EXHIBIT 10.3

 

LOAN NO: 59039

SERVICING NO.: 3204104

MERS MIN NO: 8000101-0000001436-4

 

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LOAN AGREEMENT

Dated as of June 22, 2005

Between

1334 YORK AVENUE L.P.,
as Borrower

and

BANK OF AMERICA, N.A.,
as Lender

 

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Confidential Treatment Requested by BANA

BANA-Soth-00058

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TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

1

 

Section 1.1.

 

Definitions

1

 

Section 1.2.

 

Principles of Construction

21

 

 

 

 

 

ARTICLE 2

GENERAL TERMS

21

 

Section 2.1.

 

Loan Commitment; Disbursement to Borrower

21

 

Section 2.2.

 

Loan Payments

21

 

Section 2.3.

 

Late Payment Charge

23

 

Section 2.4.

 

Prepayment; Defeasance

23

 

Section 2.5.

 

Payments after Default

28

 

Section 2.6.

 

Usury Savings

29

 

 

 

 

 

ARTICLE 3

CONDITIONS PRECEDENT

29

 

Section 3.1.

 

Representations and Warranties; Compliance with Conditions

29

 

Section 3.2.

 

Delivery of Loan Documents; Title Insurance; Reports; Leases

29

 

Section 3.3.

 

Related Documents

31

 

Section 3.4.

 

Organizational Documents

31

 

Section 3.5.

 

Opinions of Borrower’s Counsel

31

 

Section 3.6.

 

Annual Budget

31

 

Section 3.7.

 

Taxes and Other Charges

31

 

Section 3.8.

 

Completion of Proceedings

32

 

Section 3.9.

 

Payments

32

 

Section 3.10.

 

Transaction Costs

32

 

Section 3.11.

 

No Material Adverse Change

32

 

Section 3.12.

 

Leases and Rent Roll

32

 

Section 3.13.

 

Intentionally Omitted

33

 

Section 3.14.

 

Estoppel Certificates

33

 

Section 3.15.

 

Subordination and Attornment

33

 

Section 3.16.

 

Tax Lot

33

 

Section 3.17.

 

Physical Conditions Report

33

 

Section 3.18.

 

Management Agreement

33

 

Section 3.19.

 

Appraisal

33

 

Section 3.20.

 

Financial Statements

33

 

Section 3.21.

 

Net Operating Income

33

 

Section 3.22.

 

Further Documents

33

 

 

 

 

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

34

 

Section 4.1.

 

Organization

34

 

Section 4.2.

 

Status of Borrower

34

 

Section 4.3.

 

Validity of Documents

34

 

Section 4.4.

 

No Conflicts

35

 

Section 4.5.

 

Litigation

35

 

Section 4.6.

 

Agreements

35

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TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

Section 4.7.

 

Solvency

35

 

Section 4.8.

 

Full and Accurate Disclosure

36

 

Section 4.9.

 

No Plan Assets

36

 

Section 4.10.

 

Not a Foreign Person

36

 

Section 4.11.

 

Enforceability

36

 

Section 4.12.

 

Business Purposes

37

 

Section 4.13.

 

Compliance

37

 

Section 4.14.

 

Financial Information

37

 

Section 4.15.

 

Condemnation

37

 

Section 4.16.

 

Utilities and Public Access; Parking

38

 

Section 4.17.

 

Separate Lots

38

 

Section 4.18.

 

Assessments

38

 

Section 4.19.

 

Insurance

38

 

Section 4.20.

 

Use of Property

38

 

Section 4.21.

 

Certificate of Occupancy; Licenses

38

 

Section 4.22.

 

Flood Zone

39

 

Section 4.23.

 

Physical Condition

39

 

Section 4.24.

 

Boundaries

39

 

Section 4.25.

 

Leases and Rent Roll

39

 

Section 4.26.

 

Filing and Recording Taxes

40

 

Section 4.27.

 

Management Agreement

40

 

Section 4.28.

 

Illegal Activity

40

 

Section 4.29.

 

Construction Expenses

41

 

Section 4.30.

 

Personal Property

41

 

Section 4.31.

 

Taxes

41

 

Section 4.32.

 

Permitted Encumbrances

41

 

Section 4.33.

 

Federal Reserve Regulations

41

 

Section 4.34.

 

Investment Company Act

41

 

Section 4.35.

 

Intentionally Omitted

41

 

Section 4.36.

 

No Change in Facts or Circumstances; Disclosure

42

 

Section 4.37.

 

Intellectual Property

42

 

Section 4.38.

 

Survey

42

 

Section 4.39.

 

Survival

42

 

Section 4.40.

 

Embargoed Persons Act

42

 

Section 4.41.

 

Patriot Act

43

 

 

 

ARTICLE 5

BORROWER COVENANTS

44

 

Section 5.1.

 

Existence; Compliance with Legal Requirements

44

 

Section 5.2.

 

Maintenance and Use of Property

44

 

Section 5.3.

 

Waste

45

 

Section 5.4.

 

Taxes and Other Charges

45

 

Section 5.5.

 

Litigation

46

 

Section 5.6.

 

Access to Property

46

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TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

Section 5.7.

 

Notice of Default

46

 

Section 5.8.

 

Cooperate in Legal Proceedings

46

 

Section 5.9.

 

Performance by Borrower

46

 

Section 5.10.

 

Awards; Insurance Proceeds

46

 

Section 5.11.

 

Financial Reporting

47

 

Section 5.12.

 

Estoppel Statement

51

 

Section 5.13.

 

Leasing Matters

52

 

Section 5.14.

 

Property Management

56

 

Section 5.15.

 

Liens

56

 

Section 5.16.

 

Debt Cancellation

57

 

Section 5.17.

 

Zoning

57

 

Section 5.18.

 

ERISA

57

 

Section 5.19.

 

No Joint Assessment

57

 

Section 5.20.

 

Intentionally Omitted

57

 

Section 5.21.

 

Alterations

58

 

Section 5.22.

 

Intentionally Omitted

58

 

 

 

 

 

ARTICLE 6

ENTITY COVENANTS

58

 

Section 6.1.

 

Single Purpose Entity/Separateness

58

 

Section 6.2.

 

Change of Name, Identity or Structure

62

 

Section 6.3.

 

Business and Operations

63

 

Section 6.4.

 

Independent Director

63

 

 

 

 

 

ARTICLE 7

NO SALE OR ENCUMBRANCE

63

 

Section 7.1.

 

Transfer Definitions

63

 

Section 7.2.

 

No Sale/Encumbrance

64

 

Section 7.3.

 

Permitted Transfers

64

 

Section 7.4.

 

Lender’s Rights

65

 

Section 7.5.

 

Assumption

66

 

Section 7.6.

 

Mezzanine Option

68

 

 

 

 

 

ARTICLE 8

 

INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

70

 

Section 8.1.

 

Insurance

70

 

Section 8.2.

 

Casualty

73

 

Section 8.3.

 

Condemnation

74

 

Section 8.4.

 

Restoration

74

 

 

 

 

 

ARTICLE 9

RESERVE FUNDS

78

 

Section9.1.

 

Intentionally Omitted

78

 

Section 9.2.

 

Replacements

78

 

Section 9.3.

 

Intentionally Omitted

79

 

Section 9.4.

 

Required Work

79

 

Section 9.5.

 

Release of Replacement Reserve Funds

81

 

Section 9.6.

 

Tax and Insurance Reserve Funds

83

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TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

Section 9.7.

 

Debt Service Reserve

84

 

Section 9.8.

 

Operating Expenses; Extraordinary Expenses

85

 

Section 9.9.

 

Reserve Funds Generally

85

 

 

 

ARTICLE 10

CASH MANAGEMENT

88

 

Section 10.1.

 

Cash Management Account

88

 

Section 10.2.

 

Deposits and Withdrawals

89

 

Section 10.3.

 

Security Interest

92

 

 

 

 

 

ARTICLE 11

EVENTS OF DEFAULT; REMEDIES

93

 

Section 11.1.

 

Event of Default

93

 

Section 11.2.

 

Remedies

95

 

 

 

ARTICLE 12

ENVIRONMENTAL PROVISIONS

96

 

Section 12.1.

 

Environmental Representations and Warranties

96

 

Section 12.2.

 

Environmental Covenants

96

 

Section 12.3.

 

Lender’s Rights

97

 

Section 12.4.

 

Operations and Maintenance Programs

97

 

Section 12.5.

 

Environmental Definitions

98

 

Section 12.6.

 

Indemnification

98

 

 

 

ARTICLE 13

SECONDARY MARKET

100

 

Section 13.1.

 

Transfer of Loan

100

 

Section 13.2.

 

Delegation of Servicing

100

 

Section 13.3.

 

Dissemination of Information

100

 

Section 13.4.

 

Cooperation

100

 

Section 13.5.

 

Securitization Indemnification

102

 

Section 13.6.

 

Private Rating

105

 

Section 13.7.

 

Servicer

105

 

 

 

ARTICLE 14

INDEMNIFICATIONS

106

 

Section 14.1.

 

General Indemnification

106

 

Section 14.2.

 

Mortgage and Intangible Tax Indemnification

106

 

Section 14.3.

 

ERISA Indemnification

106

 

Section 14.4.

 

Survival

107

 

 

 

ARTICLE 15

EXCULPATION

107

 

Section 15.1.

 

Exculpation

107

 

 

 

ARTICLE 16

NOTICES

109

 

Section 16.1.

 

Notices

109

 

 

 

ARTICLE 17

FURTHER ASSURANCES

110

 

Section 17.1.

 

Replacement Documents

110

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TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

Section 17.2.

 

Recording of Mortgage, Etc

111

 

Section 17.3.

 

Further Acts, Etc

111

 

Section 17.4.

 

Changes in Tax, Debt, Credit and Documentary Stamp Laws

111

 

Section 17.5.

 

Expenses

112

 

 

 

ARTICLE 18

WAIVERS

113

 

Section 18.1.

 

Remedies Cumulative; Waivers

113

 

Section 18.2.

 

Modification, Waiver in Writing

113

 

Section 18.3.

 

Delay Not a Waiver

113

 

Section 18.4.

 

Trial by Jury

114

 

Section 18.5.

 

Waiver of Notice

114

 

Section 18.6.

 

Remedies of Borrower

114

 

Section 18.7.

 

Waiver of Marshalling of Assets

115

 

Section 18.8.

 

Intentionally Omitted

115

 

Section 18.9.

 

Waiver of Counterclaim

115

 

 

 

ARTICLE 19

GOVERNING LAW

116

 

Section 19.1.

 

Choice of Law

116

 

Section 19.2.

 

Severability

116

 

Section 19.3.

 

Preferences

116

 

 

 

ARTICLE 20

MISCELLANEOUS

116

 

Section 20.1.

 

Survival

116

 

Section 20.2.

 

Lender’s Discretion

117

 

Section 20.3.

 

Headings

117

 

Section 20.4.

 

Cost of Enforcement

117

 

Section 20.5.

 

Schedules Incorporated

117

 

Section 20.6.

 

No Joint Venture or Partnership; No Third Party Beneficiaries

117

 

Section 20.7.

 

Publicity

118

 

Section 20.8.

 

Conflict; Construction of Documents; Reliance

119

 

Section 20.9.

 

Entire Agreement

119

 

Section 20.10.

 

Liability

119

 

Section 20.11.

 

Satisfaction of Indebtedness

119

 

Section 20.12.

 

Inconsistencies With Sotheby’s Lease

120

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LOAN AGREEMENT

          THIS LOAN AGREEMENT, dated as of June 22, 2005 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between BANK OF AMERICA, N.A., a national banking association,
having an address at 214 North Tyron Street, Charlotte, North Carolina 28255
(together with its successors and/or assigns, “Lender”) and 1334 YORK AVENUE
L.P., a Delaware limited partnership, having an address at c/o RFR Holding LLC,
400 Park Avenue, New York, New York 10022 (together with its successors and/or
assigns, “Borrower”).

RECITALS:

          Borrower desires to obtain the Loan (defined below) from Lender.

          Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents
(defined below).

          In consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:

ARTICLE 1
DEFINITIONS; PRINCIPLES OF CONSTRUCTION

          Section 1.1. Definitions

          For all purposes of this Agreement, except as otherwise expressly
required or unless the context clearly indicates a contrary intent:

          “Acceptable Accountant” shall mean a “Big Four” accounting firm or
other independent certified public accountant acceptable to Lender. Berdon LLP
is acceptable to Lender as of the date hereof.

          “Acquired Property” shall have the meaning set forth in Section
5.11(c)(i)(A) hereof.

          “Acquired Property Statements” shall have the meaning set forth in
Section 5.11(c)(i)(A) hereof.

          “Act” shall have the meaning set forth in Section 6.1(c).

          “Additional Replacement” shall have the meaning set forth in Section
9.5(g) hereof.

          “Affiliate” shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.

          “Affiliated Loans” shall mean a loan made by Lender to a parent,
subsidiary or such other entity affiliated with Borrower or Borrower Principal.

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          “Affiliated Manager” shall have the meaning set forth in Section 7.1
hereof.

          “Aggregate Debt Service” shall mean the sum of (a) Debt Service for a
given period, plus (b) the hypothetical amount of principal and interest payable
during such period on an amount equal to the proposed amount of the Permitted
Mezzanine Financing based on level combined payments of principal and interest
based on a thirty (30) year amortization schedule and an interest rate equal to
(i) if the Permitted Mezzanine Financing bears interest at a fixed rate of
interest, the interest rate of the Permitted Mezzanine Financing identified in
the Mezzanine Notice, or (ii) if the Permitted Mezzanine Financing bears
interest at a floating rate of interest, an interest rate equal to the strike
rate set forth in the Interest Rate Cap Agreement plus the Mezzanine Spread.

          “ALTA” shall mean American Land Title Association, or any successor
thereto.

          “Alteration Threshold” means $750,000.00.

          “Annex” shall have the meaning set forth in Section 4.41 hereof.

          “Annual Budget” shall mean the operating budget, including all planned
capital expenditures, for the Property approved by Lender in accordance with
Section 5.11(a)(iv) hereof for the applicable calendar year or other period.

          “Appraisal” shall mean a current “as-is” appraisal prepared in
accordance with the requirements of FIRREA by an independent third-party
appraiser holding an MAI designation, which appraiser is licensed under the laws
of the State of New York, meets the requirements of FIRREA and is otherwise
satisfactory to Lender.

          “Approved Bank” shall mean (a) a bank or other financial institution
which has the Required Rating, (b) if a Securitization has not occurred, a bank
or other financial institution reasonably acceptable to Lender or (c) if a
Securitization has occurred, a bank or other financial institution which the
Rating Agencies have confirmed in writing will not, in and of itself, result in
a downgrade, withdrawal or qualification of the then current ratings assigned in
connection with such Securitization.

          “Assignment of Management Agreement” shall mean that certain
Assignment and Subordination of Management Agreement and Consent of Manager
dated the date hereof among Lender, Borrower and Manager, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

          “Award” shall mean any compensation paid by any Governmental Authority
in connection with a Condemnation in respect of all or any part of the Property.

          “Borrower Principal” shall mean individually and collectively, as the
context may require, Aby Rosen, an individual, and Michael Fuchs, an individual,
on a joint and several basis.

          “Borrower Principal Family Group” shall mean any Borrower Principal,
any Borrower Principal’s immediate family members, trusts formed for the benefit
of such immediate family

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members and limited partnerships wholly owned and controlled by such immediate
family members.

          “Business Day” shall mean a day on which Lender is open for the
conduct of substantially all of its banking business at its office in the city
in which the Note is payable (excluding Saturdays and Sundays).

          “Cash Management Bank” shall have the meaning set forth in Section
10.1 hereof.

          “Cash Management Account” shall have the meaning set forth in Section
10.1 hereof.

          “Casualty” shall have the meaning set forth in Section 8.2.

          “Closing Date” shall mean the date of the funding of the Loan.

          “Control” shall have the meaning set forth in Section 7.1 hereof.

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

          “Condemnation Proceeds” shall have the meaning set forth in Section
8.4(b)

          “Creditors Rights Laws” shall mean with respect to any Person any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, conservatorship, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to its debts or debtors.

          “Debt” shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums due to Lender in respect of the Loan under the
Note, this Agreement, the Mortgage or any other Loan Document.

          “Debt Service” shall mean, with respect to any particular period of
time, scheduled principal and/or interest payments under the Note.

          “Debt Service Coverage Ratio” shall mean the ratio, as determined by
Lender, of (a) Net Operating Income for the preceding 12 month period to (b)
Aggregate Debt Service for the same period, calculated by Lender as of the first
Scheduled Payment Date following Lender’s receipt of the Mezzanine Notice.

          “Debt Service Reserve Account” shall have the meaning set forth in
Section 9.7 hereof.

          “Debt Service Reserve Event” shall have the meaning set forth in
Section 9.7 hereof.

          “Debt Service Reserve Funds” shall have the meaning set forth in
Section 9.7 hereof.

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          “Default” shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.

          “Default Rate” shall mean, with respect to the Loan, a rate per annum
equal to the lesser of (a) the maximum rate permitted by applicable law, or (b)
four percent (4%) above the Note Rate.

          “Defeasance Collateral” shall have the meaning set forth in Section
2.4(b)(i)(D)(2) hereof.

          “Defeasance Security Agreement” shall have the meaning set forth in
Section 2.4(b)(i)(D)(2) hereof.

          “Disclosure Document” shall have the meaning set forth in Section 13.5
hereof.

          “Eligible Account” shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state chartered depository institution or
trust company which complies with the definition of Eligible Institution or (b)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b),
having in either case a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal and state authority. An
Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.

          “Eligible Institution” shall mean Bank of America, N.A. or a
depository institution or trust company insured by the Federal Deposit Insurance
Corporation, the short term unsecured debt obligations or commercial paper of
which are rated at least “A-1+” by S&P, “P-l” by Moody’s and “F-1+” by Fitch in
the case of accounts in which funds are held for thirty (30) days or less (or,
in the case of accounts in which funds are held for more than thirty (30) days,
the long term unsecured debt obligations of which are rated at least “AA” by
Fitch and S&P and “Aa2” by Moody’s).

          “Eligibility Requirements” shall mean, with respect to any Person,
that such Person (i) has total assets (in name or under management) in excess of
$600,000,000 and (except with respect to a pension advisory firm or similar
fiduciary) capital/statutory surplus or shareholder’s equity of $250,000,000 and
(ii) is regularly engaged in the business of making or owning commercial real
estate loans or operating commercial mortgage properties.

          “Embargoed Person” shall have the meaning set forth in Section 4.40
hereof.

          “Environmental Law” shall have the meaning set forth in Section 12.5
hereof.

          “Environmental Liens” shall have the meaning set forth in Section 12.5
hereof.

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          “Environmental Report” shall mean that certain Phase I Environmental
Site Assessment prepared by Environmental Monitoring & Consulting Associates
dated May 18, 2005.

          “Equity Collateral” shall mean the 100% direct or indirect equity
ownership interest held by Mezzanine Borrower in Borrower (other than any equity
interest in Borrower held by any SPE Component Entity).

          “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and any successor statutes thereto and
applicable regulations issued pursuant thereto in temporary or final form.

          “Event of Default” shall have the meaning set forth in Section 11.1
hereof.

          “Excess Cash Flow” shall have the meaning set forth in Section
10.2(b)(ii)(I) hereof.

          “Exchange Act” shall mean the Securities and Exchange Act of 1934, as
amended.

          “Exchange Act Filing” shall have the meaning set forth in Section
5.1l(c) hereof.

          “Extraordinary Expense Reserve Account” shall have the meaning set
forth in Section 9.8(b).

          “Extraordinary Expense Reserve Funds” shall have the meaning set forth
in Section 9.8(b).

          “Extraordinary Expenses” shall mean an operating expense or capital
expenditure with respect to the Property that (i) is not set forth on the Annual
Budget and (ii) is not subject to payment by withdrawals from the Replacement
Reserve Account. Borrower shall deliver promptly to Lender a reasonably detailed
explanation of such proposed Extraordinary Expense for the approval of Lender.

          “Fee Mortgagee” shall have the meaning set forth in the Sotheby’s
Lease and shall be deemed to refer to Lender in accordance with the applicable
terms and conditions thereof.

          “Fitch” shall mean Fitch, Inc.

          “GAAP” shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.

          “Governmental Authority” shall mean any court, board, agency,
department, commission, office or other authority of any nature whatsoever for
any governmental unit (federal, state, county, municipal, city, town, special
district or otherwise) whether now or hereafter in existence.

          “Hazardous Materials” shall have the meaning set forth in Section 12.5
hereof.

          “Improvements” shall have the meaning set forth in the granting clause
of the Mortgage.

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          “Indemnified Parties” shall mean (a) Lender, (b) any prior owner or
holder of the Loan or Participations in the Loan, (c) any servicer or prior
servicer of the Loan, (d) any Investor or any prior Investor in any Securities,
(e) any trustees, custodians or other fiduciaries who hold or who have held a
full or partial interest in the Loan for the benefit of any Investor or other
third party, (f) any receiver or other fiduciary appointed in a foreclosure or
other Creditors Rights Laws proceeding, (g) any officers, directors,
shareholders, partners, members, employees, agents, servants, representatives,
affiliates or subsidiaries of any and all of the foregoing, and (h) the heirs,
legal representatives, successors and assigns of any and all of the foregoing
(including, without limitation, any successors by merger, consolidation or
acquisition of all or a substantial portion of the Indemnified Parties’ assets
and business), in all cases whether during the term of the Loan or as part of or
following a foreclosure of the Mortgage.

           “Independent Director” shall have the meaning set forth in Section
6.4(a).

           “Initial Note Rate” shall mean, with respect to Note A, the Initial
Note A Rate, and, with respect to Note B, the Initial Note B Rate.

           “Initial Note A Rate” shall mean an interest rate equal to
5.209619047619050% per annum.

           “Initial Note B Rate” shall mean an interest rate equal to 7.770% per
annum.

           “Insurance Premiums” shall have the meaning set forth in Section
8.1(b) hereof.

           “Insurance Proceeds” shall have the meaning set forth in Section
8.4(b) hereof.

           “Interest Rate Cap Agreement” shall mean an interest rate cap
agreement which (i) is purchased and maintained by Mezzanine Borrower; (ii) is
provided by a counterparty reasonably acceptable to Lender and acceptable to the
Rating Agencies; (iii) is written on the then current standard ISDA
documentation and otherwise contains terms and conditions reasonably acceptable
to Lender and acceptable to the Rating Agencies; (iv) is co-terminus with the
Permitted Mezzanine Financing (including all extensions thereof); (v) is for a
notional amount equal to the amount of the Permitted Mezzanine Financing; and
(vi) provides for a strike rate equal to (or less than) the interest rate that,
when added to the Mezzanine Spread, results in a Debt Service Coverage Ratio,
calculated on a trailing 12-month basis, of 1.25 to 1.00.

           “Internal Revenue Code” shall mean the Internal Revenue Code of 1986,
as amended, as it may be further amended from time to time, and any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.

           “Investor” shall have the meaning set forth in Section 13.3 hereof.

          “I/O Monthly Payment Amount” shall have the meaning set forth in
Section 2.2(b) hereof.

           “Issuer Group” shall have the meaning set forth in Section 13.5(b)
hereof.

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Confidential Treatment Requested by BANA

BANA-Soth-00069

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          “Issuer Person” shall have the meaning set forth in Section 13.5(b)
hereof.

          “Lease” shall have the meaning set forth in the Mortgage.

          “Legal Requirements” shall mean all statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting the Property or any part thereof, or the construction,
use, alteration or operation thereof, whether now or hereafter enacted and in
force, and all permits, licenses, authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Borrower, at any time in force
affecting the Property or any part thereof, including, without limitation, any
which may (a) require repairs, modifications or alterations in or to the
Property or any part thereof, or (b) in any way limit the use and enjoyment
thereof.

          “Letter of Credit” shall mean an irrevocable, auto-renewing,
unconditional, transferable, clean sight draft letter of credit having an
initial term of not less than one (1) year and with automatic renewals for one
(1) year periods (unless the obligation being secured by, or otherwise requiring
the delivery of, such letter of credit is required to be performed at least
thirty (30) days prior to the initial expiry date of such letter of credit), for
which Borrower shall have no reimbursement obligation and which reimbursement
obligation is not secured by the Property or any other property pledged to
secure the Note, in favor of Lender and entitling Lender to draw thereon in New
York, New York, based solely on a statement that Lender has the right to draw
thereon executed by an officer or authorized signatory of Lender. A Letter of
Credit satisfying all of the requirements set forth in the preceding sentence
must be issued by an Approved Bank. If at any time (a) the institution issuing
any such Letter of Credit shall cease to be an Approved Bank or (b) if such
Letter of Credit is due to expire prior to the completion of the work for which
such Letter of Credit was delivered or termination of the event or events which
gave rise to the requirement that Borrower deliver such Letter of Credit to
Lender, Lender shall have the right to draw down the same in full and hold the
proceeds thereof in accordance with the provisions of this Agreement, unless
Borrower shall deliver a replacement Letter of Credit satisfying the
requirements set forth in the first sentence hereof from an Approved Bank within
(i) as to (a) above, thirty (30) days after Lender delivers written notice to
Borrower that the institution issuing the Letter of Credit has ceased to be an
Approved Bank or (ii) as to (b) above, within thirty (30) days prior to the
expiration date of said Letter of Credit.

          “Lien” shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting Borrower, the Property, any portion thereof or
any interest therein, including, without limitation, any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, and mechanic’s, materialmen’s and other similar liens and
encumbrances.

          “LLC Agreement” shall have the meaning set forth in Section 6.1(c).

          “Loan” shall mean the loan made by Lender to Borrower pursuant to this
Agreement.

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Confidential Treatment Requested by BANA

BANA-Soth-00070

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

          “Loan Documents” shall mean, collectively, this Agreement, the Note,
the Mortgage, the Assignment of Management Agreement and any and all other
documents, agreements and certificates executed and/or delivered in connection
with the Loan, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

          “Lockout Period” shall mean the period commencing on the date hereof
and ending on the date that is three (3) months prior to the Optional Prepayment
Date.

          “Losses” shall mean any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, fines, penalties, charges, fees,
judgments, awards, amounts paid in settlement of whatever kind or nature
(including but not limited to legal fees and other costs of defense).

          “LTV” shall mean the ratio, expressed as a percentage, of (a) the sum
of (i) the outstanding principal amount of the Loan at the time the LTV is
calculated plus (ii) the proposed principal amount of the Permitted Mezzanine
Financing, to (b) the appraised value of the Property based on an updated
Appraisal obtained by Lender at Borrower’s cost and expense.

          “Major Lease” shall mean as to the Property (i) any Lease which,
individually or when aggregated with all other leases at the Property with the
same Tenant or its Affiliate, either accounts for ten percent (10%) or more of
the Property’s aggregate Net Operating Income or gross leaseable area, (ii) any
Lease which contains any option, offer, right of first refusal or other similar
entitlement to acquire all or any portion of the Property, or (iii) any
instrument guaranteeing or providing credit support for any Lease meeting the
requirements of (i) or (ii) above.

          “Major Sotheby’s Sublease” shall mean as to the Property (i) any
sublease of the Sotheby’s Lease with respect to which Lender has entered into a
non-disturbance or similar agreement with the subtenant thereunder, or (ii) any
instrument guaranteeing or providing credit support for any sublease of the
Sotheby’s Lease meeting the requirements of clause (i) above.

          “Management Agreement” shall mean the management agreement entered
into by and between Borrower and Manager, pursuant to which Manager is to
provide management and other services with respect to the Property, as the same
may be amended, restated, replaced, supplemented or otherwise modified in
accordance with the terms of this Agreement.

          “Manager” shall mean RFR Realty LLC or such other entity selected as
the manager of the Property in accordance with the terms of this Agreement.

          “Maturity Date” shall mean July 1, 2035.

          “Maximum Legal Rate” shall mean the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.

          “Member” shall have the meaning set forth in Section 6.1(c).

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Confidential Treatment Requested by BANA

BANA-Soth-00071

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

          “Mezzanine Borrower” shall mean the constituent party of the Borrower
that is the obligor under the Permitted Mezzanine Financing; provided, however,
in no event shall the Mezzanine Borrower be any SPE Component Entity.

           “Mezzanine Foreclosure” shall have the meaning set forth in the
definition of the term “Mezzanine Transfer”.

           “Mezzanine Intercreditor” shall have the meaning set forth in Section
7.6(g).

          “Mezzanine Notice” shall have the meaning set forth in Section 7.6.

           “Mezzanine Spread” shall mean, if the Permitted Mezzanine Financing
shall bear interest at a floating rate of interest, an amount equal to (i) the
interest rate of the Permitted Mezzanine Financing at the closing date thereof
less (ii) the then current one month LIBOR rate or the then current rate
provided by any other similar index or interest rate convention used by
Mezzanine Lender to calculate the interest rate under the Permitted Mezzanine
Financing.

           “Mezzanine Transfer” shall mean each of (i) the pledge of the Equity
Collateral to Mezzanine Lender in connection with the Permitted Mezzanine
Financing and (ii) the transfer of the Equity Collateral by Mezzanine Borrower
to Mezzanine Lender in connection with the exercise of Mezzanine Lender’s rights
under the Permitted Mezzanine Financing, provided, that, such transfer is made
in accordance with the applicable terms and conditions of the Mezzanine
Intercreditor (such event, the “Mezzanine Foreclosure”).

           “Monthly Payment Amount” shall mean the monthly payment of interest
and principal due on each Scheduled Payment Date as set forth in Section 2.2(b)
hereof.

           “Moody’s” shall mean Moody’s Investor Services, Inc.

           “Mortgage” shall mean that certain first priority Mortgage and
Agreement of Consolidation and Modification of Mortgage, Assignment of Leases
and Rents, and Security Agreement dated the date hereof, executed and delivered
by Borrower as security for the Loan and encumbering the Property, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.

           “Mortgagor Portions” shall have the meaning set forth in Section
13.5(b).

          “Mortgagor Information” shall have the meaning set forth in Section
13.5(c).

          “Net Operating Income” shall mean, with respect to any period of time,
the amount obtained by subtracting Operating Expenses from Operating Income, as
such amount may be adjusted by Lender in its good faith discretion based on
Lender’s underwriting standards for loans which are consummated by Lender for
the purpose of including the same in any Securitization, including without
limitation, adjustments for vacancy allowance.

          “Net Proceeds” shall have the meaning set forth in Section 8.4(b)
hereof.

          “Net Proceeds Deficiency” shall have the meaning set forth in Section
8.4(b)(vi) hereof.

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Confidential Treatment Requested by BANA

BANA-Soth-00072

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          “Net Worth Statement” shall mean a certification executed by Borrower
Principal and addressed to Lender certifying that Borrower Principal’s net worth
equals or exceeds $100,000,000 (or, if any lesser amount, setting forth such
lesser amount).

          “Non-Consolidation Opinion” shall mean that certain substantive
non-consolidation opinion given by Edwards & Angell, LLP in connection herewith
and dated as of the date hereof, as the same may be amended, restated,
supplemented or modified after the date hereof.

          “Note” shall mean that certain Consolidated, Amended and Restated
Promissory Note of even date herewith in the principal amount of $235,000,000.00
made by Borrower in favor of Lender, as severed pursuant to that certain Note
Severance and Modification Agreement dated as of the date hereof pursuant to
which such consolidated note was severed and split into the following
replacements notes: (i) Replacement Note A original principal amount of
$210,000,000.00, made by Borrower in favor of Lender (“Note A”), and (ii)
Replacement Note B in the original principal amount of $25,000,000.00 (“Note
B”), made by Borrower in favor of Lender, as each of the same may be assigned,
amended, restated, replaced, extended, renewed, supplemented, severed, split, or
otherwise modified from time to time in accordance with the terms and provisions
hereof. References to the “Note” in this Agreement shall refer to Note A and
Note B collectively.

          “Note A” shall have the meaning set forth in the definition of the
term “Note”.

          “Note B” shall have the meaning set forth in the definition of the
term “Note”.

          “Note Rate” shall mean (a) prior to the Optional Prepayment Date, the
Initial Note Rate, and (b) from and after the Optional Prepayment Date, the
Revised Note Rate.

          “OFAC” shall have the meaning set forth in Section 4.41 hereof.

          “Offering Document Date” shall have the meaning set forth in Section
5.11(c)(i)(D) hereof.

          “Operating Expense Reserve Account” shall have the meaning set forth
in Section 9.8(a).

          “Operating Expense Reserve Funds” shall have the meaning set forth in
Section 9.8(a).

          “Operating Expenses” shall mean, with respect to any period of time,
the total of all expenses actually paid or payable, computed in accordance with
GAAP, of whatever kind relating to the operation, maintenance and management of
the Property, including without limitation, utilities, ordinary repairs and
maintenance, Insurance Premiums (the cost of which shall, solely for the
purposes of this definition and only for so long as the Sotheby’s Lease is in
full force and effect, be deemed to exclude any Insurance Premiums required to
be paid by Borrower hereunder beyond those Insurance Premiums required to be
paid by Sotheby’s under the Sotheby’s Lease), license fees, Taxes and Other
Charges, advertising expenses, payroll and related taxes, computer processing
charges, management fees equal to 3% of the Operating Income (provided, that for
purposes of Section 10.2(b)(ii)(B), such management fees shall be limited to 1%
of the Operating Income), operational equipment or other lease payments as
approved by Lender, normalized capital expenditures equal to $105,589.00 per
annum and

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Confidential Treatment Requested by BANA

BANA-Soth-00073

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normalized tenant improvement costs and/or leasing commissions equal to
$1,015,541.00 per annum, but specifically excluding depreciation and
amortization, income taxes, Debt Service, any incentive fees due under the
Management Agreement, any item of expense that in accordance with GAAP should be
capitalized, any item of expense that would otherwise be covered by the
provisions hereof but which is paid by any Tenant under such Tenant’s Lease or
other agreement, and deposits into the Reserve Accounts.

          “Operating Income” shall mean, with respect to any period of time, all
income, computed in accordance with GAAP, derived from the ownership and
operation of the Property from whatever source, including, but not limited to,
Rents, utility charges, escalations, forfeited security deposits, interest on
credit accounts, service fees or charges, license fees, parking fees, rent
concessions or credits, and other required pass-throughs but excluding sales,
use and occupancy or other taxes on receipts required to be accounted for by
Borrower to any Governmental Authority, refunds and uncollectible accounts,
sales of furniture, fixtures and equipment, interest income from any source
other than the escrow accounts, Reserve Accounts or other accounts required
pursuant to the Loan Documents, Insurance Proceeds (other than business
interruption or other loss of income insurance), Awards, percentage rents,
unforfeited security deposits, utility and other similar deposits, income from
tenants not paying rent, income from tenants in bankruptcy, non-recurring or
extraordinary income, including, without limitation lease termination payments,
and any disbursements to Borrower from the Reserve Funds.

          “Optional Prepayment Date” shall mean July 1, 2015.

          “Other Charges” shall mean any and all ground rents, maintenance
charges, impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.

          “Participations” shall have the meaning set forth in Section 13.1
hereof.

          “Patriot Act” shall have the meaning set forth in Section 4.41 hereof.

          “Permitted Encumbrances” shall mean collectively, (a) the Lien and
security interests created by the Loan Documents, (b) all Liens, encumbrances
and other matters disclosed in the Title Insurance Policy, (c) Liens, if any,
for Taxes imposed by any Governmental Authority not yet due or delinquent, and
(d) such other title and survey exceptions as Lender has approved or may approve
in writing in Lender’s sole discretion.

          “Permitted Fund Manager” shall mean any Person that on the date of
determination is (i) a nationally-recognized manager of investment funds
investing in debt or equity interests relating to commercial real estate or an
entity that constitutes a Qualified Institutional Lender under clauses (A), (B),
(C) or (D) of the definition thereof, (ii) investing through a fund with
committed capital of at least $250,000,000 and (iii) not subject to any action
or proceeding under any bankruptcy, insolvency, rehabilitation or other similar
proceeding.

          “Permitted Investments” shall mean to the extent available from Lender
or Lender’s servicer for deposits in the Reserve Accounts or the Cash Management
Account, any one or more of the following obligations or securities acquired at
a purchase price of not greater than

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Confidential Treatment Requested by BANA

BANA-Soth-00074

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

par, including those issued by a servicer of the Loan, the trustee under any
securitization or any of their respective Affiliates, payable on demand or
having a maturity date not later than the Business Day immediately prior to the
date on which the funds used to acquire such investment are required to be used
under this Agreement and meeting one of the appropriate standards set forth
below:

          (a) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or instrumentality
thereof provided such obligations are backed by the full faith and credit of the
United States of America including, without limitation, obligations of: the U.S.
Treasury (all direct or fully guaranteed obligations), the Farmers Home
Administration (certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime Administration
(guaranteed Title XI financing), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed transit bonds);
provided, however, that the investments described in this clause must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) be rated “AAA” or the equivalent by each of the Rating Agencies,
(iii) if rated by S&P, must not have an “r” highlighter affixed to their rating,
(iv) if such investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread (if any) and
must move proportionately with that index, and (v) such investments must not be
subject to liquidation prior to their maturity;

          (b) Federal Housing Administration debentures;

          (c) obligations of the following United States government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (iii) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;

          (d) federal funds, unsecured certificates of deposit, time deposits,
bankers’ acceptances and repurchase agreements with maturities of not more than
365 days of any bank, the short term obligations of which at all times are rated
in the highest short term rating category by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency in the highest
short term rating category and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities); provided, however, that the
investments described in this clause must (i) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (ii) if rated by S&P,
must not have an “r” highlighter affixed to their rating, (iii) if such
investments have a

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Confidential Treatment Requested by BANA

BANA-Soth-00075

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

variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;

          (e) fully Federal Deposit Insurance Corporation-insured demand and
time deposits in, or certificates of deposit of, or bankers’ acceptances with
maturities of not more than 365 days and issued by, any bank or trust company,
savings and loan association or savings bank, the short term obligations of
which at all times are rated in the highest short term rating category by each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency in the highest short term rating category and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities);
provided, however, that the investments described in this clause must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (iii) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (iv) such
investments must not be subject to liquidation prior to their maturity;

          (f) debt obligations with maturities of not more than 365 days and at
all times rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities) in its highest
long-term unsecured rating category; provided, however, that the investments
described in this clause must (i) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (ii) if rated by S&P, must not have
an “r” highlighter affixed to their rating, (iii) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;

          (g) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than 365 days and that at all times is rated by each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) in its highest short-term unsecured debt rating;
provided, however, that the investments described in this clause must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (iii) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (iv) such
investments must not be subject to liquidation prior to their maturity;

          (h) units of taxable money market funds, with maturities of not more
than 365 days and which funds are regulated investment companies, seek to
maintain a constant net asset value

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Confidential Treatment Requested by BANA

BANA-Soth-00076

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

per share and invest solely in obligations backed by the full faith and credit
of the United States, which funds have the highest rating available from each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed
in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities) for money market funds; and

          (i) any other security, obligation or investment which has been
approved as a Permitted Investment in writing by (i) Lender and (ii) each Rating
Agency, as evidenced by a written confirmation that the designation of such
security, obligation or investment as a Permitted Investment will not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities by such Rating
Agency;

          provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments, (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of one hundred twenty percent (120%) of
the yield to maturity at par of such underlying investment or (C) such
obligation or security has a remaining term to maturity in excess of one (1)
year.

          “Permitted Mezzanine Financing” shall have the meaning set forth in
Section 7.6 hereof.

          “Permitted Transferee” shall mean any of the following entities:

 

 

 

          (a) a pension fund, pension trust or pension account that immediately
prior to such transfer has total real estate assets with a market value of at
least $600,000,000.00;

 

 

 

          (b) a pension fund advisor who (i) immediately prior to such transfer
controls, directly and/or indirectly, at least $600,000,000.00 of real estate
assets (exclusive of the Property), and (ii) is acting on behalf of one or more
pension funds that, in the aggregate, satisfy the requirements of clause (a) of
this definition;

 

 

 

          (c) an insurance company which is subject to supervision by the
insurance commissioner, or a similar official or agency, of a state or territory
of the United States (including the District of Columbia) (i) with a net worth
of at least $600,000,000.00, and (ii) who, immediately prior to such transfer,
controls, directly and/or indirectly, real estate assets of at least
$600,000,000.00 (exclusive of the Property);

 

 

 

          (d) an association organized under the banking laws of the United
States or any state or territory of the United States (including the District of
Columbia) (i) with a combined capital and surplus of at least $600,000,000.00,
and (ii) who, immediately prior to such transfer, controls, directly or
indirectly, real estate assets of at least $600,000,000.00 (exclusive of the
Property); or

 

 

 

          (e) any entity (i) (x) with an “investment grade rating” from each of
the Rating Agencies or (y) who owns and operates at least ten major downtown
office buildings comparable in size to the Property located in major
metropolitan markets

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Confidential Treatment Requested by BANA

BANA-Soth-00077

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

 

 

 

(exclusive of the Property), (ii) who has a net worth of at least
$500,000,000.00, and (iii) who, immediately prior to such transfer, controls,
directly and/or indirectly, real estate assets with a total market value of at
least $500,000,000.00 (exclusive of the Property).

 

 

 

Notwithstanding the foregoing, no person or entity shall be deemed to be a
Permitted Transferee if (y) such person or entity (or any other person or entity
owned or Controlled by such person or entity or affiliated with such person or
entity) has been, within the last ten (10) years, (I) subject to any material,
uncured event of default in connection with a loan financing which resulted in
litigation or an acceleration of an indebtedness held by Lender or (II) the
subject of any action or proceeding under applicable laws relating to
insolvency; or (z) any of the principals or entities which Control such person
or entity have ever been convicted of a felony.

          “Person” shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

          “Personal Property” shall have the meaning set forth in the granting
clause of the Mortgage.

          “Physical Conditions Report” shall mean that certain Property
Condition Report prepared by IVI International, Inc. dated May 11, 2005.

          “Policies” shall have the meaning specified in Section 8.1(b) hereof.

          “Private Rating” shall have the meaning set forth in Section 13.6
hereof.

          “Prohibited Transfer” shall have the meaning set forth in Section 7.2
hereof.

          “Property” shall mean the parcel of real property, the Improvements
thereon and all Personal Property owned by Borrower and encumbered by the
Mortgage, together with all rights pertaining to such property and Improvements,
as more particularly described in the granting clause of the Mortgage and
referred to therein as the “Property”.

          “Provided Information” shall have the meaning set forth in Section
13.4(a) hereof.

          “Qualified Institutional Lender” shall mean one or more of the
following:

 

 

 

          (A) a real estate investment trust, bank, saving and loan association,
investment bank, insurance company, trust company, commercial credit
corporation, pension plan, pension fund or pension advisory firm, mutual fund,
government entity or plan, provided that any such Person referred to in this
clause (A) satisfies the Eligibility Requirements;

 

 

 

          (B) an investment company, money management firm or “qualified
institutional buyer” within the meaning of Rule 144A under the Securities Act of
1933, as amended, or an institutional “accredited investor” within the meaning
of Regulation D

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under the Securities Act of 1933, as amended, provided that any such Person
referred to in this clause (B) satisfies the Eligibility Requirements;

 

 

 

          (C) an institution substantially similar to any of the foregoing
entities described in clauses (A) or (B) that satisfies the Eligibility
Requirements;

 

 

 

          (D) any entity Controlled (as defined below) by any of the entities
described in clauses (A), (B) or (C) above;

 

 

 

          (E) a Qualified Trustee in connection with a securitization of, the
creation of collateralized debt obligations (“CDO”) secured by or financing
through an “owner trust” of, the Loan (collectively, “Securitization Vehicles”),
so long as (A) the special servicer or manager of such Securitization Vehicle
has the Required Special Servicer Rating and (B) the entire “controlling class”
of such Securitization Vehicle, other than with respect to a CDO Securitization
Vehicle, is held by one or more entities that are otherwise Qualified
Institutional Lenders under clauses (A), (B), (C) or (D) of this definition;
provided that the operative documents of the related Securitization Vehicle
require that (l) in the case of a CDO Securitization Vehicle, the “equity
interest” in such Securitization Vehicle is owned by one or more entities that
are Qualified Institutional Lenders under clauses (A), (B), (C) or (D) of this
definition and (2) if any of the relevant trustee, special servicer, manager
fails to meet the requirements of this clause (E), such Person must be replaced
by a Person meeting the requirements of this clause (E) within thirty (30) days;
or

 

 

 

          (F) an investment fund, limited liability company, limited partnership
or general partnership where a Permitted Fund Manager acts as the general
partner, managing member or fund manager and at least 50% of the equity
interests in such investment vehicle are owned, directly or indirectly, by one
or more entities that are otherwise Qualified Institutional Lenders under
clauses (A), (B), (C) or (D) of this definition.

 

 

 

For purposes of this definition only, the term “Control” shall mean the
ownership, directly or indirectly, in the aggregate of more than fifty percent
(50%) of the beneficial ownership interests of an entity and the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity, whether through the ability to exercise
voting power, by contract or otherwise.

          “Qualified Manager” shall mean Manager or a reputable and experienced
professional management organization (a) which manages, together with its
affiliates, at least ten (10) first class office buildings totaling at least
3,500,000 square feet of gross leasable area, exclusive of the Property and (b)
approved by Lender, which approval shall not have been unreasonably withheld and
for which Lender shall have received (i) written confirmation from the Rating
Agencies that the employment of such manager will not result in a downgrade,
withdrawal or qualification of the initial, or if higher, then current ratings
issued in connection with a Securitization, or if a Securitization has not
occurred, any ratings to be assigned in connection with a Securitization, and
(ii) with respect to any Affiliated Manager, a revised substantive
non-consolidation opinion if one was delivered in connection with the closing of
the Loan.

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          “Qualified Trustee” shall mean (i) a corporation, national bank,
national banking association or a trust company, organized and doing business
under the laws of any state or the United States of America, authorized under
such laws to exercise corporate trust powers and to accept the trust conferred,
having a combined capital and surplus of at least $100,000,000 and subject to
supervision or examination by federal or state authority, (ii) an institution
insured by the Federal Deposit Insurance Corporation or (iii) an institution
whose long-term senior unsecured debt is rated either of the then in effect top
two rating categories of each of the Rating Agencies.

          “Rating Agencies” shall mean each of S&P, Moody’s and Fitch, or any
other nationally-recognized statistical rating agency which has been approved by
Lender and which rate (or are anticipated to rate) the Securities.

          “Release” shall have the meaning set forth in Section 12.5 hereof.

          “REMIC Prohibition Period” shall have the meaning set forth in Section
2.4(b)(iv) hereof.

          “REMIC Trust” shall mean a “real estate mortgage investment conduit”
(within the meaning of Section 860D, or applicable successor provisions, of the
Code) that holds the Note.

          “Renewal Lease” shall have the meaning set forth in Section 5.13
hereof.

          “Renewal Sublease” shall have the meaning set forth in Section 5.13
hereof.

          “Rent Roll” shall have the meaning set forth in Section 4.24 hereof.

