shall mean the filing of a petition in bankruptcy or
other commencement of a bankruptcy or similar proceeding by or against Borrower
under any applicable bankruptcy, insolvency, reorganization or similar law now
in effect or any such proceeding by or against Borrower under any applicable
bankruptcy, insolvency, reorganization or similar law in effect after the date
of this Agreement. Upon termination of this Agreement, all Collateral shall be
reassigned to Borrower without recourse, representation or warranty.

6.2.              Attorney-In-Fact. Without limiting any rights or powers
granted by this Agreement to Administrative Agent, upon the occurrence and
during the continuance of any “Event of Default” under the Loan Documents,
Administrative Agent is hereby appointed the attorney-in-fact of Borrower for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instruments which Administrative Agent may deem
reasonably necessary or advisable to accomplish the purposes hereof, which
appointment as attorney-in-fact is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, following the occurrence and
during the continuance of an Event of Default, Administrative Agent shall have
the right and power to receive, endorse and collect all checks made payable to
the order of Borrower representing any dividend, payment or other distribution
in respect of the Collateral or any part thereof and to give full discharge for
the same.

6.3.              Further Assurances. At any time and from time to time,
Borrower shall promptly execute and deliver to Administrative Agent all further
instruments and documents, and take all further action, that may be reasonably
necessary as Administrative Agent may request, in order to carry out the intent
and purposes of this Agreement or to enable Administrative Agent to exercise and
enforce their respective rights and remedies under this Agreement, provided that
the foregoing shall be at no cost or expense to Borrower (other than to a de
minimis degree) and shall not result in any increase in Borrower’s liabilities
or obligations, or any decrease in Borrower’s rights, under this Mortgage and
the other Loan Documents.

6.4.              Expenses. Borrower agrees to pay to Administrative Agent all
out-of-pocket expenses (including reasonable expenses for legal services of
every kind) of, or incident to, the preservation of rights under or enforcement
of any of the provisions of this Agreement or, following the occurrence and
during the continuance of an Event of Default, performance by Administrative
Agent of any obligations of Borrower in respect of the Collateral which Borrower
has failed or refused to perform, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in Collateral and
defending or asserting rights and claims of Administrative Agent in respect
thereof, by litigation or otherwise, including expenses of insurance, and all
such expenses shall be Obligations secured hereby.

6.5.              No Deemed Waiver. No failure on the part of Administrative
Agent or any of its agents to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by
Administrative Agent or any of its agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.

                                                                     - 4
-                                                                    

--------------------------------------------------------------------------------

 

6.6.              Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties to this Agreement with respect to the subject
matter of this Agreement. This Agreement may not be amended, changed, waived or
modified except by a writing executed by each party hereto.

6.7.              Successors and Assigns. This Agreement shall inure to the
benefit of, and be enforceable by, Borrower, Administrative Agent and their
respective successors and permitted assigns, and nothing herein expressed or
implied shall be construed to give any other person any legal or equitable
rights under this Agreement.

6.8.              Amendment. Borrower and Administrative Agent agree that this
Agreement may be amended only by an instrument in writing executed by their duly
authorized representatives.

6.9.              Notices. All notices, directions, certificates or other
communications hereunder shall be given in the same manner as provided for in
Section 12.1 of the Loan Agreement.

6.10.           Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, including the provisions
there of regarding conflicts of laws. Unless otherwise defined in this
Agreement, terms used in this Agreement that are defined in the Code shall have
the meaning given those terms in the Code.

6.11.           Severability. If any term or the provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.

6.12.           No Assumption by Administrative Agent. Nothing herein is
intended to constitute an assumption by Administrative Agent of any obligations
of the Borrower under the Interest Rate Protection or the Swap Documents,
including but not limited the obligation of the Borrower to make any payments to
any party thereunder or with respect thereto.

6.13.           Multiple Counterparts. This Agreement may be simultaneously
executed in multiple counterparts, all of which shall constitute one and the
same instrument and each of which shall be, and shall be deemed to be, an
original.

[No Further Text – Signature Page Follows]

                                                                    

- 5 -

 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, this Interest Rate Protection Product Assignment and
Security Agreement has been executed and delivered as of the day and year first
written above.

731 RETAIL ONE LLC,
a Delaware limited liability company,

By:      731 Commercial LLC,
            a Delaware limited liability company                       

            its sole member

     By:  731 Commercial Holding LLC,
     a Delaware limited liability company,

            its sole member

     By: Alexander’s Inc.,
    a Delaware corporation,

           its sole member

    By:                                                        
    Name:  
    Title:   

 

731 COMMERCIAL LLC,
a Delaware limited liability company,

By:      731 Commercial Holding LLC,
            a Delaware limited liability company,

            its sole member

By:  Alexander’s Inc.,
a Delaware corporation,

       its sole member

By:                                                               
Name: 
Title:   

- 6 -

 

--------------------------------------------------------------------------------

 

Exhibit A

Swap Documents

[To Be Annexed]

 

 

--------------------------------------------------------------------------------

 

EXHIBIT H
[Form of Interest Election Request]

 

INTEREST ELECTION REQUEST

731 Retail One LLC and 731 Commercial LLC (collectively “Borrower”), JPMorgan
Chase Bank, N.A., as Administrative Agent (“Agent”), the lenders party thereto
and certain other parties executed and delivered that certain Loan Agreement
dated as of August 5, 2015 (as amended or modified from time to time, the “Loan
Agreement”). All terms used and not otherwise defined in this notice are used as
defined in the Loan Agreement.

Borrower notifies Agent that Borrower is exercising an interest election under
the Loan Agreement.

1.                  Current Borrowings:

            ABR Borrowing of $__________

            Eurodollar Borrowings of:

              Amount

    End of Interest Period

$                                        

                                            

$                                        

                                            

$                                        

                                            

$                                        

                                            

$                                        

                                            

$                                        

                                            

 

2.                  Proposed election of Eurodollar Borrowings:

             Amount

    Effective Date of Interest
                 Election

       Interest Period

$                                        

                                            

                                            

$                                        

                                            

                                            

$                                        

                                            

                                            

$                                        

                                            

                                            

$                                        

                                            

                                            

$                                        

                                            

                                            

 

                                                               

--------------------------------------------------------------------------------

 

Borrower represents that the interest election(s) and Interest Period(s)
selected above comply with all provisions of the Loan Agreement and that no
Event of Default has occurred and is continuing.

Date: _______________, 201__

BORROWER:

731 RETAIL ONE LLC,
a Delaware limited liability company

By:                                         
           Name: 
           Title:   

 

 

731 COMMERCIAL LLC,
a Delaware limited liability company

By:                                          
           Name: 
           Title:   

 

 

2                                                                    

 

--------------------------------------------------------------------------------

 

EXHIBIT I

                                                               [Form of
Restricted Collateral Letter]       

                                                                                                                                                                                                       

RESTRICTED COLLATERAL LETTER

_______________, 201__

JPMorgan Chase Bank, N.A,
as Administrative Agent
270 Park Avenue, 45th Floor
New York, New York 10017
Attention: Joan Matera, Executive Director

Re:       Loan Agreement dated as of August 5, 2015 among 731 Retail One LLC and
731 Commercial LLC (collectively “Borrower”), the lenders party thereto,
JPMorgan Chase Bank, N.A., asAdministrative Agent, and certain other
parties                                                                                                   

Gentlemen and Ladies:

Reference is hereby made to the above-referenced Loan Agreement. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Loan Agreement.

This notice is being delivered to you pursuant to the definition of “Restricted
Collateral” set forth in Section 1.1 of the Loan Agreement. Borrower hereby
gives notice to Administrative Agent of Borrower’s election to irrevocably
designate as “Restricted Collateral” [insert Restricted Collateral amount:]
$__________ of [insert appropriate reference(s):] [the amount currently held by
Administrative Agent as Additional Collateral pursuant to the terms of
Section 3.2(a)(viii) of the Loan Agreement] [the amount currently held by
Administrative Agent as Additional Collateral pursuant to the terms of
Section 4.4 of the Loan Agreement] [the amount currently on deposit in the
Excess Cash Flow Account].

Very truly yours,

731 RETAIL ONE LLC,
a Delaware limited liability company

By:     _______________________                       
           Name:  
           Title:   

731 COMMERCIAL LLC,
a Delaware limited liability company

By:     _______________________ 
           Name:  
           Title:   

                                                             

 

--------------------------------------------------------------------------------

 

Exhibit J

 

LEASE

between

731 RETAIL ONE LLC,

Landlord,

and

[TENANT ENTITY],

Tenant.

731 Lexington Avenue
New York, New York

as of _______________, 2015

                                                                     

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

                        
Article/Section                                                                                                  Page

                        Article 1 DEMISE, TERM, FIXED RENT
…………………........…………………1

                       1.1...........
Demise..........................................................................................
1

                       1.2........... Commencement
Date..................................................................... 1

                       1.3........... Rent Commencement
Date............................................................. 2

                       1.4............Fixed
Rent......................................................................................
2

                       1.5........... Payments of Fixed
Rent................................................................... 3

                       1.6.           Certain
Definitions……………………………………......……..…3           

 

                        Article 2 ESCALATION
RENT……………………………………………………..5           

                       2.1........... CAM
Definitions….........................................................................
5

                       2.2........... Calculation of CAM
Expenses......................................................... 7

                       2.3........... CAM Expense
Payment.................................................................. 8

                       2.4........... Auditing of CAM Expense
Statements............................................ 10

                       2.5........... Tax
Definitions……………………….....………......…................ 11

                       2.6.          Tax Payment…………………………….………….....…………..12

                       2.7........... Tax Reduction
Proceedings…........................................................ 13

 

Article 3 PERCENTAGE
RENT......................................................................... 14

3.1...... Certain
Definitions.......................................................................
14

3.2...... Calculation of Percentage
Rent.................................................... 16

3.3...... Payment of Percentage
Rent........................................................ 17

3.4...... Books and
Records...................................................................... 18

3.5...... Restricted
Area.............................................................................
19

 

Article 4
USE.......................................................................................................
20

4.1...... Permitted
Use...............................................................................
20

4.2......
Limitations....................................................................................
20

4.3......
Rules.............................................................................................
22

4.4...... Tenant’s
Signs..............................................................................
23

4.5...... Retail
Use.....................................................................................
24

4.6...... Common Loading Dock, Freight Elevator and Trash Dumpster.......26

4.7...... Wireless Internet
Service............................................................... 27

 

Article 5 LIMITED
SERVICES..........................................................................
27

5.1...... Certain
Definitions.......................................................................
27

5.2......
Cleaning........................................................................................
27

5.3...... Condenser
Water..........................................................................
28

5.4......
Sprinkler.......................................................................................
29

5.5......
Water............................................................................................
29

5.6......
Ventilation....................................................................................
29

5.7...... Rubbish
Removal.........................................................................
30

5.8...... No Other
Services........................................................................
30

5.9...... Labor
Harmony............................................................................
30

 

Article 6
ELECTRICITY.....................................................................................
31

6.1......
Capacity......................................................................................
31

                                                                     

i

--------------------------------------------------------------------------------

 

6.2...... Electricity for the
Building........................................................... 31

6.3...... Direct
Metering............................................................................
31

 

Article 7 INITIAL CONDITION OF THE PREMISES....................................
31

           7.1...... Condition of
Premises.................................................................. 31

 

Article 8
ALTERATIONS...................................................................................
31

8.1......
General.........................................................................................
31

8.2...... Basic Alterations and Minor
Alterations...................................... 32

8.3...... Approval
Process..........................................................................
33

8.4...... Performance of
Alterations.......................................................... 33

8.5...... Financial
Integrity........................................................................
34

8.6...... Effect on
Building........................................................................
35

8.7...... Time for Performance of
Alterations............................................ 35

8.8...... Removal of Alterations and Tenant’s
Property............................ 36

8.9...... Contractors and
Supervision........................................................ 36

8.10.... Landlord’s
Expenses.................................................................... 37

8.11.... Fire
System...................................................................................
37

8.12.... Changes to
Storefront.................................................................. 37

8.13.... Initial
Alterations..........................................................................
37

 

Article 9
REPAIRS..............................................................................................
38

9.1...... Landlord’s
Repairs.......................................................................
38

9.2...... Tenant’s
Repairs...........................................................................
38

9.3...... Certain
Limitations.......................................................................
39

9.4......
Overtime.......................................................................................
39

 

Article 10 ACCESS; LANDLORD’S
CHANGES............................................. 39
10.1....
Access...........................................................................................
39
10.2.... Landlord’s Obligation to Minimize Interference.........................
40
10.3.... Reserved
Areas.............................................................................
40

10.4.... Ducts, Pipes and
Conduits........................................................... 40

10.5....
Keys..............................................................................................
41

10.6.... Landlord’s
Changes..................................................................... 41

 

Article 11 UNAVOIDABLE DELAYS AND INTERRUPTION OF SERVICE 42

11.1.... Unavoidable
Delays..................................................................... 42

11.2.... Interruption of
Services................................................................ 42

11.3.... Rent
Credit...................................................................................
42

 

Article 12
REQUIREMENTS.............................................................................
43

12.1.... Tenant’s Obligation to Comply with Requirements..................... 43

12.2.... Tenant’s Right to Contest
Requirements..................................... 43

12.3.... Certificate of
Occupancy............................................................. 44

 

Article 13 QUIET
ENJOYMENT.......................................................................
44

13.1.... Quiet
Enjoyment..........................................................................
44

Article 14
SUBORDINATION...........................................................................
44
14.1....
Subordination...............................................................................
44
14.2.... Terms of Nondisturbance
Agreements......................................... 46
14.3....
Attornment...................................................................................
47
14.4.... Amendments to this
Lease........................................................... 48

ii

 

--------------------------------------------------------------------------------

 

 

14.5.... Tenant’s Estoppel
Certificate....................................................... 48

14.6.... Landlord’s Estoppel
Certificate................................................... 48

14.7.... Rights to Cure Landlord’s
Default.............................................. 49

14.8.... Zoning Lot Merger
Agreement.................................................... 49

14.9.... Existing Mortgages and Existing Superior Leases.......................
49

 

Article 15
INSURANCE.....................................................................................
50

15.1.... Tenant’s
Insurance........................................................................
50

15.2.... Landlord’s
Insurance.................................................................... 51

15.3.... Mutual Waiver of
Subrogation..................................................... 51

15.4.... Evidence of
Insurance.................................................................. 51

15.5.... No Concurrent
Insurance............................................................. 52

15.6....Tenant’s Obligation to Comply with Landlord’s Fire and Casualty

           Insurance.......................................................................................52

 

Article 16
CASUALTY.......................................................................................
52

                                    16.1....
Notice...........................................................................................
52

16.2.... Landlord’s Restoration
Obligations............................................. 52

16.3.... Tenant’s Restoration
Obligations................................................. 52

16.4.... Rent
Abatement...........................................................................
53

16.5.... Landlord’s Termination
Right...................................................... 53

16.6.... Tenant’s Termination
Right.......................................................... 53

16.7.... Termination Rights at End of
Term.............................................. 54

16.8.... No Other Termination
Rights....................................................... 54

 

Article 17
CONDEMNATION...........................................................................
54

17.1.... Effect of
Condemnation.............................................................. 54

17.2.... Condemnation
Award.................................................................. 56

17.3.... Temporary
Taking.........................................................................
56

 

Article 18 ASSIGNMENT AND
SUBLETTING............................................... 56

18.1.... General
Limitations......................................................................
56

18.2.... Landlord’s
Expenses.................................................................... 58

18.3.... Recapture
Procedure.................................................................... 58

18.4.... Certain Transfer
Rights................................................................ 59

18.5.... Transfer
Taxes..............................................................................
61

18.6.... Transfer
Profit..............................................................................
61

18.7.... Permitted
Transfers......................................................................
62

 

Article 19
DEFAULT..........................................................................................
64

19.1.... Events of
Default.........................................................................
64

19.2....
Termination...................................................................................
65

 

Article 20 TENANT’S
INSOLVENCY.............................................................. 66

20.1.... Assignments pursuant to the Bankruptcy Code...........................
66

20.2.... Replacement
Lease....................................................................... 67

20.3.... Insolvency
Events........................................................................
68

20.4.... Effect of
Stay...............................................................................
69

20.5.... Rental for Bankruptcy
Purposes................................................... 69

iii

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

Article 21 REMEDIES AND
DAMAGES......................................................... 69

21.1.... Certain
Remedies.......................................................................
69

21.2.... No
Redemption.........................................................................
70

21.3.... Calculation of
Damages............................................................. 70

 

Article 22 LANDLORD’S EXPENSES AND LATE CHARGES.................... 72

22.1.... Landlord’s Costs After Event of
Default.................................... 72

22.2.... Legal Proceeding
Costs................................................................ 72

22.3.... Interest on Late
Payments............................................................ 72

 

Article 23 END OF
TERM..................................................................................
72

23.1.... End of
Term.................................................................................
72

23.2....
Holdover.......................................................................................
73

 

Article 24 NO
WAIVER.....................................................................................
73

24.1.... No
Surrender................................................................................
73

24.2.... No Waiver by
Landlord............................................................... 73

24.3.... No Waiver by
Tenant................................................................... 74

 

Article 25
JURISDICTION.................................................................................
74

25.1.... Governing
Law.............................................................................
74

25.2.... Submission to
Jurisdiction............................................................ 74

25.3.... Waiver of Trial by
Jury................................................................. 75

 

Article 26
NOTICES............................................................................................
75

26.1.... Addresses; Manner of
Delivery.................................................... 75

 

Article 27
BROKERAGE....................................................................................
76

27.1....
Broker...........................................................................................
76

 

Article 28
INDEMNITY......................................................................................
77

28.1.... Tenant’s Indemnification of the Landlord Parties.......................
77

28.2.... Landlord’s Indemnification of the Tenant Parties.......................
78

28.3.... Indemnification
Procedure........................................................... 78

 

Article 29 LANDLORD’S CONSENTS; ARBITRATION............................... 80

29.1.... Certain
Limitations.......................................................................
80

29.2.... Expedited
Arbitration.................................................................. 80

 

Article 30 ADDITIONAL
PROVISIONS.......................................................... 81

30.1.... Tenant’s Property Delivered to Building Employees................... 81

30.2.... Not Binding Until
Execution....................................................... 81

30.3.... No Third Party
Beneficiaries...................................................... 81

30.4.... Extent of Landlord’s
Liability..................................................... 81

30.5....
Survival.........................................................................................
82

30.6....
Recording.....................................................................................
82

30.7.... Entire
Agreement.........................................................................
82

30.8....
Exhibits.........................................................................................
82

30.9.... Gender;
Plural...............................................................................
82

30.10..
Divisibility....................................................................................
82

30.11.. Vault
Space..................................................................................
82

30.12.. Adjacent
Excavation....................................................................
83

iv

--------------------------------------------------------------------------------

 

30.13..
Captions........................................................................................
83

30.14.. Parties
Bound...............................................................................
83

30.15..
Authority......................................................................................
83

30.16.. Rent
Control.................................................................................
84

30.17.. Consequential
Damages............................................................... 84

30.18.. Specially Designated Nationals; Blocked Persons; Embargoed

           
Persons........................................................................................
84

30.19.. Tenant’s
Advertising....................................................................
85

30.20.. IRS Form
W-9..............................................................................
85

 

Article 31
SECURITY.........................................................................................
85

31.1.... Security
Deposit...........................................................................
85

31.2.... Landlord’s
Rights.........................................................................
86

31.3.... Return of
Security........................................................................
86

31.4.... Transfer of Letter of
Credit.......................................................... 87

31.5.... Renewal of Letter of
Credit......................................................... 87

v

­

--------------------------------------------------------------------------------

 

DEFINED TERMS

Term                                                                                                                                         
Page

Access
Party..................................................................................................................................
41

Affiliate...........................................................................................................................................
3

Alteration
Rules.............................................................................................................................
23

Alterations.....................................................................................................................................
32

Alterations
Notice.........................................................................................................................
33

Amortized Transfer
Expenses.......................................................................................................
64

Annual
Statement..........................................................................................................................
18

Applicable
Breakpoint...................................................................................................................
14

Applicable
Rate...............................................................................................................................
3

Assessed
Valuation.......................................................................................................................
11

Assignment
Requirements.............................................................................................................
65

Bank
Rating...................................................................................................................................
89

Bankruptcy
Code..........................................................................................................................
68

Base Electrical
Capacity................................................................................................................
31

Base
Rate.........................................................................................................................................
3

Base Sales
Period..........................................................................................................................
17

Basic
Alteration.............................................................................................................................
33

Basic Sublease
Provisions..............................................................................................................
63

Bloomberg
Competitor..................................................................................................................
22

Bloomberg
Lease...........................................................................................................................
22

Bloomberg
Provisions....................................................................................................................
22

Brokers..........................................................................................................................................
79

Building...........................................................................................................................................
1

Building
Change............................................................................................................................
36

Building
Hours..............................................................................................................................
28

Building
Rules...............................................................................................................................
23

Building
Standard.........................................................................................................................
20

Building
Systems...........................................................................................................................
28

Business
Days..................................................................................................................................
3

CAM Expense
Payment..................................................................................................................
7

CAM Expense
Statement................................................................................................................
7

CAM Expense
Year........................................................................................................................
7

Casualty
Statement........................................................................................................................
56

Claim.............................................................................................................................................
81

Closing
Period...............................................................................................................................
17

Closure
Termination......................................................................................................................
26

Commencement
Date......................................................................................................................
1

Common Loading
Dock................................................................................................................
27

Compliance
Challenge...................................................................................................................
44

Condominium
Board.....................................................................................................................
46

Condominium
Declaration............................................................................................................
46

Condominium
Unit..........................................................................................................................
3

Consumer Price
Index.....................................................................................................................
4

 vi­

--------------------------------------------------------------------------------

 

Control.............................................................................................................................................
4

Deficiency.....................................................................................................................................
73

Embargoed
Person.........................................................................................................................
88

Event of
Default............................................................................................................................
67

Excluded
Amounts........................................................................................................................
11

Excluded
Uses...............................................................................................................................
22

Expedited Arbitration
Proceeding................................................................................................
83

Expiration
Date...............................................................................................................................
1

Extended Closing
Period..............................................................................................................
25

Fifth Rental
Period..........................................................................................................................
2

First Rental
Period...........................................................................................................................
2

Fixed Expiration
Date.....................................................................................................................
1

Fixed
Rent.......................................................................................................................................
2

Force
Majeure................................................................................................................................
25

Fourth Rental
Period.......................................................................................................................
2

Governmental
Authority...............................................................................................................
44

Gross
Sales....................................................................................................................................
14

Guarantor.......................................................................................................................................
68

Guaranty........................................................................................................................................
68

Holidays..........................................................................................................................................
4

HVAC...........................................................................................................................................
28

Indemnitee.....................................................................................................................................
81

Indemnitor.....................................................................................................................................
81

Initial
Alterations...........................................................................................................................
32

Initial
Tenant...................................................................................................................................
4

Insolvency
Events.........................................................................................................................
71

Landlord..........................................................................................................................................
1

Landlord Liability
Claim...............................................................................................................
80

Landlord
Parties............................................................................................................................
80

Landlord’s Property
Policy...........................................................................................................
53

Lessor............................................................................................................................................
46

Letter of
Credit.............................................................................................................................
89

List.................................................................................................................................................
87

Minor
Alteration............................................................................................................................
33

Minor Alterations
Threshold.........................................................................................................
33

Monthly CAM Expense Payment
Amount.....................................................................................
8

Monthly
Statement........................................................................................................................
17

Mortgage.......................................................................................................................................
47

Mortgagee......................................................................................................................................
47

Nondisturbance
Agreement...........................................................................................................
47

OFAC............................................................................................................................................
87

Percentage Rent
Rate....................................................................................................................
16

Permitted
Party..............................................................................................................................
59

Permitted
Use................................................................................................................................
20

Person..............................................................................................................................................
4

Predecessor
Tenant........................................................................................................................
69

vii

 

--------------------------------------------------------------------------------

 

Premises...........................................................................................................................................
1

Proposed Transfer
Terms...............................................................................................................
61

Prospective CAM Expense
Statement............................................................................................
8

Qualified
Alteration......................................................................................................................
37

Real
Property...................................................................................................................................
1

Recapture
Date..............................................................................................................................
61

Recapture
Procedure.....................................................................................................................
60

Recapture Termination
.................................................................................................................
61

Recapture Termination
Notice.......................................................................................................
61

Rent Commencement
Date.............................................................................................................
2

Rental..............................................................................................................................................
2

Requirements.................................................................................................................................
44

Reserved
Areas..............................................................................................................................
41

Restricted
Area..............................................................................................................................
20

Retail Common
Areas.....................................................................................................................
4

Retail
Space.....................................................................................................................................
1

Retail
Standard................................................................................................................................
4

Retail
Unit.......................................................................................................................................
4

Rules..............................................................................................................................................
23

Sales
Year......................................................................................................................................
16

Second Rental
Period......................................................................................................................
2

Settlement......................................................................................................................................
82

Specialty
Alterations.....................................................................................................................
32

Storage
Space..................................................................................................................................
1

Storefront......................................................................................................................................
33

Substantial
Completion.................................................................................................................
33

Successor.......................................................................................................................................
47

Successor Limitation
Items...........................................................................................................
49

Superior
Lease...............................................................................................................................
47

Tax
Payment..................................................................................................................................
12

Tax Payment Commencement
Date..............................................................................................
12

Tax
Statement................................................................................................................................
12

Tax
Year........................................................................................................................................
12

Taxes..............................................................................................................................................
11

Tenant..............................................................................................................................................
1

Tenant Liability
Claim...................................................................................................................
79

Tenant
Obligor...............................................................................................................................
71

Tenant
Parties................................................................................................................................
80

Tenant Use
Areas............................................................................................................................
4

Tenant’s CAM Expense
Share........................................................................................................
7

Tenant’s Liability
Policy................................................................................................................
52

Tenant’s
Property..........................................................................................................................
33

Tenant’s Property
Policy...............................................................................................................
52

Tenant’s
Sign.................................................................................................................................
23

Tenant’s Tax
Share........................................................................................................................
12

Term.................................................................................................................................................
1

 viii

­

--------------------------------------------------------------------------------

 

Third Rental
Period.........................................................................................................................
2

Transfer..........................................................................................................................................
59

Transfer
Date.................................................................................................................................
60

Transfer
Expenses..........................................................................................................................
64

Transfer
Inflow..............................................................................................................................
64

Transfer
Notice..............................................................................................................................
60

Transfer
Outflow...........................................................................................................................
64

Transfer
Profit...............................................................................................................................
64

Transferee......................................................................................................................................
61

Trash
Dumpster.............................................................................................................................
27

Unavoidable
Delays......................................................................................................................
43

Utility
Company..............................................................................................................................
5

Work
Access..................................................................................................................................
41

ix

--------------------------------------------------------------------------------

 

EXHIBITS

Exhibit “A” – Premises

Exhibit “4.2(A)” – Excluded Uses

Exhibit “4.2(B)” – Bloomberg Limitations

Exhibit “4.4” – Signage Criteria

Exhibit “4.4(A)” – Tenant’s Signs

Exhibit “1.6(H)” – Holidays

Exhibit “4.6” – Locations of the Common Loading Dock, Freight Elevator and Trash
Dumpster

Exhibit “14.9” – Mortgages and Superior Leases

Exhibit “31.1” – Form of Letter of Credit

x

--------------------------------------------------------------------------------

 

THIS LEASE, dated as of the _____ day of __________, 2015, by and between
731 RETAIL ONE LLC, a Delaware limited liability company, having an address c/o
Alexander’s, Inc., 888 Seventh Avenue, New York, NY 10019, as landlord, and
[TENANT ENTITY], a ____________________, having an address at
____________________, as tenant (the Person that holds the interest of the
landlord hereunder at any particular time being referred to herein as
“Landlord”; subject to Section 18.1(D) hereof, the Person that holds the
interest of the tenant hereunder at any particular time being referred to herein
as “Tenant”).

WITNESSETH:

WHEREAS, Landlord wishes to demise and let unto Tenant, and Tenant wishes to
hire and take from Landlord, on the terms and subject to the conditions set
forth herein, the premises as shown on Exhibit “A” attached hereto and made a
part hereof, consisting of (i) approximately _____ square feet of usable area on
the ground floor (the “Retail Space”), and (ii) approximately _____ square feet
of usable area on lower level 3 (the “Storage Space”), in each case of the
building that is known by the street address of 731 Lexington Avenue, New York,
New York (the Retail Space and the Storage Space being collectively referred to
herein as the “Premises”; such building being referred to herein as the
“Building”; the Building, together with the plot of land on which the Building
is constructed, being collectively referred to herein as the “Real Property”).

NOW, THEREFORE, in consideration of the premises, and other good and valuable
consideration, the mutual receipt and legal sufficiency of which the parties
hereto hereby acknowledge, Landlord and Tenant hereby agree as follows:

Article 1
DEMISE, TERM, FIXED RENT

1.1.            Demise.

Subject to the terms hereof, Landlord hereby leases to Tenant and Tenant hereby
hires from Landlord the Premises for the term to commence on the Commencement
Date and to end on the last day of the calendar month during which occurs the
day immediately preceding the date that is _____ (___) years after the Rent
Commencement Date (the “Fixed Expiration Date”; the Fixed Expiration Date, or
such earlier date that the term of this Lease terminates pursuant to the terms
hereof or pursuant to law, being referred to herein as the “Expiration Date”;
the term commencing on the Commencement Date and ending on the Expiration Date
being referred to herein as the “Term”).

1.2.            Commencement Date.

(A)             The term of this Lease shall commence on the date that Landlord
delivers possession of the Premises to Tenant in the condition required
hereunder (such date that Landlord delivers possession of the Premises to Tenant
being referred to herein as the “Commencement Date”).

 

 1

 

--------------------------------------------------------------------------------

 

 

(B)              The term “Rental” shall mean, collectively, the Fixed Rent, the
CAM Expense Payment, the Tax Payment, the Percentage Rent and the additional
rent payable by Tenant to Landlord hereunder.

1.3.            Rent Commencement Date.

The term “Rent Commencement Date” shall mean the earlier to occur of (x) the
__________ (___) day after the Commencement Date, and (y) the date that Tenant
first occupies the Premises for the conduct of business.

1.4.            Fixed Rent.

(A)             The annual fixed rent for the Premises (the annual fixed rent
payable hereunder for the Premises at any particular time being referred to
herein as the “Fixed Rent”) shall be:

(1)             With respect to the Retail Space:

(a)                ______________________________ Dollars ($__________.00)
($__________.00 per month) for the period commencing on the Rent Commencement
Date and ending on the day immediately preceding the first (1st) anniversary of
the Rent Commencement Date (the “First Rental Period”);

(b)               ______________________________ Dollars ($__________.00)
($__________.00 per month) for the period commencing on the first (1st)
anniversary of the Rent Commencement Date and ending on the day immediately
preceding the second (2nd) anniversary of the Rent Commencement Date (the
“Second Rental Period”);

(c)                ______________________________ Dollars ($__________)
($__________per month) for the period commencing on the second (2nd) anniversary
of the Rent Commencement Date and ending on the day immediately preceding the
third (3rd) anniversary of the Rent Commencement Date (the “Third Rental
Period”);

(d)               ______________________________ Dollars ($__________)
($__________per month) for the period commencing on the third (3rd) anniversary
of the Rent Commencement Date and ending on the day immediately preceding the
fourth (4th) anniversary of the Rent Commencement Date (the “Fourth Rental
Period”);

(e)                ______________________________ Dollars ($__________)
($__________per month) for the period commencing on the fourth (4th) anniversary
of the Rent Commencement Date and ending on the day immediately preceding the
fifth (5th) anniversary of the Rent Commencement Date (the “Fifth Rental
Period”); [INSERT ADDITIONAL RENTAL PERIODS

(B)              Notwithstanding anything to the contrary stated herein, if the
Tenant does not open for business in the Premises on or before the date which is
one hundred twenty (120)

2

--------------------------------------------------------------------------------

 

days after the Commencement Date, which one hundred twenty day period shall be
extended by the number of days in any period of Force Majeure, then the Fixed
Rent payable hereunder shall be one and one half times the Fixed Rent payable
pursuant to this Section 1.4.

1.5.            Payments of Fixed Rent.

(A)             Tenant shall pay the Fixed Rent in lawful money of the United
States of America that is legal tender in payment of all debts and dues, public
and private, at the time of payment, in equal monthly installments, in advance,
on the first (1st) day of each calendar month during the Term commencing on the
Rent Commencement Date, at the office of Landlord or such other place as
Landlord may designate from time to time on at least thirty (30) days of advance
notice to Tenant, without any set-off, offset, abatement or deduction whatsoever
(except to the extent otherwise expressly set forth herein).

(B)              If the Rent Commencement Date is not the first (1st) day of a
calendar month, then (x) the Fixed Rent due hereunder for the calendar month
during which the Rent Commencement Date occurs shall be adjusted appropriately
based on the number of days in such calendar month, and (y) Tenant shall pay to
Landlord such amount (adjusted as aforesaid for such calendar month) on the Rent
Commencement Date. If the Expiration Date is not the last day of a calendar
month, then the Fixed Rent due hereunder for the calendar month during which the
Expiration Date occurs shall be adjusted appropriately based on the number of
days in such calendar month.

1.6.            Certain Definitions.

(A)             The term “Affiliate” shall mean a Person that (1) Controls,
(2) is under the Control of, or (3) is under common Control with, the Person in
question.

(B)              The term “Applicable Rate” shall mean, at any particular time,
the lesser of (x) four hundred (400) basis points above the Base Rate at such
time, and (y) the maximum rate permitted by applicable law at such time.

(C)              The term “Base Rate” shall mean the rate of interest announced
publicly from time to time by JP Morgan Chase Bank, or its successor, as its
“prime lending rate” (or such other term as may be used by JP Morgan Chase Bank
(or its successor), from time to time, for the rate presently referred to as its
“prime lending rate”).

(D)             The term “Business Days” shall mean all days, excluding
Saturdays, Sundays and Holidays.

(E)              The term “Condominium Unit” shall mean the condominium unit or
units containing the Premises pursuant to the Condominium Declaration as the
same may be modified from time to time; provided, however, that no modifications
shall be made to the Condominium Declaration that have an adverse and material
effect on Tenant’s use and occupancy of the Premises.

(F)               The term “Consumer Price Index” shall mean the Consumer Price
Index for All Urban Consumers published by the Bureau of Labor Statistics of the
United States                                                              

3­

--------------------------------------------------------------------------------

 

 

Department of Labor, All Items (1982-84 = 100), seasonally adjusted, for the
most specific area that includes the location of the Building, or any successor
index thereto. If the Consumer Price Index is converted to a different standard
reference base or otherwise revised, then the determination of adjustments
provided for herein shall be made with the use of such conversion factor,
formula or table for converting the Consumer Price Index as may be published by
the Bureau of Labor Statistics or, if said Bureau does not publish such
conversion factor, formula or table, then with the use of such conversion
factor, formula or table as may be published by Prentice-Hall, Inc. or any other
nationally recognized publisher of similar statistical information. If the
Consumer Price Index ceases to be published, and there is no successor thereto,
then Landlord and Tenant shall use diligent efforts, in good faith, to agree
upon a substitute index for the Consumer Price Index. Either party shall have
the right to submit the issue of the designation of such substitute index to an
Expedited Arbitration Proceeding.

(G)             The term “Control” shall mean direct or indirect ownership of
more than fifty percent (50%) of the outstanding voting stock of a corporation
or other majority equity interest if not a corporation and the possession of
power to direct or cause the direction of the management and policy of such
corporation or other entity, whether through the ownership of voting securities,
by statute or by contract.

(H)             The term “Holidays” shall mean all days observed as legal
holidays by either (x) the State of New York, or (y) the United States of
America.

(I)                The term “Initial Tenant” shall mean [TENANT ENTITY], or a
Person that succeeds to [TENANT ENTITY] as the tenant hereunder pursuant to
Section 18.7 hereof.

(J)                The term “Person” shall mean any natural person or persons or
any legal form of association, including, without limitation, a partnership, a
limited partnership, a corporation, and a limited liability company.

(K)             The term “Retail Common Areas” shall mean the Tenant Use Areas
and all other common areas or common elements of the Building and the Land that
are appurtenant to the Retail Unit.

(L)              The term “Retail Standard” shall mean the standards (including,
without limitation, quality, style and fabrication), as of the date hereof,
maintained in a luxury manner similar to first class retailers that are then
located in midtown Manhattan on Fifth Avenue from the north side of 57th Street
to the south side of 50th Street.

(M)            The term “Retail Unit” shall mean the portions of the Building
(including the Premises) dedicated to retail usage or defined from time to time
as a portion of the retail unit as set forth in the Condominium Declaration.

(N)             The term “Tenant Use Areas” shall mean (i) the Common Loading
Dock, the Freight Elevator, the Trash Dumpster and the corridors of the Building
designated by Landlord and/or the Condominium Board for Tenant’s non-exclusive
use connecting the Common Loading Dock and the Trash Dumpster to each other and
to the Premises and (ii) the sidewalks adjacent to the Retail Unit.

 4

 

--------------------------------------------------------------------------------

 

(O)             The term “Utility Company” shall mean, collectively, the local
electrical energy distribution company and the competitive energy provider with
which Landlord has made arrangements to obtain electric service for the
Building.

Article 2
ESCALATION RENT

2.1.            CAM Definitions.

(A)             “CAM Expenses” shall mean all reasonable costs and expenses of
every kind and nature paid or incurred by Landlord in connection with:

(1)             the ownership, management (including any commercially reasonable
fees payable to any Person performing the duties of a managing agent with
respect to the Condominium Unit), security, operation, replacement, maintenance,
repair, redecorating, refurbishing, conforming with Requirements, providing of
services and all other direct costs and expenses of every kind and nature,
actually incurred, foreseeable or unforeseeable, required or desired, suggested
or recommended for the ownership, operation, maintenance or otherwise with
respect to the Retail Common Areas in a manner reasonably deemed appropriate by
Landlord, including, but not limited to, all common charges payable by Landlord
to the Condominium Board with respect to the Retail Common Areas as authorized
by the Condominium Declaration; and

(2)              the maintenance of all insurance carried by and in the
discretion of Landlord, the Condominium Board or their designees covering the
Building, the Retail Common Areas and/or the Condominium Unit and the Retail
Unit, provided that in Landlord’s reasonable judgment such insurance is then
being customarily carried by prudent landlords of non-institutional first class
mixed use office and retail buildings in midtown Manhattan, New York, provided,
however, that to the extent any such insurance is not limited to the Retail Unit
and the Retail Common Areas, then only the Retail Unit’s and Retail Common
Area’s pro-rata share of such insurance shall be included in CAM Expenses.

In addition, CAM Expenses shall include fifteen percent (15%) of all costs set
forth in the foregoing clauses (i) and (ii), to cover Landlord’s administrative
and overhead costs.

