EXHIBIT 10.50

 

 

 

 

 

 

LOAN AND SECURITY AGREEMENT

Dated as of November 30, 2011

among

REGO II BORROWER LLC,
as Borrower

 

and

BANK OF CHINA, NEW YORK BRANCH, 
as Lender

 

 

 

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

 

 

TABLE OF CONTENTS

 

 

Page

Article I        DEFINITIONS; PRINCIPLES OF CONSTRUCTION

1

Section 1.1

Definitions

1

Section 1.2

Principals of Construction

29

Article II      GENERAL TERMS

29

Section 2.1

Loan

29

Section 2.2

Interest

30

Section 2.3

Prepayments

35

Section 2.4

Intentionally Omitted

37

Section 2.5

Release on Payments in Full

37

Article III     CASH MANAGEMENT

38

Section 3.1

Cash Management

38

Article IV     REPRESENTATIONS AND WARRANTIES

44

Section 4.1

Borrower Representations

44

Section 4.2

Survival of Representations

54

Section 4.3

Lender’s Representations

54

Article V      BORROWER COVENANTS

54

Section 5.1

Affirmative Covenants

54

Section 5.2

Negative Covenants

70

Article VI     INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

73

Section 6.1

Insurance Coverage

73

Section 6.2

Condemnation and Insurance Proceeds

82

Article VII    IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS

86

Section 7.1

Borrower to Pay Impositions and Other Charges

86

Section 7.2

No Liens

87

Section 7.3

Contest

87

Article VIII    TRANSFERS, INDEBTEDNESS , SUBORDINATE LIENS AND
CONDOMINIUM

88

Section 8.1

Restrictions on Transfers

88

Section 8.2

Sale of Equipment

88

Section 8.3

Immaterial Transfers and Easements, etc.

88

       

i

 

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

 

 

 

 

 

Page

Section 8.4

Debt

89

Section 8.5

Interest Transfers; Property Transfers

89

Section 8.6

Deliveries to Lender

90

Section 8.7

Leases

90

Section 8.8

Condominium

95

Article IX     MAINTENANCE OF PROPERTY; ALTERATIONS

96

Section 9.1

Maintenance of Property

96

Section 9.2

Conditions to Alteration

96

Section 9.3

Costs of Alteration

97

Article X       BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND
OTHER INFORMATION

100

Section 10.1

Books and Records

100

Section 10.2

Financial Statements

100

Article XI     ASSIGNMENTS AND PARTICIPATIONS; COMPONENT NOTES;
SECURITIZATION

102

Section 11.1

Assignments

102

Section 11.2

Participations

102

Section 11.3

Pledge

103

Section 11.4

Disclosure of Information; Cooperation; Confidentiality

103

Section 11.5

Component Notes

104

Section 11.6

Sale of Note and Securitization

105

Section 11.7

Intentionally Omitted

105

Section 11.8

Securitization Financial Statements

106

Section 11.9

Securitization Indemnification

106

Section 11.10

Retention of Servicer

108

Article XII     RESERVE ACCOUNTS

109

Section 12.1

Tax Reserve Account

109

Section 12.2

Insurance Reserve Account

110

Section 12.3

Capital Expenditures Reserve Account

111

Section 12.4

Leasing Reserve Account

112

Section 12.5

Lease Termination Fees Reserve Account

113

Section 12.6

Intentionally Omitted

115

Section 12.7

Reserve Accounts, Generally

115

 

ii

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

 

 

 

 

 

Page

Section 12.8

Letters of Credit

115

Article XIII    DEFAULTS

117

Section 13.1

Event of Default

117

Section 13.2

Remedies

122

Section 13.3

Remedies Cumulative; Waivers

123

Section 13.4

Costs of Collection

123

Article XIV    SPECIAL PROVISIONS

124

Section 14.1

Exculpation

124

Article XV     MISCELLANEOUS

126

Section 15.1

Survival

126

Section 15.2

Lender’s Discretion

126

Section 15.3

Governing Law

126

Section 15.4

Modification, Waiver in Writing

128

Section 15.5

Delay Not a Waiver

128

Section 15.6

Notices

128

Section 15.7

TRIAL BY JURY

130

Section 15.8

Headings

130

Section 15.9

Severability

130

Section 15.10

Preferences

130

Section 15.11

Waiver of Notice

131

Section 15.12

Expenses; Indemnity

131

Section 15.13

Exhibits and Schedules Incorporated

133

Section 15.14

Offsets, Counterclaims and Defenses

133

Section 15.15

Liability of Assignees of Lender

134

Section 15.16

No Joint Venture or Partnership; No Third Party Beneficiaries

134

Section 15.17

Publicity

134

Section 15.18

Waiver of Marshalling of assets

135

Section 15.19

Waiver of Counterclaim and Other Actions

135

Section 15.20

Conflict; Construction of Documents; Reliance

135

Section 15.21

Prior Agreements

135

Section 15.22

Counterparts

136

Section 15.23

Bottom-Up Guaranties

136

Section 15.24

WAIVER OF SPECIAL DAMAGES

136

iii

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

 

 

 

 

 

Page

Section 15.25

USA PATRIOT Act Notification

136

 

 

iv

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

 

 

Schedules

 

Schedule 1            –    REA’s

Schedule 2.2.4      –    Amortization Schedule

Schedule 4.1.1      –    Borrower Organizational Structure Chart

Schedule 4.1.4      –    Pending Arbitration Proceedings, Governmental
Investigations, Actions, 
     Suits or Proceedings

Schedule 4.1.23    –    Missing Licenses and/or Permits

Schedule 4.1.27    –    Rent Roll

Schedule 5.1.26    –    Violations

Schedule 8.7.5      –    Security Deposits

 

Exhibits

 

Exhibit A              –    Form of Assignment of Interest Rate Protection
Agreement

Exhibit B              –    Form of Tenant Notification Letter

Exhibit C              –    Standard Form of Lease

Exhibit D              –    Form of Non Disturbance Agreement

 

 

 

v

 

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

 

 

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT, dated as of November 30, 2011 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
“Agreement”), among REGO II BORROWER LLC, a Delaware limited liability company
(“Borrower”), having an office at c/o Alexander’s, Inc., 210 Route 4 East,
Paramus, New Jersey 07652, and BANK OF CHINA, NEW YORK BRANCH, having an address
at 410 Madison Avenue, New York, New York 10017 (together with its successors
and assigns, “Lender”). 

W I T N E S S E T H: 

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and

WHEREAS, 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 (as
hereinafter defined).

NOW, THEREFORE, 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 I

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:

“Account Agreement” shall mean that certain Blocked Account Control Agreement,
dated as of the date hereof, among Lender, Borrower and Collection Bank, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

“Account Collateral” shall have the meaning set forth in Section 3.1.2 (a). 

“Act” shall have the meaning set forth in Section 5.1.4(ff)(vi).

“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.

“Agreement” shall have the meaning set forth in the first paragraph of this
Agreement.

 

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

 

 

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

“Alteration” shall have the meaning set forth in Section 9.2. 

“Alteration Deficiency” shall have the meaning set forth in Section 9.3(b). 

“ALX” shall mean Alexander’s, Inc.

“ALX Competitor” shall mean the Persons listed on side letter dated the date
hereof executed by Borrower and Lender (the “Initial ALX Competitors”) and such
other Person(s) who are identified by Borrower to Lender from time to time (but
in no event more frequently than twice in any calendar year), and, either
directly or through Affiliates of such Person, are primarily in the business of
owning, operating and/or developing real property; provided, however  that the
following entities shall be specifically excluded from this definition: (a) any
pension fund, pension trust or pension account, (b) any 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), (c) a corporation organized under the banking laws of the United
States or any state or territory of the United States (including the District of
Columbia), and (d) any investment bank.