          “Rents” shall have the meaning set forth in the Mortgage.

          “Replacement Reserve Account” shall have the meaning set forth in
Section 9.2(b) hereof.

          “Replacement Reserve Funds” shall have the meaning set forth in
Section 9.2(b) hereof.

          “Replacement Reserve Monthly Deposit” shall have the meaning set forth
in Section 9.2(b) hereof.

          “Replacements” shall have the meaning set forth in Section 9.2(a)
hereof.

          “Required Rating” shall mean a rating by S&P of not less than AA- if
the term of such Letter of Credit, bond or other instrument is no longer than
three (3) months or if the term of such Letter of Credit, bond or other
instrument is in excess of three (3) months, a long term unsecured credit rating
by the applicable Rating Agencies of not lower than “AA”, “AA” and “Aa2” by S&P,
Fitch and/or Moody’s, respectively, or, if a Securitization has not occurred,
such other rating that is reasonably acceptable to Lender or, if a
Securitization shall have occurred, such other rating that the Rating Agencies
shall have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the then current ratings assigned in
connection with such Securitization.

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          “Required Work” shall have the meaning set forth in Section 9.4
hereof.

          “Required Special Servicer Rating” shall mean (i) a rating of “CSS1”
in the case of Fitch, (ii) on the S&P list of approved special servicers in the
case of S&P and (iii) in the case of Moody’s, such special servicer is acting as
special servicer in a commercial mortgage loan securitization that was rated by
Moody’s within the twelve (12) month period prior to the date of determination,
and Moody’s has not downgraded or withdrawn the then-current rating on any class
of commercial mortgage securities or placed any class of commercial mortgage
securities on watch citing the continuation of such special servicer as special
servicer of such commercial mortgage securities.

          “Reserve Accounts” shall mean the Debt Service Reserve Account and the
following sub-accounts of the Cash Management Account: the Tax and Insurance
Reserve Account, the Replacement Reserve Account, the Operating Expense Reserve
Account, the Extraordinary Expense Reserve Account or any other escrow account
established by the Loan Documents.

          “Reserve Funds” shall mean the Tax and Insurance Reserve Funds, the
Replacement Reserve Funds, the Debt Service Reserve Funds, the Operating Expense
Reserve Funds, the Extraordinary Expense Reserve Funds or any other escrow funds
established by the Loan Documents.

          “Restoration” shall mean, following the occurrence of a Casualty or a
Condemnation which is of a type necessitating the repair of the Property, the
completion of the repair and restoration of the Property as nearly as possible
to the condition the Property was in immediately prior to such Casualty or
Condemnation, with such alterations as may be reasonably approved by Lender.

          “Restoration Consultant” shall have the meaning set forth in Section
8.4(b)(iii) hereof.

          “Restoration Retainage” shall have the meaning set forth in Section
8.4(b)(iv) hereof.

          “Restricted Party” shall have the meaning set forth in Section 7.1
hereof.

          “Revised Note Rate” shall mean, with respect to Note A, the Revised
Note A Rate, and, with respect to Note B, the Revised Note B Rate.

          “Revised Note A Rate” shall mean a rate per annum equal to the sum of
(x) five percent (5.00%) and (y) the Initial Note A Rate.

          “Revised Note B Rate” shall mean a rate per annum equal to the sum of
(x) five percent (5.00%) and (y) the Initial Note B Rate.

          “Sale or Pledge” shall have the meaning set forth in Section 7.1
hereof.

          “Scheduled Payment Date” shall have the meaning set forth in Section
2.2(b) hereof.

          “Securities” shall have the meaning set forth in Section 13.1 hereof.

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          “Securities Act” shall mean the Securities Act of 1933, as amended.

          “Securities Liabilities” shall have the meaning set forth in Section
13.5 hereof.

          “Securitization” shall have the meaning set forth in Section 13.1
hereof.

          “Sotheby’s” shall mean Sotheby’s, Inc., a New York corporation, as
tenant under the Sotheby’s Lease, together with its successors and assigns
permitted in accordance with the applicable terms and conditions of the
Sotheby’s Lease (including, without limitation, the Sotheby’s Guarantor to the
extent the Sotheby’s Guarantor assumes the tenant’s obligations under the
Sotheby’s Lease in accordance with the applicable terms and conditions of the
Sotheby’s Guaranty (defined below), as applicable).

          “Sotheby’s Event of Default” shall mean the occurrence and continuance
of a default under the Sotheby’s Lease beyond all applicable notice and cure
periods thereunder (if any).

          “Sotheby’s Guarantor” shall mean Sotheby’s Holdings, Inc., a Michigan
corporation, as guarantor under Sotheby’s Guaranty, together with its successors
and assigns permitted in accordance with the applicable terms and conditions of
the Sotheby’s Lease and of the Sotheby’s Guaranty (provided, that, in the case
of any assignment of the Sotheby’s Lease in accordance with the terms of the
Sotheby’s Lease (including, without limitation, Section 17(n) thereof) that
results in the successor tenant under the Sotheby’s Lease being the only party
(as between such tenant and any substitute guarantor under the Sotheby’s Lease)
to receive (or to receive a higher) long-term unsecured debt rating (or
equivalent Private Rating) from the Rating Agencies, then the term “Sotheby’s
Guarantor” as used herein shall be deemed to refer to such substitute tenant
under the Sotheby’s Lease).

          “Sotheby’s Lease” shall mean, collectively, (i) that certain Lease
dated as of the date hereof by and among Borrower and Sotheby’s, Inc., (ii) that
certain Guaranty of Lease dated as of the date hereof executed by Sotheby’s
Holdings, Inc. (the “Sotheby’s Guaranty”), and (iii) that certain Subordination,
Non-Disturbance and Attornment Agreement by and among Lender and Sotheby’s dated
as of the date hereof (the “Sotheby’s SNDA”), as each of the same may be
amended, supplemented, restated or otherwise modified in accordance with the
applicable terms and conditions thereof and hereof.

          “Sotheby’s Sublease” shall have the meaning set forth in Section 5.13
hereof.

          “Special Member” shall have the meaning set forth in Section 6.1(c).

          “Specified Article 7 Breach” shall mean a Prohibited Transfer that
results in (a) a Sale or Pledge of all or any material portion of the Property,
or (b) Borrower Principal Family Group failing to Control Borrower, any SPE
Component Entity and Affiliated Manager.

          “Specified Provisions” shall mean the following Sections of (I) this
Agreement: (a) Sections 5.1 through 5.4, (b) Section 5.6, (c) Section 5.9, (d)
Section 5.10, (e) Section 5.11(d), (f) Section 5.12(b)(i), (g) Section 5.13(a),
(h) Section 5.15, (i) Section 5.17, 0) Section 5.21, (k) Section 7.2, (1)
Section 9.2, (m) Section 9.5, (n) Sections 12.2 through 12.4 and (o) Section

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13.4(a); and (II) the Mortgage: (a) Section 3.5, (b) Section 5.1, (c) Section
8.8, (d) Section 9.1 and (e) Section 9.2.

          “SPE Component Entity” shall have the meaning set forth in Section
6.1(b) hereof.

          “Standard Statements” shall have the meaning set forth in Section
5.1l(c)(i)(A) hereof.

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

          “State” shall mean the state in which the Property or any part thereof
is located.

          “Successor Borrower” shall have the meaning set forth in Section
2.4(b)(iii) hereof.

          “Surveyor” shall have the meaning set forth in Section 3.2(c) hereof.

          “Tax and Insurance Reserve Funds” shall have the meaning set forth in
Section 9.6 hereof.

          “Tax and Insurance Reserve Account” shall have the meaning set forth
in Section 9.6 hereof.

          “Taxes” shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property or any part thereof.

          “Tenant” shall mean any Person leasing, subleasing or otherwise
occupying any portion of the Property under a Lease or other occupancy agreement
with Borrower (including, without limitation, Sotheby’s).

          “Tenant Direction Letter” shall have the meaning set forth in Section
10.2 hereof.

          “Termination Fee Deposit” shall have the meaning set forth in Section
9.3(b).

          “Title Company” shall have the meaning set forth in Section 3.2(b)
hereof.

          “Title Insurance Policy” shall mean that certain ALTA mortgagee title
insurance policy issued with respect to the Property and insuring the lien of
the Mortgage.

          “Transferee” shall have the meaning set forth in Section 7.5 hereof.

          “Tribunal” shall mean any state, commonwealth, federal, foreign,
territorial or other court or governmental department, commission, board,
bureau, district, authority, agency, central bank, or instrumentality, or any
arbitration authority.

          “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial
Code as in effect in the State where the applicable Property is located.

          “Underwriter Group” shall have the meaning set forth in Section
13.5(b) hereof.

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          “Voluntary Bankruptcy Proceeding” shall mean (i) the filing by
Borrower of a voluntary petition under any Creditors Rights Laws, or (ii) the
filing of a collusive involuntary petition against Borrower under any Creditor’s
Rights Laws by an Affiliate of Borrower.

          Section 1.2. Principles of Construction.

          All references to sections and schedules are to sections and schedules
in or to this Agreement unless otherwise specified. All uses of the word
“including” shall mean “including, without limitation” unless the context shall
indicate otherwise. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.

ARTICLE 2
GENERAL TERMS

          Section 2.1. Loan Commitment; Disbursement to Borrower

          (a) Subject to and upon the terms and conditions set forth herein,
Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on
the Closing Date.

          (b) Borrower may request and receive only one borrowing in respect of
the Loan and any amount borrowed and repaid in respect of the Loan may not be
re-borrowed.

          (c) The Loan shall be evidenced by the Note and secured by the
Mortgage and the other Loan Documents.

          (d) Borrower shall use the proceeds of the Loan to (i) refinance
Borrower’s existing loan secured by the Property, (ii) make deposits into the
Reserve Funds on the Closing Date in the amounts provided herein, (iii) pay
costs and expenses incurred in connection with the closing of the Loan, as
approved by Lender, (iv) fund any working capital requirements of the Property,
and (v) distribute the balance, if any, to its partners.

          Section 2.2. Loan Payments

          (a) The outstanding principal balance of the Loan shall bear interest
at a fixed rate per annum equal to (i) prior to the Optional Prepayment Date,
the Initial Note Rate, and (ii) from and after the Optional Prepayment Date, the
Revised Note Rate. Interest shall be computed based on the daily rate produced
assuming a three hundred sixty (360) day year, multiplied by the actual number
of days elapsed. Except as otherwise set forth in this Agreement, interest shall
be paid in arrears.

          (b) (i) Payments Prior to the Optional Prepayment Date. Borrower shall
make an initial payment of $322,067.43 (of which $273,504.96 is allocable to
Note A and $48,562.47 is allocable to Note B) on the Closing Date for interest
from the Closing Date through and including June 30, 2005. Thereafter, except as
may be adjusted in accordance with the last sentence of Section 2.2(c), (A)
Borrower shall make consecutive monthly installments of interest

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only in an amount calculated in accordance with Section 2.2(a) above (such
amount, the “I/O Monthly Payment Amount”) pursuant to the terms of Section
2.2(d) on the first (1st) day of each month beginning on August 1, 2005 (each
such date through and including the Maturity Date, a “Scheduled Payment Date”)
through and including the Scheduled Payment Date occurring in July, 2010; and
(B) Borrower shall make consecutive monthly installments of principal and
interest in the applicable amounts set forth on Schedule 2.2(b) (allocable to
Note A to Note B as set forth on such Schedule) pursuant to the terms of Section
2.2(d) (the “Monthly Payment Amount”) on each Scheduled Payment Date commencing
with the Scheduled Payment Date occurring in August, 2010 through and including
the Optional Prepayment Date.

                    (ii) Payments After the Optional Prepayment Date. On each
Scheduled Payment Date occurring after the Optional Prepayment Date, Borrower
shall (A) make a payment to Lender of principal and interest in an amount equal
to the Monthly Payment Amount to be applied first to interest in an amount equal
to interest that would have accrued on the Debt (without adjustment for Accrued
Interest) at the Initial Note Rate and then to principal, and (B) pay to Lender
all Excess Cash Flow to be applied in accordance with the terms and conditions
of this Agreement. After the Optional Prepayment Date, interest accrued at the
Revised Note Rate and not paid pursuant to the preceding sentence shall be added
to the principal balance of Note A or Note B, as applicable, and shall earn
interest at the Revised Note Rate to the extent permitted by applicable Legal
Requirements (such accrued interest, “Accrued Interest”).

                    (iii) Payment on Maturity Date. Borrower shall pay to Lender
on the Maturity Date the remaining outstanding principal amount of the Loan, all
accrued and unpaid interest (including, without limitation, the Accrued
Interest) and all other amounts due hereunder and under the other Loan
Documents.

          (c) The Monthly Payment Amount shall mean the amount of interest and
principal which would be due in order to fully amortize the principal amount of
the Loan, over an amortization term of thirty (30) years assuming an annual
interest rate equal to the Initial Note Rate, computed on the basis of a three
hundred sixty (360) day year consisting of twelve (12) months of thirty (30)
days each. Borrower expressly understands and agrees that such computation of
interest based on a three hundred sixty (360) day year consisting of twelve (12)
months of thirty (30) days each is solely for the purpose of determining the
Monthly Payment Amount, and, notwithstanding such computation, interest shall
accrue on the outstanding principal amount of the Loan as provided in Section
2.2(a) above. Borrower understands and acknowledges that such interest accrual
requirement results in more interest accruing on the Loan than if either a
thirty (30) day month and a three hundred sixty (360) day year or the actual
number of days and a three hundred sixty-five (365) day year were used to
compute the accrual of interest on the Loan. Borrower recognizes that such
interest accrual requirement will not fully amortize the Loan within the
amortization period set forth above. Following any partial prepayment occurring
solely as a result of the application of Insurance Proceeds or Awards pursuant
to the terms of this Agreement, Lender shall adjust the Monthly Payment Amount
to give effect to any such partial prepayment, provided, however, that in no
event will any such adjustment result in any such installment becoming due and
payable on any date after the Maturity Date.

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          (d) Each payment by Borrower to Lender hereunder or under the Note
shall be payable at P.O. Box 65585, Charlotte, North Carolina 28265-0585, or by
wire pursuant to the following instructions: Bank of America, N.A., ABA
#111000025, Account #4782779943 for credit to CMSG, Loan #59039, or at such
other place or pursuant to such other wiring instructions or to such other
account as Lender may designate from time to time on ten (10) days prior written
notice to Borrower. Whenever any payment hereunder or under the Note shall be
stated to be due on a day which is not a Business Day, such payment shall be
made on the first Business Day preceding such scheduled due date.

          (e) Prior to the occurrence of an Event of Default, all monthly
payments made as scheduled under this Agreement and the Note shall be applied
first to the payment of interest computed at the Note Rate, and the balance
toward the reduction of the principal amount of the Note. Prior to the
occurrence and continuance of an Event of Default, all voluntary and involuntary
prepayments on the Note shall be applied, to the extent thereof, first, to
accrued but unpaid interest on the amount prepaid, second, to the remaining
principal amount, and, third, to any other sums due and unpaid to Lender in
connection with the Loan. Following the occurrence of an Event of Default, any
payment made on the Note shall be applied to accrued but unpaid interest, late
charges, accrued fees, the unpaid principal amount of the Note, and any other
sums due and unpaid to Lender in connection with the Loan, in such manner and
order as Lender may elect in its sole and absolute discretion.

          (f) All payments made by Borrower hereunder or under the Note or the
other Loan Documents shall be made irrespective of, and without any deduction
for, any setoff or counterclaims.

          Section 2.3. Late Payment Charge

          If any principal or interest payment is not paid by Borrower on or
before the date occurring five (5) days after the date the same is due, Borrower
shall pay to Lender upon demand an amount equal to the lesser of three percent
(3%) of such unpaid sum or the maximum amount permitted by applicable law in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgage and the
other Loan Documents to the extent permitted by applicable law.

          Section 2.4. Prepayment; Defeasance

          Except as otherwise expressly permitted by this Section 2.4 no
voluntary prepayments, whether in whole or in part, of the Loan or any other
amount at any time due and owing under the Note can be made by Borrower or any
other Person without the express written consent of Lender.

          (a) Lockout Period. Borrower has no right to make, and Lender shall
have no obligation to accept, any voluntary prepayment, whether in whole or in
part, of the Loan during the Lockout Period. Notwithstanding the foregoing, if
either (i) Lender, in its sole and absolute discretion, accepts a full or
partial voluntary prepayment during the Lockout Period or (ii) there is an
involuntary prepayment during the Lockout Period, then, in either case, Borrower
shall, in

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addition to any portion of the Loan prepaid (together with all interest accrued
and unpaid thereon), pay to Lender a prepayment premium in an amount calculated
in accordance with Section 2.4(c) hereof.

          (b) Defeasance.

 

 

 

 

 

          (i) Notwithstanding any provisions of this Section 2.4 to the
contrary, including, without limitation, subsection (a) of this Section 2.4, at
any time other than during a REMIC Prohibition Period but prior to the Optional
Prepayment Date, Borrower may cause the release of the Property from the lien of
the Mortgage and the other Loan Documents upon the satisfaction of the following
conditions:

 

 

 

 

 

 

          (A) no Event of Default shall exist under any of the Loan Documents;

 

 

 

 

 

 

          (B) not less than thirty (30) (but not more than ninety (90)) days
prior written notice shall be given to Lender specifying a date on which the
Defeasance Collateral (as hereinafter defined) is to be delivered (the “Release
Date”), such date being on a Scheduled Payment Date; provided, however, that
Borrower shall have the right (i) to cancel such notice by providing Lender with
notice of cancellation ten (10) days prior to the scheduled Release Date, or
(ii) to extend the scheduled Release Date until the next Scheduled Payment Date;
provided that in each case, Borrower shall pay all of Lender’s out of pocket
costs and expenses incurred as a result of such cancellation or extension;

 

 

 

 

 

 

          (C) all accrued and unpaid interest and all other sums due under the
Note, this Agreement and under the other Loan Documents up to the Release Date,
including, without limitation, all fees, costs and expenses incurred by Lender
and its agents in connection with such release (including, without limitation,
legal fees and expenses for the review and preparation of the Defeasance
Security Agreement (as hereinafter defined) and of the other materials described
in Section 2.4(b)(i)(D) below and any related documentation, and any servicing
fees, Rating Agency fees or other costs related to such release), shall be paid
in full on or prior to the Release Date;

 

 

 

 

 

 

          (D) Borrower shall deliver to Lender on or prior to the Release Date:

 

 

 

 

 

 

 

          (1) a pledge and security agreement, in form and substance reasonably
satisfactory to a prudent lender, trustee or servicer of this type of
securitized loan transaction, creating a first priority security interest in
favor of Lender in the Defeasance Collateral, as defined herein (the “Defeasance
Security Agreement”), which shall provide, among other things, that any excess
amounts received by Lender from the Defeasance Collateral over the amounts
payable by Borrower on a given Scheduled Payment Date, which excess amounts are
not required to cover all or any portion of amounts payable on a future
Scheduled Payment Date, shall be refunded to Borrower promptly after each such
Scheduled Payment Date;

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          (2) direct non-callable obligations of the United States of America or
other obligations which are “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, to the extent the
applicable Rating Agencies rating the Securities have confirmed in writing that
the same will not cause a downgrade, withdrawal or qualification of the initial,
or, if higher, then applicable ratings of the Securities, that provide for
payments prior and as close as possible to (but in no event later than) all
successive Scheduled Payment Dates occurring after the Release Date until and
including the Optional Prepayment Date, with each such payment being equal to or
greater than the amount of the corresponding Monthly Payment Amount required to
be paid under this Agreement and the Note (including all amounts due on the
Optional Prepayment Date, including, without limitation, the outstanding
principal balance of the Loan) (the “Defeasance Collateral”), each of which
shall be duly endorsed by the holder thereof as directed by Lender or
accompanied by a written instrument of transfer in form and substance reasonably
satisfactory to Lender (including, without limitation, such certificates,
documents and instruments as may be reasonably required by the depository
institution holding such securities or the issuer thereof, as the case may be,
to effectuate book-entry transfers and pledges through the book-entry facilities
of such institution) in order to perfect upon the delivery of the Defeasance
Security Agreement the first priority security interest therein in favor of
Lender in conformity with all applicable state and federal laws governing
granting of such security interests;

 

 

 

 

 

 

 

          (3) a certificate of Borrower certifying that all of the requirements
set forth in this Section 2.4(b)(i) have been satisfied;

 

 

 

 

 

 

 

          (4) one or more opinions of counsel for Borrower in form and substance
and delivered by counsel which would be reasonably satisfactory to a prudent
lender, trustee or servicer of this type of securitized loan transaction
stating, among other things, that (i) Lender has a perfected first priority
security interest in the Defeasance Collateral and that the Defeasance Security
Agreement is enforceable against Borrower in accordance with its terms, (ii) in
the event of a bankruptcy proceeding or similar occurrence with respect to
Borrower, none of the Defeasance Collateral nor any proceeds thereof will be
property of Borrower’s estate under Section 541 of the U.S. Bankruptcy Code or
any similar statute and the grant of security interest therein to Lender shall
not constitute an avoidable preference under Section 547 of the U.S. Bankruptcy
Code or applicable state law, (iii) the release of the lien of the Mortgage and
the pledge of Defeasance Collateral will not directly or indirectly result in or
cause any REMIC Trust that then holds the Note to fail to maintain its status as
a REMIC Trust and (iv) the defeasance will not cause any REMIC Trust to be an
“investment company” under the Investment Company Act of 1940;

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          (5) a certificate in form and scope reasonably acceptable to Lender
from an Acceptable Accountant certifying that the Defeasance Collateral will
generate amounts sufficient to make all payments of principal and interest due
under the Note (including the scheduled outstanding principal balance of the
Loan due on the Optional Prepayment Date) following the Release Date and through
and including the Optional Prepayment Date; and

 

 

 

 

 

 

 

          (6) such other certificates, documents and instruments as Lender may
reasonably require; and

 

 

 

 

 

 

          (E) in the event the Loan is held by a REMIC Trust, Lender has
received written confirmation from any Rating Agency rating any Securities that
substitution of the Defeasance Collateral will not result in a downgrade,
withdrawal, or qualification of the ratings then assigned to any of the
Securities.

 

 

 

 

          (ii) Upon compliance with the requirements of Section 2.4(b)(i), (1)
the Property shall be released from the lien of the Mortgage and the other Loan
Documents, and the Defeasance Collateral shall constitute collateral which shall
secure the Note and all other obligations under the Loan Documents and (2)
Lender will, at Borrower’s expense, execute and deliver any agreements as
reasonably requested by Borrower to release the lien of the Mortgage and the
other Loan Documents from the Property or to otherwise assign the Mortgage and
any other applicable Loan Documents (including, without limitation, a letter of
authorization permitting Borrower to file UCC-3 terminations).

 

 

 

 

          (iii) Upon the release of the Property in accordance with this Section
2.4(b), Borrower shall (at Lender’s sole and absolute discretion) assign all its
obligations and rights under the Note, together with the pledged Defeasance
Collateral, to a successor entity designated and approved by Lender in its sole
and absolute discretion (“Successor Borrower”). Successor Borrower shall execute
an assignment and assumption agreement in form and substance satisfactory to
Lender in its sole and absolute discretion pursuant to which it shall assume
Borrower’s obligations under the Note and the Defeasance Security Agreement. As
conditions to such assignment and assumption, Borrower shall (A) deliver to
Lender one or more opinions of counsel in form and substance and delivered by
counsel which would be reasonably satisfactory to a prudent lender, trustee or
servicer of this type of securitized loan transaction stating, among other
things, that such assignment and assumption agreement is enforceable against
Borrower and the Successor Borrower in accordance with its terms and that the
Note, the Defeasance Security Agreement and the other Loan Documents, as so
assigned and assumed, are enforceable against the Successor Borrower in
accordance with their respective terms, and opining to such other matters
relating to Successor Borrower and its organizational structure as Lender may
reasonably require, and (B) pay all out of pocket fees, costs and expenses
incurred by Lender or its agents in connection with such assignment and
assumption (including, without limitation, reasonable legal fees and expenses
for the review of the proposed transferee and the preparation of the assignment
and assumption agreement and related certificates, documents and instruments and
any

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fees payable to any Rating Agencies and their counsel in connection with the
issuance of the confirmation referred to in subsection (b)(i)(E) above). Upon
such assignment and assumption, Borrower shall be relieved of its obligations
hereunder, under the Note, under the other Loan Documents and under the
Defeasance Security Agreement, except as expressly set forth in the assignment
and assumption agreement.

 

 

 

          (iv) For purposes of this Section 2.4, “REMIC Prohibition Period”
means the period commencing on the Closing Date and ending on the earlier to
occur of (A) the second anniversary of the “startup day” within the meaning of
Section 860G(a)(9) of the Code of any REMIC Trust that holds the Note, or (B)
the forty-second (42nd) Scheduled Payment Date. In no event shall Lender have
any obligation to notify Borrower that a REMIC Prohibition Period is in effect
with respect to the Loan, except that Lender shall notify Borrower if any REMIC
Prohibition Period is in effect with respect to the Loan after receiving any
notice described in Section 2.4(b)(i)(B); provided, however, that the failure of
Lender to so notify Borrower shall not impose any liability on Lender or grant
Borrower any right to defease the Loan during any such REMIC Prohibition Period.

          (c) Involuntary Prepayment During the Lockout Period. During the
Lockout Period, in the event of any involuntary prepayment of the Loan or any
other amount under the Note, whether in whole or in part, in connection with or
following Lender’s acceleration of the Note, and whether the Mortgage is
satisfied or released by foreclosure (whether by power of sale or judicial
proceeding), deed in lieu of foreclosure or by any other means, including,
without limitation, repayment of the Loan by Borrower or any other Person
pursuant to any statutory or common law right of redemption, Borrower shall, in
addition to any portion of the principal balance of the Loan prepaid (together
with all interest accrued and unpaid thereon and in the event the prepayment is
made on a date other than a Scheduled Payment Date, a sum equal to the amount of
interest which would have accrued under the Note on the amount of such
prepayment if such prepayment had occurred on the next Scheduled Payment Date),
pay to Lender a prepayment premium in an amount calculated in accordance with
this Section 2.4(c). Such prepayment premium shall be in an amount equal to the
greater of:

 

 

 

 

 

 

 

(i) 1% of the portion of the Loan being prepaid; or

 

 

 

 

 

 

(ii) the product obtained by multiplying:

 

 

 

 

 

 

          (A) the portion of the Loan being prepaid, times;

 

 

 

 

 

 

          (B) the difference obtained by subtracting (I) the Yield Rate from
(II) the Note Rate, times;

 

 

 

 

 

 

          (C) the present value factor calculated using the following formula:

 

 

 

 

 

 

 

l-(1+r)-n

 

 

 

 

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

 

 

 

 

r

 

 

 

 

 

 

 

r =

Yield Rate

 

 

 

 

 

 

n =

the number of years and any fraction thereof, remaining between the date the
prepayment is made and the Optional Prepayment Date

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          As used herein, “Yield Rate” means the yield rate for the 4.125% U.S.
Treasury Security due May 15, 2015, as reported in The Wall Street Journal on
the fifth Business Day preceding the Prepayment Calculation Date. If the Yield
Rate is not published for such U.S. Treasury Security, then the “Yield Rate”
shall mean the yield rate for the nearest equivalent U.S. Treasury Security (as
selected at Lender’s sole and absolute discretion) as reported in The Wall
Street Journal on the fifth Business Day preceding the Prepayment Calculation
Date. If the publication of such Yield Rate in The Wall Street Journal is
discontinued, Lender shall have the right to determine such Yield Rate from
another source typically used by other lenders, trustees or servicers of this
type of securitized loan transaction. The “Prepayment Calculation Date” shall
mean, as applicable, the date on which (i) notice of prepayment is given to
Lender, in the case of a voluntary prepayment of the entire outstanding
principal amount of the Note, (ii) Lender applies any partial prepayment to the
reduction of the outstanding principal amount of the Note, in the case of a
voluntary partial prepayment which is accepted by Lender, (iii) Lender
accelerates the Loan, in the case of a prepayment resulting from acceleration,
or (iv) Lender applies funds held under any Reserve Account, in the case of a
prepayment resulting from such application (other than in connection with
acceleration of the Loan).

          (d) Insurance and Condemnation Proceeds; Excess Interest.
Notwithstanding any other provision herein to the contrary, and provided no
Event of Default exists, Borrower shall not be required to pay any prepayment
premium in connection with any prepayment occurring solely as a result of (i)
the application of Insurance Proceeds or Condemnation Proceeds pursuant to the
terms of the Loan Documents, or (ii) the application of any interest in excess
of the maximum rate permitted by applicable law to the reduction of the Loan.

          (e) After the Lockout Period. Borrower may voluntarily prepay (without
premium) the Note in whole or in part at any time after the day the Lockout
Period ends upon giving Lender at least ten (10) days (but not more than ninety
(90) days) prior written notice. Lender shall accept a prepayment pursuant to
this Section 2.4(e) on a day other than a Scheduled Payment Date provided that,
in addition to payment of the full outstanding principal balance of the Note,
Borrower pays to Lender a sum equal to the amount of interest which would have
accrued on the Note if such prepayment occurred on the next Scheduled Payment
Date.

          (f) Partial Prepayments. Notwithstanding anything herein to the
contrary, provided no Event of Default has occurred and is continuing, any
partial prepayment of the Note shall be applied pro rata (based on the initial
principal balance of Note A and Note B) to Note A and Note B.

          Section 2.5. Payments after Default

          Upon the occurrence and during the continuance of an Event of Default,
interest on the outstanding principal balance of the Loan and, to the extent
permitted by law, overdue interest and other amounts due in respect of the Loan,
(a) shall accrue at the Default Rate, and (b) Lender shall be entitled to
receive and Borrower shall pay to Lender all cash flow from the Property in
accordance with the terms of Article 10 hereof, such amount to be applied by
Lender to the payment of the Debt in such order as Lender shall determine in its
sole discretion, including, without limitation, alternating applications thereof
between interest and principal. Interest at the Default Rate shall be computed
from the occurrence of the Event of Default until the earlier of

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(i) the actual receipt and collection of the Debt (or that portion thereof that
is then due) and (ii) the cure of such Event of Default. To the extent permitted
by applicable law, interest at the Default Rate shall be added to the Debt,
shall itself accrue interest at the same rate as the Loan and shall be secured
by the Mortgage. This paragraph shall not be construed as an agreement or
privilege to extend the date of the payment of the Debt, nor as a waiver of any
other right or remedy accruing to Lender by reason of the occurrence of any
Event of Default; the acceptance of any payment from Borrower shall not be
deemed to cure or constitute a waiver of any Event of Default; and Lender
retains its rights under this Agreement to accelerate and to continue to demand
payment of the Debt upon the happening of and during the continuance of any
Event of Default, despite any payment by Borrower to Lender.

          Section 2.6. Usury Savings

          This Agreement and the Note are subject to the express condition that
at no time shall Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower
is at any time required or obligated to pay interest on the principal balance
due hereunder at a rate in excess of the Maximum Legal Rate, the Note Rate or
the Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder. All sums paid or agreed to be paid
to Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.

ARTICLE 3
CONDITIONS PRECEDENT

          The obligation of Lender to make the Loan hereunder is subject to the
fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date. At the time Lender funds the Loan, the
conditions precedent contained in this Article 3 shall be deemed satisfied or
otherwise waived by Lender (except to the extent specifically set forth in any
post closing letter or similar agreement between Borrower and Lender).

          Section 3.1. Representations and Warranties; Compliance with
Conditions

          The representations and warranties of Borrower contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and as
of such date, and Lender shall have determined that no Default or an Event of
Default shall have occurred and be continuing; and Borrower shall be in
compliance in all material respects with all terms and conditions set forth in
this Agreement and in each other Loan Document on its part to be observed or
performed.

          Section 3.2. Delivery of Loan Documents; Title Insurance; Reports;
Leases

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          (a) Mortgage, Loan Agreement and Note. Lender shall have received from
Borrower a fully executed and acknowledged counterpart of the Mortgage and
evidence that counterparts of the Mortgage and Uniform Commercial Code financing
statements have been delivered to Title Company for recording, in the reasonable
judgment of Lender, so as to effectively create upon such recording valid and
enforceable Liens upon the Property, of the requisite priority, in favor of
Lender (or such other trustee as may be required or desired under local law),
subject only to the Permitted Encumbrances and such other Liens as are permitted
pursuant to the Loan Documents. Lender shall have also received from Borrower
fully executed counterparts of the this Agreement, the Note and Assignment of
Management Agreement and all other Loan Documents.

          (b) Title Insurance. Lender shall have received a Title Insurance
Policy issued by Counsel Abstract, Inc., as agent for Chicago Title Insurance
Company (“Chicago”), containing co-insurance endorsements issued by Counsel
Abstract, Inc., as agent for Stewart Title Insurance Company (“Stewart”; Chicago
and Stewart are collectively herein referred to as the “Title Company”) and
dated as of the Closing Date, with co-insurance agreements acceptable to Lender.
Such Title Insurance Policy shall (i) provide coverage in the amount of the
Loan, (ii) insure Lender that the Mortgage creates a valid lien on the Property
of the requisite priority, free and clear of all exceptions from coverage other
than Permitted Encumbrances and standard exceptions and exclusions from coverage
(as modified by the terms of any endorsements), (iii) contain such endorsements
and affirmative coverages as Lender may reasonably request, and (iv) name Lender
as the insured. The Title Insurance Policy shall be assignable. Lender also
shall have received evidence that all premiums in respect of such Title
Insurance Policy have been paid.

          (c) Survey. Lender shall have received a re-dated title survey for the
Property, certified to Title Company and Lender and their successors and
assigns, in form and content satisfactory to Lender and prepared by Earl B.
Lovell - S.P. Belcher, Inc. and visually updated by Fehringer Surveying, P.C.
(the “Surveyor”) in accordance with the 1999 Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys. The survey shall meet the
classification of an “Urban Survey” and the following additional items from the
list of “Optional Survey Responsibilities and Specifications” (Table A) should
be added to each survey: 2, 3, 4, 6, 8, 9, 10, 11 and 13. Such survey shall
reflect the same legal description contained in the Title Insurance Policy
referred to in subsection (b) above and shall include, among other things, a
metes and bounds description of the real property comprising part of the
Property reasonably satisfactory to Lender. The Surveyor’s seal shall be affixed
to the survey and the Surveyor shall provide a certification for each survey in
form and substance acceptable to Lender.

          (d) Insurance. Lender shall have received copies of the Policies
required hereunder, satisfactory to Lender in its sole discretion, and evidence
of the payment of all Insurance Premiums payable for the existing policy period.

          (e) Environmental Reports. Lender shall have received the
Environmental Report in respect of the Property satisfactory to Lender.

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          (f) Zoning/Building Code. Lender shall have received evidence of
compliance with zoning and building ordinances and codes, including, without
limitation, required certificates of occupancy, reasonably acceptable to Lender.

          (g) Encumbrances. Borrower shall have taken or caused to be taken such
actions in such a manner so that Lender has a valid and perfected first Lien as
of the Closing Date on the Property, subject only to applicable Permitted
Encumbrances and such other Liens as are permitted pursuant to the Loan
Documents, and Lender shall have received satisfactory evidence thereof.

          (h) Lien Searches. Borrower shall have delivered to Lender certified
search results pertaining to the Borrower, Borrower Principal and such other
Persons or any SPE Component Entity as reasonably required by Lender for state
and federal tax liens, bankruptcy, judgment, litigation and state and local UCC
filings

          Section 3.3. Related Documents

          Each additional document not specifically referenced herein, but
relating to the transactions contemplated herein, shall have been duly
authorized, executed and delivered by all parties thereto and at Lender’s
written request, Lender shall have received and approved certified copies
thereof.

          Section 3.4. Organizational Documents

          On or before the Closing Date, Borrower shall deliver or cause to be
delivered to Lender (a) copies certified by Borrower of all organizational
documentation related to Borrower, each SPE Component Entity and Borrower
Principal which must be acceptable to Lender in its sole discretion, and (b)
such other evidence of the formation, structure, existence, good standing and/or
qualification to do business of the Borrower, each SPE Component Entity and
Borrower Principal, as Lender may request in its sole discretion, including,
without limitation, good standing or existence certificates, qualifications to
do business in the appropriate jurisdictions, resolutions authorizing the
entering into of the Loan and incumbency certificates as may be requested by
Lender.

          Section 3.5. Opinions of Borrower’s Counsel

          Lender shall have received opinions of Borrower’s counsel (a) with
respect to non-consolidation issues and (b) with respect to due execution,
authority, enforceability of the Loan Documents and such other matters as Lender
may require, all such opinions in form, scope and substance satisfactory to
Lender and Lender’s counsel in their sole discretion.

          Section 3.6. Annual Budget

          Borrower shall have delivered, and Lender shall have approved, the
Annual Budget for the current fiscal year, a copy of which is attached as
Exhibit A hereto.

          Section 3.7. Taxes and Other Charges

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          Borrower shall have paid or cause to have been paid all Taxes and
Other Charges (including any in arrears) relating to the Property, which amounts
may be funded with proceeds of the Loan.

          Section 3.8. Completion of Proceedings

          All corporate and other proceedings taken or to be taken in connection
with the transactions contemplated by this Agreement and other Loan Documents
and all documents incidental thereto shall be satisfactory in form and substance
to Lender, and Lender shall have received all such counterpart originals or
certified copies of such documents as Lender may reasonably request.

          Section 3.9. Payments

          All payments, deposits or escrows required to be made or established
by Borrower under this Agreement, the Note and the other Loan Documents on or
before the Closing Date shall have been paid, deposited or escrowed, which such
amounts may be funded with the proceeds of the Loan.

          Section 3.10. Transaction Costs

          Except as otherwise expressly provided herein, Borrower shall have
paid or reimbursed Lender for all out of pocket expenses in connection with the
underwriting, negotiation, Securitization and closing of the Loan, including
title insurance premiums and other title company charges; recording,
registration, filing and similar fees, taxes and charges; transfer, mortgage,
deed, stamp or documentary taxes or similar fees or charges; costs of
third-party reports, including without limitation, environmental studies, credit
reports, seismic reports, engineer’s reports, appraisals and surveys;
underwriting and origination expenses; Securitization expenses; and all actual,
reasonable legal fees and expenses charged by counsel to Lender.

          Section 3.11. No Material Adverse Change

          There shall have been no material adverse change in the financial
condition or business condition of the Property, Borrower, Borrower Principal,
any SPE Component Entity, Manager or any other person or party contributing to
the operating income and operations of the Property since the date of the most
recent financial statements and/or other information delivered to Lender. The
income and expenses of the Property, the occupancy and leases thereof, and all
other features of the transaction shall be as represented to Lender without
material adverse change. Neither Borrower nor Borrower Principal, any SPE
Component Entity or Affiliated Manager shall be the subject of any bankruptcy,
reorganization, or insolvency proceeding.

          Section 3.12. Leases and Rent Roll

          Lender shall have received copies of all Leases affecting the
Property, which shall be satisfactory in form and substance to Lender. Lender
shall have received a current certified rent roll or other similar occupancy
statement of the Property, reasonably satisfactory in form and substance to
Lender.

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          Section 3.13. Intentionally Omitted

          Section 3.14. Estoppel Certificates

          Borrower shall have delivered to Lender an original estoppel
certificate executed by Sotheby’s in form and substance satisfactory to Lender.

          Section 3.15. Subordination and Attornment

          Borrower shall have delivered to Lender a fully executed version of
the Sotheby’s SNDA.

          Section 3.16. Tax Lot

          Lender shall have received evidence that the Property constitutes one
(1) or more separate tax lots, which evidence shall be reasonably satisfactory
in form and substance to Lender.

          Section 3.17. Physical Conditions Report

          Lender shall have received the Physical Conditions Report with respect
to the Property, which report shall be reasonably satisfactory in form and
substance to Lender.

          Section 3.18. Management Agreement

          Lender shall have received a certified copy of the Management
Agreement with respect to the Property which shall be satisfactory in form and
substance to Lender.

          Section 3.19. Appraisal

          Lender shall have received an appraisal of the Property, which shall
be satisfactory in form and substance to Lender.

          Section 3.20. Financial Statements

          Lender shall have received such financial statements and related
information (including, without limitation, tax bills) as may be reasonably
requested by Lender, which such financial statements and related information
shall be in form and substance (and prepared by such parties (including, without
limitation, an Acceptable Accountant)) as may be reasonably required by Lender
and shall be in compliance with any Legal Requirements promulgated by the
Securities and Exchange Commission.

          Section 3.21. Net Operating Income

          The Net Operating Income for the Property is not less than
$16,808,448.00 as determined by Lender in its sole discretion pursuant to its
standard underwriting procedures for loans which are consummated by Lender for
the purpose of including the same in any Securitization.

          Section 3.22. Further Documents

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          Lender or its counsel shall have received such other and further
approvals, opinions, documents and information as Lender or its counsel may have
reasonably requested including the Loan Documents in form and substance
satisfactory to Lender and its counsel.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

          Borrower and, where specifically indicated, each Borrower Principal
represents and warrants to Lender as of the Closing Date that:

          Section 4.1. Organization

          Borrower (a) has been duly organized and is validly existing and in
good standing with requisite power and authority to own the Property and to
transact the business in which it is now engaged, (b) is duly qualified to do
business and is in good standing in each jurisdiction where it is required to be
so qualified in connection with the Property, its business and its operations,
(c) possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own the Property and to transact the
business in which it is now engaged, and the sole business of Borrower is the
ownership, management and operation of the Property, and (d) has full power,
authority and legal right to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the Property pursuant to the terms of the Loan
Documents, and has full power, authority and legal right to keep and observe all
of the terms of the Loan Documents to which it is a party. Borrower and each
Borrower Principal represent and warrant that the chart attached hereto as
Exhibit B sets forth an accurate listing of the direct and indirect owners of
the equity interests in Borrower and each SPE Component Entity.

          Section 4.2. Status of Borrower

          Borrower’s exact legal name is correctly set forth on the first page
of this Agreement, on the Mortgage and on any UCC-1 Financing Statements filed
in connection with the Loan. Borrower is an organization of the type specified
on the first page of this Agreement. Borrower is incorporated in or organized
under the laws of the state of Delaware. Borrower’s principal place of business
and chief executive office, and the place where Borrower keeps its books and
records, including recorded data of any kind or nature, regardless of the medium
of recording, including software, writings, plans, specifications and
schematics, has been for the preceding four months (or, if less, the entire
period of the existence of Borrower) the address of Borrower set forth on the
first page of this Agreement. Borrower’s organizational identification number,
if any, assigned by the state of incorporation or organization is
030060905-3619750.

          Section 4.3. Validity of Documents

          Borrower has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents. This
Agreement and such other Loan Documents have been duly executed and delivered by
or on behalf of Borrower and each Borrower Principal and constitute the legal,
valid and binding obligations of Borrower and each Borrower Principal
enforceable against Borrower and each Borrower Principal in accordance with
their respective terms, subject only to applicable bankruptcy, insolvency and
similar laws

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affecting rights of creditors generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

          Section 4.4. No Conflicts

          The execution, delivery and performance of this Agreement and the
other Loan Documents by Borrower and each Borrower Principal 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, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower or any Borrower Principal pursuant to the terms of any
agreement or instrument to which Borrower or any Borrower Principal is a party
or by which any of Borrower’s or Borrower Principal’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 Governmental Authority having
jurisdiction over Borrower or any Borrower Principal or any of Borrower’s or
Borrower Principal’s properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any Governmental
Authority required for the execution, delivery and performance by Borrower or
Borrower Principal of this Agreement or any of the other Loan Documents has been
obtained and is in full force and effect.

          Section 4.5. Litigation

          There are no actions, suits or proceedings at law or in equity by or
before any Governmental Authority or other agency now pending or, to Borrower’s
or Borrower Principal’s knowledge, threatened against or affecting Borrower, any
Borrower Principal, Manager or the Property, which actions, suits or
proceedings, if determined against Borrower, any Borrower Principal, Manager or
the Property, would materially adversely affect the condition (financial or
otherwise) or business of Borrower or any Borrower Principal or the condition or
ownership of the Property.

          Section 4.6. Agreements

          Borrower is not a party to any agreement or instrument or subject to
any restriction which would materially and adversely affect Borrower or the
Property, or Borrower’s business, properties or assets, operations or condition,
financial or otherwise. Borrower is not in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument to which it is a party or
by which Borrower or the Property is bound. Borrower has no material financial
obligation under any agreement or instrument to which Borrower is a party or by
which Borrower or the Property is otherwise bound, other than (a) obligations
incurred in the ordinary course of the operation of the Property and (b)
obligations under the Loan Documents.

          Section 4.7. Solvency

          Borrower and each Borrower Principal have (a) not entered into the
transaction contemplated under this Agreement or executed the Note, this
Agreement or any other Loan Documents with the actual intent to hinder, delay or
defraud any creditor and (b) received reasonably equivalent value in exchange
for their obligations under the Note, this Agreement or any such other Loan
Documents. Giving effect to the Loan, the fair saleable value of the assets

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of Borrower and each Borrower Principal exceeds and will, immediately following
the making of the Loan, exceed the total liabilities of Borrower and each
Borrower Principal, including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities. No petition in bankruptcy has been filed
against Borrower, any Borrower Principal, any SPE Component Entity (if any) or
Affiliated Manager in the last ten (10) years, and neither Borrower nor any
Borrower Principal, any SPE Component Entity (if any) or Affiliated Manager in
the last ten (10) years has made an assignment for the benefit of creditors or
taken advantage of any Creditors Rights Laws. Neither Borrower nor any Borrower
Principal, any SPE Component Entity (if any) or Affiliated Manager is
contemplating either the filing of a petition by it under any Creditors Rights
Laws or the liquidation of all or a major portion of Borrower’s assets or
property, and Borrower has no knowledge of any Person contemplating the filing
of any such petition against Borrower or any Borrower Principal, any SPE
Component Entity (if any) or Affiliated Manager.

          Section 4.8. Full and Accurate Disclosure

          No statement of fact made by or on behalf of Borrower or any Borrower
Principal in this Agreement or in any of the other Loan Documents or in any
other document or certificate delivered by or on behalf of Borrower or any
Borrower Principal 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 material fact presently known to Borrower or any
Borrower Principal which has not been disclosed to Lender which materially
adversely affects, nor as far as Borrower or any Borrower Principal can
reasonably foresee, might materially adversely affect, the Property or the
business, operations or condition (financial or otherwise) of Borrower or any
Borrower Principal.

          Section 4.9. No Plan Assets

          Borrower is not an “employee benefit plan,” as defined in Section 3(3)
of ERISA, subject to Title I of ERISA, and none of the assets of Borrower
constitutes or will constitute “plan assets” of one or more such plans within
the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) Borrower is not a
“governmental plan” within the meaning of Section 3(32) of ERISA and (b)
transactions by or with Borrower are not subject to state statutes regulating
investment of, and fiduciary obligations with respect to, governmental plans
similar to the provisions of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code currently in effect, which prohibit or otherwise restrict
the transactions contemplated by this Agreement.