(B)              CAM Expenses shall exclude:

(1)             Taxes,

(2)              Excluded Amounts,

(3)              subject to Section 2.2(C) hereof, payments of interest and/or
principal in respect of debt that is secured by Mortgages,

(4)             expenses that relate to leasing space in the Building
(including, without limitation, permit, license and inspection fees), legal fees
and disbursements, the cost of rent concessions, advertising expenses, leasing
commissions and the cost of lease buy-outs, take over leases, subleases,
assignments),

5

 

--------------------------------------------------------------------------------

 

(5)              the cost of any improvements to the Real Property that are
required to be capitalized by generally accepted accounting principles,
consistently applied (except as otherwise provided in Section 2.2(F) hereof),
and the cost of any leases and other related expenses incurred in leasing
mechanical systems, elevators, or other equipment ordinarily considered to be of
a capital nature,

(6)               depreciation expense (subject, however, to Section 2.2(C)
hereof),

(7)             the cost of electricity and other utilities furnished to the
portions of the Building that Landlord has leased or that Landlord is offering
for lease (other than the electricity and utilities required to operate the
Building Systems or the Common Areas, including the exterior of the Building),

(8)             salaries and the cost of benefits in either case for personnel
above the grade of building manager,

(9)                rent paid or payable under Superior Leases (other than in the
nature of additional rent consisting of Taxes or CAM Expenses),

(10)                subject to Section 2.2 hereof, any expense for which
Landlord is otherwise compensated for any service provided exclusively to a
single tenant in the Building (other than by virtue of other tenants in the
Building making payments to Landlord for Operating Expenses or operating
expenses as escalation rental),

(11)             legal fees and disbursements that are paid or incurred in
connection with the negotiation of, or disputes arising out of, any lease for
space in the Building,

(12)              advertising and promotional costs that are paid or incurred
for the Building,

(13)            any fee or expenditure that is paid or payable to any Affiliate
of Landlord to the extent that such fee or expenditure exceeds the amount that
would be reasonably expected to be paid in the absence of such relationship,

(14)             interest, penalties and late charges that in either case are
paid or incurred as a result of late payments made by Landlord, unless Tenant
has failed to make corresponding payments to Landlord in a timely fashion,;

(15)             costs associated with the operation of the business of the
entity which constitutes Landlord, as the same are distinguished from the costs
of operation of the Condominium Unit, the Condominium or the Building;

(16)               costs of acquiring sculptures, paintings, fountains or other
objects of art located within or outside the Building, except to the extent that
applicable Requirements require the installation of any such items in the public
portions of the Building;

 

                                                             

6

 

--------------------------------------------------------------------------------

 

 

(17)             costs incurred in connection with the original construction of
the Building or costs of correcting the original design or construction defects
of the Building or the common areas of the Building;

(18)              any costs, fines or penalties incurred due to violations by
Landlord of any Requirement and the defense of same (provided that Tenant did
not cause any such violation);

(19)               costs of selling, syndicating, financing, mortgaging,
hypothecating or ground leasing Landlord’s interest in the Condominium Unit or
the Building;

(20)               auditor’s fees;

(21)             repairs and other work occasioned by fire or other casualty
against which Landlord is insured or insurable; and

(22)             to the extent that any employee of Landlord performs work or
services other than for the Building, the reasonably allocated portion of his
compensation with respect to work not performed in connection with the Building.

(C)              The term “CAM Expense Payment” shall mean, with respect to any
CAM Expense Year, the product obtained by multiplying (i) the CAM Expenses for
such CAM Expense Year, by (ii) Tenant’s CAM Expense Share.

(D)             The term “CAM Expense Statement” shall mean a statement that
shows the CAM Expense Payment for a particular CAM Expense Year.

(E)              The term “CAM Expense Year” shall mean each calendar year
during the Term.

(F)               The term “Tenant’s CAM Expense Share” shall mean, subject to
the terms hereof, two and thirty-six hundredths percent (2.36%).

2.2.            Calculation of CAM Expenses.

(A)             If the entire usable area of the Building that is used for
retail purposes is not occupied by Persons conducting business therein for the
entire CAM Expense Year, then, for purposes of calculating the CAM Expense
Payment, Landlord shall have the right to increase CAM Expenses by the amount
that Landlord would have included in CAM Expenses if the entire usable area of
the Building that is used for retail purposes was occupied by Persons conducting
business therein for the entire CAM Expense Year. If (i) for any particular
period, Landlord performs a particular service or a particular level of service
for the benefit of Tenant in operating the portion of the Building that is used
for retail purposes, (ii) Tenant does not otherwise pay to Landlord additional
rent for the costs incurred by Landlord in performing such service or such level
of service, (iii) Landlord includes the cost of performing such service or such
level of service in CAM Expenses for purposes of calculating the CAM Expense
Payment for the applicable CAM Expense Year, and (iv) Landlord does not perform
such service or such level of service for the benefit of all of the other
portions of the Building that are used for retail purposes and that are occupied
by Persons conducting business therein for the applicable period, then, for

 

 7

--------------------------------------------------------------------------------

 

purposes of calculating the CAM Expense Payment, Landlord shall have the right
to increase CAM Expenses by the amount that Landlord would have included in CAM
Expenses if Landlord performed such service or such level of service for the
entire usable area of the Building that is used for retail purposes and that is
occupied by Persons conducting business therein for the applicable period.

(B)              If (i) Landlord includes an expense in CAM Expenses for a
particular CAM Expense Year, and (ii) Landlord receives insurance proceeds as
reimbursement for such expense in a subsequent CAM Expense Year, then Landlord
shall deduct such insurance proceeds from CAM Expenses in the CAM Expense Year
during which Landlord receives such insurance proceeds (without making a
corresponding reduction in the CAM Expenses for the CAM Expense Year during
which Landlord incurred such expense).

(C)              If (i) Landlord makes an improvement to the portion of the Real
Property that is used for retail purposes in connection with the maintenance,
repair, management or operation thereof, (ii) generally accepted accounting
principles require Landlord to capitalize the cost of such improvement, and
(iii) such improvement is made (a) to comply with a Requirement (regardless of
whether such Requirement is valid or mandatory), (b) in lieu of a repair, or (c)
for the purpose of saving or reducing CAM Expenses (such as, for example, an
improvement that reduces labor costs), then Landlord shall have the right to
include in CAM Expenses for each CAM Expense Year the amount that amortizes the
cost of such improvement, together with interest thereon calculated at the Base
Rate, in equal annual installments over the useful life of such improvement as
reasonably estimated by Landlord (until the cost of such improvement is
amortized fully); provided, however, that for any such improvement that Landlord
makes for the purpose of saving or reducing CAM Expenses (and that Landlord does
not make to comply with a Requirement or in lieu of a repair), the aforesaid
amount that Landlord includes in CAM Expenses for any particular CAM Expense
Year shall not exceed the amount of the reduction in other CAM Expenses for such
CAM Expense Year that derives from such improvement.

2.3.            CAM Expense Payment.

(A)             Tenant shall pay the CAM Expense Payment to Landlord in
accordance with the terms of this Section 2.3.

(B)              Landlord shall have the right to give a reasonably detailed
statement to Tenant from time to time pursuant to which Landlord sets forth
Landlord’s good faith estimate of the CAM Expenses and the CAM Expense Payment
for a particular CAM Expense Year (any such statement that Landlord gives to
Tenant being referred to herein as a “Prospective CAM Expense Statement”;
one-twelfth (1/12th) of the CAM Expense Payment shown on a Prospective CAM
Expense Statement being referred to herein as the “Monthly CAM Expense Payment
Amount”). If Landlord gives to Tenant a Prospective CAM Expense Statement (or
Landlord is deemed to have given to Tenant a Prospective CAM Expense Statement
pursuant to Section 2.3(C) hereof), then Tenant shall pay to Landlord, as
additional rent, on account of the CAM Expense Payment due hereunder for such
CAM Expense Year, the Monthly CAM Expense Payment Amount, on the first (1st) day
of each subsequent calendar month for the remainder of such CAM Expense Year, in
the same manner as the monthly installments of the Fixed Rent hereunder (it
being understood that Tenant shall not be required to commence such payments of

 8

 

--------------------------------------------------------------------------------

 

the Monthly CAM Expense Payment Amount before the first (1st) day of the CAM
Expense Year to which relates the applicable Monthly CAM Expense Payment
Amount). If Landlord gives (or is deemed to have given) to Tenant a Prospective
CAM Expense Statement after the first (1st) day of the applicable CAM Expense
Year, then Tenant shall also pay to Landlord, within thirty (30) days after the
date that Landlord gives the Prospective CAM Expense Statement to Tenant, an
amount equal to the excess of (I) the product obtained by multiplying (x) the
Monthly CAM Expense Payment Amount, by (y) the number of calendar months that
have theretofore elapsed during such CAM Expense Year, over (II) the aggregate
amount theretofore paid by Tenant to Landlord on account of the CAM Expense
Payment for such CAM Expense Year. If Landlord gives (or is deemed to have
given) to Tenant a Prospective CAM Expense Statement for a particular CAM
Expense Year, then Landlord shall also provide to Tenant, within a reasonable
time after the last day of such CAM Expense Year, a CAM Expense Statement for
such CAM Expense Year.

(C)              Tenant shall pay to Landlord an amount equal to the excess (if
any) of (i) the CAM Expense Payment as reflected on a CAM Expense Statement that
Landlord gives to Tenant, over (ii) the aggregate amount that Tenant has
theretofore paid to Landlord on account of the CAM Expense Payment (if any) as
contemplated by Section 2.3(B) hereof, within thirty (30) days after the date
that Landlord gives such CAM Expense Statement to Tenant. Tenant shall have the
right to credit against the Rental thereafter coming due hereunder an amount
equal to the excess (if any) of (i) the aggregate amount that Tenant has
theretofore paid to Landlord on account of the CAM Expense Payment as
contemplated by Section 2.3(B) hereof, over (ii) the CAM Expense Payment as
reflected on such CAM Expense Statement; provided, however, that if the
Expiration Date occurs prior to the date that such credit is exhausted, then
Landlord shall pay to Tenant the unused portion of such credit on or prior to
the thirtieth (30th) day after the Expiration Date (it being understood that
Landlord’s obligation to make such payment to Tenant shall survive the
Expiration Date). If Landlord gives Tenant a CAM Expense Statement, then, unless
Landlord otherwise specifies in such CAM Expense Statement, Landlord shall be
deemed to have given to Tenant a Prospective CAM Expense Statement, for the CAM
Expense Year immediately succeeding the CAM Expense Year that is covered by such
CAM Expense Statement, that reflects a CAM Expense Payment for such immediately
succeeding CAM Expense Year in an amount equal to the CAM Expense Payment for
such CAM Expense Year that is covered by such CAM Expense Statement.

(D)             If the Rent Commencement Date occurs later than the first (1st)
day of an CAM Expense Year, then the CAM Expense Payment for the CAM Expense
Year during which the Rent Commencement Date occurs shall be an amount equal to
the product obtained by multiplying (X) the CAM Expense Payment that would have
been due hereunder if the Rent Commencement Date was the first (1st) day of such
CAM Expense Year, by (Y) a fraction, the numerator of which is the number of
days in the period beginning on the Rent Commencement Date and ending on the
last day of such CAM Expense Year, and the denominator of which is three hundred
sixty-five (365) (or three hundred sixty-six (366), if such CAM Expense Year is
a leap year).

(E)              If the Expiration Date is not the last day of a CAM Expense
Year, then the CAM Expense Payment for the CAM Expense Year during which the
Expiration Date occurs shall be an amount equal to the product obtained by
multiplying (X) the CAM Expense Payment

 9

--------------------------------------------------------------------------------

 

that would have been due hereunder if the Expiration Date was the last day of
such CAM Expense Year, by (Y) a fraction, the numerator of which is the number
of days in the period beginning on the first (1st) day of such calendar year and
ending on the Expiration Date, and the denominator of which is three hundred
sixty-five (365) (or three hundred sixty-six (366), if such CAM Expense Year is
a leap year).

(F)               Landlord’s failure to give Tenant a CAM Expense Statement or a
Prospective CAM Expense Statement for any CAM Expense Year shall not impair
Landlord’s right to give Tenant a CAM Expense Statement or a Prospective CAM
Expense Statement for any other CAM Expense Year. CAM Expense Statements shall
be in sufficient detail to enable Tenant and Tenant’s accountants to determine
the accuracy of Landlord’s calculations.

2.4.            Auditing of CAM Expense Statements.

(A)             Any CAM Expense Statement that Landlord gives to Tenant shall be
binding upon Tenant conclusively unless, within one hundred eighty (180) days
after the date that Landlord gives Tenant such CAM Expense Statement, Tenant
gives a notice to Landlord objecting to such CAM Expense Statement. Tenant’s
right to give such notice (and conduct the audit contemplated by this
Section 2.4(A)) shall survive the Expiration Date (to the extent that the
Expiration Date occurs earlier than the one hundred eightieth (180th) day after
the date that Landlord gives the applicable CAM Expense Statement to Tenant). If
Tenant gives such notice to Landlord, then, subject to the terms of this
Section 2.4(A), Tenant may examine and audit Landlord’s books and records
relating to such CAM Expense Statement and to the CAM Expense Statements for the
previous years to the extent required to conduct Tenant’s audit to determine the
accuracy thereof. Tenant may perform such examination on reasonable advance
notice to Landlord, at reasonable times, in Landlord’s office or, at Landlord’s
option, at the office of Landlord’s managing agent or accountants. Tenant, in
performing such examination, shall have the right to be accompanied by an
independent certified public accountant licensed in New York that is reasonably
acceptable to Landlord; provided, however, that Tenant shall not be entitled to
be so accompanied by any certified public accountant unless Tenant and such
certified public accountant certify to Landlord in a written instrument that is
reasonably satisfactory to Landlord that the compensation being paid by Tenant
to such certified public accountant is not conditioned or otherwise contingent
(in whole or in part) on the extent of any reduction in the CAM Expense Payment
that derives from such examination. Tenant shall not have the right to conduct
any such audit unless Tenant delivers to Landlord a statement, in a form
reasonably designated by Landlord, signed by Tenant and Tenant’s certified
public accountant to which such books and records are proposed to be disclosed,
pursuant to which Tenant and such certified public accountants agree to maintain
the information obtained from such examination in confidence, except that Tenant
shall have the right to disclose such information (i) to the extent required by
law (including, without limitation, state or federal securities laws or the
rules of any organized stock exchange), (ii) to Tenant’s lenders, investors and
consultants to the extent that, in each case, such Person has good reason to
gain access to such confidential information, (iii) to prospective bona fide
purchasers of Tenant’s business, (iv) to the extent such information is
otherwise available to the general public and (v) to the extent reasonably
required in connection with Tenant’s enforcement of its rights hereunder.

 

10

 

--------------------------------------------------------------------------------

 

(B)              If it is determined ultimately that (i) Landlord, in a CAM
Expense Statement, overstated the CAM Expense Payment, and (ii) Tenant overpaid
the CAM Expense Payment for a particular CAM Expense Year, then Tenant shall be
entitled to credit the amount of such overpayment of the CAM Expense Payment
against the Rental thereafter coming due hereunder. If (x) Tenant is entitled to
a credit against Rental pursuant to this Section 2.4(B), and (y) the Expiration
Date occurs prior to the date that such credit is exhausted, then Landlord shall
pay to Tenant the unused portion of such credit on or prior to the thirtieth
(30th) day after the Expiration Date (and Landlord’s obligation to make such
payment shall survive the Expiration Date).

(C)              Nothing contained in this Section 2.4 shall constitute an
extension of the date by which Tenant is required to pay the CAM Expense Payment
to Landlord hereunder.

2.5.            Tax Definitions.

(A)             The term “Assessed Valuation” shall mean the amount for which
the Condominium Unit is assessed pursuant to applicable provisions of the New
York City Charter and of the Administrative Code of The City of New York, in
either case for the purpose of calculating all or any portion of the Taxes.

(B)              The term “Excluded Amounts” shall mean (w) any taxes imposed on
Landlord’s income, (x) franchise, revenues, receipts, corporate, partnership,
real estate transfer taxes or realty gains taxes, estate or inheritance taxes
imposed on Landlord, (y) any other similar taxes imposed on Landlord and (z)
penalties, interest and other charges imposed for late payment of Taxes.

(C)              The term “Taxes” shall mean the aggregate amount of real estate
taxes and any general or special assessments that in each case are imposed upon
the Condominium Unit (including, without limitation, (i) assessments made upon
or with respect to any “air” and “development” rights now or hereafter
appurtenant to or affecting the Condominium Unit, (ii) any fee, tax or charge
imposed by any Governmental Authority for any vaults, vault space or other space
within or outside the boundaries of the Condominium Unit, and (iii) any taxes or
assessments levied after the date of this Lease in whole or in part for public
benefits to the Condominium Unit, including without limitation, any Business
Improvement District taxes and assessments and fees and assessments that are
levied based on the use of water or energy by Landlord and/or the Condominium
Unit) without taking into account (a) any discount that Landlord receives by
virtue of any early payment of Taxes, (b) any Excluded Amounts, or (c) any
exemption or deferral of Taxes to which the Condominium Unit or Premises are
entitled under Section 421-a of the Real Property Tax Law that derive from the
construction of a portion of the Building as a multiple dwelling (as such term
is defined in Section 421-a(1)(c) of the Real Property Tax Law); provided,
however, that if, because of any change in the taxation of real estate, any
other tax or assessment, however denominated (including, without limitation, any
franchise, income, profit, sales, use, occupancy, gross receipts or rental tax),
is imposed upon the Condominium Unit, the owner thereof, or the occupancy, rents
or income derived therefrom, in sole and direct substitution for any of the
Taxes, then such other tax or assessment to the extent substituted shall be
included in Taxes for purposes hereof (computed as if the Condominium Unit were
Landlord’s sole asset and the income therefrom was Landlord’s sole income).

11

 

--------------------------------------------------------------------------------

 

(D)             The term “Tax Payment” shall mean, with respect to any Tax Year,
the product obtained by multiplying (i) Taxes for such Tax Year, by (ii)
Tenant’s Tax Share.

(E)              The term “Tax Statement” shall mean a statement that shows the
Tax Payment for a particular Tax Year.

(F)               The term “Tax Year” shall mean the period from July 1 through
June 30 (or such other period as hereinafter may be duly adopted by the
Governmental Authority then imposing Taxes as its fiscal year for real estate
tax purposes).

(G)             The term “Tenant’s Tax Share” shall mean, subject to the terms
hereof, ______________________________ percent (_____%); provided however, in
the event the Condominium Unit shall be modified after the date hereof, Tenant’s
Tax Share shall be equitably adjusted so that Tenant shall be obligated to pay a
portion of the Taxes payable with respect to the Condominium Unit as so modified
as is comparable to the proportion of the Taxes payable by Tenant with respect
to the Condominium Unit as presently constituted.

2.6.            Tax Payment.

(A)             Subject to the provisions of this Section 2.6, Tenant shall pay
to Landlord, as additional rent, the Tax Payment.

(B)              Subject to the provisions of this Section 2.6, Tenant shall pay
to Landlord the Tax Payment for a particular Tax Year within twenty (20) days
after receipt of Landlord’s Tax Statement. If Tenant’s obligation to make the
Tax Payment hereunder commences on a date that is not the date that the
applicable Governmental Authority requires Landlord to make a corresponding
payment of Taxes, then Tenant shall pay to Landlord, on such date that Tenant’s
obligation to make the Tax Payment hereunder commences, the installment of the
Tax Payment due hereunder for the corresponding period, which installment shall
be apportioned appropriately.

(C)              The term “Tax Payment Commencement Date” shall mean the Rent
Commencement Date. If the Tax Payment Commencement Date occurs later than the
first (1st) day of a Tax Year, then the Tax Payment for the Tax Year during
which the Tax Payment Commencement Date occurs shall be an amount equal to the
product obtained by multiplying (X) the Tax Payment that would have been due
hereunder if the Tax Payment Commencement Date was the first (1st) day of such
Tax Year, by (Y) a fraction, the numerator of which is the number of days in the
period beginning on the Tax Payment Commencement Date and ending on the last day
of such Tax Year, and the denominator of which is three hundred sixty-five (365)
(or three hundred sixty-six (366), if such Tax Year includes the month of
February in a leap year).

(D)             If the Expiration Date is not the last day of a Tax Year, then
the Tax Payment for the Tax Year during which the Expiration Date occurs shall
be an amount equal to the product obtained by multiplying (X) the Tax Payment
that would have been due hereunder if the Expiration Date was the last day of
such Tax Year, by (Y) a fraction, the numerator of which is the number of days
in the period beginning on the first (1st) day of such Tax Year and ending on
the Expiration Date, and the denominator of which is three hundred sixty-five
(365) (or three hundred sixty-six (366), if such Tax Year includes the month of
February in a leap year).

12

 

--------------------------------------------------------------------------------

 

(E)              The Tax Payment shall be computed initially on the basis of the
Assessed Valuation in effect on the date that Landlord gives the applicable Tax
Statement to Tenant (as the Taxes may have been settled or finally adjudicated
prior to such time) regardless of any then pending application, proceeding or
appeal to reduce the Assessed Valuation, but shall be subject to subsequent
adjustment as provided in Section 2.7 hereof.

(F)               Tenant shall pay the Tax Payment regardless of whether Tenant
is exempt, in whole or part, from the payment of any Taxes by reason of Tenant’s
diplomatic status or otherwise.

(G)             If Taxes are required to be paid on any date or dates other than
as presently required by the Governmental Authority imposing Taxes, then the due
date of the installments of the Tax Payment shall be adjusted so that each such
installment is due from Tenant to Landlord twenty (20) days prior to the date
that the corresponding payment is due to the Governmental Authority.

(H)             Landlord’s failure to give to Tenant a Tax Statement for any Tax
Year shall not impair Landlord’s right to give to Tenant a Tax Statement for any
other Tax Year.

(I)                Landlord shall give to Tenant a copy of the relevant tax bill
for each Tax Year (to the extent that the applicable Governmental Authority has
issued such tax bill to Landlord) when it delivers Tenant’s Tax Statement.

2.7.            Tax Reduction Proceedings.

(A)             Landlord (and not Tenant) shall be eligible to institute
proceedings to reduce the Assessed Valuation.

(B)              If, after a Tax Statement has been sent to Tenant, an Assessed
Valuation that Landlord used to compute the Tax Payment for a Tax Year is
reduced, and, as a result thereof, a refund of Taxes is actually received by, or
credited to, Landlord, then Landlord, promptly after Landlord’s receipt of such
refund (or such refund is credited to Landlord, as the case may be), shall send
to Tenant a Tax Statement adjusting the Taxes for such Tax Year and setting
forth, based on such adjustment, the portion of such refund for which Tenant is
entitled a credit as set forth in this Section 2.7(B). Landlord shall credit the
portion of such refund to which Tenant is entitled against the Fixed Rent
thereafter coming due hereunder. The portion of such refund to which Tenant is
entitled shall be limited to the portion of the Taxes, if any, that Tenant had
theretofore paid to Landlord on account of the Tax Payment for the Tax Year to
which the refund is applicable on the basis of the Assessed Valuation before it
had been reduced. The Tax Payment paid by Tenant for such Tax Year (after taking
into account such refund) shall be an amount equal to the Tax Payment that
Tenant would have paid hereunder if the Assessed Valuation used in computing
Taxes for such Tax Year had reflected initially the aforesaid reduction thereof
that yielded such refund. If (x) Tenant is entitled to a credit against Rental
pursuant to this Section 2.7(B), and (y) the Expiration Date occurs prior to the
date that such credit is exhausted, then Landlord shall pay to Tenant the unused
portion of such credit on or prior to the thirtieth (30th) day after the
Expiration Date (and Landlord’s obligation to make such payment shall survive
the Expiration Date). If (i) Landlord receives such refund (or a credit

13

 

--------------------------------------------------------------------------------

 

therefor) after the Expiration Date, and (ii) Tenant is entitled to a portion
thereof as contemplated by this Section 2.7(B), then Landlord shall pay to
Tenant an amount equal to Tenant’s share of such refund (or such credit) within
thirty (30) days after the date that such refund is paid to Landlord (or such
refund is credited to Landlord, as the case may be) (and Landlord’s obligation
to make such payment shall survive the Expiration Date).

Article 3
PERCENTAGE RENT

3.1.            Certain Definitions.

(A)             The term “Applicable Breakpoint” shall mean, with respect to a
Sales Year, ______________________________ Dollars ($__________).

(B)              The term “Gross Sales” shall mean all gross receipts, computed
in accordance with generally accepted accounting principles, consistently
applied, that are derived from the operation of a Permitted Party’s business at
the Premises for the applicable Sales Year in question, including, without
limitation:

(1)             the proceeds of sales for all goods, wares and merchandise sold,
and services performed, in either case by a Permitted Party, from the business
conducted at, upon or from the Premises by a Permitted Party,

(2)              the proceeds of sales for which the applicable Permitted Party
makes delivery or performance at or from the Premises (regardless of the
location at which such sales originate),

(3)              the proceeds of sales that are made, and orders that are
received, in either case in or at the Premises (regardless of whether delivery
or performance is made at or from the Premises),

(4)             the proceeds of sales (other than to Tenant’s employees) that
are made by mechanical or vending devices that are located at the Premises,

(5)              the proceeds of sales originating from whatever source but for
which a Permitted Party in the normal and customary course of such Permitted
Party’s operations credits or attributes to such Permitted Party’s business
conducted in the Premises, and

(6)               the proceeds of any business interruption insurance carried by
a Permitted Party in respect of such Permitted Party’s business at the Premises;

provided, however, that Gross Sales shall not include:

(a)                the amount of any local, county, state or federal sales,
luxury or excise tax on such sales that are collected by the Permitted Party (to
the extent that such tax is added to the selling price (or absorbed therein) and
paid to the taxing authority by the Permitted Party),

14

­

--------------------------------------------------------------------------------

 

(b)               the proceeds of sales that are made at a discount to
employees, or to non-profit, charitable or religious organizations,

(c)                the proceeds of any sale (cash or credit) to the extent that
such proceeds are thereafter refunded to the purchaser,

(d)               the proceeds of any sales of the Permitted Party’s trade
fixtures,

(e)                interest, service or finance charges on credit sales (other
than layaways) that derive from the Premises and that accrue after the
applicable Permitted Party sells the applicable receivable to a third party that
is not an Affiliate of a Permitted Party,

(f)                direct expenses of credit card sales that are paid by the
applicable Permitted Party to the issuers of such credit cards (other than
issuers who are Affiliates of a Permitted Party),

(g)               insurance proceeds (other than proceeds of business
interruption insurance),

(h)               amounts that the applicable Permitted Party collects for
delivery charges and delivery fees, to the extent that such amounts are paid by
the applicable Permitted Party to third parties that are not Affiliates of a
Permitted Party,

(i)                 any penalties or other charges charged by a Permitted Party
for returned checks,

(j)                 receipts from vending machines and pay telephones, to the
extent that such vending machines and pay telephones are installed in the
Premises only for the convenience of customers or employees and constitute only
an incidental use of the Premises,

(k)               transfers of merchandise by Tenant for the Premises to another
place of business owned or operated by Tenant,

(l)                 delivery charges and delivery fees paid to third parties,

(m)             any penalties charged by Tenant for returned checks,

(n)               the proceeds of any sale of fixtures and equipment that do not
occur in the ordinary course of Tenant’s business or after Tenant’s use thereof,

(o)               the proceeds of sales of gift certificates or other similar
vouchers in either case prior to the time that such certificates or vouchers
have been converted into a sale by redemption at the Premises,

(p)               bad debts,

(q)               the amount of any special discount to the customer for damaged
or defective merchandise,

 15

 

--------------------------------------------------------------------------------

 

(r)                 receipts from customers for fittings and alterations (to the
extent that such services are provided only for the convenience of customers and
such services constitute only an incidental use of the Premises),

(s)                interest, service and other charges imposed by Tenant and
paid by Tenant’s customers for extension of credit on sales by Tenant where such
charges are not included in the sales price of the merchandise,

(t)                 the bulk sale or wholesale transfer of Tenant’s inventory
not in the ordinary course of business,

(u)               the transfer or exchange of merchandise between the Premises
and any other store(s) of Tenant or any affiliate of Tenant,

(v)               amounts collected by Tenant on account of claims against
transportation companies and carriers; and

(x)             internet or catalogue sales in either case to the extent that
(i) payment for the items purchased does not occur at the Premises and (ii) any
such sale is properly accounted for in the ordinary course of business as having
occurred at a location other than the Premises.

(C)              “Percentage Rent Rate” shall mean eight percent (8%).

(D)             The term “Sales Year” shall mean each period of one (1) year
beginning on each January 1 and ending on each December 31 that occurs during
the Term; provided, however, that (x) if the Rent Commencement Date is not
January 1, then the first Sales Year shall be the period commencing on the Rent
Commencement Date and ending on December 31 of the calendar year during which
the Rent Commencement Date occurs, and (y) if the Expiration Date is not
December 31, then the last Sales Year shall be the period commencing on January
1 of the calendar year during which the Expiration Date occurs and ending on the
Expiration Date.

3.2.            Calculation of Percentage Rent.

(A)             Subject to the terms of this Article 3, Tenant shall pay to
Landlord, as additional rent, an annual amount equal to the product obtained by
multiplying (i) the Percentage Rent Rate, by (ii) the excess of (X) the Gross
Sales for each Sales Year, over (Y) the Applicable Breakpoint.

(B)              If (i) any Sales Year includes less than twelve (12) full
calendar months, (ii) during any Sales Year, Tenant is entitled to an abatement
or reduction in Fixed Rent pursuant to the provisions hereof, or (iii) during
any Sales Year, Tenant does not occupy the Premises for the conduct of business
by reason of the occurrence of a fire or other casualty, then the Applicable
Breakpoint for such Sales Year shall be reduced appropriately.

(C)              The Gross Sales for any period during which the applicable
Permitted Party is not open for business for retail trade for any reason other
than as permitted hereunder

16

 

--------------------------------------------------------------------------------

 

(any such period being referred to herein as a “Closing Period”) shall be deemed
to be an amount equal to the product obtained by multiplying (x) the Gross Sales
for the portion of the Sales Year immediately preceding the Sales Year during
which the Closing Period occurs that corresponds to the calendar days comprising
the Closing Period (such portion of such immediately preceding Sales Year being
referred to herein as the “Base Sales Period”), by (y) the sum of (i) one (1),
and (ii) the percentage increase (if any) in Gross Sales that occurred from the
calendar month immediately succeeding the Base Sales Period to the calendar
month immediately succeeding the Closing Period; provided, however, that if the
Sales Year during which the Closing Period occurs is the first (1st) Sales Year,
then the monthly amount of Gross Sales for the Closing Period shall be deemed to
be the average of the monthly amount of Gross Sales for the period of three (3)
months immediately succeeding the last day of the Closing Period. Nothing
contained in this Section 3.2(C) limits Landlord’s rights against Tenant at law,
in equity or as otherwise set forth herein if Tenant (or another Permitted
Party) closes its business in the Premises to retail trade in violation of the
provisions of this Lease.

3.3.            Payment of Percentage Rent.

(A)             Within twenty (20) days after the last day of any calendar month
that occurs during a Sales Year (other than the calendar month that ends on
December 31), Tenant shall submit to Landlord a statement (the “Monthly
Statement”), in the form of the Annual Statement, except that (i) each Monthly
Statement shall contain a statement of Gross Sales for the applicable calendar
month, and shaft contain the cumulative Gross Sales to date for the applicable
Sales Year, and (ii) each Monthly Statement may be signed by an officer of
Tenant and shall not be required to be certified. Tenant shall not be required
to make any payments in respect of Percentage Rent for a particular Sales Year
until Gross Sales for such Sales Year shall have exceeded the Applicable
Breakpoint.

(B)              Tenant shall submit to Landlord on or before the sixtieth
(60th) day after the last day of each Sales Year (including, without limitation,
the last Sales Year, as to which Tenant’s obligation shall survive the
termination of this Lease) a statement (the “Annual Statement”), signed and
certified as being true and correct by a corporate officer of Tenant (or the
other applicable Permitted Party), showing in reasonable detail Gross Sales
during the preceding Sales Year, an itemization of all permissible exclusions
therefrom, and a calculation of the Percentage Rent payable with respect to the
Sales Year in question based upon such Gross Sales. Each Annual Statement shall
also be duly certified to be true and correct in compliance with the definition
of Gross Sales and in accordance with generally accepted accounting principles,
consistently applied, by a certified public accountant from one of the “big-4”
firms of certified public accountants (or their successors), or, at Tenant’s
option, by a certified public accountant from a reputable firm of certified
public accountants that is reasonably acceptable to Landlord.

(C)              If an Annual Statement indicates that Percentage Rent is
payable for the applicable Sales Year, then such Annual Statement shall be
accompanied by an amount equal to the excess of (I) the amount of Percentage
Rent payable as shown thereon, over (II) the amount, if any, previously paid by
Tenant on account of Percentage Rent for such Sales Year.

 

17

 

--------------------------------------------------------------------------------

 

3.4.            Books and Records.

(A)             Tenant shall (or shall cause the applicable Permitted Party to)
prepare, and keep for a period of not less than three (3) years following the
end of each Sales Year during the Term, true and accurate books of account and
records, conforming to generally accepted accounting principles, consistently
applied, of all transactions from which Gross Sales are derived.

(B)              Subject to the terms of this Section 3.4, Landlord, at its
expense, shall have the right, upon reasonable prior notice to Tenant, to cause
a complete audit of any Annual Statement (and the corresponding books and
records of the applicable Permitted Party) to be performed by an independent
certified public accountant that Landlord designates reasonably. Tenant shall
make all such books and records available for examination at the office where
such books and records are regularly maintained (and if such books and records
are not regularly maintained in the city where the Building is located, then
Tenant shall provide true, complete and correct copies of such books and records
in such city where the Building is located). Landlord shall keep confidential
the information that Landlord obtains from such audit, except that Landlord
shall have the right to disclose such information (i) to the extent required by
law (including, without limitation, state or federal securities laws or the
rules of any organized stock exchange), (ii) to Landlord’s lenders, investors
and consultants that, in each case, have good reason to gain access to such
infonnation, (iii) to prospective purchasers and Lessors, (iv) to the extent
such information is otherwise available to the general public, and (v) to the
extent reasonably required in connection with Landlord’s enforcement of
Landlord’s rights hereunder.

(C)              Landlord shall provide to Tenant the results of any audit that
is performed at the request of Landlord as contemplated by Section 3.4(B)
hereof, and such results shall be binding conclusively upon Tenant unless,
within forty-five (45) days after Tenant receives the written report of the
audit performed by Landlord’s accountants, Tenant notifies Landlord that Tenant
disputes the results of such audit. If (i) Tenant notifies Landlord within such
period of forty-five (45) days that Tenant disputes the results of Landlord’s
audit, and (ii) Landlord and Tenant fail to resolve such dispute within
forty-five (45) days after the date that Tenant gives such notice to Landlord,
then either party shall have the right to submit the dispute to an Expedited
Arbitration Proceeding.

(D)             If Landlord exercises Landlord’s right to audit the books and
records of Tenant or the other applicable Permitted Party as contemplated by
this Section 3.4, then Tenant shall pay Landlord within thirty (30) days after
the Percentage Rent for the applicable Sales Year is determined as provided in
this Section 3.4, an amount equal to the excess of (I) the Percentage Rent for
the applicable Sales Year that is due to Landlord as so determined, over (II)
the Percentage Rent (if any) that Tenant has theretofore paid to Landlord for
the applicable Sales Year. Subject to the terms of this Section 3.4(D), if such
determination indicates that Tenant understated Gross Sales by three percent
(3%) or less, then the payments to be made to Landlord for Percentage Rent as a
result of such understatement shall bear interest at the Base Rate (calculated
from the date that such Percentage Rent was first due and payable to Landlord
hereunder). If such determination indicates that Tenant understated Gross Sales
by more than three percent (3%), then (x) the aforesaid interest shall be
calculated at the Applicable Rate, and (y) Tenant shall pay the reasonable fees
and disbursements of the accountant engaged by

18

 

--------------------------------------------------------------------------------

 

Landlord to perform such audit, within thirty (30) days after the date that
Landlord submits to Tenant an invoice therefor. Nothing contained herein
constitutes a waiver of Landlord’s rights against Tenant to the extent deriving
from an Event of Default.

(E)              If there arise differences or disputes between Landlord and
Tenant concerning Gross Sales, then Tenant shall preserve the applicable books
and records (including all supporting data and any other records from which
Gross Sales may be tested or determined) until a final resolution or final
determination of such dispute or difference.

3.5.            Restricted Area.

(A)             During the Term, no Permitted Party shall operate within the
Restricted Area any other store under the same trade name as used in the
Premises (other than in the Premises) that competes with the business that such
Permitted Party is conducting in the Premises hereunder. In the event that a
Permitted Party shall operate within the Restricted Area any other store under
the same trade name as used in the Premises that competes with the business that
such Permitted party is conducting in the Premises hereunder, in addition to any
and all other remedies available to Landlord on account thereof, Gross Sales for
purposes of this Lease (i) shall include the Gross Sales that such Permitted
Party (or such Affiliate) derives from such other competing business (it being
understood that the parties shall determine such Gross Sales from such other
business in the same manner as provided herein for Gross Sales that derive from
the Premises), and (ii) if at such time such Permitted Party shall not be
operating a business in the Premises for the conduct of retail sales to public
in accordance herewith, the Gross Sales derived from the Premises shall be
deemed to be Gross Sales equal to the average of the Gross Sales for the three
(3) Sales Years preceding the date upon which such Permitted Party ceased
operating a business in the Premises, and if there were less than three (3)
Sales Years prior to such date upon which such Permitted Party ceased operating
such a business, then (x) if there were two (2) such Sales Years, the average of
the Gross Sales for such two (2) Sales Years and (y) if there is only one (1)
such Sales Year, the Gross Sales of such Sales Year, provided that if the
Premises have never been opened for the conduct of retail sales to the public,
the Gross Sales derived from the Premises shall be deemed to be Gross Sales
equal to Ten Million and 00/100 Dollars ($10,000,000.00).

(B)              The term “Restricted Area” shall mean the portion of the
Borough of Manhattan that is located (w) west of Third Avenue (it being agreed
that any business having a place of business along either the easterly boundary
of Third Avenue shall be deemed to be located within the Restricted Area if
either the storefront or entrance of such business is located on Third Avenue,
or such business has a presence on Third Avenue sufficient that a reasonable
person would deem such business to be located “on” Third Avenue, (x) south of
East 65th Street (it being agreed that any business having a place of business
on the northerly boundary of East 65th Street shall be deemed to be located
within the Restricted Area if either the storefront or entrance of such business
is located on East 65th Street or such business has a presence on East 65th
Street sufficient that a reasonable person would deem such business to be
located “on” East 65th Street), (y) east of Lexington Avenue (it being agreed
that any business having a place of business on the westerly boundary of
Lexington Avenue shall be deemed to be located within the Restricted Area if
either the storefront or entrance of such business is located on Lexington
Avenue or such business has a presence on Lexington Avenue sufficient that a
reasonable person

19

 

--------------------------------------------------------------------------------

 

would deem such business to be located “on” Lexington Avenue),and (z) north of
East 55th Street (it being agreed that any business having a place of business
along the southerly boundary of East 55th Street shall be deemed to be located
within the Restricted Area if either the storefront or entrance of such business
is on East 55th Street or such business has a presence on East 55th Street
sufficient that a reasonable person would deem such business to be located “on”
East 55th Street).