“ALX Transfer” and “ALX Transfers” shall have the meaning set forth in the
definition of “Permitted Transfers”.

“Annual Budget” shall mean the operating budget for the Property prepared by
either Borrower or Manager, on Borrower’s behalf, pursuant to the Management
Agreement, for the applicable Fiscal Year or other period setting forth, in
reasonable detail, Borrower’s or Manager’s, as applicable, good faith estimates
of the anticipated results of operations of the Property, including revenues
from all sources, all Operating Expenses, Management Fees, Manager Lease Fees
and Capital Expenditures.

“Applicable Interest Rate” shall mean 2.11% per annum for the Initial Interest
Accrual Period and thereafter (a) the LIBOR Rate with respect to any period when
the Loan (or the applicable portion thereof) is a LIBOR Loan, or (b) the
Reference Rate plus  the Spread with respect to any period when the Loan (or the
applicable portion thereof) is a Substitute Rate Loan.

“Appraisal” means a written statement setting forth an opinion of the market
value of the Property that (i) has been independently and impartially prepared
by a Qualified Appraiser directly engaged by Lender, (ii) complies with all
applicable federal and state laws and regulations dealing with appraisals or
valuations of real property, and (iii) has been reviewed as to form and content
and approved by Lender, in its reasonable discretion.

“Approved Bank” shall mean a bank or other financial institution which has a
minimum long-term unsecured debt rating of at least “A-” by S&P and a short-term
unsecured debt rating of at least “A-1” by S&P.

“Assignment of Contracts” shall mean that certain Assignment of Contracts,
Licenses and Permits, dated as of the date hereof, from Borrower, as assignor,
to Lender, as assignee.

2

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

 

 

“Assignment of Interest Rate Protection Agreement” shall mean collectively, any
Assignment(s) of Interest Rate Protection Agreement substantially in the form
attached hereto as Exhibit A  among Borrower or an Affiliate of Borrower, as
applicable, Lender and the related Counterparty to the related Interest Rate
Protection Agreement to be entered into pursuant to Section 5.1.25. 

“Assignment of Leases” shall mean that certain first priority Assignment of
Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to
Lender, as assignee.

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

“Assignment Opinion” shall have the meaning set forth in Section 5.1.25(h).  

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy,” as amended from time to time, and any successor statute or
statutes and all rules and regulations from time to time promulgated thereunder,
and any comparable foreign laws relating to bankruptcy, insolvency or creditors’
rights.

“BOC” shall have the meaning set forth in Section 11.9.2. 

“BOC Group” shall have the meaning set forth in Section 11.9.2(b).

“Borrower” has the meaning set forth in the first paragraph of this Agreement,
together with any permitted successors or assigns, including any Successor
Borrower.

“Borrower Related Party” shall mean Borrower, Guarantor, any Manager which is an
Affiliate of Borrower or Guarantor or any other Person that is Controlled by or
is under common Control with Borrower or Guarantor. 

“Borrower’s Account” shall mean Account #2030267849959 named “Alexander’s,
Inc.”, ABA# 031201467.

“Borrower’s Architect” shall mean Borrower’s architect, engineer or construction
consultant which is licensed to practice in the State and has at least five (5)
years of architectural, engineering or construction experience in connection
with commercial properties in New York City.

“Borrower’s  Certificate” shall mean a certificate executed by an authorized
signatory of Borrower or Manager that is familiar with the financial condition
of Borrower and the operation of the Property, as the act of Borrower and not of
such authorized signatory, who shall have no personal liability in connection
therewith.

“Borrower’s Knowledge” means the current actual knowledge of Albert Zubcak,
Benjamin Schall and Ross Morrison.

3

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

 

 

 

“Breakage Costs” shall have the meaning set forth in Section 2.2.3(f). 

“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which banks in New York, New York are not open for domestic and international
business.

“Calculation Period” shall have the meaning set forth in the definition of Debt
Service Coverage Ratio.

“Capital Expenditure Funds” has the meaning set forth in Section 12.3.1. 

“Capital Expenditures” shall mean any amount incurred in respect of capital
items which in accordance with GAAP would not be included in Borrower’s annual
financial statements for an applicable period as an operating expense of the
Property and is not reasonably expected by Borrower to be a regularly recurring
operating expense of the Property.

“Capital Expenditures Reserve Account” shall have the meaning set forth in
Section 3.1.1(e). 

“Captive Insurance Company” shall have the meaning set forth in
Section 6.1.9(a). 

“Cash” shall mean the legal tender of the United States of America.

“Cash or Cash Equivalents” shall mean any one or a combination of the following:
 (a) Cash, and (b) U.S. Obligations.

“Cash Management Agreement” shall mean that certain Cash Management Agreement of
even date herewith among Lender, Borrower, the Deposit Bank and Manager.

“Casualty Amount” shall mean $3,000,000.00.

“Closing Date” shall mean the date of this Agreement set forth in the
introductory paragraph hereof.

“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.

“Collateral” shall mean all property of Borrower or any other Person in which
Lender has or is intended to have a security interest hereunder, under the
Mortgage, the Assignment of Leases and the other Loan Documents.

“Collateral Accounts” shall have the meaning set forth in Section 3.1.1. 

“Collection Account” shall have the meaning set forth in Section 3.1.1. 

4

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

 

 

 

“Collection Bank” shall mean JP Morgan Chase, or any successor Eligible
Institution acting as Collection Bank under the Account Agreement or other
financial institution reasonably approved by Lender.

“Common Elements” shall have the meaning set forth in Section 8.8.1. 

“Condo Documents” shall have the meaning set forth in Section 8.8.2. 

“Condominium” shall have the meaning set forth in Section 8.8.1.  

“Contest Threshold” shall have the meaning set forth in Section 7.3. 

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise (and
Control shall not be deemed absent solely because a non-managing member, partner
or shareholder shall have veto rights with respect to major decisions).  The
terms Controlled, Controlling and Common Control shall have correlative
meanings.

“Counterparty” shall mean each counterparty to, or issuer of, any Interest Rate
Protection Agreement other than Borrower or an Affiliate of Borrower.

“Counterparty Opinion” shall have the meaning set forth in Section 5.1.25(g). 

“Covered Disclosure Information” has the meaning set forth in Section
11.8.2(a).   

“Debt” shall mean, with respect to any Person at any time:  (a) indebtedness or
liability of such Person for borrowed money whether or not evidenced by bonds,
debentures, notes or other instruments, or indebtedness for the deferred
purchase price of property or services; (b) obligations of such Person as lessee
under leases which should have been or should be, in accordance with GAAP,
recorded as capital leases; (c) current liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA;
(d) obligations otherwise described in this definition of “Debt” issued for, or
liabilities incurred on the account of, such Person; (c) obligations or
liabilities of such Person arising under letters of credit, credit facilities or
other acceptance facilities; (f) obligations of such Person under any guarantees
or other agreement to become secondarily liable for any obligation of any other
Person, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person or otherwise to
assure a creditor against loss; (g) obligations of such Person secured by any
Lien (excluding Liens for Impositions or Other Charges which are not yet due and
payable) on any property of such Person, whether or not the obligations have
been assumed by such Person; or (h) obligations of such Person under any
interest rate or currency exchange agreement.