          Section 4.10. Not a Foreign Person

          Neither Borrower nor Borrower Principal is a “foreign person” within
the meaning of §1445(f)(3) of the Internal Revenue Code.

          Section 4.11. Enforceability

          The Loan Documents are not subject to any right of rescission,
set-off, counterclaim or defense by Borrower, including the defense of usury,
nor would the operation of any of the terms of the Loan Documents, or the
exercise of any right thereunder, render the Loan Documents unenforceable, and
neither Borrower nor Borrower Principal has asserted any right of rescission,
set-off, counterclaim or defense with respect thereto. As of the date hereof, to
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Borrower’s knowledge, no Default or Event of Default exists under or with
respect to any Loan Document.

          Section 4.12. Business Purposes

          The Loan is solely for the business purpose of Borrower, and is not
for personal, family, household, or agricultural purposes.

          Section 4.13. Compliance

          To the best of Borrower’s knowledge, the Property, and the use and
operation thereof, comply in all material respects with all Legal Requirements,
including, without limitation, building and zoning ordinances and codes and the
Americans with Disabilities Act. To Borrower’s knowledge, Borrower is not in
default or violation of any order, writ, injunction, decree or demand of any
Governmental Authority and Borrower has received no written notice of any such
default or violation. There has not been committed by Borrower or, to Borrower’s
knowledge, any other Person in occupancy of or involved with the operation or
use of the Property any act or omission affording any Governmental Authority the
right of forfeiture as against the Property or any part thereof or any monies
paid in performance of Borrower’s obligations under any of the Loan Documents.

          Section 4.14. Financial Information

          All financial data, including, without limitation, the balance sheets,
statements of cash flow, statements of income and operating expense and rent
rolls (or similar occupancy statement), that have been delivered to Lender in
respect of Borrower, any Borrower Principal and/or the Property (a) (i) with
respect to Borrower and/or Borrower Principal, are true, complete and correct in
all material respects, and (ii) with respect to the Property, are, to Borrower’s
actual knowledge, true, complete and correct in all material respects, (b)
accurately represent the financial condition of Borrower or Borrower Principal,
as applicable, as of the date of such reports, and (c) with respect to Borrower
and/or Borrower Principal, to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with GAAP
throughout the periods covered, except as disclosed therein. Borrower does not
have any contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Borrower and reasonably likely to have a material
adverse effect on the Property or the current and/or intended operation thereof,
except as referred to or reflected in said financial statements. Since the date
of such financial statements, there has been no materially adverse change in the
financial condition, operations or business of Borrower or Borrower Principal
from that set forth in said financial statements.

          Section 4.15. Condemnation

          No Condemnation or other proceeding has been commenced or, to
Borrower’s best knowledge, is threatened or contemplated with respect to all or
any portion of the Property or for the relocation of roadways providing access
to the Property.

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          Section 4.16. Utilities and Public Access; Parking

          The Property has adequate rights of access to public ways and is
served by water, sewer, sanitary sewer and storm drain facilities adequate to
service the Property for full utilization of the Property for its intended uses.
All public utilities necessary to the full use and enjoyment of the Property as
currently used and enjoyed are located either in the public right-of-way
abutting the Property (which are connected so as to serve the Property without
passing over other property) or in recorded easements serving the Property and
such easements are set forth in and insured by the Title Insurance Policy. All
roads necessary for the use of the Property for its current purposes have been
completed and dedicated to public use and accepted by all Governmental
Authorities. The Property has, or is served by, parking to the extent required
to comply with all Legal Requirements.

          Section 4.17. Separate Lots

          The Property is assessed for real estate tax purposes as one or more
wholly independent tax lot or lots, separate from any adjoining land or
improvements not constituting a part of such lot or lots, and no other land or
improvements is assessed and taxed together with the Property or any portion
thereof.

          Section 4.18. Assessments

          To Borrower’s knowledge after due inquiry of the owner of the Property
immediately prior to the Closing Date, there are no pending or proposed special
or other assessments for public improvements or otherwise affecting the
Property, nor are there any contemplated improvements to the Property that may
result in such special or other assessments.

          Section 4.19. Insurance

          Borrower has obtained and has delivered to Lender insurance
certificates reflecting the insurance coverages, amounts and other requirements
set forth in this Agreement. To Borrower’s knowledge after due inquiry
(including, without limitation, due inquiry of Sotheby’s), no claims have been
made under any of the Policies, and to Borrower’s knowledge, no Person,
including Borrower and/or Sotheby’s, has done, by act or omission, anything
which would materially impair the coverage of any of the Policies.

          Section 4.20. Use of Property

          The Property is used exclusively for auction house, restaurant,
limited retail and office purposes and other appurtenant and related uses.

          Section 4.21. Certificate of Occupancy; Licenses

          All material certifications, permits, licenses and approvals,
including, without limitation, certificates of completion or occupancy and any
applicable liquor license required for the legal use, occupancy and operation of
the Property for the purpose intended herein, have been obtained and are valid
and in full force and effect. Borrower shall keep and maintain (or cause to be
kept and maintained) all licenses necessary for the operation of the Property
for the purpose intended herein. The use being made of the Property is in
conformity with the certificate of occupancy and any permits or licenses issued
for the Property.

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          Section 4.22. Flood Zone

          To the best of Borrower’s knowledge, none of the Improvements on the
Property are located in an area identified by the Federal Emergency Management
Agency as an area having special flood hazards, or, if any portion of the
Improvements is located within such area, Borrower has obtained (or has caused
to be obtained) the insurance prescribed in Section 8.1(a)(i).

          Section 4.23. Physical Condition

          Except as set forth in the Physical Conditions Report, to Borrower’s
knowledge, the Property, 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. Except as set forth in the Physical Conditions Report,
to Borrower’s knowledge, there exists no structural or other material defects or
damages in the Property, as a result of a Casualty or otherwise, and whether
latent or otherwise. Borrower has not received notice from any insurance company
or bonding company of any defects or inadequacies in the Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.

          Section 4.24. Boundaries

          (a) To the best of Borrower’s knowledge, none of the Improvements
which were included in determining the appraised value of the Property lie
outside the boundaries and building restriction lines of the Property to any
material extent, and (b) no improvements on adjoining properties encroach upon
the Property and no easements or other encumbrances upon the Property encroach
upon any of the Improvements so as to materially affect the value or
marketability of the Property.

          Section 4.25. Leases and Rent Roll

          Borrower has delivered to Lender a true, correct and complete (i) copy
of the fully executed Sotheby’s Lease, which such Lease represents the entire
agreement of the parties thereto with respect to the matters contained therein,
and (ii) rent roll for the Property or similar occupancy statement relating to
the Property reasonably acceptable to Lender (each, a “Rent Roll”) which
includes all Leases affecting the Property. Except as set forth in the Rent Roll
(as same has been updated by written notice thereof to Lender) delivered to
Lender on or prior to the Closing Date: (a) the Sotheby’s Lease is in full force
and effect; (b) the premises demised under the Sotheby’s Lease has been
completed and Sotheby’s has accepted possession of and is in occupancy of all of
its demised premises under the Sotheby’s Lease; (c) Sotheby’s has commenced the
payment of rent under the Sotheby’s Lease, there are no offsets, claims or
defenses to the enforcement thereof, and Borrower has no monetary obligations to
Sotheby’s under the Sotheby’s Lease; (d) all Rents due and payable under the
Sotheby’s Lease have been paid and no portion thereof has been paid for any
period more than thirty (30) days in advance;

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(e) the rent payable under Sotheby’s Lease is the amount of fixed rent set forth
in the Sotheby’s Lease, and there is no claim or basis for a claim by Sotheby’s
for an offset or adjustment to the rent; (f) Sotheby’s has not made any written
claim of a material default against Borrower which remains outstanding nor has
Borrower or Manager received, by telephonic, in-person, e-mail or other
communication, any notice of a material default under the Sotheby’s Lease; (g)
to Borrower’s knowledge there is no present material default by Sotheby’s under
the Sotheby’s Lease; (h) all security deposits, if any, under the Sotheby’s
Lease have been collected by Borrower; (i) Borrower is the sole owner of the
entire landlord’s interest in the Sotheby’s Lease; (j) the Sotheby’s Lease is
the valid, binding and enforceable obligation of Borrower and the Sotheby’s
Lease and the Sotheby’s Guaranty are the valid, binding and enforceable
obligation of Sotheby’s and Sotheby’s Guarantor (as applicable) and there are no
agreements with Sotheby’s or Sotheby’s Guarantor under the Sotheby’s Lease or
the Sotheby’s Guaranty (as applicable) other than as expressly set forth in the
Sotheby’s Lease or the Sotheby’s Guaranty (as applicable); (k) to Borrower’s
actual knowledge, no Person has any possessory interest in, or right to occupy,
the Property or any portion thereof except under the terms of the Sotheby’s
Lease or any of the existing subleases thereof as set forth on Schedule 8.1(i)
thereof; (1) the Sotheby’s Lease does not contain any option or offer to
purchase or right of first refusal to purchase the Property or any part thereof
(other than the right of first offer set forth in Section 23 thereof); (m)
neither the Sotheby’s Lease nor the Rents have been assigned, pledged or
hypothecated except to Lender, and no other Person has any interest therein
except Sotheby’s; and (n) no conditions exist which now give Sotheby’s the right
to “go dark” pursuant to the provisions of the Sotheby’s Lease.

          Section 4.26. Filing and Recording Taxes

          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 or will be paid,
and, under current Legal Requirements, the Mortgage is enforceable in accordance
with its terms by Lender (or any subsequent holder thereof).

          Section 4.27. Management Agreement

          The Management Agreement is in full force and effect and there is no
default thereunder by any party thereto and, to Borrower’s knowledge, no event
has occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder. No management fees under the Management
Agreement are accrued and unpaid.

          Section 4.28. Illegal Activity

          No portion of the Property has been or will be purchased with proceeds
of any illegal activity on the part of Borrower or its Affiliates, and no part
of the proceeds of the Loan will be used in connection with any illegal
activity.

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          Section 4.29. Construction Expenses

          Except as set forth in Lender’s Title Insurance Policy, to Borrower’s
knowledge, there are no claims for payment for work, labor or materials
affecting the Property which are or may become a lien prior to, or of equal
priority with, the Liens created by the Loan Documents.

          Section 4.30. Personal Property

          Borrower has paid in full for, and is the owner of, all Personal
Property (other than tenants’ property) used in connection with the operation of
the Property, free and clear of any and all security interests, liens or
encumbrances, except for Permitted Encumbrances and the Lien and security
interest created by the Loan Documents.

          Section 4.31. Taxes

          Borrower and Borrower Principal have filed all federal, state, county,
municipal, and city income, personal property and other tax returns required to
have been filed by them and have paid all taxes and related liabilities which
have become due pursuant to such returns or pursuant to any assessments received
by them. Neither Borrower nor Borrower Principal knows of any basis for any
additional assessment in respect of any such taxes and related liabilities for
prior years.

          Section 4.32. Permitted Encumbrances

          None of the Permitted Encumbrances, individually or in the aggregate,
materially interferes with the benefits of the security intended to be provided
by the Loan Documents, impairs the use or the operation of the Property or
impairs Borrower’s ability to pay its obligations in a timely manner.

          Section 4.33. Federal Reserve Regulations

          Borrower will use the proceeds of the Loan for the purposes set forth
in Section 2.1(d) hereof and not for any illegal activity. No part of the
proceeds of the Loan will be used for the purpose of purchasing or acquiring any
“margin stock” within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose which would be inconsistent
with such Regulation U or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or prohibited by the terms and
conditions of this Agreement or the other Loan Documents.

          Section 4.34. Investment Company Act

          Borrower is not (a) an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended; (b) 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 (c) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.

          Section 4.35. Intentionally Omitted

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          Section 4.36. No Change in Facts or Circumstances; Disclosure

          All information submitted by Borrower or its agents to Lender and in
all financial statements, rent rolls (or similar occupancy statements), reports,
certificates and other documents submitted in connection with the Loan or in
satisfaction of the terms thereof and all statements of fact made by Borrower in
this Agreement or in any other Loan Document, are accurate, complete and correct
in all material respects. There has been no material adverse change in any
condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading in any material respect or that
otherwise materially and adversely affects or might materially and adversely
affect the Property or the business operations or the financial condition of
Borrower. Borrower has disclosed to Lender all material facts and has not failed
to disclose any material fact that could cause any representation or warranty
made herein to be materially misleading.

          Section 4.37. Intellectual Property

          All trademarks, trade names and service marks necessary to the
business of Borrower as presently conducted or as Borrower contemplates
conducting its business are in good standing and, to the extent of Borrower’s
actual knowledge, uncontested. Borrower has not infringed, is not infringing,
and has not received notice of infringement with respect to asserted trademarks,
trade names and service marks of others. To Borrower’s knowledge, there is no
infringement by others of trademarks, trade names and service marks of Borrower.

          Section 4.38. Survey

          The Survey for the Property delivered to Lender in connection with
this Agreement has been prepared in accordance with the provisions of Section
3.2(c) hereof or such requirement has otherwise been waived by Lender, and to
the knowledge of Borrower does not fail to reflect any material matter affecting
the Property or the title thereto.

          Section 4.39. Survival

          Borrower agrees that, unless expressly provided otherwise, all of the
representations and warranties of Borrower set forth in this Agreement and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any portion of the Debt remains owing to Lender. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.

          Section 4.40. Embargoed Persons Act.

          As of the date hereof and at all times throughout the term of the
Loan, including after giving effect to any transfers of interests permitted
pursuant to the Loan Documents, (a) none of the funds or other assets of
Borrower and Borrower Principal constitute property of, or are beneficially
owned, directly or indirectly, by 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

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investment in Borrower or Borrower Principal, as applicable (whether directly or
indirectly), is prohibited by law or the Loan made by Lender is in violation of
law (“Embargoed Person”); (b) no Embargoed Person has any interest of any nature
whatsoever in Borrower or Borrower Principal, as applicable, with the result
that the investment in Borrower or Borrower Principal, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law; and (c) none of the funds of Borrower or Borrower Principal, as applicable,
have been derived from any unlawful activity with the result that the investment
in Borrower or Borrower Principal, as applicable (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law.

          Section 4.41. Patriot Act.

          All capitalized words and phrases and all defined terms used in the
USA Patriot Act of 2001, 107 Public Law 56 (October 26, 2001) and in other
statutes and all orders, rules and regulations of the United States government
and its various executive departments, agencies and offices related to the
subject matter of the Patriot Act, including Executive Order 13224 effective
September 24, 2001 (collectively referred to in this Section only as the
“Patriot Act”) and are incorporated into this Section. Each of Borrower and
Borrower Principal hereby represents and warrants that Borrower and Borrower
Principal and each and every Person affiliated with Borrower or Borrower
Principal or that to Borrower’s knowledge has an economic interest in Borrower,
or, to Borrower’s knowledge, that has or will have an interest in the
transaction contemplated by this Agreement or in the Property or will
participate, in any manner whatsoever, in the Loan, is: (i) not a “blocked”
person listed in the Annex to Executive Order Nos. 12947, 13099 and 13224 and
all modifications thereto or thereof (as used in this Section only, the
“Annex”); (ii) in full compliance with the requirements of the Patriot Act and
all other requirements contained in the rules and regulations of the Office of
Foreign Assets Control, Department of the Treasury (as used in this Section
only, “OFAC”); (iii) operated under policies, procedures and practices, if any,
that are in compliance with the Patriot Act and available to Lender for Lender’s
review and inspection during normal business hours and upon reasonable prior
notice; (iv) not in receipt of any notice from the Secretary of State or the
Attorney General of the United States or any other department, agency or office
of the United States claiming a violation or possible violation of the Patriot
Act; (v) not listed as a Specially Designated Terrorist or as a “blocked” person
on any lists maintained by the OFAC pursuant to the Patriot Act or any other
list of terrorists or terrorist organizations maintained pursuant to any of the
rules and regulations of the OFAC issued pursuant to the Patriot Act or on any
other list of terrorists or terrorist organizations maintained pursuant to the
Patriot Act; (vi) not a person who has been determined by competent authority to
be subject to any of the prohibitions contained in the Patriot Act; and (vii)
not owned or controlled by or now acting and or will in the future act for or on
behalf of any person named in the Annex or any other list promulgated under the
Patriot Act or any other person who has been determined to be subject to the
prohibitions contained in the Patriot Act. Borrower covenants and agrees that in
the event Borrower receives any notice that Borrower Principal or Borrower (or
any of its beneficial owners or affiliates or participants) become listed on the
Annex or any other list promulgated under the Patriot Act or is indicted,
arraigned, or custodially detained on charges involving money laundering or
predicate crimes to money laundering, Borrower shall immediately notify Lender.
It shall be an Event of Default hereunder if Borrower, Borrower Principal or any
other party to any Loan Document becomes

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listed on any list promulgated under the Patriot Act or is indicted, arraigned
or custodially detained on charges involving money laundering or predicate
crimes to money laundering.

ARTICLE 5
BORROWER COVENANTS

          From the date hereof and until repayment of the Debt in full and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier release of the Lien of the Mortgage (and all related obligations) in
accordance with the terms of this Agreement and the other Loan Documents,
Borrower hereby covenants and agrees with Lender that:

          Section 5.1. Existence; Compliance with Legal Requirements

          (a) Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply with all Legal Requirements
applicable to it and the Property to the extent that the failure to do so would
have a material adverse effect on the value or quality of the Property or
Borrower’s ability to repay the Loan. Borrower hereby covenants and agrees not
to commit, permit or suffer to exist any act or omission affording any
Governmental Authority the right of forfeiture as against the Property or any
part thereof or any monies paid in performance of Borrower’s obligations under
any of the Loan Documents.

          (b) After prior written notice to Lender, Borrower, at its own
expense, may contest (or may permit Sotheby’s to contest (in accordance with the
applicable terms and conditions of the Sotheby’s Lease)) by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the Legal Requirements affecting the Property, provided that (i) no
Event of Default or Sotheby’s Event of Default has occurred and is continuing;
(ii) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any other instrument to which Borrower or the Property is
subject and shall not constitute a default thereunder (including, without
limitation, the Sotheby’s Lease); (iii) neither the Property, any part thereof
or interest therein, any of the tenants or occupants thereof, nor Borrower shall
be affected in any material adverse way as a result of such proceeding; (iv)
non-compliance with the Legal Requirements shall not impose civil or criminal
liability on Sotheby’s, Borrower or Lender; (v) Borrower shall have furnished
(or shall have caused to be furnished) the security as may be required in the
proceeding or by Lender to ensure compliance by Borrower and/or Sotheby’s with
the Legal Requirements; and (vi) Borrower shall have furnished (or shall have
caused to be furnished) to Lender all other items reasonably requested by
Lender.

          Section 5.2. Maintenance and Use of Property

          Subject to Section 20.12 hereof, (i) Borrower shall cause the Property
to be maintained in a good and safe condition and repair, (ii) the Improvements
and the Personal Property shall not be removed, demolished or other than in
accordance with the provisions of Section 5.21, materially altered (except for
normal replacement of the Personal Property) without the prior written consent
of Lender, and (iii) if under applicable zoning provisions the use of all or any
portion of the Property is or shall become a nonconforming use, Borrower will
not cause or permit the nonconforming use to be discontinued or the
nonconforming Improvement to be

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abandoned without the express written consent of Lender (which such consent (a)
prior to the Optional Prepayment Date, shall not be unreasonably withheld,
conditioned or delayed, or (b) from and after the Optional Prepayment Date, may
be granted or withheld in Lender’s sole and absolute discretion).

          Section 5.3. Waste

          Borrower shall not knowingly commit (or permit to be committed) or
suffer (or permit to be suffered) any waste of the Property or make or permit
any change in the use of the Property which will in any way materially increase
the risk of fire or other hazard arising out of the operation of the Property,
or take (or permit to be taken) any action that might invalidate or give cause
for cancellation of any Policy, or do or permit to be done thereon anything that
may in any way impair the value of the Property or the security for the Loan.
Borrower will not, without the prior written consent of Lender, permit any
drilling or exploration for or extraction, removal, or production of any
minerals from the surface or the subsurface of the Property, regardless of the
depth thereof or the method of mining or extraction thereof.

          Section 5.4. Taxes and Other Charges

          (a) Borrower shall pay (or cause to be paid) all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Property or
any part thereof as the same become due and payable; provided, however,
Borrower’s obligation to directly pay Taxes shall be suspended for so long as
(i) the same are paid by Sotheby’s pursuant to the terms of the Sotheby’s Lease,
or (ii) funds sufficient to pay the same have been deposited with Lender
pursuant to Section 9.6 hereof. Borrower shall furnish (or caused to be
furnished) to Lender receipts for the payment of the Taxes and the Other Charges
prior to the date the same shall become delinquent (provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 9.6 hereof).
Borrower shall not suffer and shall promptly cause to be paid and discharged any
Lien or charge whatsoever which may be or become a Lien or charge against the
Property, and shall, subject to Section 3.5(b) of the Mortgage and Sections
5.1(b) and 5.4(b) hereof, promptly pay for all utility services provided to the
Property.

          (b) After prior written notice to Lender, Borrower, at its own
expense, may (or may permit Sotheby’s to) 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
Taxes or Other Charges, provided that (i) no Event of Default or Sotheby’s Event
of Default has occurred and remains uncured; (ii) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower is subject (including, without limitation, the
Sotheby’s Lease) and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable Legal
Requirements; (iii) neither the Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, canceled or
lost; (iv) Borrower shall promptly upon final determination thereof pay (or
cause to be paid) the amount of any such Taxes or Other Charges, together with
all costs, interest and penalties which may be payable in connection therewith;
(v) such proceeding shall suspend the collection of such contested Taxes or
Other Charges from the Property; and (vi) Borrower shall furnish (or cause to be
furnished) such security as may be

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required in the proceeding, or deliver (or cause to be delivered) to Lender such
reserve deposits as may be requested by Lender, to insure the payment of any
such Taxes or Other Charges, together with all interest and penalties thereon
(unless Borrower has paid (or caused to be paid) all of the Taxes or Other
Charges under protest). Lender may pay over any such cash deposit or part
thereof held by Lender to the claimant entitled thereto at any time when, in the
judgment of Lender, the entitlement of such claimant is established or the
Property (or part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, canceled or lost or there shall be any danger of the Lien
of the Mortgage being primed by any related Lien.

          Section 5.5. Litigation

          On and after the date hereof, Borrower shall give prompt written
notice to Lender of any litigation or governmental proceedings pending or
threatened in writing against Borrower or against Sotheby’s (of which it has
actual notice) which might materially adversely affect Borrower’s or Sotheby’s
condition (financial or otherwise) or business or the Property.

          Section 5.6. Access to Property

          Subject to the rights of Tenants under Leases, Borrower shall permit
agents, representatives and employees of Lender to inspect the Property or any
part thereof at reasonable hours upon reasonable advance notice.

          Section 5.7. Notice of Default

          Borrower shall promptly advise Lender of any material adverse change
in the condition (financial or otherwise) of Borrower, any Borrower Principal,
Sotheby’s (of which it has actual notice) or the Property or of the occurrence
of any Default, Event of Default or Sotheby’s Event of Default of which Borrower
has knowledge.

          Section 5.8. Cooperate in Legal Proceedings

          Borrower shall at Borrower’s expense cooperate fully with Lender with
respect to any proceedings before any court, board or other Governmental
Authority which may in any way affect the rights of Lender hereunder or any
rights obtained by Lender under any of the other Loan Documents and, in
connection therewith, permit Lender, at its election, to participate in any such
proceedings.

          Section 5.9. Performance by Borrower

          Borrower shall in a timely manner observe, perform and fulfill each
and every covenant, term and provision to be observed and performed by Borrower
under this Agreement and the other Loan Documents and any other agreement or
instrument affecting or pertaining to the Property and any amendments,
modifications or changes thereto.

          Section 5.10. Awards; Insurance Proceeds

          Subject to Section 20.12 hereof, Borrower shall cooperate with Lender
in obtaining for Lender the benefits of any Awards or Insurance Proceeds
lawfully or equitably payable in

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connection with the Property, and Lender shall be reimbursed for any expenses
incurred in connection therewith (including reasonable, actual attorneys’ fees
and disbursements, and the payment by Borrower of the expense of an appraisal on
behalf of Lender in case of a Casualty or Condemnation affecting the Property or
any part thereof) out of such Awards or Insurance Proceeds.

          Section 5.11. Financial Reporting

          (a) Borrower and Borrower Principal shall keep adequate books and
records of account in accordance with GAAP or on a federal income tax basis, or
in accordance with other methods acceptable to Lender in its sole discretion,
consistently applied and shall furnish to Lender:

 

 

 

          (i) prior to a Securitization, at the request of Lender, monthly, and
following a Securitization, quarterly and annual certified rent rolls signed and
dated by Borrower, detailing the names of all Tenants of the Improvements, the
portion of Improvements (in terms of square footage) occupied by each Tenant,
the base rent, additional rent and any other charges payable under each Lease
(including annual store sales required to be reported by Tenant under any
Lease), and the term of each Lease, including the commencement and expiration
dates and any tenant extension, expansion or renewal options, the extent to
which any Tenant is in default under any Lease, and any other information as is
reasonably required by Lender, within twenty (20) days after the end of each
calendar month, thirty (30) days after the end of each fiscal quarter or sixty
(60) days after the close of each fiscal year of Borrower, as applicable;
provided, however, Borrower shall only be required to deliver the information
specified in the foregoing Section 5.11(a)(i) if the Sotheby’s Lease is no
longer in full force or effect;

 

 

 

          (ii) prior to a Securitization, at the request of Lender, monthly, and
following a Securitization, quarterly and annual operating statements of the
Property, prepared and certified by Borrower in the form required by Lender
(with the annual operating statement prepared and audited by an Acceptable
Accountant), detailing the revenues received, the expenses incurred and the net
operating income before and after debt service (principal and interest) and
major capital improvements for the period of calculation and containing
appropriate year-to-date information, within twenty (20) days after the end of
each calendar month, thirty (30) days after the end of each fiscal quarter or
sixty (60) days after the close of each fiscal year of Borrower, as applicable;

 

 

 

          (iii) (I) quarterly and annual balance sheets, profit and loss
statements, statements of cash flows, and statements of change in financial
position of Borrower in the form required by Lender (with the annual financial
statements prepared and audited by an Acceptable Accountant), within thirty (30)
days after the end of each fiscal quarter or ninety (90) days after the close of
each fiscal year of Borrower, as the case may be, and (II) annual balance sheets
and Net Worth Statements of each Borrower Principal in the form approved by
Lender, prepared by a CPA reasonably acceptable to Lender and certified by
Borrower Principal, within ninety (90) days after the close of each fiscal year
of each Borrower Principal; and

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          (iv) an Annual Budget not later than thirty (30) days prior to the
commencement of each fiscal year of Borrower in form reasonably satisfactory to
Lender; provided, that Lender shall have the right to approve each Annual Budget
(A) covering any period of time after the Optional Prepayment Date, (B) if a
Mezzanine Borrower incurs a Permitted Mezzanine Financing, or (C) if the
Sotheby’s Lease is no longer in full force and effect; and Lender’s approval, in
each case, shall not be unreasonably withheld, conditioned or delayed.

          (b) Upon request from Lender made during any period that the Sotheby’s
Lease is no longer in full force or effect, Borrower shall promptly furnish to
Lender:

 

 

 

          (i) a property management report for the Property, showing the number
of inquiries made and/or rental applications received from tenants or
prospective tenants and deposits received from tenants and any other information
requested by Lender, in reasonable detail and certified by Borrower under
penalty of perjury to be true and complete, but no more frequently than
quarterly;

 

 

 

          (ii) an accounting of all security deposits held in connection with
any Lease of any part of the Property, including the name and identification
number of the accounts in which such security deposits are held, the name and
address of the financial institutions in which such security deposits are held
and the name of the Person to contact at such financial institution, along with
any authority or release necessary for Lender to obtain information regarding
such accounts directly from such financial institutions; and

 

 

 

          (iii) a report of all letters of credit provided by any Tenant in
connection with any Lease of any part of the Property, including the account
numbers of such letters of credit, the names and addresses of the financial
institutions that issued such letters of credit and the names of the Persons to
contact at such financial institutions, along with any authority or release
necessary for Lender to obtain information regarding such letters of credit
directly from such financial institutions.

          (c) Borrower shall comply with the following:

 

 

 

          (i) If requested by Lender, Borrower shall provide Lender, promptly
upon request, with the following financial statements if, at the time a
Disclosure Document is being prepared for a Securitization, it is expected that
the principal amount of the Loan when combined with the principal amount of any
Affiliated Loans at the time of Securitization may, or if the principal amount
of the Loan when combined with the principal amount of any Affiliated Loans at
any time during which the Loan and any Affiliated Loans are included in a
Securitization does, equal or exceed 20% of the aggregate principal amount of
all mortgage loans included or expected to be included, as applicable, in the
Securitization:

 

 

 

 

 

          (A) A balance sheet with respect to the Property for the two most
recent fiscal years, meeting the requirements of Section 210.3-01 of Regulation
S-X of the Securities Act and statements of income and statements of cash flows
with respect to the Property for the three most recent fiscal years, meeting the

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requirements of Section 210.3-02 of Regulation S-X, and, to the extent that such
balance sheet is more than 135 days old as of the date of the document in which
such financial statements are included, interim financial statements of the
Property meeting the requirements of Section 210.3-01 and 210.3-02 of Regulation
S-X (all of such financial statements, collectively, the “Standard Statements”);
provided, however, that with respect to a Property (other than properties that
are hotels, nursing homes, or other properties that would be deemed to
constitute a business and not real estate under Regulation S-X or other legal
requirements) that has been acquired by Borrower from an unaffiliated third
party (such Property, “Acquired Property”), as to which the other conditions set
forth in Section 210.3-14 of Regulation S-X for provision of financial
statements in accordance with such Section have been met, in lieu of the
Standard Statements otherwise required by this section, Borrower shall instead
provide the financial statements required by such Section 210.3-14 of Regulation
S-X (“Acquired Property Statements”).

 

 

 

 

 

          (B) Not later than 30 days after the end of each fiscal quarter
following the date hereof, a balance sheet of the Property as of the end of such
fiscal quarter, meeting the requirements of Section 210.3-01 of Regulation S-X,
and statements of income and statements of cash flows of the Property for the
period commencing following the last day of the most recent fiscal year and
ending on the date of such balance sheet and for the corresponding period of the
most recent fiscal year, meeting the requirements of Section 210.3-02 of
Regulation S-X (provided, that if for such corresponding period of the most
recent fiscal year Acquired Property Statements were permitted to be provided
hereunder pursuant to subsection (i) above, Borrower shall instead provide
Acquired Property Statements for such corresponding period).

 

 

 

 

 

          (C) Not later than 75 days after the end of each fiscal year following
the date hereof, a balance sheet of the Property as of the end of such fiscal
year, meeting the requirements of Section 210.3-01 of Regulation S-X, and
statements of income and statements of cash flows of the Property for such
fiscal year, meeting the requirements of Section 210.3-02 of Regulation S-X.

 

 

 

 

 

          (D) Within ten Business Days after notice from Lender in connection
with the Securitization of this Loan, such additional financial statements, such
that, as of the date (each an “Offering Document Date”) of each Disclosure
Document, Borrower shall have provided Lender with all financial statements as
described in subsection (f)(i) above; provided that the fiscal year and interim
periods for which such financial statements shall be provided shall be
determined as of such Offering Document Date.

 

 

 

 

          (ii) If requested by Lender, Borrower shall provide Lender, promptly
upon request, with summaries of the financial statements referred to in Section
5.11(c) hereof if, at the time a Disclosure Document is being prepared for a
Securitization, it is expected that the principal amount of the Loan and any
Affiliated Loans at the time of Securitization may, or if the principal amount
of the Loan and any Affiliated Loans at any

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time during which the Loan and any Affiliated Loans are included in a
Securitization does, equal or exceed 10% (but is less than 20%) of the aggregate
principal amount of all mortgage loans included or expected to be included, as
applicable, in a Securitization, Such summaries shall meet the requirements for
“summarized financial information,” as defined in Section 210.1-02(bb) of
Regulation S-X, or such other requirements as may be determined to be necessary
or appropriate by Lender.

 

 

 

          (iii) All financial statements provided by Borrower hereunder pursuant
to Section 5.11(c)(i) and (ii) hereof shall be prepared in accordance with GAAP,
and shall meet the requirements of Regulation S-X and other applicable legal
requirements. All financial statements referred to in Section 5.11(c)(i)(A)and
(C) above shall be audited by Acceptable Accountants in accordance with
Regulation S-X and all other applicable legal requirements, shall be accompanied
by the manually executed report of the independent accountants thereon, which
report shall meet the requirements of Regulation S-X and all other applicable
legal requirements, and shall be further accompanied by a manually executed
written consent of the Acceptable Accountants, in form and substance reasonably
acceptable to Lender, to the inclusion of such financial statements in any
Disclosure Document and any Exchange Act Filing and to the use of the name of
such Acceptable Accountants and the reference to such Acceptable Accountants as
“experts” in any Disclosure Document and Exchange Act Filing (as defined below),
all of which shall be provided at the same time as the related financial
statements are required to be provided. All financial statements (audited or
unaudited) provided by Borrower under this Section 5.11 shall be certified by
the chief financial officer or administrative member of Borrower, which
certification shall state that such financial statements meet the requirements
set forth in the first sentence of this Section 5.1l(c)(iii).

 

 

 

          (iv) If requested by Lender, Borrower shall provide Lender, promptly
upon request, with any other or additional financial statements, or financial,
statistical or operating information, as Lender shall determine to be required
pursuant to Regulation S-X or any amendment, modification or replacement thereto
or other legal requirements in connection with any Disclosure Document or any
filing under or pursuant to the Exchange Act in connection with or relating to a
Securitization (hereinafter an “Exchange Act Filing”) or as shall otherwise be
reasonably requested by Lender.

 

 

 

          (v) In the event Lender determines, in connection with a
Securitization, that the financial statements required in order to comply with
Regulation S-X or other legal requirements are other than as provided herein,
then notwithstanding the provisions of Section 5.11(c) hereof, Lender may
request, and Borrower shall promptly provide, such combination of Acquired
Property Statement and/or Standard Statements or such other financial statements
as Lender determines to be necessary or appropriate for such compliance.

 

 

 

          (vi) Any reports, statements or other information required to be
delivered under this Agreement shall be delivered in paper form and in the event
that Lender requires financial statements in connection with subsection (c)
above because the Loan when combined with the principal amount of any Affiliated
Loans equal or exceed 20% of the aggregate principal amount of all mortgage
loans included in a Securitization

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(defined below), Borrower shall deliver such reports, statements and other
information (A) on a diskette, and (B) if requested by Lender and within the
capabilities of Borrower’s data systems without change or modification thereto,
in electronic form and prepared using Microsoft Word for Windows or WordPerfect
for Windows files (which files may be prepared using a spreadsheet program and
saved as word processing files).

          (d) Borrower shall furnish Lender with such other additional financial
or management information (including state and federal tax returns) as may, from
time to time, be reasonably required by Lender in form and substance reasonably
satisfactory to Lender (including, without limitation, any financial reports
required to be delivered by any Tenant or any guarantor of any Lease pursuant to
the terms of such Lease), and shall furnish to Lender and its agents convenient
facilities for the examination and audit of any such books and records.

          (e) All items requiring the certification of Borrower shall, except
where Borrower is an individual, require a certificate executed by the general
partner, managing member or chief executive officer of Borrower, as applicable
(and the same rules shall apply to any sole shareholder, general partner or
managing member which is not an individual).

          Section 5.12. Estoppel Statement

          (a)     (i) After request by Lender, Borrower shall within ten (10)
Business Days furnish Lender with a statement, duly acknowledged and certified,
setting forth (1) the amount of the original principal amount of the Note, (2)
the current rate of interest on the Note, (3) the unpaid principal amount of the
Note, (4) the date installments of interest and/or principal were last paid, (5)
any offsets or defenses to the payment of the Debt, if any, and (6) that the
Note, this Agreement, the Mortgage and the other Loan Documents are valid, legal
and binding obligations and have not been modified or if modified, giving
particulars of such modification; provided, that, except in connection with a
Securitization or a Default or an Event of Default, such request shall be made
no more frequently than once per calendar year.

                    (ii) Upon request by Borrower made no more frequently than
once per calendar year, Lender, within twenty (20) Business Days of such
request, shall provide Borrower with an informational statement setting forth:
(1) the unpaid principal amount of the Note, (2) the current interest rate of
the Note, and (3) the maturity date of the Note, and the date installments of
interest and/or principal were last paid; provided, that, such statement shall
(I) be made only to Lender’s actual knowledge and shall be for informational
purposes only, (II) not be binding on Lender or have the effect of an estoppel
and (III) not waive, amend or otherwise modify Borrower’s obligations contained
herein and in the other Loan Documents.

          (b)     (i) So long as the Sotheby’s Lease is in full force and
effect, Borrower shall use commercially reasonable efforts (which such efforts
(in and of themselves) shall not require Borrower to default any Tenant under
its Lease or any guarantor under any related guaranty) to deliver to Lender,
promptly upon request, duly executed estoppel certificates from any one or more
Tenants (including, without limitation, Sotheby’s) or related guarantors
(including, without limitation, the Sotheby’s Guarantor) as required by Lender
attesting to such facts regarding the related Lease or guaranty (as applicable)
as Lender may require and as to which such Tenant or

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guarantor (as applicable) shall be required to attest under its Lease or related
guaranty (as applicable).

                    (ii) During any period that the Sotheby’s Lease is no longer
in full force or effect, Borrower shall use its best efforts to deliver to
Lender, promptly upon request, duly executed estoppel certificates from any one
or more Tenants as required by Lender attesting to such facts regarding the
related Lease as Lender may require, including, but not limited to attestations
that each Lease covered thereby is in full force and effect with no defaults
thereunder on the part of any party, that none of the Rents have been paid more
than one month in advance, except as security, and that the Tenant claims no
defense or offset against the full and timely performance of its obligations
under the Lease.

          Section 5.13. Leasing Matters.

          (a) To the extent that the Sotheby’s Lease is in full force and
effect, the following provisions shall apply:

 

 

 

 

          (i)       (A) Notwithstanding anything contained herein to the
contrary, Borrower shall not, without the prior written consent of Lender (which
such consent (a) prior to the Optional Prepayment Date, shall not be
unreasonably withheld, conditioned or delayed, or (b) from and after the
Optional Prepayment Date, may be granted or withheld in Lender’s sole and
absolute discretion), grant any approval under (or permit any approval to be
deemed granted under), enter into, enter into any agreement with respect to
(including, without limitation, any non-disturbance agreement), renew, extend,
amend, modify, permit any assignment of, waive any provisions of, terminate,
exercise any recapture or enforcement rights with respect to (including, without
limitation, any exercise of rights after a Tenant default), reduce Rents under,
accept a surrender of space under, or shorten the term of, the Sotheby’s Lease
or any Major Sotheby’s Sublease.

 

 

 

 

 

          (B) Notwithstanding anything to the contrary contained herein,
Borrower may consent to Sotheby’s entering into a proposed sublease of the
Sotheby’s Lease (other than a Major Sotheby’s Sublease) (such sublease, a
“Sotheby’s Sublease”) and any renewal or extension of an existing sublease
(other than a Major Sotheby’s Sublease) of the Sotheby’s Lease (such sublease, a
“Renewal Sublease”) without the prior written consent of Lender, provided that
Borrower has determined, in its reasonable discretion, that the conditions set
forth in sub-clauses (A) through (F) of Section 17(j) of the Sotheby’s Lease
have been satisfied in all material respects, provided, further, that from and
after the Optional Prepayment Date, Borrower shall not consent to any Sotheby’s
Sublease or Renewal Sublease without the prior written consent of Lender, which
consent may be granted or withheld in Lender’s sole discretion.

 

 

 

 

          (ii) Borrower (1) shall observe and perform all the obligations
imposed upon the landlord under the Leases and shall not do or permit to be done
anything to impair the value of any of the Leases as security for the Debt; (2)
shall promptly send copies to Lender of all notices of default or requests for
landlord consent which Borrower shall send or receive thereunder; (3) shall
enforce all of the material terms, covenants and

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conditions contained in the Leases upon the part of the tenant thereunder to be
observed or performed; (4) shall not collect any of the Rents more than one (1)
month in advance (except security deposits shall not be deemed Rents collected
in advance); (5) shall not execute any other assignment of the landlord’s
interest in any of the Leases or the Rents; and (6) shall not consent to any
assignment of or subletting under any Leases without the prior written consent
of Lender.

 

 

 

 

 

          (iii) Notwithstanding anything to the contrary contained herein:

 

 

 

 

 

 

          (A) Borrower shall not permit Sotheby’s or Sotheby’s Guarantor to be
released from liability under the Sotheby’s Lease in connection with an
assignment of the Sotheby’s Lease pursuant to Section 17(n)(2) and 17(n)(3) of
the Sotheby’s Lease unless (1) Lender shall have received evidence that all of
the conditions thereto set forth in Section 17(n)(2) and 17(n)(3), as
applicable, of the Sotheby’s Lease have been satisfied; (2) Lender shall have
received confirmation from a majority of the Rating Agencies rating the
Securities that such assignment will not result in a downgrade, withdrawal or
qualification of the then current ratings issued in connection with a
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization; provided, that (I) Lender shall,
at Borrower’s cost and expense (which such cost and expense shall only include
the reasonable, out-of-pocket, third party costs and expenses incurred by
Lender), seek such confirmation from each of the Rating Agencies rating (or that
are anticipated to rate) the Securities and shall communicate to Borrower the
response of each of such Rating Agencies to the same within ninety (90) days of
Lender’s receipt of written notice from Borrower (which such notice shall be
accompanied by the information listed in the immediately following clause (3)
and shall be marked in bold lettering with the following language: “LENDER’S
RESPONSE IS REQUIRED WITHIN NINETY (90) DAYS OF RECEIPT OF THIS NOTICE PURSUANT
TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and the
envelope containing the request must be marked “PRIORITY”) and (II) if Lender
shall fail to so communicate such response within the aforesaid time period in
accordance with clause (I) above, clause (2) hereof shall be deemed to be
satisfied by Borrower; (3) Borrower shall have provided (or caused to be
provided) to Lender copies of all documentation and other information required
to be provided to Borrower and Lender (as Fee Mortgagee) pursuant to Section
17(n)(2)(vii) and (viii) of the Sotheby’s Lease; and (4) Lender, as Fee
Mortgagee, shall have reasonably determined that any proposed assignee and/or
substitute guarantor is a reputable person of good character and business
dealings pursuant to Section 17(n)(2)(v) of the Sotheby’s Lease; and

 

 

 

 

 

 

          (B) Borrower shall not, except as provided in Section 5.13(a)(iii)(A)
above, release, waive, amend, modify, terminate or otherwise alter the Sotheby’s
Guaranty in any manner (1) without obtaining Lender’s prior written consent,
which such consent shall not be unreasonably withheld, conditioned or delayed,
and (2) unless Lender shall have received written confirmation from the Rating

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Agencies rating the Securities that the same will not result in a downgrade,
withdrawal or qualification of the initial, or if higher, then current ratings
issued in connection with a Securitization, or if a Securitization has not
occurred, any ratings to be assigned in connection with a Securitization.

          (b) To the extent that the Sotheby’s Lease is no longer in full force
and effect, the following provisions shall apply:

 

 

 

          (i) Borrower may enter into a proposed Lease (including the renewal or
extension of an existing Lease (a “Renewal Lease”)) without the prior written
consent of Lender, provided such proposed Lease or Renewal Lease (1) provides
for rental rates and terms comparable to existing local market rates and terms
(taking into account the type and quality of the tenant) as of the date such
Lease is executed by Borrower (unless, in the case of a Renewal Lease, the rent
payable during such renewal, or a formula or other method to compute such rent,
is provided for in the original Lease), (2) is an arm’s-length transaction with
a bona fide, independent third party tenant, (3) does not have a materially
adverse effect on the value of the Property taken as a whole, (4) is subject and
subordinate to the Mortgage and the Tenant thereunder agrees to attorn to
Lender, (5) does not contain any option, offer, right of first refusal, or other
similar right to acquire all or any portion of the Property, (6) has a base term
of less than fifteen (15) years including options to renew, (7) has no rent
credits, free rents or concessions granted thereunder (other than those granted
in accordance with then current market standards for Leases similar to the
proposed Lease leasing space in properties similar to the Property), and (8) is
written on the standard form of lease approved by Lender, as such form may be
modified to incorporate (I) economic terms consistent with this Section, and
(II) such other reasonable and customary changes to said form which are
consistent with the provisions of this Section and would not, in Borrower’s
reasonable judgement, have a material adverse effect on the value or quality of
the Property or Borrower’s ability to repay the Loan. All proposed Leases which
do not satisfy the requirements set forth in this subsection shall be subject to
the prior approval of Lender and its counsel, at Borrower’s expense, which such
approval shall not be unreasonably withheld, conditioned or delayed. Borrower
shall promptly deliver to Lender copies of all Leases which are entered into
pursuant to this subsection together with Borrower’s certification that it has
satisfied all of the conditions of this Section. Notwithstanding anything herein
to the contrary, from and after the Optional Prepayment Date, Borrower shall not
enter into any proposed Lease or Renewal Lease without obtaining Lender’s prior
written consent, which consent may be granted or withheld in Lender’s sole and
absolute discretion.

 

 

 

          (ii) Borrower (1) shall observe and perform all the obligations
imposed upon the landlord under the Leases and shall not do or permit to be done
anything to impair the value of any of the Leases as security for the Debt; (2)
shall promptly send copies to Lender of all notices of default which Borrower
shall send or receive thereunder; (3) shall enforce all of the material terms,
covenants and conditions contained in the Leases upon the part of the tenant
thereunder to be observed or performed; (4) shall not collect any of the Rents
more than one (1) month in advance (except security deposits shall not be deemed
Rents collected in advance); (5) shall not execute any other assignment of the

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landlord’s interest in any of the Leases or the Rents; and (6) shall not consent
to any assignment of or subletting under any Leases not in accordance with their
terms, without the prior written consent of Lender.

 

 

 

          (iii) Borrower may, without the prior written consent of Lender,
amend, modify or waive the provisions of any Lease or terminate, reduce Rents
under, accept a surrender of space under, or shorten the term of, any Lease
(including any guaranty, letter of credit or other credit support with respect
thereto) provided that such action (taking into account, in the case of a
termination, reduction in rent, surrender of space or shortening of term, the
planned alternative use of the affected space) does not have a materially
adverse effect on the value of the Property taken as a whole, and provided that
such Lease, as amended, modified or waived, is otherwise in compliance with the
requirements of this Agreement and any subordination agreement binding upon
Lender with respect to such Lease. A termination of a Lease with a tenant who is
in default beyond applicable notice and grace periods shall not be considered an
action which has a materially adverse effect on the value of the Property taken
as a whole. Any amendment, modification, waiver, termination, rent reduction,
space surrender or term shortening which does not satisfy the requirements set
forth in this subsection shall be subject to the prior approval of Lender and
its counsel, at Borrower’s expense, which such approval shall not be
unreasonably withheld, conditioned or delayed. Borrower shall promptly deliver
to Lender copies of amendments, modifications and waivers which are entered into
pursuant to this subsection together with Borrower’s certification that it has
satisfied all of the conditions of this subsection. Notwithstanding anything
herein to the contrary, from and after the Optional Prepayment Date, Borrower
shall not amend, modify or waive the provisions of any Lease or terminate,
reduce Rents under, accept a surrender of space under, or shorten the term of,
any Lease without the prior written consent of Lender, which consent may be
granted or withheld in Lender’s sole and absolute discretion.