Article 4
USE

4.1.            Permitted Use.

Subject to Section 4.2 hereof, Tenant shall use and occupy (i) the Retail Space
for the operation of a typical _______________ store, including, without
limitation the retail sale of [DESCRIBE] and any other branded products and such
other items as are sold in other _______________ stores around the world, and
(ii) the Storage Space, for storage purposes only related to the store being
operated in the Retail Space, and, in each case, for no other purpose (the use
described in this sentence being referred to herein as the “Permitted Use”).
Tenant shall use and occupy the Premises during the Term for the Permitted Use
in a high grade and reputable manner which shall not adversely affect the first
class reputation of the Building (such standards, at any particular time, being
referred to herein collectively as the “Building Standard”). Tenant’s
advertising for the business that Tenant conducts in the Premises shall not
detract from the character and reputation of the Building as a first-class mixed
use commercial, office and residential tower and shall conform to the Building
Standard.

4.2.            Limitations.

(A)             Tenant shall not use the Premises or any part thereof, or permit
the Premises or any part thereof to be used:

(1)             to conduct or permit any fire, auction, going-out-of- business
or bankruptcy sale,

(2)              to engage in any unethical method of business operation,

(3)              to sell or display for sale any pornographic or obscene
material,

(4)             to sell tickets for lotteries, games of chance or otherwise
permit the Premises to be used for gambling,

(5)              to sell home goods,

(6)               to distribute or permit to be distributed handbills or other
matter to persons or customers outside the Premises,

(7)             for the business of photographic, multilith or multigraph
reproductions or offset printing, except in connection with Tenant’s own
business and/or activities,

20

 

--------------------------------------------------------------------------------

 

(8)             as a check cashing or money wiring service conducted on an
off-the-street retail basis (except that nothing contained in this clause
4.2(A)(8) precludes Tenant from providing check cashing or money wiring services
that are customarily offered by commercial banks),

(9)                by the United States government, the City or State of New
York, any foreign government, the United Nations or any agency or department of
any of the foregoing,

(10)                as a café, restaurant or bar, confectionery, or for the sale
of soda or other beverages, sandwiches, ice cream or baked goods or for the
preparation, dispensing or consumption or sale of food or beverages in any
manner whatsoever, whether for “on” or “off’ premises consumption (except that
nothing contained in this clause 4.2(A)(10) precludes Tenant from using a
portion of the Premises as a pantry and/or lunchroom for use by Tenant’s
officers and employees, and not for use by the general public),

(11)             as a grocery store, supermarket, butcher shop, meat, fresh
produce or seafood shop, drugstore, bakery or liquor store,

(12)              as an employment agency, executive search firm or similar
enterprise, labor union, school or vocational training center (except for the
training of employees of Tenant),

(13)            as a drugstore, bakery or liquor store or solely as a seafood
shop,

(14)             as a barber shop or beauty salon,

(15)             as a radio, television or interne studio,

(16)               for a banking, trust company, depository, guarantee or safe
deposit business,

(17)             as a savings bank, a savings and loan association, or as a loan
company,

(18)              as a stockbroker’s or dealer’s office or for the underwriting
or sale of securities,

(19)               as a discount retailer (such as Target, Marshall’s, Wal-Mart,
K-Mart, Conway, Jack’s 99 Cent Stores, Odd-Job Trading, or Sally Beauty) or a
discount jewelry store, or

(20)               for a use which conflicts with rights theretofore granted by
Landlord to any other tenant in the Building (such conflicting uses being
collectively referred to as the “Excluded Uses”). Landlord shall advise Tenant,
promptly after Tenant’s request from time to time, of whether Landlord has
granted rights to any other tenant in the Building. Landlord agrees that
Landlord shall not grant any rights to any other tenant in the Condominium Unit
which would cause any component of the Permitted Use to become an Excluded Use.
The Excluded Uses as of the date of this Lease are set forth on Exhibit “4.2(A)”
attached hereto.

(B)              Tenant shall not permit the Premises to be occupied by any
Person which would cause the landlord under the Agreement of Lease (as
heretofore amended, the “Bloomberg

21

 

--------------------------------------------------------------------------------

 

Lease”), dated as of April 30, 2001, between Seven Thirty One Limited
Partnership, as landlord, and Bloomberg, L.P., as tenant, to be in default of
the Bloomberg Provisions. As used herein, the term “Bloomberg Provisions” shall
mean the provisions of the Bloomberg Lease annexed hereto and made a part hereof
as Exhibit “4.2(B)” . Landlord represents that the Bloomberg Provisions as
annexed hereto are a true and complete copy of the applicable provisions
contained in the Bloomberg Lease. Tenant shall have the right from time to time
during the Term to request a then current list of Bloomberg Competitors, which
Landlord shall provide to Tenant within ten (10) days after the date of such
request. As used herein, the term “Bloomberg Competitor” shall mean a Person who
is a Competitor (as such term is defined in the Bloomberg Lease and set forth in
the Bloomberg Provisions).

 

(C)        Tenant shall not use (or permit to be used) the sidewalks or other
space outside the Premises for any display, sale or similar undertaking or
storage, or use (or permit to be used) any loudspeaker, phonograph or other
sound system or advertising device which may be heard outside the Premises.

(D)        Tenant acknowledges that the Building is to be operated by the
Condominium Board as a first-class mixed use commercial, office and residential
tower in an upscale Manhattan neighborhood and, subject to the terms of this
Lease, shall operate its business at the Premises in a manner consistent
therewith.

(E)        Tenant acknowledges that Landlord may suffer irreparable harm by
reason of a breach or threatened breach of the provisions of this Section 4.2
and, accordingly, Landlord, in addition to any other remedy that Landlord has
under this Lease or that is permitted by law, shall be entitled to enjoin the
action, activity or inaction that gives rise to, or may give rise to, such
breach or threatened breach by Tenant.

4.3.            Rules.

Subject to the terms of this Section 4.3, Tenant shall comply with, and Tenant
shall cause any other Person claiming by, through or under Tenant to comply
with, (i) the rules relating to the operation of the Building (the “Building
Rules”) as of the date hereof, (ii) the rules relating to the performance of
Alterations (the “Alteration Rules”) as of the date hereof, and (iii) other
reasonable rules that Landlord hereafter adopts from time to time on reasonable
advance notice to Tenant, including, without limitation, rules that govern the
performance of Alterations (the Building Rules, the Alteration Rules and such
other reasonable rules, being collectively referred to herein as the “Rules”).
Nothing contained in this Lease shall be construed to impose upon Landlord any
obligation to enforce the Rules or the terms of any other lease against any
other tenant, and Landlord shall not be liable to Tenant for violation thereof
by any other tenant. Landlord shall not enforce any Rule against Tenant that
Landlord is not then enforcing against all other retail tenants in the Retail
Unit. If a conflict or inconsistency exists between the Rules and the provisions
of the remaining portion of this Lease, then the provisions of the remaining
portion of this Lease shall control.

 

 22

 

--------------------------------------------------------------------------------

 

4.4.            Tenant’s Signs.

(A)             Subject to the terms of this Section 4.4, Tenant shall have the
right to erect and maintain two (2) exterior signs, one (1) affixed to the
northern side of the canopy which constitutes a portion of the Storefront and
one (1) affixed to the southern side of the canopy which constitutes a portion
of the Storefront, which signs identify Tenant as an occupant of the Premises
(and for no other purpose) at the locations described in, and in accordance with
the specifications described in, Exhibit “4.4(A)” attached hereto and made a
part hereof (any such signs erected by Tenant being collectively referred to
herein as “Tenant’s Sign”), and which signs shall be subject to Landlord’s
approval. During the Term, Tenant shall have the right to modify or replace
Tenant’s Sign without Landlord’s consent as long as the proposed modification or
replacement of Tenant’s Sign is (i) substantially the same size and dimensions
and attaches to the Building in substantially the same manner as Tenant’s Sign
(provided same shall have been previously approved by Landlord) and is
consistent with the requirements of Exhibit “4.4” attached hereto, (ii) composed
of substantially similar or higher quality materials and mechanical components
as Tenant’s Sign (provided same shall have been previously approved by Landlord)
and (iii) comprised of a design which is consistent with the Tenant’s standard
stores then operating throughout Manhattan. Notwithstanding anything to the
contrary contained herein, if a proposed modification or replacement of Tenant’s
Sign does not meet the criteria set forth in subsections (i), (ii) or (iii)
above, such modification or replacement shall be subject to Landlord’s prior
approval, which approval shall not be unreasonably withheld or delayed. Tenant’s
installation of Tenant’s Sign shall be deemed an Alteration and shall be
performed at Tenant’s cost in accordance with the provisions set forth in
Article 8 hereof. Provided that as long as Initial Tenant shall be Tenant
hereunder, Landlord agrees not to withhold its approval of the design of any
sign which is used by Tenant in Tenant’s other stores substantially similar to
any of the signs shown on Exhibit “4.4(A)”. Tenant, at Tenant’s expense, shall
maintain and repair any Tenant’s Sign that Tenant erects pursuant to this
Section 4.4 in accordance with customary standards for first-class buildings in
the vicinity of the Building and in compliance with all applicable Requirements.
Tenant, at Tenant’s expense, shall remove Tenant’s Sign promptly upon the
Expiration Date and shall repair any damage caused by the installation of
Tenant’s Sign or such removal.

(B)              Any window displays and marketing materials which are located
within three (3) feet of the interior line of the Storefront shall be subject to
Landlord’s approval; provided that as long as Initial Tenant shall be Tenant
hereunder, and the Premises shall be used and occupied for the Permitted Use,
Tenant may display window displays and marketing materials without Landlord’s
approval if such displays and materials are consistent with the display criteria
described on Exhibit “4.4” and with the display criteria used by Tenant in
Tenant’s other stores in the United States operating under the same tradename as
Tenant is operating in the Premises, and shall: (i) comply with all applicable
Requirements, (ii) be professionally designed, constructed and displayed, (iii)
not be illuminated, or contain any elements which are flashing, blinking,
rotating, animated or audible and (iv) shall not contain a wall in front of the
entire bay. In addition to the foregoing window displays and marketing materials
permitted within the Premises, Tenant shall have the right to place similar
materials, subject to all of the foregoing provisions and restrictions of this
Section 4.4(B), in the interior glass-line of the windows located on the second
(2nd) floor of the Building immediately above and co extensive with the windows
constituting a portion of the Storefront of the Premises.

 23

 

--------------------------------------------------------------------------------

 

(C)              Tenant shall not install or otherwise display in the windows of
the Premises (x) any signs that are, or have the appearance of being, temporary
in nature, or (y) any signs that promote a liquidation sale or a sale in
contemplation of ceasing business operations. Tenant shall not have the right to
affix any signs to the interior or exterior of the window glass in the Premises,
except that Tenant may affix to the interior of the window glass customary signs
that indicate Tenant’s acceptance of credit cards and Tenant’s hours of
operation, provided that in all events such signs comply with all applicable
Requirements and are consistent with first class installations of retailers in
comparable buildings in the vicinity of the Building.

4.5.            Retail Use.

(A)             Tenant shall store in the Premises only the merchandise that
Tenant sells on a retail basis at the Premises. Tenant shall not permit its
customers to form lines that extend outside of the Premises. Tenant shall
maintain the appearance of the Premises, including, without limitation, the
display of the merchandise being sold therein, in conformity with the standards
ordinarily employed in first-class retail stores. Tenant shall not use any
system that directs light, sound or odors outside of the Premises for purposes
of advertising or promotion. Tenant shall not distribute, place or install
outside of the Premises (but otherwise on the Real Property) any handbills,
placards, signs or other similar materials. Tenant shall not have the right to
prop open the doors or windows of the Premises. Tenant shall not have the right
to install any awnings or other similar devices on the exterior of the
storefront of the Premises. Tenant shall not have any right to use the sidewalk
that is adjacent to the Premises for any purpose other than ordinary ingress and
egress.

(B)              Subject to the terms of this Section 4.4, during the period
commencing on the Rent Commencement Date and ending on the day immediately prior
to the first (1st) anniversary of the Rent Commencement Date, Tenant shall cause
the entire Premises (in its entirety) to be open for retail trade with the
general public every day, seven (7) days per week, at least eight (8) hours per
day. Nothing contained in this Section 4.5(B) limits Tenant’s right to cause the
Premises to be open for retail trade with the general public during other
periods. At all times during the Term that the Premises shall be open for retail
trade with the general public, then, Tenant shall have the right to cause the
Premises to be closed for business with the general public (i) for no more than
three (3) Business Days during any particular calendar year for the purpose of
Tenant’s taking inventory, (ii) for no more than one hundred twenty (120)
Business Days in the aggregate (after the date upon which Tenant shall initially
open the Premises for the conduct of business) during any particular period of
five (5) years for the purpose of performing Alterations in the Premises in
accordance with the provisions of Article 8 hereof (as such one hundred twenty
(120) Business Day period may be extended by delays caused by Landlord or
Governmental Authorities), or (iii) during the period that Tenant cannot be
reasonably expected to conduct business in the Premises because of fire or other
casualty or condemnation or because of any cause beyond Tenant’s reasonable
control, including, strikes, labor troubles or the occurrence of an act of God,
war, terrorist act, utility failure (“Force Majeure”), provided that Tenant’s
insolvency or financial condition shall in no circumstances be the basis of any
claim of Force Majeure on the part of Tenant (the period during which Tenant
closes its business in the Premises to retail trade pursuant to clause (ii) or
clause (iii) of this sentence being referred to herein as an “Extended Closing
Period”). During any Extended Closing Period, Tenant, at Tenant’s cost and
expense, shall maintain the Premises so that at all times the Premises shall

24

 

--------------------------------------------------------------------------------

 

appear clean and orderly as viewed from the street outside the Building (and
shall cause the Premises to be lighted in substantially the same manner as if
such Premises was open for the conduct of retail trade in accordance with this
Section 4.5(B)); provided, however, that if Tenant is performing Alterations
during an Extended Closing Period or the Extended Closing Period is by reason of
a fire or other casualty or condemnation, then Tenant shall block the applicable
portion of the Premises from view from the street outside the Building by
placement of a screen or other decorative device in the interior of such
applicable portion of the Premises, the location and design of which is approved
by Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed.

(C)               

(1)             If at any time Landlord shall reasonably believe that Tenant has
ceased retail operations in all or a substantial portion of the Premises with
respect to which Tenant has not theretofore delivered a Closure Notice, Landlord
shall have the right to deliver a notice to Tenant indicating that Landlord
believes that Tenant has ceased retail operations in the Premises. Within
fifteen (15) days after such notice has been given or deemed given pursuant to
Article 26 hereof, (a) Tenant shall deliver a notice to Landlord stating the
Tenant does not intend to cease retail operations in the Premises, and (b)
Tenant shall resume retail operations in the entire Premises within such fifteen
(15) day period. Notwithstanding anything to the contrary contained herein,
Tenant shall not be deemed to be “closed” for purposes this Section 4.5(C)
merely as a result of Tenant’s closure of the Premises (x) to perform
Alterations or inventory to the extent permitted under Section 4.5(B) hereof or
(y) following a casualty affecting the Premises (unless Tenant fails to use
commercially reasonable efforts to re-open for retail trade with the general
public within twelve (12) months following such casualty).

(2)              If Tenant fails to so resume retail operations in the entire
Premises, then Landlord shall have the right to terminate this Lease (a “Closure
Termination”) at any time by giving notice thereof to Tenant unless Tenant has
re-opened retail operations at the Premises. If Landlord exercises Landlord’s
right to consummate a Closure Termination, then the Term shall expire and
terminate on a date specified by Landlord, and Tenant, on such date, shall
deliver exclusive possession of the Premises to Landlord in accordance with the
provisions of Article 23 hereof. Upon the termination of this Lease under the
conditions provided for in this Section 4.5, the Fixed Rent, the Tax Payment and
the CAM Charge shall be apportioned and any prepaid portion of Fixed Rent, the
Tax Payment and the CAM Charge for any period after such date shall be refunded
by Landlord to Tenant.

(D)             Tenant, at its sole cost and expense, shall keep, maintain,
repair, replace, renew and restore (as used in this Section 4.5(D), “maintain”)
the Premises, the doors of the Premises, and its inventory and every part
thereof in a condition and appearance consistent with the operation of the
Permitted Use consistent with the Building Standard, including, without
limitation, floor coverings, interior walls, furniture and furnishings,
appliances, ceilings, doors, door frames, windows, window sashes, window
casements and frames, entrances, exits, signs, locks and closing devices.

(E)              Tenant shall not suffer, permit, install or operate in or about
the Premises any pay phone, coin-operated vending machine or other devices for
the sale of goods, wares,

 25

­

--------------------------------------------------------------------------------

 

merchandise, food and beverages, including, but not limited to, pay lockers, pay
toilets, scales, amusement devices and machines, electronic games and machines
for Tenant’s sale of beverages, food, candy, gum, cigarettes or other
commodities or edibles.

(F)               Tenant shall perform, at its sole cost and expense, any and
all maintenance reasonably necessary or desirable in order to keep the floors of
all “wet” areas of the Premises in a waterproof condition and inspect all floor
tiles in the Premises on a monthly basis. Tenant shall promptly replace any
broken or cracked tiles and cause all grout and seams to remain closed

(G)              

(1)             Tenant shall not make or cause or permit to be made any music
that violates the noise levels, as defined in Section §24-231 (Commercial music)
of the Noise Code of the City of New York (the “NYC Noise Code”), in any spaces
adjacent to the Premises, whether such adjacent spaces are commercial,
residential, retail or adjacent base building space. If Tenant intends to
broadcast music within the Premises, Tenant shall submit to Landlord acoustic
information showing the anticipated sound and music level within the Premises,
together with any proposed acoustic treatments, in order to achieve Compliance
with the sound level limits described in the NYC Noise Code in horizontally or
vertically adjacent tenant or base building spaces. Tenant shall also not make
or cause or permit to be made any vibrations or impacts that are perceptible as
vibration or audible as structure-borne noise in horizontally or vertically
adjacent tenant or building spaces.

(2)              The relevant provisions of Section §24-231 of the Noise Code
are as follows: (a) No person shall make or cause or permit to be made or caused
any music originating from or in connection with the operation of any commercial
establishment or enterprise when the level of sound attributable to such music,
as measured inside any receiving property dwelling unit: (1) is in excess of 42
dB(A) as measured with a sound level meter; or (2) is in excess of 45 dB in any
one-third octave band having a center frequency between 63 hertz and 500 hertz
(ANSI bands numbers 18 through 27, Inclusive), in accordance with American
National Standards Institute standard S1.6-1984; or (3) causes a 6 dB(C) or more
increase in the total sound level above the ambient sound level as measured in
decibels in the “C” weighting network provided that the ambient sound level is
in excess of 62 dB(C).

4.6.            Common Loading Dock, Freight Elevator and Trash Dumpster.

Subject to the terms of this Section 4.6 hereof, Tenant shall have the right in
common with other occupants of the Building to use the portions of the loading
docks (collectively, the “Common Loading Dock”) of the Building indicated on
Exhibit “4.6” attached hereto, the freight elevators (collectively, the “Freight
Elevator”) indicated on Exhibit “4.6” attached hereto, and the trash dumpster or
trash storage area indicated on Exhibit “4.6” attached hereto or a reasonably
similar trash dumpster or storage area designated by Landlord (in either case,
the “Trash Dumpster”), in each case, on all Business Days at times approved by
Landlord or Landlord’s designee. Tenant shall use the Tenant Use Areas solely
for the purpose of receiving and dispatching merchandise (if applicable),
equipment and rubbish in accordance with the Rules and applicable Requirements.
Tenant shall be solely responsible for securing any of Tenant’s

 26

 

--------------------------------------------------------------------------------

 

Property located at the Tenant Use Areas and for monitoring access to the
Premises from the Tenant Use Areas and Landlord shall not have liability
whatsoever with respect thereto. Tenant shall reimburse Landlord, as additional
rent hereunder, an amount equal to any amounts charged to Landlord in connection
with Tenant’s use of the Common Loading Dock, Freight Elevator or Trash
Dumpster, within thirty (30) days of Landlord’s demand therefor to the extent
that such amounts are not otherwise payable to Landlord pursuant to Article 2
hereof and are charged by the Condominium Board to the condominium unit owners
of the Building based upon usage of such services.

4.7.            Wireless Internet Service.

Tenant shall not solicit other occupants of the Building to use wireless
Internet service that emanates from the Premises. Tenant shall not permit the
signals of Tenant’s wireless Internet service (if any) to emanate beyond the
Premises or otherwise interfere in any material respect with any Building
Systems.

Article 5
LIMITED SERVICES

5.1.            Certain Definitions.

(A)             The term “Building Hours” shall mean the period from 8:00 AM to
6:00 PM on Business Days and the period from 9:00 AM to 1:00 PM on Saturdays
that are not Holidays.

(B)              The term. “Building Systems” shall mean the service systems of
the Building, including, without limitation, the mechanical, gas, steam,
electrical, sanitary, HVAC, elevator, plumbing, and life-safety systems of the
Building (it being understood that the Building Systems shall not include any
systems that Tenant installs in the Premises as an Alteration).

(C)              The term “HVAC” shall mean heat, ventilation and
air-conditioning.

5.2.            Cleaning.

(A)             Tenant, at Tenant’s expense, shall cause the Premises, all glass
surfaces (interior and exterior), and all fixtures, furnishings and property of
Tenant to be cleaned daily, shall not at any time sweep any refuse, rubbish or
dirt into the gutters or streets of the Building and Tenant, at Tenant’s
expense, shall exterminate the portions of the Premises that Tenant uses for the
storage, preparation, service or consumption of food against infestation by
insects and veHnin regularly, and in addition, whenever there is evidence of
infestation and whenever Landlord, in its reasonable discretion, deems the same
necessary or desirable. Tenant shall engage Persons to perform such
exterminating that are approved by Landlord, which approval Landlord shall not
unreasonably withhold, condition or delay. Tenant shall cause such Persons to
perform such exterminating in a manner that is reasonably satisfactory to
Landlord.

(B)              Tenant, at Tenant’s expense, shall clean daily all portions of
the Premises used for the storage, preparation, service or consumption of food
or beverages. Tenant shall not have the right to perform any cleaning services
in the Premises using any Person other than the

27

 

--------------------------------------------------------------------------------

 

cleaning contractor that Landlord has engaged from time to time to perform
cleaning services in the Building for Landlord; provided, however, that (x)
Landlord shall not have the right to require Tenant to use such cleaning
contractor unless the rates that such cleaning contractor agrees to charge
Tenant for such additional cleaning services are commercially reasonable, and
(y) subject to Section 5.9 hereof, Tenant shall have the right to use Tenant’s
own employees for such additional cleaning services. If such cleaning contractor
does not agree to charge Tenant for such additional cleaning services at
commercially reasonable rates, then Tenant may employ to perform such additional
cleaning services another cleaning contractor that Landlord approves, which
approval Landlord shall not unreasonably withhold, condition or delay.

(C)              Tenant shall comply with any refuse disposal program
(including, without limitation, any waste recycling program) that Landlord
imposes reasonably or that is required by Requirements.

(D)             Tenant shall not clean any window in the Premises, nor require,
permit, suffer or allow any window in the Premises to be cleaned, in either case
from the outside in violation of Section 202 of the New York Labor Law, any
other Requirement, or the rules of the Board of Standards and Appeals, or of any
other board or body having or asserting jurisdiction.

5.3.            Condenser Water.

Tenant, at Tenant’s sole cost and expense, may tap into the condenser water
pipes of the Building to obtain condenser water for its HVAC System through
valved outlets to the Premises at the locations designated by Landlord (it being
agreed that such valved outlets shall be deemed to be a portion of the Building
Systems). Subject to the terms of this Section 5.3, Tenant shall have the right
to access the Building’s condenser water system for purposes of pumping (at
Tenant’s sole cost and expense) condenser water to Tenant’s HVAC system, at such
times and in such quantities as Tenant shall request (subject, however, to the
permitted capacity of such system). Any installations required to connect
Tenant’s HVAC system to the condenser water pipes shall be made by Tenant and
shall constitute an Alteration. Tenant shall pay Landlord, from time to time,
for the supply of condenser water, within thirty (30) days after rendition of a
bill therefor, an annual charge equal to the sum of (x) one hundred five percent
(105%) of Landlord’s actual cost to obtain (from the Condominium Board or
otherwise) or reasonable actual cost to produce such condenser water as is used
by Tenant and which cost is customarily charged to other retail tenants in the
Building using the same system and (y) an amount equal to any tax imposed by any
Governmental Authority on the amount set forth in clause (x) of this sentence.
Tenant’s use of condenser water shall not exceed eight (8) tons of condenser
water, and, upon Tenant’s payment to Landlord of the fee described in this
Section 5.3, and subject to the express provisions of this Lease(including,
without limitation, Landlord’s maintenance and repair requirements), Landlord
shall make such condenser water available to Tenant during the Term on a 24
hours per day, seven days per week basis, based on the Building’s heating and
cooling seasons, provided that Tenant shall install and use its own VFD pumps to
utilize such condenser water for Tenant’s HVAC system. Tenant expressly
acknowledges that the Building condenser water pumps and fans may not be
operating on a 24 hours per day, seven days per week basis and that Tenant’s
HVAC System, shall be designed and operated based on the foregoing
acknowledgment.

 

28

--------------------------------------------------------------------------------

 

5.4.            Sprinkler.

Tenant shall maintain the sprinkler system that Tenant installs at the Premises
as part of the Initial Alterations in accordance with applicable Requirements.
With respect to such sprinkler system installed by Tenant as part of the Initial
Alterations, Tenant’s completed design documents, including all hydraulic
calculations, shall be submitted to the Factory Mutual Insurance Company, or
such other Person reasonably designated by Landlord from time to time, for their
review and approval prior to commencement of such installations. If any
modifications to the base building fire protection capacities are required to
accommodate Tenant’s specific occupancy requirements, then Tenant’s completed
design documents, including all hydraulic calculations for such modifications,
shall be submitted to the Factory Mutual Insurance Company, or to such other
Person reasonably designated by Landlord from time to time, for their review and
approval prior to commencement of installations, and shall be made by Landlord
at Tenant’s sole cost and expense. Landlord agrees to not unreasonably withhold,
condition or delay its approval with respect to any matters in this Section 5.4.
Subject to Unavoidable Delays, at Landlord’s cost, Landlord shall provide Tenant
at all times following the Commencement Date with a connection to the sprinkler
main and a shut-off valve inside the Premises.

5.5.            Water.

Landlord shall provide to the Premises (a) cold water for ordinary drinking,
cleaning and lavatory purposes and (b) hot water solely for the purpose of
servicing the perimeter heating system in the Premises. If Tenant requires, uses
or consumes water for any purpose in excess of ordinary drinking, cleaning, or
lavatory purposes, Landlord may install water meters and thereby measure
Tenant’s water usage. In such event (i) Tenant shall pay Landlord for the actual
cost of the meters and Landlord’s out-of-pocket, reasonable costs in connection
with the installation thereof and the reading thereof from time to time, and
through the duration of Tenant’s occupancy Tenant shall keep said meters and
equipment in good working order and repair at Tenant’s own cost and expense;
(ii) Tenant shall pay for the actual costs of the water used by Tenant as
measured on said meters, which costs shall be allocated to Tenant based upon the
proportion of water used by Tenant to the total amount of water used from the
Building System supplying water to Tenant, it being agreed that upon Tenant’s
default in making such payment to Landlord within thirty (30) days after demand
therefor by Landlord, Landlord may pay such charges and collect the same from
Tenant; and (iii) Tenant shall pay the sewer rent, charge or any other tax,
rent, levy or charge which now or hereafter is assessed, imposed or shall become
a lien upon the Premises or the Real Property pursuant to any Requirement made
or issued in connection with any such metered use, consumption, maintenance or
supply of water, water system, or sewage or sewage connection or system. The
bill rendered by Landlord for the above shall be based upon Tenant’s consumption
and shall be payable by Tenant as additional rent within thirty (30) days after
demand by Landlord.

5.6.            Ventilation.

Tenant may tap into the Building Systems, in the locations designated by
Landlord in Landlord’s sole discretion, to gain access to fresh air and to
dispose of spent air. Landlord shall

 29

 

--------------------------------------------------------------------------------

 

have no obligation to provide ventilation beyond the level of ventilation
required for the mere general “retail” use of the Premises (as opposed to
Tenant’s particular use or manner of use).

5.7.            Rubbish Removal.

Landlord shall cause the rubbish to be removed from the Trash Dumpster such that
Tenant shall be able to adequately dispose of the rubbish generated by Tenant in
connection with the operation of Tenant’s business at the Premises, and Tenant
shall pay to Landlord, as additional rent hereunder, an amount equal to the
actual out-of-pocket costs incurred by Landlord or the Condominium Board, as the
case may be; related to such rubbish removal based upon a reasonable system of
measuring Tenant’s usage of such Trash Dumpster; it being agreed that (i) any
system of measuring Tenant’s usage of the Trash Dumpster adopted by the
Condominium Board shall be deemed to be reasonable for purposes hereof and (ii)
any Person with whom Landlord or the Condominium Board (or either’s managing
agent) contracts to provide rubbish removal services shall charge commercially
competitive rates as of the date that any such contract is entered into. Tenant
shall place and store Tenant’s rubbish in rubber or plastic airtight containers
which shall be washed and cleaned daily and shall be kept in a self-contained,
refrigerated and drained area in the Trash Dumpster set aside for the storage of
garbage and refuse so as to prevent any fumes, odors or fluids from emanating
from the Premises. All such rubbish containers shall be removed from the
Premises on a daily basis and deposited in the Trash Dumpster using a method
approved by Landlord, provided that Landlord, at Landlord’s sole option, may
remove such rubbish containers from the Premises, at Tenant’s sole cost and
expense.

5.8.            No Other Services.

Landlord shall not be required to provide any services to support Tenant’s use
and occupancy of the Premises, except to the extent expressly set forth herein.

5.9.            Labor Harmony.

If (i) Tenant employs, or permits the employment of, any contractor, mechanic or
laborer in the Premises, whether in connection with any Alteration or otherwise,
(ii) such employment interferes or causes any conflict with other contractors,
mechanics or laborers engaged in the maintenance, repair, management or
operation of the Retail Unit or the Building, by Landlord, Tenant or others, or
of any adjacent property owned by Landlord or managed by Landlord’s managing
agent of the Condominium Unit, and (iii) Landlord gives Tenant notice thereof
(which notice may be given verbally to the person employed by Tenant with whom
Landlord’s representative ordinarily discusses matters relating to the
Premises), then Tenant shall cause all contractors, mechanics or laborers
causing such interference or conflict to leave the Building immediately and
shall take such other action as may be reasonably necessary to resolve such
conflict.

 

 30

 

--------------------------------------------------------------------------------

 

Article 6
ELECTRICITY

6.1.            Capacity.

Tenant, during the Term, shall use electricity in the Premises only in such
manner that complies with the requirements of the Utility Company. Tenant shall
not permit the demand for electricity in the Premises to exceed the electrical
capacity existing in the Premises on the Commencement Date (the “Base Electrical
Capacity”).

6.2.            Electricity for the Building.

Landlord shall arrange with the Utility Company to provide electricity for the
Building Systems and the common areas of the Building. Landlord shall not be
liable to Tenant for any failure or defect in the supply or character of
electricity furnished to the Building, except to the extent that such failure or
defect results from the negligence or willful misconduct of Landlord, its
agents, contractors or employees. Landlord shall not be required to make any
installations in the Premises to distribute electricity within the Premises.
Landlord shall not be required to maintain or repair during the Term any
installations that exist in the Premises on the Commencement Date that
distribute electricity within the Premises.

6.3.            Direct Metering.

Landlord shall have no obligation to provide electricity to the Premises. Tenant
shall obtain electric current for the Premises by contracting therefor directly
with the utility company that serves the Building. Tenant shall have the right
to use the electrical facilities that then exist in the Building to obtain such
direct electric service (without Landlord having any liability or obligation to
Tenant in connection therewith). Nothing contained in this Section 6.3 permits
Tenant to use electrical capacity in the Building that exceeds the Base
Electrical Capacity.

Article 7
INITIAL CONDITION OF THE PREMISES

7.1.            Condition of Premises.

Subject to Section 9.1 hereof, (a) Tenant shall accept possession of the
Premises in the condition that exists on the Commencement Date “as is,” and (b)
Landlord shall have no obligation to perform any work or make any installations
in order to prepare the Building or the Premises for Tenant’s occupancy. Except
as expressly set forth herein, Landlord has made no representations or promises
with respect to the Building, the Real Property or the Premises.

Article 8
ALTERATIONS

8.1.            General.

(A)             Except as otherwise provided in this Article 8, Tenant shall not
make any Alterations without Landlord’s prior consent.

31

 

--------------------------------------------------------------------------------

 

(B)              The term “Alterations” shall mean alterations, installations,
improvements, additions or other physical changes (other than decorations) in
each case in or to the Premises that are made by or on behalf of Tenant or any
other Person claiming by, through or under Tenant; provided, however, that
Alterations shall not include Landlord’s Work.

(C)              The term “Initial Alterations” shall mean the Alterations to
prepare the Premises for Tenant’s initial occupancy.

(D)             The term “Specialty Alterations” shall mean Alterations that (i)
perforate a floor slab in the Premises, (ii) require the reinforcement of a
floor slab in the Premises, (iii) consist of the installation of a raised
flooring system, (iv) consist of the installation of a vault or other similar
device or system that is intended to secure the Premises or a portion thereof in
a manner that exceeds the level of security that a reasonable Person uses for
ordinary retail space, or (v) involve material plumbing connections (such as
sinks, bathrooms and pantries).

(E)              The term “Substantial Completion” or words of similar import
shall mean that the applicable work has been substantially completed in
accordance with the applicable plans and specifications, if any, it being agreed
that such work shall be deemed substantially complete notwithstanding the fact
that minor or insubstantial details of construction or demolition, mechanical
adjustment or decorative items remain to be performed.

(F)               The term “Tenant’s Property” shall mean Tenant’s personal
property (other than attached fixtures), including, without limitation, Tenant’s
movable fixtures, movable partitions, telephone equipment, furniture,
furnishings and decorations.

8.2.            Basic Alterations and Minor Alterations.

(A)             Subject to the provisions of this Section 8.2, Landlord shall
not unreasonably withhold, condition or delay its consent to any proposed
Alteration, provided that such Alteration (i) does not affect or alter the
storefront of the Premises, including, without limitation, the windows and doors
comprising a component of such storefront and any canopy attached thereto (the
“Storefront”), (ii) is not located within five (5) feet of the interior line of
the Storefront, (iii) does not adversely affect any part of the Building other
than the Premises, (iv) does not require any alterations, installations,
improvements, additions or other physical changes to be performed in or made to
any portion of the Building other than the Premises, (v) does not affect the
proper functioning of any Building System, (vi) does not reduce the value or
utility of the Building, (vii) does not affect the structure of the Building,
(viii) does not impede Landlord’s access to Reserved Areas in any material
respect, (ix) does not violate or render invalid the certificate of occupancy
for the Building or any part thereof, (x) uses materials at or above the quality
of Building standard materials, (xi) complies with all applicable Requirements,
and (xii) conforms to the Retail Standard (any Alteration that satisfies the
requirements described in clauses (i) through (xii) above being referred to
herein as a “Basic Alteration”).

(B)              If Tenant is the Initial Tenant, Tenant shall not be required
to obtain Landlord’s prior consent to a particular Basic Alteration if the sum
of (i) the “hard” construction cost of such Basic Alteration, and (ii) the
“hard” construction cost of any other Basic Alterations performed during the
immediately preceding period of twelve (12) months without Landlord’s

32

--------------------------------------------------------------------------------

 

consent as contemplated by this Section 8.2, does not exceed the Minor
Alterations Threshold (any such Basic Alteration for which Landlord’s prior
approval is not required being referred to herein as a “Minor Alteration”). The
term “Minor Alterations Threshold” shall mean Fifty Thousand Dollars ($50,000).
Nothing contained in this Section 8.2(B) limits Tenant’s liability to Landlord
if (i) Tenant performs an Alteration without Landlord’s consent, and (ii) it is
determined ultimately that such Alteration does not constitute a Minor
Alteration.

8.3.            Approval Process.

(A)             Tenant shall not perform any Alteration unless Tenant first
gives to Landlord a notice thereof (an “Alterations Notice”) that (i) refers
specifically to this Section 8.3, (ii) includes six (6) copies of the plans and
specifications for the proposed Alteration (including, without limitation,
layout, architectural, mechanical and structural drawings, to the extent
applicable) in CADD format that contain sufficient detail for Landlord and
Landlord’s consultants to reasonably assess the proposed Alteration, (iii)
indicates whether Tenant considers the proposed Alterations to constitute a
Basic Alteration, (iv) indicates whether Tenant considers the proposed
Alteration to constitute a Minor Alteration and whether Tenant intends to
perform the proposed Alteration without Landlord’s consent as contemplated by
this Article 8, and (v) includes with such notice a bona fide estimate issued by
a reputable and independent construction company of the “hard” construction cost
of performing the proposed Alteration (if Tenant considers the proposed
Alteration to constitute a Minor Alteration and plans to perform such Alteration
without Landlord’s consent).

(B)              Landlord shall have the right to object to a proposed
Alteration only by giving notice thereof to Tenant, and setting forth in such
notice a statement in reasonable detail of the grounds for Landlord’s
objections.

(C)              In no event shall Landlord’s consent or approval be given or
deemed given (whether such consent is express or implied) with respect to any
Alteration that is otherwise not in conformity with the terms of this Lease or
Requirements (it being understood that the provisions of this Lease or
Requirements, as applicable, shall govern and supersede any such item(s)).
Landlord shall have the right to (a) disapprove any plans and specifications for
a particular Alteration in part, (b) reserve Landlord’s approval of items shown
on such plans and specifications pending Landlord’s review of other plans and
specifications, and (c) condition Landlord’s approval of such plans and
specifications upon Tenant’s making revisions to the plans and specifications or
supplying additional information.

(D)             Tenant acknowledges that (i) the review of plans or
specifications for an Alteration by or on behalf of Landlord, or (ii) the
preparation of plans or specifications for an Alteration by Landlord’s architect
or engineer (or any architect or engineer designated by Landlord), is solely for
Landlord’s benefit, and, accordingly, Landlord makes no representation or
warranty that such plans or specifications comply with any Requirements or are
otherwise adequate or correct.

           

33

 

--------------------------------------------------------------------------------

 

8.4.            Performance of Alterations.

(A)             Tenant, at Tenant’s expense, prior to the performance of any
Alteration, shall obtain all permits, approvals and certificates required by any
Governmental Authorities in connection therewith. Landlord shall have the right
to require Tenant to make all filings with Governmental Authorities to obtain
such permits, approvals and certificates using an expeditor designated
reasonably by Landlord (provided that the charges imposed by such expeditor are
commercially reasonable). Upon the request of Tenant, Landlord shall join in any
applications for any permits, approvals or certificates required to be obtained
by Tenant in connection with any permitted Alteration (provided that the
applicable Requirement requires Landlord to join in such application) and shall
otherwise cooperate with Tenant in connection therewith. Tenant shall reimburse
Landlord for any costs, including, without limitation, reasonable attorneys’
fees and disbursements, that Landlord incurs in so joining in such applications
and cooperating with Tenant, within thirty (30) days after the date that
Landlord gives to Tenant an invoice therefor from time to time.