“Debt Service” shall mean, with respect to any particular period of time,
scheduled principal and interest payments due under the Note (after taking into
account any cap or interest payments actually received by Lender and provided by
any Interest Rate Protection Agreement entered into by Borrower pursuant to
Section 5.1.25). 

5

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

 

 

 

“Debt Service Coverage Ratio” shall mean a ratio, as reasonably determined by
Lender for the applicable period in which:

(a)                the numerator is the Net Operating Income, as determined
under GAAP (provided  that Rents shall not be straight-lined), as stated on
Borrower’s four most recent quarterly financial statements delivered to Lender
pursuant to Section 10.2.1, for the twelve (12) calendar month period ending on
the last day of the calendar quarter immediately prior to the applicable
Determination Date (the “Calculation Period”); and

(b)               the denominator is the aggregate amount of interest and
principal due and payable on the Note based upon the aggregate amount of
interest and principal which would be due and payable in accordance with the
Note for the Calculation Period based upon (x) the Applicable Interest Rate then
in effect (after taking into account the impact of any Interest Rate Protection
Agreement which is then in place), and (y) a thirty (30) year amortization
schedule, which amortization schedule shall be adjusted from and after any
prepayment of the Loan in part to reflect the new Principal Amount but using the
same assumed final payment date.

“Debt Service Reserve Account” shall have the meaning set forth in Section
3.1.1(a).   

“Default” shall mean the occurrence of any event hereunder or under any of the
other Loan Documents 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 an acceleration of the Loan, a rate
per annum equal to the lesser of (a) the Maximum Legal Rate and (b) three
percent (3%) above the Applicable Interest Rate.

“Deficiency” shall have the meaning set forth in Section 6.2.4(b)(ii). 

“Deposit Account” shall have the meaning set forth in Section 3.1.1. 

“Deposit Bank” shall mean Lender or any successor Eligible Institution thereto
chosen by Lender; provided, however, that Lender shall provide not less than
thirty (30) days’ prior written notice to Borrower of any change to the identity
of the Deposit Bank during the term of the Loan.

“Determination Date” shall mean the date that is forty-five (45) days following
the end of each calendar quarter occurring during the term of the Loan.

“Disclosure Documents” shall have the meaning set forth in Section 11.9.1. 

“DSCR Collateral Event” shall mean, as of any Determination Date, the failure by
Borrower, as reasonably determined by Lender, to maintain a Debt Service
Coverage Ratio  of at least 1.25 to 1.00 for the Calculation Period ending on
the last day of the calendar quarter immediately preceding such Determination
Date.

6

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

 

 

 

“DSCR Collateral Period” shall mean any period commencing upon any Determination
Date as of which Lender reasonably determines that a DSCR Collateral Event has
occurred and is continuing until such subsequent Determination Date, if any, as
Lender reasonably determines that the Debt Service Coverage Ratio was greater
than 1.25 to 1.00 for the Calculation Period ending on the last day of the
calendar quarter immediately preceding such Determination Date. 

“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 Fifty Million
and 00/100 Dollars ($50,000,000.00) 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 a depository institution or trust company, the
short term unsecured debt obligations or commercial paper of which are rated at
least “A‑1” by S&P, “P‑1” by Moody’s or “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 “A+” by Fitch and S&P and
“A1” by Moody’s).   Lender shall constitute an Eligible Institution.   

“Environmental Indemnity Agreement” shall mean that certain Environmental
Indemnity Agreement dated as of the date hereof given by Borrower and Guarantor,
for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

“Environmental Law” shall mean any federal, state or local statute, regulation
or ordinance or any judicial or administrative decree or decision, whether now
existing or hereafter enacted, promulgated or issued, with respect to the
protection of human health as it relates to Hazardous Material exposure, or the
environment, any Hazardous Materials, Microbial Matter, drinking water, stream
sediments, vegetation, groundwater, wetlands, landfills, open dumps, storage
tanks, underground storage tanks, solid waste, waste water, atmosphere, soil,
storm water run‑off, waste emissions or wells, or the generation, manufacture,
storage, handling, transportation, disposal, release, emission or discharge of
any Hazardous Materials.  Without limiting the generality of the foregoing, the
term shall encompass each of the following statutes, and regulations promulgated
thereunder, and amendments and successors to such statutes and regulations, as
may be enacted and promulgated from time to time:  (a) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (codified in
scattered Sections of 26 U.S.C.; 33 U.S.C.; 42 U.S.C. and 42 U.S.C. § 9601 et
seq.); (b) the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901
et seq.); (c) the Hazardous Materials

 

   

7

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

 

 

Transportation Act (49 U.S.C. § 1801 et seq.); (d) the Toxic Substances Control
Act (15 U.S.C. § 2061 et seq.); © the Clean Water Act (33 U.S.C. § 1251 et
seq.); (f) the Clean Air Act (42 U.S.C. § 7401 et seq.); (g) the Safe Drinking
Water Act (21 U.S.C. § 349; 42 U.S.C. § 201 and § 300f et seq.); (h) the
National Environmental Policy Act of 1969 (42 U.S.C. § 4321); (i) the Superfund
Amendment and Reauthorization Act of 1986 (codified in scattered Sections of
10 U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C.); (j) Title III of the Superfund
Amendment and Reauthorization Act (40 U.S.C. § 1101 et seq.); (k)  the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 USCA
6901 et  seq.; (l) the Emergency Planning and Community Right-to-Know Act of
1986, 42 USCA 11001 et  seq.; (m) the River and Harbor Act of 1899, 33 USCA 401
et  seq.; (n) the Endangered Species Act of 1973, 16 USCA 1531 et  seq.; and
(o) the Occupational Safety and Health Act of 1970, 29 USCA 651 et  seq.   The
term “Environmental Law” also includes, but is not limited to, any present and
future federal, state and local laws, statutes ordinances, rules, regulations
and the like, conditioning transfer of property upon a negative declaration or
other approval of a Governmental Authority of the environmental condition of a
property; or requiring notification or disclosure of Releases of Hazardous
Materials or other environmental conditions of a property to any Governmental
Authority or other Person, whether or not in connection with transfer of title
to or interest in property.

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

“ERISA” shall mean the United States Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder.

“Event of Default” shall have the meaning set forth in Section 13.1(a). 

“Exchange Act” shall have the meaning set forth in Section 11.9.1. 

“Exculpated Parties” shall have the meaning set forth in Section 14.1.1. 

“Excusable Delay” shall mean a delay solely due to acts of God, governmental
restrictions, stays, judgments, orders, decrees, enemy actions, civil commotion,
fire, casualty, strikes, work stoppages, shortages of labor or materials or
other causes beyond the reasonable control of Borrower, but Borrower’s lack of
funds in and of itself shall not be deemed a cause beyond the control of
Borrower.

“Final Member” shall have the meaning set forth in Section 5.1.4(ff)(vii).

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1
and ending on December 31 during each year of the term of the Loan or the
portion of any such twelve (12) month period falling within the term of the Loan
in the event that such twelve (12) month period occurs partially before or
after, or partially during, the term of the Loan.

“Fitch” shall mean Fitch Ratings, Inc.

8

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

 

 

 

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

“GAAP” shall mean the generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession, to the extent such
principles are applicable to the facts and circumstances on the date of
determination and as amended.

“Government Lists” has the meaning set forth in Section 4.1.40. 

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

“Guarantor” shall mean ALX, or any permitted successor thereto.

“Guaranty”  shall mean that certain Guaranty of Recourse Obligations from
Guarantor in favor of Lender.