 

 

 

          (iv) Notwithstanding anything contained herein to the contrary,
Borrower shall not, without the prior written consent of Lender (which such
consent (a) prior to the Optional Prepayment Date, shall not be unreasonably
withheld, conditioned or delayed, or (b) from and after the Optional Prepayment
Date, may be granted or withheld in Lender’s sole and absolute discretion),
enter into, renew, extend, amend, modify, waive any provisions of, terminate,
reduce Rents under, accept a surrender of space under, or shorten the term of,
any Major Lease.

          (c) Notwithstanding anything to the contrary contained herein, to the
extent Lender’s prior approval is required for any leasing matters set forth in
this Section 5.13, Lender shall have twenty (20) days from receipt of written
request and all required information and documentation relating thereto in which
to approve or disapprove such matter, provided that such request to Lender is
marked in bold lettering with the following language: “LENDER’S RESPONSE IS
REQUIRED WITHIN TWENTY (20) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS
OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and the envelope
containing the request must be marked “PRIORITY”. In the event that Lender fails
to approve or disapprove the leasing matter in question within such time (which
such disapproval (if applicable) shall set forth the reasons for the same),
Lender’s approval shall

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be deemed given for all purposes. Borrower shall provide Lender with such
information and documentation as may be reasonably required by Lender,
including, without limitation, lease comparables and other market information as
reasonably required by Lender.

          Section 5.14. Property Management

          (a) Borrower shall (i) promptly perform and observe all of the
covenants required to be performed and observed by it under the Management
Agreement and do all things necessary to preserve and to keep unimpaired its
material rights thereunder; (ii) promptly notify Lender of any default under the
Management Agreement of which it is aware; (iii) promptly deliver to Lender a
copy of any notice of default or other material notice received by Borrower
under the Management Agreement; (iv) promptly give notice to Lender of any
notice or information that Borrower receives which indicates that Manager is
terminating the Management Agreement or that Manager is otherwise discontinuing
its management of the Property; and (v) promptly enforce the performance and
observance of all of the covenants required to be performed and observed by
Manager under the Management Agreement.

          (b) If at any time, (i) Manager shall become insolvent or a debtor in
a bankruptcy proceeding; (ii) an Event of Default has occurred and is continuing
and Lender has accelerated the Loan; (iii) a material default has occurred and
is continuing beyond applicable notice and cure periods (if any) under the
Management Agreement, or (iv) the Optional Prepayment Date shall occur; Borrower
shall, at the request of Lender, terminate the Management Agreement upon thirty
(30) days prior notice to Manager and replace Manager with a Qualified Manager
approved by Lender on terms and conditions satisfactory to Lender, it being
understood and agreed that the management fee for such replacement manager shall
not exceed then prevailing market rates.

          (c) Intentionally Omitted.

          (d) Borrower shall not, without the prior written consent of Lender
(which consent shall not be unreasonably withheld, conditioned or delayed): (i)
surrender, terminate or cancel the Management Agreement or otherwise replace
Manager or enter into any other management agreement with respect to the
Property; (ii) reduce or consent to the reduction of the term of the Management
Agreement; (iii) increase or consent to the increase of the amount of any
charges under the Management Agreement; or (iv) otherwise materially modify,
change, supplement, alter or amend, or waive or release any of its rights and
remedies under, the Management Agreement in any material respect. In the event
that Borrower replaces Manager at any time during the term of Loan pursuant to
this subsection, such Manager shall be a Qualified Manager.

          Section 5.15. Liens

          Borrower shall not, without the prior written consent of Lender,
create, incur, assume or suffer to exist any Lien on any portion of the Property
or permit any such action to be taken, except Permitted Encumbrances.

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          Section 5.16. Debt Cancellation

          Borrower shall not cancel or otherwise forgive or release any claim or
debt (other than termination of Leases in accordance herewith) owed to Borrower
by any Person, except for adequate consideration and in the ordinary course of
Borrower’s business.

          Section 5.17. Zoning

          Borrower shall not initiate or consent to any zoning reclassification
of any portion of the Property or seek any variance under any existing zoning
ordinance or use or permit the use of any portion of the Property in any manner
that could result in such use becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation, without the
prior written consent of Lender.

          Section 5.18. ERISA

          (a) Borrower shall not engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender
of any of its rights under the Note, this Agreement or the other Loan Documents)
to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA.

          (b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as reasonably requested by Lender, that (i) Borrower is not and does not
maintain an “employee benefit plan” as defined in Section 3(3) of ERISA, which
is subject to Title I of ERISA, or a “governmental plan” within the meaning of
Section 3(3) of ERISA; (ii) Borrower is not subject to state statutes regulating
investments and fiduciary obligations with respect to governmental plans; and
(iii) one or more of the following circumstances is true:

 

 

 

 

 

          (A) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. §2510.3-101(b)(2);

 

 

 

 

 

          (B) Less than twenty-five percent (25%) of each outstanding class of
equity interests in Borrower are held by “benefit plan investors” within the
meaning of 29 C.F.R. §2510.3-101(f)(2); or

 

 

 

 

 

          (C) Borrower qualifies as an “operating company” or a “real estate
operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).

          Section 5.19. No Joint Assessment

          Borrower shall not suffer, permit or initiate the joint assessment of
the Property with (a) any other real property constituting a tax lot separate
from the Property, or (b) any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby the Lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Property.

          Section 5.20. Intentionally Omitted

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          Section 5.21. Alterations

          Subject to Section 20.12 hereof (to the extent applicable), Lender’s
prior approval shall be required in connection with any alterations to any
Improvements (a) that may have a material adverse effect on the Property, (b)
that are structural in nature, (c) that require Borrower’s prior consent under
the Sotheby’s Lease, (d) that, together with any other alterations undertaken at
the same time (including any related alterations, improvements or replacements),
are reasonably anticipated to have a cost in excess of the Alteration Threshold,
or (e) that are made from and after the Optional Prepayment Date. If the total
unpaid amounts incurred and to be incurred with respect to such alterations to
the Improvements shall at any time exceed the Alteration Threshold, Borrower
shall promptly deliver (or cause to be delivered) to Lender as security for the
payment of such amounts and as additional security for Borrower’s obligations
under the Loan Documents any of the following: (i) cash, (ii) direct
non-callable obligations of the United States of America or other obligations
which are “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940, to the extent acceptable to the applicable
Rating Agencies, (iii) other securities acceptable to Lender and the Rating
Agencies, or (iv) a completion bond, provided that such completion bond is
acceptable to the Lender and the Rating Agencies. Such security shall be in an
amount equal to the excess of the total unpaid amounts incurred and to be
incurred with respect to such alterations to the Improvements over the
Alteration Threshold.

          Section 5.22. Intentionally Omitted

ARTICLE 6
ENTITY COVENANTS

          Section 6.1. Single Purpose Entity/Separateness

          Until the Debt has been paid in full, Borrower represents, warrants
and covenants as follows:

          (a) Borrower has not and will not:

 

 

 

          (i) engage in any business or activity other than the ownership,
operation and maintenance of the Property, and activities incidental thereto;

 

 

 

          (ii) acquire or own any assets other than (A) the Property, and (B)
such incidental Personal Property as may be necessary for the operation of the
Property;

 

 

 

          (iii) merge into or consolidate with any Person, or dissolve,
terminate, liquidate in whole or in part, transfer or otherwise dispose of all
or substantially all of its assets or change its legal structure;

 

 

 

          (iv) fail to observe all organizational formalities, or fail to
preserve its existence as an entity duly organized, validly existing and in good
standing (if applicable) under the applicable Legal Requirements of the
jurisdiction of its organization or formation, or amend, modify, terminate or
fail to comply with the provisions of its organizational documents;

 

 

 

          (v) own any subsidiary, or make any investment in, any Person;

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          (vi) commingle its assets with the assets of any other Person;

 

 

 

          (vii) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than (A) the Debt, (B) trade and
operational indebtedness incurred in the ordinary course of business with trade
creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a
note, (3) on commercially reasonable terms and conditions, and (4) due not more
than sixty (60) days past the date incurred and paid on or prior to such date
(subject to Borrower’s right to contest the same in accordance with Section
3.5(b) of the Mortgage), and/or (C) financing leases and purchase money
indebtedness incurred in the ordinary course of business relating to Personal
Property on commercially reasonable terms and conditions; provided however, the
aggregate amount of the indebtedness described in (B) and (C) shall not exceed
at any time three percent (3%) of the outstanding principal amount of the Note;

 

 

 

          (viii) fail to maintain its records, books of account, bank accounts,
financial statements, accounting records and other entity documents separate and
apart from those of any other Person; except that Borrower’s financial position,
assets, liabilities, net worth and operating results may be included in the
consolidated financial statements of an Affiliate, provided that such
consolidated financial statements contain a footnote indicating that Borrower is
a separate legal entity and that it maintains separate books and records;

 

 

 

          (ix) enter into any contract or agreement with any general partner,
member, shareholder, principal, guarantor of the obligations of Borrower, or any
Affiliate of the foregoing, except upon terms and conditions that are
intrinsically fair, commercially reasonable and substantially similar to those
that would be available on an arm’s-length basis with unaffiliated third
parties;

 

 

 

          (x) maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person;

 

 

 

          (xi) assume or guaranty the debts of any other Person, hold itself out
to be responsible for the debts of any other Person, or otherwise pledge its
assets for the benefit of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person;

 

 

 

          (xii) make any loans or advances to any Person;

 

 

 

          (xiii) fail to file its own tax returns or files a consolidated
federal income tax return with any Person (unless prohibited or required, as the
case may be, by applicable Legal Requirements);

 

 

 

          (xiv) fail either to hold itself out to the public as a legal entity
separate and distinct from any other Person or to conduct its business solely in
its own name or fail to correct any known misunderstanding regarding its
separate identity;

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          (xv) fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations;

 

 

 

          (xvi) if it is a partnership or limited liability company, without the
unanimous written consent of all of its partners or members, as applicable, and
the written consent of 100% of the directors of each SPE Component Entity (if
any), including, without limitation, each Independent Director, (a) file or
consent to the filing of any petition, either voluntary or involuntary, to take
advantage of any Creditors Rights Laws, (b) seek or consent to the appointment
of a receiver, liquidator or any similar official, (c) take any action that
might cause such entity to become insolvent, or (d) make an assignment for the
benefit of creditors;

 

 

 

          (xvii) fail to allocate shared expenses (including, without
limitation, shared office space and services performed by an employee of an
Affiliate) among the Persons sharing such expenses and to use separate
stationery, invoices and checks;

 

 

 

          (xviii) fail to remain solvent or pay its own liabilities (including,
without limitation, salaries of its own employees) only from its own funds;
provided, however, that any such failure to remain solvent will not constitute a
breach of this covenant if cash flow from the Property is insufficient for
Borrower to remain solvent;

 

 

 

          (xix) acquire obligations or securities of its partners, members,
shareholders or other affiliates, as applicable;

 

 

 

          (xx) violate or cause to be violated the assumptions made with respect
to Borrower and its principals in any opinion letter pertaining to substantive
consolidation delivered to Lender in connection with the Loan; or

 

 

 

          (xxi) fail to maintain a sufficient number of employees in light of
its contemplated business operations.

          (b) If Borrower is a partnership or limited liability company, each
general partner in the case of a general partnership, each general partner in
the case of a limited partnership (or, if Borrower is a Delaware limited
partnership, at least one general partner in the case of a limited partnership),
or the managing member in the case of a limited liability company (each an “SPE
Component Entity”) of Borrower, as applicable, shall be a corporation or a
Delaware limited liability company (meeting the criteria set forth in Section
6.1(c) below) whose sole asset is its interest in Borrower. Each SPE Component
Entity (i) will at all times comply with each of the covenants, terms and
provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxi), as if
such representation, warranty or covenant was made directly by such SPE
Component Entity; (ii) will not engage in any business or activity other than
owning an interest in Borrower; (iii) will at all times own at least a 0.5%
general partnership or managing membership interest in Borrower and will not
acquire or own any assets other than its partnership, membership, or other
equity interest in Borrower; (iv) will not incur any debt, secured or unsecured,
direct or contingent (including guaranteeing any obligation); and (v) will cause
Borrower to comply with the provisions of this Section 6.1 and Section 6.4.
Prior to the withdrawal or the disassociation of any SPE

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Component Entity from Borrower, Borrower shall immediately appoint a new general
partner or managing member whose articles of incorporation are substantially
similar to those of such SPE Component Entity and, if an opinion letter
pertaining to substantive consolidation was required at closing, deliver a new
opinion letter acceptable to Lender and the Rating Agencies with respect to the
new SPE Component Entity and its equity owners. Notwithstanding the foregoing,
to the extent Borrower is a single member Delaware limited liability company
satisfying the covenants related thereto contained herein, so long as Borrower
maintains such formation status, no SPE Component Entity shall be required.

          (c) In the event Borrower or any SPE Component Entity is a single
member Delaware limited liability company, the limited liability company
agreement of Borrower or such SPE Component Entity (as applicable) (the “LLC
Agreement”) shall provide that (i) upon the occurrence of any event that causes
the sole member of Borrower or such SPE Component Entity (as applicable)
(“Member”) to cease to be the member of Borrower or such SPE Component Entity
(as applicable) (other than (A) upon an assignment by Member of all of its
limited liability company interest in Borrower or such SPE Component Entity (as
applicable) and the admission of the transferee in accordance with the Loan
Documents and the LLC Agreement, or (B) the resignation of Member and the
admission of an additional member of Borrower or such SPE Component Entity (as
applicable) in accordance with the terms of the Loan Documents and the LLC
Agreement), any person acting as Independent Director of Borrower or such SPE
Component Entity (as applicable) shall, without any action of any other Person
and simultaneously with the Member ceasing to be the member of Borrower or such
SPE Component Entity (as applicable), automatically be admitted to Borrower or
such SPE Component Entity (as applicable) (“Special Member”) and shall continue
Borrower or such SPE Component Entity (as applicable) without dissolution and
(ii) Special Member may not resign from Borrower or such SPE Component Entity
(as applicable) or transfer its rights as Special Member unless (A) a successor
Special Member has been admitted to Borrower or such SPE Component Entity (as
applicable) as Special Member in accordance with requirements of Delaware law
and (B) such successor Special Member has also accepted its appointment as an
Independent Director. The LLC Agreement shall further provide that (i) Special
Member shall automatically cease to be a member of Borrower or such SPE
Component Entity (as applicable) upon the admission to Borrower or such SPE
Component Entity (as applicable) of a substitute Member, (ii) Special Member
shall be a member of Borrower or such SPE Component Entity (as applicable) that
has no interest in the profits, losses and capital of Borrower or such SPE
Component Entity (as applicable) and has no right to receive any distributions
of Borrower’s or such SPE Component Entity’s (as applicable) assets, (iii)
pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the
“Act”), Special Member shall not be required to make any capital contributions
to Borrower or such SPE Component Entity (as applicable) and shall not receive a
limited liability company interest in Borrower or such SPE Component Entity (as
applicable), (iv) Special Member, in its capacity as Special Member, may not
bind Borrower or such SPE Component Entity (as applicable) and (v) except as
required by any mandatory provision of the Act, Special Member, in its capacity
as Special Member, shall have no right to vote on, approve or otherwise consent
to any action by, or matter relating to, Borrower or such SPE Component Entity
(as applicable), including, without limitation, the merger, consolidation or
conversion of Borrower or such SPE Component Entity (as applicable); provided,
however, such prohibition shall not limit the obligations of Special Member, its
capacity as Independent Director, to vote on such matters required by the Loan
Documents or the LLC Agreement. In order to implement

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the admission to Borrower or such SPE Component Entity (as applicable) of
Special Member, Special Member shall execute a counterpart to the LLC Agreement.
Prior to its admission to Borrower or such SPE Component Entity (as applicable)
as Special Member, Special Member shall not be a member of Borrower or such SPE
Component Entity (as applicable).

          Upon the occurrence of any event that causes the Member to cease to be
a member of Borrower or such SPE Component Entity (as applicable), to the
fullest extent permitted by law, the personal representative of Member shall,
within ninety (90) days after the occurrence of the event that terminated the
continued membership of Member in Borrower or such SPE Component Entity (as
applicable), agree in writing (i) to continue Borrower or such SPE Component
Entity (as applicable) and (ii) to the admission of the personal representative
or its nominee or designee, as the case may be, as a substitute member of
Borrower or such SPE Component Entity (as applicable), effective as of the
occurrence of the event that terminated the continued membership of Member of
Borrower or such SPE Component Entity (as applicable) in Borrower or such SPE
Component Entity (as applicable). Any action initiated by or brought against
Member or Special Member under any Creditors Rights Laws shall not cause Member
or Special Member to cease to be a member of Borrower or such SPE Component
Entity (as applicable) and upon the occurrence of such an event, the business of
Borrower or such SPE Component Entity (as applicable) shall continue without
dissolution. The LLC Agreement shall provide that each of Member and Special
Member waives any right it might have to agree in writing to dissolve Borrower
or such SPE Component Entity (as applicable) upon the occurrence of any action
initiated by or brought against Member or Special Member under any Creditors
Rights Laws, or the occurrence of an event that causes Member or Special Member
to cease to be a member of Borrower or such SPE Component Entity (as
applicable).

          Section 6.2. Change of Name, Identity or Structure

          Borrower shall not change or permit to be changed (a) Borrower’s name,
(b) Borrower’s identity (including its trade name or names), (c) Borrower’s
principal place of business set forth on the first page of this Agreement, (d)
the corporate, partnership or other organizational structure of Borrower or each
SPE Component Entity, (e) Borrower’s state of organization, or (f) Borrower’s
organizational identification number, without in each case notifying Lender of
such change in writing at least thirty (30) days prior to the effective date of
such change and, in the case of a change in Borrower’s structure, without first
obtaining the prior written consent of Lender. In addition, Borrower shall not
change or permit to be changed any organizational documents of Borrower or any
SPE Component Entity (if any) if such change would adversely impact the
covenants set forth in Section 6.1 and Section 6.4 hereof. Borrower authorizes
Lender to file any financing statement or financing statement amendment required
by Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein. At the request of Lender, Borrower shall
execute a certificate in form satisfactory to Lender listing the trade names
under which Borrower intends to operate the Property, and representing and
warranting that Borrower does business under no other trade name with respect to
the Property. If Borrower does not now have an organizational identification
number and later obtains one, or if the organizational identification number
assigned to Borrower subsequently changes, Borrower shall promptly notify Lender
of such organizational identification number or change.

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          Section 6.3. Business and Operations

          Borrower will qualify to do business and will remain in good standing
under the laws of the State as and to the extent the same are required for the
ownership, maintenance, management and operation of the Property.

          Section 6.4. Independent Director

          (a) The organizational documents of each SPE Component Entity (if any)
shall provide that at all times there shall be, and Borrower shall cause there
to be, at least two duly appointed members of the board of directors (each an
“Independent Director”) of such SPE Component Entity reasonably satisfactory to
Lender each of whom are not at the time of such individual’s initial
appointment, and shall not have been at any time during the preceding five (5)
years, and shall not be at any time while serving as a director of such SPE
Component Entity, either (i) a shareholder (or other equity owner) of, or an
officer, director, partner, manager, member (other than as a Special Member in
the case of single member Delaware limited liability companies), employee,
attorney or counsel of, Borrower, such SPE Component Entity or any of their
respective shareholders, partners, members, subsidiaries or affiliates; (ii) a
customer or creditor of, or supplier to, Borrower or any of its respective
shareholders, partners, members, subsidiaries or affiliates who derives any of
its purchases or revenue from its activities with Borrower or such SPE Component
Entity or any Affiliate of any of them; (iii) a Person who Controls or is under
common Control with any such shareholder, officer, director, partner, manager,
member, employee, supplier, creditor or customer; or (iv) a member of the
immediate family of any such shareholder, officer, director, partner, manager,
member, employee, supplier, creditor or customer.

          (b) The organizational documents of each SPE Component Entity (if any)
shall provide that the board of directors of such SPE Component Entity shall not
take any action which, under the terms of any certificate of incorporation,
by-laws or any voting trust agreement with respect to any common stock, requires
an unanimous vote of the board of directors of such SPE Component Entity of
Borrower unless at the time of such action there shall be at least two members
of the board of directors who are Independent Directors. Such SPE Component
Entity will not, without the unanimous written consent of its board of directors
including each Independent Director, on behalf of itself or Borrower, (i) file
or consent to the filing of any petition, either voluntary or involuntary, to
take advantage of any applicable Creditors Rights Laws; (ii) seek or consent to
the appointment of a receiver, liquidator or any similar official; (iii) take
any action that might cause such entity to become insolvent; or (iv) make an
assignment for the benefit of creditors.

ARTICLE 7
NO SALE OR ENCUMBRANCE

          Section 7.1. Transfer Definitions

          For purposes of this Article 7 an “Affiliated Manager” shall mean any
managing agent in which Borrower, Borrower Principal, any SPE Component Entity
(if any) or any affiliate of such entities has, directly or indirectly, any
legal, beneficial or economic interest; “Control”

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shall mean the power to direct the management and policies of a Restricted Party
(subject to any specified approval rights over major decisions relating to such
Restricted Party that may be vested in other constituent parties of such
Restricted Party), directly or indirectly, whether through the ownership of
voting securities or other beneficial interests, by contract or otherwise;
“Restricted Party” shall mean Borrower, Borrower Principal, any SPE Component
Entity (if any), any Affiliated Manager, or any shareholder, partner, member or
non-member manager, or any direct or indirect legal or beneficial owner of
Borrower, Borrower Principal, any SPE Component Entity (if any), any Affiliated
Manager or any non-member manager; and a “Sale or Pledge” shall mean a voluntary
or involuntary sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, grant of any options with respect to, or any other transfer or
disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) of a legal or beneficial interest.

          Section 7.2. No Sale/Encumbrance

          (a) Except as set forth in Section 7.3 hereof, Borrower shall not
cause or permit a Sale or Pledge of the Property or any part thereof or any
legal or beneficial interest therein nor permit a Sale or Pledge of an interest
in any Restricted Party (in each case, a “Prohibited Transfer”), other than
pursuant to Leases of space in the Improvements to Tenants in accordance with
the provisions of Section 5.13 (including, without limitation, the Sotheby’s
Lease), without the prior written consent of Lender.

          (b) A Prohibited Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower’s right, title and interest
in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation,
any merger, consolidation or Sale or Pledge of such corporation’s stock or the
creation or issuance of new stock in one or a series of transactions; (iv) if a
Restricted Party is a limited or general partnership or joint venture, any
merger or consolidation or the change, removal, resignation or addition of a
general partner or the Sale or Pledge of the partnership interest of any general
or limited partner or any profits or proceeds relating to such partnership
interests or the creation or issuance of new partnership interests; (v) if a
Restricted Party is a limited liability company, any merger or consolidation or
the change, removal, resignation or addition of a managing member or non-member
manager (or if no managing member, any member) or the Sale or Pledge of the
membership interest of any member or any profits or proceeds relating to such
membership interest; (vi) if a Restricted Party is a trust or nominee trust, any
merger, consolidation or the Sale or Pledge of the legal or beneficial interest
in a Restricted Party or the creation or issuance of new legal or beneficial
interests; or (vii) the removal or the resignation of Manager (including,
without limitation, an Affiliated Manager) other than in accordance with Section
5.14.

          Section 7.3. Permitted Transfers

          Notwithstanding the provisions of Section 7.2, the following transfers
shall not be deemed to be a Prohibited Transfer and shall not require Lender’s
consent: (a) a transfer (but not the pledge) by devise or descent or by
operation of law upon the death of a member, partner or

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shareholder of a Restricted Party; (b) the transfer (but not the pledge), in one
or a series of transactions, of the stock, partnership interests or membership
interests (as the case may be) in a Restricted Party, or (c) a Mezzanine
Transfer; provided, that, with respect to the transfers listed in clauses (a),
(b) or (c) above, (A) Lender shall receive ten (10) Business Days prior written
notice of such transfers, (B) except in connection with a Mezzanine Foreclosure,
after giving effect to such transfers Borrower Principal Family Group shall (i)
own at least a 25% direct or indirect interest in Borrower and Affiliated
Manager, (ii) Control Borrower and Affiliated Manager, and (iii) control the
day-to-day operation of the Property, (C) the Property shall continue to be
managed by Affiliated Manager or a Qualified Manager in the manner in which the
Property is managed immediately prior to such transfer, (D) in the case of the
transfer of any direct ownership interests in Borrower or in any SPE Component
Entity, such transfers shall be conditioned upon the continued compliance with
the relevant provisions of Article 6 hereof, (E) no such transfers shall permit
Sotheby’s to exercise its right of first offer contained in Article 23 of the
Sotheby’s Lease or shall otherwise constitute a Sotheby’s Event of Default, and
(F) in the case of any transfer that, in one or in a series of transactions,
results in any Person and/or its Affiliates directly or indirectly owning in
excess of forty-nine percent (49%) of the ownership interests in any Restricted
Party, such transfers shall be conditioned upon the delivery to Lender of a
substantive non-consolidation opinion, which such opinion shall be provided by
outside counsel reasonably acceptable to Lender and acceptable to the Rating
Agencies and shall otherwise be in form, scope and substance reasonably
acceptable to Lender and in form, scope and substance acceptable to the Rating
Agencies; provided, however, to the extent that the transfers set forth in
clause (F) above are to a Person that was the subject of a “pairing” in the
Non-Consolidation Opinion and such transfers result in such Person increasing
(but not changing the nature of) their respective ownership interests in such
Restricted Party, clause (F) shall be deemed satisfied to the extent Lender
receives written confirmation from the counsel who rendered the
Non-Consolidation Opinion stating that the Non-Consolidation Opinion is still
valid and will not be affected by the aforesaid transfers regardless of any
facts or assumptions contained therein related to equity ownership or any
similar related facts or assumptions, which such confirmation shall be
reasonably acceptable to Lender and acceptable to the Rating Agencies.

          Notwithstanding the foregoing, a transfer shall not be deemed to be a
Prohibited Transfer solely due to the failure to satisfy the requirement that
the Borrower Principal Family Group own at least a 25% direct or indirect
ownership interest in Borrower and Affiliated Manager set forth in clause (B) of
the foregoing paragraph of this Section 7.3 so long as (i) all other applicable
requirements set forth in the foregoing paragraph of this Section 7.3 shall be
satisfied, (ii) the Borrower Principal Family Group shall continue to own at
least a 10% direct or indirect ownership interest in Borrower and Affiliated
Manager, and (iii) all remaining direct or indirect ownership interests in
Borrower and Affiliated Manager shall be owned by Permitted Transferees.

          Section 7.4. Lender’s Rights

          Lender reserves the right to condition the consent to a Prohibited
Transfer requested hereunder upon (a) a modification of the terms hereof and an
assumption of the Note and the other Loan Documents as so modified by the
proposed Prohibited Transfer, (b) receipt of payment of a transfer fee equal to
one percent (1%) of the outstanding principal balance of the

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Loan and all of Lender’s expenses incurred in connection with such Prohibited
Transfer, (c) receipt of written confirmation from the Rating Agencies that the
Prohibited Transfer will not result in a downgrade, withdrawal or qualification
of the initial, or if higher, then current ratings issued in connection with a
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization, (d) the proposed transferee’s
continued compliance with the covenants set forth in this Agreement (including,
without limitation, the covenants in Article 6) and the other Loan Documents,
(e) a new Qualified Manager for the Property or a new manager for the Property
satisfactory to Lender and in each case, a new management agreement satisfactory
to Lender, and (f) the satisfaction of such other conditions and/or legal
opinions as Lender shall determine in its sole discretion to be in the interest
of Lender. All expenses incurred by Lender shall be payable by Borrower whether
or not Lender consents to the Prohibited Transfer. Lender shall not be required
to demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
a Prohibited Transfer made without Lender’s consent. This provision shall apply
to each and every Prohibited Transfer, whether or not Lender has consented to
any previous Prohibited Transfer. Notwithstanding anything to the contrary
contained in this Section 7.4, if any Sale or Pledge permitted under this
Section 7.4 results (in one or in a series of transactions) in any Person and/or
its Affiliates owning in excess of forty-nine percent (49%) of the direct or
indirect ownership interests in Borrower or in any SPE Component Entity (other
than the Persons owning such interests as of the date hereof) or in any transfer
of a general partnership or managing limited partnership interest in Borrower,
Borrower shall, prior to such transfer, and in addition to any other requirement
for Lender consent contained herein, deliver a revised version of the
Non-Consolidation Opinion to Lender reflecting such Prohibited Transfer, which
opinion shall be in form, scope and substance reasonably acceptable in all
respects to Lender and in form, scope and substance acceptable in all respects
to the Rating Agencies.

          Section 7.5. Assumption

          Notwithstanding the foregoing provisions of this Article 7, Lender
shall not unreasonably withhold consent to a transfer of the Property in its
entirety to, and the related assumption of the Loan by, any Person (a
“Transferee”) provided that each of the following terms and conditions are
satisfied:

          (a) no Event of Default has occurred and is continuing;

          (b) Borrower shall have (i) delivered written notice to Lender of the
terms of such prospective transfer not less than thirty (30) days before the
date on which such transfer is scheduled to close and, concurrently therewith,
all such information concerning the proposed Transferee as Lender shall
reasonably require and (ii) paid to Lender a non-refundable processing fee in
the amount of $25,000. Lender shall have the right to approve or disapprove the
proposed transfer based on its then current underwriting and credit requirements
for similar loans secured by similar properties which loans are sold in the
secondary market, such approval not to be unreasonably withheld. In determining
whether to give or withhold its approval of the proposed transfer, Lender shall
consider the experience and track record of Transferee and its principals in
owning and operating facilities similar to the Property, the financial strength
of Transferee and its principals, the general business standing of Transferee
and its principals and Transferee’s and its principals’ relationships and
experience with contractors, vendors, tenants,

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lenders and other business entities; provided, however, that, notwithstanding
Lender’s agreement to consider the foregoing factors in determining whether to
give or withhold such approval, such approval shall be given or withheld based
on what Lender determines to be commercially reasonable and, if given, may be
given subject to such conditions as Lender may deem reasonably appropriate;

          (c) Borrower shall have paid to Lender, concurrently with the closing
of such transfer, (i) a non-refundable assumption fee in an amount equal to one
percent (1.0%) of the then outstanding principal balance of the Note, and (ii)
all out-of-pocket costs and expenses, including reasonable attorneys’ fees,
incurred by Lender in connection with the transfer;

          (d) Transferee assumes and agrees to pay the Debt as and when due
subject to the provisions of Article 15 hereof and, prior to or concurrently
with the closing of such transfer, Transferee and its constituent partners,
members or shareholders as Lender may require, shall execute, without any cost
or expense to Lender, such documents and agreements as Lender shall reasonably
require to evidence and effectuate said assumption;

          (e) Borrower and Transferee, without any cost to Lender, shall furnish
any information reasonably requested by Lender for the preparation of, and shall
authorize Lender to file, new financing statements and financing statement
amendments and other documents to the fullest extent permitted by applicable
law, and shall execute any additional documents reasonably requested by Lender;

          (f) Borrower shall have delivered to Lender, without any cost or
expense to Lender, such endorsements to Lender’s Title Insurance Policy insuring
that fee simple or leasehold title to the Property, as applicable, is vested in
Transferee (subject to Permitted Encumbrances), hazard insurance endorsements or
certificates and other similar materials as Lender may deem reasonably necessary
at the time of the transfer, all in form and substance reasonably satisfactory
to Lender;

          (g) Transferee shall have furnished to Lender, if Transferee is a
corporation, partnership, limited liability company or other entity, all
appropriate papers evidencing Transferee’s organization and good standing, and
the qualification of the signers to execute the assumption of the Debt, which
papers shall include certified copies of all documents relating to the
organization and formation of Transferee and of the entities, if any, which are
partners or members of Transferee. Transferee and such constituent partners,
members or shareholders of Transferee (as the case may be), as Lender shall
reasonably require, shall comply with the covenants set forth in Article 6
hereof;

          (h) Transferee shall assume the obligations of Borrower under any
Management Agreement or provide a new management agreement with a new manager
which meets with the requirements of Section 5.14 hereof and assign to Lender as
additional security such new management agreement;

          (i) Transferee shall furnish an opinion of counsel reasonably
satisfactory to Lender and its counsel (A) that Transferee’s formation documents
provide for the matters described in subparagraph (g) above, (B) that the
assumption of the Debt has been duly authorized, executed

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and delivered, and that the Note, the Mortgage, this Agreement, the assumption
agreement and the other Loan Documents are valid, binding and enforceable
against Transferee in accordance with their terms, (C) that Transferee and any
entity which is a controlling stockholder, member or general partner of
Transferee, have been duly organized, and are in existence and good standing,
and (E) with respect to such other matters as Lender may reasonably request;

          (j) if required by Lender, Lender shall have received confirmation in
writing from the Rating Agencies that rate the Securities to the effect that the
transfer will not result in a qualification, downgrade or withdrawal of any
rating initially assigned or to be assigned to the Securities;

          (k) Borrower’s obligations under the contract of sale pursuant to
which the transfer is proposed to occur shall expressly be subject to the
satisfaction of the terms and conditions of this Section 7.5; and

          (1) Transferee shall, prior to such transfer, deliver a substantive
non-consolidation opinion to Lender, which opinion shall be in form, scope and
substance reasonably acceptable in all respects to Lender and in form, scope and
substance acceptable in all respects to the Rating Agencies.

A consent by Lender with respect to a transfer of the Property in its entirety
to, and the related assumption of the Loan by, a Transferee pursuant to this
Section 7.5 shall not be construed to be a waiver of the right of Lender to
consent to any subsequent transfer of the Property.

Notwithstanding anything to the contrary contained in this Section 7.5, in no
event shall Lender be required to consent to a transfer/assumption under this
Section 7.5 prior to a Securitization if the consideration to be paid to
Borrower in connection therewith is less than the appraised value of the
Property as determined in connection with Lender’s underwriting of the Loan.

          Section 7.6. Mezzanine Option

          Notwithstanding the foregoing provisions of this Article 7, at any
time during the term of the Loan, a constituent party or parties (direct or
indirect) of Borrower that is not an SPE Component Entity (any such party or
parties, collectively, the “Mezzanine Borrower”) shall be permitted to incur
mezzanine financing (the “Permitted Mezzanine Financing”) secured by a pledge of
Mezzanine Borrower’s direct or indirect equity interests in Borrower (other than
the direct equity interests in Borrower owned by any SPE Component Entity),
provided, that, the following terms and conditions are each satisfied:

          (a) No Event of Default shall have occurred and be continuing;

          (b) Lender shall have received at least thirty (30) and no more than
ninety (90) days prior written notice of the exercise of the proposed Permitted
Mezzanine Financing (the “Mezzanine Notice”);

          (c) No more than one Permitted Mezzanine Financing may be outstanding
at any given time;

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          (d) The principal amount of the proposed Permitted Mezzanine Financing
(including, without limitation, all earn-out or other advances or negative
amortization or similar features contemplated thereunder which would in any way
increase the principal amount due thereunder) shall not exceed an amount which,
when aggregated with the outstanding principal amount of the Loan, would result
in (i) an LTV in excess of 85%, or (ii) a Debt Service Coverage Ratio,
calculated on a trailing 12-month basis, less than 1.25 to 1.00;

          (e) The Permitted Mezzanine Financing shall bear interest at a fixed
rate of interest, or if the Permitted Mezzanine Financing shall bear interest at
a floating rate of interest, Mezzanine Borrower shall have obtained and shall
maintain an Interest Rate Cap Agreement, and such Interest Rate Cap Agreement
shall have been collaterally assigned to the Mezzanine Lender in a manner
reasonably satisfactory to Lender;

          (f) The loan term (including any extension terms) of the proposed
Permitted Mezzanine Financing shall be co-terminus with or longer than the term
of the Loan;

          (g) The holder of the Permitted Mezzanine Financing (the “Mezzanine
Lender”) shall (A) be a Qualified Institutional Lender, (B) represent and
warrant to Lender that, as of the date of the funding of the Permitted Mezzanine
Financing, it is solvent and not involved in any voluntary or involuntary action
or proceeding as debtor under any applicable federal bankruptcy law, or any
similar federal or state law, and (C) agree in the Mezzanine Intercreditor
(defined below) that any subsequent transfer of the Permitted Mezzanine
Financing shall be to a Qualified Institutional Lender;

          (h) Mezzanine Lender shall have delivered to Lender (for execution by
Lender) an intercreditor agreement executed by Mezzanine Lender, which such
intercreditor agreement shall be in form and substance reasonably acceptable to
Lender and acceptable to the Rating Agencies (such intercreditor agreement, the
“Mezzanine Intercreditor”);

          (i) Borrower shall deliver to Lender, at Borrower’s sole cost and
expense, a revised and/or updated substantive non-consolidation opinion
reasonably acceptable to Lender and acceptable to the Rating Agencies reflecting
the Permitted Mezzanine Financing;

          (j) Borrower, at Borrower’s sole cost and expense, shall provide to
Lender satisfactory (i.e., showing no Liens other than Permitted Encumbrances)
UCC searches, together with tax lien, bankruptcy, judgment and litigation
searches with respect to the Property, Borrower and Borrower Principal in the
State in which the Property is located, in Delaware and in the jurisdictions
where each such Person has its principal place of business;

          (k) Borrower shall have paid or reimbursed Lender for all reasonable,
out of pocket costs and expenses incurred by Lender (including, without
limitation, reasonable attorneys’ fees and disbursements and any costs, expenses
and/or fees of the Rating Agencies) in connection with the Permitted Mezzanine
Financing and Borrower shall have paid or shall have caused Mezzanine Borrower
to pay all title premiums, recording charges, filing fees, taxes or other
expenses payable in connection with the Permitted Mezzanine Financing;

          (1) Borrower shall execute such amendments to the Loan Documents as
may be reasonably requested by Lender, including, without limitation, an
amendment to the terms hereof

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such that property level expenses are reserved and paid by Lender in accordance
with the Annual Budget approved hereunder (provided no Event of Default has
occurred and is continuing) pursuant to an amendment to the cash management
provisions set forth in Article 10 hereof;

          (m) Lender shall have received written confirmation from the Rating
Agencies that the proposed Permitted Mezzanine Financing shall not result in a
downgrade, withdrawal or qualification of the ratings assigned to any Securities
(or, with respect to a proposed Securitization, to be issued); and;

          (n) Borrower shall deliver to Lender an Officers Certificate
certifying that the requirements set forth in this Section 7.6 have been
satisfied.

ARTICLE 8
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

          Section 8.1. Insurance

          (a) Borrower shall obtain and maintain, or cause to be maintained, at
all times insurance for Borrower and the Property providing at least the
following coverages:

 

 

 

          (i) comprehensive “all risk” insurance on the Improvements and the
Personal Property, in each case (A) in an amount equal to one hundred percent
(100%) of the “Full Replacement Cost,” which for purposes of this Agreement
shall mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) with a waiver of depreciation;
(B) containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of $100,000 for all such insurance coverage; and (D) if any
of the Improvements or the use of the Property shall at any time constitute
legal non-conforming structures or uses, providing coverage for contingent
liability from Operation of Building Laws, Demolition Costs and Increased Cost
of Construction Endorsements and containing an “Ordinance or Law Coverage” or
“Enforcement” endorsement. In addition, Borrower shall obtain: (y) if any
portion of the Improvements is currently or at any time in the future located in
a “special flood hazard area” designated by the Federal Emergency Management
Agency, flood hazard insurance in an amount equal to the maximum amount of such
insurance available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as each may be amended; and (z) earthquake insurance in amounts and in
form and substance reasonably satisfactory to Lender in the event the Property
is located in an area with a high degree of seismic risk, provided that the
insurance pursuant to clauses (y) and (z) hereof shall be on terms consistent
with the comprehensive all risk insurance policy required under this subsection
(i);

 

 

 

          (ii) Commercial General Liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in or
about the Property, with such insurance (A) to be on the so-called “occurrence”
form with a general aggregate limit of not less than $2,000,000 and a per
occurrence limit of not less than $1,000,000; (B) to continue at not less than
the aforesaid limit until required to be

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changed by Lender in writing by reason of changed economic conditions making
such protection inadequate; and (C) to cover at least the following hazards: (1)
premises and operations; (2) products and completed operations; (3) independent
contractors; (4) blanket contractual liability; and (5) contractual liability
covering the indemnities contained in Article 12 and Article 14 hereof to the
extent the same is available;

 

 

 

          (iii) loss of rents insurance or business income insurance, as
applicable, (A) with loss payable to Lender; (B) covering all risks required to
be covered by the insurance provided for in subsection (i) above; and (C) which
provides that after the physical loss to the Improvements and Personal Property
occurs, the loss of rents or income, as applicable, will be insured until such
rents or income, as applicable, either return to the same level that existed
prior to the loss, or the expiration of eighteen (18) months, whichever first
occurs, and notwithstanding that the policy may expire prior to the end of such
period; and (D) which contains an extended period of indemnity endorsement which
provides that after the physical loss to the Improvements and Personal Property
has been repaired, the continued loss of income will be insured until such
income either returns to the same level it was at prior to the loss, or the
expiration of six (6) months from the date that the Property is repaired or
replaced and operations are resumed, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period. The amount of such
loss of rents or business income insurance, as applicable, shall be determined
prior to the date hereof and at least once each year thereafter based on (i) for
any period that the Sotheby’s Lease is in full force and effect, the amount of
base rent and additional rent payable under the Leases (including, without
limitation, any income attributable to Borrower due to any subleases of the
Leases) for the succeeding period of coverage required above, or (ii) for any
period that the Sotheby’s Lease is not in full force and effect, Borrower’s
reasonable estimate of the gross income from the Property for the succeeding
period of coverage required above. All proceeds payable to Lender pursuant to
this subsection shall be held by Lender and shall be applied to the obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note (with any excess proceeds applied, to the extent no Event of
Default has occurred and is continuing, in accordance with the applicable
provisions of Section 10.2(b)); provided, however, that nothing herein contained
shall be deemed to relieve Borrower of its obligations to pay the obligations
secured by the Loan Documents on the respective dates of payment provided for in
the Note, this Agreement and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such loss of rents or business
income insurance, as applicable;

 

 

 

          (iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
Property coverage form does not otherwise apply, (A) owner’s contingent or
protective liability insurance covering claims not covered by or under the terms
or provisions of the above mentioned commercial general liability insurance
policy; and (B) the insurance provided for in subsection (i) above written in a
so-called Builder’s Risk Completed Value form (1) on a non-reporting basis, (2)
against “all risks” insured against pursuant to subsection (i) above, (3)
including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;

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          (v) workers’ compensation, subject to the statutory limits of the
State, and employer’s liability insurance in respect of any work or operations
on or about the Property, or in connection with the Property or its operation
(if applicable);

 

 

 

          (vi) comprehensive boiler and machinery insurance, if applicable, in
amounts as shall be reasonably required by Lender on terms consistent with the
commercial property insurance policy required under subsection (i) above;

 

 

 

          (vii) excess liability insurance in an amount not less than
$50,000,000 per occurrence on terms consistent with the commercial general
liability insurance required under subsection (ii) above; and

 

 

 

          (viii) upon sixty (60) days’ written notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time are
commonly insured against for property similar to the Property.

          (b) All insurance provided for in Section 8.1(a) shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”), and shall be subject to the approval of Lender as to
insurance companies, amounts, deductibles, loss payees and insureds, which such
approval shall not be unreasonably withheld, conditioned or delayed. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and having a claims paying
ability rating of “A” (or its equivalent) or better by at least two Rating
Agencies, one of which must be S&P or such other Rating Agencies approved by
Lender. The Policies described in Section 8.1(a) shall designate Lender and its
successors and assigns as additional insureds, mortgagees and/or loss payee as
deemed appropriate by Lender. Not less than ten (10) days prior to the
expiration dates of the Policies theretofore furnished to Lender, Borrower shall
deliver to Lender (i) for any period that the Sotheby’s Lease is in full force
and effect, certificates evidencing renewal of the Policies (such certificates,
the “Insurance Certificates”) accompanied by evidence satisfactory to Lender of
payment of the premiums due with respect to the Policies (the “Insurance
Premiums”) and Borrower shall make commercially reasonable efforts to deliver to
Lender, as soon as possible thereafter, renewal Policies, and (ii) for any
period that the Sotheby’s Lease is not in full force and effect, renewal
Policies accompanied by evidence satisfactory to Lender of payment of the
Insurance Premiums shall be delivered by Borrower to Lender.

          (c) Any blanket insurance Policy shall specifically allocate to the
Property the amount of coverage from time to time required hereunder and shall
otherwise provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 8.1(a).

          (d) All Policies provided for or contemplated by Section 8.1(a),
except for the Policy referenced in Section 8.1(a)(v), shall name Borrower as
the insured or additional insured and loss payee and Lender as the additional
insured, mortgagee or loss payee, as its interests may appear, and in the case
of property damage, boiler and machinery, flood and earthquake insurance, shall
contain a so-called New York standard non-contributing mortgagee clause in favor
of Lender providing that the loss thereunder shall be payable to Lender.

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          (e) All Policies provided for in Section 8.1(a) shall contain clauses
or endorsements to the effect that:

 

 

 

          (i) no act or negligence of Borrower, or anyone acting for Borrower,
or of any Tenant or other occupant, or failure to comply with the provisions of
any Policy, which might otherwise result in a forfeiture of the insurance or any
part thereof, shall in any way affect the validity or enforceability of the
insurance insofar as Lender is concerned;

 

 

 

          (ii) the Policies shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least thirty (30)
days’ prior written notice to Lender and any other party named therein as an
additional insured;

 

 

 

          (iii) the issuers thereof shall give written notice to Lender if the
Policies have not been renewed thirty (30) days prior to its expiration;

 

 

 

          (iv) Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder; and

 

 

 

          (v) the Policies do not contain an exclusion for acts of terrorism
(provided, that, with respect to the Policies required under Section 8.1(a)(iii)
hereof, such Policies may, with respect to coverage for acts of terrorism only,
exclude the coverage detailed in Section 8.l(a)(iii)(D)).

          (f) If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in the Property, including, without
limitation, obtaining such insurance coverage as Lender in its sole discretion
deems appropriate. All premiums incurred by Lender in connection with such
action or in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and, until paid, shall be secured by the Mortgage
and shall bear interest at the Default Rate.