(B)              Prior to performing any Alteration, Tenant shall also furnish
to Landlord duplicate original policies of, or, at Tenant’s option, certificates
of, (1) worker’s compensation insurance in amounts not less than the statutory
limits (covering all persons to be employed by Tenant, and Tenant’s contractors
and subcontractors, in connection with such Alteration), and (2) commercial
general liability insurance (including property damage and bodily injury
coverage), in each case in customary form, and in amounts that are not less than
Five Million Dollars ($5,000,000) with respect to general contractors and One
Million Dollars ($1,000,000) with respect to subcontractors, naming the Landlord
Parties as additional insureds.

(C)              Upon completion of each Alteration, Tenant, at Tenant’s
expense, shall (1) obtain certificates of final approval for each Alteration to
the extent required by any Governmental Authority, (2) furnish Landlord with
copies of such certificates, and (3) give to Landlord copies of the “as-built”
plans and specifications for such Alterations in CADD format (or, if the
applicable Alteration constitutes a Minor Alteration, appropriate record
drawings or shop drawings therefor).

(D)             All Alterations shall be made and performed substantially in
accordance with the plans and specifications therefor as approved by Landlord
(to the extent such approval of Landlord is required under this Article 8), all
Requirements and the Rules. All materials and equipment incorporated in the
Premises as a result of any Alterations shall be first-quality.

8.5.            Financial Integrity.

(A)              

(1)       Tenant shall not permit any materials or equipment that are
incorporated as fixtures into the Premises in connection with any Alterations to
be subject to any lien, encumbrance, chattel mortgage or title retention or
security agreement.

(2)               Tenant shall not make any Alteration at a cost for labor and
materials (as reasonably estimated by Landlord’s architect, engineer or
contractor) in excess of Fifty Thousand Dollars ($50,000), either individually
or in the aggregate with any other Alterations constructed

34

 

--------------------------------------------------------------------------------

 

in any particular period of twelve (12) consecutive months, prior to Tenant’s
delivering to Landlord a performance bond and a payment bond that covers
Tenant’s obligation to pay the applicable contractor and the applicable
contractor’s obligation to pay its subcontractors (in either case issued by a
surety company and in form reasonably satisfactory to Landlord), each in an
amount equal to one hundred percent (100%) of such estimated cost.

(3)       Tenant shall discharge any mechanic’s lien filed against the Real
Property for work claimed to have been done for, or for materials claimed to
have been furnished to, Tenant (or any Person claiming by, through or under
Tenant) within thirty (30) days after Tenant has received notice thereof, at
Tenant’s expense, by payment or filing the bond required by law. The provisions
of this Section 8.5(A)(3) shall survive the expiration or earlier termination of
this Lease.

(B)              Subject to the terms of this Section 8.5(B), within forty-five
(45) days after the Substantial Completion of any Alterations, Tenant shall
deliver to Landlord: (i) general releases and waivers of lien from all
contractors, subcontractors, materialmen, architects, engineers and other
Persons who may file a lien against the Real Property in connection with such
Alterations, (ii) a certificate from Tenant’s independent licensed architect
certifying that, in his or her opinion, the Alterations have been completed in
accordance with the final detailed plans and specifications for such Alterations
as approved by Landlord (to the extent Landlord’s approval was required under
this Article 8), and (iii) a certificate from Tenant’s independent licensed
architect or Tenant’s general contractor certifying that all contractors,
subcontractors, materialmen, architects, engineers and other Persons who may
file a lien against the Real Property in connection with the Alterations have
been paid in full. Tenant shall not be required to deliver to Landlord any
general release or waiver of lien if Tenant is disputing in good faith the
payment which would otherwise entitle Tenant to such release or waiver, provided
that (x) Tenant keeps Landlord advised in a timely fashion of the status of such
dispute and the basis therefor, and (y) Tenant delivers to Landlord the general
release or waiver of lien promptly after the date that the dispute is settled.
Nothing contained in this Section 8.5(B), however, shall relieve Tenant from
complying with the provisions of Section 8.5(A)(3) hereof.

8.6.            Effect on Building.

If (i) solely as a result of any Alterations, any alterations, installations,
improvements, additions or other physical changes are required to be performed
in or made to any portion of the Building other than the Premises in order to
comply with any Requirements (any such alterations, installations, improvements,
additions or changes being referred to herein as a “Building Change”), and (ii)
such Building Change would not otherwise have had to be performed or made
pursuant to applicable Requirements at such time, then (x) Landlord may perform
such Building Change, and (y) Tenant shall pay to Landlord the reasonable costs
thereof, as additional rent, within thirty (30) days after Landlord gives to
Tenant an invoice therefor.

8.7.            Time for Performance of Alterations.

If the performance of any Alteration by or on behalf of Tenant, or any other
Person claiming by, through or under Tenant, interferes with or interrupts the
maintenance, repair,

 35

 

--------------------------------------------------------------------------------

 

management or operation of the Building in any material respect or interferes
with or interrupts the use and occupancy of the Building by other tenants (if
any) in the Building in any material respect, then Landlord shall have the right
to require Tenant to perform such Alteration at other times that Landlord
reasonably designates from time to time.

8.8.            Removal of Alterations and Tenant’s Property.

(A)             On or prior to the Expiration Date, Tenant, at Tenant’s expense,
shall remove Tenant’s Property from the Premises, and, at Tenant’s option,
Tenant also may remove, at Tenant’s expense, all Alterations made by or on
behalf of Tenant or any other Person claiming by, through or under Tenant;
provided, however, in any case, that Tenant shall repair and restore in a good
and workerlike manner to good condition any damage to the Premises or the
Building caused by such removal. Landlord, upon notice to Tenant given at least
thirty (30) days prior to the Expiration Date, may require Tenant to remove any
Specialty Alterations from the Premises, and to repair and restore in a good and
workerlike manner to good condition any damage to the Premises or the Building
caused by such removal; provided, however, that Landlord shall not have the
right to require Tenant to remove any Qualified Alterations. If (x) the
Expiration Date is not the Fixed Expiration Date, and (y) Landlord gives a
notice to Tenant on or prior to the thirtieth (30th) day after the Expiration
Date to the effect that Landlord does not wish to retain a particular Specialty
Alteration, then Tenant shall pay to Landlord the reasonable costs incurred by
Landlord in so removing such Specialty Alterations, and in so repairing and
restoring any such damage to the Building or the Premises, within thirty (30)
days after Landlord submits to Tenant an invoice therefor; provided, however,
that Landlord shall not have the right to give any such notice to Tenant in
respect of Qualified Alterations. Any Alterations that remain in the Premises
after the Expiration Date shall be deemed to be the property of Landlord (with
the understanding, however, that Tenant shall remain liable to Landlord for any
default of Tenant in respect of Tenant’s obligations under this Section 8.8(A)).

(1)             Prior to Tenant’s performance of a Specialty Alteration, Tenant
shall have the right to request (simultaneously with Tenant’s submission to
Landlord of plans and specifications for such Specialty Alteration) that
Landlord designate that Tenant shall not be required to remove (or pay the cost
to remove) such Specialty Alteration upon the expiration or earlier termination
of the Term. Landlord shall have the right to approve or deny any such request
in Landlord’s sole discretion. If (i) Tenant makes any such request, and (ii)
Landlord either approves such request, or fails to respond to Tenant’s aforesaid
request on or prior to the fifteenth (15th) Business Day after the date that
Tenant gives such request to Landlord, then Landlord shall not have the right to
require Tenant to remove (or pay the cost to remove) such Specialty Alteration
upon the expiration or earlier termination of the Term (any such Specialty
Alteration which Tenant shall not be required to remove (or to pay the cost of
removal) as aforesaid being referred to herein as a “Qualified Alteration”).

8.9.            Contractors and Supervision.

All Alterations that require Landlord’s consent shall be performed only under
the supervision of an independent licensed architect approved by Landlord, which
approval Landlord shall not unreasonably withhold, condition or delay. Subject
to the provisions of this Section 8.9, Tenant shall perform all Alterations
using, at Tenant’s option, either (i) contractors,

36

 

--------------------------------------------------------------------------------

 

subcontractors and mechanics that in each case are designated from time to time
by Landlord, or (ii) contractors, subcontractors or mechanics that in each case
are designated by Tenant and approved by Landlord, which approval Landlord shall
not unreasonably withhold, condition or delay. If an Alteration affects a
Building System, then (i) Tenant shall engage to perform such Alteration (or the
applicable portion thereof that affects such Building System) a contractor from
a list of at least three (3) contractors whose charges are commercially
reasonable for the applicable trade as designated reasonably by Landlord, and
(ii) Tenant shall engage an engineer whose charges are commercially reasonable
designated reasonably by Landlord to design such Alteration (or the applicable
portion thereof that affects such Building System). Landlord shall give Tenant
notice of such contractors and such engineer designated by Landlord promptly
after Tenant’s request therefor from time to time. In connection with the
performance of the Initial Alterations, Landlord hereby approves the
contractors, subcontractors and mechanics listed on Exhibit 8.9 attached hereto
and made a part hereof.

8.10.        Landlord’s Expenses.

Tenant shall pay to Landlord, from time to time, as additional rent, the
reasonable out-of-pocket costs incurred by Landlord in connection with an
Alteration (including, without limitation, costs that Landlord incurs in
reviewing the plans and specifications for such Alterations, and inspecting the
progress of such Alterations), within thirty (30) days after Landlord gives
Tenant an invoice therefor.

8.11.        Fire System.

Tenant, at Tenant’s sole cost and expense, as part of the Initial Alterations,
shall install a fire protection and fire alarm system which complies with
applicable Requirements within the Premises and provides for the ability to link
such system to the system operated with respect to the rest of the Building
(such that the status of Tenant’s fire protection and fire alarm system can be
monitored from a central monitoring station for the Building). Landlord shall
provide a connection to Landlord’s Class E central fire system. Tenant shall
reimburse Landlord for the actual out-of-pocket costs that Landlord incurs in
connection with providing such connection.

8.12.        Changes to Storefront.

Tenant shall not have the right to make any changes to or penetrations in the
Storefront without obtaining Landlord’s prior consent, which consent may be
withheld in Landlord’s sole discretion; it being agreed that window display
changes and changes to signage, including Tenant’s Sign, made in conformance
with the provisions of this Lease shall not be deemed to be changes to the
Storefront for purposes of this Section 8.12. Tenant shall not have any right to
install security gates on the interior or exterior of the Storefront.

8.13.        Initial Alterations.

Tenant shall complete the Initial Alterations on or before the ninetieth (90th)
day following the Commencement Date. The Initial Alterations shall include a
complete renovation and remodeling of the interior of the Premises. Within
ninety (90) days after the date hereof, Tenant shall deliver to Landlord
detailed plans and specifications for the Initial Alterations (which shall
include cooling and heating load calculations, electrical panel-board schedules
and

37

­

--------------------------------------------------------------------------------

 

loads and such other details as may be required by Landlord’s engineer) prepared
by Tenant’s licensed architect, detailing the Initial Alterations. Tenant shall
commence such renovations within ten (10) days after Landlord has approved
Tenant’s plans and specifications and has turned over possession of the
Premises. All such work shall be promptly commenced and thereafter continued
with due diligence to the end that it shall be fully completed and the Premises
opened for business in accordance with the provisions hereof not later than the
Rent Commencement Date. Tenant shall perform no work in the Premises until such
plans and specifications have been approved in writing by Landlord.

Article 9
REPAIRS

9.1.            Landlord’s Repairs.

Subject to the terms of this Article 9, Landlord shall maintain and repair as
necessary (i) the Tenant Use Areas and Retail Common Areas, and (ii) the
foundation, floor slabs, roof, exterior walls and other structural elements of
the Building (excluding Storefront glass and doors) and other structural
elements of the Premises and to the portions of the Building Systems that
provide service to the Premises or otherwise cause such operation, maintenance
and the making of such repairs and replacements to occur, in each case in
conformity with the standards that are customary for first-class buildings in
the vicinity of the Building. Nothing contained in this Section 9.1 shall
require Landlord to maintain or repair the systems within the Premises that
distribute within the Premises electricity or water.

9.2.            Tenant’s Repairs.

(A)             Subject to the terms of this Article 9, Tenant, at Tenant’s
expense, shall take good care of the Premises (including, without limitation,
(i) the fixtures and equipment that are installed in the Premises on the
Commencement Date, (ii) the Alterations, (iii) the systems within the Premises
that distribute within the Premises electricity or water, and (iv) the windows
for the Premises). Tenant’s obligations under this Section 9.2(A) shall extend
to the Storefront for the Premises (including, without limitation, the
Storefront glass and doors). Tenant shall make all repairs to the Premises as
and when needed to preserve the Premises in good condition, except for
reasonable wear and tear, obsolescence and damage for which Tenant is not
responsible pursuant to the provisions of Article 16 hereof. All repairs made by
Tenant as contemplated by this Section 9.2(A) shall be in conformity with the
standards that are customary for first-class buildings in the vicinity of the
Building. Tenant shall perform such repairs in accordance with the terms of
Article 8 hereof.

(B)              Subject to the terms of this Section 9.2(B), if (a) Landlord
gives Tenant a notice that Tenant has failed to perform a repair that this
Section 9.2 obligates Tenant to perform, and (b) Tenant fails to proceed with
reasonable diligence to make such repair within twenty (20) days after the date
that Landlord gives such notice to Tenant (or such shorter period that Landlord
designates in such notice to the extent reasonably required under the
circumstances to alleviate an imminent threat to persons or property) or such
longer period as may be reasonably required (provided that Tenant diligently
commences such repair and prosecutes such repair to completion), then (i)
Landlord may make such repair, and (ii) Tenant shall pay to Landlord, as

38

­

--------------------------------------------------------------------------------

 

additional rent, the reasonable expenses thereof, with interest thereon at the
Applicable Rate calculated from the date that Landlord incurs such expenses,
within thirty (30) days after Landlord gives Tenant an invoice therefor. Nothing
contained in this Section 9.2(B) limits the remedies that are available to
Landlord after the occurrence of an Event of Default.

9.3.            Certain Limitations.

(A)             Tenant, at Tenant’s expense, shall repair in accordance with the
terms set forth in Section 9.2 hereof all damage to the Premises, or to any
other part of the Building or the Building Systems, in each case to the extent
resulting from the carelessness, neglect or improper conduct of, or Alterations
made by, Tenant or any other Person claiming by, through or under Tenant;
provided, however, that Landlord shall have the right to perform any such repair
to the extent that such repair affects the structure of the Building or such
repair affects any Building System, in which case Tenant shall pay to Landlord
an amount equal to the costs that Landlord reasonably incurs in performing such
repair, on or prior to the thirtieth (30th) day after the date that Landlord
gives to Tenant an invoice therefor. Nothing contained in this Section 9.3(A)
limits the provisions of Section 15.3 hereof.

(B)              Landlord shall repair all damage to the Premises that results
from Landlord’s carelessness, neglect or improper conduct. Nothing contained in
this Section 9.3(B) limits the provisions of Section 15.3 hereof.

9.4.            Overtime.

Subject to the provisions of this Section 9.4, Landlord shall have no obligation
to employ contractors or labor at overtime or premium pay rates in connection
with (x) Landlord’s making repairs as contemplated by this Article 9, or (y)
Landlord’s performing the work for which Landlord requires a Work Access. If the
condition that Landlord is required to repair, or the work for which Landlord
requires a Work Access, (i) denies Tenant from having reasonable access to the
Premises, (ii) threatens the health or safety of any occupant of the Premises,
or (iii) materially interferes with Tenant’s ability to conduct its business in
the Premises during Tenant’s ordinary business hours, then Landlord shall employ
contractors or labor at overtime or premium pay rates to the extent reasonably
necessary. Landlord, at Tenant’s request, shall also perform (a) any other
repair that this Article 9 requires Landlord to perform, or (b) any other work
for which Landlord requires a Work Access, using contractors or labor at
overtime or premium pay rates, in which case Tenant shall pay to Landlord, as
additional rent, an amount equal to the reasonable costs that Landlord incurs in
performing such repair or such work (using contractors or labor at overtime or
premium pay rates), within thirty (30) days after the date that Landlord gives
to Tenant an invoice therefor.

Article 10
ACCESS; LANDLORD’S CHANGES

10.1.        Access.

Subject to the terms of this Section 10.1, Landlord and Landlord’s agents,
representatives, contractors and employees, the Condominium Board, the
Condominium Board’s agents, representatives, contractors and employees and the
utility companies servicing the Building may

39

 

--------------------------------------------------------------------------------

 

enter the Premises at reasonable times upon reasonable prior notice to Tenant
(which notice may be given verbally to the person employed by Tenant with whom
Landlord’s representative ordinarily discusses matters relating to the Premises)
to (i) examine the Premises, (ii) show the Premises to prospective tenants
during the last twelve (12) months of the Term, (iii) show the Premises to
prospective purchasers or master lessees of Landlord’s interest in the Real
Property, (iv) show the Premises to Mortgagees or Lessors (or prospective
Mortgagees or Lessors), (v) gain access to Reserved Areas, or (vi) make repairs,
alterations, improvements, additions or restorations that (I) Landlord is
required to make pursuant to the terms of this Lease, or (II) are reasonably
necessary in connection with the maintenance, repair, management or operation of
the Real Property (any such party requiring such access being referred to herein
as an “Access Party”; any Access Party’s entry upon the Premises to perform such
repairs, alterations, improvements, additions or restorations being referred to
herein as a “Work Access”). An Access Party shall not be required to give Tenant
advance notice of the entry by such Access Party into the Premises as
contemplated by this Section 10.1 to the extent necessary by reason of the
occurrence of an emergency, but Landlord shall endeavor in good faith to do so.
An Access Party, in connection with a Work Access, shall have the right to bring
into the Premises, and store in the Premises in a reasonable manner for the
duration of the Work Access, the materials and tools that such Access Party
reasonably requires to perform the applicable repair, alteration, improvement,
addition or restoration. An Access Party shall have no liability to Tenant for
any loss sustained by Tenant by reason of such Access Party’s entry upon the
Premises; provided, however, that subject to Section 15.3 hereof, Landlord shall
remain liable to Tenant for personal injury or property damage that derives from
Landlord’s negligence or wilful misconduct in connection with any such entry
upon the Premises.

10.2.        Landlord’s Obligation to Minimize Interference.

Subject to Section 9.4 hereof, Landlord shall use commercially reasonable
efforts to minimize interference with Tenant’s use of the Premises in connection
with any Work Access.

10.3.        Reserved Areas.

The Premises shall not include (i) the demising walls of the Premises (except
for the interior face thereof), (ii) the walls of the Premises that constitute
the curtain wall for the Building (except for the interior face thereof), (iii)
balconies, terraces and roofs that are adjacent to the Premises, and (iv) space
that is used for Building Systems or other purposes associated with the
operation, repair, management or maintenance of the Real Property, including,
without limitation, shafts, stacks, stairways, chutes, pipes, conduits, ducts,
fan rooms, mechanical rooms, plumbing facilities, and service closets (the areas
described in clauses (iii) and (iv) above being collectively referred to herein
as the “Reserved Areas”).

10.4.        Ducts, Pipes and Conduits.

Landlord shall have the right to install, use and maintain ducts, pipes and
conduits in and through the Premises, provided that (a) such ducts, pipes and
conduits are installed in, on or adjacent to existing partitioning columns or
ceilings and are enclosed by Landlord, (b) such ducts, pipes and conduits do not
reduce the usable area of the Premises by more than a de minimis amount, and (c)
Landlord installs such ducts, pipes and conduits in a manner that

40

 

--------------------------------------------------------------------------------

 

minimizes, to the extent reasonably practicable, any adverse effect on an
Alteration theretofore performed in the Premises or on Tenant’s use of the
Premises in accordance with this Lease. Landlord shall repair any damage to the
Premises caused by Landlord in the exercise of its rights under this
Section 10.4.

10.5.        Keys.

Tenant shall provide Landlord, from time to time, with the keys to the Premises
(or with the appropriate means to access the Premises using Tenant’s electronic
security systems).

10.6.        Landlord’s Changes.

(A)             Landlord, from time to time, shall have the right to change the
arrangement or location of the public portions of the Building, including,
without limitation, entrances, passageways, doors, corridors, stairs and
toilets, provided any such change does not (a) unreasonably reduce or
unreasonably interfere with Tenant’s access to the Building or the Premises, or
(b) reduce the floor area of the Premises (except to a de minimis extent).

(B)              Landlord, from time to time, shall have the right to change the
name, number or designation by which the Building is commonly known.

(C)               

(1)             Landlord shall have the right, from time to time, to close,
obstruct or darken the windows of the Premises temporarily to the extent
required to comply with a Requirement (whether such Requirement is independently
applicable to the Building or made applicable as a result of Landlord’s
performance of repairs, maintenance, alterations, or improvements to the
Building). Landlord shall have the right to close, obstruct or darken the
windows of the Premises permanently to the extent required to comply with a
Requirement that does not become applicable to the Building by virtue of
Landlord’s action or performance of elective construction in the Building.

(2)              If, at any time, the windows of the Premises are closed,
obstructed or darkened temporarily, as aforesaid, then Landlord shall perform
(or cause to be performed) such repairs, maintenance, alterations or
improvements, or shall comply with the applicable Requirement (or cause such
Requirement to be complied with), in each case with reasonable diligence, and
otherwise take such action as may be reasonably necessary to minimize the period
during which such windows are temporarily closed, obstructed or darkened (it
being understood, however, that subject to Section 9.4 hereof, Landlord shall
not be required to perform such repairs, maintenance, alterations or
improvements using contractors or labor at overtime or premium pay rates).
Notwithstanding anything to the contrary contained herein, if Landlord closes,
darkens or obstructs the windows of the Premises to comply with a Requirement in
accordance with this Section 10.5(C), then (i) Landlord shall use commercially
reasonable efforts to select a method for complying with such Requirement that
does not arbitrarily affect the Premises, and (ii) Tenant shall have the right,
in compliance with all applicable Requirements, to (a) place any signage on the
exterior of the windows which have been closed, obstructed or darkened, which
signage shall be substantially similar to the same permitted under this Lease
immediately prior to the closing, obstruction or darkening of the windows in the
Premises, and

41

 

--------------------------------------------------------------------------------

 

(b) subject to Section 4.4 hereof, place any signage on such portion of any
scaffolding or sidewalk bridge (located in front of the windows of the Premises)
that is coextensive with the Storefront, it being understood and agreed that any
sign placed on such windows or such scaffolding or sidewalk bridge in accordance
with this Section 10.6(C) shall be subject to Landlord’s approval, which shall
not be unreasonably withheld or delayed.

Article 11
UNAVOIDABLE DELAYS AND INTERRUPTION OF SERVICE

11.1.        Unavoidable Delays.

Subject to Article 16 hereof and Article 17 hereof, this Lease and the
obligation of Tenant to pay Rental hereunder and to perform all of Tenant’s
other covenants shall not be affected, impaired or excused, and Landlord shall
not have any liability to Tenant, to the extent that Landlord is unable to
perform Landlord’s covenants under this Lease by reason of any cause beyond
Landlord’s reasonable control, including, without limitation, strikes, labor
troubles, acts of terrorism or the occurrence of an act of God (“Unavoidable
Delays”).

11.2.        Interruption of Services.

Landlord, from time to time, shall have the right to temporarily interrupt or
curtail the level of service provided by the Building Systems to the extent
reasonably necessary to accommodate the performance of repairs, additions,
alterations, replacements or improvements that in Landlord’s reasonable judgment
are desirable or necessary. Landlord shall use Landlord’s diligent efforts to
schedule any such interruption or curtailment at times that minimizes, to the
extent reasonably practicable, the effect of such interruption or curtailment on
Tenant’s ability to conduct its business in the Premises during Tenant’s
ordinary business hours. If such interruption or curtailment of the level of
service provided by the Building Systems (i) denies Tenant from having
reasonable access to the Premises, (ii) threatens the health or safety of any
occupant of the Premises, or (iii) unreasonably interferes with Tenant’s ability
to conduct its business in the Premises during Tenant’s ordinary business hours,
then Landlord shall employ contractors or labor at overtime or premium pay rates
to the extent reasonably necessary.

11.3.        Rent Credit.

Subject to the terms of this Section 11.3, if (1) (i) Landlord fails to perform
Landlord’s covenants hereunder, (ii) Landlord interrupts or curtails the level
of service provided by Building Systems as contemplated by Section 11.2 hereof,
or (iii) Landlord performs repairs, alterations, improvements, additions or
restorations in the Building, and (2) Tenant, by reason of the event described
in clause (1) above, is unable to, and actually does not, for at least three (3)
consecutive Business Days operate Tenant’s business in the Premises (or a
portion thereof) during Tenant’s ordinary business hours, in substantially the
same manner that Tenant conducted its business prior to such event, then Tenant
shall be entitled to a credit to apply against the Fixed Rent and Escalation
Rent thereafter coming due hereunder in an amount equal to the product obtained
by multiplying (I) the quotient obtained by dividing (a) the sum of the Fixed
Rent and Escalation Rent for the Premises, by (b) three hundred sixty-five (365)
(or three hundred sixty-six (366) in a leap year), by (c) the number of square
feet of usable area in the Premises, by (II)

42

­

--------------------------------------------------------------------------------

 

the number of square feet of usable area of the portion of the Premises which is
unusable, as aforesaid, by (III) the number of days in the period commencing on
(and including) the date immediately following the date that is three (3)
Business Days and ending on the date that such portion of the Premises becomes
usable. If (x) Tenant is entitled to a credit against Rental pursuant to this
Section 11.3, and (y) the Expiration Date occurs prior to the date that such
credit is exhausted, then Landlord shall pay to Tenant the unused portion of
such credit on or prior to the thirtieth (30th) day after the Expiration Date
(and Landlord’s obligation to make such payment shall survive the Expiration
Date). This Section 11.3 shall not apply in respect of the occurrence of a fire
or other casualty or in respect of a condemnation.

Article 12
REQUIREMENTS

12.1.        Tenant’s Obligation to Comply with Requirements.

(A)             Subject to the terms of this Article 12, Tenant, at Tenant’s
expense, shall comply with all Requirements applicable to the Premises,
including, without limitation, (i) Requirements that are applicable to the
performance of Alterations, (ii) Requirements that become applicable by reason
of Alterations having been performed, and (iii) Requirements that are applicable
by reason of the specific nature or type of business operated by Tenant (or any
other Person claiming by, through or under Tenant) in the Premises, provided
that Landlord shall perform, at Tenant’s expense, any Alteration to the
structure of the Building or to the Building Systems in either case to comply
with any Requirement.

(B)              The term “Requirements” shall mean, collectively, (i) all
present and future laws, rules, orders, ordinances, regulations, statutes,
requirements, codes and executive orders of all Governmental Authorities, and of
any applicable fire rating bureau, or other body exercising similar functions,
and (ii) all requirements that the issuer of Landlord’s Property Policy imposes
(including, without limitation, any such requirements that such issuer requires
as the basis for the premium that such issuer charges Landlord for Landlord’s
Property Policy).

(C)              The term “Governmental Authority” shall mean the United States
of America, the State of New York, The City of New York, any political
subdivision thereof and any agency, department, commission, board, bureau or
instrumentality of any of the foregoing, or any quasi-governmental authority,
now existing or hereafter created, having jurisdiction over the Real Property or
any portion thereof.

12.2.        Tenant’s Right to Contest Requirements.

Subject to the provisions of this Section 12.2, Tenant, at Tenant’s expense, may
contest by appropriate proceedings prosecuted diligently and in good faith the
legality or applicability of any Requirement affecting the Premises (any such
proceedings instituted by Tenant being referred to herein as a “Compliance
Challenge”). Tenant shall not have the right to institute a Compliance Challenge
unless Tenant first gives Landlord notice thereof. Tenant shall not institute
any Compliance Challenge if, by reason of Tenant’s delaying its compliance with
the applicable Requirement or by reason of the Compliance Challenge, (a)
Landlord (or any Landlord Party) may be imprisoned, (b) the Real Property or any
part thereof may be condemned

43

 

--------------------------------------------------------------------------------

 

 

or vacated, or (c) the certificate of occupancy for the Premises or the Building
may be suspended. If Landlord or any Landlord Party may be subject to any civil
fines or penalties or other criminal penalties or if Landlord or any Landlord
Party may be liable to any third party in either case by reason of Tenant’s
delaying its compliance with the applicable Requirement or by reason of the
Compliance Challenge, then Tenant shall furnish to Landlord a bond of a surety
company reasonably satisfactory to Landlord, or a letter of credit issued for
the account of Landlord by a bank reasonably satisfactory to Landlord, in either
case, in form and substance reasonably satisfactory to Landlord, and in an
amount equal to one hundred ten percent (110%) of the sum of (A) the cost of
such compliance, (B) the criminal or civil penalties or fines that may accrue by
reason of such non-compliance (as reasonably estimated by Landlord), and (C) the
amount of such liability to third parties (as reasonably estimated by Landlord).
If Tenant initiates any Compliance Challenge, then Tenant shall keep Landlord
advised regularly as to the status of such proceedings.

12.3.        Certificate of Occupancy.

Tenant shall use the Premises only in a manner that conforms with the
certificate of occupancy that is in effect at such time for the Premises and in
any event only for the uses permitted herein. After the Initial Alterations are
completed, Tenant shall obtain any certificate, approval, signoff or other
authorization with respect to the Premises (including without limitation an
occupancy certificate or certificate of occupancy with respect to the Premises)
which may be required with respect to the Premises specifically from the New
York City Department of Buildings to permit occupancy of the Premises for the
conduct of Tenant’s business. Tenant shall not have the right to amend the
certificate of occupancy for the Premises or the Building without Landlord’s
prior approval.

Article 13
QUIET ENJOYMENT

13.1.        Quiet Enjoyment.

Landlord covenants that Tenant may peaceably and quietly enjoy the Premises for
the Term, subject, nevertheless, to the terms and conditions of this Lease.

Article 14
SUBORDINATION

14.1.        Subordination.

(A)             This Lease shall be subordinate to the lien of any Mortgage, any
Superior Lease or any Condominium Declaration and to the interests of any
Mortgagee, Lessor or Condominium Board irrespective of the time of recording of
such Mortgage, Superior Lease or Condominium Declaration. However, from time to
time, Landlord may elect that this Lease be superior to the lien of such
Mortgage, and may exercise such election by giving notice thereof to Tenant,
which notice must be consented to by such Mortgagee. The exercise of any of the
elections provided in this Section shall not exhaust Landlord’s right to elect
differently thereafter, from time to time. This clause shall be self-operative
and no further instrument shall be required, provided, however, upon Landlord’s
request, from time to time, Tenant shall: (a) confirm in

44­

 

 

 

 

--------------------------------------------------------------------------------

 

 

writing and in recordable form that this Lease is so subordinate or so superior
(as Landlord may elect) to the lien of any Mortgage, Superior Lease or
Condominium Declaration and/or (b) execute a Nondisturbance Agreement making
this Lease so subordinate or so superior (as Landlord may elect) to the lien of
any Mortgage, Superior Lease or Condominium Declaration, in such form as may be
required by an applicable Mortgagee, Lessor or Condominium Board.
Notwithstanding the foregoing, this Lease shall only be subject and subordinate
to the priority of any future Superior Lease or to the lien of any future
Mortgage if the applicable Lessor or Mortgagee, as the case may be, executes and
delivers to Tenant a Nondisturbance Agreement. Tenant shall execute and deliver
promptly a Nondisturbance Agreement that a Mortgagee proposes to use and that
conforms to the terms of this Article 14and is otherwise mutually acceptable to
Tenant and the Mortgagee in their commercially reasonable judgment. The term
“Condominium Board” shall mean, collectively or individually, the board or
boards that governs the business and affairs of the condominium that is created
by the Condominium Declaration.

(B)              The term “Condominium Declaration” shall mean a condominium
declaration (including the by-laws made a part thereof) submitting the ownership
of the fee interest in the Premises to a condominium form of ownership in
accordance with Article 9-B of the Real Property Law of the State of New York,
dated December 4, 2003, and recorded in the New York County Office of the
Register of The City of New York, on February 3, 2004, in CRFN No. 2004000064392
(as such declaration may be amended from time to time).

(C)              The term “Lessor” shall mean a lessor under a Superior Lease.

(D)             The term “Mortgage” shall mean any trust indenture or mortgage
which now or hereafter encumbers the Real Property, the Building or any Superior
Lease and the leasehold interest created thereby.

(E)              The term “Mortgagee” shall mean any trustee, mortgagee or
holder of a Mortgage.

(F)               The term “Nondisturbance Agreement” shall mean, subject to
Section 14.2 hereof, an agreement, in recordable form, between a Lessor, a
Mortgagee, or the Condominium Board, as the case may be, and Tenant, to the
effect that (i) if there is a foreclosure of the Mortgage, then Mortgagee shall
not name Tenant in any foreclosure action and the successor to Landlord by
virtue of the foreclosure will not evict Tenant, disturb Tenant’s possession
under this Lease, or terminate or disturb Tenant’s leasehold estate or rights
hereunder, and will recognize Tenant as the direct tenant of such successor to
Landlord on the same terms and conditions as are contained in this Lease, (ii)
if the Superior Lease is terminated, then the Lessor will not evict Tenant,
disturb Tenant’s possession under the Lease, or terminate or disturb Tenant’s
leasehold estate or rights hereunder, and will recognize Tenant as the direct
tenant of such Lessor on the same terms and conditions as are contained in this
Lease, or (iii) if there is a sale of the Premises by virtue of the Condominium
Board exercising a power of sale that is granted under the Condominium
Declaration, then the successor to Landlord by virtue of such sale will not
evict Tenant, disturb Tenant’s possession under the Lease, or terminate or
disturb Tenant’s leasehold estate or rights hereunder, and will recognize Tenant
as the direct tenant of such successor on the same terms and conditions as are
contained in this Lease.

 

 

45

--------------------------------------------------------------------------------

 

(G)             The term “Superior Lease” shall mean any lease pursuant to which
Landlord now or hereafter obtains or retains its interest in the Real Property
or the Building (to the extent that Landlord’s interest in the Real Property is
a leasehold estate).

14.2.        Terms of Nondisturbance Agreements.

Subject to the terms of this Section 14.2, any Nondisturbance Agreement may
provide that the Person that succeeds to Landlord by reason of the foreclosure
of a Mortgage, the termination of a Superior Lease, or the exercise of the power
of sale as set forth in the Condominium Declaration, as the case may be (any
such Person being referred to herein as the “Successor”) shall not be:

(A)             liable for any act or omission of any prior landlord (including,
without limitation, the then defaulting landlord), except to the extent that (i)
such act or omission continues after the date that the Successor succeeds to
Landlord’s interest in the Real Property, and (ii) such act or omission of such
prior landlord is of a nature that the Successor can cure by performing a
service or making a repair, or

(B)              subject to any defenses or offsets that Tenant has against any
prior landlord (including, without limitation, the then defaulting landlord)
(except for any offsets that are expressly permitted under this Lease), or

(C)              bound by any payment of Rental that Tenant has made to any
prior landlord (including, without limitation, the then defaulting landlord)
more than thirty (30) days in advance of the date that such payment is due
(except for any CAM Expense Payments and/or Tax Payments required by this
Lease), or

(D)             bound by any obligation to make any payment to or on behalf of
Tenant to the extent that such obligation accrues prior to the date that the
Successor succeeds to Landlord’s interest in the Real Property, or

(E)              bound by any obligation to perform any work or to make
improvements to the Premises, except for:

(1)             repairs and maintenance that Landlord is required to perform
pursuant to the provisions of this Lease and that first become necessary, or the
need for which continues, after the date that the Successor succeeds to
Landlord’s interest in the Real Property,

(2)              repairs to the Premises that become necessary by reason of a
fire or other casualty that occurs from and after the date that the Successor
succeeds to Landlord’s interest in the Real Property and that Landlord is
required to perform pursuant to Article 16 hereof,

(3)              repairs to the Premises that become necessary by reason of a
fire or other casualty that occurs prior to the date that the Successor succeeds
to Landlord’s interest in the Real Property and that Landlord is required to
perform pursuant to Article 16 hereof, to the extent that the Successor can make
such repairs from the net proceeds of Landlord’s Property Policy that are
actually made available to the Successor (with the understanding, however, that
if (i) a fire or other casualty occurs prior to the date that the Successor
succeeds to Landlord’s

46

­

--------------------------------------------------------------------------------

 

interest in the Real Property, (ii) Landlord is required to repair the resulting
damage to the Building pursuant to Article 16 hereof, and (iii) the Successor
cannot make such repairs from such net proceeds, then Tenant shall have the
right to terminate this Lease by giving notice thereof to the Successor within
fifteen (15) days after the date that the Successor gives Tenant notice that the
Successor does not intend to perform such repairs),

(4)             repairs to the Premises as a result of a partial condemnation
that occurs from and after the date that the Successor succeeds to Landlord’s
interest in the Real Property and that Landlord is required to perform pursuant
to Article 17 hereof, and

(5)              repairs to the Premises as a result of a partial condemnation
that occurs prior to the date that the Successor succeeds to Landlord’s interest
in the Real Property and that Landlord is required to perform pursuant to
Article 17 hereof, to the extent that the Successor can make such repairs from
the net proceeds of any condemnation award made available to the Successor (with
the understanding, however, that if (i) a partial condemnation occurs prior to
the date that the Successor succeeds to Landlord’s interest in the Real
Property, (ii) Landlord is required to make repairs to the Building pursuant to
Article 17 hereof by reason of such partial condemnation, and (iii) the
Successor cannot make such repairs from such net proceeds, then Tenant shall
have the right to terminate this Lease by giving notice thereof to the Successor
within fifteen (15) days after the date that the Successor gives Tenant notice
that the Successor does not intend to perform such repairs), or

(F)               bound by any amendment or modification of this Lease made
without the consent of the Mortgagee or the Lessor, as the case may be (the
aforesaid items in clause (A) through (F) above for which a Successor is not
liable being referred to herein as the “Successor Limitation Items”).

Any Nondisturbance Agreement may also contain other terms and conditions that
are reasonably required by the Mortgagee, the Lessor, or the Condominium Board,
as the case may be that do not (i) increase Tenant’s monetary obligations under
this Lease, (ii) adversely affect or diminish, to more than a de minimis extent,
Tenant’s rights under this Lease, or (iii) increase, to more than a de minimis
extent, Tenant’s other obligations under this Lease (other than the requirement
that Tenant give notice to such Mortgagee, Lessor or Condominium Board and
provide an additional cure period to such entity). A Successor that is an
Affiliate of the Person that constitutes Landlord shall not have the right to
include in a Nondisturbance Agreement the Successor Limitation Items, or such
other terms and conditions.

14.3.        Attornment.

(A)             If, at any time prior to the Expiration Date, a Successor
succeeds to Landlord’s interest in the Real Property, then Tenant, at the
Successor’s election, shall attorn, from time to time, to the Successor, in
either case upon the then executory terms of this Lease, for the remainder of
the Term. If the Successor is not an Affiliate of the Person that constituted
Landlord immediately prior to such Successor’s obtaining an interest in the
Premises, then the Successor shall not have liability for the Successor
Limitation Items from and after the date that Tenant so attorns to the
Successor.