“Hazardous Materials” shall mean each and every element, compound, chemical
mixture, contaminant, pollutant, material, waste or other substance which is
defined, determined or identified as hazardous or toxic under any Environmental
Law.  Without limiting the generality of the foregoing, the term shall mean and
include:

(a)                “hazardous substances” as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendment and Reauthorization Act of 1986, or Title III of the Superfund
Amendment and Reauthorization Act, each as amended, and regulations promulgated
thereunder; excluding, however, common maintenance and cleaning products
regularly found at properties with a standard of operation and maintenance
comparable to the Property;

(b)               “hazardous waste” and “regulated substances” as defined in the
Resource Conservation and Recovery Act of 1976, as amended, and regulations
promulgated thereunder;

(c)                “hazardous materials” as defined in the Hazardous Materials
Transportation Act, as amended, and regulations promulgated thereunder;

(d)               “chemical substance or mixture” as defined in the Toxic
Substances Control Act, as amended, and regulations promulgated thereunder; and

(e)                petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead and radon, and
compounds containing them (including gasoline, diesel fuel, oil and lead-based
paint), and radioactive materials, flammables and explosives and compounds
containing them, excluding, however,

9

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

 

 

products or substances which are generally used in the ordinary course of
Premises operations, work projects and similar activities undertaken by or on
behalf of Indemnitor or any tenants at the Premises, in each case in such
quantities and concentrations as are reasonable for the intended application.

“Impositions” shall mean all taxes (including all ad valorem, sales (including
those imposed on lease rentals), use, single business, gross receipts, value
added, intangible transaction, privilege or license or similar taxes), business
improvement district charges, governmental assessments (including all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Agreement), water, sewer or other rents and charges,
excises, levies, fees (including license, permit, inspection, authorization and
similar fees), and all other governmental charges, in each case whether general
or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property, and/or any Rents (including all interest
and penalties thereon), which at any time prior to, during or in respect of the
term hereof may be assessed or imposed on or in respect of or be a Lien upon
(a) Borrower (including all income, franchise, single business or other taxes
imposed on Borrower for the privilege of doing business in the jurisdiction in
which the Property is located), (b) the Property, or any other Collateral
delivered or pledged to Lender in connection with the Loan, or any part thereof,
or any Rents therefrom or any estate, right, title or interest therein,
excluding any taxes paid by Tenants directly to a taxing authority, or (c) any
occupancy, operation, use or possession of, or sales from, or activity conducted
on, or in connection with the Property or the leasing or use of all or any part
thereof (other than obligations of Tenants under Leases and any taxes paid by
Tenants directly to a taxing authority).  Nothing contained in this Agreement
shall be construed to require Borrower to pay any tax, assessment, levy or
charge earlier than when due, or imposed on (i) any tenant occupying any portion
of the Property, (ii) any third party manager of the Property, including the
Manager, or (iii) Lender in the nature of a capital levy, estate, inheritance,
succession, income or net revenue tax.

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

“Indebtedness” shall mean (a) the Principal Amount of the Loan together with all
interest accrued and unpaid thereon, the Prepayment Premium, if applicable, and
all other sums due to Lender in respect of the Loan under the Note, this
Agreement, the Mortgage or any other Loan Document and (b) all sums which may
become due and payable by Borrower to the Counterparty pursuant to any Lender
Interest Rate Protection Agreement, including, without limitation, any sums
payable by Borrower to such Counterparty in connection with the termination
thereof.

“Indemnified Parties” shall have the meaning set forth in Section 15.12(b). 

“Independent” shall mean, when used with respect to any Person, a Person who:
(a) does not have any direct financial interest or any material indirect
financial interest in Borrower or in any Affiliate of Borrower, (b) is not
connected with Borrower or any Affiliate of Borrower as an officer, employee,
promoter, underwriter, trustee, partner, member, manager, creditor (other than
as a result of such Person providing services to Borrower or any Affiliate)
director, supplier, customer or person performing similar functions, and (c) is
not a member of the immediate family of a Person described in (a) or (b) above. 

10

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

 

 

“Independent Accountant” shall mean a firm of recognized, certified public
accountants which is Independent and which is selected by Borrower and
reasonably acceptable to Lender, it being agreed by Lender that any of the
so-called “Big Four” accounting firms (including any successor entities thereto)
are each hereby approved by Lender as the Independent Accountant.

“Independent Architect” shall mean an architect, engineer or construction
consultant selected by Borrower which is Independent, licensed to practice in
the State and has at least five (5) years of architectural, engineering or
construction experience and which is reasonably acceptable to Lender. 

“Independent Manager” shall mean a natural person who has prior experience as an
independent director, independent manager or independent member with at least
three years of employment experience and who is provided by a nationally
recognized professional service company, and which individual is duly appointed
as an Independent Manager and who shall not have been at the time of such
individual’s appointment or at any time while serving as an Independent Manager
be, and may not have been at any time during the preceding five (5) years:

(a) a stockholder, member, director (other than as an Independent Manager),
officer, employee, partner, attorney or counsel of Borrower or any Affiliate of
Borrower;

(b) a customer, supplier or other Person who derives any of its revenues from
its activities with Borrower or any Affiliate of Borrower (other than as an
Independent Manager);

(c) a Person or other entity controlling or under common control with any such
stockholder, member, partner, customer, supplier or other Person;

(d) a member of the immediate family of any such stockholder, member, director,
officer, employee, partner, customer, supplier or other Person; or 

(e) or otherwise affiliated with Borrower or any stockholder, member, director,
officer, employee, partner, attorney or counsel of Borrower or any guarantor. 

For purposes of this definition of “Independent Manager”, (i) a “special purpose
entity” is an entity, whose organizational documents contain restrictions on its
activities and impose requirements intended to preserve such entity’s
separateness that are substantially similar to the provisions of Section 5.1.4 
hereof, (ii) a “nationally recognized professional service company” means CT
Corporation, Corporation Service Company, National Registered Lenders, Inc.,
Wilmington Trust Company, Stewart Management Company or Lord Securities
Corporation or, if none of those companies is then providing professional
Independent Managers, another nationally-recognized company reasonably approved
by Lender, in each case that is not an Affiliate of Borrower and that provides
professional Independent Managers and other corporate services in the ordinary
course of its business and (iii) the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management, policies or activities of such Person, whether through ownership of
voting securities, by contract or otherwise.

11

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

 

 

“Initial ALX Competitors” shall have the meaning set forth in the definition of
“ALX Competitor” above.  

“Initial Interest Accrual Period” shall mean the period commencing on the
Closing Date and ending on December 29th, 2011.

“Insurance Requirements” shall mean, collectively, (a) all material terms of any
insurance policy required pursuant to this Agreement and (b) all material
regulations and then current standards applicable to or affecting the Property
or any part thereof or any use or condition thereof, which may, at any time, be
recommended by the Board of Fire Underwriters, if any, having jurisdiction over
the Property, or such other body exercising similar functions.

“Insurance Reserve Account” shall have the meaning set forth in
Section 3.1.1(c). 

“Insurance Reserve Amount” shall have the meaning set forth in Section 12.2.1. 

“Interest Accrual Period” shall have the meaning set forth in Section 2.2.5. 

“Interest Rate Protection Agreement”  shall mean one or more interest rate hedge
products (together with the schedules relating thereto) entered into in
connection with the Loan and satisfying the requirements of Section 5.1.25 and
otherwise in form and substance reasonably satisfactory to Lender, with a
confirmation from the Counterparty thereto, between Borrower or an Affiliate of
Borrower, as applicable, and a Counterparty with a Minimum Counterparty Rating,
and all amendments, restatements, replacements, supplements and modifications
thereto.  The term “Interest Rate Protection Agreement” shall include any Lender
Interest Rate Protection Agreement.