          Section 8.2. Casualty

          If the Property 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 Lender and shall promptly commence and diligently prosecute (or shall
cause the prompt commencement and diligent prosecution of) the Restoration of
the Property in accordance with Section 8.4, whether or not Lender makes any Net
Proceeds available pursuant to Section 8.4. Borrower shall pay (or cause to be
paid) all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to make proof of loss if not
made promptly by Borrower. Borrower shall adjust (or cause to be adjusted) all
claims for Insurance Proceeds in consultation with, and approval of, Lender;
provided, however, if an Event of Default has occurred and is continuing, Lender
shall have the exclusive right to participate in the adjustment of all claims
for Insurance Proceeds.

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          Section 8.3. Condemnation

          Borrower shall promptly give Lender notice of the actual or threatened
commencement of any proceeding for the Condemnation of the Property of which
Borrower has knowledge and shall deliver to Lender copies of any and all papers
served in connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower shall, at its
expense, diligently prosecute (or shall cause the diligent prosecution of) any
such proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any 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 Debt at the time and in the manner provided for its payment
in the Note and in this Agreement and the Debt shall not be reduced until any
Award shall have been actually received and applied by Lender, after the
deduction of expenses of collection, to the reduction or discharge of the Debt.
Lender 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 Note. If the Property or any portion thereof
is taken by a condemning authority, Borrower shall promptly commence and
diligently prosecute (or shall cause the prompt commencement and diligent
prosecution of) the Restoration of the Property and otherwise comply with the
provisions of Section 8.4, whether or not Lender makes any Net Proceeds
available pursuant to Section 8.4. If the Property is sold, through foreclosure
or otherwise, prior to the receipt by Lender of the Award, Lender shall have the
right, whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.

          Section 8.4. Restoration

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

          (a) If the Net Proceeds shall be less than $500,000 and the costs of
completing the Restoration shall be less than $500,000, the Net Proceeds will be
disbursed by Lender to Borrower upon receipt, provided that all of the
conditions set forth in Section 8.4(b)(i) are met and Borrower delivers to
Lender a written undertaking to expeditiously commence and to satisfactorily
complete with due diligence the Restoration in accordance with the terms of this
Agreement.

          (b) If the Net Proceeds are equal to or greater than $500,000 or the
costs of completing the Restoration are equal to or greater than $500,000,
Lender shall make the Net Proceeds available for the Restoration in accordance
with the provisions of this Section 8.4. The term “Net Proceeds” for purposes of
this Section 8.4 shall mean: (i) the net amount of all insurance proceeds
received by Lender pursuant to Section 8.1(a)(i), (iv), (vi) and (viii) as a
result of a Casualty, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
the same (“Insurance Proceeds”), or (ii) the net amount of the Award as a result
of a Condemnation, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
the same (“Condemnation Proceeds”), whichever the case may be.

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(i) The Net Proceeds shall be made available to Borrower for Restoration
provided that each of the following conditions are met:

 

 

 

            (A) no Event of Default shall have occurred and be continuing;

 

 

 

            (B) (1) in the event the Net Proceeds are Insurance Proceeds, less
than thirty percent (30%) of the total floor area of the Improvements on the
Property has been damaged, destroyed or rendered unusable as a result of a
Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds, less
than fifteen percent (15%) of the land constituting the Property is taken, such
land is located along the perimeter or periphery of the Property, and no portion
of the Improvements is located on such land;

 

 

 

            (C) Leases covering in the aggregate at least seventy-five percent
(75%) of the total rentable space in the Property which has been demised under
executed and delivered Leases in effect as of the date of the occurrence of such
Casualty or Condemnation, whichever the case may be, shall remain in full force
and effect during and after the completion of the Restoration without abatement
of rent beyond the time required for Restoration;

 

 

 

            (D) Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than sixty (60) days after such Casualty or
Condemnation, whichever the case may be, occurs) and shall diligently pursue the
same to satisfactory completion;

 

 

 

            (E) Lender shall be satisfied that any operating deficits, including
all scheduled payments of principal and interest under the Note, which will be
incurred with respect to the Property as a result of the occurrence of any such
Casualty or Condemnation, whichever the case may be, will be covered out of the
insurance coverage referred to in Section 8.1(a)(iii) above;

 

 

 

            (F) Lender shall be satisfied that the Restoration will be completed
on or before the earliest to occur of (1) six (6) months prior to the Optional
Prepayment Date, (2) the earliest date required for such completion under the
terms of any Leases or material agreements affecting the Property, (3) such time
as may be required under applicable zoning law, ordinance, rule or regulation,
or (4) the expiration of the insurance coverage referred to in Section
8.1(a)(iii);

 

 

 

            (G) the Property and the use thereof after the Restoration will be
in compliance with and permitted under all applicable Legal Requirements;

 

 

 

            (H) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements;

 

 

 

            (I) such Casualty or Condemnation, as applicable, does not result in
the permanent loss of access to the Property or the Improvements;

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          (J) Borrower shall deliver, or cause to be delivered, to Lender 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 Lender; and

 

 

 

 

 

          (K) the Net Proceeds together with any cash or cash equivalent
deposited by Borrower with Lender are sufficient in Lender’s reasonable judgment
to cover the cost of the Restoration.

 

 

 

          (ii) The Net Proceeds shall be held by Lender until disbursements
commence, and, until disbursed in accordance with the provisions of this Section
8.4, shall constitute additional security for the Debt and other obligations
under the Loan Documents. The Net Proceeds shall be disbursed by Lender to, or
as directed by, Borrower from time to time during the course of the Restoration,
upon receipt of evidence reasonably satisfactory to Lender that (A) all the
conditions precedent to such advance, including those set forth in Section
8.4(b)(i), have been satisfied, (B) all materials installed and work and labor
performed (except to the extent that such materials, work or labor are to be
paid for out of the requested disbursement) in connection with the related
Restoration item have been paid for in full, and (C) there exist no notices of
pendency, stop orders, mechanic’s or materialman’s liens or notices of intention
to file same, or any other liens or encumbrances of any nature whatsoever on the
Property which have not either been fully bonded to the satisfaction of Lender
and discharged of record or in the alternative fully insured to the satisfaction
of Lender by Title Company. Notwithstanding the foregoing, Insurance Proceeds
from the Policies required to be maintained by Borrower pursuant to Section
8.1(a)(iii) shall be controlled by Lender at all times, shall not be subject to
the provisions of this Section 8.4 and shall be used solely for the payment of
the obligations under the Loan Documents and Operating Expenses.

 

 

 

          (iii) All plans and specifications required in connection with the
Restoration shall be subject to prior review and reasonable acceptance in all
respects by Lender and by an independent consulting engineer selected by Lender
(the “Restoration Consultant”). Lender 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
and materialmen engaged in the Restoration, as well as the contracts in excess
of $100,000 under which they have been engaged, shall be subject to prior review
and reasonable acceptance by Lender and the Restoration Consultant. All out of
pocket costs and expenses incurred by Lender in connection with making the Net
Proceeds available for the Restoration, including, without limitation,
reasonable counsel fees and disbursements and the Restoration Consultant’s fees,
shall be paid by Borrower.

 

 

 

          (iv) In no event shall Lender be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually incurred
from time to time for work in place as part of the Restoration, as certified by
the Restoration Consultant, minus the Restoration Retainage. The term
“Restoration 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 Restoration Consultant, until the Restoration has been

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completed. The Restoration Retainage shall be reduced to five percent (5%) of
the costs incurred upon receipt by Lender of satisfactory evidence that fifty
percent (50%) of the Restoration has been completed. The Restoration Retainage
shall in no event, and notwithstanding anything to the contrary set forth above
in this Section 8.4(b), be less than or duplicative of the amount actually held
back by Borrower from contractors, subcontractors and materialmen engaged in the
Restoration. The Restoration Retainage shall not be released until the
Restoration Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 8.4(b) and that all
approvals necessary for the re-occupancy and use of the Property have been
obtained from all appropriate Governmental Authorities, and Lender receives
evidence reasonably satisfactory to Lender that the costs of the Restoration
have been paid in full or will be paid in full out of the Restoration Retainage;
provided, however, that Lender will release the portion of the Restoration
Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the Restoration
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor’s, subcontractor’s or
materialman’s contract, the contractor, subcontractor or materialman delivers
the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by Title Company, and Lender receives an endorsement to the Title
Insurance Policy insuring the continued priority of the lien of the Mortgage and
evidence of payment of any premium payable for such endorsement. If required by
Lender, the release of any such portion of the Restoration 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.

 

 

 

          (v) Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month, except upon completion
of the Restoration.

 

 

 

          (vi) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the reasonable opinion of Lender in consultation with the
Restoration Consultant, be sufficient to pay in full the balance of the costs
which are estimated by the Restoration Consultant to be incurred in connection
with the completion of the Restoration, Borrower shall deposit the deficiency
(the “Net Proceeds Deficiency”) with Lender before any further disbursement of
the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with
Lender shall be held by Lender 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 8.4(b) shall constitute additional security for the Debt and other
obligations under the Loan Documents.

 

 

 

          (vii) The excess, if any, of the Net Proceeds and the remaining
balance, if any,-of the Net Proceeds Deficiency deposited with Lender after the
Restoration Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 8.4(b), and the
receipt by Lender of evidence satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in full,

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shall be remitted by Lender to Borrower, provided no Event of Default shall have
occurred and shall be continuing under the Note, this Agreement or any of the
other Loan Documents.

          (c) 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 8.4(b)(vii) may (x) be retained and applied by Lender toward the
payment of the Debt whether or not then due and payable in the order, priority
and proportions (1) to the extent no Event of Default has occurred and is
continuing, as set forth in the second sentence of Section 2.2(e) hereof, or (2)
to the extent an Event of Default has occurred and is continuing, as Lender in
its sole discretion shall deem proper, or, (y) at the sole discretion of Lender,
the same may be paid, either in whole or in part, to Borrower for such purposes
and upon such conditions as Lender shall designate.

          (d) In the event of foreclosure of the Mortgage, or other transfer of
title to the Property in extinguishment in whole or in part of the Debt, all
right, title and interest of Borrower in and to the Policies then in force
concerning the Property and all proceeds payable thereunder shall thereupon vest
in the purchaser at such foreclosure, Lender or other transferee in the event of
such other transfer of title.

Notwithstanding anything to the contrary contained in this Section 8.4, the
applicable terms and conditions of the Sotheby’s Lease shall control the
disbursement of the Net Proceeds hereunder provided that (i) the Sotheby’s Lease
is in full force and effect; (ii) no Sotheby’s Event of Default resulting from
non-payment of Rent under the Sotheby’s Lease has occurred and is continuing;
(iii) no Event of Default has occurred and is continuing; (iv) Lender, as Fee
Mortgagee under the Sotheby’s Lease is paid the Net Proceeds and is designated
the Casualty Depository (as defined in the Sotheby’s Lease) or the Condemnation
Depository (as defined in the Sotheby’s Lease), as the case may be, and is
entitled all rights and remedies appurtenant thereto under the Sotheby’s Lease;
and (v) each of Borrower and Sotheby’s continues to comply with all applicable
terms and conditions of the Sotheby’s Lease related to the disbursement of said
Net Proceeds.

ARTICLE 9
RESERVE FUNDS

          Section 9.1. Intentionally Omitted

          Section 9.2. Replacements

          (a) On an ongoing basis throughout the term of the Loan, Borrower
shall make (or cause to be made) capital repairs, replacements and improvements
necessary to keep the Property in good order and repair and in a good marketable
condition or prevent deterioration of the Property, including, but not limited
to, those repairs, replacements and improvements more particularly described in
(i) the Physical Conditions Report prepared in connection with the closing of
the Loan and (ii) Schedule I attached hereto and made a part hereof
(collectively, the “Replacements”). Borrower shall complete all Replacements (or
cause the same to be completed) in a good and workmanlike manner as soon as
commercially reasonable after commencing to make each such Replacement

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          (b) In the event (i) of the occurrence and continuance of a Sotheby’s
Event of Default, (ii) that Sotheby’s Guarantor’s long-term unsecured debt
rating (or its equivalent Private Rating (to the extent applicable)) is
downgraded below “B” (or its equivalent) by any of the Rating Agencies, (iii)
the Sotheby’s Lease is no longer in full force or effect, or (iv) the Optional
Prepayment Date shall have occurred, Borrower shall establish a sub-account of
the Cash Management Account with Lender or Lender’s agent to fund the
Replacements (the “Replacement Reserve Account”) into which Borrower shall
deposit $8,799.08 (the “Replacement Reserve Monthly Deposit”) into the
Replacement Reserve Account on each Scheduled Payment Date. Amounts so deposited
shall hereinafter be referred to as “Replacement Reserve Funds.” Lender may, in
its reasonable discretion, adjust the Replacement Reserve Monthly Deposit from
time to time to an amount sufficient to maintain the proper maintenance and
operation of the Property. In the event Lender shall at any time increase the
Replacement Reserve Monthly Deposit, Borrower may, at its election, request that
Lender obtain, at the sole cost and expense of Borrower, a Physical Conditions
Report prepared by an engineer selected by Lender in its reasonable discretion,
in which case the Replacement Reserve Monthly Deposit shall be adjusted by
Lender based on the results of such report, provided that in no event shall such
amounts be reduced below the initial amount of the Replacement Reserve Monthly
Deposit set forth in herein.

          Section 9.3. Intentionally Omitted

          Section 9.4. Required Work

          In the event the Sotheby’s Lease is no longer in full force and
effect, Borrower shall diligently pursue all Replacements (collectively, the
“Required Work”) to completion in accordance with the following requirements:

          (a) Lender reserves the right, at its option, to approve all contracts
or work orders with materialmen, mechanics, suppliers, subcontractors,
contractors or other parties providing labor or materials in connection with the
Required Work, provided that, prior to the Optional Prepayment Date, Lender’s
approval shall only be required to the extent such contracts or work orders
exceed $50,000. Upon Lender’s request, Borrower shall assign (or cause to be
assigned) any contract or subcontract to Lender.

          (b) In the event Lender determines in its reasonable discretion that
any Required Work is not being or has not been performed in a workmanlike or
timely manner, Lender shall have the option to withhold disbursement for such
unsatisfactory Required Work and to proceed under existing contracts or to
contract with third parties to complete such Required Work and to apply the
Replacement Reserve Funds toward the labor and materials necessary to complete
such Required Work, without providing any prior notice to Borrower and to
exercise any and all other remedies available to Lender upon an Event of Default
hereunder.

          (c) In order to facilitate Lender’s completion of the Required Work,
Borrower grants Lender the right to enter onto the Property and perform any and
all work and labor necessary to complete the Required Work and/or employ
watchmen to protect the Property from damage. All sums so expended by Lender, to
the extent not from the Reserve Funds, shall be deemed to have been advanced
under the Loan to Borrower and secured by the Mortgage. For this purpose

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Borrower constitutes and appoints Lender its true and lawful attorney-in-fact
with full power of substitution to complete or undertake the Required Work in
the name of Borrower upon Borrower’s failure to do so in a workmanlike and
timely manner. Such power of attorney shall be deemed to be a power coupled with
an interest and cannot be revoked. Borrower empowers said attorney-in-fact as
follows: (i) to use any of the Reserve Funds for the purpose of making or
completing the Required Work; (ii) to make such additions, changes and
corrections to the Required Work as shall be necessary or desirable to complete
the Required Work; (iii) to employ such contractors, subcontractors, agents,
architects and inspectors as shall be required for such purposes; (iv) to pay,
settle or compromise all existing bills and claims which are or may become Liens
against the Property, or as may be necessary or desirable for the completion of
the Required Work, or for clearance of title; (v) to execute all applications
and certificates in the name of Borrower which may be required by any of the
contract documents; (vi) to prosecute and defend all actions or proceedings in
connection with the Property or the rehabilitation and repair of the Property;
and (vii) to do any and every act which Borrower might do on its own behalf to
fulfill the terms of this Agreement.

          (d) Nothing in this Section 9.4 shall: (i) make Lender responsible for
making or completing the Required Work; (ii) require Lender to expend funds in
addition to the Reserve Funds to make or complete any Required Work; (iii)
obligate Lender to proceed with the Required Work; or (iv) obligate Lender to
demand from Borrower additional sums to make or complete any Required Work.

          (e) Borrower shall permit Lender and Lender’s agents and
representatives (including, without limitation, Lender’s engineer, architect, or
inspector) or third parties performing Required Work pursuant to this Section
9.4 to enter onto the Property during normal business hours (subject to the
rights of tenants under their Leases) to inspect the progress of any Required
Work and all materials being used in connection therewith, to examine all plans
and shop drawings relating to such Required Work which are or may be kept at the
Property, and to complete any Required Work made pursuant to this Section 9.4.
Borrower shall cause all contractors and subcontractors to cooperate with Lender
and Lender’s representatives or such other persons described above in connection
with inspections described in this Section 9.4 or the completion of Required
Work pursuant to this Section 9.4.

          (f) Lender may, to the extent any Required Work would reasonably
require an inspection of the Property, inspect the Property at Borrower’s
expense prior to making a disbursement of the Reserve Funds in order to verify
completion of the Required Work for which reimbursement is sought. Borrower
shall pay Lender a reasonable inspection fee not exceeding $1,000 for each such
inspection. Lender may require that such inspection be conducted by an
appropriate independent qualified professional selected by Lender and/or may
require a copy of a certificate of completion by an independent qualified
professional acceptable to Lender prior to the disbursement of the Reserve
Funds. Borrower shall pay the expense of the inspection as required hereunder,
whether such inspection is conducted by Lender or by an independent qualified
professional.

          (g) The Required Work and all materials, equipment, fixtures, or any
other item comprising a part of any Required Work shall be constructed,
installed or completed, as

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applicable, free and clear of all mechanic’s, materialman’s or other Liens
(except for Permitted Encumbrances).

          (h) Before each disbursement of the Reserve Funds, Lender may require
Borrower to provide Lender with a search of title to the Property effective to
the date of the disbursement, which search shows that no mechanic’s or
materialmen’s or other Liens of any nature have been placed against the Property
since the date of recordation of the Mortgage and that title to the Property is
free and clear of all Liens (except for Permitted Encumbrances).

          (i) All Required Work shall comply with all Legal Requirements and
applicable insurance requirements including, without limitation, applicable
building codes, special use permits, environmental regulations, and requirements
of insurance underwriters.

          (j) Borrower hereby assigns to Lender all rights and claims Borrower
may have against all Persons supplying labor or materials in connection with the
Required Work; provided, however, that Lender may not pursue any such rights or
claims unless an Event of Default has occurred and remains uncured.

          Section 9.5. Release of Replacement Reserve Funds

 

 

 

 

          (a) To the extent the Sotheby’s Lease is in full force and effect,
upon Lender’s receipt of a certification from Borrower stating that a
Replacement has been completed in accordance with Section 8 of the Sotheby’s
Lease, Borrower shall, subject to Section 9.5(c) below, be entitled to a
disbursement from the Replacement Reserve Account in an amount equal to the cost
of such Replacement.

 

 

 

 

          (b) To the extent the Sotheby’s Lease is not in full force and effect,
the following provisions shall control:

 

 

 

 

 

          (i) Upon written request from Borrower and satisfaction of the
requirements set forth in this Agreement, Lender shall disburse to Borrower
amounts from the Replacement Reserve Account to the extent necessary to pay for
or reimburse Borrower for the actual costs of any approved Replacements.
Notwithstanding the preceding sentence, in no event shall Lender be required to
(y) disburse funds from any of the Reserve Accounts if an Event of Default
exists, or (z) disburse funds from the Replacement Reserve Account to reimburse
Borrower for the costs of routine repairs or maintenance to the Property.

 

 

 

 

 

          (ii) Each request for disbursement from the Replacement Reserve
Account shall be on a form provided or reasonably approved by Lender and shall
(i) include copies of invoices for all items or materials purchased and all
labor or services provided and (ii) specify the Required Work for which the
disbursement is requested. With each request Borrower shall certify that all
Required Work has been performed in accordance with all Legal Requirements.
Except as provided in Section 9.5(b)(iv), each request for disbursement shall be
made only after completion of the Replacement (or the portion thereof completed
in accordance with Section 9.5(b)(iv), as applicable, for which disbursement is
requested. Borrower shall provide Lender evidence satisfactory to Lender in its
reasonable judgment of such completion or performance.

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           (iii) Borrower shall pay all invoices in connection with the Required
Work with respect to which a disbursement is requested prior to submitting such
request for disbursement from the Replacement Reserve Account or, at the request
of Borrower, Lender will either (A) issue joint checks, payable to Borrower and
the contractor, supplier, materialman, mechanic, subcontractor or other party to
whom payment is due in connection with the Required Work or (B) make payment to
such contractor, supplier, materialman, mechanic, subcontractor or other party
directly. In the case of direct payment and payments made by joint check, Lender
may require a waiver of lien from each Person receiving payment prior to
Lender’s disbursement of the Replacement Reserve Funds. In addition, as a
condition to any disbursement, Lender may require Borrower to obtain lien
waivers from each contractor, supplier, materialman, mechanic or subcontractor
who receives payment in an amount equal to or greater than $10,000 for
completion of its work or delivery of its materials. Any lien waiver delivered
hereunder shall conform to all Legal Requirements and shall cover all work
performed and materials supplied (including equipment and fixtures) for the
Property by that contractor, supplier, subcontractor, mechanic or materialman
through the date covered by the current disbursement request (or, in the event
that payment to such contractor, supplier, subcontractor, mechanic or
materialmen is to be made by a joint check, the release of lien shall be
effective through the date covered by the previous release of funds request).

 

 

 

           (iv) If (1) the cost of any item of Required Work exceeds $50,000,
(2) the contractor performing such Required Work requires periodic payments
pursuant to terms of a written contract, and (3) Lender has approved in writing
in advance such periodic payments, a request for disbursement from the
Replacement Reserve Account may be made after completion of a portion of the
work under such contract, provided (A) such contract requires payment upon
completion of such portion of work, (B) the materials for which the request is
made are on site at the Property and are properly secured or have been installed
in the Property, (C) all other conditions in this Agreement for disbursement
have been satisfied, and (D) funds remaining in the Replacement Reserve Account
are, in Lender’s judgment, sufficient to complete such Replacement and other
Replacements when required.

 

 

 

           (v) In the event any Borrower requests a disbursement from the
Replacement Reserve Account to pay for or reimburse Borrower for the actual cost
of labor or materials used in connection with repairs or improvements other than
the Replacements specified in the Physical Conditions Report prepared in
connection with the closing of the Loan (an “Additional Replacement”), Borrower
shall disclose in writing to Lender the reason why funds in the Replacement
Reserve Account should be used to pay for such Additional Replacement. If Lender
determines that (i) such Additional Replacement is of the type intended to be
covered by the Replacement Reserve Account, (ii) Intentionally Omitted, (iii)
costs for such Additional Replacement are reasonable, (iv) the funds in the
Replacement Reserve Account are sufficient to pay for such Additional
Replacement and all other Replacements for the Property specified in the
Physical Conditions Report, and (v) all other conditions for disbursement under
this Agreement have been met, Lender may disburse funds from the Replacement
Reserve Account.

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           (vi) If the funds in the Replacement Reserve Account should exceed
the amount of payments actually applied by Lender for the purposes of the
account, Lender in its sole discretion shall either return any excess to
Borrower or credit such excess against future payments to be made to the
Replacement Reserve Account. In allocating any such excess, Lender may deal with
the Person shown on Lender’s records as being the owner of the Property. If at
any time Lender reasonably determines that the Replacement Reserve Funds are not
or will not be sufficient to make the required payments, Lender shall notify
Borrower of such determination and Borrower shall pay to Lender any amount
necessary to make up the deficiency within ten (10) days after notice from
Lender to Borrower requesting payment thereof.

          (c) Borrower shall not make a request for, nor shall Lender have any
obligation to make, any disbursement from the Replacement Reserve Account more
frequently than once in any calendar month and (except in connection with the
final disbursement) in any amount less than the lesser of (i) $10,000 or (ii)
the total cost of the Required Work for which the disbursement is requested.

          (d) Lender’s disbursement of any Reserve Funds or other acknowledgment
of completion of any Required Work in a manner satisfactory to Lender shall not
be deemed a certification or warranty by Lender to any Person that the Required
Work has been completed in accordance with Legal Requirements.

          (e) The insufficiency of any balance in any of the Reserve Accounts
shall not relieve Borrower from its obligation to fulfill or cause to be
fulfilled all preservation and maintenance covenants in the Loan Documents.

          (f) Upon payment in full of the Debt, all amounts remaining on
deposit, if any, in the Replacement Reserve Account shall be returned to
Borrower or the Person shown on Lender’s records as being the owner of the
Property and no other party shall have any right or claim thereto.

          Section 9.6. Tax and Insurance Reserve Funds

          In the event (i) of the occurrence and continuance of a Sotheby’s
Event of Default, (ii) that Sotheby’s Guarantor’s long-term unsecured debt
rating (or its equivalent Private Rating (to the extent applicable)) is
downgraded below “B” (or its equivalent) by any of the Rating Agencies, or (iii)
the Sotheby’s Lease is no longer in full force and effect, Borrower shall
establish a sub-account of the Cash Management Account with Lender or Lender’s
agent (the “Tax and Insurance Reserve Account”) into which Borrower shall
deposit (I) upon the occurrence of any event described in clauses (i) through
(iii) above, an amount reasonably determined by Lender, which such amount, when
added to the required monthly deposits set forth in the following clause (II),
is sufficient to make payments of Taxes and Insurance Premiums as required
herein, and (II) on each Scheduled Payment Date (a) one-twelfth of the Taxes
that Lender reasonably estimates will be payable during the next ensuing twelve
(12) months or such higher amount necessary to accumulate with Lender sufficient
funds to pay all such Taxes at least thirty (30) days prior to the earlier of
(i) the date that the same will become delinquent and (ii) the date that
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thereof, and (b) except to the extent Lender has waived the insurance escrow
because the insurance required hereunder is maintained under a blanket insurance
Policy acceptable to Lender in accordance with Section 8.1(c), one-twelfth of
the Insurance Premiums that Lender estimates will be payable during the next
ensuing twelve (12) months for the renewal of the coverage afforded by the
Policies upon the expiration thereof or such higher amount necessary to
accumulate with Lender sufficient funds to pay all such Insurance Premiums at
least thirty (30) days prior to the expiration of the Policies (said amounts in
(a) and (b) above hereinafter called the “Tax and Insurance Reserve Funds”).
Lender will apply the Tax and Insurance Reserve Funds to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Section 5.4 and
Section 8.1 hereof. In making any disbursement from the Tax and Insurance
Reserve Account, Lender may do so according to any bill, statement or estimate
procured from the appropriate public office or tax lien service (with respect to
Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiry
into the accuracy of such bill, statement or estimate or into the validity of
any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. If
the amount of the Tax and Insurance Reserve Funds shall exceed the amounts due
for Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1 hereof,
Lender shall, in its sole discretion, return any excess to Borrower or credit
such excess against future payments to be made to the Tax and Insurance Reserve
Account. In allocating any such excess, Lender may deal with the person shown on
Lender’s records as being the owner of the Property. Any amount remaining in the
Tax and Insurance Reserve Account after the Debt has been paid in full shall be
returned to Borrower or the person shown on Lender’s records as being the owner
of the Property and no other party shall have any right or claim thereto. If at
any time Lender reasonably determines that the Tax and Insurance Reserve Funds
are not or will not be sufficient to pay Taxes and Insurance Premiums by the
dates set forth in (a) and (b) above, Lender shall notify Borrower of such
determination and Borrower shall pay to Lender any amount necessary to make up
the deficiency within ten (10) days after notice from Lender to Borrower
requesting payment thereof.

          Section 9.7. Debt Service Reserve

          In the event (A) of the occurrence and continuance of a Sotheby’s
Event of Default, (B) that Sotheby’s Guarantor’s long-term unsecured debt rating
(or its equivalent Private Rating (to the extent applicable)) is downgraded
below “B” (or its equivalent) by any of the Rating Agencies or (C) the Sotheby’s
Lease is no longer in full force and effect (each, a “Debt Service Reserve
Event”), Borrower shall establish an Eligible Account with Lender or Lender’s
agent (such account, the “Debt Service Reserve Account”) into which Borrower
shall deposit an amount equal to $7,133,600.88 (the “Debt Service Reserve
Funds”). Provided no Event of Default has occurred and is continuing, sums on
deposit in the Debt Service Reserve Account shall be disbursed to Borrower upon
(a) (i) in the event such funds were deposited into the Debt Service Reserve
Account pursuant to clause (A) above, the cure by Sotheby’s of such Sotheby’s
Event of Default, or (ii) in the event such funds were deposited into the Debt
Service Reserve Account pursuant to clause (B) above, Sotheby’s Guarantor
achieving a long-term unsecured debt rating (or its equivalent Private Rating
(to the extent applicable)) of “B” (or its equivalent) or greater from each of
the Rating Agencies, as applicable, and (b) Lender’s receipt of confirmation
from each of the Rating Agencies that such disbursement will not result in a
downgrade, withdrawal or qualification of the initial, or if higher, then
current ratings issued in connection with a Securitization, or if a
Securitization has not occurred, any ratings to be

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assigned in connection with a Securitization. Notwithstanding anything to the
contrary contained herein, Borrower may, at Borrower’s option, provide a Letter
of Credit in lieu of any of the cash deposits required to be made pursuant to
this Section 9.7, provided that (i) such Letter of Credit is in the amount of
the cash deposits required thereunder and otherwise meets all applicable
requirements related thereto contained herein, and (ii) Borrower gives Lender
ten (10) Business Days prior notice thereof and delivers to Lender a revised
substantive non-consolidation opinion reflecting the delivery of such Letter of
Credit, which opinion shall be in form, scope and substance acceptable in all
respects to the Rating Agencies and in form, scope and substance reasonably
acceptable in all respects to Lender. In the event that Borrower so chooses to
provide any such Letter of Credit, (i) in the event such Letter of Credit is
provided to Lender in substitution of any funds then held by Lender in the Debt
Service Reserve Account, Lender shall, upon receipt of such Letter of Credit,
disburse said funds to Borrower, and (ii) Lender’s “disbursement” of funds set
forth in this Section 9.7 shall be deemed to refer to Lender transferring such
Letter of Credit to Borrower.

          Section 9.8. Operating Expenses; Extraordinary Expenses

          (a) Upon the occurrence of the Optional Prepayment Date, Borrower
shall establish an Eligible Account with Lender or Lender’s agent into which
Borrower shall deposit, on each Scheduled Payment Date from and after the
Optional Prepayment Date, funds sufficient to pay all Operating Expenses
required to be incurred during the following month in accordance with the Annual
Budget approved by Lender (the “Operating Expense Reserve Account”). Amounts so
deposited shall hereinafter be referred to as the “Operating Expense Reserve
Funds”. Provided no Event of Default has occurred and is continuing, sums from
the Operating Expense Reserve Account shall be disbursed by Lender to Borrower
following receipt and approval of Borrower’s written request for the payment of
such Operating Expenses.

          (b) Upon the occurrence of the Optional Prepayment Date, Borrower
shall establishan Eligible Account with Lender or Lender’s agent into which
Borrower shall deposit, on each Scheduled Payment Date from and after the
Optional Prepayment Date, funds sufficient to pay any Extraordinary Expenses, if
any, for the following month which have been approved by Lender (the
“Extraordinary Expense Reserve Account”). Amounts so deposited shall hereinafter
be referred to as the “Extraordinary Expense Reserve Funds”. Provided no Event
of Default has occurred and is continuing, sums from the Extraordinary Expense
Reserve Account shall be disbursed by Lender to Borrower following receipt and
approval of Borrower’s written request for the payment of such Extraordinary
Expenses.

          Section 9.9. Reserve Funds Generally

          (a)          (i) No earnings or interest on the Tax and Insurance
Reserve Account shall be payable to Borrower. Neither Lender nor any loan
servicer that at any time holds or maintains such non-interest-bearing Reserve
Account shall have any obligation to keep or maintain such Reserve Account or
any funds deposited therein in interest-bearing accounts. If Lender or any such
loan servicer elects in its sole and absolute discretion to keep or maintain any
such non-interest-bearing Reserve Account or any funds deposited therein in an
interest-bearing account, the account shall be an Eligible Account and (A) such
funds shall not be invested except in

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Permitted Investments, and (B) all interest earned or accrued thereon shall be
for the account of and be retained by Lender or such loan servicer.

                    (ii) Funds deposited in the Reserve Accounts (other than the
Tax and Insurance Reserve Account) shall be held in one or more Permitted
Investments and interest shall be credited to Borrower. In no event shall Lender
or any loan servicer that at any time holds or maintains such Reserve Accounts
be required to select any particular interest-bearing account or the account
that yields the highest rate of interest, provided that selection of the account
shall be consistent with the general standards at the time being utilized by
Lender or the loan servicer, as applicable, in establishing similar accounts for
loans of comparable type. All such interest shall be and become part of the
applicable Reserve Account, and shall be disbursed in accordance with the
applicable terms and conditions hereof; provided, however, that Lender may, at
its election, retain any such interest for its own account during the occurrence
and continuance of an Event of Default. Borrower agrees that it shall include
all interest on such Reserve Funds as the income of Borrower (and, if Borrower
is a partnership or other pass-through entity, the partners, members or
beneficiaries of Borrower, as the case may be), and shall be the owner of such
Reserve Funds for federal and applicable state and local tax purposes, except to
the extent that Lender retains any interest for its own account during the
occurrence and continuance of an Event of Default (provided, further, that, upon
a cure (if any) of such Event of Default and Lender’s acceptance of the same,
any such interest shall be deemed to be income of (and for the account of)
Borrower).

          (b) Borrower grants to Lender a first-priority perfected security
interest in, and assigns and pledges to Lender, each of the Reserve Accounts and
any and all Reserve Funds now or hereafter deposited in the Reserve Accounts as
additional security for payment of the Debt. Until expended or applied in
accordance herewith, the Reserve Accounts and the Reserve Funds shall constitute
additional security for the Debt. The provisions of this Section 9.9 are
intended to give Lender or any subsequent holder of the Loan “control” of the
Reserve Accounts within the meaning of the UCC.

          (c) The Reserve Accounts and any and all Reserve Funds now or
hereafter deposited in the Reserve Accounts shall be subject to the exclusive
dominion and control of Lender, which shall hold the Reserve Accounts and any or
all Reserve Funds now or hereafter deposited in the Reserve Accounts subject to
the terms and conditions of this Agreement. Borrower shall have no right of
withdrawal from the Reserve Accounts or any other right or power with respect to
the Reserve Accounts or any or all of the Reserve Funds now or hereafter
deposited in the Reserve Accounts, except as expressly provided in this
Agreement.

          (d) Lender shall furnish or cause to be furnished to Borrower, without
charge, an annual accounting of each Reserve Account in the normal format of
Lender or its loan servicer, showing credits and debits to such Reserve Account
and the purpose for which each debit to each Reserve Account was made.

          (e) As long as no Event of Default has occurred and is continuing,
Lender shall make disbursements from the Reserve Accounts in accordance with
this Agreement. All such disbursements shall be deemed to have been expressly
pre-authorized by Borrower, and shall not be deemed to constitute the exercise
by Lender of any remedies against Borrower unless an

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Event of Default has occurred and is continuing and Lender has expressly stated
in writing its intent to proceed to exercise its remedies as a secured party,
pledgee or lienholder with respect to the Reserve Accounts.

          (f) If any Event of Default occurs, Borrower shall immediately lose
all of its rights to receive disbursements from the Reserve Accounts until the
earlier to occur of (i) the date on which such Event of Default is cured and
Lender has accepted such cure, or (ii) the payment in full of the Debt. In
addition, at Lender’s election, Borrower shall lose all of its rights to receive
interest on the applicable Reserve Accounts upon the occurrence and during the
continuance of an Event of Default. Upon the occurrence and continuance of any
Event of Default, Lender may exercise any or all of its rights and remedies as a
secured party, pledgee and lienholder with respect to the Reserve Accounts.
Without limitation of the foregoing, upon any Event of Default, Lender may use
and disburse the Reserve Funds (or any portion thereof) for any of the following
purposes: (A) repayment of the Debt, including, but not limited to, principal
prepayments and the prepayment premium applicable to such full or partial
prepayment (as applicable); (B) reimbursement of Lender for all losses, out of
pocket fees, costs and expenses (including, without limitation, reasonable legal
fees) suffered or incurred by Lender as a result of such Event of Default; (C)
payment of any amount expended in exercising any or all rights and remedies
available to Lender at law or in equity or under this Agreement or under any of
the other Loan Documents; (D) payment of any item from any of the Reserve
Accounts as required or permitted under this Agreement; or (E) any other purpose
permitted by applicable law; provided, however, that any such application of
funds shall not cure or be deemed to cure any Event of Default. Without limiting
any other provisions hereof, each of the remedial actions described in the
immediately preceding sentence shall be deemed to be a commercially reasonable
exercise of Lender’s rights and remedies as a secured party with respect to the
Reserve Funds and shall not in any event be deemed to constitute a set off or a
foreclosure of a statutory banker’s lien. Nothing in this Agreement shall
obligate Lender to apply all or any portion of the Reserve Funds to effect a
cure of any Event of Default, or to pay the Debt, or in any specific order of
priority. The exercise of any or all of Lender’s rights and remedies under this
Agreement or under any of the other Loan Documents shall not in any way
prejudice or affect Lender’s right to initiate and complete a foreclosure under
the Mortgage.

          (g) The Reserve Funds shall not constitute escrow or trust funds and
may be commingled with other monies held by Lender. Notwithstanding anything
else herein to the contrary, Lender may commingle in one or more Eligible
Accounts any and all funds controlled by Lender, including, without limitation,
funds pledged in favor of Lender by other borrowers, whether for the same
purposes as the Reserve Accounts or otherwise. Without limiting any other
provisions of this Agreement or any other Loan Document, the Reserve Accounts
may be established and held in such name or names as Lender or its loan
servicer, as agent for Lender, shall deem appropriate, including, without
limitation, in the name of Lender or such loan servicer as agent for Lender. In
the case of any Reserve Account which is held in a commingled account, Lender or
its loan servicer, as applicable, shall maintain records sufficient to enable it
to determine at all times which portion of such account is related to the Loan.
The Reserve Accounts are solely for the protection of Lender. With respect to
the Reserve Accounts, Lender shall have no responsibility beyond the allowance
of due credit for the sums actually received by Lender or beyond the
reimbursement or payment of the costs and expenses for which such accounts were
established in accordance with their terms. Upon assignment of the Loan by

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Lender, any Reserve Funds shall be turned over to the assignee and any
responsibility of Lender as assignor shall terminate. The requirements of this
Agreement concerning Reserve Accounts in no way supersede, limit or waive any
other rights or obligations of the parties under any of the Loan Documents or
under applicable law.

          (h) Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in the Reserve
Accounts or the Reserve Funds deposited therein or permit any Lien to attach
thereto, except for the security interest granted in this Section 9.9, or any
levy to be made thereon, or any UCC Financing Statements, except those naming
Lender as the secured party, to be filed with respect thereto.

          (i) Borrower will maintain the security interest created by this
Section 9.9 as a first priority perfected security interest and will defend the
right, title and interest of Lender in and to the Reserve Accounts and the
Reserve Funds against the claims and demands of all Persons whomsoever. At any
time and from time to time, upon the written request of Lender, and at the sole
expense of Borrower, Borrower will promptly and duly execute and deliver such
further instruments and documents and will take such further actions as Lender
reasonably may request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted.

ARTICLE 10
CASH MANAGEMENT

          Section 10.1. Cash Management Account

          (a) Borrower acknowledges and confirms that Borrower has established,
and Borrower covenants that it shall maintain, an Eligible Account with Lender
or Lender’s agent (in such capacity, the “Cash Management Bank”) into which
Borrower shall, and shall cause Manager and each Tenant to, deposit or cause to
be deposited, all Rents and other revenue from the Property (such account, all
funds at any time on deposit therein and any proceeds, replacements or
substitutions of such account or funds therein, are referred to herein as the
“Cash Management Account”).

          (b) The Cash Management Account shall be in the name of Borrower in
trust for the benefit of Lender, provided that Borrower shall be the owner of
all funds on deposit in such accounts for federal and applicable state and local
tax purposes (except to the extent Lender retains any interest earned on the
Cash Management Account for its own account). Sums on deposit in the Cash
Management Account shall not be invested except in such Permitted Investments as
determined and directed by Lender and all income earned thereon shall be the
income of Borrower (other than income earned on the Tax and Insurance Reserve
Funds or income earned after the occurrence and continuance of an Event of
Default (provided, that, upon a cure (if any) of such Event of Default and
Lender’s acceptance of the same, any such income shall be deemed to be income of
(and for the account of) Borrower)). Lender shall have no liability for any loss
resulting from the investment of funds in Permitted Investments in accordance
with the terms and conditions of this Agreement.

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          (c) The Cash Management Account shall be subject to the exclusive
dominion and control of Lender and, except as otherwise expressly provided
herein, neither Borrower, Manager nor any other party claiming on behalf of, or
through, Borrower or Manager, shall have any right of withdrawal therefrom or
any other right or power with respect thereto.

          (d) Borrower agrees to pay the customary fees and expenses of Lender
(incurred in connection with maintaining the Cash Management Account) and any
successors thereto in connection therewith, as separately agreed by them from
time to time.

          (e) Lender shall be responsible for the performance only of such
duties with respect to the Cash Management Account as are specifically set forth
herein, and no duty shall be implied from any provision hereof. Lender shall not
be under any obligation or duty to perform any act which would involve it in
expense or liability or to institute or defend any suit in respect hereof, or to
advance any of its own monies. Borrower shall indemnify and hold Lender and its
directors, employees, officers and agents harmless from and against any loss,
cost or damage (including, without limitation, reasonable out of pocket
attorneys’ fees and disbursements) incurred by such parties in connection with
the Cash Management Account other than such as a result from the gross
negligence or willful misconduct of Lender or intentional nonperformance by
Lender of its obligations under this Agreement.

 

 

 

Section 10.2. Deposits and Withdrawals

 

 

 

(a) Borrower represents, warrants and covenants that:

 

 

 

          (i) Concurrently with the execution of this Agreement, Borrower shall
notify and advise Sotheby’s to send directly to the Cash Management Account all
payments of Rents or any other item payable under the Sotheby’s Lease pursuant
to an instruction letter substantially in the form of Exhibit C attached hereto
(a “Tenant Direction Letter”). If Borrower fails to provide any such notice (and
without prejudice to Lender’s rights with respect to such default), Lender shall
have the right, and Borrower hereby grants to Lender a power of attorney (which
power of attorney shall be coupled with an interest and irrevocable so long as
any portion of the Debt remains outstanding), to sign and deliver a Tenant
Direction Letter;

 

 

 

          (ii) Borrower shall, and shall cause Manager to, instruct all Persons
that maintain open accounts with Borrower or Manager with respect to the
Property or with whom Borrower or Manager does business on an “accounts
receivable” basis with respect to the Property to deliver all payments due under
such accounts to the Cash Management Account. Neither Borrower nor Manager shall
direct any such Person to make payments due under such accounts in any other
manner;

 

 

 

          (iii) All Rents or other income from the Property shall (A) be deemed
additional security for payment of the Debt and shall be held in trust for the
benefit, and as the property, of Lender, (B) not be commingled with any other
funds or property of Borrower or Manager, and (C) if received by Borrower or
Manager notwithstanding the delivery of a Tenant Direction Letter, be deposited
in the Cash Management Account within five (5) Business Days of receipt;

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          (iv) Without the prior written consent of Lender, so long as any
portion of the Debt remains outstanding, neither Borrower nor Manager shall
terminate, amend, revoke or modify any Tenant Direction Letter in any manner
whatsoever or direct or cause any Tenant to pay any amount in any manner other
than as provided in the related Tenant Direction Letter; and

 

 

 

          (v) So long as any portion of the Debt remains outstanding, neither
Borrower, Manager nor any other Person shall open or maintain any accounts other
than the Cash Management Account into which revenues from the ownership and
operation of the Property are deposited. The foregoing shall not prohibit
Borrower from utilizing one or more separate accounts for the disbursement or
retention of funds that have been transferred to Borrower pursuant to the
express terms of this Agreement.

 

 

           (b)       (i) On each Scheduled Payment Date prior to the Optional
Prepayment Date (and if such day is not a Business Day, then the immediately
preceding day which is a Business Day), Borrower hereby irrevocably authorizes
Lender to withdraw or allocate to the following sub-accounts of the Cash
Management Account, as the case may be, amounts received in the Cash Management
Account, in each case to the extent that sufficient funds remain therefor, in
the following amounts and order of priority:

 

 

 

               (A) if required pursuant to Section 9.6 hereof, funds sufficient
to pay the monthly deposits to the Tax and Insurance Reserve Account, if any,
shall be allocated to the Tax and Insurance Reserve Account to be held and
disbursed in accordance with Section 9.6;

 

 

 

               (B) funds sufficient to pay the I/O Monthly Payment Amount or
Monthly Payment Amount, as applicable, shall be withdrawn and paid to Lender;

 

 

 

               (C) if required pursuant to Section 9.2(b) hereof, funds
sufficient to pay the Replacement Reserve Monthly Deposit, if any, shall be
allocated to the Replacement Reserve Account to be held and disbursed in
accordance with Section 9.5;

 

 

 

               (D) funds sufficient to pay any interest accruing at the Default
Rate, late payment charges, if any, and any other sums due and payable to Lender
under any of the Loan Documents, shall be withdrawn and paid to Lender and
applied against such items; and

 

 

 

               (E) funds in an amount equal to the balance (if any) remaining on
deposit in the Cash Management Account after the foregoing withdrawals and
allocations shall be disbursed to Borrower provided no Event of Default has
occurred and is continuing.

 

 

                      (ii) On each Scheduled Payment Date from and after the
Optional Prepayment Date (and if such day is not a Business Day, then the
immediately preceding day which is a Business Day), Borrower hereby irrevocably
authorizes Lender to withdraw or allocate to the following sub-accounts of the
Cash Management Account, as the case may be, amounts received in the Cash
Management Account, in each case to the extent that sufficient funds remain
therefor, in the following amounts and order of priority:

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               (A) if required pursuant to Section 9.6 hereof, funds sufficient
to pay the monthly deposits to the Tax and Insurance Reserve Account, if any,
shall be allocated to the Tax and Insurance Reserve Account to be held and
disbursed in accordance with Section 9.6;

 

 

 

               (B) funds sufficient to pay Operating Expenses for the following
month to be incurred in accordance with the related Annual Budget shall be
allocated to the Operating Expense Reserve Account to be held and disbursed in
accordance with Section 9.8;

 

 

 

               (C) funds sufficient to pay the Monthly Payment Amount shall be
withdrawn and paid to Lender;

 

 

 

               (D) funds sufficient to pay the Replacement Reserve Monthly
Deposit, if any, shall be allocated to the Replacement Reserve Account to be
held and disbursed in accordance with Section 9.5;

 

 

 

               (E) funds sufficient to pay any interest accruing at the Default
Rate, late payment charges, if any, and any other sums due and payable to Lender
under any of the Loan Documents, shall be withdrawn and paid to Lender and
applied against such items; and

 

 

 

               (F) funds sufficient to pay any Additional Replacements for the
following month which have been approved by Lender shall be allocated to the
Replacement Reserve Account to be held and disbursed in accordance with Section
9.5;

 

 

 

               (G) funds sufficient to pay any Extraordinary Expenses for the
following month which have been approved by Lender shall be allocated to the
Extraordinary Expense Account to be held and disbursed in accordance with
Section 9.8;

 

 

 

               (H) provided no Event of Default shall have occurred and be
continuing, funds in an amount equal to the balance (if any) remaining on
deposit in the Cash Management Account after the foregoing withdrawals and
allocations (“Excess Cash Flow”) shall be withdrawn and paid to Lender to be
applied, in each case pro rata (based on the initial principal balance of Note A
and Note B) to Note A and Note B, (1) first, to the reduction of the outstanding
principal balance of the Loan, (2) second, to the payment of Accrued Interest
(without duplication of any amount paid pursuant to Section 10.2(b)(ii)(C)), and
(3) third, to the extent permitted under applicable law, to the payment of
interest on the Accrued Interest at the Revised Note Rate (without duplication
of any amount paid pursuant to Section 10.2(b)(ii)(C)).