 

 47

­

--------------------------------------------------------------------------------

 

(B)              The provisions of this Section 14.3 shall apply notwithstanding
that, as a matter of law, this Lease terminates upon the termination of any
Superior Lease or the foreclosure of a Mortgage. No further instrument shall be
required to give effect to Tenant’s attorning to a Successor as contemplated by
this Section 14.3. Tenant, however, upon demand of any Successor, shall execute,
from time to time, instruments, in a recordable form and in a form reasonably
satisfactory to the Successor, confirming the foregoing provisions of this
Section 14.3. A Mortgagee, a Lessor, or the Condominium Board shall have the
right to include such provisions in a Nondisturbance Agreement.

14.4.        Amendments to this Lease.

Tenant shall execute and deliver, from time to time, amendments to this Lease,
promptly after Landlord’s request, to the extent that (x) such amendments are
reasonably required by a Mortgagee or a Lessor that in either case is not an
Affiliate of Landlord (or are reasonably required by a proposed Mortgagee or
proposed Lessor that in either case is not an Affiliate of Landlord and that
consummates the applicable Mortgage or the applicable Superior Lease
contemporaneously with Tenant’s execution and delivery of such amendment
hereof), and (y) Landlord gives to Tenant reasonable evidence to the effect that
such Mortgagee or Lessor requires such amendments; provided, however, that
Tenant shall not be required to agree to any such amendments to this Lease that
(i) increase Tenant’s monetary obligations under this Lease, (ii) adversely
affect or diminish, to more than a de minimis extent, Tenant’s rights under this
Lease, or (iii) increase, to more than a de minimis extent, Tenant’s other
obligations under this Lease.

14.5.        Tenant’s Estoppel Certificate.

Tenant, within fifteen (15) Business Days after Landlord’s request from time to
time (but not more frequently than two (2) times in any particular period of
twelve (12) months), shall deliver to Landlord a written statement executed by
Tenant, in form reasonably satisfactory to Landlord, (1) stating that this Lease
is then in full force and effect and has not been modified (or if this Lease is
not in full force and effect, stating the reasons therefor, or if this Lease is
modified, setting forth all modifications), (2) setting forth the date to which
the Fixed Rent, the Escalation Rent and other items of Rental have been paid,
(3) stating whether, to the best knowledge of Tenant (but without having made
any investigation), Landlord is in default under this Lease, and, if Landlord is
in default, setting forth the specific nature of all such defaults, and (4)
stating any other matters reasonably requested by Landlord and related to this
Lease. Tenant acknowledges that any such statement that Tenant delivers to
Landlord pursuant to this Section 14.5 may be relied upon by (x) any purchaser
or owner of the Real Property or any interest therein (including, without
limitation, any Lessor), or (y) any Mortgagee.

14.6.        Landlord’s Estoppel Certificate.

Landlord, within fifteen (15) Business Days after Tenant’s request from time to
time (but not more frequently than two (2) times in any particular period of
twelve (12) months), shall deliver to Tenant a written statement executed by
Landlord (i) stating that this Lease is then in full force and effect and has
not been modified (or if this Lease is not in full force and effect, stating the
reasons therefor, or if this Lease is modified, setting forth all
modifications), (ii)

 48

­

--------------------------------------------------------------------------------

 

setting forth the date to which the Fixed Rent, the Escalation Rent and any
other items of Rental have been paid, (iii) stating whether, to the best
knowledge of Landlord (but without having made any investigation), Tenant is in
default under this Lease, and, if Tenant is in default, setting forth the
specific nature of all such defaults, and (iv) stating any other matters
reasonably requested by Tenant and related to this Lease. Landlord acknowledges
that any statement delivered by Landlord to Tenant pursuant to this Section 14.6
may be relied upon by (w) any assignee of Tenant’s interest hereunder, (x) any
subtenant of all or any part of the Premises, (y) any Person that acquires
Control of Tenant (provided that such assignment, sublease or transfer of
Control is accomplished in a manner that complies with the provisions of Article
18 hereof), or (z) any Person that extends credit to Tenant.

14.7.        Rights to Cure Landlord’s Default.

If (x) a Superior Lease or Mortgage exists, (y) the Lessor or Mortgagee is not
an Affiliate of Landlord, and (z) Landlord gives Tenant notice thereof, then
Tenant shall not seek to terminate this Lease by reason of Landlord’s default
hereunder until Tenant has given written notice of such default to such Lessor
or such Mortgagee in either case at the address that has been furnished to
Tenant. If any such Lessor or Mortgagee notifies Tenant, within ten (10)
Business Days after the date that such Lessor or Mortgagee receives such notice
from Tenant, that such Lessor or Mortgagee intends to remedy such act or
omission of Landlord, then Tenant shall not have the right to so terminate this
Lease unless such Lessor or Mortgagee fails to remedy such act or omission of
Landlord within a reasonable period of time after the date that such Lessor or
Mortgagee gives such notice to Tenant (it being understood that such Lessor or
Mortgagee shall not have any liability to Tenant for the failure of such Lessor
or Mortgagee to so remedy such act or omission of Landlord during such period).

14.8.        Zoning Lot Merger Agreement.

Tenant hereby waives irrevocably any rights that Tenant may have in connection
with any zoning lot merger or transfer of development rights with respect to the
Real Property, including, without limitation, any rights that Tenant may have to
be a party to, to contest, or to execute any Declaration of Restrictions (as
such term is used in Section 12-10 of the Zoning Resolution of The City of New
York effective December 15, 1961, as amended) with respect to the Real Property,
which would cause the Premises to be merged with or unmerged from any other
zoning lot pursuant to such Zoning Resolution or to any document of a similar
nature and purpose. Tenant agrees that this Lease shall be subject and
subordinate to any Declaration of Restrictions or any other document of similar
nature and purpose now or hereafter affecting the Real Property. In confirmation
of such subordination and waiver, Tenant, from time to time, shall execute and
deliver promptly any certificate or instrument that Landlord reasonably
requests.

14.9.        Existing Mortgages and Existing Superior Leases.

Landlord hereby represents and warrants to Tenant that the only Mortgages and
Superior Leases that exist as of the date hereof are as described in
Exhibit “14.9” attached hereto and made a part hereof.

 

49

 

--------------------------------------------------------------------------------

 

Article 15
INSURANCE

15.1.        Tenant’s Insurance.

(A)             Tenant, at Tenant’s expense, shall obtain and keep in full force
and effect (i) an insurance policy for Tenant’s Property, the interior
installation existing in the Premises on the Commencement Date and the
Alterations, in either case to the extent insurable under the ISO Cause of Loss
– Special Form property insurance policy or its equivalent, in an amount equal
to one hundred percent (100%) of the replacement cost thereof, (ii) an insurance
policy for the plate glass that constitutes the windows of the Premises, to the
extent insurable under the available standard forms of “all-risk” insurance
policies, in an amount equal to one hundred percent (100%) of the replacement
value thereof (the insurance policies described in clause (i) above and this
clause (ii) being collectively referred to herein as “Tenant’s Property
Policy”), and (iii) a policy of commercial general liability insurance on an
occurrence basis, with contractual liability coverage for insured contracts (the
insurance policy described in this clause (iii) being referred to herein as
“Tenant’s Liability Policy”). Tenant’s Property Policy and. Tenant’s Liability
Policy shall name Tenant as the insured. Tenant’s Property Policy shall also
include business interruption insurance that is sufficient in amount to pay the
Fixed Rent and the CAM Expense Payment and the Tax Payment due hereunder for a
period of at least one (1) year. The Landlord Parties shall be named as
additional insureds on Tenant’s Liability Policy.

(B)              Tenant’s Liability Policy shall contain a provision that (a) no
act or omission of Tenant shall affect or limit the obligation of the insurer to
pay the amount of any loss sustained on behalf of the additional insureds, and
(b) the policy will provide at least thirty (30) days of advance written notice
of cancellation to Landlord (except ten (10) days notice for nonpayment of
premium). If Tenant receives any notice of cancellation or any other notice from
the insurance carrier which may adversely affect the coverage of the insureds
under Tenant’s Property Policy or Tenant’s Liability Policy, then Tenant shall
immediately deliver to Landlord a copy of such notice. The minimum amounts of
liability under Tenant’s Liability Policy shall be Five Million Dollars
($5,000,000) per occurrence and in the annual aggregate for injury (or death) to
persons and damage to property, which minimum amount Landlord may increase from
time to time to the amount of insurance that in Landlord’s reasonable judgment
is then being customarily required by prudent landlords of first-class buildings
in the vicinity of the Building from tenants leasing space similar in size,
nature and location to the Premises.

(C)              Tenant shall cause Tenant’s Liability Policy and Tenant’s
Property Policy to be issued by reputable and independent insurers that are (x)
permitted to do business in the State of New York, and (y) rated in Best’s
Insurance Guide, or any successor thereto, as having a general policyholder
rating of A- and a financial rating of at least VIII (it being understood that
if such ratings are no longer issued, then such insurer’s financial integrity
shall conform to the standards that constitute such ratings from Best’s
Insurance Guide as of the date hereof).

(D)             Tenant has the right to satisfy Tenant’s obligation to carry
Tenant’s Liability Policy with blanket or umbrella insurance policies, provided
that such blanket or umbrella insurance policies (x) contain an aggregate per
location endorsement that provides the required level of protection for the
Premises, and (y) provide that a loss that relates to any other

50

 

--------------------------------------------------------------------------------

 

location does not impair or reduce the level of protection available for the
Premises below the amount required by this Lease, provided, further however, if
Tenant’s commercial general liability and umbrella/excess liability policies do
not provide such per location endorsements and limits, then, notwithstanding the
provisions of Section 15.1(B), the minimum amounts of liability under Tenant’s
Liability Policy shall be Ten Million Dollars ($10,000,000).

15.2.        Landlord’s Insurance.

(A)             Subject to the terms of this Section 15.2, Landlord shall obtain
and keep in full force and effect insurance against loss or damage by fire and
other casualty to the Building, to the extent insurable on commercially
reasonable terms under then available standard forms of property insurance
policies providing coverage as broad as the ISO Cause of Loss – Special Form
property policy, in an amount equal to one hundred percent (100%) of the
replacement cost thereof or, at Landlord’s option, in such lesser amount as will
avoid co insurance (such insurance being referred to herein as “Landlord’s
Property Policy”).

(B)              Landlord shall have the right to provide that the coverage of
Landlord’s Property Policy is subject to a reasonable deductible. Tenant shall
cooperate with Landlord and Landlord’s insurance companies in the adjustment of
any claims for any damage to the Building. Landlord shall not be required to
carry insurance on Tenant’s Property, Alterations or the interior installation
existing in the Premises on the Commencement Date. Landlord shall not be
required to carry insurance against, or be responsible for, any loss suffered by
Tenant due to the interruption of Tenant’s business. Landlord shall not be
required to carry insurance for the windows for the Premises.

15.3.        Mutual Waiver of Subrogation.

Subject to the provisions of this Section 15.3, Landlord and Tenant shall each
obtain an appropriate clause in, or endorsement on, Landlord’s Property Policy
or Tenant’s Property Policy (as the case may be) pursuant to which the insurance
companies waive subrogation or consent to a waiver of right of recovery.
Landlord and Tenant also agree that, having obtained such clauses or
endorsements of waiver of subrogation or consent to a waiver of right of
recovery, they shall not make any claim against or seek to recover from the
Landlord Parties or the Tenant Parties (as the case may be) for any loss or
damage to its property or the property of others resulting from fire or other
hazards covered by Landlord’s Property Policy or Tenant’s Property Policy (as
the case may be); provided, however, that the release, discharge, exoneration
and covenant not to sue herein contained shall be limited by and be coextensive
with the terms and provisions of the waiver of subrogation clause or
endorsements or clauses or endorsements consenting to a waiver of right of
recovery.

15.4.        Evidence of Insurance.

On or prior to the Commencement Date, each party shall deliver to the other
party appropriate certificates of insurance required to be carried by the
parties pursuant to this Article 15, including evidence of waivers of
subrogation and copies of additional insured endorsements in either case as
required by Section 15.3 hereof. Each party shall deliver to the other party
evidence of each renewal or replacement of a policy prior to the expiration of
such policy.

51

­

--------------------------------------------------------------------------------

 

 

15.5.        No Concurrent Insurance.

Tenant shall not obtain any property insurance (under Tenant’s Property Policy
or otherwise) that covers the property that is covered by Landlord’s Property
Policy.

15.6.        Tenant’s Obligation to Comply with Landlord’s Fire and Casualty
Insurance.

If (i) Tenant (or any other Person claiming by, through or under Tenant) uses
the Premises for any purpose other than general retail use , and (ii) the use of
the Premises by Tenant (or such other Person) causes the premium for Landlord’s
Property Policy to exceed the premium that would have otherwise applied therefor
(and which was in effect immediately prior thereto) if Tenant (or such Person)
used the Premises for general retail purposes, then Tenant shall pay to
Landlord, as additional rent, an amount equal to such excess, on or prior to the
thirtieth (30th) day after the date that Landlord gives to Tenant an invoice
therefor. Nothing contained in this Section 15.6 expands Tenant’s rights under
Article 4 hereof.

Article 16
CASUALTY

16.1.        Notice.

Tenant shall notify Landlord promptly of any fire or other casualty that occurs
in the Premises, provided that Tenant shall have no liability if Tenant shall
fail to so notify Landlord.

16.2.        Landlord’s Restoration Obligations.

Subject to the terms of this Section 16.2, Landlord shall repair the damage to
the Premises to the extent caused by fire or other casualty, with reasonable
diligence in a good and workerlike manner using building standard materials.
Landlord shall not be required to restore Tenant’s Property or the Alterations.
Landlord shall not be required to restore the windows for the Premises. Landlord
shall not be required to commence such restoration until Tenant gives Landlord
the notice described in Section 16.1 hereof (unless Landlord otherwise has
received actual notice of the fire or other casualty). Landlord shall have the
right to adapt the restoration of the Premises as contemplated by this
Section 16.2 to comply with applicable Requirements that are then in effect.
Landlord shall not be obligated to restore the Premises as provided in this
Section 16.2 to the extent that this Lease terminates by reason of such fire or
other casualty as provided in this Article 16.

16.3.        Tenant’s Restoration Obligations.

Subject to the terms of this Section 16.3, Tenant shall repair the damage to the
Alterations and Tenant’s Property to the extent caused by fire or other
casualty, with reasonable diligence. Tenant shall have the right to adapt the
restoration of the Alterations and Tenant’s Property as contemplated by this
Section 16.3 to comply with applicable Requirements that are then in effect.
Tenant shall not be obligated to restore the Alterations and Tenant’s Property
as provided in this Section 16.3 to the extent that this Lease terminates by
reason of such fire or other casualty as provided in this Article 16.

 52

­

--------------------------------------------------------------------------------

 

16.4.        Rent Abatement.

The Fixed Rent, the CAM Expense Payment and the Tax Payment that is otherwise
due and payable hereunder shall be reduced in the proportion that the number of
square feet of usable area of the part of the Premises that is not usable by
Tenant (and Tenant actually does not use) by reason of such fire or other
casualty bears to the total usable area of the Premises immediately prior to
such fire or other casualty, for the period commencing on the date of such fire
or other casualty and ending on the earlier of (i) date that Landlord
Substantially Completes the restoration described in Section 16.2 hereof, or
(ii) the date this Lease is terminated by either Landlord or Tenant in
accordance with the provisions of this Article 16.

16.5.        Landlord’s Termination Right.

If the Building is so damaged by fire or other casualty that, in Landlord’s
opinion, substantial alteration, demolition, or reconstruction of the Building
is required (regardless of whether the Premises have been damaged or rendered
untenantable), then Landlord may terminate this Lease by giving Tenant notice
thereof on or prior to the ninetieth (90th) day after such fire or other
casualty; provided, however, that if the Premises are not substantially damaged
or rendered substantially untenantable by such fire or other casualty, then
Landlord may not so terminate this Lease unless Landlord elects to terminate
leases (including this Lease) affecting at least thirty-five percent (35%) of
the usable area of the Retail Unit. Landlord also shall have the right to
terminate this Lease if the owners of the condominium established by the
Condominium Declaration do not make the election contemplated by Section 339-ee
of the New York Real Property Law to restore the Building after a fire or other
casualty (to the extent that such election is required to be made by such unit
owners). If Landlord elects to terminate this Lease as aforesaid, then (I) the
Term shall expire on a date set by Landlord that is not sooner than (i) the
tenth (10th) day after the date that Landlord gives such notice (if all or
substantially all of the Premises is rendered untenantable by such fire or other
casualty), and (ii) the ninetieth (90th) day after the date that Landlord gives
such notice (if less than all or substantially all of the Premises is rendered
untenantable by such fire or other casualty), and (II) Tenant, on such date set
by Landlord, shall vacate the Premises and surrender the Premises to Landlord in
accordance with the terms of this Lease that govern Tenant’s obligations upon
the expiration or earlier termination of the Term. Upon the termination of this
Lease under this Section 16.5, the Rental shall be apportioned and any prepaid
portion of the Rental for any period after the Expiration Date shall be refunded
promptly by Landlord to Tenant (and Landlord’s obligation to make such refund
shall survive the Expiration Date).

16.6.        Tenant’s Termination Right.

(A)             Landlord, within forty-five (45) days after the earlier to occur
of (x) the date that Tenant gives Landlord notice of the occurrence of a fire or
other casualty as contemplated by Section 16.1 hereof, and (y) the date that
Landlord otherwise has actual notice of such fire or other casualty, shall give
to Tenant a statement prepared by a reputable and independent contractor setting
forth such contractor’s estimate in good faith as to the time required for
Landlord to Substantially Complete the restoration described in Section 16.2
hereof (such statement that Landlord gives to Tenant being referred to herein as
the “Casualty Statement”). If the estimated time period exceeds eighteen (18)
months from the date of the

53

­

--------------------------------------------------------------------------------

 

applicable fire or other casualty, then Tenant may elect to terminate this Lease
by giving notice to Landlord not later than the thirtieth (30th) day after the
date that Landlord gives the Casualty Statement to Tenant.

(B)              If Tenant makes any such election to terminate this Lease
pursuant to this Section 16.6, then (I) the Term shall expire on the thirtieth
(30th) day after notice of such election is given by Tenant, and Tenant shall
vacate the Premises and surrender the Premises to Landlord on such date “as is”
and otherwise in accordance with the terms of this Lease that govern Tenant’s
obligations upon the expiration or earlier termination of the Term, (II) any
Rental due hereunder shall be apportioned as of the date of such termination,
and (III) any portion of the Rental that is then prepaid by Tenant and relates
to the period after the Expiration Date shall be promptly refunded by Landlord
to Tenant (with the understanding that Landlord’s obligation to make any such
refund shall survive such termination of this Lease).

16.7.        Termination Rights at End of Term.

If the Premises or the Retail Unit are substantially damaged by a fire or other
casualty that occurs during the period of two (2) years immediately preceding
the Fixed Expiration Date, then either Landlord or Tenant may elect to terminate
this Lease by notice given to the other party within thirty (30) days after such
fire or other casualty occurs. If either party makes such election, then the
Term shall, expire on the thirtieth (30th) day after the notice of such election
is given, and, accordingly, Tenant, on or prior to such thirtieth (30th) day,
shall vacate the Premises and surrender the Premises to Landlord in accordance
with the provisions hereof that govern Tenant’s obligation to deliver possession
of the Premises to Landlord upon the expiration of the Term. Upon the
termination of this Lease under this Section 16.7, the Rental shall be
apportioned and any prepaid portion of the Rental for any period after the
Expiration Date shall be refunded promptly by Landlord to Tenant (and Landlord’s
obligation to make such refund shall survive the Expiration Date). For purposes
of this Section 16.7, the term “substantially damaged” shall mean that: (a) a
fire or other casualty precludes Tenant from using or having access to more than
fifty percent (50%) of the Premises for the conduct of its business, or more
than fifty percent (50%) of the Retail Unit or the Building is damaged whether
or not the Premises are damaged, and (b) Tenant’s inability to so use the
Premises (or the applicable portion thereof) is reasonably expected to continue
until at least the earlier to occur of (i) the Fixed Expiration Date, and (ii)
the one hundred twentieth (120th) day after the date that such fire or other
casualty occurs.

16.8.        No Other Termination Rights.

Tenant shall have no right to cancel this Lease by virtue of a fire or other
casualty except to the extent specifically set forth herein. This Article 16 is
intended to constitute an “express agreement to the contrary” for purposes of
Section 227 of the New York Real Property Law.

 

54

­

--------------------------------------------------------------------------------

 

Article 17
CONDEMNATION

17.1.        Effect of Condemnation.

(A)             Subject to the provisions of Section 17.2 hereof, if the entire
Real Property, the entire Building or the entire Premises is condemned or
otherwise acquired by the exercise of the power of eminent domain, then this
Lease shall terminate as of the date that such condemnation or acquisition is
consummated.

(B)              If only a part of the Real Property and not the entire Premises
is so acquired or condemned, then:

(1)             except as hereinafter provided in this Section 17.1, this Lease
shall remain effective, and, from and after the date that the condemnation or
acquisition is consummated, (w) the Fixed Rent shall be reduced in the
proportion that the number of square feet of usable area of the part of the
Premises so acquired or condemned bears to the total usable area of the Premises
immediately prior to such acquisition or condemnation, and (x) Tenant’s Tax
Share shall be redetermined based upon the proportion that the number of square
feet of usable area of the Premises that is remaining after such acquisition or
condemnation bears to the number of square feet of usable area of the
Condominium Unit that is remaining after such acquisition or condemnation, and
(y) Tenant’s CAM Expense Share shall be redetermined based upon the proportion
that the number of square feet of usable area of the Premises remaining after
such acquisition or condemnation bears to the number of square feet of usable
area of the Retail Unit remaining after such acquisition or condemnation that is
used for retail purposes;

(2)              if the part of the Real Property so acquired or condemned
contains more than thirty percent (30%) of the total area of the Premises
immediately prior to such acquisition or condemnation, then on or prior to the
sixtieth (60th) day after the date that the condemnation or acquisition is
consummated, Landlord shall have the right to terminate this Lease by giving
notice to Tenant; provided, however, that if the Premises are unaffected by such
acquisition or condemnation, then Landlord shall only have the right to so
terminate this Lease if Landlord terminates leases (including this Lease) for at
least thirty-five percent (35%) of the usable area of the Retail Unit (excluding
any portion of the Retail Unit leased to or occupied by Landlord or Landlord’s
Affiliates); and

(3)              if (a) the part of the Real Property so acquired or condemned
contains more than fifteen percent (15%) of the total area of the Premises
immediately prior to such acquisition or condemnation, or (b) by reason of such
acquisition or condemnation, Tenant no longer has reasonable means of access to
the Premises, or (c) Tenant cannot reasonably conduct its business in the
portion of the Premises which remains after such acquisition or condemnation,
then Tenant may elect to terminate this Lease by giving notice to Landlord on or
prior to the sixtieth (60th) day after the date that Tenant is given notice of
such acquisition or condemnation being consummated.

The Term shall expire on the thirtieth (30th) day after the date that Landlord
or Tenant give any such notice to terminate this Lease.

 

 55

­

--------------------------------------------------------------------------------

 

(C)              Upon the termination of this Lease and the Term pursuant to the
provisions of this Section 17.1, the Rental shall be apportioned and any prepaid
portion of the Rental for any period after such date shall be refunded promptly
by Landlord to Tenant (and Landlord’s obligation to make such refund shall
survive the Expiration Date).

(D)             If a part of the Premises is so acquired or condemned and this
Lease and the Term is not terminated pursuant to the foregoing provisions of
this Section 17.1, then Landlord, at Landlord’s expense, shall restore the part
of the Premises that is not so acquired or condemned to a self-contained rental
unit inclusive of Alterations that Tenant has theretofore Substantially
Completed, except that if such acquisition or condemnation occurs prior to the
Substantial Completion of the Initial Alterations, then Landlord shall only be
required to restore the part of the Premises not so acquired or condemned to a
self-contained rental unit exclusive of any Alterations.

17.2.        Condemnation Award.

Subject to Section 17.3 hereof, Landlord shall be entitled to receive the entire
award for any such acquisition or condemnation of all or any part of the Real
Property. Tenant shall have no claim against Landlord or the condemning
authority for the value of any unexpired portion of the Term, and, accordingly,
Tenant hereby expressly assigns to Landlord all of its right in and to any such
award. Nothing contained in this Section 17.2 shall be deemed to prevent Tenant
from making a separate claim in any condemnation proceedings for the then value
of any Tenant’s Property included in such taking, for any moving expenses or for
the costs incurred by Tenant in performing the Initial Alterations (prior to
Tenant’s Substantial Completion thereof) in the portion of the Premises that is
not so condemned or acquired.

17.3.        Temporary Taking.

If the whole or any part of the Premises is acquired or condemned temporarily
during the Term, then (a) Tenant shall give prompt notice thereof to Landlord,
(b) the Term shall not be reduced or affected in any way, (c) Tenant shall
continue to pay in full all items of Rental payable by Tenant hereunder without
reduction or abatement, and (d) Tenant shall be entitled to receive for itself
any award or payments for such use, provided, however, that if the acquisition
or condemnation is for a period extending beyond the Term, then such award or
payment shall be apportioned equitably between Landlord and Tenant. Tenant, at
Tenant’s expense, shall make Alterations to restore the Premises to the
condition existing prior to any such temporary acquisition or condemnation.

Article 18
ASSIGNMENT AND SUBLETTING

18.1.        General Limitations.

(A)             Subject to the terms of this Article 18, without the prior
consent of Landlord in each instance, Tenant shall not (i) assign Tenant’s
interest in this Lease, in whole or in part, by express assignment or by
operation of law or by other means, (ii) sublease the Premises or any part
thereof, (iii) permit a subtenant under a sublease that is consummated in
accordance with the terms of this Article 18 to further sublease the Premises or
any part thereof

56

 

--------------------------------------------------------------------------------

 

or to assign the subtenant’s interest under any such sublease in whole or in
part by express assignment or by operation of law or by other means, (iv) amend
or modify any sublease that is consummated in accordance with the terms of this
Article 18, (v) mortgage or otherwise encumber Tenant’s interest in this Lease,
in whole or in part, or (vi) permit the Premises or any part thereof to be
occupied by any Person other than Tenant (any of the events described in
clauses (i) through (vi) above being referred to herein as a “Transfer”; Tenant
and any other Person that has the right to occupy the Premises in accordance
with the terms of this Article 18 being referred to herein as a “Permitted
Party”).

(B)              Subject to Section 18.7 hereof, the transfer of Control in a
Permitted Party, however accomplished, whether in a single transaction or in a
series of unrelated or related transactions, shall constitute an assignment of
such Permitted Party’s interest in this Lease or the Premises (as the case may
be) for purposes of this Article 18.

(C)              The consent by Landlord to any Transfer shall not relieve
Tenant from its obligation to obtain the prior consent of Landlord to any other
Transfer to the extent required by this Lease.

(D)             The assignment by any Person that constitutes Tenant of the
tenant’s interest under this Lease shall not relieve such Person of the
obligations of the tenant under this Lease. Such Person’s liability under this
Lease shall continue notwithstanding (x) the subsequent release of any other
Person that constitutes Tenant from liability under this Lease, (y) any
limitation on any such other Person’s liability hereunder by virtue of the
Bankruptcy Code, or (z) any modification or amendment of this Lease that
Landlord consummates with any such other Person that constitutes Tenant
subsequently; provided, however, that if such other Person that constitutes
Tenant subsequently is not an Affiliate of such Person, then any modification or
amendment contemplated by clause (z) hereof shall not expand the liability of
any prior Person which constituted Tenant hereunder.

(E)              Notwithstanding anything to the contrary contained herein,
Tenant shall not, and Tenant shall not permit any other Permitted Party to,
enter into any lease, sublease, license, concession or other agreement for use
or occupancy of the Premises or any portion thereof which provides for a rental
or other payment for such use or occupancy based in whole or in part on the net
income or profits derived by any Person from the property leased, occupied or
used, or which would require the payment of any consideration that would not
qualify as “rents from real property,” as that term is defined in Section 856(d)
of the Internal Revenue Code of 1986, as amended.

(F)               If Tenant assigns the tenant’s interest under this Lease in
violation of the terms of this Article 18, then such assignment shall be void
and of no force and effect against Landlord; provided, however, that Landlord
(x) may collect an amount equal to the then Rental from the assignee as a fee
for such assignee’s use and occupancy, and (y) shall apply the net amount
collected to the Rental reserved in this Lease. If the Premises or any part
thereof are sublet to, occupied by, or used by any Person other than Tenant
(regardless of whether such subletting, occupancy or use violates this Article
18), then Landlord (a) after the occurrence of an Event of Default, may collect
amounts from the subtenant, user or occupant as a fee for its use and occupancy,
and (b) shall apply the net amount collected to the Rental reserved in this
Lease.

57

--------------------------------------------------------------------------------

 

No such assignment, subletting, occupancy or use, with or without Landlord’s
prior consent, nor any such collection or application of fees for use and
occupancy, shall (i) be deemed a waiver by Landlord of any term, covenant or
condition of this Lease, (ii) be deemed in and of itself the acceptance by
Landlord of such assignee, subtenant, occupant or user as tenant hereunder, or
(iii) relieve Tenant of the obligations of the tenant under this Lease.

18.2.        Landlord’s Expenses.

Tenant shall reimburse Landlord for the actual and out-of-pocket reasonable
costs that Landlord incurs in connection with any proposed Transfer, including,
without limitation, reasonable attorneys’ fees and disbursements and the
reasonable costs of making investigations as to the acceptability of the
proposed Transferee, within thirty (30) days after Landlord gives to Tenant an
invoice therefor.

18.3.        Recapture Procedure.

(A)             Tenant shall have the right to institute the procedure described
in this Section 18.3 (the “Recapture Procedure”) only by giving to Landlord
notice thereof (a “Transfer Notice”), which:

(1)             refers expressly to this Section 18.3 and indicates that such
notice constitutes a Transfer Notice,

(2)              sets forth the material terms under which Tenant intends to
consummate the Transfer (including, for example, (a) the rental to be paid by a
subtenant, (b) the consideration to be paid by or to an assignee, (c) the work
allowance to which a subtenant is entitled, (d) the term of a proposed sublease,
and (e) the nature and cost of any work that Tenant intends to perform to
prepare the Premises for occupancy by the subtenant or assignee), and

(3)              sets forth the date on which Tenant proposes to consummate the
proposed Transfer (such date being referred to herein as the “Transfer Date”)
(it being understood that the Transfer Date shall be no sooner than three
hundred sixty-five (365) days, and no later than five hundred forty-five (545)
days, after the date that Tenant gives the Transfer Notice to Landlord) (the
material terms of a proposed Transfer as set forth in the Transfer Notice being
referred to herein as the “Proposed Transfer Terms”).

Tenant shall not be required to identify, in the Transfer Notice, the Person to
which Tenant intends to make the Transfer (the Person to which a Transfer is
made being referred to herein as a “Transferee”). If (i) Tenant has theretofore
received a bona fide written offer that then remains effective from a
prospective Transferee pursuant to which such prospective Transferee proposes to
enter into the applicable Transfer on terms that are no less favorable to Tenant
than the Proposed Transfer Terms, and (ii) Tenant gives to Landlord a copy of
such written offer (which shall include the nature of the Transferee’s business
and current financial information with respect to the proposed Transferee), then
Tenant shall have the right to give to Landlord a notice pursuant to which
Tenant accelerates the Transfer Date to a date that occurs no earlier than the
first to occur of (I) the three hundred sixty-fifth (365th) day after the date
that Tenant gives the Transfer Notice to Landlord, and (II) the one hundred
twentieth (120th) day after the date that Tenant gives to Landlord a copy of
such written offer and such notice (it being understood that

 58

­

--------------------------------------------------------------------------------

 

Tenant shall have the right to give such notice to Landlord either
simultaneously with the Transfer Notice or at any time thereafter until the
three hundred sixty-fifth (365th) day after the date that Tenant gives the
Transfer Notice to Landlord).

(B)              The term “Recapture Date” shall mean the three hundred
sixty-fifth (365th) day after the date that Tenant gives the Transfer Notice to
Landlord; provided, however, that if (i) Tenant has theretofore received a bona
fide written offer that then remains effective from a prospective Transferee
pursuant to which such prospective Transferee proposes to enter into the
applicable Transfer on terms that are no less favorable to Tenant than the
Proposed Transfer Terms, (ii) Tenant gives to Landlord a copy of such written
offer (either simultaneously with the Transfer Notice or any time thereafter
until the three hundred sixty-fifth (365th) day after the date that Tenant gives
the Transfer Notice to Landlord), and (iii) Tenant notifies Landlord that Tenant
intends to accelerate the Recapture Date as provided in this Section 18.3(B),
then the Recapture Date shall be the earlier to occur of (I) the three hundred
sixty-fifth (365th) day after the date that Tenant gives the Transfer Notice to
Landlord, and (II) the one hundred twentieth (120th) day after the date that
Tenant gives to Landlord a copy of such written offer and such notice.

(C)               

(1)             If Tenant gives a Transfer Notice to Landlord, then Landlord
shall have the right to terminate this Lease, on the terms set forth in this
Section 18.3(C), by giving notice thereof (the “Recapture Termination Notice”)
to Tenant not later than the Recapture Date (any such termination of this Lease
being referred to herein as a “Recapture Termination”).

(2)              If Landlord gives to Tenant a Recapture Termination Notice,
then the Term shall terminate on the Transfer Date. If the Term so terminates on
the Transfer Date, then Tenant, on the Transfer Date, shall vacate the Premises
and deliver exclusive possession thereof to Landlord in accordance with the
terms of this Lease that govern Tenant’s obligations upon the expiration or
earlier termination of the Term.

18.4.        Certain Transfer Rights.

If Landlord does not timely deliver a Recapture Termination Notice, Landlord
shall not unreasonably withhold, condition or delay Landlord’s consent to
Tenant’s consummating a Transfer, provided that:

(A)             Tenant has theretofore instituted the Recapture Procedure for
such Transfer;

(B)              Landlord’s right to elect to consummate a Recapture Termination
with respect to the proposed Transfer has lapsed (without Landlord’s having
exercised Landlord’s rights to consummate a Recapture Termination);

(C)              the Transfer is on material terms that are at least as
favorable to Tenant as the Proposed Transfer Terms set forth in the Transfer
Notice theretofore given by Tenant to Landlord;

 

59

 

--------------------------------------------------------------------------------

 

(D)             the Transfer occurs no earlier than the thirtieth (30th) day
before the Transfer Date and no later than the sixtieth (60th) day after the
Transfer Date;

(E)              Tenant submits to Landlord a counterpart of the documents that
the Transferor intends to use to consummate the proposed Transfer, which have
been executed and delivered by Tenant and the proposed Transferee, and which are
subject to no conditions to the effectiveness thereof (other than Landlord’s
granting Landlord’s consent thereto);

(F)               the Premises has not been listed or otherwise publicly
advertised at a rental rate that is less than the prevailing rental rate
reasonably determined by Landlord;

(G)             no Event of Default has occurred and is then continuing;

(H)             the proposed Transferee has a financial standing that is
reasonably satisfactory to Landlord but in any event has a tangible net worth
(calculated in accordance with generally accepted accounting principles
consistently applied) of not less than ____________________ Million Dollars
($100,000,000.00);

(I)                the proposed Transferee is of a character, is engaged in a
business, and proposes to use the Premises in a manner that in each case is in
keeping with the standards of a first-class building in the vicinity of the
Building and does not violate any prohibited uses set forth herein;

(J)                the proposed Transferee, or any Affiliate of the proposed
Transferee, does not occupy any space in the Building;

(K)             neither the proposed Transferee, nor an Affiliate of the
proposed Transferee, is a Person with whom Landlord is then engaged in bona fide
negotiations regarding the leasing or subleasing of space in the Building;

(L)              if the Transfer constitutes a sublease, then the term thereof
shall be for no less than three (3) years (unless such term commences less than
three (3) years before the Fixed Expiration Date);

(M)            any sublease of the Premises does not consist of less than the
entire usable area thereof;

(N)             the use of the Premises by the Transferee does not violate any
rights that Landlord has theretofore granted to a third party;

(O)             Tenant, and the Transferee, executes and delivers to Landlord a
consent to the Transfer in a form reasonably acceptable to Landlord, Tenant and
the Transferee;

(P)               if the Transfer constitutes an assignment of the tenant’s
interest under this Lease, the assignee has expressly assumed all of the
obligations of Tenant hereunder to the extent accruing from and after the date
that the Transfer is effective; and

 

 60

--------------------------------------------------------------------------------

 

(Q)             if the Transfer constitutes a sublease, such sublease provides
expressly that (i) such sublease is subject and subordinate to the Lease (and to
the terms thereof), and (ii) if this Lease terminates, then Landlord, at
Landlord’s option, may take over all of the right, title and interest of Tenant
under such sublease, and the Transferee, at Landlord’s option, shall attorn to
Landlord pursuant to the then executory provisions of such sublease, except that
Landlord shall not be:

(1)             liable for any act or omission of Tenant under such sublease,

(2)              subject to any defense or offsets which the Transferee may have
against Tenant,

(3)              bound by any previous payment that the Transferee made to
Tenant more than thirty (30) days in advance of the date that such payment was
due,

(4)             bound by any obligation to make any payment to or on behalf of
the Transferee,

(5)              bound by any obligation to perform any work or to make
improvements to the Premises,

(6)               bound by any amendment or modification of such sublease made
without Landlord’s consent, or

(7)             bound to return the Transferee’s security deposit, if any, until
such deposit has come into Landlord’s actual possession and the Transferee is
entitled to such security deposit pursuant to the terms of such sublease (the
requirements of a proposed sublease as set forth in this Section 18.4(Q) being
collectively referred to herein as the “Basic Sublease Provisions”).

Landlord shall have the right to withhold Landlord’s consent to any proposed
Transfer made by any Person (other than Tenant) in Landlord’s sole and absolute
discretion.

18.5.        Transfer Taxes.

Tenant shall pay any transfer taxes (and other similar charges and fees) that
any Governmental Authority imposes in connection with any Transfer (including,
without limitation, any such transfer taxes, charges or fees that a Governmental
Authority imposes in connection with Landlord’s exercising Landlord’s rights to
consummate a Recapture Termination).

18.6.        Transfer Profit.

(A)             Subject to Section 18.7 hereof, Tenant shall pay to Landlord
fifty percent (50%) of the Transfer Profit that Tenant derives from a Transfer.
Tenant shall make payments to Landlord on account of Transfer Profit not later
than the thirtieth (30th) day after the date that Tenant receives each payment
that constitutes a Transfer Inflow.

(B)               

 61

­

--------------------------------------------------------------------------------

 

(1)             The term “Transfer Expenses” shall mean the sum of the actual
out-of-pocket expenses that Tenant pays solely in consummating a Transfer,
including, without limitation, (i) brokerage commissions, (ii) allowances that
Tenant makes available to the Transferee to fund the cost of Alterations that
the Transferee makes to the Premises, (iii) costs that Tenant pays in making
Alterations to prepare the Premises solely for the Transferee’s initial
occupancy, (iv) the amount payable to Landlord under Section 18.2 hereof for
such Transfer, (v) reasonable attorneys’ fees and disbursements that Tenant pays
in connection with consummating such Transfer, and (vi) the transfer taxes (and
other similar charges and fees) that Tenant pays pursuant to Section 18.5
hereof.