“Late Payment Charge” shall have the meaning set forth in Section 2.2.8. 

“Lease” shall mean, any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any Person is granted by Borrower a
possessory interest in, or right to use or occupy all or any portion of any
space in the Property, and every modification, amendment or other agreement
relating to such lease, sublease, subsublease, or other agreement entered into
in connection with such lease, sublease, subsublease, or other agreement and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto.

“Lease Modification” shall have the meaning set forth in Section 8.7.1. 

“Lease Termination Fee” shall have the meaning set forth in Section 12.5.1. 

12

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

 

 

 

“Lease Termination Fee Reserve Account” shall have the meaning set forth in
Section 12.5.1. 

“Lease Termination Funds” shall have the meaning set forth in Section 12.5.1. 

“Leasing Reserve Account” shall have the meaning set forth in Section 3.1.1(d). 

“Legal Requirements” shall mean all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations and
requirements, and irrespective of the nature of the work to be done, of every
Governmental Authority that has jurisdiction over the Borrower, the Guarantor
(in connection with the Loan) or the Property including, without limitation,
Environmental Laws and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to Borrower or to the Property and
the Improvements and the Equipment thereon, or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of the Property and the Improvements and the Equipment thereon
including, without limitation, building and zoning codes and ordinances and laws
relating to handicapped accessibility.

“Lender” shall have the meaning set forth in the introductory paragraph of this
Agreement.

“Lender Interest Rate Protection Agreement” shall mean any Interest Rate
Protection Agreement entered into by Borrower with Lender or an Affiliate of
Lender as Counterparty, and only for so long as such Counterparty remains Lender
(or an Affiliate of Lender).

“Lender’s Notice” shall have the meaning set forth in Section 2.2.3(b). 

“Letter of Credit” or “Letters of Credit” shall mean one or more irrevocable,
unconditional, transferable, clean sight draft letters of credit, in favor of
Lender and entitling Lender to draw thereon in New York, New York, based solely
on a statement executed by an officer or authorized signatory of Lender and
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) the Letter of Credit
is due to expire prior to the sixtieth (60th) day after the Maturity Date
(without automatic renewal), Lender shall have the right immediately 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 from an Approved Bank within (i) as to (a) above, twenty (20) 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,
at least twenty (20) days prior to the expiration date of such Letter of
Credit.  Borrower shall not have or be permitted to have any liability or other
obligations under any reimbursement agreement with respect to any Letter of
Credit or otherwise in connection with reimbursement to the Approved Bank for
draws on such Letter of Credit.

“Liabilities” shall have the meaning set forth in Section 11.9.2(b). 

13

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

 

 

“LIBOR” shall mean, with respect to each Interest Accrual Period, the rate for
deposits in U.S. dollars (with respect to the period equal or comparable to the
applicable Interest Accrual Period) that appears on Reuters Screen LIBOR01 Page
(or the successor thereto) as of 11:00 a.m., London time, on the related LIBOR
Determination Date.  If such rate does not appear on Reuters Screen LIBOR01 Page
as of 11:00 a.m., London time, on such LIBOR Determination Date, LIBOR shall be
the arithmetic mean of the offered rates (expressed as a percentage per annum)
for deposits in U.S. dollars (with respect to the period equal or comparable to
the applicable Interest Accrual Period) that appear on the Reuters Screen
LIBOR01 Page as of 11:00 a.m., London time, on such LIBOR Determination Date, if
at least two such offered rates so appear.  If fewer than two such offered rates
appear on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on such
LIBOR Determination Date, Lender shall request the principal London Office of
any four major reference banks in the London interbank market selected by Lender
to provide such bank’s offered quotation (expressed as a percentage per annum)
to prime banks in the London interbank market for deposits in U.S. dollars (with
respect to the period equal or comparable to the applicable Interest Accrual
Period) as of 11:00 a.m., London time, on such LIBOR Determination Date for the
then Principal Amount of the Loan.  If at least two (2) such offered quotations
are so provided, LIBOR shall be the arithmetic mean of such quotations.  If
fewer than two such quotations are so provided, Lender shall request any
three (3) major banks in New York City selected by Lender to provide such bank’s
rate (expressed as a percentage per annum) for loans in U.S. dollars to leading
European banks for a one-month period as of approximately 11:00 a.m., New York
City time on the applicable LIBOR Determination Date for the then Principal
Amount of the Loan.  If at least two (2) such rates are so provided, LIBOR shall
be the arithmetic mean of such rates.  LIBOR shall be determined by Lender and
at Borrower’s request, Lender shall provide Borrower with the basis for its
determination.   

“LIBOR Determination Date” shall mean, with respect to each Interest Accrual
Period where the Loan is a LIBOR Loan, the date that is two (2) London Business
Days prior to the date such Interest Accrual Period commences.

“LIBOR Rate” shall mean, for any Interest Accrual Period, a rate per annum
determined by Lender to be equal to LIBOR divided by (1 minus  the Reserve
Requirement) for such Interest Accrual Period plus  the Spread.

 “LIBOR Loan” shall mean the Loan or any portion thereof at any time in which
the Applicable Interest Rate thereon is calculated at the LIBOR Rate.

“License(s)” shall have the meaning set forth in Section 4.1.23. 

“Lien” shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance or charge on or
affecting Borrower, the Property, any portion thereof or any interest of
Borrower 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 the filing of mechanic’s, materialmen’s and other similar liens and
encumbrances.

14

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

 

 

“Loan” shall mean the loan in the original principal amount of Two Hundred
Seventy-Five Million and No/100 Dollars ($275,000,000.00) being made by Lender
to Borrower with respect to the Property which is the subject of this Agreement.

“Loan Agreement”  shall mean this Agreement.

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Leases, the Assignment of Contracts, the
Environmental Indemnity Agreement, the Assignment of Management Agreement, the
Guaranty, the Assignment of Interest Rate Protection Agreement, the Account
Agreement, the Cash Management Agreement, as well as all other documents now or
hereafter executed and/or delivered by Borrower or Guarantor with respect to the
Loan.

“London Business Day” shall mean any day other than a Saturday, Sunday or any
other day on which commercial banks in London, England, or New York, New York,
are not open for business.

“Losses” shall have the meaning set forth in Section 14.1.2. 

“Management Agreement” shall mean, collectively, (x) that certain Rego Park II
Management Agreement, dated as of the date hereof, by and between Borrower and
Manager, and (y) that certain Rego Park II Retention Agreement, dated as of the
date hereof, by and between Borrower and Manager, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with the terms hereof.

“Management Fees” shall mean an amount equal to the property management fees
payable to the Manager pursuant to the terms of the Management Agreement for
base management services.

“Manager” shall mean ALX.

“Manager Lease Fees” shall mean the fees for leasing space at the property
payable to Manager pursuant to the terms of the Management Agreement.

“Material Action” shall mean, with respect to any Person, to institute
proceedings to have such Person be adjudicated bankrupt or insolvent, or consent
to the institution of bankruptcy or insolvency proceedings against such Person
or file a petition seeking, or consent to, reorganization or relief with respect
to such Person under any applicable federal or state law relating to bankruptcy,
or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or a substantial part of
its property, or make any assignment for the benefit of creditors of such
Person, or admit in writing such Person’s inability to pay its debts generally
as they become due, or declare or effectuate a moratorium on the payment of any
obligation, or take action in furtherance of any such action.