 

 

           (c) Notwithstanding anything to the contrary herein, Borrower
acknowledges that Borrower is responsible for monitoring the sufficiency of
funds deposited in the Cash Management Account and that Borrower is liable for
any deficiency in available funds, irrespective of whether Borrower has received
any account statement, notice or demand from Lender or Lender’s servicer. If the
amount on deposit in the Cash Management Account is insufficient to make all of
the withdrawals and allocations described in Section 10.2(c)(i) through (iv)
above, Borrower shall deposit such deficiency into the Cash Management Account
within

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five (5) days (provided that such five day period shall not constitute a grace
period for any default or Event of Default under this Agreement or any other
Loan Document based on a failure to satisfy any monetary obligation provided in
any Loan Document).

          (d) Notwithstanding any other provision contained in this Agreement or
in any of the other Loan Documents, if an Event of Default shall have occurred
and be continuing, Borrower shall have no rights to receive any sums on deposit
in the Cash Management Account or the Reserve Accounts and Borrower hereby
irrevocably authorizes Lender to (I) liquidate and transfer any amounts then
invested in Permitted Investments pursuant to the applicable terms hereof to the
Reserve Accounts or reinvest such amounts in other Permitted Investments as
Lender may reasonably determine is necessary to perfect or protect any security
interest granted or purported to be granted hereby or pursuant to the other Loan
Documents or to enable Lender to exercise and enforce Lender’s rights and
remedies hereunder or under any other Loan Document with respect to any Reserve
Account, and (II) make any and all withdrawals from the Cash Management Account
and transfers between any of the Reserve Accounts as Lender shall determine in
Lender’s sole and absolute discretion and Lender shall apply such funds as set
forth in Section 10.3(c) below. Lender’s right to withdraw and apply funds as
stated herein shall be in addition to all other rights and remedies provided to
Lender under this Agreement, the Note, the Mortgage and the other Loan
Documents.

          Section 10.3. Security Interest

          (a) To secure the full and punctual payment of the Debt and
performance of all obligations of Borrower now or hereafter existing under this
Agreement and the other Loan Documents, Borrower hereby grants to Lender a
first-priority perfected security interest in the Cash Management Account, all
interest, cash, checks, drafts, certificates and instruments, if any, from time
to time deposited or held therein, any and all amounts invested in Permitted
Investments, and all “proceeds” (as defined in the UCC as in effect in the state
in which the Cash Management Account is located or maintained) of any or all of
the foregoing. Furthermore, Borrower shall not, without obtaining the prior
written consent of Lender, further pledge, assign or grant any security interest
in any of the foregoing or permit any Lien to attach thereto or any levy to be
made thereon or any UCC Financing Statements to be filed with respect thereto.
Borrower will maintain the security interest created by this Section 10.3(a) as
a first priority perfected security interest and will defend the right, title
and interest of Lender in and to the Cash Management Account against the claims
and demands of all Persons whomsoever.

          (b) Borrower authorizes Lender to file any financing statement or
statements required by Lender to establish or maintain the validity, perfection
and priority of the security interest granted herein in connection with the Cash
Management Account. Borrower agrees that at any time and from time to time, at
the expense of Borrower, Borrower will promptly and duly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that Lender may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby (including, without limitation, any security interest in and to any
Permitted Investments) or to enable Lender to exercise and enforce its rights
and remedies hereunder.

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          (c) Upon the occurrence and continuance of an Event of Default, Lender
may exercise any or all of its rights and remedies as a secured party, pledgee
and lienholder with respect to the Cash Management Account. Without limitation
of the foregoing, upon any Event of Default, Lender may use the Cash Management
Account for any of the following purposes: (A) repayment of the Debt, including,
but not limited to, principal prepayments and the prepayment premium applicable
to such full or partial prepayment (as applicable), and any such payments may be
applied by Lender to Note A and/or Note B in such order and priority as Lender
may determine in its sole and absolute discretion; (B) reimbursement of Lender
for all losses, out of pocket fees, costs and expenses (including, without
limitation, reasonable legal fees) suffered or incurred by Lender as a result of
such Event of Default; (C) payment of any amount expended in exercising any or
all rights and remedies available to Lender at law or in equity or under this
Agreement or under any of the other Loan Documents; or (D) payment of any item
as required or permitted under this Agreement; provided, however, that any such
application of funds shall not cure or be deemed to cure any Event of Default.
Without limiting any other provisions hereof, each of the remedial actions
described in the immediately preceding sentence shall be deemed to be a
commercially reasonable exercise of Lender’s rights and remedies as a secured
party with respect to the Cash Management Account and shall not in any event be
deemed to constitute a setoff or a foreclosure of a statutory banker’s lien.
Nothing in this Agreement shall obligate Lender to apply all or any portion of
the Cash Management Account to effect a cure of any Event of Default, or to pay
the Debt, or in any specific order of priority. The exercise of any or all of
Lender’s rights and remedies under this Agreement or under any of the other Loan
Documents shall not in any way prejudice or affect Lender’s right to initiate
and complete a foreclosure under the Mortgage.

ARTICLE 11
EVENTS OF DEFAULT; REMEDIES

          Section 11.1. Event of Default

          The occurrence of any one or more of the following events shall
constitute an “Event of Default”:

          (a) if any portion of the Debt is not paid on or prior to the ninth
day following the date the same is due or if the entire Debt is not paid on or
before the Maturity Date; provided, however, Borrower shall not be in default so
long as there is sufficient money in the Cash Management Account for payment of
all amounts then due and payable (including any deposits into Reserve Accounts)
and Lender’s access to such money has not been constrained or constricted in any
manner;

          (b) except as otherwise expressly provided in the Loan Documents, if
any of the Taxes or Other Charges are not paid prior to the thirtieth day
following the date when the same are due and payable, unless there is sufficient
money in the Tax and Insurance Reserve Account for payment of amounts then due
and payable and Lender’s access to such money has not been constrained or
restricted in any manner;

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          (c) if the Policies are not kept in full force and effect, or if the
Insurance Certificates and certified copies of the Policies are not delivered to
Lender as provided in, and within the respective time periods set forth in,
Section 8.1;

          (d) if Borrower breaches any covenant with respect to itself or any
SPE Component Entity (if any) contained in Article 6 or any covenant contained
in Article 7 hereof;

          (e) if any representation or warranty of, or with respect to,
Borrower, Borrower Principal, any SPE Component Entity, or any member, general
partner, principal or beneficial owner of any of the foregoing, made herein, in
any other Loan Document, or in any certificate, report, financial statement or
other instrument or document furnished to Lender at the time of the closing of
the Loan or during the term of the Loan shall have been false or misleading in
any material respect when made and the same has a material adverse effect on the
value of the Property or of the Loan;

          (f) if (i) Borrower or any SPE Component Entity (if any) shall
commence any case, proceeding or other action (A) under any Creditors Rights
Laws, seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or
Borrower or any SPE Component Entity (if any) shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against
Borrower or any SPE Component Entity (if any) any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of sixty (60) days;
or (iii) there shall be commenced against Borrower or any SPE Component Entity
(if any) any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of any order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within sixty (60) days from the entry thereof; or (iv) Borrower
or any SPE Component Entity (if any) shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) Borrower or any SPE Component
Entity (if any) shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due;

          (g) if Borrower shall be in default beyond applicable notice and grace
periods under any other mortgage, deed of trust, deed to secure debt or other
security agreement covering any part of the Property, whether it be superior or
junior in lien to the Mortgage;

           (h) if the Property becomes subject to any mechanic’s, materialman’s
or other Lien other than a Lien for any Taxes or Other Charges not then due and
payable and the Lien shall remain undischarged of record (by payment, bonding or
otherwise) for a period of (i) to the extent the Sotheby’s Lease is in full
force and effect, one hundred twenty (120) days after Borrower’s receipt of
notice of the same, or (ii) to the extent the Sotheby’s Lease is not in full
force and effect, thirty (30) days after Borrower’s receipt of notice of the
same;

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          (i) if any federal tax lien is filed against Borrower or any SPE
Component Entity (if any) or the Property and same is not discharged of record
or bonded to Lender’s reasonable satisfaction within thirty (30) days after same
is filed;

          (j) if a final, non-appealable judgment not covered by the Policies is
filed against the Borrower in excess of $500,000 which is not vacated, bonded or
discharged within 30 days;

          (k) if any default occurs under any guaranty or indemnity executed in
connection herewith and such default continues after the expiration of
applicable grace periods, if any;

          (1) Intentionally Omitted; or

          (m) if Borrower shall continue to be in default under any other term,
covenant or condition of this Agreement or any of the Loan Documents for more
than ten (10) days after notice from Lender in the case of any default which can
be cured by the payment of a sum of money or for thirty (30) days after notice
from Lender in the case of any other default, provided that if such default
cannot reasonably be cured within such thirty (30) day period and Borrower shall
have commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for so long as it shall require Borrower in
the exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of one hundred twenty (120) days.

          Section 11.2. Remedies

          (a) Upon the occurrence and during the continuance of an Event of
Default (other than an Event of Default described in Section 11.1 (f) above),
Lender may, in addition to any other rights or remedies available to it pursuant
to this Agreement and the other Loan Documents or at law or in equity, take such
action, without notice or demand, that Lender deems advisable to protect and
enforce its rights against Borrower and in the Property, including, without
limitation, declaring the Debt to be immediately due and payable, and Lender may
enforce or avail itself of any or all rights or remedies provided in the Loan
Documents against Borrower and the Property, including, without limitation, all
rights or remedies available at law or in equity; and upon any Event of Default
described in Section 11.l(f) above, the Debt and all other obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained herein or
in any other Loan Document to the contrary notwithstanding.

          (b) Upon the occurrence and continuance of an Event of Default, all or
any one or more of the rights, powers, privileges and other remedies available
to Lender against Borrower under this Agreement or any of the other Loan
Documents executed and delivered by, or applicable to, Borrower or at law or in
equity may be exercised by Lender at any time and from time to time, whether or
not all or any of the Debt shall be declared due and payable, and whether or not
Lender shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Property. Any such actions taken by Lender shall be cumulative
and concurrent and may be

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pursued independently, singularly, successively, together or otherwise, at such
time and in such order as Lender may determine in its sole discretion, to the
fullest extent permitted by law, without impairing or otherwise affecting the
other rights and remedies of Lender permitted by law, equity or contract or as
set forth herein or in the other Loan Documents.

ARTICLE 12
ENVIRONMENTAL PROVISIONS

          Section 12.1. Environmental Representations and Warranties

          Except as set forth in the Environmental Report, Borrower represents
and warrants, based upon the Environmental Report, the Engineering Report, any
other third party, due diligence contracted for in connection herewith and
information that Borrower knows, that: (a) there are no Hazardous Materials or
underground storage tanks in, on, or under the Property, except those that are
both (i) in compliance with Environmental Laws and with permits issued pursuant
thereto (if such permits are required), if any, and (ii) either (A) in the case
of Hazardous Materials, in amounts not in excess of that necessary to operate
the Property for the purposes set forth herein or (B) fully disclosed to and
approved by Lender in writing pursuant to an Environmental Report; (b) there are
no past, present or threatened Releases of Hazardous Materials in violation of
any Environmental Law or which would require remediation by a Governmental
Authority in, on, under or from the Property except as described in the
Environmental Report; (c) there is no threat of any Release of Hazardous
Materials migrating to the Property except as described in the Environmental
Report; (d) there is no past or present non-compliance with Environmental Laws,
or with permits issued pursuant thereto, in connection with the Property except
as described in the Environmental Report; (e) Borrower does not know of, and has
not received, any written or oral notice or other communication from any Person
relating to Hazardous Materials in, on, under or from the Property; and (f)
Borrower has truthfully and fully provided to Lender, in writing, any and all
information relating to environmental conditions in, on, under or from the
Property known to Borrower or contained in Borrower’s files and records,
including but not limited to any reports relating to Hazardous Materials in, on,
under or migrating to or from the Property and/or to the environmental condition
of the Property.

          Section 12.2. Environmental Covenants

          Borrower covenants and agrees that so long as Borrower owns, manages,
is in possession of, or otherwise controls the operation of the Property: (a)
all uses and operations on or of the Property, whether by Borrower or any other
Person, shall be in compliance with all Environmental Laws and permits issued
pursuant thereto; (b) there shall be no Releases of Hazardous Materials in, on,
under or from the Property; (c) there shall be no Hazardous Materials in, on, or
under the Property, except those that are both (i) in compliance with all
Environmental Laws and with permits issued pursuant thereto, if and to the
extent required, and (ii) (A) in amounts not in excess of that necessary to
operate the Property for the purposes set forth herein or (B) fully disclosed to
and approved by Lender in writing; (d) Borrower shall keep the Property free and
clear of all Environmental Liens; (e) Borrower shall, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to Section
12.4 below, including but not limited to providing all relevant information and
making knowledgeable

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persons available for interviews; (f) Borrower shall, at its sole cost and
expense, perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
reasonable written request of Lender, upon Lender’s reasonable belief that the
Property is not in full compliance with all Environmental Laws, and share with
Lender the reports and other results thereof, and Lender and other Indemnified
Parties shall be entitled to rely on such reports and other results thereof; (g)
Borrower shall, at its sole cost and expense, comply with all reasonable written
requests of Lender to (i) reasonably effectuate remediation of any Hazardous
Materials in, on, under or from the Property; and (ii) comply with any
Environmental Law; (h) Borrower shall not allow any tenant or other user of the
Property to violate any Environmental Law; and (i) Borrower shall immediately
notify Lender in writing after it has become aware of (A) any presence or
Release or threatened Release of Hazardous Materials in, on, under, from or
migrating towards the Property; (B) any non-compliance with any Environmental
Laws related in any way to the Property; (C) any actual or potential
Environmental Lien against the Property; (D) any required or proposed
remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other communication of which Borrower becomes aware
from any source whatsoever (including but not limited to a Governmental
Authority) relating in any way to Hazardous Materials.

          Section 12.3. Lender’s Rights

          Upon Lender’s reasonable belief that the Property is not in full
compliance with all Environmental Laws, Lender and any other Person designated
by Lender, including but not limited to any representative of a Governmental
Authority, and any environmental consultant, and any receiver appointed by any
court of competent jurisdiction, shall have the right, but not the obligation,
to enter upon the Property at all reasonable times (subject to the rights of
Tenants under Leases) to assess any and all aspects of the environmental
condition of the Property and its use, including but not limited to conducting
any environmental assessment or audit (the scope of which shall be determined in
Lender’s sole discretion) and taking samples of soil, groundwater or other
water, air, or building materials, and conducting other invasive testing.
Borrower shall cooperate with and provide access to Lender and any such person
or entity designated by Lender.

          Section 12.4. Operations and Maintenance Programs

          If recommended by the Environmental Report or any other environmental
assessment or audit of the Property, Borrower shall establish and comply with
(or cause to be complied with) an operations and maintenance program with
respect to the Property, in form and substance reasonably acceptable to Lender,
prepared by an environmental consultant reasonably acceptable to Lender, which
program shall address any asbestos-containing material or lead based paint or
mold (which shall mean mold, fungi, bacterial or microbial matter) that may now
or in the future be detected at or on the Property. Without limiting the
generality of the preceding sentence, Lender may require (a) periodic notices or
reports to Lender in form, substance and at such intervals as Lender may
specify, (b) an amendment to such operations and maintenance program to address
changing circumstances, laws or other matters, (c) at Borrower’s sole expense,
supplemental examination of the Property by consultants specified by Lender, (d)
subject to the rights of Tenants under Leases, access to the Property by Lender,
its agents or servicer, to review and assess the environmental condition of the
Property and Borrower’s compliance with any

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operations and maintenance program, and (e) variation of the operations and
maintenance program in response to the reports provided by any such consultants.

          Section 12.5. Environmental Definitions

          “Environmental Law” means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations, standards, policies and
other government directives or requirements, as well as common law, including
but not limited to the Comprehensive Environmental Response, Compensation and
Liability Act and the Resource Conservation and Recovery Act, that apply to
Borrower or the Property and relate to Hazardous Materials or protection of
human health or the environment. “Environmental Liens” means all Liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to any act
or omission of Borrower or any other Person. “Hazardous Materials” shall mean
petroleum and petroleum products and compounds containing them, including
gasoline, diesel fuel and oil; explosives, flammable materials; radioactive
materials; polychlorinated biphenyls and compounds containing them; lead and
lead-based paint; asbestos or asbestos-containing materials in any form that is
or could become friable; mold (which shall mean mold, fungi, bacterial or
microbial matter); underground or above-ground storage tanks, whether empty or
containing any substance; any substance the presence of which on the Property is
prohibited by any federal, state or local authority; any substance that requires
special handling; and any other material or substance now or in the future
defined as a “hazardous substance,” “hazardous material”, “hazardous waste”,
“toxic substance”, “toxic pollutant”, “contaminant”, or “pollutant” within the
meaning of any Environmental Law; provided, that, the term “Hazardous Materials”
shall not include or apply to (A) substances reasonably necessary for the
regular and ordinary maintenance of the Property or consumed in the regular and
ordinary use of the Property or (B) gas or other fuels used in connection with
electrical generating equipment for the Property, but in each case under (A)
and/or (B) above, only if the use and/or possession of the same does not
constitute, give rise to, nor create any material risk of any violation of any
Environmental Laws; “Release” of any Hazardous Materials includes but is not
limited to any release, deposit, discharge, emission, leaking, spilling,
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping,
disposing or other movement of Hazardous Materials.

          Section 12.6. Indemnification

          (a) Borrower and Borrower Principal covenant and agree at their sole
cost and expense, to protect, defend, indemnify, release and hold Indemnified
Parties harmless from and against any and all Losses imposed upon or incurred by
or asserted against any Indemnified Parties and directly or indirectly arising
out of or in any way relating to any one or more of the following: (i) any
presence of any Hazardous Materials in, on, above, or under the Property; (ii)
any past, present or threatened Release of Hazardous Materials in, on, above,
under or from the Property; (iii) any activity by Borrower, any Person
affiliated with Borrower, and any Tenant or other user of the Property in
connection with any actual, proposed or threatened use, treatment, storage,
holding, existence, disposition or other Release, generation, production,
manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from the Property of any Hazardous
Materials at any time located in, under, on or above the Property or any actual
or proposed remediation of any Hazardous Materials at any time located in,
under, on or above the Property, whether or not such remediation is

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voluntary or pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (iv) any past, present or
threatened non-compliance or violations of any Environmental Laws (or permits
issued pursuant to any Environmental Law) in connection with the Property or
operations thereon, including but not limited to any failure by Borrower, any
person or entity affiliated with Borrower, and any tenant or other user of the
Property to comply with any order of any Governmental Authority in connection
with any Environmental Laws; (v) the imposition, recording or filing or the
threatened imposition, recording or filing of any Environmental Lien encumbering
the Property; (vi) any acts of Borrower, any person or entity affiliated with
Borrower, and any tenant or other user of the Property in (A) arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Materials at any facility or incineration
vessel containing such or similar Hazardous Materials or (B) accepting any
Hazardous Materials for transport to disposal or treatment facilities,
incineration vessels or sites from which there is a Release, or a threatened
Release of any Hazardous Substance which causes the incurrence of costs for
remediation; and (vii) any misrepresentation or inaccuracy in any representation
or warranty or material breach or failure to perform any covenants or other
obligations pursuant to this Agreement relating to environmental matters.

          (b) Upon written request by any Indemnified Party, Borrower and
Borrower Principal shall defend same (if requested by any Indemnified Party, in
the name of the Indemnified Party) by attorneys and other professionals selected
by Borrower and Borrower Principal and reasonably approved by the Indemnified
Parties (the “Approved Parties”). After the Approved Parties have assumed the
defense of any Indemnified Party, Borrower and Borrower Principal shall not be
responsible for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the defendants in any such action
include both the Indemnified Party and Borrower and/or Borrower Principal and
the Indemnified Party shall have reasonably concluded that there are any legal
defenses available to it and/or other Indemnified Parties that are different
from or additional to those available to Borrower and/or Borrower Principal, the
Indemnified Party shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such Indemnified Party. Borrower and Borrower Principal shall not be
liable for the expenses of more than one such separate counsel unless an
Indemnified Party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another Indemnified Party.

          (c) Notwithstanding the foregoing, Borrower shall have no liability
for any Losses imposed upon or incurred by or asserted against any Indemnified
Parties and described in subsection (a) above to the extent that Borrower can
conclusively prove both that such Losses were caused solely by actions,
conditions or events that occurred after the date that Lender (or any purchaser
at a foreclosure sale) actually acquired title to the Property and that such
Losses were not caused by the direct or indirect actions of Borrower, Borrower
Principal, or any partner, member, principal, officer, director, trustee or
manager of Borrower or Borrower Principal or any employee, agent, contractor or
Affiliate of Borrower or Borrower Principal. The obligations and liabilities of
Borrower and Borrower Principal under this Section 12.6 shall fully survive
indefinitely notwithstanding any termination, satisfaction, assignment, entry of
a judgment of

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foreclosure, exercise of any power of sale, or delivery of a deed in lieu of
foreclosure of the Mortgage.

ARTICLE 13
SECONDARY MARKET

          Section 13.1. Transfer of Loan

          Lender may, at any time, sell, transfer or assign the Loan Documents,
or grant participations therein (“Participations”) or syndicate the Loan
(“Syndication”) or issue mortgage pass-through certificates or other securities
evidencing a beneficial interest in a rated or unrated public offering or
private placement (“Securities”) (a Syndication or the issuance of
Participations and/or Securities, a “Securitization”).

          Section 13.2. Delegation of Servicing

          At the option of Lender, the Loan may be serviced by a
servicer/trustee selected by Lender and Lender may delegate all or any portion
of its responsibilities under this Agreement and the other Loan Documents to
such servicer/trustee pursuant to a servicing agreement between Lender and such
servicer/trustee.

          Section 13.3. Dissemination of Information

          Lender may forward to each purchaser, transferee, assignee, or
servicer of, and each participant, or investor in, the Loan, or any
Participations and/or Securities or any of their respective successors
(collectively, the “Investor”) or any Rating Agency rating the Loan, or any
Participations and/or Securities, each prospective Investor, and any
organization maintaining databases on the underwriting and performance of
commercial mortgage loans, all documents and information which Lender now has or
may hereafter acquire relating to the Debt and to Borrower, any managing member
or general partner thereof, Borrower Principal, any SPE Component Entity (if
any) and the Property, including financial statements, whether furnished by
Borrower or otherwise, as Lender determines necessary or desirable; provided,
that, notwithstanding anything to the contrary contained herein, in connection
with any written disclosure set forth in any Disclosure Document regarding any
financial information provided to Lender relating to Borrower Principal, Lender
shall only include the Net Worth Statement in any such Disclosure Document.
Borrower irrevocably waives any and all rights it may have under applicable
Legal Requirements to prohibit such disclosure, including but not limited to any
right of privacy.

          Section 13.4. Cooperation

          At the request of the holder of the Note and, to the extent not
already required to be provided by Borrower under this Agreement, Borrower and
Borrower Principal shall use reasonable efforts to provide information not in
the possession of the holder of the Note in order to satisfy the market
standards to which the holder of the Note customarily adheres or which may be
reasonably required in the marketplace or by the Rating Agencies in connection
with such sales or transfers, including, without limitation, to:

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          (a) provide updated financial, budget and other information with
respect to the Property, Borrower, Borrower Principal and Manager and provide
modifications and/or updates to the appraisals, market studies, environmental
reviews and reports (Phase I reports and, if appropriate, Phase II reports) and
engineering reports of the Property obtained in connection with the making of
the Loan (all of the foregoing being referred to as the “Provided Information”),
together, if customary, with appropriate verification and/or consents of the
Provided Information through letters of auditors or opinions of counsel of
independent attorneys acceptable to Lender and the Rating Agencies;

          (b) make changes to those portions of the organizational documents of
Borrower or any SPE Component Entity relating to the criteria for single
purpose, bankruptcy remote entities promulgated by the Rating Agencies;

          (c) cause counsel to render or update existing opinion letters as to
enforceability and non-consolidation, and a 10b-5 comfort letter, which may be
relied upon by the holder of the Note, the Rating Agencies and their respective
counsel, which shall be dated as of the closing date of the Securitization;

          (d) permit site inspections in accordance with the terms of this
Agreement, appraisals, market studies and other due diligence investigations of
the Property, as may be reasonably requested by the holder of the Note or the
Rating Agencies or as may be necessary or appropriate in connection with the
Securitization;

          (e) make the representations and warranties with respect to the
Property, Borrower, Borrower Principal and the Loan Documents as are made in the
Loan Documents and such other representations and warranties as may be
reasonably requested by the holder of the Note or the Rating Agencies; provided,
that Borrower and Borrower Principal shall not be required to make any
representations or warranties relating to (I) description of risks (including
legal and tax risks) set forth in the Disclosure Document or numbers or figures
which have been adjusted by any member of the Issuer Group or the Underwriter
Group and included in the Disclosure Document, (II) matters with respect to
which Borrower and/or Borrower Principal have informed Lender in writing that
the same are incorrect, materially misleading or omit pertinent information, or
(III) matters that the Issuer Group and/or the Underwriter Group have determined
are not material or matters for which Borrower and/or Borrower Principal has not
provided (or caused to be provided) the relevant facts;

          (f) execute such amendments to the Loan Documents as may be reasonably
requested by the holder of the Note or the Rating Agencies or otherwise to
effect the Securitization including, without limitation, bifurcation of the Loan
into two or more components and/or separate notes and/or creating a
senior/subordinate note structure; provided, however, that Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (i) change the interest rate, the stated maturity or the amortization of
principal set forth in the Note, except in connection with a bifurcation of the
Loan which may result in varying fixed interest rates and amortization
schedules, but which shall have the same initial weighted average coupon of the
original Note, or (ii) in the reasonable judgment of Borrower, modify or amend
any other economic or material business term of the Loan, or (iii) in the
reasonable judgment of Borrower, materially increase Borrower’s obligations and
liabilities

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under the Loan Documents or materially decrease the rights of Borrower under the
Loan Documents;

          (g) deliver to Lender and/or any Rating Agency, (i) one or more
certificates executed by an officer of the Borrower certifying as to the
accuracy, as of the closing date of the Securitization, of all representations
made by Borrower in the Loan Documents as of the Closing Date in all relevant
jurisdictions or, if such representations are no longer accurate, certifying as
to what modifications to the representations would be required to make such
representations accurate as of the closing date of the Securitization, and (ii)
certificates of the relevant Governmental Authorities in all relevant
jurisdictions indicating the good standing and qualification of Borrower as of
the date of the closing date of the Securitization;

          (h) have reasonably appropriate personnel participate in a bank
meeting and/or presentation for the Rating Agencies or Investors; and

          (i) cooperate with and assist Lender in obtaining ratings of the
Securities from two (2) or more of the Rating Agencies.

          All reasonable third party costs and expenses incurred by Borrower in
connection with Borrower’s complying with requests made under the foregoing
provisions of this Section 13.4 and Section 13.5(a) shall be paid by Borrower;
provided, that, to the extent that any such costs exceed $10,000, Lender shall,
upon Borrower’s request, pay such excess amount.

          In the event that Borrower requests any consent or approval hereunder
and the provisions of this Agreement or any Loan Documents require the receipt
of written confirmation from each Rating Agency with respect to the rating on
the Securities, or, in accordance with the terms of the transaction documents
relating to a Securitization, such a rating confirmation is required in order
for the consent of Lender to be given, Borrower shall pay all of the costs and
expenses of Lender, Lender’s servicer and each Rating Agency in connection
therewith, and, if applicable, shall pay any fees imposed by any Rating Agency
as a condition to the delivery of such confirmation.

          Section 13.5. Securitization Indemnification

          (a) Borrower and Borrower Principal understand that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including, without limitation, a prospectus, prospectus
supplement, offering memorandum or private placement memorandum (each, a
“Disclosure Document”) and may also be included in filings with the Securities
and Exchange Commission pursuant to the Securities Act or the Exchange Act, or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower and Borrower Principal
will cooperate with the holder of the Note in updating the Disclosure Document
by providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.

          (b) Promptly upon Lender’s request, Borrower and Borrower Principal
agree to provide in connection with each of (i) a preliminary and a final
offering memorandum or private

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placement memorandum or similar document (including any Investor or Rating
Agency “term sheets” or presentations relating to the Property and/or the Loan)
or (ii) a preliminary and final prospectus or prospectus supplement, as
applicable, an indemnification certificate (A) certifying that Borrower and
Borrower Principal have carefully examined such portions of such memorandum or
prospectus or other document (including any Investor or Rating Agency “term
sheets” or presentations relating to the Property and/or the Loan), as
applicable, as may be specifically requested by Lender relating to Borrower,
Borrower Principal, Manager, their Affiliates, the Loan, the Loan Documents and
the Property (such portions, collectively, the “Mortgagor Portions”) and that,
to the best of Borrower’s knowledge, such Mortgagor Portions do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in the light of the circumstances under
which they were made, not misleading (or, if such Mortgagor Portions do contain
such an untrue statement or do omit to state such a material fact, certifying as
to what modifications to the Mortgagor Portions would be required to make such
Mortgagor Portions accurate), (B) indemnifying Lender (and for purposes of this
Section 13.5, Lender hereunder shall include its officers and directors) and the
Affiliate of Lender that (i) has filed the registration statement, if any,
relating to the Securitization and/or (ii) which is acting as issuer, depositor,
sponsor and/or a similar capacity with respect to the Securitization (any Person
described in (i) or (ii), an “Issuer Person”), and each director and officer of
any Issuer Person, and each Person or entity who controls any Issuer Person
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively, the “Issuer Group”), and each Person which is acting
as an underwriter, manager, placement agent, initial purchaser or similar
capacity with respect to the Securitization, each of its directors and officers
and each Person who controls any such Person within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act (collectively, the
“Underwriter Group”) for any Losses to which Lender, the Issuer Group or the
Underwriter Group may become subject insofar as the Losses arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in such Mortgagor Portions which have been examined and approved by
Borrower in writing or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated in such
Mortgagor Portions or necessary in order to make the statements in such
Mortgagor Portions or in light of the circumstances under which they were made,
not misleading (collectively the “Securities Liabilities”) and (C) agreeing to
reimburse Lender, the Issuer Group and the Underwriter Group for any legal or
other expenses reasonably incurred by Lender and Issuer Group in connection with
investigating or defending the Securities Liabilities; provided, however, that
Borrower and Borrower Principal will be liable in any such case under clauses
(B) or (C) above only to the extent that any such Securities Liabilities arise
out of or is based upon any such untrue statement or omission made therein in
reliance upon and in conformity with information furnished to Lender or any
member of the Issuer Group or Underwriter Group by or on behalf of Borrower or
Borrower Principal in connection with such Mortgagor Portions which have been
examined and approved by Borrower in writing. This indemnity agreement will be
in addition to any liability which Borrower and Borrower Principal may otherwise
have. To the extent the indemnification certificate described in clauses (A),
(B) and (C) above is not provided, the indemnification provided for in clauses
(B) and (C) above shall be effective, but shall be based upon and limited to
factual information with respect to the Property, Borrower, Borrower Principal
and Manager previously provided by Borrower, Borrower Principal, Manager, any of
their respective Affiliates, or any accountants or employees

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of such parties (excluding, in each such case, Sotheby’s) directly to Lender,
Lender’s authorized agents, the Issuer Group or the Underwriter Group; provided,
that, in such case, Borrower and Borrower Principal will only be liable under
clauses (B) and (C) above to the extent that (i) such factual information is
accurately set forth in the Mortgagor Portions, and (ii) the Securities
Liabilities arise out of or are based upon any untrue statement or omission of a
material fact made in the Mortgagor Portions in reliance upon and in conformity
with such factual information.

          (c) In connection with filings under the Exchange Act or any
information provided to holders of Securities on an ongoing basis, Borrower and
Borrower Principal agree to (i) indemnify Lender, the Issuer Group and the
Underwriter Group for Losses to which Lender, the Issuer Group or the
Underwriter Group may become subject insofar as the Securities Liabilities arise
out of or are based upon the omission or alleged omission to state in financial,
budget and other factual information with respect to the Property, Borrower,
Borrower Principal and Manager provided by Borrower, Borrower Principal,
Manager, any of their respective Affiliates, or any accountants or employees of
such parties (excluding, in each such case, Sotheby’s) directly to Lender,
Lender’s authorized agents, the Issuer Group or the Underwriter Group
(collectively, the “Mortgagor Information”) a material fact required to be
stated in such Mortgagor Information in order to make the statements in such
Mortgagor Information, in light of the circumstances under which they were made
not misleading and (ii) reimburse Lender, the Issuer Group or the Underwriter
Group for any legal or other expenses reasonably incurred by Lender, the Issuer
Group or the Underwriter Group in connection with defending or investigating the
Securities Liabilities; provided, however, that Borrower and Borrower Principal
will be liable in any such case under clauses (i) or (ii) above only to the
extent that (I) such Mortgagor Information is accurately set forth in such
filings under the Exchange Act or is accurately disclosed to the holders of
Securities (as applicable), and (II) any such Securities Liabilities arise out
of or are based upon any such untrue statement or omission of a material fact
made therein in reliance upon and in conformity with the Mortgagor Information;

          (d) Promptly after receipt by an indemnified party under this Section
13.5 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 13.5, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party hereunder except to the extent that failure to notify
causes prejudice to the indemnifying party. In the event that any action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled, jointly with
any other indemnifying party, to participate therein and, to the extent that it
(or they) may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. After notice from the indemnifying party to such indemnified
party under this Section 13.5, the indemnifying party shall not be responsible
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
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indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. The indemnifying party shall not be liable for the expenses of more
than one such separate counsel unless an indemnified party shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to another indemnified party.

          (e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in Section 13.5(c)
or Section 13.5(d) is or are for any reason held to be unenforceable by an
indemnified party in respect of any losses, claims, damages or liabilities (or
action in respect thereof) referred to therein which would otherwise be
indemnifiable under Section 13.5(c) or Section 13.5(d), the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages or liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be considered:
(i) the indemnified party’s, Borrower’s and Borrower Principal’s relative
knowledge and access to information concerning the matter with respect to which
claim was asserted; (ii) the opportunity to correct and prevent any statement or
omission; and (iii) any other equitable considerations appropriate in the
circumstances. Lender, Borrower and Borrower Principal hereby agree that it
would not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation.

          (f) The liabilities and obligations of Borrower, Borrower Principal
and Lender under this Section 13.5 shall survive the satisfaction of this
Agreement and the satisfaction and discharge of the Debt.

          Section 13.6. Private Rating

          For so long as the Sotheby’s Lease is in full force and effect, to the
extent that any of the Rating Agencies rating (or that are anticipated to rate)
the Securities cease to publicly issue a long-term, unsecured debt rating for
Sotheby’s Guarantor, Borrower shall, at Borrower’s sole cost and expense, retain
such Rating Agencies and cause such Rating Agencies to continue to monitor
Sotheby’s Guarantor and to continue to issue to Lender and Borrower a long term,
unsecured debt rating (or an equivalent rating reasonably acceptable to Lender)
for Sotheby’s Guarantor (the “Private Rating”). If, for any period in excess of
ninety (90) days, Borrower is unable to obtain such a Private Rating, Sotheby’s
Guarantor’s long-term, unsecured debt rating (or its equivalent Private Rating)
shall be deemed to be below “B+” (or its equivalent) by each of the Rating
Agencies for all purposes under this Agreement until such Private Rating is
actually issued.

          Section 13.7. Servicer

          At the option of Lender, the Loan may be serviced by a
servicer/trustee selected by Lender and Lender may delegate all or any portion
of its responsibilities under this Agreement

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and the other Loan Documents to such servicer/trustee pursuant to a servicing
agreement between Lender and such servicer/trustee.

ARTICLE 14
INDEMNIFICATIONS

          Section 14.1. General Indemnification

          Borrower shall indemnify, defend and hold harmless the Indemnified
Parties from and against any and all Losses imposed upon or incurred by or
asserted against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following: (a) any accident,
injury to or death of persons or loss of or damage to property occurring in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (b) any use,
nonuse or condition in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (c) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof; (d)
any failure of the Property to be in compliance with any Applicable Legal
Requirements; (e) any and all claims and demands whatsoever which may be
asserted against Lender by reason of any alleged obligations or undertakings on
its part to perform or discharge any of the terms, covenants, or agreements
contained in any Lease; (f) the holding or investing of the Reserve Accounts or
the performance of the Required Work or Additional Replacements, or (g) the
payment of any commission, charge or brokerage fee to anyone which may be
payable in connection with the funding of the Loan (collectively, the
“Indemnified Liabilities”); provided, however, that Borrower shall not have any
obligation to Lender hereunder to the extent that such Indemnified Liabilities
arise from the gross negligence, illegal acts, fraud or willful misconduct of
Lender. To the extent that the undertaking to indemnify, defend and hold
harmless set forth in the preceding sentence may be unenforceable because it
violates any law or public policy, Borrower shall pay the maximum portion that
it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Lender.

          Section 14.2. Mortgage and Intangible Tax Indemnification

          Borrower shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties from and against
any and all Losses imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any tax on the making and/or recording of the Mortgage, the Note or
any of the other Loan Documents, but excluding any income, franchise or other
similar taxes.

          Section 14.3. ERISA Indemnification

          Borrower shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties from and against
any and all Losses (including, without limitation, reasonable attorneys’ fees
and costs incurred in the investigation, defense, and settlement of Losses
incurred in correcting any prohibited transaction or in the sale of a prohibited
loan, and in obtaining any individual prohibited transaction exemption under
ERISA

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that may be required, in Lender’s sole discretion) that Lender may incur,
directly or indirectly, as a result of a default under Section 4.8 or Section
5.18 of this Agreement.

          Section 14.4. Survival

          The obligations and liabilities of Borrower and Borrower Principal
under this Article 14 shall fully survive for a period of two (2) years
following any termination, satisfaction, assignment, entry of a judgment of
foreclosure, exercise of any power of sale, or delivery of a deed in lieu of
foreclosure of the Mortgage.

ARTICLE 15
EXCULPATION

          Section 15.1. Exculpation

          (a) Except as otherwise provided herein or in the other Loan
Documents, Lender shall not enforce the liability and obligation of Borrower or
Borrower Principal, as applicable, to perform and observe the obligations
contained herein or in the other Loan Documents by any action or proceeding
wherein a money judgment shall be sought against Borrower or Borrower Principal,
except that Lender may bring a foreclosure action, action for specific
performance or other appropriate action or proceeding to enable Lender to
enforce and realize upon this Agreement, the Note, the Mortgage and the other
Loan Documents, and the interest in the Property, the Rents and any other
collateral given to Lender created by this Agreement, the Note, the Mortgage and
the other Loan Documents; provided, however, that any judgment in any such
action or proceeding shall be enforceable against Borrower or Borrower
Principal, as applicable, only to the extent of Borrower’s or Borrower
Principal’s interest in the Property, in the Rents and in any other collateral
given to Lender. Lender, by accepting this Agreement, the Note, the Mortgage and
the other Loan Documents, agrees that it shall not, except as otherwise provided
in this Section 15.1, sue for, seek or demand any deficiency judgment against
Borrower or Borrower Principal in any such action or proceeding, under or by
reason of or under or in connection with this Agreement, the Note, the Mortgage
or the other Loan Documents. The provisions of this Section 15.1 shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Agreement, the Note, the Mortgage or the other Loan
Documents; (ii) impair the right of Lender to name Borrower or Borrower
Principal as a party defendant in any action or suit for judicial foreclosure
and sale under this Agreement and the Mortgage; (iii) affect the validity or
enforceability of any indemnity (including, without limitation, those contained
in Section 12.6, Section 13.5 and Article 14 of this Agreement), guaranty,
master lease or similar instrument made in connection with this Agreement, the
Note, the Mortgage and the other Loan Documents; (iv) impair the right of Lender
to obtain the appointment of a receiver; (v) impair the enforcement of the
assignment of leases provisions contained in the Mortgage; or (vi) impair the
right of Lender to obtain a deficiency judgment or other judgment on the Note
against Borrower or Borrower Principal if necessary to obtain any Insurance
Proceeds or Awards to which Lender would otherwise be entitled under this
Agreement; provided however, Lender shall only enforce such judgment to the
extent of the Insurance Proceeds and/or Awards.

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          (b) Notwithstanding the provisions of this Section 15.1 to the
contrary, Borrower and Borrower Principal shall be personally liable to Lender
on a joint and several basis for Losses due to:

 

 

 

          (i) fraud or intentional misrepresentation by Borrower, Borrower
Principal or any other Affiliate of Borrower or Borrower Principal in connection
with the execution and the delivery of this Agreement, the Note, the Mortgage,
any of the other Loan Documents, or any certificate, report, financial statement
or other instrument or document furnished to Lender at the time of the closing
of the Loan or during the term of the Loan;

 

 

 

          (ii) Borrower’s misapplication or misappropriation of Rents received
by Borrower after the occurrence of an Event of Default;

 

 

 

          (iii) Borrower’s misapplication or misappropriation of tenant security
deposits or Rents collected in advance;

 

 

 

          (iv) the misapplication or the misappropriation of Insurance Proceeds
or Awards;

 

 

 

          (v) Borrower’s failure to pay real estate taxes with respect to the
Property; provided, that Borrower and Borrower Principal shall not be personally
liable under this Section 15.1(b)(v) to the extent there is insufficient income
from the Property to pay such real estate taxes or to the extent such real
estate taxes accrue after the date (i) a receiver has been appointed for the
Property, (ii) Lender obtains control of the cash flow from the Property to the
exclusion of Borrower pursuant to Article 10 hereof or otherwise, or (iii)
escrowing for real estate taxes has commenced and is continuing in accordance
with the provisions of this Agreement;

 

 

 

          (vi) any act of intentional waste or arson by Borrower, any principal,
Affiliate, member or general partner thereof or by Borrower Principal, any
principal, Affiliate, member or general partner thereof;

 

 

 

          (vii) Borrower’s failure following any Event of Default to deliver to
Lender upon demand all Rents and books and records relating to the Property; or

 

 

 

          (viii) Borrower’s willful misconduct.

          (c) Notwithstanding the foregoing, the agreement of Lender not to
pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL
AND VOID and shall be of no further force and effect and the Debt shall be fully
recourse to Borrower and Borrower Principal jointly and severally in the event
of (i) a default by Borrower, Borrower Principal or any SPE Component Entity (if
any) of any of the covenants set forth in Article 6 or Article 7 hereof, or (ii)
if the Property or any part thereof shall become an asset in a Voluntary
Bankruptcy Proceeding; provided, however, that (I) a breach by Borrower or any
SPE Component Entity of the covenants set forth in Article 6 hereof shall not
result in recourse liability hereunder unless such breach was material and,
within fifteen (15) days of notice from Lender, Borrower fails to cure such
breach and fails to deliver to Lender a new or revised substantive
non-consolidation opinion, in form and substance and from counsel reasonably
satisfactory to Lender in accordance

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with the Rating Agency standards for the same, to the effect that such failure
does not negate/impair the opinion previously delivered to Lender; or (II) a
breach of the covenants set forth in Article 7 hereof (other than by virtue of a
Specified Article 7 Breach) shall not result in recourse liability hereunder
unless such breach was material and, within fifteen (15) days of notice from
Lender, Borrower fails to cure such breach and fails to deliver to Lender
confirmation from each Rating Agency that such breach and its cure will not
result in a downgrade, withdrawal or qualification of the initial, or if higher,
then current ratings issued in connection with a Securitization, or if a
Securitization has not occurred, any ratings to be assigned in connection with a
Securitization.

          (d) Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Section 506(a), 506(b), 111l(b) or any other provision of
the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness
secured by the Mortgage or to require that all collateral shall continue to
secure all of the indebtedness owing to Lender in accordance with this
Agreement, the Note, the Mortgage or the other Loan Documents.

ARTICLE 16
NOTICES

          Section 16.1. Notices

          All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested, (b)
expedited prepaid overnight delivery service, either commercial or United States
Postal Service, with proof of attempted delivery, or by (c) telecopier (with
answer back acknowledged provided an additional notice is given pursuant to
subsection (b) above), addressed as follows (or at such other address and Person
as shall be designated from time to time by any party hereto on ten (10) days
prior written notice to the other parties hereto, as the case may be, in a
written notice to the other parties hereto in the manner provided for in this
Section):

 

 

 

 

 

If to Lender:

 

Bank of America, N.A.
Capital Markets Servicing Group
900 West Trade Street, Suite 650
NCI -026-06-01
Charlotte, North Carolina 28255
Attn: Servicing Manager
Telephone No: (866) 531-0957
Facsimile No.: (704) 317-4501

 

 

 

 

 

If to Borrower:

 

1334 York Avenue L.P.
c/o RFR Holding LLC
390 Park Avenue
New York, New York 10022
Attention: Aby Rosen
Facsimile No.: 212-308-5090

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With a copy to:

 

Fried, Frank, Harris, Shriver & Jacobson

 

 

 

One New York Plaza

 

 

 

New York, New York 10004-1980

 

 

 

Attention: Robert J. Sorin, Esq.

 

 

 

Facsimile No.: (212) 859-4000

 

 

 

 

 

If to Borrower

 

 

 

Principal:

 

Aby Rosen

 

 

 

Michael Fuchs

 

 

 

c/o RFR Holding LLC

 

 

 

390 Park Avenue

 

 

 

New York, New York 10022

 

 

 

Attention: Aby Rosen

 

 

 

Facsimile No.: 212-308-5090

 

 

 

 

 

With a copy to:

 

Fried, Frank, Harris, Shriver & Jacobson

 

 

 

One New York Plaza

 

 

 

New York, New York 10004-1980

 

 

 

Attention: Robert J. Sorin, Esq.

 

 

 

Facsimile No.: (212) 859-4000

A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day.