(2)              The term “Amortized Transfer Expenses” shall mean, with respect
to any period, the amount of the Transfer Expenses that amortize during such
period if the Transfer Expenses are amortized, in equal monthly installments,
with interest calculated at the Base Rate, over the period that the Transferee
is obligated to make payments to Tenant in respect of the applicable Transfer.

(3)              The term “Transfer Profit” shall mean, with respect to any
period, the excess (if any) of (x) the Transfer Inflow for such period, over (y)
the sum of (I) the Transfer Outflow for such period, and (II) the Amortized
Transfer Expenses for such period.

(4)             The term “Transfer Inflow” shall mean, with respect to any
period, the aggregate consideration that Tenant receives during such period from
or on behalf of the Transferee in connection with the applicable Transfer.

(5)              The term “Transfer Outflow” shall mean, with respect to any
period, the aggregate amount that Tenant pays for the Premises to Landlord as
Rental under this Lease (it being understood that if the applicable Transfer
constitutes an assignment of Tenant’s interest hereunder, then the Transfer
Outflow therefor shall be zero).

(C)              If (i) Tenant enters into a sublease in accordance with the
terms of this Article 18, (ii) Landlord would have the right to receive payments
from Tenant on account of Transfer Profit if the Transferee under such sublease
pays all of the rental that such sublease obligates such Transferee to pay to
Tenant, (iii) such Transferee fails to make such payments of rental to Tenant,
and (iv) Tenant fails to collect such rental within thirty (30) days after the
date that such rental becomes due and payable, then Landlord shall have the
right to pursue such Transferee (in the name of Tenant, if necessary) to collect
such rental on behalf of Tenant, in which case (i) Landlord shall pay over to
Tenant the rental that Landlord receives by so pursuing such Transferee (after
deducting therefrom the costs that Landlord incurs in so pursuing such
Transferee), and (ii) Tenant shall pay simultaneously to Landlord the Transfer
Profit deriving therefrom. Tenant shall cooperate with Landlord in connection
with Landlord’s exercising Landlord’s rights under this Section 18.6(C).

18.7.        Permitted Transfers.

(A)             The term “Assignment Requirements” shall mean (i) the
requirement that Tenant has provided to Landlord, not later than the tenth
(10th) Business Day after the applicable assignment has been consummated, an
certified balance sheet for the assignee that is dated no

62

 

--------------------------------------------------------------------------------

 

earlier than the last day of the most recently ended fiscal quarter (or the last
day of the fiscal quarter that immediately precedes the most recently ended
fiscal quarter, if the applicable assignment occurs less than sixty (60) days
after the last day of the most recently ended fiscal quarter) and that reflects
that the assignee’s (together with any guarantor’s) tangible net worth, as
determined in accordance with generally accepted accounting principles,
consistently applied, is not less than the tangible net worth of Tenant on the
Commencement Date, and in no event less than _________________________ Million
Dollars ($____________________), and (ii) the Transferee shall be of
substantially the same caliber, style and character of Tenant and shall continue
to use the Premises for the then permitted use hereunder in accordance with this
Lease.

(B)              Tenant shall have the right to assign Tenant’s entire interest
under this Lease to an Affiliate of Tenant without (x) Landlord’s prior
approval, (y) Landlord’s having the right to consummate a Recapture Termination
in respect thereof, and (z) Tenant’s being required to pay Transfer Profit to
Landlord in connection therewith, provided that in each case (i) Tenant gives to
Landlord, not later than the tenth (10th) Business Day after any such assignment
is consummated, an instrument, duly executed by Tenant and the aforesaid
Affiliate of Tenant, to the effect that such Affiliate assumes all of the
obligations of Tenant under this Lease to the extent arising from and after the
date of such assignment, (ii) Tenant, with such notice, provides Landlord with
reasonable evidence to the effect that the Person to which Tenant is so
assigning Tenant’s interest under this Lease constitutes an Affiliate of Tenant,
(iii) the assignee of Tenant’s interest agrees to continue to operate the
Premises for the then permitted use hereunder for a period of at least one (1)
year after the date of such Transfer, and (iv) the Assignment Requirements are
satisfied.

(C)              The merger or consolidation of Tenant into or with another
Person shall be permitted without (x) Landlord’s prior approval, (y) Landlord’s
having the right to consummate a Recapture Termination in respect thereof, and
(z) Tenant’s being required to pay Transfer Profit to Landlord in connection
therewith, provided that in each case (i) such merger or consolidation is a bona
fide transaction (1) with a third-party who is an operator with experience
operating a business comparable to the business being operated at the Premises
for not less than five (5) years prior to such merger or consolidation, and (2)
with respect to which the surviving entity agrees to continue to operate the
Premises for the then permitted use hereunder for a period of at least one (1)
year after the date of such Transfer, (ii) such merger or consolidation is not
principally for the purpose of transferring Tenant’s interest in this Lease,
(iii) Tenant gives Landlord notice of such merger or consolidation not later
than the tenth (10th) Business Day after the occurrence thereof, (iv) the
Assignment Requirements are satisfied, and (v) Tenant, within ten (10) Business
Days after such merger or consolidation, provides Landlord with reasonable
evidence that the requirement described in clause (i) and (ii) above have been
satisfied.

(D)             The assignment of Tenant’s entire interest under this Lease in
connection with the sale by Tenant and any Affiliate of Tenant of all of the
locations in the United States being operated under the then-trade name being
used by Tenant in the Premises shall be permitted without (x) Landlord’s prior
approval, (y) Landlord’s having the right to consummate a Recapture Termination
in respect thereof, and (z) Tenant’s being required to pay Transfer Profit to
Landlord in connection therewith, provided that in each case (i) Tenant gives to
Landlord, not later than the tenth (10th) Business Day after any such assignment
is consummated, an

 63

­

--------------------------------------------------------------------------------

 

instrument, duly executed by Tenant and the Transferee, in form reasonably
satisfactory to Landlord, to the effect that such Transferee assumes all of the
obligations of Tenant to the extent arising under this Lease from and after the
date of such assignment, (ii) such sale of all or substantially all of the
assets of Tenant is a bona fide transaction (1) with a third-party who is an
operator with experience operating a business comparable to the business being
operated at the Premises for not less than five (5) years prior to such
Transfer, and (2) with respect to which the Transferee agrees to continue to
operate the Premises for the then permitted use hereunder for a period of at
least one (1) year after the date of such Transfer, (iii) such sale of all or
substantially all of the assets of Tenant is not principally for the purpose of
transferring Tenant’s interest in this Lease, (iv) the Assignment Requirements
are satisfied, and (v) Tenant, within ten (10) Business Days after such sale,
provides Landlord with reasonable evidence that the requirement described in
clause (ii) and (iii) above have been satisfied.

(E)              The direct or indirect transfer of shares or equity interests
in Tenant (including, without limitation, the issuance of treasury stock, or the
creation or issuance of a new class of stock, in either case in the context of
an initial public offering or in the context of a subsequent offering of equity
securities) which transfers Control of Tenant shall be permitted without (x)
Landlord’s prior approval, (y) Landlord’s having the right to consummate a
Recapture Termination in respect thereof, and (z) Tenant’s being required to pay
Transfer Profit to Landlord in connection therewith, provided that in each case
(i) such transfer is not principally for the purpose of transferring the
interest of Tenant under this Lease, (ii) Tenant gives Landlord notice of such
transfer not later than the tenth (10th) Business Day after the occurrence
thereof, and (iii) Tenant, within ten (10) Business Days after the date that
such transfer occurs, provides Landlord with reasonable evidence that the
requirement described in clause (i) has been satisfied (except that Tenant shall
not be required to comply with this clause (iii) to the extent that such direct
or indirect transfer of shares or equity interests is accomplished through the
public “over-the-counter” securities market or through any recognized stock
exchange).

(F)               Tenant shall have the right to sublease the Premises to an
Affiliate of Tenant, without (x) Landlord’s prior approval, (y) Landlord’s
having the right to consummate a Recapture Termination in respect thereof, and
(z) Tenant’s being required to pay Transfer Profit to Landlord in connection
therewith, provided that in each case (i) Tenant gives to Landlord a copy of
such sublease, not later than the tenth (10th) Business Day after any such
sublease or license is consummated (redacted as to its economic terns), (ii)
Tenant, with such copy of such sublease, provides Landlord with a certificate,
signed by an officer of Tenant, stating that the Person to whom Tenant is so
subleasing the Premises constitutes an Affiliate of Tenant, and that such
sublease includes the Basic Sublease Provisions, and (iii) the Assignment
Requirements are satisfied.

Article 19
DEFAULT

19.1.        Events of Default.

The term “Event of Default” shall mean the occurrence of any of the following
events:

 64

 

--------------------------------------------------------------------------------

 

 

(A)             Tenant fails to pay any installment of Fixed Rent when due and
such failure continues for five (5) Business Days after the date that Landlord
gives notice of such failure to Tenant;

(B)              Tenant fails to pay any installment of Rental (other than Fixed
Rent) when due and such failure continues for five (5) Business Days after the
date that Landlord gives notice of such failure to Tenant;

(C)              Tenant’s interest under this Lease (or the subtenant’s interest
under a sublease that Tenant consummates in accordance with the terms of Article
18 hereof) devolves upon or passes to any other Person, whether by operation of
law or otherwise, except as expressly permitted under Article 18 hereof;

(D)             Tenant defaults in respect of Tenant’s obligations under
Section 5.9 hereof, and such default continues for more than three (3) Business
Days after Landlord gives Tenant notice thereof;

(E)              Tenant defaults in respect of Tenant’s obligations under
Section 8.5(A)(3) hereof, and such default continues for more than five (5)
Business Days after Landlord gives Tenant notice thereof;

(F)               Tenant defaults in the observance or performance of any other
covenant of this Lease on Tenant’s part to be observed or performed and Tenant
fails to remedy such default within thirty (30) days after Landlord gives Tenant
notice thereof, except that if (i) such default cannot be remedied with
reasonable diligence during such period of thirty (30) days, (ii) Tenant takes
reasonable steps during such period of thirty (30) days to commence Tenant’s
remedying of such default, and (iii) Tenant prosecutes diligently Tenant’s
remedying of such default to completion, then an Event of Default shall not
occur by reason of such default, provided that Tenant completes its remedying of
such default within one hundred twenty (120) days after the date that Landlord
gives Tenant such notice; or

(G)             the Premises are abandoned (for purposes of this
Section 19.1(G), the term “abandoned” shall mean that Tenant shall have vacated
the Premises with no intention to return);

(H)             any guarantor of Tenant’s obligations under this Lease
(“Guarantor”) shall fail to perform any of its obligations when due under any
guaranty of Tenant’s obligations under this Lease (a “Guaranty”) from Guarantor
in favor of Landlord, or Guarantor shall assert that the Guaranty has ceased,
for any reason, to be in full force and effect;

(I)                Guarantor or any assignor of this Lease generally does not,
or is unable to, or admits in writing its inability to, pay its debts and they
become due or is subject to the filing of a petition, case or proceeding in
bankruptcy; or

(J)                an Insolvency Event occurs.

 ­65

--------------------------------------------------------------------------------

 

19.2.        Termination.

If (1) an Event of Default occurs, and (2) Landlord, at any time thereafter, at
Landlord’s option, gives a notice to Tenant stating that this Lease and the Term
shall expire and terminate on the third (3rd) Business Day after the date that
Landlord gives Tenant such notice, then this Lease and the Term and all rights
of Tenant under this Lease shall expire and terminate as of the third (3rd)
Business Day after the date that Landlord gives Tenant such notice, and Tenant
immediately shall quit and surrender the Premises, but Tenant shall nonetheless
remain liable for all of its obligations hereunder, as provided in Article 21
hereof and Article 22 hereof.

Article 20
TENANT’S INSOLVENCY

20.1.        Assignments pursuant to the Bankruptcy Code.

(A)             The term “Bankruptcy Code” shall mean 11 U.S.C. Section 101 et
seq., or any statute of similar nature and purpose.

(B)              If Tenant proposes to assign the tenant’s interest hereunder
pursuant to the provisions of the Bankruptcy Code to any Person that has made a
bona fide offer to accept an assignment of the tenant’s interest under this
Lease on terms acceptable to Tenant, then Tenant shall give to Landlord notice
of such proposed assignment no later than thirty (30) days after the date that
Tenant receives such offer, but in any event no later than ten (10) days before
the date that Tenant makes application to a court of competent jurisdiction for
authority and approval to consummate such assignment. Such notice given by
Tenant to Landlord shall (a) set forth the name and address of such Person that
has made such bona fide offer, (b) set forth all of the terms and conditions of
such bona fide offer, and (c) confirm that such Person will provide to Landlord
adequate assurance of future performance that conforms with the terms of
Section 20.1(C) hereof. Landlord shall have the right to accept an assignment of
this Lease upon the same terms and conditions and for the same consideration, if
any, as the bona fide offer made by such Person (less any brokerage commissions
that would otherwise be payable by Tenant out of the consideration to be paid by
such Person in connection with such assignment of the tenant’s interest under
this Lease), by giving notice thereof to Tenant at any time prior to the
effective date of such proposed assignment.

(C)              A Person that submits a bona fide offer to take by assignment
the tenant’s interest under this Lease as described in Section 20.1(B) hereof
shall be deemed to have provided Landlord with adequate assurance of future
performance only if such Person (a) deposits with Landlord simultaneously with
such assignee’s taking by assignment the tenant’s interest under this Lease an
amount equal to the then annual Fixed Rent, as security for the faithful
performance and observance by such assignee of the tenant’s obligations of this
Lease (and such Person gives to Landlord, at least five (5) days prior to the
date that the proposed assignment becomes effective, information reasonably
satisfactory to Landlord that indicates that such Person has the ability to post
such deposit), (b) gives to Landlord, at least five (5) days prior to the date
that the proposed assignment becomes effective, such Person’s financial
statements, audited by a certified public accountant in accordance with
generally accepted accounting principles, consistently applied, for the three
(3) fiscal years that immediately precede such

 66

­

--------------------------------------------------------------------------------

 

assignment, that indicate that such Person has a tangible net worth of at least
ten (10) times the then annual Fixed Rent for each of such three (3) years, and
(c) gives to Landlord, at least five (5) days prior to the date that the
proposed assignment becomes effective, such other information or takes such
action that in either case Landlord, in its reasonable judgment, determines is
necessary to provide adequate assurance of the performance by such assignee of
the obligations of the tenant under this Lease; provided, however, that in no
event shall such adequate assurance of future performance be less favorable to
Landlord than the assurance contemplated by Section 365(b)(3) of the Bankruptcy
Code (notwithstanding that this Lease may be construed as a lease of real
property in a shopping center).

(D)             If Tenant’s interest under this Lease is assigned to any Person
pursuant to the provisions of the Bankruptcy Code, then any such assignee shall
(x) be deemed without further act or deed to have assumed all the obligations of
the tenant arising under this Lease from and after the date of such assignment,
and (y) execute and deliver to Landlord upon demand an instrument confirming
such assumption.

(E)              Nothing contained in this Article 20 limits Landlord’s rights
against Tenant under Article 18 hereof.

20.2.        Replacement Lease.

If (i) Tenant is not the Person that constituted Tenant initially, and (ii)
either (I) this Lease is disaffirmed or rejected pursuant to the Bankruptcy
Code, or (II) this Lease terminates by reason of occurrence of an Insolvency
Event, then, subject to the terms of this Section 20.2, the Persons that
constituted Tenant hereunder previously, including, without limitation, the
Person that constituted Tenant initially (each such Person that previously
constituted Tenant hereunder (but does not then constitute Tenant hereunder),
and with respect to which Landlord exercises Landlord’s rights under this
Section 20.2, being referred to herein as a “Predecessor Tenant”) shall (1) pay
to Landlord the aggregate Rental that is then due and owing by Tenant to
Landlord under this Lease to and including the date of such disaffirmance,
rejection or termination, and (2) enter into a new lease, between Landlord, as
landlord, and the Predecessor Tenant, as tenant, for the Premises, and for a
term commencing on the effective date of such disaffirmance, rejection or
termination and ending on the Fixed Expiration Date, at the same Fixed Rent and
upon the then executory terms that are contained in this Lease, except that (a)
the Predecessor Tenant’s rights under the new lease shall be subject to the
possessory rights of Tenant under this Lease and the possessory rights of any
Person claiming by, through or under Tenant or by virtue of any statute or of
any order of any court, and (b) such new lease shall require all defaults
existing under this Lease to be cured by the Predecessor Tenant with reasonable
diligence. Landlord shall have the right to require the Predecessor Tenant to
execute and deliver such new lease on the terms set forth in this Section 20.2
only by giving notice thereof to Tenant within thirty (30) days after Landlord
receives notice of any such disaffirmance or rejection (or, if this Lease
terminates by reason of Landlord making an election to do so, then Landlord may
exercise such right only by giving such notice to Tenant within thirty (30) days
after this Lease so terminates). If the Predecessor Tenant defaults in its
obligation to enter into said new lease for a period of ten (10) days following
Landlord’s request therefor, then, in addition to all other rights and remedies
by reason of such default, either at law or in equity, Landlord shall have the
same rights and remedies against such Predecessor Tenant as if such Predecessor
Tenant had entered into such

67

--------------------------------------------------------------------------------

 

new lease and such new lease had thereafter been terminated as of the
commencement date thereof by reason of such Predecessor Tenant’s default
thereunder.

20.3.        Insolvency Events.

This Lease shall terminate automatically upon the occurrence of any of the
following events:

 

(A)             a Tenant Obligor commences or institutes any case, proceeding or
other action (a) seeking relief on its behalf as debtor, or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, or (b) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
property; or

(B)              a Tenant Obligor makes a general assignment for the benefit of
creditors; or

 

(C)              any case, proceeding or other action is commenced or instituted
against a Tenant Obligor (a) seeking to have an order for relief entered against
it as debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, or (b) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its property, which in either of such cases both (i) results
in any such entry of an order for relief, adjudication of bankruptcy or
insolvency or such an appointment or the issuance or entry of any other order
having a similar effect, and (ii) remains undismissed for a period of sixty (60)
days; or

(D)             any case, proceeding or other action is commenced or instituted
against a Tenant Obligor seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its property
which results in the entry of an order for any such relief which is not vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days from the
entry thereof; or

(E)              a Tenant Obligor takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clauses (A), (B), (C), or (D) above; or

(F)               a trustee, receiver or other custodian is appointed for any
substantial part of a Tenant Obligor’s assets, and such appointment is not
vacated or stayed within twenty-five (25) Business Days (the events described in
this Section 20.3 being collectively referred to herein as “Insolvency Events”).

The term “Tenant Obligor” shall mean (a) Tenant, (b) any Person that comprises
Tenant (if Tenant is comprised of more than one (1) Person), (c) any partner in
Tenant (if Tenant is a general partnership), (d) any general partner in Tenant
(if Tenant is a limited partnership), (e)

68

­

--------------------------------------------------------------------------------

 

any Person that has guaranteed all or any part of the obligations of Tenant
hereunder (if such Person is an Affiliate of Tenant), and (f) any Person that
(x) preceded Tenant as the tenant hereunder, and (y) is an Affiliate of Tenant.
If this Lease terminates pursuant to this Section 20.3, then (I) Tenant
immediately shall quit and surrender the Premises, and (II) Tenant shall
nonetheless remain liable for all of its obligations hereunder, as provided in
Article 21 hereof and Article 22 hereof.

20.4.        Effect of Stay.

Notwithstanding anything to the contrary contained herein, if (i) Landlord’s
right to terminate this Lease after the occurrence of an Event of Default, or
the termination of this Lease upon the occurrence of an Insolvency Event, is
stayed by order of any court having jurisdiction over an Insolvency Event, or by
federal or state statute, (ii) the trustee appointed in connection with an
Insolvency Event, or Tenant or Tenant as debtor-in-possession, fails to assume
Tenant’s obligations under this Lease on or prior to the earliest to occur of
(a) the last day of the period prescribed therefor by law, (b) the one hundred
twentieth (120th) day after entry of the order for relief, or (c) a date that is
otherwise designated by the court, or (iii) said trustee, Tenant or Tenant as
debtor-in-possession fails to provide adequate protection of Landlord’s right,
title and interest in and to the Premises or adequate assurance of the complete
and continuous future performance of Tenant’s obligations under this Lease as
provided in Section 20.1(C) hereof, then Landlord, to the extent permitted by
law or by leave of the court having jurisdiction over such proceeding, shall
have the right, at its election, to terminate this Lease on five (5) Business
Days of advance notice to Tenant, Tenant as debtor-in-possession or said
trustee, and, upon the expiration of said period of five (5) Business Days, this
Lease shall cease and expire as aforesaid and Tenant, Tenant as
debtor-in-possession or said trustee shall immediately quit and surrender the
Premises as aforesaid.

20.5.        Rental for Bankruptcy Purposes.

Notwithstanding anything contained in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of Landlord under this Lease, regardless of
whether such amounts are expressly denominated as Rental, shall constitute rent
for the purposes of Section 502(b)(6) of the Bankruptcy Code, and Tenant’s
payment obligations with respect thereto shall constitute obligations to be
timely performed pursuant to Section 365(d) of the Bankruptcy Code.

Article 21
REMEDIES AND DAMAGES

21.1.        Certain Remedies.

(A)             If (x) an Event of Default occurs and this Lease and the Term
expires and comes to an end as provided in Article 19 hereof, or (y) this Lease
terminates as provided in Section 20.3 hereof, then:

(1)             Tenant shall immediately quit and peacefully surrender the
Premises to Landlord, and Landlord and its agents may, without prejudice to any
other remedy which Landlord may have, (a) re-enter the Premises or any part
thereof, without notice, either by summary proceedings, or by any other
applicable action or proceeding permitted by applicable

69

 

--------------------------------------------------------------------------------

 

Requirements, (b) repossess the Premises and dispossess Tenant and any other
Persons from the Premises, and (c) remove any and all of their property and
effects from the Premises; and

(2)              Landlord, at Landlord’s option, may relet the whole or any
portion or portions of the Premises from time to time, either in the name of
Landlord or otherwise, to such tenant or tenants, for such term or terms ending
before, on or after the Fixed Expiration Date, at such rental or rentals and
upon such other conditions, which may include concessions and free rent periods,
as Landlord, in its sole discretion, may determine.

(B)              Landlord shall have no obligation to relet the Premises or any
part thereof and shall not be liable for refusal or failure to relet the
Premises or any part thereof, or, in the event of any such reletting, for
refusal or failure to collect any rent due upon any such reletting. Any such
refusal or failure on Landlord’s part shall not relieve Tenant of any liability
under this Lease or otherwise affect any such liability. Landlord, at Landlord’s
option, may make such repairs, replacements, alterations, additions,
improvements, decorations and other physical changes in and to the Premises as
Landlord, in its sole discretion, considers advisable or necessary in connection
with any such reletting or proposed reletting, without relieving Tenant of any
liability under this Lease or otherwise affecting any such liability.

(C)              In the event of a breach or threatened breach by Tenant, or any
Persons claiming by, through or under Tenant, of any term, covenant or condition
of this Lease, Landlord shall have the right to (1) enjoin or restrain such
breach, (2) invoke any other remedy allowed by law or in equity as if re-entry,
summary proceedings and other special remedies were not provided in this Lease
for such breach, and (3) seek any declaratory, injunctive or other equitable
relief, and specifically enforce this Lease. The right to invoke the remedies
hereinbefore set forth are cumulative and nonexclusive and shall not preclude
Landlord from invoking any other remedy allowed at law or in equity.

21.2.        No Redemption.

Tenant, on its own behalf and on behalf of all Persons claiming by, through or
under Tenant, including all creditors, does hereby waive any and all rights
which Tenant and all such Persons might have under any present or future law to
redeem the Premises, or to re-enter or repossess the Premises, or to restore the
operation of this Lease, after (a) Tenant has been dispossessed by a judgment or
by warrant of any court or judge, or (b) any re-entry by Landlord, or (c) any
expiration or termination of this Lease and the Term, whether such dispossess,
reentry, expiration or termination is by operation of law or pursuant to the
provisions of this Lease. The words “re-enter,” “re-entry” and “re-entered” as
used in this Lease shall not be deemed to be restricted to their technical legal
meanings.

21.3.        Calculation of Damages.

(A)             If this Lease terminates by reason of the occurrence of an Event
of Default or by reason of the occurrence of an Insolvency Event, then Tenant
shall pay to Landlord, on demand, and Landlord shall be entitled to recover:

 

 70

 

--------------------------------------------------------------------------------

 

(1)             all Rental payable under this Lease by Tenant to Landlord (x) to
the date that this Lease terminates, or (y) to the date of re-entry upon the
Premises by Landlord, as the case may be;

(2)              the excess of (a) the Rental for the period which otherwise
would have constituted the unexpired portion of the Term, over (b) the net
amount, if any, of rents collected under any reletting effected pursuant to the
provisions of clause (2) of Section 21.1(A) hereof for any part of such period
(such excess being referred to herein as a “Deficiency”), as damages (it being
understood that (x) such net amount described in clause (b) above shall be
calculated by deducting from the rents collected under any such reletting all of
Landlord’s expenses in connection with the termination of this Lease, Landlord’s
re-entry upon the Premises and such reletting, including, but not limited to,
all repossession costs, brokerage commissions, legal expenses, attorneys’ fees
and disbursements, alteration costs, contributions to work and other expenses of
preparing the Premises for such reletting, (y) any such Deficiency shall be paid
in monthly installments by Tenant on the days specified in this Lease for
payment of installments of Fixed Rent, and (z) Landlord shall be entitled to
recover from Tenant each monthly Deficiency as it arises, and no suit to collect
the amount of the Deficiency for any month shall prejudice Landlord’s right to
collect the Deficiency for any subsequent month by a similar proceeding); and

(3)              regardless of whether Landlord has collected any monthly
Deficiency as aforesaid, and in lieu of any further Deficiency, as and for
liquidated and agreed final damages, an amount equal to the excess of (a) the
Rental for the period which otherwise would have constituted the unexpired
portion of the Term (commencing on the date immediately succeeding the last date
with respect to which a Deficiency, if any, was collected), over (b) the then
fair and reasonable net effective rental value of the Premises for the same
period (which is calculated by deducting from the fair and reasonable rental
value of the Premises the expenses that Landlord would reasonably expect to
incur in reletting the Premises, including, but not limited to, all repossession
costs, brokerage commissions, legal expenses, attorneys’ fees and disbursements,
alteration costs, contributions to work and other expenses of preparing the
Premises for such reletting), both discounted to present value at the Base Rate.
If, before presentation of proof of such liquidated damages to any court,
commission or tribunal, the Premises, or any part thereof, have been relet by
Landlord for the period which otherwise would have constituted the unexpired
portion of the Term, or any part thereof, then the amount of rent reserved upon
such reletting shall be deemed, prima facie, to be the fair and reasonable
rental value of the Premises (or the applicable part thereof) so relet during
the term of the reletting.

(B)              If the Premises, or any part thereof, are relet together with
other space in the Building, then the rents collected or reserved under any such
reletting and the expenses of any such reletting shall be equitably apportioned
for the purposes of this Section 21.3. Tenant acknowledges and agrees that in no
event shall it be entitled to any rents collected or payable under any
reletting, regardless of whether such rents exceed the Rental reserved in this
Lease.

(C)              Nothing contained in this Article 21 shall be deemed to limit
or preclude the recovery by Landlord from Tenant of the maximum amount allowed
to be obtained as damages by any statute or rule of law, or of any sums or
damages to which Landlord may be entitled in addition to the damages set forth
in this Section 21.3.

 

71

­

--------------------------------------------------------------------------------

 

Article 22
LANDLORD’S EXPENSES AND LATE CHARGES

22.1.        Landlord’s Costs After Event of Default.

Tenant shall pay to Landlord an amount equal to the costs that Landlord incurs
in instituting or prosecuting any legal proceeding against Tenant (or any other
Person claiming by, through or under Tenant) after the occurrence of an Event of
Default, together with interest thereon calculated at the Applicable Rate from
the date that Landlord incurs such costs, within thirty (30) days after Landlord
gives to Tenant an invoice therefor (it being understood that Landlord shall
have the right to collect such amount from Tenant as additional rent to the
extent that Landlord incurs such costs during the Term and as damages to the
extent that Landlord incurs such costs after the Expiration Date).

22.2.        Legal Proceeding Costs.

If Landlord or Tenant, as the case may be, institutes or prosecutes any legal
proceeding against the other arising out of this Lease, then the losing party in
any such legal proceeding shall pay to the prevailing party an amount equal to
the reasonable actual out-of-pocket costs that the prevailing party incurred in
instituting or prosecuting such legal proceeding, together with interest thereon
calculated at the Applicable Rate from the date that the prevailing party
incurred such costs, within thirty (30) days after the prevailing party gives to
the non-prevailing party an invoice therefore. If the determination in any such
legal proceeding is that the prevailing party was partially liable, then the
non-prevailing party shall pay to the prevailing party the percentage of the
aforesaid costs equal to the percentage by which the prevailing party was
successful (so that if, for example, the prevailing party was determined in any
such proceeding to be twenty percent (20%) liable, then the non-prevailing party
would pay the prevailing party only eighty percent (80%) of the prevailing
party’s costs to institute or prosecute such legal proceeding).

22.3.        Interest on Late Payments.

If Tenant fails to pay any item of Rental on or prior to the fifth (5th) day
after the date that such payment is due, then Tenant shall pay to Landlord, in
addition to such item of Rental, as a late charge and as additional rent, an
amount equal to interest at the Applicable Rate on the amount unpaid, computed
from the date such payment was due to and including the date of payment. Nothing
contained in this Section 22.3 limits Landlord’s rights and remedies, by
operation of law or otherwise, after the occurrence of an Event of Default.

Article 23
END OF TERM

23.1.        End of Term.

On the Expiration Date, Tenant shall quit and surrender to Landlord the
Premises, vacant, broom-clean, in good order and condition, ordinary wear and
tear and damage for which Tenant is not responsible under the terms of this
Lease excepted, and otherwise in compliance with the provisions hereof. Tenant
expressly waives, for itself and for any Person claiming by, through or under
Tenant, any rights which Tenant or any such Person may have under the provisions
of

 72

­

--------------------------------------------------------------------------------

 

Section 2201 of the New York Civil Practice Law and Rules and of any successor
law of like import then in force in connection with any holdover summary
proceedings that Landlord institutes to enforce the provisions of this Article
23.

23.2.        Holdover.

If possession of the Premises is not surrendered to Landlord on the Expiration
Date, then Tenant shall pay to Landlord on account of use and occupancy of the
Premises, for each month (or any portion thereof) during which Tenant (or a
Person claiming by, through or under Tenant) holds over in the Premises after
the Expiration Date, an amount equal to the greater of (i) one and one-half
(1-1/2) times the aggregate Rental that was payable under this Lease during the
last month of the Term, and (ii) the then fair market rental value of the
Premises. Landlord’s right to collect such amount from Tenant for use and
occupancy shall be in addition to any other rights or remedies that Landlord may
have hereunder or at law or in equity (including, without limitation, Landlord’s
right to recover Landlord’s damages from Tenant that derive from vacant and
exclusive possession of the Premises not being surrendered to Landlord on the
Expiration Date). Nothing contained in this Section 23.2 shall permit Tenant to
retain possession of the Premises after the Expiration Date or limit in any
manner Landlord’s right to regain possession of the Premises, through summary
proceedings or otherwise. Landlord’s acceptance of any payments from Tenant
after the Expiration Date shall be deemed to be on account of the amount to be
paid by Tenant in accordance with the provisions of this Article 23.

Article 24
NO WAIVER

24.1.        No Surrender.

(A)             Landlord shall be deemed to have accepted a surrender of the
Premises only if Landlord executes and delivers to Tenant a written instrument
providing expressly therefor.

(B)              No employee of Landlord or of Landlord’s agents shall have any
power to accept the keys to the Premises prior to the Expiration Date in the
absence of a writing with respect thereto. The delivery of such keys to any
employee of Landlord or of Landlord’s agents shall not operate as a termination
of this Lease or a surrender of the Premises in the absence of a writing with
respect thereto. If Tenant at any time desires to have Landlord sublet the
Premises on Tenant’s account, then Landlord or Landlord’s agents are authorized
to receive said keys for such purpose without releasing Tenant from any of
Tenant’s obligations under this Lease.

24.2.        No Waiver by Landlord.

(1)             Landlord’s failure to seek redress for violation of, or to
insist upon the strict performance of, any covenant or condition of this Lease,
or any of the Rules, shall not be deemed to be a waiver thereof. The receipt by
Landlord of Rental with knowledge of the breach of any covenant of this Lease by
Tenant shall not be deemed a waiver of such breach.

(2)              No payment by Tenant or receipt by Landlord of a lesser amount
than the monthly Fixed Rent or other item of Rental herein stipulated shall be
deemed to be other than on

73

­

--------------------------------------------------------------------------------

 

account of the earliest stipulated Fixed Rent or other item of Rental, or as
Landlord may elect to apply such payment. No endorsement or statement on any
check or any letter accompanying any check or payment as Fixed Rent or other
item of Rental shall be deemed to be an accord and satisfaction. Landlord may
accept such check or payment without prejudice to Landlord’s right to recover
the balance of such Fixed Rent or other item of Rental or to pursue any other
remedy provided in this Lease or otherwise available to Landlord at law or in
equity.

(B)              Landlord’s failure during the Term to prepare and deliver any
invoices, and Landlord’s failure to make a demand for payment under any of the
provisions of this Lease after one (1) year after the Fixed Expiration Date,
shall not in any way be deemed to be a waiver of, or cause Landlord to forfeit
or surrender, its rights to collect any item of Rental which may have become due
during the Term (except to the extent otherwise expressly set forth herein).
Tenant’s liability for such amounts shall survive the expiration or earlier
termination of this Lease.

(C)              No provision of this Lease shall be deemed to have been waived
by Landlord, unless such waiver is in writing signed by Landlord.

24.3.        No Waiver by Tenant.

Tenant’s failure to seek redress for violation of, or to insist upon the strict
performance of, any covenant or condition of this Lease on Landlord’s part to be
performed, shall not be deemed to be a waiver. The payment by Tenant of any item
of Rental or performance of any obligation of Tenant hereunder with knowledge of
any breach by Landlord of any covenant of this Lease shall not be deemed a
waiver of such breach, nor shall it prejudice Tenant’s right to pursue any
remedy against Landlord in this Lease provided or otherwise available to Tenant
in law or in equity. No provision of this Lease shall be deemed to have been
waived by Tenant, unless such waiver is in writing signed by Tenant.

Article 25
JURISDICTION

25.1.        Governing Law.

This Lease shall be construed and enforced in accordance with the laws of the
State of New York.

25.2.        Submission to Jurisdiction.

Tenant hereby (a) irrevocably consents and submits to the jurisdiction of any
federal, state, county or municipal court sitting in the State of New York for
purposes of any action or proceeding brought therein by Landlord against Tenant
concerning any matters relating to this Lease, (b) irrevocably waives personal
service of any summons and complaint and consents to the service upon it of
process in any such action or proceeding in accordance with Article 26 hereof,
(c) irrevocably waives all objections as to venue and any and all rights it may
have to seek a change of venue with respect to any such action or proceedings,
(d) agrees that the laws of the State of New York shall govern in any such
action or proceeding and waives any defense to any action or proceeding granted
by the laws of any other country or jurisdiction unless such

74

 

--------------------------------------------------------------------------------

 

defense is also allowed by the laws of the State of New York, and (e) agrees
that any final unappealable judgment rendered against it in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by law. Tenant further
agrees that any action or proceeding by Tenant against Landlord concerning any
matters arising out of or in any way relating to this Lease shall be brought
only in the State of New York, County of New York.

25.3.        Waiver of Trial by Jury.

Landlord and Tenant hereby waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other on any
matters whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant’s use or occupancy of the Premises,
or for the enforcement of any remedy under any statute, emergency or otherwise.
If Landlord commences any summary proceeding against Tenant, then Tenant shall
not interpose any counterclaim of whatever nature or description in any such
proceeding (unless such counterclaim is mandatory), and shall not seek to
consolidate such proceeding with any other action which may have been or will be
brought in any other court by Tenant.

Article 26
NOTICES

26.1.        Addresses; Manner of Delivery.

Except as otherwise expressly provided in this Lease, any bills, statements,
consents, notices, demands, requests or other communications given or required
to be given under this Lease shall (1) be in writing, (2) be deemed sufficiently
given if (a) delivered by hand (against a signed receipt), (b) sent by
registered or certified mail (return receipt requested), or (c) sent by a
nationally-recognized overnight courier (with proof of delivery required), and
(3) be addressed in each case:

if to Tenant, at:

                                                          
                                                          
                                                          

Attn.:                                                  

 

with a copy to:

                                                          
                                                          
                                                          

Attn.:                                                  

 

if to Landlord, at:

 75

­

--------------------------------------------------------------------------------

 

c/o Alexander’s, Inc.
888 Seventh Avenue
New York, New York 10019

Attn.: Executive Vice President and Chief Financial Officer

 

and to:

c/o Alexander’s, Inc.
210 Route 4 East
Paramus, New Jersey 07652

Attn.: Executive Vice President and Chief Financial Officer

and to:

c/o Vornado Realty L.P.
888 Seventh Avenue
New York, New York 10019

Attn: Executive Vice President – Retail

or to such other address or addresses as Landlord or Tenant may designate from
time to time on at least ten (10) Business Days of advance notice given to the
other in accordance with the provisions of this Article 26. Any such bill,
statement, consent, notice, demand, request, or other communication shall be
deemed to have been given (x) on the date that it is hand delivered, as
aforesaid, or (y) three (3) Business Days after the date that it is mailed, as
aforesaid, or (z) on the first (1st) Business Day after the date that it is sent
by a nationally-recognized courier, as aforesaid. Any such bills, statements,
consents, notices, demands, requests or other communications that the Person
that is the property manager for the Building gives to Tenant in accordance with
the terms of this Article 26 shall be deemed to have been given by Landlord
(except that Landlord, at any time and from time to time, shall have the right
to terminate or suspend such property manager’s right to give such bills,
statements, consents, notices, demands, requests or other communications to
Tenant by giving not less than five (5) days of advance notice thereof to
Tenant).

Article 27
BROKERAGE

27.1.        Broker.

Landlord and Tenant each represents to the other that it has not dealt with any
broker, finder or salesperson in connection with this Lease other than
__________ and Vornado Realty L.P. (collectively, the “Brokers”). The Brokers
shall be paid all commissions, fees or other compensation due Brokers in
connection with this Lease by or on behalf of Landlord pursuant to separate
agreements. The provisions of this Article 27 shall survive the Fixed Expiration
Date or earlier termination of this Lease.