“Material Adverse Effect” shall mean any event or condition that has a material
adverse effect, in each case, taken as a whole on (a) the Property, (b) the use,
operation or value of the Property, (c) the business, profits, operations or
financial condition of Borrower or Guarantor, (d) the ability of Borrower to
repay the principal and interest of the Loan as it becomes due or to satisfy any
of Borrower’s obligations under the Loan Documents, © the enforceability or
validity of the Loan Documents or the perfection or priority of the Liens
created under the Loan Documents or (f) the rights, interests and remedies of
Lender under the Loan Documents.

15

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

 

 

“Material Alteration” shall mean any Alteration which, when aggregated with (a)
all related Alterations (other than decorative work such as painting, wall
papering and carpeting and the replacement of fixtures, furnishings and
equipment to the extent being of a routine and recurring nature and performed in
the ordinary course of business) constituting a single project and (b) all other
then-ongoing Alterations commenced after the Closing Date, involves an estimated
cost exceeding the Threshold Amount with respect to such Alteration or related
Alterations (including the Alteration in question) then being undertaken at the
Property.

“Material Business Terms” shall have the meaning set forth in Section 8.7.1. 

“Maturity Date” shall mean November 30, 2018 or such earlier date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.

“Maximum Legal Rate” shall mean the maximum non‑usurious 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.

“Microbial Matter” shall mean fungi or bacterial matter which reproduces through
the release of spores or the splitting of cells, including, but not limited to,
mold, mildew and viruses, whether or not such microbial matter is living.

“Minimum Counterparty Rating”  shall mean a long-term unsecured debt rating of
not less than “A” from S&P.

“Monetary Default” shall mean a Default (a) in an obligation to pay money
hereunder or under any Loan Document or (b) arising pursuant to Section
13.1(a)(vi)  or (vii). 

“Monthly Capital Expenditures Reserve Amount” shall have the meaning set forth
in Section 12.3.1. 

“Monthly Insurance Reserve Amount” shall have the meaning set forth in
Section 12.2.1. 

“Monthly Tax Reserve Amount” shall have the meaning set forth in
Section 12.1.1. 

“Monthly Tenant Leasing Reserve Amount” shall have the meaning set forth in
Section 12.4.1.  

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage”  shall mean that certain first priority Consolidated, Amended and
Restated Fee and Leasehold Mortgage, Assignment of Leases and Rents and Security
Agreement, dated as of the date hereof, between Borrower and Lender, and
encumbering the

16

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

 

 

Property, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

“Multi-Asset Person” shall mean a Person in respect of which the net operating
income from the Property (or such portion thereof allocable to such Person)
represents less than fifty percent (50%) of such Person’s aggregate gross
income.

“Net Operating Income” shall mean the amount obtained by subtracting Operating
Expenses from Operating Income.

“New Lease” shall have the meaning set forth in Section 8.7.1. 

“Non‑Disturbance Agreement” shall have the meaning set forth in Section 8.7.9. 

“Non-Excluded Taxes” shall have the meaning set forth in Section 2.2.10. 

“Note” shall mean that certain Consolidated, Amended and Restated Promissory
Note, dated the date hereof, between Borrower and Lender in the principal amount
of Two Hundred and Seventy-Five Million and No/100 Dollars ($275,000,000.00), as
same may be amended, supplemented, restated, increased, extended and
consolidated, substituted or replaced from time to time.

“Notice of Satisfaction” shall mean that certain notice of satisfaction
(tracking number 06DEPTECH033Q) issued by the Department of Environmental
Protection of the City of New York on March 23, 2009.

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

“OFAC” has the meaning set forth in Section 4.1.40. 

“Operating Expenses” shall mean, for any period, without duplication, all
expenses actually paid or payable by Borrower during such period in connection
with the operation, management, maintenance, repair and use of the Property,
determined on an accrual basis, and, except to the extent otherwise provided in
this definition, in accordance with GAAP.  Operating Expenses specifically shall
include (a) all operating expenses incurred in such period based on quarterly
financial statements delivered to Lender in accordance with Section 10.2.1,
(b) property management fees in an amount equal to two percent (2%) of Operating
Income, (c) administrative, payroll, security and general expenses for the
Property, (d) the cost of utilities, inventories and fixed asset supplies
consumed in the operation of the Property, (e) a reasonable reserve for
uncollectible accounts (to the extent that the income relating to such accounts
has been included in the determination of Operating Income), (f) costs and fees
of Independent professionals (including, without limitation, legal, accounting,
consultants and other professional expenses), technical consultants, operational
experts (including quality assurance inspectors) or other third parties retained
to perform services required or permitted hereunder, (g) cost of attendance by
employees at training and manpower development programs, (h) association dues,
(i) computer processing charges, (j) operational equipment and other lease
payments as permitted herein or reasonably approved by Lender and (k) taxes and
other Impositions, other than income taxes or other Impositions in the nature of
income taxes and insurance premiums.

   

17

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

 

 

Notwithstanding the foregoing, Operating Expenses shall not include
(a) depreciation or amortization, (b) income taxes or other Impositions in the
nature of income taxes, (c) any expenses (including legal, accounting and other
professional fees, expenses and disbursements) incurred in connection with the
making of the Loan or the sale, exchange, transfer, financing or refinancing of
all or any portion of the Property or in connection with the recovery of
Proceeds which are applied to prepay the Note, (d) any expenses which in
accordance with GAAP should be capitalized, (e) Debt Service, (f) any item of
expense which would otherwise be considered within Operating Expenses pursuant
to the provisions above but which is paid directly by any Tenant, (g) deposits
required to be made to the Reserve Accounts, (h) leasing commissions, including
all Manager Lease Fees, and (i) tenant improvements and allowances and other
reletting costs.

“Operating Income” shall mean, for any period, all revenues of Borrower during
such period from the use, ownership or operation of the Property as follows:

(a)                all amounts payable to Borrower by any Person as Rent and
other amounts under Leases, license agreements, occupancy agreements, concession
agreements or other agreements relating to the Property (provided that Rents
shall not be straight-lined as required under GAAP);

(b)               business interruption or rent insurance proceeds allocable to
the applicable calculation period;

(c)                payments received for utility charges, escalations, forfeited
security deposits, interest on credit accounts, service fees or charges, license
fees, parking fees and other pass-through reimbursements paid by Tenants under
the Leases of any nature; and

(d)               all other amounts which in accordance with GAAP are included
in Borrower’s annual financial statements as operating income attributable to
the Property.

Notwithstanding the foregoing, Operating Income shall not include (i) any
Proceeds (other than business interruption or rent insurance proceeds and only
to the extent allocable to the applicable calculation period), (ii) any proceeds
resulting from the Transfer of all or any portion of the Property, (iii) any
Rent attributable to a Lease prior to the date on which (A) the actual payment
of rent is required to commence thereunder and (B) all free rent periods have
expired, except that with respect to Leases providing for recurrent free rent
periods, the initial free rent period shall have expired, provided, however,
that if a Lease meets the requirements set forth in clause (A) and (B) at any
time during the applicable Calculation Period, the Rents attributable to such
Lease shall be included in the calculation of Operating Income for such
Calculation Period, (iv) any item of income otherwise included in Operating
Income but paid directly by any Tenant to a Person other than Borrower as an
offset or deduction against Rent payable by such Tenant, provided such item of
income is for payment of an item of expense (such as payments for utilities paid
directly to a utility company) and such expense is otherwise excluded from the
definition of Operating Expenses pursuant to clause (f)  of the definition
thereof, (v) security deposits received from Tenants until forfeited or applied,
(vi) any termination fees paid under any Lease in connection with the
termination thereof (except to the

18

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

 

 

extent applied on a pro‑rata basis over the non‑terminable portion of the Lease
term prior to such termination) and (vii) interest income.  Operating Income
shall be calculated on the accrual basis of accounting and, except to the extent
otherwise provided in this definition, in accordance with GAAP.