ARTICLE 17
FURTHER ASSURANCES

          Section 17.1. Replacement Documents

          Upon receipt of an affidavit of an officer of Lender as to the loss,
theft, destruction or mutilation of the Note or any other Loan Document which is
not of public record: (i) with respect to any Loan Document other than the Note,
Borrower will issue, in lieu thereof, a replacement of such other Loan Document,
dated the date of such lost, stolen, destroyed or mutilated Loan Document in the
same principal amount thereof and otherwise of like tenor and (ii) with respect
to the Note, (a) Borrower will execute a reaffirmation of the Debt as evidenced
by such Note acknowledging that Lender has informed Borrower that the Note was
lost, stolen destroyed or mutilated and that such Debt continues to be an
obligation and liability of the Borrower as set forth in the Note, a copy of
which shall be attached to such reaffirmation and (b) if requested by Lender,
Borrower will execute a replacement note and Lender or Lender’s custodian (at
Lender’s option) shall provide to Borrower Lender’s (or Lender’s custodian’s)
then standard form of lost note affidavit and indemnity, which such form shall
be reasonably acceptable to Borrower.

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          Section 17.2. Recording of Mortgage, Etc.

          Borrower forthwith upon the execution and delivery of the Mortgage and
thereafter, from time to time, will cause the Mortgage and any of the other Loan
Documents creating a lien or security interest or evidencing the lien hereof
upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect and
perfect the lien or security interest hereof upon, and the interest of Lender
in, the Property. Borrower will pay all taxes, filing, registration or recording
fees, and all expenses incident to the preparation, execution, acknowledgment
and/or recording of the Note, the Mortgage, the other Loan Documents, any note,
deed of trust or mortgage supplemental hereto, any security instrument with
respect to the Property and any instrument of further assurance, and any
modification or amendment of the foregoing documents, and all federal, state,
county and municipal taxes, duties, imposts, assessments and charges arising out
of or in connection with the execution and delivery of the Mortgage, any deed of
trust or mortgage supplemental hereto, any security instrument with respect to
the Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.

          Section 17.3. Further Acts, Etc.

          Borrower will, at the cost of Borrower, and without expense to Lender,
do, execute, acknowledge and deliver all and every further acts, deeds,
conveyances, deeds of trust, mortgages, assignments, security agreements,
control agreements, notices of assignments, transfers and assurances as Lender
shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and
rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed,
pledged, assigned, warranted and transferred or intended now or hereafter so to
be, or which Borrower may be or may hereafter become bound to convey or assign
to Lender, or for carrying out the intention or facilitating the performance of
the terms of this Agreement or for filing, registering or recording the
Mortgage, or for complying with all Legal Requirements. Borrower, on demand,
will execute and deliver, and in the event it shall fail to so execute and
deliver, hereby authorizes Lender to execute in the name of Borrower or without
the signature of Borrower to the extent Lender may lawfully do so, one or more
financing statements and financing statement amendments to evidence more
effectively, perfect and maintain the priority of the security interest of
Lender in the Property. Upon the occurrence and during the continuance of an
Event of Default, Borrower grants to Lender an irrevocable power of attorney
coupled with an interest for the purpose of exercising and perfecting any and
all rights and remedies available to Lender at law and in equity, including
without limitation, such rights and remedies available to Lender pursuant to
this Section 17.3.

          Section 17.4. Changes in Tax, Debt, Credit and Documentary Stamp Laws

          (a) If any law is enacted or adopted or amended after the date of this
Agreement which deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Lender’s interest in the Property, Borrower will pay the tax, with interest
and penalties thereon, if any. If Lender is advised by counsel chosen by it that
the payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury then Lender shall have
the

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option by written notice of not less than one hundred twenty (120) days to
declare the Debt immediately due and payable.

          (b) Borrower will not claim or demand or be entitled to any credit or
credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property, or any part thereof, and no deduction shall
otherwise be made or claimed from the assessed value of the Property, or any
part thereof, for real estate tax purposes by reason of the Mortgage or the
Debt. If such claim, credit or deduction shall be required by law, Lender shall
have the option, by written notice of not less than one hundred twenty (120)
days, to declare the Debt immediately due and payable.

          If at any time the United States of America, any State thereof or any
subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, the Mortgage, or any of the other Loan Documents or impose
any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any.

          Section 17.5. Expenses

          Borrower covenants and agrees to pay or, if Borrower fails to pay, to
reimburse, Lender upon receipt of written notice from Lender for all reasonable,
out of pocket costs and expenses (including reasonable, actual attorneys’ fees
and disbursements) reasonably incurred by Lender in accordance with this
Agreement in connection with (a) the preparation, negotiation, execution and
delivery of this Agreement and the other Loan Documents and the consummation of
the transactions contemplated hereby and thereby and all the costs of furnishing
all opinions by counsel for Borrower (including without limitation any opinions
requested by Lender as to any legal matters arising under this Agreement or the
other Loan Documents with respect to the Property); (b) Borrower’s ongoing
performance of and compliance with Borrower’s respective agreements and
covenants contained in this Agreement and the other Loan Documents on its part
to be performed or complied with after the Closing Date, including, without
limitation, confirming compliance with environmental and insurance requirements;
(c) following a request by Borrower, Lender’s ongoing performance and compliance
with all agreements and conditions contained in this Agreement and the other
Loan Documents on its part to be performed or complied with after the Closing
Date; (d) the negotiation, preparation, execution, delivery and administration
of any consents, amendments, waivers or other modifications to this Agreement
and the other Loan Documents and any other documents or matters requested by
Lender; (e) securing Borrower’s compliance with any requests made pursuant to
the provisions of this Agreement; (f) the filing and recording fees and
expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Lien in favor of Lender pursuant to this
Agreement and the other Loan Documents; (g) enforcing or preserving any rights,
in response to third party claims or the prosecuting or defending of any action
or proceeding or other litigation, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, the Property, or any other
security given for the Loan; and (h) enforcing any obligations of or collecting
any payments due from Borrower under this Agreement, the other Loan Documents or
with respect to the Property or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a “work-out” or of any insolvency or bankruptcy proceedings; provided,
however, that Borrower shall not be liable for the payment

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of any such costs and expenses to the extent the same arise by reason of the
gross negligence, illegal acts, fraud or willful misconduct of Lender.
Notwithstanding the foregoing, in no event shall Borrower be obligated to pay or
reimburse Lender for the allocated costs of Lender’s internal services.

ARTICLE 18
WAIVERS

          Section 18.1. Remedies Cumulative; Waivers

          The rights, powers and remedies of Lender under this Agreement shall
be cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower or Borrower Principal pursuant to this Agreement or
the other Loan Documents, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued singularly, concurrently or
otherwise, at such time and in such order as Lender may determine in Lender’s
sole discretion. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default shall impair any such remedy, right or power
or shall be construed as a waiver thereof, but any such remedy, right or power
may be exercised from time to time and as often as may be deemed expedient. A
waiver of one Default or Event of Default with respect to Borrower shall not be
construed to be a waiver of any subsequent Default or Event of Default by
Borrower or to impair any remedy, right or power consequent thereon.

          Section 18.2. Modification, Waiver in Writing

          No modification, amendment, extension, discharge, termination or
waiver of any provision of this Agreement, or of the Note, or of any other Loan
Document, nor consent to any departure by Borrower therefrom, shall in any event
be effective unless the same shall be in a writing signed by the party against
whom enforcement is sought, and then such waiver or consent shall be effective
only in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.

          Section 18.3. Delay Not a Waiver

          Neither any failure nor any delay on the part of Lender or Borrower in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under the Note
or under any other Loan Document, or any other instrument given as security
therefor, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.

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          Section 18.4. Trial by Jury

          BORROWER, BORROWER PRINCIPAL AND LENDER EACH HEREBY AGREES NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER,
BORROWER PRINCIPAL AND BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER,
BORROWER PRINCIPAL AND LENDER.

          Section 18.5. Waiver of Notice

          Borrower shall not be entitled to any notices of any nature whatsoever
from Lender except with respect to matters for which this Agreement or the other
Loan Documents specifically and expressly provide for the giving of notice by
Lender to Borrower and except with respect to matters for which Borrower is not,
pursuant to applicable Legal Requirements, permitted to waive the giving of
notice. Borrower hereby expressly waives the right to receive any notice from
Lender with respect to any matter for which this Agreement or the other Loan
Documents do not specifically and expressly provide for the giving of notice by
Lender to Borrower.

          Section 18.6. Remedies of Borrower

          (a) In the event that a claim is made that Lender or its agents have
acted unreasonably or unreasonably delayed acting in any case where by law or
under this Agreement or the other Loan Documents, Lender or such agent, as the
case may be, has an obligation to act reasonably or promptly, Borrower agrees
that neither Lender nor its agents shall be liable for any monetary damages, and
Borrower’s sole remedies shall be limited to commencing an action seeking
injunctive reliefer declaratory judgment. The parties hereto agree that Borrower
or Lender may, upon twenty (20) Business Days prior written notice to the other
party, submit such action to arbitration under the then prevailing rules of the
American Arbitration Association (the “AAA”) in accordance with the provisions
of this Section 18.6. The references to “Rules” contained in this Section 18.6
shall be deemed to refer to Commercial Arbitration Rules of the AAA.

          (b) Borrower or Lender may submit such action to arbitration in the
City of New York before a single arbitrator under the “Expedited Procedures”
provisions of the Commercial Arbitration Rules of the AAA (presently Rules E-l
through E-10); provided, however, that, with respect to any such arbitration,
(i) for such arbitration to be binding on the parties hereto, the list of
arbitrators referred to in Rule E-5 shall consist of arbitrators who have the
qualifications set forth in Section 18.6(c) below, (ii) such list shall be
returned within seven (7) days of the date of mailing; (iii) the parties shall
notify the AAA by facsimile within seven (7) days of any objections to the
arbitrator appointed and shall have no right to object if the arbitrator so

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appointed was on the list submitted by the AAA and was not objected to in
accordance with Rule E-5.b; (iv) the “Notice of Hearing” referred to in Rule E-8
shall be given seven (7) days in advance of the hearing; (v) the hearing shall
be held within thirty (30) days after confirmation of the appointment of the
arbitrator; and (vi) the decision of the arbitrator shall be final and
conclusive on the parties.

          (c) The arbitrator conducting any arbitration shall be bound by the
provisions of this Agreement and shall not have the power to add to, subtract
from, or otherwise modify such provisions (except that the provisions of Rule
R-40 shall apply to this Section 18.6). The arbitrator shall consider only the
specific issues submitted to him or her for resolution. Lender and Borrower
agree to sign all documents and to do all other things necessary to submit any
such matter to arbitration and further agree to, and hereby do, subject to the
other terms and conditions of this Section 18.6, waive any and all rights they
or either of them may at any time have to revoke their agreement hereunder to
submit to arbitration and to abide by the decision rendered thereunder which
shall be binding and conclusive on the parties. Judgement may be had on the
decision of the arbitrator so rendered in any court of competent jurisdiction.
Each proposed arbitrator hereunder shall be a qualified, disinterested and
impartial person unaffiliated with either Borrower or Lender who shall have had
at least ten (10) years experience, at an executive level, in matters relating
to the management, operation and financing of Class A commercial buildings in
Manhattan. Lender and Borrower shall each have the right to appear and be
represented by counsel before said arbitrator and to submit such testimony, data
and memoranda in support of their respective positions in the matter in dispute
as may be reasonably necessary or appropriate in the circumstances. In the case
of any dispute submitted to arbitration under this Section 18.6 by (I) Borrower,
Borrower shall pay its own, as well as Lender’s, costs, fees and expenses in
connection therewith and the expenses and fees of the arbitrator selected and
the AAA, or (II) Lender, each party shall pay its own costs, fees and expenses
in connection therewith and the expenses and fees of the arbitrator selected and
the AAA shall be shared equally by Borrower and Lender.

          Section 18.7. Waiver of Marshalling of Assets

          To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s partners and others with interests in Borrower, and of the
Property, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Property for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.

          Section 18.8. Intentionally Omitted

          Section 18.9. Waiver of Counterclaim

          Borrower hereby waives the right to assert a counterclaim, other than
a compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents.

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ARTICLE 19
GOVERNING LAW

          Section 19.1. Choice of Law

          This Agreement shall be deemed to be a contract entered into pursuant
to the laws of the State of New York and shall in all respects be governed,
construed, applied and enforced in accordance with the laws of the State of New
York, provided however, (a) that with respect to the creation, perfection,
priority and enforcement of any Lien created by the Loan Documents, and the
determination of deficiency judgments, the laws of the state where the Property
is located shall apply, and (b) with respect to the security interest in each of
the Reserve Accounts and the Cash Management Account, the laws of the state
where each such account is located shall apply.

          Section 19.2. Severability

          Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

          Section 19.3. Preferences

          Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
Creditors Rights Laws, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.

ARTICLE 20
MISCELLANEOUS

          Section 20.1. Survival

          This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.

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          Section 20.2. Lender’s Discretion

          Whenever pursuant to this Agreement, Lender exercises any right given
to it to approve or disapprove, or any arrangement or term is to be satisfactory
to Lender, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory shall (except as is
otherwise specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.

          Section 20.3. Headings

          The Article and/or Section headings and the Table of Contents in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

          Section 20.4. Cost of Enforcement

          In the event (a) that the Mortgage is foreclosed in whole or in part,
(b) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of Borrower or any of its constituent Persons or an assignment by
Borrower or any of its constituent Persons for the benefit of its creditors, or
(c) Lender successfully exercises any of its other remedies under this Agreement
or any of the other Loan Documents, Borrower shall be chargeable with and agrees
to pay all costs of collection and defense, including attorneys’ fees and costs,
incurred by Lender or Borrower in connection therewith and in connection with
any appellate proceeding or post-judgment action involved therein, together with
all required service or use taxes.

          Section 20.5. Schedules Incorporated

          The Schedules annexed hereto are hereby incorporated herein as a part
of this Agreement with the same effect as if set forth in the body hereof.

          Section 20.6. No Joint Venture or Partnership; No Third Party
Beneficiaries

          (a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.

          (b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such

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Confidential Treatment Requested by BANA

BANA-Soth-00180

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

conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable
to do so.

          (c) The general partners, members, principals and (if Borrower is a
trust) beneficial owners of Borrower are experienced in the ownership and
operation of properties similar to the Property, and Borrower and Lender are
relying solely upon such expertise and business plan in connection with the
ownership and operation of the Property. Borrower is not relying on Lender’s
expertise, business acumen or advice in connection with the Property.

          (d) Notwithstanding anything to the contrary contained herein, Lender
is not undertaking the performance of (i) any obligations under the Leases; or
(ii) any obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.

          (e) By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Agreement, the
Mortgage, the Note or the other Loan Documents, including, without limitation,
any officer’s certificate, balance sheet, statement of profit and loss or other
financial statement, survey, appraisal, or insurance policy, Lender shall not be
deemed to have warranted, consented to, or affirmed the sufficiency, the
legality or effectiveness of same, and such acceptance or approval thereof shall
not constitute any warranty or affirmation with respect thereto by Lender.

          (f) Borrower recognizes and acknowledges that in accepting this
Agreement, the Note, the Mortgage and the other Loan Documents, Lender is
expressly and primarily relying on the truth and accuracy of the representations
and warranties set forth in Article 4 of this Agreement without any obligation
to investigate the Property and notwithstanding any investigation of the
Property by Lender; that such reliance existed on the part of Lender prior to
the date hereof, that the warranties and representations are a material
inducement to Lender in making the Loan; and that Lender would not be willing to
make the Loan and accept this Agreement, the Note, the Mortgage and the other
Loan Documents in the absence of the warranties and representations as set forth
in Article 4 of this Agreement.

          Section 20.7. Publicity

          All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public (excluding any
prospectus or similar document issued to investors or potential investors in any
Affiliate of Borrower) which refers to the Loan, Lender, Banc of America
Securities LLC, or any of their Affiliates shall be subject to the prior written
approval of Lender, not to be unreasonably withheld. Lender shall be permitted
to make any news, releases, publicity or advertising by Lender or its Affiliates
through any media intended to reach the general public which refers to the Loan
terms or provisions regarding the amount of the Loan, the term, that the
interest rate is a fixed rate (without disclosure of the interest rate spread),
the name and location of the Property, that Sotheby’s is the primary Tenant at
the Property, Borrower and that the Borrower is affiliated with RFR Holding
Corp. without the approval of Borrower or any such Persons. Borrower also agrees
that Lender may share any information pertaining to the Loan with Bank of
America Corporation, including its bank subsidiaries, Bane of America Securities
LLC and any other Affiliates of the foregoing, in connection with the sale

- 118 -

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00181

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

or transfer of the Loan or any Participations and/or Securities created. Without
in any way limiting the provisions of Article 13 hereof or Lender’s rights
thereunder, any news, releases, publicity or advertising by Lender or its
Affiliates relating to any provisions or terms of the Loan (except as set forth
above) shall require the prior approval of Borrower, which such approval shall
not be unreasonably withheld, conditioned or delayed.

          Section 20.8. Conflict; Construction of Documents; Reliance

          In the event of any conflict between the provisions of this Agreement
and any of the other Loan Documents, the provisions of this Agreement shall
control. The parties hereto acknowledge that they were represented by competent
counsel in connection with the negotiation, drafting and execution of the Loan
Documents and that such Loan Documents shall not be subject to the principle of
construing their meaning against the party which drafted same. Borrower
acknowledges that, with respect to the Loan, Borrower shall rely solely on its
own judgment and advisors in entering into the Loan without relying in any
manner on any statements, representations or recommendations of Lender or any
parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender’s exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.

          Section 20.9. Entire Agreement

          This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written between Borrower and Lender are superseded by
the terms of this Agreement and the other Loan Documents.

          Section 20.10. Liability

          If Borrower or Borrower Principal consists of more than one Person,
the obligations and liabilities of each such Person hereunder shall be joint and
several.

          Section 20.11. Satisfaction of Indebtedness. Upon (i) payment of the
outstanding principal amount of, all unpaid interest on and all other sums due
under the Note and the other Loan Documents, or (ii) a defeasance of the Note in
accordance with the terms and provisions of Section 2.4(b) hereof, at the prior
written request of Borrower, Lender shall (a) assign, or sever into two (2) or
more separate loans and assign, the Mortgage and all other Loan Documents to
Borrower and/or to any other Person(s) designated by Borrower, which assignment
and severance documents shall be in recordable form (but shall be without
representation or warranty by, or recourse to, Lender, except that Lender shall
represent that such assignment(s) has been duly authorized and that Lender has
not assigned or encumbered the Mortgage or the other Loan

- 119 -

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00182

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

Documents), (b) deliver to or as directed by Borrower (I) the original executed
Note and all originally executed other notes held by Lender which may have been
consolidated, amended and/or restated in connection with the execution of the
Note or (II) with respect to any such notes held by Lender where the original
has been lost, mutilated or destroyed (1) a lost note affidavit on Lender’s
standard form thereof for the benefit of any assignee lender and the title
insurance company insuring the Mortgage, as assigned, and (2) to the extent such
title company confirms in writing that it cannot issue a title insurance policy
to such assignee lender without exception for such lost, mutilated or destroyed
Note or notes, a lost note indemnity for the benefit of such title company from,
at Lender’s option, Lender or Lender’s custodian on Lender’s or Lender’s
custodian’s standard from thereof (which such form shall be reasonably
acceptable to Borrower), (c) execute and deliver an allonge with respect to the
Note and any other note(s) described in clause (b) above, (d) deliver the
original executed Mortgage or a certified copy thereof of record, and (e)
execute and deliver such other instruments of conveyance, assignment,
termination, severance and release (including appropriate UCC-3 termination
statements) in recordable form as may be reasonably requested by Borrower to
evidence such assignment and/or severance. All reasonable, out of pocket fees
and expenses incurred by Lender in connection with the foregoing shall be paid
by Borrower. Concurrently with the payment of the outstanding principal amount
of, all unpaid interest on and all other sums due under the Note and the other
Loan Documents (whether or not Borrower shall request an assignment as set forth
in this Section 20.11), Lender shall, upon Borrower’s prior written request,
deliver to Borrower (i) a payoff letter in Lender’s customary form thereof, (ii)
all original Policies which may be held by or on behalf of Lender, (iii) any
amounts held in the Reserve Accounts or any Letters of Credit held by Lender
hereunder, and (iv) a termination of any guaranties delivered to Lender in
connection with the Loan (excluding any environmental indemnity or guaranties
which specifically survive repayment of the Loan), duly executed by Lender.

          Section 20.12. Inconsistencies With Sotheby’s Lease. Notwithstanding
any provision of this Agreement or any of the other Loan Documents to the
contrary (but subject to the last sentence of this Section 20.12), so long as
the Sotheby’s Lease is in full force and effect, in the event that (a) Borrower
is obligated to perform or comply with any covenant specifically relating to the
use, operation, leasing, maintenance, repair, replacement or alteration of the
Property contained in the Specified Provisions and Sotheby’s is not obligated to
perform or comply with any such covenant under the Sotheby’s Lease, or such
obligation is inconsistent with the obligation of Sotheby’s to perform or comply
with such covenant under the Sotheby’s Lease, then Borrower shall not be
obligated to perform or comply with such covenant or, in the case of an
inconsistency, Borrower’s obligation to perform or comply with such covenant
shall be such as would be consistent with Sotheby’s obligation to perform or
comply with such covenant under the Sotheby’s Lease, (b) Borrower is prohibited
or restricted from, or its rights are qualified or conditioned in any way with
respect to, taking or refraining from taking any action specifically relating to
the use, operation, leasing, maintenance, repair, replacement or alteration of
the Property contained in the Specified Provisions and Sotheby’s is not
prohibited or restricted from, or its rights are not so qualified or
conditioned, with respect to taking or refraining from taking any such action
under the Sotheby’s Lease, or the prohibition, restriction, qualification or
condition imposed upon Borrower in connection with such action is inconsistent
with the prohibition, restriction, qualification or condition imposed Sotheby’s
under the Sotheby’s Lease, then Borrower shall not be so prohibited or
restricted from, and its rights shall not be qualified or conditioned in any way
with respect to, taking or refraining from taking any such action or, in

- 120 -

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00183

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

the case of any such inconsistency, any such prohibition, restriction,
qualification or condition shall be such as would be consistent with the
prohibition, qualification or condition imposed on Sotheby’s under the Sotheby’s
Lease, (c) Lender’s consent to any matter specifically relating to the use,
operation, leasing, maintenance, repair, replacement or alteration of the
Property is required under the Specified Provisions and Borrower’s consent, as
landlord, is not similarly required under the Sotheby’s Lease, then Lender’s
consent to such matter shall not be required, and (d) Lender’s consent to any
matter specifically relating to the use, operation, leasing, maintenance,
repair, replacement or alteration of the Property is required under the
Specified Provisions and may be granted or denied in Lender’s sole discretion,
but Borrower’s consent, as landlord, to such matter may not be unreasonably
withheld under the Sotheby’s Lease, then Lender’s consent to such matter shall
not be unreasonable withheld. Notwithstanding the foregoing provisions of this
Section 20.12, Borrower acknowledges and agrees that the covenants contained in
the following portions of this Agreement are consistent in all respects with, or
do not impose any additional qualifications or restrictions with respect to,
Borrower’s rights with respect to Sotheby’s under the Sotheby’s Lease (or if the
same impose such additional obligations or restrictions, Borrower has accepted
the same and acknowledges that the same are independent obligations of Borrower,
separate and apart from the rights and obligations of Borrower and/or Sotheby’s
under the Sotheby’s Lease) and, as such, the following portions of this
Agreement are not subject to the terms and conditions contained in this Section
20.12: (i) Section 5.13(a)(iii)(A) and (B), and (ii) Section 9.2 (b).

[NO FURTHER TEXT ON THIS PAGE]

- 121 -

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00184

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

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.

 

 

 

 

 

 

 

 

BORROWER:

 

 

 

 

1334 YORK AVENUE L.P., a Delaware limited partnership

 

 

 

 

By:

1334 GP II LLC, a Delaware limited liability company, its general partner

 

 

 

 

 

By:

-s- Aby Rosen [c5750501.jpg]

 

 

 

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

 

 

 

Name: Aby Rosen

 

 

 

Title: Member

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00185

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

 

 

 

BORROWER PRINCIPAL:

 

 

 

Acknowledged and agreed to with respect to its obligations set forth in Article
4, Section 12.6, Article 13, Article 15 and Article 18 hereof:

 

 

 

-s- Aby Rosen [c5750501.jpg]

 

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

 

Aby Rosen, an individual

 

 

 

-s- Michael Fuchs [c5750502.jpg]

 

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

 

Michael Fuchs, an individual

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00186

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

 

 

 

 

 

LENDER:

 

 

 

 

BANK OF AMERICA, N,A. a national banking association

 

 

 

 

 

By:

  -s- Dean C. Ravosa [c5750503.jpg]

 

 

 

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

 

 

Name: Dean C. Ravosa

 

 

Title:   Principal

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00187

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

SCHEDULE I

REPLACEMENTS

(attached hereto)

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00188

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

Input Inflation Rate and Int. Rate for Rsve Acct. Input escrowed rsve amt in D10
(Yr 1) only if same amt. each year OR annual amis in D10-P10 if different each
yr. If Underwritten amt. is different from escrow amt., input underwritten amt
in D13.

REPLACEMENT RESERVE ANALYSIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Project Name:

 

Sotheby’s Building Refinance

 

 

Office Square Feet:

406,110sf

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Built:

 

 

 

 

 

 

 

 

 

Retail Square Feet:

0sf

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Inflation Rate:

 

0.00

%

 

 

 

 

 

 

Total Square Feet:

406,110sf

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate on Rsve Acct:

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year 1

 

Year 2

 

Year 3

 

Year 4

 

Year 5

 

Year 6

 

Year 7

 

Year 8

 

Year 9

 

Year 10

 

Year 11

 

Year 12

 

Annual Rsves Escrow Per Square Foot:

 

 

 

$

0.26

 

$

 0.26

 

$

0.26

 

$

0.26

 

$

0.26

 

$

0.26

 

$

0.26

 

$

0.26

 

$

0.26

 

$

0.26

 

$

0.26

 

$

0.26

 

Avg. Annual Rsves Per Square Foot:

 

$  0.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwritten Annual Reserves Per Square Foot:

 

$  0.26

 

- (input, If different form escrow)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ITEM

 

Immediate
Repairs

 

Year 1

 

Year 2

 

Year 3

 

Year 4

 

Year 5

 

Year 6

 

Year 7

 

Year 8

 

Year 9

 

Year 10

 

Year 11

 

Year 12

 

Total

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Concrete - parking garage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $

13,500

 

 

 

 

$

13.500

 

Asphalt & Striping - parking lot/parking garage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

      —

 

Lighting - parking area and grounds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0

 

Landscaping

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0

 

Drainage & irrigation System

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

Plumbing Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

375

 

$

375

 

$

375

 

 $

5,975

 

$

375

 

$

7,475

 

Roof

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

HVAC System

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $

76,454

 

 

 

 

$

76,454

 

Building Facade

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $

 505,500

 

 

 

 

$

505,500

 

Windows & Doors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

Sprinklers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

Eleavtor / Escalator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $

   12,000

 

$

12,000

 

$

24,000

 

Building & Elevator - ADR upfit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

Lighting - common areas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

Carpeting & wallcoverings - common areas

 

 

 

 

 

 

 

 

 

 

 

 

$

60,000

 

$

60,000

 

$

60,000

 

$

60,000

 

$

60,000

 

$

60,000

 

$

60,000

 

 $

60,000

 

$

60,000

 

$

540,000

 

Painting - Common areas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

Miscellaneous

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

IMMEDIATE REPAIRS

$

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

Cash Requirements

 

 

 

$

0

 

$

0

 

$

0

 

$

60,000

 

$

60,000

 

$

60,000

 

$

60,000

 

$

60,375

 

$

60,375

 

$

60,375

 

 $

673,429

 

$

72,375

 

$

1,166.929

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

Inflation factor @

0.00%

 

 

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

100.00

%

 

 

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

CASH REQUIREMENTS W/ Inflation

 

 

 

$

0

 

$

0

 

$

0

 

$

60,000

 

$

60,000

 

$

60,000

 

$

60,000

 

$

60,375

 

$

60,375

 

$

60,375

 

 $

673,429

 

$

72,375

 

$

1,166,929

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

ANNUAL RESERVE COLLECTIONS

 

 

 

$

105,589

 

$

105,589

 

$

105,589

 

$

105,589

 

$

105,589

 

$

105,589

 

$

105,589

 

$

105,589

 

$

105,589

 

$

105,589

 

 $

105,589

 

$

105,589

 

$

1,267,063

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

Annual Surplus/(Shortfall)

 

 

 

$

105,589

 

$

105,589

 

$

105,589

 

$

45,589

 

$

45,589

 

$

45,589

 

$

45,589

 

$

45,214

 

$

45,214

 

$

45,214

 

($

567,840)

 

$

33,214

 

 

 

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Interest @

0.00%

 

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

 $

0

 

$

0

 

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

REVE BALANCE/(SHORTFALL)

$

0

 

$

105,589

 

$

211,177

 

$

316,766

 

$

362,354

 

$

407,943

 

$

453,532

 

$

499,120

 

$

544,334

 

$

589,547

 

$

634,761

 

 $

66,921

 

$

100.134

 

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00189

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

Schedule 2.2(b)

Monthly Payments
(see attached)

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00190

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

SCHEDULE 2.2(b)

Sotheby’s Monthly Payments

 

 

 

 

 

 

 

 

 

$25.0MM B-Note

 

 

 

 

 

 

 

 

 

Period

 

Date

 

Interest

 

Principal

 

Cash Flows

0

 

7/1/2005

 

 

 

 

 

 

1

 

8/1/2005

 

167,270.83

 

—

 

167,270.83

2

 

9/1/2005

 

167,270.83

 

—

 

167,270.83

3

 

10/1/2005

 

161,875.00

 

—

 

161,875.00

4

 

11/1/2005

 

167,270.83

 

—

 

167,270.83

5

 

12/1/2005

 

161,875.00

 

—

 

161,875.00

6

 

1/1/2006

 

167,270.83

 

—

 

167,270.83

7

 

2/1/2006

 

167,270.83

 

—

 

167,270.83

8

 

3/1/2006

 

151,083.33

 

—

 

151,083.33

9

 

4/1/2006

 

167,270.83

 

—

 

167,270.83

10

 

5/1/2006

 

161,875.00

 

—

 

161,875.00

11

 

6/1/2006

 

167,270.83

 

—

 

167,270.83

12

 

7/1/2006

 

161,875.00

 

—

 

161,875.00

13

 

8/1/2006

 

167,270.83

 

—

 

167,270.83

14

 

9/1/2006

 

167,270.83

 

—

 

167,270.83

15

 

10/1/2006

 

161,875.00

 

—

 

161,875.00

16

 

11/1/2006

 

167,270.83

 

—

 

167,270.83

17

 

12/1/2006

 

161,875.00

 

—

 

161,875.00

18

 

1/1/2007

 

167,270.83

 

—

 

167,270.83

19

 

2/1/2007

 

167,270.83

 

—

 

167,270.83

20

 

3/1/2007

 

151,083.33

 

—

 

151,083.33

21

 

4/1/2007

 

167,270.83

 

—

 

167,270.83

22

 

5/1/2007

 

161,875.00

 

—

 

161,875.00

23

 

6/1/2007

 

167,270.83

 

—

 

167,270.83

24

 

7/1/2007

 

161,875.00

 

—

 

161,875.00

25

 

8/1/2007

 

167,270.83

 

—

 

167,270.83

26

 

9/1/2007

 

167,270.83

 

—

 

167,270.83

27

 

10/1/2007

 

161,875.00

 

—

 

161,875.00

28

 

11/1/2007

 

167,270.83

 

—

 

167,270.83

29

 

12/1/2007

 

161,875.00

 

—

 

161,875.00

30

 

1/1/2008

 

167,270.83

 

—

 

167,270.83

31

 

2/1/2008

 

167,270.83

 

—

 

167,270.83

32

 

3/1/2008

 

156,479.17

 

—

 

156,479.17

33

 

4/1/2008

 

167,270.83

 

—

 

167,270.83

34

 

5/1/2008

 

161,875.00

 

—

 

161,875.00

35

 

6/1/2008

 

167,270.83

 

—

 

167,270.83

36

 

7/1/2008

 

161,875.00

 

—

 

161,875.00

37

 

8/1/2008

 

167,270.83

 

—

 

167,270.83

38

 

9/1/2008

 

167,270.83

 

—

 

167,270.83

39

 

10/1/2008

 

161,875.00

 

—

 

161,875.00

40

 

11/1/2008

 

167,270.83

 

—

 

167,270.83

41

 

12/1/2008

 

161,875.00

 

—

 

161,875.00

42

 

1/1/2009

 

167,270.83

 

—

 

167,270.83

43

 

2/1/2009

 

167,270.83

 

—

 

167,270.83

44

 

3/1/2009

 

151,083.33

 

—

 

151,083.33

45

 

4/1/2009

 

167,270.83

 

—

 

167,270.83

46

 

5/1/2009

 

161,875.00

 

—

 

161,875.00

47

 

6/1/2009

 

167,270.83

 

—

 

167,270.83

48

 

7/1/2009

 

161,875.00

 

—

 

161,875.00

49

 

8/1/2009

 

167,270.83

 

—

 

167,270.83

50

 

9/1/2009

 

167,270.83

 

—

 

167,270.83

51

 

10/1/2009

 

161,875.00

 

—

 

161,875.00

52

 

11/1/2009

 

167,270.83

 

—

 

167,270.83

53

 

12/1/2009

 

161,875.00

 

—

 

161,875.00

54

 

1/1/2010

 

167,270.83

 

—

 

167,270.83

55

 

2/1/2010

 

167,270.83

 

—

 

167,270.83

56

 

3/1/2010

 

151,083.33

 

—

 

151,083.33

57

 

4/1/2010

 

167,270.83

 

—

 

167,270.83

 

$210.0MM A-Note

 

Period

 

Date

 

Interest

 

Principal

 

Cash Flows

0

 

7/1/2005

 

 

 

 

 

 

1

 

8/1/2005

 

942,072.78

 

—

 

942,072.78

2

 

9/1/2005

 

942,072.78

 

—

 

942,072.78

3

 

10/1/2005

 

911,683.33

 

—

 

911,683.33

4

 

11/1/2005

 

942,072.78

 

—

 

942,072.78

5

 

12/1/2005

 

911,683.33

 

—

 

911,683.33

6

 

1/1/2006

 

942,072.78

 

—

 

942,072.78

7

 

2/1/2006

 

942,072.78

 

—

 

942,072.78

8

 

3/1/2006

 

850,904.44

 

—

 

850,904.44

9

 

4/1/2006

 

942,072.78

 

—

 

942,072.78

10

 

5/1/2006

 

911,683.33

 

—

 

911,683.33

11

 

6/1/2006

 

942,072.78

 

—

 

942,072.78

12

 

7/1/2006

 

911,683.33

 

—

 

911,683.33

13

 

8/1/2006

 

942,072.78

 

—

 

942,072.78

14

 

9/1/2006

 

942,072.78

 

—

 

942,072.78

15

 

10/1/2006

 

911,683.33

 

—

 

911,683.33

16

 

11/1/2006

 

942,072.78

 

—

 

942,072.78

17

 

12/1/2006

 

911,683.33

 

—

 

911,683.33

18

 

1/1/2007

 

942,072.78

 

—

 

942,072.78

19

 

2/1/2007

 

942,072.78

 

—

 

942,072.78

20

 

3/1/2007

 

850,904.44

 

—

 

850,904.44

21

 

4/1/2007

 

942,072.78

 

—

 

942,072.78

22

 

5/1/2007

 

911,683.33

 

—

 

911,683.33

23

 

6/1/2007

 

942,072.78

 

—

 

942,072.78

24

 

7/1/2007

 

911,683.33

 

—

 

911,683.33

25

 

8/1/2007

 

942,072.78

 

—

 

942,072.78

26

 

9/1/2007

 

942,072.78

 

—

 

942,072.78

27

 

10/1/2007

 

911,683.33

 

—

 

911,683.33

28

 

11/1/2007

 

942,072.78

 

—

 

942,072.78

29

 

12/1/2007

 

911,683.33

 

—

 

911,683.33

30

 

1/1/2008

 

942,072.78

 

—

 

942,072.78

31

 

2/1/2008

 

942,072.78

 

—

 

942,072.78

32

 

3/1/2008

 

881,293.89

 

—

 

881,293.89

33

 

4/1/2008

 

942,072.78

 

—

 

942,072.78

34

 

5/1/2008

 

911,683.33

 

—

 

911,683.33

35

 

6/1/2008

 

942,072.78

 

—

 

942,072.78

36

 

7/1/2008

 

911,683.33

 

—

 

911,683.33

37

 

8/1/2008

 

942,072.78

 

—

 

942,072.78

38

 

9/1/2008

 

942,072.78

 

—

 

942,072.78

39

 

10/1/2008

 

911,683.33

 

—

 

911,683.33

40

 

11/1/2008

 

942,072.78

 

—

 

942,072.78

41

 

12/1/2008

 

911,683.33

 

—

 

911,683.33

42

 

1/1/2009

 

942,072.78

 

—

 

942,072.78

43

 

2/1/2009

 

942,072.78

 

—

 

942,072.78

44

 

3/1/2009

 

850,904.44

 

—

 

850,904.44

45

 

4/1/2009

 

942,072.78

 

—

 

942,072.78

46

 

5/1/2009

 

911,683.33

 

—

 

911,683.33

47

 

6/1/2009

 

942,072.78

 

—

 

942,072.78

48

 

7/1/2009

 

911,683.33

 

—

 

911,683.33

49

 

8/1/2009

 

942,072.78

 

—

 

942,072.78

50

 

9/1/2009

 

942,072.78

 

—

 

942,072.78

51

 

10/1/2009

 

911,683.33

 

—

 

911,683.33

52

 

11/1/2009

 

942,072.78

 

—

 

942,072.78

53

 

12/1/2009

 

911,683.33

 

—

 

911,683.33

54

 

1/1/2010

 

942,072.78

 

—

 

942,072.78

55

 

2/1/2010

 

942,072.78

 

—

 

942,072.78

56

 

3/1/2010

 

850,904.44

 

—

 

850,904.44

57

 

4/1/2010

 

942,072.78

 

—

 

942,072.78

Page 1 of 6

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00191

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

SCHEDULE 2.2(b)

Sotheby’s Monthly Payments

 

 

 

 

 

 

 

 

 

$25.0MM B-Note

 

 

 

 

 

 

 

 

 

58

 

5/1/2010

 

161,875.00

 

—

 

161,875.00

59

 

6/1/2010

 

167,270.83

 

—

 

167,270.83

60

 

7/1/2010

 

161,875.00

 

—

 

161,875.00

61

 

8/1/2010

 

167,270.83

 

23,649.76

 

190,920.60

62

 

9/1/2010

 

167,112.60

 

23,761.41

 

190,874.00

63

 

10/1/2010

 

161,568.01

 

27,673.30

 

189,241.31

64

 

11/1/2010

 

166,768.46

 

24,004.21

 

190,772.67

65

 

12/1/2010

 

161,233.40

 

27,909.38

 

189,142.78

66

 

1/1/2011

 

166,421.11

 

24,249.27

 

190,670.38

67

 

2/1/2011

 

166,258.86

 

24,363.74

 

190,622.61

68

 

3/1/2011

 

150,022.06

 

35,819.36

 

185,841.42

69

 

4/1/2011

 

165,856.19

 

24,647.85

 

190,504.03

70

 

5/1/2011

 

160,346.39

 

28,535.19

 

188,881.59

71

 

6/1/2011

 

165,500.35

 

24,898.90

 

190,399.25

72

 

7/1/2011

 

160,000.41

 

28,779.30

 

188,779.71

73

 

8/1/2011

 

165,141.20

 

25,152.30

 

190,293.49

74

 

9/1/2011

 

164,972.91

 

25,271.03

 

190,243.94

75

 

10/1/2011

 

159,487.57

 

29,141.12

 

188,628.69

76

 

11/1/2011

 

164,608.84

 

25,527.89

 

190,136.73

77

 

12/1/2011

 

159,133.59

 

29,390.87

 

188,524.46

78

 

1/1/2012

 

164,241.39

 

25,787.14

 

190,028.53

79

 

2/1/2012

 

164,068.85

 

25,908.87

 

189,977.72

80

 

3/1/2012

 

153,321.60

 

33,491.43

 

186,813.02

81

 

4/1/2012

 

163,671.42

 

26,189.28

 

189,860.69

82

 

5/1/2012

 

158,222.12

 

30,033.94

 

188,256.06

83

 

6/1/2012

 

163,295.24

 

26,454.68

 

189,749.92

84

 

7/1/2012

 

157,856.35

 

30,292.00

 

188,148.36

85

 

8/1/2012

 

162,915.55

 

26,722.56

 

189,638.12

86

 

9/1/2012

 

162,736.76

 

26,848.71

 

189,585.47

87

 

10/1/2012

 

157,313.34

 

30,675.12

 

187,988.46

88

 

11/1/2012

 

162,351.88

 

27,120.26

 

189,472.13

89

 

12/1/2012

 

156,939.11

 

30,939.14

 

187,878.26

90

 

1/1/2013

 

161,963.41

 

27,394.33

 

189,357.74

91

 

2/1/2013

 

161,780.12

 

27,523.65

 

189,303.77

92

 

3/1/2013

 

145,957.64

 

38,686.95

 

184,644.59

93

 

4/1/2013

 

161,337.12

 

27,836.21

 

189,173.32

94

 

5/1/2013

 

155,952.45

 

31,635.27

 

187,587.72

95

 

6/1/2013

 

160,939.20

 

28,116.95

 

189,056.15

96

 

7/1/2013

 

155,565.56

 

31,908.24

 

187,473.79

97

 

8/1/2013

 

160,537.58

 

28,400.30

 

188,937.89

98

 

9/1/2013

 

160,347.56

 

28,534.37

 

188,881.93

99

 

10/1/2013

 

154,990.30

 

32,314.10

 

187,304.40

100

 

11/1/2013

 

159,940.43

 

28,821.61

 

188,762.05

101

 

12/1/2013

 

154,594.45

 

32,593.39

 

187,187.83

102

 

1/1/2014

 

159,529.52

 

29,111.53

 

188,641.04

103

 

2/1/2014

 

159,334.74

 

29,248.95

 

188,583.69

104

 

3/1/2014

 

143,738.48

 

40,252.64

 

183,991.12

105

 

4/1/2014

 

158,869.71

 

29,577.04

 

188,446.75

106

 

5/1/2014

 

153,553.37

 

33,327.90

 

186,881.27

107

 

6/1/2014

 

158,448.83

 

29,873.99

 

188,322.82

108

 

7/1/2014

 

153,144.14

 

33,616.63

 

186,760.77

109

 

8/1/2014

 

158,024.02

 

30,173.71

 

188,197.73

110

 

9/1/2014

 

157,822.13

 

30,316.14

 

188,138.28

111

 

10/1/2014

 

152,534.80

 

34,046.54

 

186,581.34

112

 

11/1/2014

 

157,391.49

 

30,619.98

 

188,011.47

113

 

12/1/2014

 

152,116.08

 

34,341.96

 

186,458.04

114

 

1/1/2015

 

156,956.84

 

30,926.64

 

187,883.48

115

 

2/1/2015

 

156,749.92

 

31,072.63

 

187,822.55

116

 

3/1/2015

 

141,392.79

 

41,907.61

 

183,300.40

117

 

4/1/2015

 

156,261.62

 

31,417.14

 

187,678.76

118

 

5/1/2015

 

151,017.50

 

35,117.05

 

186,134.54

 

$210.0MM A-Note

 

58

 

5/1/2010

 

911,683.33

 

—

 

911,683.33

59

 

6/1/2010

 

942,072.78

 

—

 

942,072.78

60

 

7/1/2010

 

911,683.33

 

—

 

911,683.33

61

 

8/1/2010

 

942,072.78

 

198,658.02

 

1,140,730.80

62

 

9/1/2010

 

941,181.59

 

199,595.81

 

1,140,777.40

63

 

10/1/2010

 

909,954.37

 

232,455.71

 

1,142,410.09

64

 

11/1/2010

 

939,243.38

 

201,635.36

 

1,140,878.73

65

 

12/1/2010

 

908,069.83

 

234,438.79

 

1,142,508.62

66

 

1/1/2011

 

937,287.12

 

203,693.90

 

1,140,981.02

67

 

2/1/2011

 

936,373.34

 

204,655.45

 

1,141,028.79

68

 

3/1/2011

 

844,927.31

 

300,882.66

 

1,145,809.98

69

 

4/1/2011

 

934,105.46

 

207,041.90

 

1,141,147.37

70

 

5/1/2011

 

903,074.19

 

239,695.63

 

1,142,769.81

71

 

6/1/2011

 

932,101.37

 

209,150.78

 

1,141,252.15

72

 

7/1/2011

 

901,125.59

 

241,746.11

 

1,142,871.69

73

 

8/1/2011

 

930,078.62

 

211,279.29

 

1,141,357.91

74

 

9/1/2011

 

929,130.81

 

212,276.65

 

1,141,407.46

75

 

10/1/2011

 

898,237.28

 

244,785.43

 

1,143,022.71

76

 

11/1/2011

 

927,080.40

 

214,434.27

 

1,141,514.67

77

 

12/1/2011

 

896,243.65

 

246,883.30

 

1,143,126.94

78

 

1/1/2012

 

925,010.90

 

216,611.97

 

1,141,622.87

79

 

2/1/2012

 

924,039.17

 

217,634.51

 

1,141,673.68

80

 

3/1/2012

 

863,510.40

 

281,327.97

 

1,144,838.38

81

 

4/1/2012

 

921,800.79

 

219,989.92

 

1,141,790.71

82

 

5/1/2012

 

891,110.23

 

252,285.11

 

1,143,395.34

83

 

6/1/2012

 

919,682.14

 

222,219.34

 

1,141,901.48

84

 

7/1/2012

 

889,050.24

 

254,452.81

 

1,143,503.04

85

 

8/1/2012

 

917,543.76

 

224,469.53

 

1,142,013.28

86

 

9/1/2012

 

916,536.77

 

225,529.16

 

1,142,065.93

87

 

10/1/2012

 

885,991.97

 

257,670.97

 

1,143,662.94

88

 

11/1/2012

 

914,369.11

 

227,810.16

 

1,142,179.27

89

 

12/1/2012

 

883,884.33

 

259,888.81

 

1,143,773.14

90

 

1/1/2013

 

912,181.26

 

230,112.40

 

1,142,293.66

91

 

2/1/2013

 

911,148.96

 

231,198.67

 

1,142,347.63

92

 

3/1/2013

 

822,036.46

 

324,970.35

 

1,147,006.81

93

 

4/1/2013

 

908,653.95

 

233,824.13

 

1,142,478.08

94

 

5/1/2013

 

878,327.42

 

265,736.26

 

1,144,063.68

95

 

6/1/2013

 

906,412.90

 

236,182.36

 

1,142,595.25

96

 

7/1/2013

 

876,148.42

 

268,029.19

 