 76

 

--------------------------------------------------------------------------------

 

 

Article 28
INDEMNITY

28.1.        Tenant’s Indemnification of the Landlord Parties.

(A)             Subject to the terms of this Section 28.1, Tenant shall
indemnify the Landlord Parties, and hold the Landlord Parties harmless, from and
against, all losses, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) that are incurred
by a Landlord Party and that derive from a claim (a “Tenant Liability Claim”)
made by a third party against such Landlord Party arising from or alleged to
arise from:

(1)             an act or omission of any Tenant Party during the Term
(including, without limitation, claims that derive from a Permitted Party’s
conducting such Permitted Party’s business in the Premises);

(2)              an event or circumstance that occurs during the Term in the
Premises or in another portion of the Building with respect to which Tenant has
exclusive use pursuant to the terms hereof (subject, however, to Landlord’s
rights of access under Article 10 hereof);

(3)              the breach of any covenant to be performed by Tenant hereunder;

(4)             a misrepresentation made by Tenant hereunder (including, without
limitation, a misrepresentation of Tenant under Section 27.1 hereof);

(5)              a Compliance Challenge (or Tenant’s delaying Tenant’s
compliance with a Requirement during the pendency of a Compliance Challenge); or

(6)               Landlord’s cooperating with Tenant as contemplated by
Section 8.4(A) hereof.

Tenant shall not be required to indemnify the Landlord Parties, and hold the
Landlord Parties harmless, in either case as aforesaid, to the extent that it is
finally determined that the negligence or wilful misconduct of a Landlord Party
contributed to the loss or damage sustained by the Person making the Tenant
Liability Claim. Nothing contained in this Section 28.1 limits the provisions of
Section 30.17 hereof.

(B)              The term “Landlord Parties” shall mean, collectively, Landlord,
each Lessor, each Mortgagee, the Condominium Board, any subcommittee of the
Condominium Board and their respective partners, members, managers,
shareholders, officers, directors, employees, trustees and agents.

(C)              The term “Tenant Parties” shall mean each Permitted Party and
their respective partners, members, managers, shareholders, officers, directors,
employees, trustees and agents.

(D)             The parties intend that the Landlord Parties (other than
Landlord) shall be third-party beneficiaries of this Section 28.1.

77

­

--------------------------------------------------------------------------------

 

28.2.        Landlord’s Indemnification of the Tenant Parties.

(A)             Subject to the terms of this Section 28.2, Landlord shall
indemnify the Tenant Parties, and hold the Tenant Parties harmless, from and
against, all losses, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) that are incurred
by a Tenant Party and that derive from a claim (a “Landlord Liability Claim”)
made by a third party against such Tenant Party arising from or alleged to arise
from:

(1)             the breach of any covenant to be performed by Landlord
hereunder;

(2)              a misrepresentation made by Landlord hereunder (including,
without limitation, a misrepresentation of Landlord under Section 27.1 hereof);

(3)              Landlord’s failure to pay the Brokers a commission or other
compensation in connection herewith; or

(4)             any event or circumstance that occurs during the Term in the
Building or in the vicinity of the Building (other than the Premises) as a
result of the act or omission of any Landlord Party.

Landlord shall not be required to indemnify the Tenant Parties, and hold the
Tenant Parties harmless, in either case as aforesaid, to the extent that it is
finally determined that the negligence or wilful misconduct of a Tenant Party
contributed to the loss or damage sustained by the Person making the Landlord
Liability Claim.

(B)              The parties intend that the Tenant Parties (other than Tenant)
shall constitute third-party beneficiaries of this Section 28.2.

28.3.        Indemnification Procedure.

(A)             If at any time a Landlord Liability Claim is made or threatened
against a Tenant Party, or a Tenant Liability Claim is made or threatened
against a Landlord Party, then the Person entitled to indemnity under this
Article 28 (the “Indemnitee”) shall give to the other party (the “Indemnitor”)
notice of such Landlord Liability Claim or such Tenant Liability Claim, as the
case may be (the “Claim”); provided, however, that the Indemnitee’s failure to
provide such notice shall not impair the Indemnitee’s rights to indemnity as
provided in this Article 28 except to the extent that the Indemnitor is
prejudiced materially thereby. Such notice shall state the basis for the Claim
and the amount thereof (to the extent such amount is determinable at the time
that such notice is given).

(B)              The Indemnitor shall have the right to defend against the Claim
using attorneys that the Indemnitor reasonably selects (it being understood that
the attorneys designated by the Indemnitor’s insurer shall be deemed approved by
the Indemnitee for purposes hereof). The Indemnitor’s failure to notify the
Indemnitee of the Indemnitor’s election to defend against the Claim within
thirty (30) days after the Indemnitee gives such notice to the Indemnitor shall
be deemed a waiver by the Indemnitor of its aforesaid right to defend against
the Claim.

 

78

­

--------------------------------------------------------------------------------

 

(C)              Subject to the terms of this Section 28.3(C), if the Indemnitor
elects to defend against the Claim pursuant to Section 28.3(B) hereof, then the
Indemnitee may participate, at the Indemnitee’s expense, in defending against
the Claim. The Indemnitor shall have the right to control the defense against
the Claim (and, accordingly, the Indemnitee shall cause its counsel to act
accordingly). If there exists a conflict between the interests of the Indemnitor
and the interests of the Indemnitee, then the Indemnitor shall pay the
reasonable fees and disbursements of any counsel that the Indemnitee retains in
so participating in the defense against the Claim.

(D)             If the Claim is a Tenant Liability Claim, then Landlord shall
cooperate reasonably with Tenant in connection therewith. If the Claim is a
Landlord Liability Claim, then Tenant shall cooperate reasonably with Landlord
in connection therewith.

(E)              The Indemnitor shall not consent to the entry of any judgment
or award regarding the Claim, or enter into any settlement regarding the Claim,
except in either case with the prior approval of the Indemnitee (any such entry
of any judgment or award regarding a Claim to which the Indemnitor consents, or
any such settlement regarding a claim to which the Indemnitor agrees, being
referred to herein as a “Settlement”). The Indemnitee shall not unreasonably
withhold, condition or delay the Indemnitee’s approval of a proposed Settlement,
provided that the Indemnitor pays, in cash, to the Person making the Claim, the
entire amount of the Settlement contemporaneously with the Indemnitee’s approval
thereof (so that neither the Indemnitor nor the Indemnitee have any material
obligations regarding the applicable Claim that remain executory from and after
the consummation of the Settlement). If (x) the terms of the Settlement do not
provide for the Indemnitor’s making payment, in cash, to the Person making the
Claim, the entire amount of the Settlement contemporaneously with the
Indemnitee’s approval thereof, and (y) the Indemnitee does not approve the
proposed Settlement, then the Indemnitor’s aggregate liability under this
Article 28 for the Claim (including, without limitation, the costs incurred by
the Indemnitor for legal costs and other costs of defense) shall not exceed an
amount equal to the sum of (i) the aggregate legal costs and defense costs that
the Indemnitor incurred to the date that the Indemnitor proposes such
Settlement, (ii) the amount that the Indemnitor would have otherwise paid to the
Person making the applicable Claim under the terms of the proposed Settlement,
and (iii) the aggregate legal costs and defense costs that the Indemnitor would
have reasonably expected to incur in consummating the proposed Settlement.

(F)               If the Indemnitor does not elect to defend against the Claim
as contemplated by this Section 28.3, then the Indemnitee may defend against, or
settle, such claim, action or proceeding in any manner that the Indemnitee deems
reasonably appropriate, and the Indemnitor shall be liable for the Claim to the
extent provided in this Article 28.

Article 29
LANDLORD’S CONSENTS; ARBITRATION

29.1.        Certain Limitations.

(A)             Subject to the terms of Section 29.2 hereof, Tenant hereby
waives any claim against Landlord for Landlord’s unreasonably withholding,
unreasonably conditioning or unreasonably delaying any consent or approval
requested by Tenant in cases where Landlord

79

­

--------------------------------------------------------------------------------

 

expressly agreed herein not to unreasonably withhold, unreasonably condition or
unreasonably delay such consent or approval. If there is a determination that
such consent or approval has been unreasonably withheld, unreasonably
conditioned or unreasonably delayed, then (1) the requested consent or approval
shall be deemed to have been granted, and (2) Landlord shall have no liability
to Tenant for its refusal or failure to give such consent or approval. Tenant’s
sole remedy for Landlord’s unreasonably withholding, conditioning or delaying
consent or approval shall be as provided in this Article 29.

29.2.        Expedited Arbitration.

(A)             If (i) this Lease obligates Landlord to not unreasonably
withhold, condition or delay Landlord’s consent or approval for a particular
matter, (ii) Landlord withholds, delays or conditions its consent or approval
for such matter, and (iii) Tenant believes that Landlord did so unreasonably,
then Tenant shall have the right to submit the issue of whether Landlord
unreasonably withheld, delayed or conditioned such consent or approval to an
Expedited Arbitration Proceeding only by giving notice thereof to Landlord on or
prior to the thirtieth (30th) day after the date that Landlord denied or
conditioned such consent or approval, or the thirtieth (30th) day after the date
that Tenant claims that Landlord’s delaying such consent or approval first
became unreasonable, as the case may be.

(B)              The sole decision to be made in the Expedited Arbitration
Proceeding shall be (a) whether Landlord unreasonably withheld, delayed or
conditioned its consent with respect to the particular matter being arbitrated
and (b) if Landlord is found to have unreasonably withheld, delayed or
conditioned its consent thereto, then whether it did so arbitrarily and
capriciously. If the decision in the Expedited Arbitration Proceeding is that
Landlord unreasonably withheld, conditioned, or delayed consent with respect to
such matter, then (i) Landlord shall be deemed to have consented to such matter,
and (ii) Landlord shall execute and deliver documentation that is reasonably
requested by Tenant to evidence such consent. The arbitrators shall have no
power to award any damages to Tenant, unless they find that Landlord
unreasonably withheld its consent to the particular matter arbitrarily and
capriciously, in which case the arbitrators may make a monetary award to Tenant
for the actual damages suffered by Tenant as a result thereof.

(C)              The term “Expedited Arbitration Proceeding” shall mean a
binding arbitration proceeding conducted in The City of New York under the
Commercial Arbitration Rules of the American Arbitration Association (or its
successor) and administered pursuant to the Expedited Procedures provisions
thereof; provided, however, that with respect to any such arbitration, (i) the
list of arbitrators referred to in Section E-5(b) shall be returned within five
(5) Business Days from the date of mailing; (ii) the parties shall notify the
American Arbitration Association (or its successor) by telephone, within four
(4) Business Days, of any objections to the arbitrator appointed and, subject to
clause (vii) below, shall have no right to object if the arbitrator so appointed
was on the list submitted by the American Arbitration Association (or its
successor) and was not objected to in accordance with Section E-5(b) as modified
by clause (i) above; (iii) the notification of the hearing referred to in
Section E-8 shall be four (4) Business Days in advance of the hearing; (iv) the
hearing shall be held within seven (7) Business Days after the appointment of
the arbitrator; (v) the arbitrator shall have no right to award damages (except
as expressly provided in Section 29.2(B) hereof) or vary, modify or waive any
provision

80

­

--------------------------------------------------------------------------------

 

of this Lease; (vi) the decision of the arbitrator shall be final and binding on
the parties; and (vii) the arbitrator shall not have been employed by either
party (or their respective Affiliates) during the period of three (3) years
prior to the date of the Expedited Arbitration Proceeding. The arbitrator shall
determine the extent to which each party is successful in such Expedited
Arbitration Proceeding in addition to rendering a decision on the dispute
submitted. If the arbitrator determines that one (1) party is entirely
unsuccessful, then such party shall pay all of the fees of such arbitrator. If
the arbitrator determines that both parties are partially successful, then each
party shall be responsible for such arbitrator’s fees only to the extent such
party is unsuccessful (e.g., if Landlord is eighty percent (80%) successful and
Tenant is twenty percent (20%) successful, then Landlord shall be responsible
for twenty percent (20%) of such arbitrator’s fees and Tenant shall be
responsible for eighty percent (80%) of such arbitrator’s fees).

Article 30
ADDITIONAL PROVISIONS

30.1.        Tenant’s Property Delivered to Building Employees.

Any Building employee to whom any property is entrusted by or on behalf of
Tenant shall be deemed to be acting as Tenant’s agent with respect to such
property.

30.2.        Not Binding Until Execution.

This Lease shall not be binding upon Landlord or Tenant unless and until
Landlord and Tenant have executed and unconditionally delivered a fully executed
copy of this Lease to each other.

30.3.        No Third Party Beneficiaries.

Landlord and Tenant hereby acknowledge that they do not intend for any other
Person to constitute a third-party beneficiary hereof.

30.4.        Extent of Landlord’s Liability.

(A)             The obligations of Landlord under this Lease shall not be
binding upon the Person that constitutes Landlord initially after the sale,
conveyance, assignment or transfer by such Person of its interest in the
Building or the Real Property, as the case may be (or upon any other Person that
constitutes Landlord after the date of such sale, conveyance, assignment or
transfer, which obligations shall be deemed assumed by any such Person that
constitutes Landlord after such sale, conveyance, assignment or transfer by such
Person of its interest in the Building or the Real Property, as the case may
be), to the extent such obligations accrue from and after the date of such sale,
conveyance, assignment or transfer.

(B)              The members, managers, partners, shareholders, directors,
officers and principals, direct and indirect, comprising Landlord shall not be
liable for the performance of Landlord’s obligations under this Lease. Tenant
shall look solely to Landlord to enforce Landlord’s obligations hereunder.

 

81

--------------------------------------------------------------------------------

 

(C)              The liability of Landlord for Landlord’s obligations under this
Lease shall be limited to Landlord’s interest in the Real Property and the
proceeds thereof. Tenant shall not look to any property or assets of Landlord
(other than Landlord’s interest in the Real Property and the proceeds thereof)
in seeking either to enforce Landlord’s obligations under this Lease or to
satisfy a judgment for Landlord’s failure to perform such obligations.

30.5.        Survival.

Tenant’s liability for all amounts that are due and payable to Landlord shall
survive the Expiration Date.

30.6.        Recording.

Tenant shall not record this Lease. Tenant shall not record a memorandum of this
Lease . Landlord shall have the right to record a memorandum of this Lease. If
Landlord submits to Tenant a memorandum hereof that is in reasonable form, then
Tenant shall execute, acknowledge and deliver such memorandum promptly after
Landlord’s submission thereof to Tenant.

30.7.        Entire Agreement.

This Lease contains the entire agreement between the parties and supersedes all
prior understandings, if any, with respect thereto. This Lease shall not be
modified, changed, or supplemented, except by a written instrument executed by
both parties.

30.8.        Exhibits.

If any inconsistency exists between the terms and provisions of this Lease and
the terms and provisions of the Exhibits hereto, then the terms and provisions
of this Lease shall prevail.

30.9.        Gender; Plural.

Wherever appropriate in this Lease, personal pronouns shall be deemed to include
the other gender and the singular to include the plural.

30.10.    Divisibility.

If any term of this Lease, or the application thereof to any Person or
circumstance, is held to be invalid or unenforceable, then the remainder of this
Lease or the application of such term to any other Person or any other
circumstance shall not be thereby affected, and each term shall remain valid and
enforceable to the fullest extent permitted by law.

30.11.    Vault Space.

If (i) Tenant uses or occupies any vaults, vault space or other space outside
the boundaries of the Real Property that in each case is located below grade,
and (ii) such space is diminished by any Governmental Authority or by any
utility company, then such diminution shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any

82

--------------------------------------------------------------------------------

 

abatement or diminution of Rental, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Landlord.

30.12.    Adjacent Excavation.

If an excavation is made upon land adjacent to the Building, or is authorized to
be made, then Tenant, upon reasonable advance notice, shall grant to the Person
causing or authorized to cause such excavation a license to enter upon the
Premises for the purpose of doing such work as said Person deems necessary to
preserve the Building from injury or damage and to support the same by proper
foundations, without any claim for damages or indemnity against Landlord, or
diminution or abatement of Rental, provided that the use and enjoyment of the
Premises shall not be materially and adversely impaired thereby.

30.13.    Captions.

The captions are inserted only for convenience and for reference and in no way
define, limit or describe the scope of this Lease nor the intent of any
provision thereof.

30.14.    Parties Bound.

The covenants, conditions and agreements contained in this Lease shall bind and
inure to the benefit of Landlord and Tenant and their respective legal
representatives, successors, and, except as otherwise provided in this Lease,
their assigns.

30.15.    Authority.

(A)             Tenant hereby represents and warrants to Landlord that (i)
Tenant is duly organized and validly existing in good standing under the laws of
_______________, and possesses all licenses and authorizations necessary to
carry on its business in the State of New York, (ii) Tenant has full power and
authority to carry on its business, enter into this Lease and consummate the
transaction contemplated hereby, (iii) the individual executing and delivering
this Lease on Tenant’s behalf has been duly authorized to do so, (iv) this Lease
has been duly executed and delivered by Tenant, (v) this Lease constitutes a
valid, legal, binding and enforceable obligation of Tenant (subject to
bankruptcy, insolvency or creditor rights laws generally, and principles of
equity generally), (vi) the execution, delivery and performance of this Lease by
Tenant will not cause or constitute a default under, or conflict with, the
organizational documents of Tenant or any agreement to which Tenant is a party,
(vii) the execution, delivery and performance of this Lease by Tenant will not
violate any Requirement, (viii) all consents, approvals, authorizations, orders
or filings of or with any court or governmental agency or body, if any, required
on the part of Tenant for the execution, delivery and performance of this Lease
have been obtained or made, and (ix) OFAC has not listed Tenant or any of
Tenant’s Affiliates on the OFAC List.

(B)              Landlord hereby represents and warrants to Tenant that (i)
Landlord is duly organized and validly existing in good standing under the laws
of Delaware, and possesses all licenses and authorizations necessary to carry on
its business, (ii) Landlord has full power and authority to carry on its
business, enter into this Lease and consummate the transaction contemplated
hereby, (iii) the individual executing and delivering this Lease on Landlord’s

83

 

--------------------------------------------------------------------------------

 

behalf has been duly authorized to do so, (iv) this Lease has been duly executed
and delivered by Landlord, (v) this Lease constitutes a valid, legal, binding
and enforceable obligation of Landlord (subject to bankruptcy, insolvency or
creditor rights laws generally, and principles of equity generally), (vi) the
execution, delivery and performance of this Lease by Landlord will not cause or
constitute a default under, or conflict with, the organizational documents of
Landlord or any agreement to which Landlord is a party, (vii) the execution,
delivery and performance of this Lease by Landlord does not violate any
Requirement, and (viii) all consents, approvals, authorizations, orders or
filings of or with any court or governmental agency or body, if any, required on
the part of Landlord for the execution, delivery and performance of this Lease
have been obtained or made.

30.16.    Rent Control.

If at the commencement of, or at any time or times during, the Term, the Rental
reserved in this Lease is not fully collectible by reason of any Requirement,
then Tenant shall enter into such agreements and take such other steps (without
additional expense to Tenant) as Landlord may reasonably request and as may be
legally permissible to allow Landlord to collect the maximum rents which may
from time to time during the continuance of such legal rent restriction be
legally permissible (and not in excess of the amounts reserved therefor under
this Lease). Upon the termination of such legal rent restriction prior to the
expiration of the Term, (a) the Rental shall become and thereafter be payable
hereunder in accordance with the amounts reserved in this Lease for the periods
following such termination, and (b) Tenant shall pay to Landlord, if legally
permissible, an amount equal to the excess of (i) the items of Rental which
would have been paid pursuant to this Lease but for such legal rent restriction,
over (ii) the rents paid by Tenant to Landlord during the period or periods such
legal rent restriction was in effect.

30.17.    Consequential Damages.

Subject to the terms of this Section 30.17, Tenant shall have no liability for
any consequential damages that Landlord suffers. Landlord shall have the right
to collect consequential damages from Tenant for Tenant’s failure to surrender
possession of the Premises to Landlord as provided in Article 23 hereof.
Landlord shall have no liability for any consequential damages suffered by
Tenant or any Person claiming by, through or under Tenant.

30.18.    Specially Designated Nationals; Blocked Persons; Embargoed Persons.

(A)             Tenant represents and warrants to Landlord that (a) Tenant and
each person or entity directly or indirectly owning an interest in Tenant is (i)
not currently identified on the OFAC List maintained by the Office of Foreign
Assets Control of the Department of the Treasury (“OFAC”) and/or on any other
similar list maintained by OFAC pursuant to any authorizing statute, executive
order or regulation (collectively, the “List”), and (ii) not a person or entity
with whom a citizen of the United States is prohibited to engage in transactions
by any trade embargo, economic sanction, or other prohibition of United States
law, regulation, or Executive Order of the President of the United States, (b)
none of the funds or other assets of Tenant constitute property of, or are
beneficially owned, directly or indirectly, by, any Embargoed Person, (c) no
Embargoed Person has any interest of any nature whatsoever in Tenant (whether
directly or indirectly), (d) none of the funds of Tenant have been derived from

84

­

--------------------------------------------------------------------------------

 

any unlawful activity with the result that the investment in Tenant is
prohibited by law or that the Lease is in violation of law, and (e) Tenant has
implemented procedures, and will consistently apply those procedures, to ensure
the foregoing representations and warranties remain true and correct at all
times. The term “Embargoed Person” means any person, entity or government
subject to trade restrictions under U.S. law, including but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders
or regulations promulgated thereunder with the result that the investment in
Tenant is prohibited by law or Tenant is in violation of law. The foregoing
representations shall not be deemed to apply with respect to any Persons who may
own shares in Tenant’s parent corporation which are traded through an
“over-the-counter market” or through any recognized stock exchange.

(B)              Tenant covenants and agrees (a) to comply with all requirements
of law relating to money laundering, anti-terrorism, trade embargos and economic
sanctions, now or hereafter in effect, (b) to immediately notify Landlord in
writing if any of the representations, warranties or covenants set forth in this
paragraph or the preceding paragraph are no longer true or have been breached or
if Tenant has a reasonable basis to believe that they may no longer be true or
have been breached, (c) not to use funds from any “Prohibited Person” (as such
term is defined in the September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism) to make any payment due to Landlord under the Lease and (d) at the
request of Landlord, to provide such information as may be requested by Landlord
to determine Tenant’s compliance with the terms hereof.

(C)              Tenant hereby acknowledges and agrees that Tenant’s inclusion
on the List at any time during the Lease Term shall be a material default of the
Lease. Notwithstanding anything herein to the contrary, Tenant shall not permit
the Premises or any portion thereof to be used or occupied by any person or
entity on the List or by any Embargoed Person (on a permanent, temporary or
transient basis), and any such use or occupancy of the Premises by any such
person or entity shall be a material default of the Lease.

30.19.    Tenant’s Advertising.

Tenant shall not use a picture, photograph or drawing of the Building (or a
silhouette thereof) in Tenant’s letterhead or promotional materials without
Landlord’s prior approval.

30.20.    IRS Form W-9.

Upon execution and delivery of this Lease, Landlord and Tenant shall each
execute and deliver to the other a Form W-9.

Article 31
SECURITY

31.1.        Security Deposit.

Subject to the terms of this Article 31, Tenant, on the date hereof, shall
deposit with Landlord, as security for the performance of Tenant’s obligations
under this Lease, a “clean,”

85

­

--------------------------------------------------------------------------------

 

unconditional, irrevocable and transferable letter of credit (the “Letter of
Credit”) that (i) is in the amount of
_____________________________________________/100 Dollars ($__________), (ii) is
in the form attached hereto as Exhibit “31.1” or is otherwise reasonably
satisfactory to Landlord, (iii) is issued for a term of not less than one (1)
year, (iv) is issued for the account of Landlord, (v) automatically renews for
periods of not less than one (1) year unless the issuer thereof otherwise
advises Landlord on or prior to the thirtieth (30th) day before the applicable
expiration date, and (vi) is issued by, and drawn on, a bank that has a Standard
& Poor’s rating of at least “A” (or, if Standard & Poor’s hereafter ceases the
publication of ratings for banks, a rating of a reputable rating agency as
reasonably designated by Landlord that most closely approximates a Standard &
Poor’s rating of “A” as of the date hereof) and that has an office in the city
where the Building is located at which Landlord can present the Letter of Credit
for payment (the aforesaid rating of the bank that issues the Letter of Credit
being referred to herein as the “Bank Rating”).

31.2.        Landlord’s Rights.

If an Event of Default occurs and is continuing, then Landlord may present the
Letter of Credit for payment and apply the proceeds thereof (i) to the payment
of any Rental that then remains unpaid, or (ii) to any damages that Landlord
incurs solely by reason of such Event of Default. If Landlord so applies any
part of the proceeds of the Letter of Credit, then Tenant, upon demand, shall
provide Landlord with a replacement Letter of Credit so that Landlord has the
full amount of the required security at all times during the Term. If at any
time the Bank Rating of the issuer of the Letter of Credit is less than “A” (or,
if Standard & Poor’s hereafter ceases the publication of ratings for banks, the
Bank Rating of the issuer of the Letter of Credit is less than a rating of a
reputable rating agency as reasonably designated by Landlord that most closely
approximates a Standard & Poor’s rating of “A” as of the date hereof), then
Tenant shall deliver to Landlord a replacement Letter of Credit, issued by a
bank that has a Bank Rating that satisfies the aforesaid requirement (and
otherwise meets the requirements set forth in Section 31.1 hereof) within
fifteen (15) days after the date that Landlord gives Tenant notice of such
deficiency in such issuer’s rating. If Tenant fails to deliver to Landlord such
replacement Letter of Credit within such period of fifteen (15) days, then
Landlord, in addition to Landlord’s other rights at law, in equity or as
otherwise set forth herein, shall have the right to present the Letter of Credit
for payment and retain the proceeds thereof as security in lieu of the Letter of
Credit (it being agreed that Landlord shall have the right to use, apply and
transfer such proceeds in the manner described in this Section 31.2). Tenant
shall reimburse Landlord for any reasonable costs that Landlord incurs in so
presenting the Letter of Credit for payment within thirty (30) days after
Landlord submit to Tenant an invoice therefore. Nothing contained in this
Section 31.2 limits Landlord’s rights or remedies in equity, at law, or as
otherwise set forth herein.

31.3.        Return of Security.

Landlord shall return to Tenant the Letter of Credit (to the extent not
theretofore presented for payment in accordance with the terms hereof) within
thirty (30) days after Tenant performs all of the obligations of Tenant
hereunder upon the expiration or earlier termination of the Term.

 86

­

--------------------------------------------------------------------------------

 

31.4.        Transfer of Letter of Credit.

Tenant, at Tenant’s expense, shall cause the issuer of the Letter of Credit to
amend the Letter of Credit to name a new beneficiary thereunder in connection
with Landlord’s assignment of Landlord’s rights under this Lease to a Person
that succeeds to Landlord’s interest in the Real Property, promptly after
Landlord’s request from time to time.

31.5.        Renewal of Letter of Credit.

If the issuer of the Letter of Credit advises Landlord that such issuer does not
intend to renew the Letter of Credit, then Landlord may present the Letter of
Credit for payment and retain the proceeds thereof as security in lieu of the
Letter of Credit (it being agreed that Landlord shall have the right to use,
apply and transfer such proceeds in the manner described in this Article 31).
Tenant shall reimburse Landlord for any reasonable costs that Landlord incurs in
so presenting the Letter of Credit for payment within thirty (30) days after
Landlord submit to Tenant an invoice therefor. Landlord also shall have the
right to so present the Letter of Credit and so retain the proceeds thereof as
security in lieu of the Letter of Credit at any time from and after the
thirtieth (30th) day before the Expiration Date if the Letter of Credit expires
earlier than the ninetieth (90th) day after the Expiration Date.

87

 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, Landlord and Tenant have duly executed and delivered this
Lease as of the date first above written.

731 RETAIL ONE LLC

By:      731 Commercial LLC, sole member

By:     731 Commercial Holding LLC, sole member

   By: Alexander’s Inc., member

By:                                                            
   Name: 
   Title:   

[TENANT ENTITY]

 

By:      _______________________________                                  
           Name:  _________________________
           Title:     _________________________

 

                                                                       1

­

--------------------------------------------------------------------------------

 

Exhibit “A”

Premises

[to be inserted]

 

­

--------------------------------------------------------------------------------

 

Exhibit “4.2(A)”

Excluded Uses

Tenant shall not use the Premises for (a) the principal use of the operation of
a home improvement store similar to Home Depot Inc.’s operation in the Building
or similar to a home improvement store operated by Lowe’s, Builder’s Square,
Chase Pitkin or another similar type of home improvement store, or (b) the
operation of a store which is for the principal use of: (I) the sale of floor
coverings (other than rugs), (II) the sale of paint (other than paint which is
primarily used for artistic paintings), (III) the sale of wallpaper, (IV) the
sale of hardware including, without limitation a “Sears Hardware” store (but not
a Sears department store), (V) the sale of lumber or (VI) the sale of plumbing
fixtures.

Tenant shall not (a) sublet the Premises or assign the Lease to California
Closet, Organized Living or Hold Everything, or (b) use the Premises for the
principal use of the operation of store for the retail sale of container,
storage or organization products similar to The Container Store Inc.’s operation
in the Building or similar to the stores operated by The Container Store, Inc.,
or (c) use any portion of the Premises for the sale of such products if such
portion of the Premises shall be larger than the greater of (x) ten percent
(10%) of the usable area of the Premises, and (y) two thousand five hundred
(2,500) square feet of usable area.

 

­

--------------------------------------------------------------------------------

 

Exhibit “4.2(B)”

Bloomberg Limitations

“Competitor” shall mean, at any particular time, a Person listed at such time on
the List of Regular Competitors or the List of Primary Competitors.

“List of Primary Competitors” shall mean, subject to the terms of Section 40.6
hereof, the list of Persons set forth on Exhibit Definitions-D attached hereto
and made a part hereof. [NOTE: Exhibit Definitions–D is attached to this
Exhibit 4.2(B)].

“List of Regular Competitors” shall mean the list of Persons set forth on
Exhibit Definitions-E attached hereto and made a part hereof, as such list may
be revised from time to time pursuant to the terms of Section 40.6 hereof.
[NOTE: Exhibit Definitions----E attached to this Exhibit 4.2(B)].

“Primary Competitor” shall mean, at any particular time, a Person listed on the
List of Primary Competitors at such time.

“Regular Competitor” shall mean, at any particular time, a Person listed on the
List of Regular Competitors at such time.

“Tenant’s Core Business” shall mean the business of providing to the general
public (on a subscription basis or otherwise) financial information such as
news, data and analysis of financial markets and businesses via any medium,
including, without limitation, interne, dedicated communication network,
television, radio and print, and the business of operating an electronic
communications network that matches buyers and sellers of securities and that is
registered with the Securities and Exchange Commission as an electronic
communications network (it being understood that the business of serving as a
securities broker for the transfer of securities using an organized securities
exchange shall not constitute Tenant’s Core Business for purposes hereof).

Section 40.3  Subject to the terms of this Section 40.3, Landlord shall not
permit any Competitor to use for the conduct of its business any portion of the
Entire Premises or any other space located on Lower Level 3 of the Building,
Lower Level 2 of the Building, Lower Level 1 of the Building, the ground floor
of the Building, or the second (2nd) floor of the Building (such other space
located on Lower Level 3 of the Building, Lower Level 2 of the Building, Lower
Level 1 of the Building, the ground floor of the Building, or the second (2nd)
floor of the Building being referred to herein as the “Retail Area”), except
that the portion of the Retail Area located in the Third Avenue Building may be
so used by any Competitor which is not a Primary Competitor, provided such use
is not for a television, radio or Internet studio. Nothing contained in this
Section 40.3 shall require Landlord to prohibit a Person that is a Competitor
from using any portion of the Entire Premises or the Retail Area (a) unless such
Person constitutes a Competitor on the earlier of (x) the date that such Person
entered into occupancy of the applicable space, and (y) the date that such
Person entered into an agreement to occupy the applicable space, or (b) if such
Person occupies a portion of the Premises pursuant to a sublease by Tenant or an
assignment of Tenant’s interest hereunder (it being understood that this

 

 

--------------------------------------------------------------------------------

 

clause (b) does not limit Landlord’s obligation not to permit any other Person
that constitutes a Competitor to use the Entire Premises or the Retail Area for
the conduct of business as provided in this Section 40.3). Landlord shall not
permit any Primary Competitor to use for the conduct of business any portion of
the Building (other than the Premises) that is being constructed by Landlord as
part of the Work for commercial office purposes (as reflected in the Schematic
Drawings) (including, without limitation, any Recapture Space or Subleasehold
Assignment Space with respect to which Landlord exercises Landlord’s rights
under Article 12 hereof); provided, however, that nothing contained in this
Section 40.3 shall require Landlord to prohibit a Person that is a Primary
Competitor from using any such portion of the Building unless such Person
constitutes a Primary Competitor on the earlier of (x) the date that such Person
entered into occupancy of the applicable space, and (y) the date that such
Person entered into an agreement to occupy the applicable space.

Section 40.6  Subject to the terms of this Section 40.6, Landlord shall not
name, or permit to be named, the Building for a Competitor. Nothing contained in
this Section 40.6 shall prohibit the naming of the Building in a manner which
identifies a Person that is a Competitor unless such Person constitutes a
Competitor on the earlier of (a) the date on which the entire Building is so
named, and (b) the date on which Landlord (or the Condominium Association)
entered into an agreement to so name the entire Building.

Section 40.7  Tenant shall have the right, from time to time, on no less than
ten (10) days of prior notice to Landlord, to remove any Person from the List of
Regular Competitors and insert thereon any other Person, provided that (i) the
Person that Tenant proposes to insert on the List of Regular Competitors
derives, in such Person’s most recently ended fiscal year, more than one-half
(1/2) of its revenues from a business or from businesses in either case in
competition with Tenant’s Core Business, and (ii) the number of Persons on the
List of Regular Competitors shall in no event exceed five (5). In no event may
Tenant replace any Person on the List of Primary Competitors or place any other
Person thereon, except that if any Person succeeds to the interest of a Person
on the List of Primary Competitors as a result of a merger or consolidation or
the sale of all or substantially all of the assets of such Primary Competitor,
then the List of Primary Competitors shall be updated to remove such Person
therefrom and place the Person surviving such merger or consolidation or such
sale thereon if such Person surviving such merger or consolidation or such sale
derives, in such Person’s most recently ended fiscal year, more than one-half
(1/2) of its revenues from a business or businesses in either case in
competition with Tenant’s Core Business. Landlord may, from time to time,
request that Tenant update the List of Regular Competitors in accordance with
this Section 40.7. No later than ten (10) days after Landlord makes such
request, Tenant shall notify Landlord of any Person or Persons which Tenant
elects to remove from the List of Regular Competitors and any Person or Persons
which Tenant proposes to place thereon. For the nine (9) month period following
the expiration of such ten (10) day period, Tenant shall not be entitled to
update the List of Regular Competitors as contemplated by this Section 40.7.

 

­

--------------------------------------------------------------------------------

 

ATTACHMENT TO EXHIBIT 4.2(B)

Exhibit Definitions-D

List of Regular Competitors

Dow Jones & Co.

McGraw-Hill Companies

News Corporation Ltd.

Primark Corp.

Reed Elsevier

 

 

--------------------------------------------------------------------------------

 

ATTACHMENT TO EXHIBIT 4.2(B)

Exhibit Definitions-E

List of Primary Competitors

Bridge

Reuters Group PLC

Thomson Corp.

 

 

--------------------------------------------------------------------------------

 

Exhibit “4.4”

Signage Criteria

All signs and graphics on the storefront must conform to the Tenant Design
Criteria and must be part of initial concept and design submission. The Tenant’s
sign design and specifications of applications and mounting details are to be
submitted with preliminary submissions and are subject to Landlord’s sole
approval prior to application.

The Tenant is required to identify the Premises with exterior signage. One sign
is permitted per entry. Within the Tenant space, signage must be located inside
it, and may not spill over into the public areas. Under all conditions the
Tenant’s sign may be one of the following:

Exterior Signs

1.                  Exterior signs shall be limited to letters spelling the
Tenant’s trade name. The use of crest shields, logos or other insignia is not
permitted.

2.                  Primary tenant signs shall be limited to individual
non-illuminated letters located on the awning over each exterior entrance. This
signage will be centered on the width of the awning. The maximum overall length
of a sign will not exceed the width of each awning. The vertical height of all
signs shall be a maximum if 12 inches on one horizontal line. If more than one
horizontal line of lettering is required, Landlord shall determine letter sizes.
Depth of all letters shall not exceed a maximum of 5 inches.

3.                  Signs and connections shall be soundly constructed with
adequate internal support securely attached and weather tight. All fasteners,
screws, bolts, etc. used in fabrication and mounting of the signs shall be
rustproof. Exposed fasteners are not permitted.

4.                  Any damage done to any part of the building during the
mounting or removal of signs shall be promptly repaired to “like new condition”
by the Tenant, at the Tenant’s expense.

Interior Signs

1.                  No painting or stenciling of graphics, logos or lettering of
any kind is permitted on the storefront glass. Vinyl type letters are not
permitted. Tempered clear vision glass may not be etched. Background color or
banners on the storefront glass are not permitted.

2.                  No signage is allowed on building columns or storefront
framing, or the painted gypsum board soffit.

3.                  Interior signage is to be non-illuminated (Landlord’s
option).

4.                  Artisan’s plaque may be featured within storefront.

5.                  Special signage shall be reviewed on an individual basis
approved by Landlord.

 

 

­

--------------------------------------------------------------------------------

 

6.                  Restaurants are permitted to display one pedestal sign and
one menu board at each entrance to the restaurant. The size, design and
materials of the pedestal sign and menu board must be reviewed and approved by
the Landlord.

7.                  Temporary sale and promotional signs shall not be affixed to
the storefront glass. Signs of this type should be treated as place cards and
displayed on the storefront fixtures in conjunctions with window displays, at
least one foot from the storefront.

The selection of materials is of extreme importance in reinforcing the character
of 731 Lexington Avenue. The materials listed below have been selected to
encourage variety and creativity of signage design.

 

 

 

 

Glass

Clear, translucent, ceramic frit.

Metals

Stainless steel, chrome, shop painted metals, approved by Landlord.

Plastics

To be approved by Landlord in limited quantities.

Masonry/Stone

To be approved by Landlord.

Wood

To be approved by the Landlord in limited quantities.

Cloth Banners To be approved by the Landlord in limited quantities.

Landlord reserves the right to approve other special materials.

* These materials can only be used as an integral component of an overall
design.

The Landlord reserves the right to reject any signage that, in the Landlord’s
sole opinion, does not convey a sense of permanence. The following signage is
prohibited:

Flashing, oscillating and moving signs.

Formed plastic or injection molded signs.

Noise producing signs.

Charge card signs affixed to the storefront.

Promotional signs of any type – unless presented in a pre-designed enclosure
approved by the Landlord.

Going out of business signs.

Temporary signs, posters, notices, announcements or advertisements except those
specifically approved in advance by the Landlord.

Names other than the actual store name may not appear on the storefront.