“Opinion of Counsel” shall mean an opinion of counsel of a law firm selected by
Borrower and reasonably acceptable to Lender.

“Other Charges” shall mean maintenance charges, impositions other than
Impositions, 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 by any Governmental Authority, other than those required to be
paid by a Tenant pursuant to its respective Lease.

“Patriot Act” shall have the meaning set forth in the definition of Prescribed
Laws.

“Patriot Act Offense” has the meaning set forth in Section 4.1.40. 

“Payment Date” shall be the thirtieth (30) calendar day of each calendar month
and if such day is not a Business Day, then the Business Day immediately
succeeding such day, commencing on December 30, 2011 and continuing to and
including the Maturity Date.  “Payment Date” shall also include such earlier
date, if any, on which the unpaid Principal Amount is paid in full.

“Permitted Debt” shall mean, collectively, (a) the Note and the other
obligations, indebtedness and liabilities specifically provided for in any Loan
Document and secured by this Agreement, the Mortgage and the other Loan
Documents, (b) trade payables incurred in the ordinary course of Borrower’s
business, not secured by Liens on the Property (other than statutory liens under
the UCC and liens being properly contested in accordance with the provisions of
this Agreement or the Mortgage or Liens for amounts not yet due and payable),
not to exceed $5,000,000.00 outstanding at any one time (but such calculation
shall not include any amounts for which there are deposits held in the Reserve
Accounts), payable by or on behalf of Borrower for or in respect of the
operation of the Property in the ordinary course of operating Borrower’s
business, provided that (but subject to the remaining terms of this definition)
each such amount shall be paid within sixty (60) days following the date on
which each such amount is incurred, except for accounting fees, which may be
paid on an annual basis, and (c) amounts due under any equipment leases,
provided that, at all times during the term of the Loan, the aggregate amount
outstanding under the equipment leases shall not exceed $500,000.  Nothing
contained herein shall be deemed to require Borrower to pay any amount, so long
as Borrower is in good faith, and by proper legal proceedings, diligently
contesting the validity, amount or application thereof, provided that in each
case, at the time of the commencement of any such action or proceeding, and
during the pendency of such action or proceeding (i) no Event of Default shall
exist and be continuing hereunder, (ii) adequate reserves with respect thereto
are maintained on the books of Borrower in accordance with GAAP, (iii) such
contest operates to suspend collection or enforcement, as the case may be, of
the contested amount and such contest is maintained and prosecuted continuously
and with diligence and (iv) the amount being

19

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

 

 

contested shall not exceed $1,500,000.  Notwithstanding anything set forth
herein, in no event shall Borrower be permitted under this provision to enter
into a note (other than the Note and the other Loan Documents) or other
instrument for borrowed money.

“Permitted Encumbrances” shall mean, collectively, (a) any Lien and security
interest created or permitted by the Loan Documents, (b) any Lien, encumbrances
and other matters disclosed in the Title Policy, (c) any Lien, if any, for
Impositions, or for Other Charges, in either case which are not yet due or
delinquent or are the subject of a permitted contest pursuant to Section 7.3,
(d) statutory liens for labor or materials filed against the Property that are
the subject of a permitted contest pursuant to Section 7.3, (e) any Lien arising
after the date hereof in connection with the actions permitted to be taken by
Borrower in accordance with the provisions of Section 7.3, (f) any Lien filed
against equipment leased pursuant to equipment leases permitted hereunder and
(g) the Leases.

“Permitted Investments” shall mean any one or more of the following obligations
or securities with maturities of not more than three hundred sixty‑five (365)
days acquired at a purchase price of not greater than par, payable on demand or
having a maturity date not later than the Business Day immediately prior to the
first Payment Date following the date of acquiring such investment 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 (certificate 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 (a) must
(i) have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (ii) 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 (iii) 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 Student Loan Marketing Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause (c) must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if such investments have a variable
rate of interest, such interest rate must be tied to a single

20

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

 

 

interest rate index plus  a fixed spread (if any) and must move proportionately
with that index and (iii) 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 three hundred sixty‑five (365) days of any bank, the short-term
obligations of which at all times are rated in the highest short-term rating
category by two (2) of the Rating Agencies (or, if not rated by all Rating
Agencies, rated by at least one (1) 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 then current ratings assigned to
the Securities); provided, however, that the investments described in this
clause (d) must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) 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 (iii) 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
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 (1) 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 then current ratings assigned to
the Securities); provided, however, that the investments described in this
clause (e) must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) 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 (iii) such investments must not be subject to liquidation prior to
their maturity;

(f)                debt obligations with maturities of not more than three
hundred sixty‑five (365) days and at all times rated by each Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one (1) Rating Agency and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investments would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Securities) in its highest long-term unsecured debt rating category; provided,
however, that the investments described in this clause (f) must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) 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 (iii) 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

   

21

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

 

 

more than one (1) year after the date of issuance thereof) with maturities of
not more than three hundred sixty‑five (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 (1) 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 then current
ratings assigned to the Securities) in its highest short-term unsecured debt
rating; provided, however, that the investments described in this clause (g)
must (i) have a predetermined fixed dollar of principal due at maturity that
cannot vary or change, (ii) 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
(iii) such investments must not be subject to liquidation prior to their
maturity;

(h)               units of taxable money market funds, which funds are regulated
investment companies, seek to maintain a constant net asset value 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 (1) 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 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 Lender.

“Permitted Transfers” means any of the following, provided  the same shall not
result in a violation of Legal Requirements, including without limitation, ERISA
and Prescribed Laws, and provided that, with respect to Permitted Transfers
(other than a ALX Transfer) the same shall not cause the proposed transferee to
exceed exposure limits of Lender (provided, however, that if Lender shall
determine that a Transfer to such proposed transferee would exceed the exposure
limits of Lender, then Lender shall so notify Borrower within ten (10) Business
Days after the proposed transferee has been identified to Lender with a request
for approval set forth in a written notice that states clearly (in 14-point type
or larger): “THIS IS A REQUEST FOR APPROVAL OF A TRANSFEREE.  LENDER SHALL HAVE
NO RIGHT TO OBJECT TO THE TRANSFEREE BASED ON THE TRANSFEREE EXCEEDING THE
EXPOSURE LIMITS OF LENDER IF LENDER DOES NOT RESPOND TO THIS REQUEST WITHIN TEN
(10) BUSINESS DAYS” and in the event Lender fails to so notify Borrower within
such ten (10) Business Day period, Lender shall have no right to object to the
proposed transferee on such basis): 

(a)                any pledge of direct or indirect equity interests in and/or
right to distributions by ALX or any Multi-Asset Person to secure a loan to any
such Persons that is secured by all or a substantial portion of any of such
Person’s assets;

(b)               the Transfer or issuance of any securities or any direct or
indirect interests in (i) any direct or indirect owner of Borrower, in either
case, whose securities are publicly traded on a national exchange (including
ALX) (regardless of whether such

22

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

 

 

Transfer or issuance is of publicly traded securities or interests), (ii) any
Person who directly or indirectly holds such publicly traded securities or
interests or (iii) any Multi-Asset Person; provided, that after such Transfer,
ALX shall continue to Control Borrower; or

(c)                the merger or consolidation of ALX with or into any other
Person or sale of all or substantially all of the assets of ALX (each, an “ALX
Transfer” and, collectively, “ALX Transfers”);  provided, however, that if any
ALX Transfer or series of ALX Transfers (other than the sale of publicly traded
securities in ALX) shall result in a change of Control of ALX, then Lender’s
prior written consent (which shall not be unreasonably withheld, conditioned or
delayed) shall be required in connection with such ALX Transfer unless after
giving effect to such ALX Transfer, ALX (or the successor entity thereto) shall
be a Person that has and provides substantially at least the same experience and
expertise as ALX prior to such Transfer, merger or consolidation in conducting
business of the nature currently conducted by ALX in respect of the Property’s
type.