1,144,177.61

97

 

8/1/2013

 

904,150.97

 

238,562.54

 

1,142,713.51

98

 

9/1/2013

 

903,080.77

 

239,688.70

 

1,142,769.47

99

 

10/1/2013

 

872,908.56

 

271,438.44

 

1,144,347.00

100

 

11/1/2013

 

900,787.82

 

242,101.54

 

1,142,889.35

101

 

12/1/2013

 

870,679.10

 

273,784.47

 

1,144,463.57

102

 

1/1/2014

 

898,473.52

 

244,536.83

 

1,143,010.36

103

 

2/1/2014

 

897,376.52

 

245,691.20

 

1,143,067.71

104

 

3/1/2014

 

809,538.10

 

338,122.17

 

1,147,660.28

105

 

4/1/2014

 

894,757.49

 

248,447.15

 

1,143,204.65

106

 

5/1/2014

 

864,815.75

 

279,954.37

 

1,144,770.13

107

 

6/1/2014

 

892,387.05

 

250,941.53

 

1,143,328.58

108

 

7/1/2014

 

862,510.95

 

282,379.68

 

1,144,890.63

109

 

8/1/2014

 

889,994.54

 

253,459.13

 

1,143,453.67

110

 

9/1/2014

 

888,857.51

 

254,655.61

 

1,143,513.12

111

 

10/1/2014

 

859,079.14

 

285,990.93

 

1,145,070.06

112

 

11/1/2014

 

886,432.13

 

257,207.80

 

1,143,639.93

113

 

12/1/2014

 

856,720.92

 

288,472.44

 

1,145,193.36

114

 

1/1/2015

 

883,984.18

 

259,783.74

 

1,143,767.92

115

 

2/1/2015

 

882,818.77

 

261,010.08

 

1,143,828.85

116

 

3/1/2015

 

796,327.11

 

352,023.90

 

1,148,351.00

117

 

4/1/2015

 

880,068.67

 

263,903.97

 

1,143,972.64

118

 

5/1/2015

 

850,533.65

 

294,983.20

 

1,145,516.86

Page 2 of 6

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00192

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

SCHEDULE 2.2(b)

Sotheby’s Monthly Payments

 

 

 

 

 

 

 

 

 

$25.0MM B-Note

 

 

 

 

 

 

 

 

 

119

 

6/1/2015

 

155,816.45

 

31,731.22

 

187,547.67

120

 

7/1/2015

 

150,584.65

 

35,422.43

 

186,007.09

121

 

8/1/2015

 

155,367.14

 

32,048.23

 

187,415.37

122

 

9/1/2015

 

155,152.71

 

32,199.52

 

187,352.22

123

 

10/1/2015

 

149,939.29

 

35,877.76

 

185,817.05

124

 

11/1/2015

 

154,697.21

 

32,520.88

 

187,218.10

125

 

12/1/2015

 

149,496.41

 

36,190.23

 

185,686.64

126

 

1/1/2016

 

154,237.48

 

32,845.24

 

187,082.72

127

 

2/1/2016

 

154,017.72

 

33,000.29

 

187,018.01

128

 

3/1/2016

 

143,874.54

 

40,156.65

 

184,031.19

129

 

4/1/2016

 

153,528.24

 

33,345.64

 

186,873.87

130

 

5/1/2016

 

148,359.80

 

36,992.14

 

185,351.94

131

 

6/1/2016

 

153,057.62

 

33,677.67

 

186,735.29

132

 

7/1/2016

 

147,902.21

 

37,314.99

 

185,217.20

133

 

8/1/2016

 

152,582.62

 

34,012.80

 

186,595.42

134

 

9/1/2016

 

152,355.04

 

34,173.36

 

186,528.41

135

 

10/1/2016

 

147,219.09

 

37,796.95

 

185,016.04

136

 

11/1/2016

 

151,873.50

 

34,513.11

 

186,386.61

137

 

12/1/2016

 

146,750.89

 

38,127.29

 

184,878.17

138

 

1/1/2017

 

151,387.48

 

34,856.01

 

186,243.49

139

 

2/1/2017

 

151,154.26

 

35,020.55

 

186,174.82

140

 

3/1/2017

 

136,314.79

 

45,490.31

 

181,805.10

141

 

4/1/2017

 

150,615.58

 

35,400.62

 

186,016.19

142

 

5/1/2017

 

145,527.79

 

38,990.22

 

184,518.01

143

 

6/1/2017

 

150,117.84

 

35,751.79

 

185,869.63

144

 

7/1/2017

 

145,043.84

 

39,331.67

 

184,375.51

145

 

8/1/2017

 

149,615.47

 

36,106.23

 

185,721.70

146

 

9/1/2017

 

149,373.89

 

36,276.67

 

185,650.56

147

 

10/1/2017

 

144,320.49

 

39,842.02

 

184,162.50

148

 

11/1/2017

 

148,864.59

 

36,636.00

 

185,500.59

149

 

12/1/2017

 

143,825.29

 

40,191.39

 

184,016.69

150

 

1/1/2018

 

148,350.55

 

36,998.67

 

185,349.22

151

 

2/1/2018

 

148,103.00

 

37,173.32

 

185,276.33

152

 

3/1/2018

 

133,545.80

 

47,443.92

 

180,989.73

153

 

4/1/2018

 

147,536.84

 

37,572.77

 

185,109.61

154

 

5/1/2018

 

142,534.30

 

41,102.23

 

183,636.53

155

 

6/1/2018

 

147,010.44

 

37,944.16

 

184,954.60

156

 

7/1/2018

 

142,022.48

 

41,463.34

 

183,485.82

157

 

8/1/2018

 

146,479.14

 

38,319.02

 

184,798.15

158

 

9/1/2018

 

146,222.75

 

38,499.90

 

184,722.66

159

 

10/1/2018

 

141,256.60

 

42,003.69

 

183,260.29

160

 

11/1/2018

 

145,684.12

 

38,879.93

 

184,564.05

161

 

12/1/2018

 

140,732.88

 

42,373.20

 

183,106.08

162

 

1/1/2019

 

145,140.46

 

39,263.50

 

184,403.96

163

 

2/1/2019

 

144,877.76

 

39,448.84

 

184,326.60

164

 

3/1/2019

 

130,618.93

 

49,508.93

 

180,127.86

165

 

4/1/2019

 

144,282.56

 

39,868.78

 

184,151.33

166

 

5/1/2019

 

139,370.13

 

43,334.66

 

182,704.79

167

 

6/1/2019

 

143,725.86

 

40,261.55

 

183,987.41

168

 

7/1/2019

 

138,828.85

 

43,716.56

 

182,545.40

169

 

8/1/2019

 

143,163.97

 

40,657.98

 

183,821.95

170

 

9/1/2019

 

142,891.94

 

40,849.91

 

183,741.84

171

 

10/1/2019

 

138,018.02

 

44,288.62

 

182,306.64

172

 

11/1/2019

 

142,322.29

 

41,251.81

 

183,574.10

173

 

12/1/2019

 

137,464.14

 

44,679.40

 

182,143.54

174

 

1/1/2020

 

141,747.34

 

41,657.46

 

183,404.80

175

 

2/1/2020

 

141,468.62

 

41,854.11

 

183,322.72

176

 

3/1/2020

 

132,079.64

 

48,478.35

 

180,557.99

177

 

4/1/2020

 

140,864.22

 

42,280.53

 

183,144.75

178

 

5/1/2020

 

136,046.44

 

45,679.64

 

181,726.08

179

 

6/1/2020

 

140,275.69

 

42,695.76

 

182,971.45

 

$210.0MM A-Note

 

119

 

6/1/2015

 

877,561.46

 

266,542.26

 

1,144,103.73

120

 

7/1/2015

 

848,095.88

 

297,548.44

 

1,145,644.31

121

 

8/1/2015

 

875,030.92

 

269,205.12

 

1,144,236.03

122

 

9/1/2015

 

873,823.25

 

270,475.93

 

1,144,299.18

123

 

10/1/2015

 

844,461.17

 

301,373.18

 

1,145,834.35

124

 

11/1/2015

 

871,257.90

 

273,175.41

 

1,144,433.30

125

 

12/1/2015

 

841,966.85

 

303,997.91

 

1,145,964.76

126

 

1/1/2016

 

868,668.66

 

275,900.02

 

1,144,568.68

127

 

2/1/2016

 

867,430.96

 

277,202.43

 

1,144,633.39

128

 

3/1/2016

 

810,304.35

 

337,315.86

 

1,147,620.21

129

 

4/1/2016

 

864,674.19

 

280,103.33

 

1,144,777.53

130

 

5/1/2016

 

835,565.45

 

310,734.01

 

1,146,299.46

131

 

6/1/2016

 

862,023.66

 

282,892.45

 

1,144,916.11

132

 

7/1/2016

 

832,988.31

 

313,445.89

 

1,146,434.20

133

 

8/1/2016

 

859,348.45

 

285,707.53

 

1,145,055.98

134

 

9/1/2016

 

858,066.75

 

287,056.24

 

1,145,122.99

135

 

10/1/2016

 

829,140.97

 

317,494.39

 

1,146,635.36

136

 

11/1/2016

 

855,354.70

 

289,910.09

 

1,145,264.79

137

 

12/1/2016

 

826,504.01

 

320,269.22

 

1,146,773.23

138

 

1/1/2017

 

852,617.40

 

292,790.51

 

1,145,407.91

139

 

2/1/2017

 

851,303.92

 

294,172.66

 

1,145,476.58

140

 

3/1/2017

 

767,727.70

 

382,118.60

 

1,149,846.30

141

 

4/1/2017

 

848,270.04

 

297,365.17

 

1,145,635.21

142

 

5/1/2017

 

819,615.52

 

327,517.86

 

1,147,133.39

143

 

6/1/2017

 

845,466.77

 

300,315.00

 

1,145,781.77

144

 

7/1/2017

 

816,889.88

 

330,386.01

 

1,147,275.89

145

 

8/1/2017

 

842,637.41

 

303,292.29

 

1,145,929.70

146

 

9/1/2017

 

841,276.82

 

304,724.02

 

1,146,000.84

147

 

10/1/2017

 

812,815.95

 

334,672.95

 

1,147,488.90

148

 

11/1/2017

 

838,408.45

 

307,742.36

 

1,146,150.81

149

 

12/1/2017

 

810,027.00

 

337,607.72

 

1,147,634.71

150

 

1/1/2018

 

835,513.37

 

310,788.81

 

1,146,302.18

151

 

2/1/2018

 

834,119.15

 

312,255.92

 

1,146,375.07

152

 

3/1/2018

 

752,132.71

 

398,528.97

 

1,150,661.67

153

 

4/1/2018

 

830,930.53

 

315,611.26

 

1,146,541.79

154

 

5/1/2018

 

802,756.14

 

345,258.73

 

1,148,014.87

155

 

6/1/2018

 

827,965.82

 

318,730.97

 

1,146,696.80

156

 

7/1/2018

 

799,873.53

 

348,292.05

 

1,148,165.58

157

 

8/1/2018

 

824,973.52

 

321,879.73

 

1,146,853.25

158

 

9/1/2018

 

823,529.55

 

323,399.20

 

1,146,928.74

159

 

10/1/2018

 

795,560.09

 

352,831.02

 

1,148,391.11

160

 

11/1/2018

 

820,495.94

 

326,591.42

 

1,147,087.35

161

 

12/1/2018

 

792,610.48

 

355,934.85

 

1,148,545.32

162

 

1/1/2019

 

817,434.08

 

329,813.36

 

1,147,247.44

163

 

2/1/2019

 

815,954.52

 

331,370.28

 

1,147,324.80

164

 

3/1/2019

 

735,648.49

 

415,875.05

 

1,151,523.54

165

 

4/1/2019

 

812,602.33

 

334,897.73

 

1,147,500.07

166

 

5/1/2019

 

784,935.45

 

364,011.16

 

1,148,946.61

167

 

6/1/2019

 

809,466.98

 

338,197.01

 

1,147,663.99

168

 

7/1/2019

 

781,886.91

 

367,219.08

 

1,149,106.00

169

 

8/1/2019

 

806,302.44

 

341,527.01

 

1,147,829.45

170

 

9/1/2019

 

804,770.33

 

343,139.22

 

1,147,909.56

171

 

10/1/2019

 

777,320.31

 

372,024.45

 

1,149,344.76

172

 

11/1/2019

 

801,562.07

 

346,515.23

 

1,148,077.30

173

 

12/1/2019

 

774,200.88

 

375,306.97

 

1,149,507.86

174

 

1/1/2020

 

798,323.93

 

349,922.67

 

1,148,246.60

175

 

2/1/2020

 

796,754.15

 

351,574.52

 

1,148,328.68

176

 

3/1/2020

 

743,875.23

 

407,218.18

 

1,151,093.41

177

 

4/1/2020

 

793,350.16

 

355,156.49

 

1,148,506.65

178

 

5/1/2020

 

766,216.36

 

383,708.96

 

1,149,925.32

179

 

6/1/2020

 

790,035.57

 

358,644.38

 

1,148,679.95

Page 3 of 6

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00193

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

SCHEDULE 2.2(b)

Sotheby’s Monthly Payments

 

 

 

 

 

 

 

 

 

$25.0MM B-Note

 

 

 

 

 

 

 

 

 

180

 

7/1/2020

 

135,474.21

 

46,083.37

 

181,557.58

181

 

8/1/2020

 

139,681.68

 

43,114.85

 

182,796.53

182

 

9/1/2020

 

139,393.21

 

43,318.38

 

182,711.59

183

 

10/1/2020

 

134,616.17

 

46,688.75

 

181,304.91

184

 

11/1/2020

 

138,790.99

 

43,743.27

 

182,534.25

185

 

12/1/2020

 

134,030.62

 

47,101.87

 

181,132.49

186

 

1/1/2021

 

138,183.16

 

44,172.11

 

182,355.27

187

 

2/1/2021

 

137,887.61

 

44,380.63

 

182,268.24

188

 

3/1/2021

 

124,275.44

 

53,984.48

 

178,259.92

189

 

4/1/2021

 

137,229.46

 

44,844.98

 

182,074.44

190

 

5/1/2021

 

132,512.33

 

48,173.07

 

180,685.41

191

 

6/1/2021

 

136,607.09

 

45,284.08

 

181,891.17

192

 

7/1/2021

 

131,907.20

 

48,600.01

 

180,507.21

193

 

8/1/2021

 

135,978.93

 

45,727.27

 

181,706.20

194

 

9/1/2021

 

135,672.98

 

45,943.13

 

181,616.11

195

 

10/1/2021

 

130,998.95

 

49,240.82

 

180,239.77

196

 

11/1/2021

 

135,036.12

 

46,392.46

 

181,428.57

197

 

12/1/2021

 

130,379.72

 

49,677.70

 

180,057.42

198

 

1/1/2022

 

134,393.33

 

46,845.97

 

181,239.29

199

 

2/1/2022

 

134,079.89

 

47,067.11

 

181,147.00

200

 

3/1/2022

 

120,819.97

 

56,422.43

 

177,242.40

201

 

4/1/2022

 

133,387.46

 

47,555.64

 

180,943.10

202

 

5/1/2022

 

128,776.72

 

50,808.68

 

179,585.39

203

 

6/1/2022

 

132,729.32

 

48,019.98

 

180,749.30

204

 

7/1/2022

 

128,136.80

 

51,260.16

 

179,396.96

205

 

8/1/2022

 

132,065.05

 

48,488.64

 

180,553.70

206

 

9/1/2022

 

131,740.62

 

48,717.54

 

180,458.16

207

 

10/1/2022

 

127,175.48

 

51,938.40

 

179,113.88

208

 

11/1/2022

 

131,067.15

 

49,192.70

 

180,259.85

209

 

12/1/2022

 

126,520.66

 

52,400.40

 

178,921.06

210

 

1/1/2023

 

130,387.41

 

49,672.28

 

180,059.69

211

 

2/1/2023

 

130,055.06

 

49,906.76

 

179,961.82

212

 

3/1/2023

 

117,167.48

 

58,999.39

 

176,166.87

213

 

4/1/2023

 

129,326.39

 

50,420.87

 

179,747.25

214

 

5/1/2023

 

124,828.09

 

53,594.57

 

178,422.66

215

 

6/1/2023

 

128,630.44

 

50,911.88

 

179,542.32

216

 

7/1/2023

 

124,151.41

 

54,071.99

 

178,223.40

217

 

8/1/2023

 

127,928.01

 

51,407.47

 

179,335.48

218

 

9/1/2023

 

127,584.05

 

51,650.14

 

179,234.19

219

 

10/1/2023

 

123,134.00

 

54,789.81

 

177,923.81

220

 

11/1/2023

 

126,871.88

 

52,152.61

 

179,024.48

221

 

12/1/2023

 

122,441.55

 

55,278.35

 

177,719.90

222

 

1/1/2024

 

126,153.07

 

52,659.75

 

178,812.82

223

 

2/1/2024

 

125,800.74

 

52,908.33

 

178,709.07

224

 

3/1/2024

 

117,353.40

 

58,868.22

 

176,221.62

225

 

4/1/2024

 

125,052.86

 

53,435.99

 

178,488.84

226

 

5/1/2024

 

120,672.90

 

56,526.20

 

177,199.10

227

 

6/1/2024

 

124,317.12

 

53,955.07

 

178,272.19

228

 

7/1/2024

 

119,957.53

 

57,030.91

 

176,988.44

229

 

8/1/2024

 

123,574.53

 

54,479.00

 

178,053.53

230

 

9/1/2024

 

123,210.02

 

54,736.17

 

177,946.19

231

 

10/1/2024

 

118,881.09

 

57,790.38

 

176,671.47

232

 

11/1/2024

 

122,457.12

 

55,267.36

 

177,724.49

233

 

12/1/2024

 

118,149.04

 

58,306.87

 

176,455.90

234

 

1/1/2025

 

121,697.22

 

55,803.50

 

177,500.72

235

 

2/1/2025

 

121,323.85

 

56,066.93

 

177,390.78

236

 

3/1/2025

 

109,244.00

 

64,589.68

 

173,833.67

237

 

4/1/2025

 

120,516.55

 

56,636.50

 

177,153.06

238

 

5/1/2025

 

116,262.20

 

59,638.09

 

175,900.30

239

 

6/1/2025

 

119,738.58

 

57,185.39

 

176,923.97

240

 

7/1/2025

 

115,505.77

 

60,171.78

 

175,677.55

 

$210.0MM A-Note

 

180

 

7/1/2020

 

762,993.55

 

387,100.27

 

1,150,093.82

181

 

8/1/2020

 

786,690.11

 

362,164.75

 

1,148,854.87

182

 

9/1/2020

 

785,065.42

 

363,874.39

 

1,148,939.81

183

 

10/1/2020

 

758,161.02

 

392,185.47

 

1,150,346.49

184

 

11/1/2020

 

781,673.69

 

367,443.46

 

1,149,117.15

185

 

12/1/2020

 

754,863.21

 

395,655.70

 

1,150,518.91

186

 

1/1/2021

 

778,250.38

 

371,045.75

 

1,149,296.13

187

 

2/1/2021

 

776,585.84

 

372,797.31

 

1,149,383.16

188

 

3/1/2021

 

699,921.83

 

453,469.65

 

1,153,391.48

189

 

4/1/2021

 

772,879.16

 

376,697.80

 

1,149,576.96

190

 

5/1/2021

 

746,312.20

 

404,653.80

 

1,150,965.99

191

 

6/1/2021

 

769,373.97

 

380,386.26

 

1,149,760.23

192

 

7/1/2021

 

742,904.07

 

408,240.12

 

1,151,144.19

193

 

8/1/2021

 

765,836.14

 

384,109.06

 

1,149,945.20

194

 

9/1/2021

 

764,113.01

 

385,922.28

 

1,150,035.29

195

 

10/1/2021

 

737,788.78

 

413,622.86

 

1,151,411.63

196

 

11/1/2021

 

760,526.20

 

389,696.63

 

1,150,222.83

197

 

12/1/2021

 

734,301.29

 

417,292.69

 

1,151,593.98

198

 

1/1/2022

 

756,906.00

 

393,506.11

 

1,150,412.11

199

 

2/1/2022

 

755,140.70

 

395,363.70

 

1,150,504.40

200

 

3/1/2022

 

680,460.59

 

473,948.41

 

1,154,409.00

201

 

4/1/2022

 

751,240.92

 

399,467.38

 

1,150,708.30

202

 

5/1/2022

 

725,273.11

 

426,792.90

 

1,152,066.01

203

 

6/1/2022

 

747,534.26

 

403,367.84

 

1,150,902.10

204

 

7/1/2022

 

721,669.09

 

430,585.35

 

1,152,254.44

205

 

8/1/2022

 

743,793.10

 

407,304.61

 

1,151,097.70

206

 

9/1/2022

 

741,965.91

 

409,227.33

 

1,151,193.24

207

 

10/1/2022

 

716,254.92

 

436,282.59

 

1,152,537.52

208

 

11/1/2022

 

738,172.90

 

413,218.66

 

1,151,391.55

209

 

12/1/2022

 

712,566.94

 

440,163.40

 

1,152,730.34

210

 

1/1/2023

 

734,344.57

 

417,247.14

 

1,151,591.71

211

 

2/1/2023

 

732,472.78

 

419,216.80

 

1,151,689.58

212

 

3/1/2023

 

659,889.68

 

495,594.85

 

1,155,484.53

213

 

4/1/2023

 

728,368.88

 

423,535.27

 

1,151,904.15

214

 

5/1/2023

 

703,034.39

 

450,194.35

 

1,153,228.74

215

 

6/1/2023

 

724,449.27

 

427,659.81

 

1,152,109.08

216

 

7/1/2023

 

699,223.32

 

454,204.68

 

1,153,428.00

217

 

8/1/2023

 

720,493.17

 

431,822.75

 

1,152,315.92

218

 

9/1/2023

 

718,555.99

 

433,861.22

 

1,152,417.21

219

 

10/1/2023

 

693,493.22

 

460,234.37

 

1,153,727.59

220

 

11/1/2023

 

714,545.02

 

438,081.89

 

1,152,626.92

221

 

12/1/2023

 

689,593.32

 

464,338.18

 

1,153,931.50

222

 

1/1/2024

 

710,496.71

 

442,341.87

 

1,152,838.58

223

 

2/1/2024

 

708,512.34

 

444,429.99

 

1,152,942.33

224

 

3/1/2024

 

660,936.75

 

494,493.03

 

1,155,429.78

225

 

4/1/2024

 

704,300.27

 

448,862.28

 

1,153,162.56

226

 

5/1/2024

 

679,632.24

 

474,820.06

 

1,154,452.30

227

 

6/1/2024

 

700,156.58

 

453,222.63

 

1,153,379.21

228

 

7/1/2024

 

675,603.28

 

479,059.67

 

1,154,662.96

229

 

8/1/2024

 

695,974.30

 

457,623.57

 

1,153,597.87

230

 

9/1/2024

 

693,921.38

 

459,783.83

 

1,153,705.21

231

 

10/1/2024

 

669,540.73

 

485,439.20

 

1,154,979.93

232

 

11/1/2024

 

689,681.05

 

464,245.86

 

1,153,926.91

233

 

12/1/2024

 

665,417.82

 

489,777.68

 

1,155,195.50

234

 

1/1/2025

 

685,401.24

 

468,749.44

 

1,154,150.68

235

 

2/1/2025

 

683,298.40

 

470,962.22

 

1,154,260.62

236

 

3/1/2025

 

615,264.45

 

542,553.28

 

1,157,817.73

237

 

4/1/2025

 

678,751.71

 

475,746.63

 

1,154,498.34

238

 

5/1/2025

 

654,791.11

 

500,959.99

 

1,155,751.10

239

 

6/1/2025

 

674,370.14

 

480,357.29

 

1,154,727.43

240

 

7/1/2025

 

650,530.87

 

505,442.98

 

1,155,973.85

Page 4 of 6

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00194

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

SCHEDULE 2.2(b)

Sotheby’s Monthly Payments

 

 

 

 

 

 

 

 

 

$25.0MM B-Note

 

241

 

8/1/2025

 

118,953.36

 

57,739.39

 

176,692.75

242

 

9/1/2025

 

118,567.04

 

58,011.95

 

176,578.99

243

 

10/1/2025

 

114,366.67

 

60,975.46

 

175,342.13

244

 

11/1/2025

 

117,770.91

 

58,573.65

 

176,344.56

245

 

12/1/2025

 

113,592.59

 

61,521.60

 

175,114.19

246

 

1/1/2026

 

116,967.38

 

59,140.57

 

176,107.95

247

 

2/1/2026

 

116,571.68

 

59,419.75

 

175,991.43

248

 

3/1/2026

 

104,931.45

 

67,632.32

 

172,563.78

249

 

4/1/2026

 

115,721.59

 

60,019.51

 

175,741.10

250

 

5/1/2026

 

111,600.01

 

62,927.43

 

174,527.44

251

 

6/1/2026

 

114,898.97

 

60,599.90

 

175,498.87

252

 

7/1/2026

 

110,800.17

 

63,491.74

 

174,291.91

253

 

8/1/2026

 

114,068.70

 

61,185.69

 

175,254.38

254

 

9/1/2026

 

113,659.31

 

61,474.52

 

175,133.83

255

 

10/1/2026

 

109,594.84

 

64,342.15

 

173,936.98

256

 

11/1/2026

 

112,817.50

 

62,068.45

 

174,885.95

257

 

12/1/2026

 

108,776.33

 

64,919.63

 

173,695.96

258

 

1/1/2027

 

111,967.84

 

62,667.91

 

174,635.75

259

 

2/1/2027

 

111,548.54

 

62,963.74

 

174,512.28

260

 

3/1/2027

 

100,373.01

 

70,848.46

 

171,221.47

261

 

4/1/2027

 

110,653.22

 

63,595.42

 

174,248.64

262

 

5/1/2027

 

106,671.98

 

66,404.32

 

173,076.30

263

 

6/1/2027

 

109,783.42

 

64,209.10

 

173,992.51

264

 

7/1/2027

 

105,826.26

 

67,001.00

 

172,827.27

265

 

8/1/2027

 

108,905.51

 

64,828.49

 

173,734.00

266

 

9/1/2027

 

108,471.76

 

65,134.52

 

173,606.28

267

 

10/1/2027

 

104,550.92

 

67,900.80

 

172,451.72

268

 

11/1/2027

 

107,581.64

 

65,762.53

 

173,344.17

269

 

12/1/2027

 

103,685.45

 

68,511.42

 

172,196.87

270

 

1/1/2028

 

106,683.23

 

66,396.38

 

173,079.62

271

 

2/1/2028

 

106,238.99

 

66,709.81

 

172,948.80

272

 

3/1/2028

 

98,967.31

 

71,840.23

 

170,807.54

273

 

4/1/2028

 

105,311.97

 

67,363.85

 

172,675.83

274

 

5/1/2028

 

101,478.63

 

70,068.41

 

171,547.04

275

 

6/1/2028

 

104,392.44

 

68,012.62

 

172,405.05

276

 

7/1/2028

 

100,584.56

 

70,699.21

 

171,283.76

277

 

8/1/2028

 

103,464.34

 

68,667.42

 

172,131.76

278

 

9/1/2028

 

103,004.90

 

68,991.58

 

171,996.47

279

 

10/1/2028

 

99,235.44

 

71,651.06

 

170,886.49

280

 

11/1/2028

 

102,063.88

 

69,655.50

 

171,719.37

281

 

12/1/2028

 

98,320.48

 

72,296.59

 

170,617.07

282

 

1/1/2029

 

101,114.10

 

70,325.60

 

171,439.70

283

 

2/1/2029

 

100,643.56

 

70,657.58

 

171,301.14

284

 

3/1/2029

 

90,476.86

 

77,830.53

 

168,307.39

285

 

4/1/2029

 

99,650.05

 

71,358.53

 

171,008.59

286

 

5/1/2029

 

95,973.49

 

73,952.47

 

169,925.96

287

 

6/1/2029

 

98,677.80

 

72,044.49

 

170,722.29

288

 

7/1/2029

 

95,028.16

 

74,619.43

 

169,647.59

289

 

8/1/2029

 

97,696.50

 

72,736.83

 

170,433.33

290

 

9/1/2029

 

97,209.83

 

73,080.19

 

170,290.02

291

 

10/1/2029

 

93,600.83

 

75,626.46

 

169,227.30

292

 

11/1/2029

 

96,214.86

 

73,782.18

 

169,997.04

293

 

12/1/2029

 

92,633.41

 

76,309.01

 

168,942.42

294

 

1/1/2030

 

95,210.62

 

74,490.70

 

169,701.32

295

 

2/1/2030

 

94,712.22

 

74,842.34

 

169,554.56

296

 

3/1/2030

 

85,094.22

 

81,628.17

 

166,722.39

297

 

4/1/2030

 

93,665.30

 

75,580.98

 

169,246.28

298

 

5/1/2030

 

90,154.45

 

78,058.00

 

168,212.45

299

 

6/1/2030

 

92,637.33

 

76,306.25

 

168,943.58

300

 

7/1/2030

 

89,154.94

 

78,763.19

 

167,918.13

301

 

8/1/2030

 

91,599.78

 

77,038.27

 

168,638.05

 

 

 

 

 

 

 

 

 

$210.0MM A-Note

 

241

 

8/1/2025

 

669,947.78

 

485,010.86

 

1,154,958.65

242

 

9/1/2025

 

667,772.00

 

487,300.41

 

1,155,072.41

243

 

10/1/2025

 

644,115.42

 

512,193.85

 

1,156,309.27

244

 

11/1/2025

 

663,288.20

 

492,018.64

 

1,155,306.84

245

 

12/1/2025

 

639,755.79

 

516,781.43

 

1,156,537.21

246

 

1/1/2026

 

658,762.67

 

496,780.79

 

1,155,543.45

247

 

2/1/2026

 

656,534.08

 

499,125.90

 

1,155,659.97

248

 

3/1/2026

 

590,976.10

 

568,111.52

 

1,159,087.62

249

 

4/1/2026

 

651,746.38

 

504,163.91

 

1,155,910.30

250

 

5/1/2026

 

628,533.56

 

528,590.40

 

1,157,123.96

251

 

6/1/2026

 

647,113.39

 

509,039.14

 

1,156,152.53

252

 

7/1/2026

 

624,028.84

 

533,330.64

 

1,157,359.49

253

 

8/1/2026

 

642,437.25

 

513,959.76

 

1,156,397.02

254

 

9/1/2026

 

640,131.60

 

516,385.97

 

1,156,517.57

255

 

10/1/2026

 

617,240.38

 

540,474.04

 

1,157,714.42

256

 

11/1/2026

 

635,390.46

 

521,374.99

 

1,156,765.45

257

 

12/1/2026

 

612,630.52

 

545,324.92

 

1,157,955.44

258

 

1/1/2027

 

630,605.18

 

526,410.47

 

1,157,015.65

259

 

2/1/2027

 

628,243.67

 

528,895.45

 

1,157,139.12

260

 

3/1/2027

 

565,302.85

 

595,127.08

 

1,160,429.93

261

 

4/1/2027

 

623,201.24

 

534,201.52

 

1,157,402.76

262

 

5/1/2027

 

600,778.81

 

557,796.28

 

1,158,575.10

263

 

6/1/2027

 

618,302.47

 

539,356.42

 

1,157,658.89

264

 

7/1/2027

 

596,015.69

 

562,808.44

 

1,158,824.13

265

 

8/1/2027

 

613,358.09

 

544,559.31

 

1,157,917.40

266

 

9/1/2027

 

610,915.16

 

547,129.96

 

1,158,045.12

267

 

10/1/2027

 

588,832.94

 

570,366.74

 

1,159,199.68

268

 

11/1/2027

 

605,902.00

 

552,405.23

 

1,158,307.23

269

 

12/1/2027

 

583,958.59

 

575,495.93

 

1,159,454.53

270

 

1/1/2028

 

600,842.17

 

557,729.61

 

1,158,571.78

271

 

2/1/2028

 

598,340.16

 

560,362.44

 

1,158,702.60

272

 

3/1/2028

 

557,385.93

 

603,457.93

 

1,160,843.86

273

 

4/1/2028

 

593,119.19

 

565,856.38

 

1,158,975.57

274

 

5/1/2028

 

571,529.73

 

588,574.63

 

1,160,104.36

275

 

6/1/2028

 

587,940.34

 

571,306.00

 

1,159,246.35

276

 

7/1/2028

 

566,494.29

 

593,873.35

 

1,160,367.64

277

 

8/1/2028

 

582,713.28

 

576,806.36

 

1,159,519.64

278

 

9/1/2028

 

580,125.69

 

579,529.24

 

1,159,654.93

279

 

10/1/2028

 

558,896.02

 

601,868.89

 

1,160,764.91

280

 

11/1/2028

 

574,825.87

 

585,106.16

 

1,159,932.03

281

 

12/1/2028

 

553,742.95

 

607,291.38

 

1,161,034.33

282

 

1/1/2029

 

569,476.70

 

590,735.00

 

1,160,211.70

283

 

2/1/2029

 

566,826.63

 

593,523.63

 

1,160,350.26

284

 

3/1/2029

 

509,567.52

 

653,776.49

 

1,163,344.01

285

 

4/1/2029

 

561,231.16

 

599,411.65

 

1,160,642.81

286

 

5/1/2029

 

540,524.68

 

621,200.76

 

1,161,725.44

287

 

6/1/2029

 

555,755.42

 

605,173.69

 

1,160,929.11

288

 

7/1/2029

 

535,200.56

 

626,803.25

 

1,162,003.81

289

 

8/1/2029

 

550,228.70

 

610,989.37

 

1,161,218.07

290

 

9/1/2029

 

547,487.76

 

613,873.62

 

1,161,361.38

291

 

10/1/2029

 

527,161.83

 

635,262.28

 

1,162,424.10

292

 

11/1/2029

 

541,884.06

 

619,770.30

 

1,161,654.36

293

 

12/1/2029

 

521,713.29

 

640,995.69

 

1,162,708.98

294

 

1/1/2030

 

536,228.19

 

625,721.89

 

1,161,950.08

295

 

2/1/2030

 

533,421.16

 

628,675.68

 

1,162,096.84

296

 

3/1/2030

 

479,252.41

 

685,676.60

 

1,164,929.01

297

 

4/1/2030

 

527,524.90

 

634,880.22

 

1,162,405.12

298

 

5/1/2030

 

507,751.73

 

655,687.22

 

1,163,438.95

299

 

6/1/2030

 

521,735.33

 

640,972.49

 

1,162,707.82

300

 

7/1/2030

 

502,122.48

 

661,610.79

 

1,163,733.27

301

 

8/1/2030

 

515,891.87

 

647,121.48

 

1,163,013.35

Page 5 of 6

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00195

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

SCHEDULE 2.2(b)

Sotheby’s Monthly Payments

 

 

 

 

 

 

 

 

 

$25.0MM B-Note

 

 

 

 

 

 

 

 

 

302

 

9/1/2030

 

91,084.33

 

77,401.94

 

168,486.27

303

 

10/1/2030

 

87,644.95

 

79,828.54

 

167,473.49

304

 

11/1/2030

 

90,032.33

 

78,144.16

 

168,176.49

305

 

12/1/2030

 

86,622.08

 

80,550.21

 

167,172.29

306

 

1/1/2031

 

88,970.53

 

78,893.30

 

167,863.83

307

 

2/1/2031

 

88,442.67

 

79,265.72

 

167,708.39

308

 

3/1/2031

 

79,404.67

 

85,642.34

 

165,047.01

309

 

4/1/2031

 

87,339.30

 

80,044.19

 

167,383.49

310

 

5/1/2031

 

84,003.62

 

82,397.63

 

166,401.24

311

 

6/1/2031

 

86,252.43

 

80,811.01

 

167,063.44

312

 

7/1/2031

 

82,946.84

 

83,143.22

 

166,090.06

313

 

8/1/2031

 

85,155.44

 

81,584.98

 

166,740.41

314

 

9/1/2031

 

84,609.57

 

81,970.11

 

166,579.67

315

 

10/1/2031

 

81,349.47

 

84,270.22

 

165,619.69

316

 

11/1/2031

 

83,497.28

 

82,754.86

 

166,252.14

317

 

12/1/2031

 

80,267.98

 

85,033.24

 

165,301.23

318

 

1/1/2032

 

82,374.64

 

83,546.93

 

165,921.56

319

 

2/1/2032

 

81,815.64

 

83,941.32

 

165,756.96

320

 

3/1/2032

 

76,011.81

 

88,036.12

 

164,047.93

321

 

4/1/2032

 

80,664.97

 

84,753.16

 

165,418.12

322

 

5/1/2032

 

77,514.09

 

86,976.21

 

164,490.30

323

 

6/1/2032

 

79,515.95

 

85,563.83

 

165,079.78

324

 

7/1/2032

 

76,396.90

 

87,764.43

 

164,161.32

325

 

8/1/2032

 

78,356.24

 

86,382.04

 

164,738.28

326

 

9/1/2032

 

77,778.27

 

86,789.82

 

164,568.09

327

 

10/1/2032

 

74,707.33

 

88,956.47

 

163,663.80

328

 

11/1/2032

 

76,602.39

 

87,619.45

 

164,221.83

329

 

12/1/2032

 

73,564.01

 

89,763.13

 

163,327.13

330

 

1/1/2033

 

75,415.55

 

88,456.80

 

163,872.35

331

 

2/1/2033

 

74,823.70

 

88,874.37

 

163,698.07

332

 

3/1/2033

 

67,045.60

 

94,362.09

 

161,407.68

333

 

4/1/2033

 

73,597.69

 

89,739.36

 

163,337.05

334

 

5/1/2033

 

70,642.51

 

91,824.34

 

162,466.85

335

 

6/1/2033

 

72,382.88

 

90,596.45

 

162,979.33

336

 

7/1/2033

 

69,461.34

 

92,657.70

 

162,119.04

337

 

8/1/2033

 

71,156.76

 

91,461.52

 

162,618.28

338

 

9/1/2033

 

70,544.80

 

91,893.28

 

162,438.08

339

 

10/1/2033

 

67,674.16

 

93,918.62

 

161,592.77

340

 

11/1/2033

 

69,301.57

 

92,770.42

 

162,071.99

341

 

12/1/2033

 

66,465.35

 

94,771.47

 

161,236.82

342

 

1/1/2034

 

68,046.76

 

93,655.73

 

161,702.49

343

 

2/1/2034

 

67,420.12

 

94,097.85

 

161,517.97

344

 

3/1/2034

 

60,326.93

 

99,102.34

 

159,429.27

345

 

4/1/2034

 

66,127.45

 

95,009.87

 

161,137.32

346

 

5/1/2034

 

63,379.12

 

96,948.91

 

160,328.03

347

 

6/1/2034

 

64,843.09

 

95,916.03

 

160,759.12

348

 

7/1/2034

 

62,130.32

 

97,829.98

 

159,960.30

349

 

8/1/2034

 

63,546.77

 

96,830.63

 

160,377.40

350

 

9/1/2034

 

62,898.89

 

97,287.73

 

160,186.62

351

 

10/1/2034

 

60,239.95

 

99,163.70

 

159,403.65

352

 

11/1/2034

 

61,584.46

 

98,215.10

 

159,799.57

353

 

12/1/2034

 

58,961.93

 

100,065.39

 

159,027.32

354

 

1/1/2035

 

60,257.80

 

99,151.11

 

159,408.91

355

 

2/1/2035

 

59,594.40

 

99,619.16

 

159,213.56

356

 

3/1/2035

 

53,225.17

 

104,112.87

 

157,338.04

357

 

4/1/2035

 

58,231.26

 

100,580.90

 

158,812.16

358

 

5/1/2035

 

55,701.57

 

102,365.68

 

158,067.26

359

 

6/1/2035

 

56,873.38

 

101,538.93

 

158,412.31

360

 

7/1/2035

 

54,381.29

 

8,398,654.81

 

8,453,036.10

 

 

 

 

 

 

 

 

 

$210.0MM A-Note

 

302

 

9/1/2030

 

512,988.84

 

650,176.29

 

1,163,165.13

303

 

10/1/2030

 

493,618.17

 

670,559.74

 

1,164,177.91

304

 

11/1/2030

 

507,063.94

 

656,410.97

 

1,163,474.91

305

 

12/1/2030

 

487,857.33

 

676,621.78

 

1,164,479.11

306

 

1/1/2031

 

501,083.87

 

662,703.70

 

1,163,787.57

307

 

2/1/2031

 

498,110.94

 

665,832.07

 

1,163,943.01

308

 

3/1/2031

 

447,208.75

 

719,395.63

 

1,166,604.39

309

 

4/1/2031

 

491,896.73

 

672,371.19

 

1,164,267.91

310

 

5/1/2031

 

473,110.09

 

692,140.07

 

1,165,250.16

311

 

6/1/2031

 

485,775.45

 

678,812.51

 

1,164,587.96

312

 

7/1/2031

 

467,158.31

 

698,403.03

 

1,165,561.34

313

 

8/1/2031

 

479,597.17

 

685,313.81

 

1,164,910.99

314

 

9/1/2031

 

476,522.81

 

688,548.91

 

1,165,071.73

315

 

10/1/2031

 

458,161.88

 

707,869.84

 

1,166,031.71

316

 

11/1/2031

 

470,258.39

 

695,140.86

 

1,165,399.26

317

 

12/1/2031

 

452,070.92

 

714,279.26

 

1,166,350.17

318

 

1/1/2032

 

463,935.65

 

701,794.19

 

1,165,729.84

319

 

2/1/2032

 

460,787.36

 

705,107.08

 

1,165,894.44

320

 

3/1/2032

 

428,100.06

 

739,503.41

 

1,167,603.47

321

 

4/1/2032

 

454,306.75

 

711,926.53

 

1,166,233.28

322

 

5/1/2032

 

436,560.97

 

730,600.13

 

1,167,161.10

323

 

6/1/2032

 

447,835.49

 

718,736.14

 

1,166,571.62

324

 

7/1/2032

 

430,268.89

 

737,221.18

 

1,167,490.08

325

 

8/1/2032

 

441,303.97

 

725,609.14

 

1,166,913.12

326

 

9/1/2032

 

438,048.85

 

729,034.46

 

1,167,083.31

327

 

10/1/2032

 

420,753.24

 

747,234.35

 

1,167,987.60

328

 

11/1/2032

 

431,426.21

 

736,003.35

 

1,167,429.57

329

 

12/1/2032

 

414,313.99

 

754,010.28

 

1,168,324.27

330

 

1/1/2033

 

424,741.92

 

743,037.13

 

1,167,779.05

331

 

2/1/2033

 

421,408.61

 

746,544.72

 

1,167,953.33

332

 

3/1/2033

 

377,602.19

 

792,641.53

 

1,170,243.72

333

 

4/1/2033

 

414,503.73

 

753,810.62

 

1,168,314.35

334

 

5/1/2033

 

397,860.09

 

771,324.46

 

1,169,184.55

335

 

6/1/2033

 

407,661.88

 

761,010.19

 

1,168,672.07

336

 

7/1/2033

 

391,207.69

 

778,324.68

 

1,169,532.36

337

 

8/1/2033

 

400,756.33

 

768,276.79

 

1,169,033.12

338

 

9/1/2033

 

397,309.79

 

771,903.52

 

1,169,213.32

339

 

10/1/2033

 

381,142.25

 

788,916.38

 

1,170,058.63

340

 

11/1/2033

 

390,307.86

 

779,271.55

 

1,169,579.41

341

 

12/1/2033

 

374,334.19

 

796,080.39

 

1,170,414.58

342

 

1/1/2034

 

383,240.74

 

786,708.17

 

1,169,948.91

343

 

2/1/2034

 

379,711.52

 

790,421.92

 

1,170,133.43

344

 

3/1/2034

 

339,762.51

 

832,459.63

 

1,172,222.13

345

 

4/1/2034

 

372,431.17

 

798,082.91

 

1,170,514.08

346

 

5/1/2034

 

356,952.50

 

814,370.86

 

1,171,323.37

347

 

6/1/2034

 

365,197.60

 

805,694.68

 

1,170,892.28

348

 

7/1/2034

 

349,919.23

 

821,771.86

 

1,171,691.10

349

 

8/1/2034

 

357,896.69

 

813,377.31

 

1,171,274.00

350

 

9/1/2034

 

354,247.83

 

817,216.95

 

1,171,464.78

351

 

10/1/2034

 

339,272.66

 

832,975.09

 

1,172,247.75

352

 

11/1/2034

 

346,844.97

 

825,006.86

 

1,171,851.83

353

 

12/1/2034

 

332,074.78

 

840,549.30

 

1,172,624.08

354

 

1/1/2035

 

339,373.18

 

832,869.31

 

1,172,242.49

355

 

2/1/2035

 

335,636.88

 

836,800.96

 

1,172,437.84

356

 

3/1/2035

 

299,765.24

 

874,548.13

 

1,174,313.36

357

 

4/1/2035

 

327,959.66

 

844,879.57

 

1,172,839.24

358

 

5/1/2035

 

313,712.40

 

859,871.74

 

1,173,584.14

359

 

6/1/2035

 

320,312.05

 

852,927.04

 

1,173,239.09

360

 

7/1/2035

 

306,276.54

 

70,548,700.42

 

70,854,976.96

Page 6 of 6

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00196

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

EXHIBIT A

Annual Budget

(on file with Lender)

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00197

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

EXHIBIT B

Organizational Chart

(attached hereto)

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00198

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

 

 

1334 York Avenue
Organization Chart
Post SochsenFonds Buyout

 

(FLOW CHART) [c5750504.jpg]

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00199

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

EXHIBIT C

Form of Tenant Direction Letter

[BORROWER LETTERHEAD]

_________ __, 20__

[TENANTS UNDER LEASES]

 

 

Re:

Lease dated ____________ between ________________,

 

as Landlord, and _________________, as Tenant,

 

concerning premises known as ________________

Ladies and Gentlemen:

          This letter shall constitute notice to you that the undersigned has
granted a security interest in the captioned lease and all rents, additional
rent and all other monetary obligations to landlord thereunder (collectively,
“Rent”) in favor of Bank of America, N.A., as lender (“Lender”), to secure
certain of the undersigned’s obligations to Lender. The undersigned hereby
irrevocably instructs and authorizes you to disregard any and all previous
notices sent to you in connection with Rent and hereafter to deliver all Rent to
the following address:

_________________________

_________________________

_________________________

          The instructions set forth herein are irrevocable and are not subject
to modification in any manner, except that Lender, or any successor lender so
identified by Lender, may by written notice to you rescind the instructions
contained herein.

 

 

 

Sincerely,

 

 

 

[BORROWER]

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00200

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

ACKNOWLEDGMENT AND AGREEMENT

The undersigned acknowledges notice of the security interest of Lender and
hereby confirms that the undersigned has received no notice of any other pledge
or assignment of the Rent and will honor the above instructions.

[Tenant]

 

 

 

By:

 

 

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

 

 

Name:

 

Its:

 

 

Dated as of: ______________ __, 20__

 

 

Confidential Treatment Requested by BANA

BANA-Soth-00201

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