 

­

--------------------------------------------------------------------------------

 

Exhibit 4.4(A)

 

Tenant’s Signs

 

 

--------------------------------------------------------------------------------

 

Exhibit “1.6(H)”

Holidays

New Year’s Day

Easter Sunday

Thanksgiving Day

Christmas Day

 

 

--------------------------------------------------------------------------------

 

Exhibit “4.6”

Locations of the Common Loading Dock, Freight Elevator and the Trash Dumpster

See Attached

 

 

--------------------------------------------------------------------------------

 

Exhibit “8.9”

Approved Contractors – Initial Alterations

 

 

--------------------------------------------------------------------------------

 

Exhibit “14.9”

Mortgages and Superior Leases

Mortgage recorded or to be recorded against the Real Property pursuant to the
terms of the loan agreement, dated as of July 6, 2005, between Archon Financial,
L.P. and 731 Retail One LLC

 

 

--------------------------------------------------------------------------------

 

Exhibit “31.1”

Form of Letter of Credit

IRREVOCABLE STANDBY LETTER OF CREDIT NO._______
DATE: ______________________

BENEFICIARY:

____________________________
C/O VORNADO REALTY TRUST
210 ROUTE 4 EAST
PARAMUS, NJ 07652
ATTN: CHIEF FINANCIAL OFFICER

BY ORDER OF:

APPLICANT:
________________________
________________________
________________________

WE HEREBY ESTABLISH IN YOUR FAVOR OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.
_______________ FOR THE ACCOUNT OF ______________, FOR AN AMOUNT OR AMOUNTS NOT
TO EXCEED IN THE AGGREGATE USD $_____________ (______________________) AND
00/100 U.S. DOLLARS) AVAILABLE BY YOUR DRAFTS AT SIGHT DRAWN ON
_____________________, EFFECTIVE IMMEDIATELY AND EXPIRING AT OUR OFFICE ON
_______________________.

FUNDS UNDER THIS LETTER OF CREDIT ARE AVAILABLE AGAINST YOUR DRAFT(S) AS HEREIN
ABOVE SET FORTH MARKED “DRAWN UNDER ________________ LETTER OF CREDIT NO.
___________ DATED ____________”.

PARTIAL AND MULTIPLE DRAWINGS ARE PERMITTED.

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT THE EXPIRATION DATE SHALL BE
AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE (1) YEAR FROM THE EXPIRATION
DATE HEREOF OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST SIXTY (60) DAYS PRIOR
TO SUCH EXPIRATION DATE WE SEND NOTICE To YOU BY CERTIFIED MAIL, A NATIONALLY
RECOGNIZED OVERNIGHT COURIER OR BY HAND-DELIVERED COURIER, AT THE ADDRESS STATED
ABOVE, THAT WE ELECT NOT TO EXTEND THIS LETTER OF CREDIT FOR ANY SUCH ADDITIONAL
PERIOD. UPON SUCH NOTICE TO YOU, YOU MAY DRAW ON US AT SIGHT FOR AN AMOUNT NOT
TO EXCEED THE BALANCE REMAINING IN THIS LETTER OF CREDIT WITHIN THE
THEN-APPLICABLE EXPIRY DATE.

THIS LETTER OF CREDIT IS TRANSFERABLE, BUT ONLY IN ITS ENTIRETY, AND MAY BE
SUCCESSIVELY TRANSFERRED. TRANSFER OF THIS LETTER OF CREDIT SHALL BE EFFECTED BY
US UPON SUBMISSION OF THIS ORIGINAL LETTER OF CREDIT, INCLUDING ALL AMENDMENTS,
IF ANY, ACCOMPANIED BY THE ATTACHED TRANSFER REQUEST FORM DULY COMPLETED AND
SIGNED, WITH THE SIGNATURE THEREON AUTHENTICATED BY YOUR BANK. IN ANY EVENT,
THIS LETTER OF CREDIT WILL NOT BE TRANSFERRED TO ANY ENTITY/PERSON WITH
WHICH/WHOM U.S. PERSONS ARE PROHIBITED FROM DOING BUSINESS UNDER U.S. FOREIGN
ASSETS CONTROL REGULATIONS OR OTHER APPLICABLE U.S. LAWS AND REGULATIONS.

CHARGES AND FEES RELATED TO SUCH TRANSFER WILL BE FOR THE ACCOUNT OF THE
APPLICANT. FAILURE TO PAY ANY SUCH CHARGES WILL NOT IMPEDE THE TRANSFER.

WE ENGAGE WITH YOU THAT DRAFTS DRAWN UNDER AND IN CONFORMITY WITH THE TERMS AND
CONDITIONS OF THIS CREDIT WILL BE DULY HONORED ON PRESENTATION IF PRESENTED ON
OR BEFORE THE EXPIRATION DATE AT OUR COUNTERS AT _______________. THE ORIGINAL
LETTER OF CREDIT MUST ACCOMPANY THE DOCUMENTS REQUIRED UNDER THIS CREDIT FOR
ENDORSEMENT.

PRESENTATIONS MAY ALSO BE MADE BY HAND DELIVERY OR MESSENGER TO
_________________________________________.

THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, AND, EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, IS SUBJECT TO THE
INTERNATIONAL STANDBY PRACTICES, ICC PUBLICATION NO. 590 (THE “ISP98”), AND IN
THE EVENT OF ANY CONFLICT, THE LAWS OF THE STATE OF NEW YORK WILL CONTROL,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT K

[FORM OF]
GUARANTY OF INTEREST

This GUARANTY OF INTEREST (this “Guaranty”), dated as of ____________, is made
by ALEXANDER’S, INC., a Delaware corporation, having an address at c/o
Alexanders Inc., 210 Route 4 East, Paramus, New Jersey 07652 (the “Guarantor”),
to JPMORGAN CHASE BANK. N.A., a national banking association (together with its
successors and/or assigns, the “Administrative Agent”), as administrative agent
for the benefit of the Lenders (each a “Lender” and collectively, together with
each of their successors and/or assigns, the “Lenders”) under that certain Loan
Agreement hereinafter defined.

RECITALS:

 

WHEREAS, 731 RETAIL ONE LLC, a Delaware limited liability company, and
731 COMMERCIAL LLC, a Delaware limited liability company (jointly, severally and
collectively, the “Borrower”), have requested that the Lenders make a certain
loan in the principal amount of up to $350,000,000.00 (the “Loan”), to be made
pursuant to a certain Loan Agreement dated as of August 6, 2015 by and among the
Borrower, the Administrative Agent and the Lenders and Lead Arrangers party
thereto (as the same may hereinafter be amended, modified or extended, the “Loan
Agreement”), evidenced by certain promissory notes dated as of August 6, 2015
(as the same may hereinafter be amended, modified or extended, the “Notes”) and
secured by certain mortgages which have been consolidated, modified and extended
by a certain Consolidation, Modification and Extension Agreement dated as of
August 6, 2015 (as the foregoing may hereinafter be amended, modified or
extended, collectively, the “Mortgage”) encumbering the condominium units known
as Retail Unit 1 and Retail Unit 2 of the Beacon Court Condominium,
731 Lexington Avenue, New York, New York 10022 (the “Premises”) (the Notes, the
Loan Agreement, the Mortgage, and all of the other documents executed and/or
delivered by Borrower or Guarantor in connection with the Loan, as the same may
hereinafter be amended, modified or extended, being herein referred to as the
“Loan Documents”).

WHEREAS, the Guarantor expects to derive financial and other benefits from the
delivery of this Guaranty to the Lenders in satisfaction of the requirements of
Section 9.15(4) of the Loan Agreement.

WHEREAS, any capitalized term used herein and not otherwise defined shall have
the meaning ascribed to such term in the Loan Agreement.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Guarantor hereby agrees for the benefit of the Administrative Agent and the
Lenders as follows:

1.                   Guaranty

The Guarantor absolutely and unconditionally guarantees to the Administrative
Agent, the Lead Arrangers and the Lenders and their successors, endorsees and
assigns, the prompt payment when due, whether by acceleration or otherwise, of
[all interest at the regular interest rate (i.e., not including any additional
interest payable as a result of the application of the Default Rate) on the
Loans in excess of 4.25%] [all interest at the regular interest rate (i.e., not
including any additional interest payable as a result of the application of the
Default Rate) on the Loans in excess of 4.25%, but not including any interest on
the Loans in excess of [ ____%]1], as and when the same shall be due and payable
(collectively, the “Guaranteed Obligations”):

--------------------------------------------------------------------------------

1  Insert the strike price under the Hedge Agreement (as defined in the Loan
Agreement) satisfying the requirements of Section 9.15 of the Loan Agreement.

--------------------------------------------------------------------------------

 

2.                   Financial Covenants

The Guarantor warrants, represents and covenants to the Administrative Agent and
the Lenders that on and after the date hereof: (a) the Guarantor is and shall
remain solvent; (b) the financial statements delivered by Guarantor are true and
correct in all material respects as of the date of such financial statements;
(c) there has been no Material Adverse Change in the financial condition of
Guarantor since the date of such most recently delivered financial statements,
(d) the Guarantor shall comply with the financial reporting requirements
applicable to the Guarantor that are set forth in Section 8.2 of the Loan
Agreement, (e) as of the date hereof Guarantor has a Net Worth greater than the
Guarantor’s Minimum Net Worth and Liquid Assets greater than Guarantor’s Minimum
Liquid Assets, and (f) Guarantor shall at all times maintain a Net Worth of not
less than Guarantor’s Minimum Net Worth and Liquid Assets of not less than
Guarantor’s Minimum Liquid Assets.

3.                   Representations and Warranties

The Guarantor represents and warrants to the Administrative Agent that:

(a)                 Power and Authority. The Guarantor has the full power and
authority to execute and deliver this Guaranty and to perform its obligations
hereunder; the execution, delivery and performance of this Guaranty by the
Guarantor has been duly and validly authorized; and all requisite action has
been taken by the Guarantor to make this Guaranty valid and binding upon the
Guarantor and enforceable in accordance with its terms.

(b)                 Binding Agreement. This Guaranty constitutes the valid and
legally binding obligations of the Guarantor and is enforceable in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally.

(c)                 Litigation. Except as disclosed in Guarantor’s financial
statements, there is no litigation, administrative proceeding, investigation or
other legal action (including any proceeding under any state or federal
bankruptcy or insolvency law) pending or, to the knowledge of Guarantor,
threatened, against the Guarantor which if adversely determined would have a
Material Adverse Effect.

(d)                 Required Consents. All consents, approvals and
authorizations, if any, required for the execution, delivery and performance of
this Guaranty have been obtained, and no other consent, authorization or
approval of, filing with, notice to, or exemption by, any Governmental Authority
or other Person (except for those which have been obtained, made or given) is
required to authorize, or is required in connection with the execution, delivery
and performance of this Guaranty or is required as a condition to the validity
or enforceability of this Guaranty. No provision of any applicable statute, law
(including, without limitation, any applicable usury or similar law), rule or
regulation of any Governmental Authority prevents the execution, delivery or
performance of, or affects the validity of, this Guaranty.

(e)                 No Conflicting Agreement. The Guarantor is not in default
under any mortgage, indenture, contract or agreement to which it is a party or
by which it or any of its properties is bound which, in any case, would have a
material adverse effect on the Guarantor’s ability to perform its obligations
under this Guaranty. The execution, delivery or carrying out of the terms of
this Guaranty will not result in the breach of any term or provision of any of
the Guarantor’s organizational documents or constitute a default thereunder, or
result in the creation or imposition of, or obligation to create, any lien or
other encumbrance upon any property of the Guarantor or result in a breach of or
require the mandatory repayment of or other acceleration of payment under or
pursuant to the terms of any such mortgage, indenture, contract or agreement.

(f)                  Compliance with Applicable Laws. The Guarantor is not in
default with respect to any judgment, order, writ, injunction, decree or
decision of any Governmental Authority which, in any case, would have a material
adverse effect on the Guarantor’s ability to perform its obligations under this
Guaranty.

 

-2-

­

--------------------------------------------------------------------------------

 

4.                   Covenants

The Guarantor covenants and agrees that:

(a)                 Reimbursement. The Guarantor shall, promptly upon demand by
the Administrative Agent and in any event within ten (10) Business Days of such
demand, pay to the Administrative Agent and/or reimburse the Administrative
Agent as directed by the Administrative Agent, in respect of all Guaranteed
Obligations or other agreements herein, in such manner and at such time as the
Administrative Agent shall require.

(b)                 Performance. In the event that the Guarantor does not timely
pay any of its obligations under this Guaranty, the Administrative Agent may pay
said obligations at the expense of the Guarantor. Any amounts expended by the
Administrative Agent in the exercise of any rights of the Administrative Agent
hereunder shall be paid to the Administrative Agent promptly upon demand, and
until paid shall accrue interest at the Default Rate.

5.                   Unconditional and Continuing Nature of Guaranty

(a)                 Unconditional Guaranty. The obligations of the Guarantor
hereunder are absolute and unconditional, under all circumstances and
irrespective of the genuineness, validity, regularity, discharge, release or
enforceability of the Guaranteed Obligations, or of any instrument evidencing
any of the Guaranteed Obligations or of any collateral therefor or of the
existence or extent of such collateral or of the obligations of the Guarantor
under this Guaranty or any other guaranty relating to the Loan.

(b)                 Modification of Agreements. The Guarantor agrees that the
Administrative Agent or any Lender may at any time and from time to time, either
before or after the maturity thereof, without notice to or further consent of
the Guarantor, extend the time of payment of, exchange, release, substitute or
surrender any collateral for, renew or extend any of, or change the amount of,
the Guaranteed Obligations or increase the interest rate thereon, and may also
make any agreement with the Borrower or with any other party to or person liable
on any of the Guaranteed Obligations, or any guarantor of or hypothecator of
collateral or other surety for such Guaranteed Obligations or any interest
therein, for the extension, renewal, payment, compromise, discharge or release
thereof, in whole or in part, or for any modification of the terms thereof or of
any agreement between the Administrative Agent, the Lender and the Borrower or
any such other party or person, without in any way impairing or affecting this
Guaranty.

(c)                 Continuing Guaranty. This is a continuing Guaranty and,
subject to the last paragraph of Section 1, shall remain in full force and
effect and be binding upon the Guarantor and the Guarantor’s successors and
assigns until all of the occurrence of the conditions set forth in subsection
(e) below have been satisfied. If any of the present or future Guaranteed
Obligations are guaranteed by Persons in addition to the Guarantor, the death,
release or discharge in whole or in part, or the bankruptcy, liquidation or
dissolution of one or more of them, shall not discharge or affect the Guaranteed
Obligations of the Guarantor under this Guaranty. In addition, the death,
release or discharge in whole or in part, or the bankruptcy, liquidation or
dissolution of any of the Persons comprising the Guarantor shall not discharge
or affect the liabilities of any of the other Persons comprising the Guarantor
under this Guaranty.

(d)                 Guaranty of Payment. This Guaranty is a guaranty of payment
and not of collection, and neither the Administrative Agent nor the Lenders
shall be under any obligation to take any action against the Borrower or any
other person liable with respect to any of the Guaranteed Obligations or resort
to any collateral security securing any of the Guaranteed Obligations or this
Guaranty as a condition precedent to the Guarantor being obligated to make
payment and perform as agreed herein.

(e)                 Release. Provided that no amounts in respect of the
Guaranteed Obligations shall be outstanding, upon the indefeasible repayment in
full of the Loan and all other sums due in connection therewith, the liability
of the Guarantor under this Guaranty shall be automatically released.

 

-3-

 

--------------------------------------------------------------------------------

 

6.                   Reinstatement

This Guaranty shall continue to be effective or shall be reinstated, as the case
may be, if at any time payment of all or any part of any payment of the
Guaranteed Obligations is rescinded or must be restored or returned by the
Administrative Agent, any Lead Arranger or any Lender whether under any
reorganization, bankruptcy, receivership or insolvency proceeding or otherwise;
and the Guarantor agrees that it will indemnify the Administrative Agent, the
Lead Arrangers and the Lenders on demand for all out-of-pocket costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Administrative Agent, any Lead Arranger or any of the
Lenders in connection with such rescission or restoration, including any such
out-of-pocket costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.

7.                   Waivers

The Guarantor hereby waives for the benefit of the Administrative Agent, the
Lead Arrangers and the Lenders:

(a)                 Waiver of Notice, Presentment. Notice of the acceptance of
this Guaranty and of the making of the Loan or extensions of credit or the
incurrence of any other obligation by the Borrower pursuant to the Loan
Documents, presentment to or demand of payment from anyone whosoever liable upon
the Indebtedness or any of the Guaranteed Obligations, protest, notice of
presentment, non-payment or protest and notice of any sale of collateral
security or any default of any sort;

(b)                 Waiver of Claims. Any rights to claim or interpose any
defense, counterclaim or offset of any nature and description which it may have
or which may exist between and among the Administrative Agent, any Lender, the
Borrower and/or the. Guarantor or to seek injunctive relief;

(c)                 Subrogation. Until such time as the Administrative Agent,
the Lead Arrangers and the Lenders shall have been indefeasibly paid in full all
of the Indebtedness and the Guaranteed Obligations, the Guarantor subordinates
any rights to be subrogated to the rights of the Administrative Agent, the Lead
Arrangers and the Lenders with respect to the Guaranteed Obligations and the
Guarantor subordinates any right to, and agrees that it will not institute or
take any action against the Borrower seeking, contribution, reimbursement or
indemnification by the Borrower with respect to any payments made by the
Guarantor to the Administrative Agent, the Lead Arrangers or the Lenders; and

(d)                 WAIVER OF JURY TRIAL. EACH PARTY HERETO (AND THE
ADMINISTRATIVE AGENT, THE LEAD ARRANGERS AND THE LENDERS BY THEIR ACCEPTANCE OF
THIS GUARANTY) HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (AND THE ADMINISTRATIVE AGENT, THE LEAD ARRANGERS AND THE LENDERS
BY THEIR ACCEPTANCE OF THIS GUARANTY) (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION .

(e)                 WAIVER OF SPECIAL DAMAGES. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE GUARANTOR AND (BY THEIR ACCEPTANCE OF THIS GUARANTY)
THE ADMINISTRATIVE AGENT, THE LEAD ARRANGERS AND THE LENDERS AGREES THAT IT
SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST THE GUARANTOR AND THE
ADMINISTRATIVE AGENT, THE LEAD ARRANGERS AND THE LENDERS, AS APPLICABLE, ON ANY
THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
(AS

-4-

­

--------------------------------------------------------------------------------

 

OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A
RESULT OF, THIS GUARANTY OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE
LOAN OR THE USE OF THE PROCEEDS THEREOF.

(f)                  Other Defenses. Any defense or benefits that may be derived
from or afforded by laws which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.

8.                   Miscellaneous

(a)                 Successors and Assigns. This Guaranty shall bind the
undersigned, its legal representatives, successors, and assigns and shall inure
to the benefit of the Administrative Agent, the Lead Arrangers, the Lenders and
their successors, endorsees and assigns.

(b)                 Enforcement of Loan Documents. The obligations of the
undersigned are in addition to, and not in diminution of, the obligations of the
Borrower and the Guarantor under any other Loan Document. No failure on the part
of the Administrative Agent to exercise, and no delay in exercising, any right,
remedy or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise by the Administrative
Agent of any right, remedy or power hereunder or under any other Loan Document
preclude any other or future exercise thereof or the exercise of any other
right, remedy or power.

(c)                 Liabilities Unimpaired. The liability of the Guarantor under
this Guaranty shall not be limited or impaired by reason of any amendment,
waiver or modification of the provisions of any Loan Document, the release or
substitution of any collateral securing the Loan, any transfer of the Premises
or any part thereof to the Administrative Agent or its nominee, any failure on
the part of the Administrative Agent or the Lenders to record or otherwise
perfect any lien or security interest in any such collateral, any sale or
transfer of the Premises or any part thereof or any determination that any Loan
Document is illegal or unenforceable

(d)                 Reserved.

(e)                 Guarantor’s Acknowledgements. The Guarantor hereby
acknowledges (i) receipt and approval of the Mortgage, the Loan Agreement and
each Loan Document referred to therein, and (ii) it has derived or expects to
derive a financial or other benefit from each and every obligation incurred by
the Borrower to the Administrative Agent and the Lenders under or pursuant to
the Mortgage and the other Loan Documents.

(f)                  Assignment. This Guaranty may be assigned by the
Administrative Agent on behalf of the Lenders and its benefits shall inure to
any such assignee, in each case, as assigned in accordance with the terms of the
Loan Agreement.

(g)                 Post Default Interest. The Guarantor agrees that any of the
Guaranteed Obligations which are not paid within ten (10) Business Days of
Administrative Agent’s demand shall accrue interest at the Default Rate until
paid in full, all such interest being payable to the Administrative Agent for
the benefit of the Lenders on demand.

(h)                 Governing Law. This Guaranty and the rights and obligations
of the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York, without regard to
principles of conflict of laws.

(i)                   Headings Descriptive. Section headings have been inserted
in this Guaranty for convenience only and shall not in any way affect the
meaning or construction of any provision hereof.

(j)                  Severability. Every provision of this Guaranty is intended
to be severable, and if any term or provision thereof shall be invalid, illegal
or unenforceable for any reason, the validity, legality and enforceability of
the remaining provisions thereof shall not be affected or impaired thereby, and
any invalidity, illegality or unenforceability in any jurisdiction shall not
affect the validity, legality or enforceability of any such term or provision in
any other jurisdiction.

-5-

 

--------------------------------------------------------------------------------

 

(k)                 Remedies Cumulative. Each and every right, remedy and power
granted to the Administrative Agent or allowed it by law or other agreement
shall be cumulative and not exclusive of any other, and may be exercised by the
Administrative Agent at any time and from time to time.

(l)                   Consent to Jurisdiction. The Guarantor hereby irrevocably
submits to the jurisdiction of any State of New York or Federal court sitting in
the City of New York over any suit, action or proceeding arising out of or
relating to the Loan Documents. The Guarantor hereby agrees that the
Administrative Agent shall have the option in its sole discretion to lay the
venue of any such suit, action or proceeding in the courts of the City of New
York or the United States of America located in New York, New York and hereby
irrevocably waives to the fullest extent permitted by law any objection which it
may now or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
The Guarantor hereby agrees that a final judgment in any such suit, action or
proceeding brought in such a court shall be conclusive and binding upon it.

(m)               Entire Agreement. This Guaranty contains the entire agreement
and understanding between the Administrative Agent and the Guarantor with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to the subject matter hereof.

(n)                 Amendments. This Guaranty may not be amended except by a
writing signed by an authorized officer of the Guarantor and the Administrative
Agent in accordance with the requirements of Section 12.2 of the Loan Agreement,
and compliance with its terms may not be waived, orally or by course of dealing,
without a writing signed by an authorized officer of the Administrative Agent.

(o)                 Notices. All notices, requests and demands to or upon the
Guarantor or the Administrative Agent shall be in writing and shall be deemed to
have been duly given or served for all purposes if delivered or served in
accordance the terms of with Section 12.1 of the Loan Agreement.

(p)                 Expenses. If any suit or proceeding is instituted by the
Administrative Agent on behalf of itself, the Lenders or the Lead Arrangers for
the enforcement of any of the provisions of this Guaranty, the Guarantor shall
pay to the Administrative Agent within ten (10) Business Days of demand, all
out-of-pocket expenses of the Administrative Agent (including reasonable
attorneys’ fees and actual disbursements) in connection with such suit or
proceeding, and until such expenses are paid, the same shall accrue interest at
the Default Rate. The obligations of the Guarantor under this paragraph shall
survive any termination of the Guarantor’s other obligations under this
Guaranty.

(q)                 Exculpation of Certain Persons. Notwithstanding anything to
the contrary contained in this Guaranty, no direct or indirect shareholder,
partner, member, principal, Affiliate, employee, officer, trustee, director,
agent or other representative of Guarantor (each, a “Related Party”) shall have
any personal liability for, nor be joined as a party to any action with respect
to, the payment, performance or discharge of any covenants, obligations or
undertakings of Guarantor under this Guaranty, and by acceptance hereof, the
Administrative Agent, the Lead Arrangers and the Lenders for themselves and
their respective successors and assigns irrevocably waive any and all right to
sue for, seek or demand any such damages, money judgment, deficiency judgment or
personal judgment against any such Related Party under or by reason of or in
connection with this Guaranty. In addition to the foregoing, notwithstanding
anything contained in this Guaranty to the contrary, in no event shall the
assets of any Related Party (including any distributions made by Guarantor to
its direct or indirect members, partners or shareholders) be available to
satisfy any obligation of Guarantor hereunder. Nothing contained in this
paragraph shall diminish any of Borrower’s obligations under any of the Loan
Documents.

(Remainder of page intentionally left blank; signature page(s) follow.)

 

-6-

­

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the Guarantor has duly executed and entered into this
Guaranty of Interest as of the day and year first above written.

ALEXANDER’S, INC.,
a Delaware corporation

By:    ___________________________           
   Name:  
   Title:   

 

 

-7-

­

--------------------------------------------------------------------------------

 

SCHEDULE 1

COMMITMENTS

LENDER

COMMITMENT

COMMITMENT PERCENTAGE

JPMorgan Chase Bank, N.A.

$116,666,666.67

       33.33333333%

Wells Fargo Bank, N.A.

$116,666,666.66

       33.33333333%

Landesbank Baden-Wiirttemberg,

New York Branch

$116,666,666.67

       33.333333%

 

 

­

--------------------------------------------------------------------------------

 

SCHEDULE 2

LEASING GUIDELINES

 

Except as otherwise provided herein, Borrower shall not (i) enter into any Lease
(a “New Lease”) or (ii) unless otherwise required by law or such Lease, modify
or terminate any Lease (including, without limitation, accept a surrender of any
portion of the Project subject to a Lease), allow a reduction in the term of any
Lease or a reduction in the Rent payable under any Lease, change any renewal
provisions of any Lease in a manner materially adverse to Borrower, materially
increase the obligations of Borrower or materially decrease the obligations of
any Lessee (a “Lease Modification”), except in each case as described below.

A.        Subject to the provisions of Paragraph D below, no prior written
consent of Administrative Agent or any Lender shall be required with respect to
a New Lease which is not a Major Lease or a Lease Modification relating to a
Lease which is not a Major Lease, provided that (1) such New Lease or Lease
Modification contains market-rate terms and conditions, (2) such New Lease or
Lease Modification is on an arms-length basis with a third party which is not an
Affiliate of Borrower or Guarantor, (3) in the case of a New Lease, such New
Lease is unconditionally subordinate to the Mortgage and the Loans and provides
for the Lessee’s attornment to any successor landlord in the event of any
conveyance or transfer of the Project, (4) such New Lease or Lease Modification
does not contain any option (or right of first refusal) to acquire all or any
portion of the Project and (5) such New Lease or Lease Modification (to the
extent “use” is addressed in such Lease Modification) prohibits the use of the
premises demised thereby for any of the following uses: any pornographic or
obscene purposes, any commercial sex establishment, any pornographic, obscene,
nude or semi-nude performances, or sexual conduct, or any other use that has or
would reasonably be expected to violate applicable laws. As used herein, the
term “Major Lease” means any Lease with any Lessee which, when aggregated with
any and all other Leases with such Lessee or its Affiliates, demises 25,000 or
more square feet of leasable retail space at the Project. For purposes of the
preceding sentence, the spaces demised to any Lessee and its Affiliates at the
Project shall be deemed to include any and all spaces at the Project with
respect to which such Lessee and/or its Affiliates has a right or option to
lease and/or a right of first refusal to lease pursuant to any Lease.

In addition, Borrower shall have the right to terminate any Lease without
Administrative Agent’s or any Lender’s prior written consent, provided that (i)
Borrower is simultaneously replacing such Lease with one or more New Leases
which are either consented to (or deemed to be consented to) by the Requisite
Leasing Approval Lenders in accordance with the terms hereof or not subject to
the Requisite Leasing Approval Lenders’ consent pursuant to the terms hereof or
(ii) the Lessee thereunder in default under the terms of its Lease beyond the
expiration of any applicable notice and cure periods set forth therein.

B.        Subject to the provisions of Paragraph D below, new Leases and Lease
Modifications that do not meet all of the conditions of Section (A) above
require the prior written consent of the Requisite Leasing Approval Lenders (not
to be unreasonably withheld, conditioned or delayed). Each request by Borrower
for the Requisite Leasing Approval Lenders’ consent to a New Lease or Lease
Modification shall be accompanied by all information and documentation
reasonably necessary in order for by the Requisite Leasing Approval Lenders to

 

­

--------------------------------------------------------------------------------

 

make an informed decision, and shall contain a legend in capitalized bold
letters on the top of the cover transmittal stating: “THIS IS A REQUEST FOR
CONSENT TO A [NEW LEASE] [LEASE MODIFICATION]. REQUISITE LEASING APPROVAL
LENDERS’ RESPONSE IS REQUESTED WITHIN FIVE (5) BUSINESS DAYS.” If the Requisite
Leasing Approval Lenders shall fail to respond to any initial request by
Borrower for consent within five (5) Business Days after delivery to the
Requisite Leasing Approval Lenders of such request, Borrower may send an
additional notice to the Requisite Leasing Approval Lenders, which shall include
.a copy of the initial request (including all information and documentation
supplied in connection therewith), and shall contain the following legend in
capitalized bold letters on the top thereof: “THIS IS A SECOND REQUEST FOR
CONSENT TO A [NEW LEASE] [LEASE MODIFICATION]. REQUISITE LEASING APPROVAL
LENDERS’ RESPONSE IS REQUESTED WITHIN FIVE (5) BUSINESS DAYS. THE REQUISITE
LEASING APPROVAL LENDERS’ FAILURE TO RESPOND WITHIN SUCH TIME PERIOD SHALL
RESULT IN THE REQUISITE LEASING APPROVAL LENDERS’ CONSENT BEING DEEMED TO HAVE
BEEN GRANTED.” In the event that the Requisite Leasing Approval Lenders fail to
respond to such second notice within five (5) Business Days after delivery to
the Requisite Leasing Approval Lenders of such second request by either granting
its consent or withholding its consent (and, in the case of withholding consent,
stating the grounds therefor in reasonable details), then the Requisite Leasing
Approval Lenders’ consent shall be deemed to have been granted.

Promptly following receipt of any such request for consent from Borrower,
Administrative Agent shall supply to the Lenders a copy thereof.

Any requests for Requisite Leasing Approval Lenders’ consent which Borrower
submits in accordance with this Section (B) shall include copies of any material
financial information that Borrower has received from the prospective Lessee,
provided however, that the Requisite Leasing Approval Lenders herein agree to
hold such financial information confidential.

C.        Notwithstanding anything contained in this Schedule 2, all Existing
Leases are acknowledged to have been consented to by the Requisite Leasing
Approval Lenders.

D.        Notwithstanding anything contained in this Schedule 2, any Alterations
that are required to be performed by Borrower under a New Lease or a Lease
Modification shall require the prior written consent of (i) Administrative Agent
(not to be unreasonably withheld, conditioned or delayed) if the estimated costs
of all alterations required to be performed by Borrower thereunder, together
with the estimated costs of all then unapproved alterations being conducted by
Borrower at such time (excluding the cost of any alterations required by
applicable law), shall exceed the Threshold Amount and (ii) the Required Lenders
(not to be unreasonably withheld, conditioned or delayed) if the estimated costs
of all alterations required to be performed by Borrower thereunder, together
with the estimated costs of all then unapproved alterations being conducted by
Borrower at such time (excluding the cost of any alterations required by
applicable law), shall exceed the Required Lenders Threshold Amount.

-2-

­

--------------------------------------------------------------------------------

 

SCHEDULE 2.1

CONDITIONS TO CLOSING

The advance of the Loans shall be subject to Administrative Agent’s and each
Lender’s receipt, review, approval and/or confirmation of the following, at
Borrower’s cost and expense, each in form and content satisfactory to
Administrative Agent and each Lender in their sole and absolute discretion:

1.                  The Loan Documents, executed by Borrower and, as applicable,
Guarantor and each other party thereto.

2.                  Payment to Administrative Agent, the Lead Arrangers and the
Lenders of all fees, costs and expenses then payable thereto pursuant to this
Agreement and the other Loan Documents, including the Fee Letters.

3.                  The Title Policy.

4.                  The Business Organizational Documents of Borrower, Sole
Member and Guarantor, together with authorizing resolutions and/or consents and
a good standing certificate as of a recent date for each of Borrower, Sole
Member and Guarantor.

5.                  Legal opinions issued by counsel for Borrower, Sole Member
and Guarantor, opining as to the due organization, valid existence and good
standing of Borrower, Sole Member and Guarantor, and the due authorization,
execution, delivery, enforceability and validity of the Loan Documents with
respect to Borrower and Guarantor; that the Loans, as reflected in the Loan
Documents, are not usurious; to the extent that Administrative Agent is not
otherwise satisfied, that the Project and its use is in full compliance with all
legal requirements; and as to such other matters as Administrative Agent and
Administrative Agent’s counsel may reasonably specify.

6.                  Current Uniform Commercial Code searches, and litigation,
bankruptcy, judgment and Patriot Act reports as requested by Administrative
Agent, with respect to Borrower, Guarantor, and (if requested by Administrative
Agent) the immediately preceding owner of the Project.

7.                  Evidence of insurance conforming in all respects to the
requirements of this Agreement, together with evidence indicating whether the
Project, or any part thereof, lies within a “special flood hazard area”.

8.                  A current “as-built” survey of the Project, dated or updated
to a date not earlier than thirty (30) days prior to the date hereof, certified
to Administrative Agent (on behalf of the Lenders), the Title Company and
Borrower, prepared by a licensed surveyor acceptable to Administrative Agent and
the Title Company, and conforming to Administrative Agent’s current standard
survey requirements, which may include certification to additional participants,
co lenders and/or investors. Without limitation, the minimum requirements for
the survey shall be as set forth in the 2011 Minimum Standard Detail
Requirements for ALTA/ACSM Land Title

 

­

--------------------------------------------------------------------------------

 

Surveys, jointly established and adopted by ALTA and NSPS, and include items 1,
2, 3, 4, 6(b), 7(a), 7(b)(1), 7(c), 8, 10(a), 11(a), 13, 14, 16, 17, 18, 19,
20(a) and 20(b) of Table A thereof.

9.                  A current engineering report with respect to the Project,
covering, among other matters, inspection of heating and cooling systems, roof
and structural details, showing no failure of compliance with building plans and
specifications, applicable legal requirements (including requirements of the
Americans with Disabilities Act) and fire, safety and health standards and
reviewing and approving, among other matters, soil tests, plans and
specifications (including heating, ventilation and cooling systems, roof and
structural details, mechanical and electrical systems), and compliance with
local, state or federal laws, regulations, codes, etc. The engineer preparing
such report must be satisfied that the Project is in compliance with fire,
safety and health standards which such engineer deems reasonable, in addition to
standards imposed by law, regulation or codes. If reasonably requested by
Administrative Agent, such report shall also include an assessment of the
Project’s tolerance for earthquake and seismic activity.

10.              A current Site Assessment.

11.              A current zoning report from a zoning consultant approved by
Administrative Agent indicating that the Project complies with all zoning and
land use requirements applicable to the Project.

12.              All appraisals, building condition reports and Site Assessments
delivered to Administrative Agent prior to the execution of this Agreement shall
be certified to Administrative Agent (on behalf of the Lenders and their
successors and assigns) without modification or change thereto in the form
reasonably requested by Administrative Agent which may include certification to
additional participants, co lenders and/or investors.

13.              A current rent roll of the Project, certified by Borrower or
the current owner of the Project. Such rent roll shall include the following
information: (a) tenant names; (b) unit/suite numbers; (c) area of each demised
Project and total area of the Project (stated in net rentable square feet); (d)
rental rate (including escalations) (stated in gross amount and in amount per
net rentable square foot per year); (e) lease term (commencement, expiration and
renewal options); (f) expense pass-throughs; (g) cancellation/termination
provisions; (h) security deposit; and (i) material operating covenants and co
tenancy clauses. In addition, Borrower shall provide Administrative Agent with
true and correct copies of all Existing Leases.

14.              Estoppel certificates from Home Depot, the Container Store,
H&M, and Bank of America and commercially reasonable efforts to obtain estoppel
certificates from the tenants occupying the balance of the Project.

15.              Subordination, Non-Disturbance and Attornment Agreements from
Home Depot, the Container Store, H&M, and Bank of America, which Agreements
shall be substantially in the form of Exhibit D (except for such changes thereto
as a tenant may reasonably request and Administrative Agent shall reasonably
approve), or such other form as shall be acceptable to Administrative Agent.

 

2

­

--------------------------------------------------------------------------------

 

16.              Copies of the Management Agreement, certified by Borrower as
being true, correct and complete, together with the Assignment of Management
Agreement executed by Borrower and the Managers.

17.              Copies of all leasing and brokerage agreements for the Project
and a list of all material operating, service and maintenance agreements for the
Project that are material to the operation and management of the Project,
together with, in the case of any such agreement with a service provider which
is an Affiliate of Borrower or Guarantor, a letter in the form of Exhibit F from
the service provider under each such agreement which is not terminable upon not
more than thirty (30) days’ notice to such service provider.

18.              Evidence that (a) the Project and the operation thereof comply
with all legal requirements, including that all requisite certificates of
occupancy, building permits, and other licenses, certificates, approvals or
consents required by any Governmental Authority have been issued without
variance or condition, (b) following any casualty, the improvements which form a
part of the Project may be reconstructed and the current use thereof restored,
and (c) that there is no litigation, action, citation, injunctive proceedings,
or like matter pending or threatened with respect to the validity of such
matters.

19.              Such financial statements with respect to Borrower and
Guarantor as Administrative Agent or the Lenders shall request.

20.              No change shall have occurred in the financial condition of
Borrower or Guarantor or in the Net Operating Income of the Project, or in the
financial condition of any major or anchor tenant, which would have, in
Administrative Agent’s or any Lender’s judgment, a Material Adverse Effect.

21.              No condemnation or adverse zoning or usage change proceeding
shall have occurred or shall have been threatened against the Project; the
Project shall not have suffered any significant damage by fire or other casualty
which has not been repaired; no structural change to the Project shall have
occurred or to any of the Improvements thereon; no law, regulation, ordinance,
moratorium, injunctive proceeding, restriction, litigation, action, citation or
similar proceeding or matter shall have been enacted, adopted, or threatened by
any third party or Governmental Authority, which would have, in Administrative
Agent’s or any Lender’s judgment, a Material Adverse Effect.

22.              All fees and commissions payable to real estate brokers,
mortgage brokers, or any other brokers or agents in connection with the Loans
have been paid.

23.              If and to the extent required by Administrative Agent, copies
of all service contracts, warranties, licenses and permits applicable to the
operation or use of the Project.

24.              The original mortgage(s) and promissory note(s) referred in to
in clause (i) of the definition of “Assignment/Gap Documents”.

25.              Such additional documents or items as are customary for
transactions of this type or as Administrative Agent, the Lenders or their
counsel may reasonably require.

3

­

--------------------------------------------------------------------------------

 

26.              The representations and warranties contained in this Loan
Agreement and in all other Loan Documents are true and correct in all material
respects.

27.              No Potential Default or Event of Default shall exist.

28.              Borrower shall have executed a Disbursement and Rate Management
Authorization and Instruction Agreement in the form provided by Administrative
Agent.

 

4

­

 

--------------------------------------------------------------------------------

SCHEDULE 9.7

AGREEMENTS WITH BORROWER’S AFFILIATES

 

1.                  That certain Management Agreement dated as August 5, 2015
between Manager and Borrower with respect to the management of the restaurant
portion of the Project by the Manager together with any management agreements
entered into with future Managers in accordance with the terms of this
Agreement.

2.                  That certain Management Agreement dated as of July 6, 2003
between Manager and Borrower with respect to the management of the retail
portion of the Project by the Manager together with any management agreements
entered into with future Managers in accordance with the terms of this
Agreement.

 
 
 

 

 

­