“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.

“Physical Conditions Report” shall mean Physical Conditions Report shall mean
that certain Property Condition Assessment dated as of July 22, 2011, prepared
by Jones, Hill, McFarland & Ellis.

“Plan” shall have the meaning set forth in Section 4.1.10(a). 

“Prepayment Premium” shall mean in respect of any prepayment of the Loan (other
than any prepayment of the Loan in accordance with Section 2.2.3(h), Section
2.2.9 or Section 6.2, which shall not give rise to any Prepayment Premium or
penalty) during the Prepayment Premium Period, an amount equal to one percent
(1%) of the Principal Amount so prepaid. 

“Prepayment Premium Period” shall mean the period commencing on the Closing Date
and ending on the first (1st) anniversary thereof.

“Prescribed Laws” shall mean, collectively, (a) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107‑56) (The USA PATRIOT Act) (the “Patriot
Act”), (b) Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism,
(c) the International Emergency Economic Power Act, 50 U.S.C. § 1701 et seq.,
and (d) all other Legal Requirements relating to money laundering or terrorism.

“Principal Amount” shall mean the outstanding principal amount of the Loan.

“Proceeds” shall have the meaning set forth in Section 6.2.2. 

23

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

 

 

 

“Provided Information” shall have the meaning set forth in Section 11.6.1. 

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

“Qualified Appraiser” means an independent, nationally recognized, M.A.I.
certified appraiser reasonably selected by Lender.

“Qualified Manager” shall mean (a) ALX, VRLP or any Affiliate of ALX or VRLP,
(b) a reputable and experienced management company which manages at least
5,000,000 square feet of gross leasable area exclusive of the Property and which
management company shall have at least five (5) years of experience managing
properties similar in class and size to the Property which are located in New
York City and/or other similar metropolitan areas, or (c) any Person with
respect to which Borrower shall have obtained the prior written consent of
Lender, which consent shall not be unreasonably withheld.  

“Rating Agencies” shall mean (a) prior to a Securitization, each of S&P, Moody’s
and Fitch and any other nationally recognized statistical rating agency which
has been approved by Lender and are reasonably anticipated by Lender to rate the
Securities in the Securitization, and (b) after a Securitization has occurred,
each such Rating Agency which has rated the Securities in the Securitization.

“Rating Agency Confirmation” shall mean a written affirmation from each of the
Rating Agencies that the credit rating of the Securities by such Rating Agency
immediately prior to the occurrence of the event with respect to which such
Rating Agency Confirmation is sought will not be qualified, downgraded or
withdrawn as a result of the occurrence of such event, which affirmation may be
granted or withheld in such Rating Agency’s sole and absolute discretion;
provided that in the event that a Securitization has occurred, but a Rating
Agency, within the period of time provided in the Securitization’s pooling and
servicing agreement (or similar agreement), has not responded to the request for
a Rating Agency Confirmation or has responded in a manner that indicates that
such Rating Agency is neither reviewing such request nor waiving the requirement
for a Rating Agency Confirmation, then the approval of Lender shall be required
in lieu of such Rating Agency Confirmation, which such approval shall be based
on Lender’s good faith determination of whether such Rating Agency would issue a
Rating Agency Confirmation (unless Lender has an independent approval right in
respect of the matter at issue pursuant to the terms of this Agreement, in which
case the discretion afforded to Lender in connection with such independent
approval right shall apply instead).

“REA” shall mean, collectively, as the same may be amended, restated,
supplemented or otherwise modified from time to time, those certain Agreements
more specifically described on Schedule 1 attached hereto and made a part
hereof.

“Reference Rate” shall mean, for any day, the rate of interest for such day from
time to time announced by Citibank, N.A., at its New York City Main Branch as
its prime rate (being a base rate for calculating interest on certain loans),
each change in any interest rate hereunder based on the Reference Rate to take
effect at the time of such change in the prime rate.  The Reference Rate is not
necessarily the lowest rate for commercial or other types of loans and Lender
has not committed to charge interest hereunder at any lower or lowest rate at
which Citibank, N.A. may now or in the future make loans to Borrower or other
borrowers.

24

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

 

 

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect, including any successor or other
Regulation or official interpretation of said Board of Governors relating to
Reserve Requirements applicable to member banks of the Federal Reserve System.

“Regulatory Change” shall mean any change after the date of this Agreement in
Federal, state or foreign law or regulations (including, without limitation,
Regulation D) applying to a class of banks including Lender or the adoption or
making after such date of any interpretation, directive or request applying to a
class of banks including Lender of or under any Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or government or monetary
authority charged with the interpretation or administration thereof.

“Relevant Portions” shall have the meaning set forth in Section 11.9.2. 

“Remargining Collateral” shall have the meaning set forth in Section 3.1.6(b). 

“Rent Roll” shall have the meaning set forth in Section 4.1.27(a). 

“Rents” shall mean all rents, rent equivalents, moneys payable as damages or in
lieu of rent or rent equivalents, royalties (including, without limitation, all
oil and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or paid
to or for the account of or benefit of Borrower, Manager (as agent of Borrower)
or any of their agents or employees from any and all sources arising from or
attributable to the Property, including all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter
arising or created out of the sale, lease, sublease, license, concession or
other grant of the right of the use and/or occupancy of the Property or
rendering of services by Borrower, Manager (as agent of Borrower) or any of
their agents or employees in connection with the Property and Proceeds, if any,
from business interruption or other loss of income insurance required to be paid
pursuant to a Lease.

“Required Amount” shall have the meaning set forth in Section 3.1.5.

“Reserve Accounts” shall mean, collectively, the Tax Reserve Account, the
Insurance Reserve Account, the Debt Service Reserve Account, the Leasing Reserve
Account, the Lease Termination Fee Reserve Account, the Capital Expenditures
Reserve Account and any other escrow fund established by the Loan Documents.

“Reserve Requirements” shall mean, for any day as applied to a LIBOR Loan the
aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day, if any, (including, without
limitation, any supplemental, marginal and emergency reserves) under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto dealing with
reserve requirements prescribed for urocurrency funding (currently referred to
as “Eurocurrency Liabilities” in Regulation D) required to be maintained by
Lender

25

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

 

 

 

or its Loan participants, if any.  Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by Lender or any of its Loan participants, if any, by reason of any
Regulatory Change against (a) any category of liabilities that includes deposits
by reference to which LIBOR is to be determined as provided in this Agreement or
(b) any category of extensions of credit or other assets that includes the loans
the interest rate on which is determined on the basis of rates used in
determining LIBOR.  Notwithstanding anything to the contrary contained herein,
any increase in the reserve requirements described in the definition which
arises subsequent to the date of this Agreement shall not be included within
“Reserve Requirements” to the extent that Lender fails to notify Borrower of
such increase within ninety (90) days after Lender should reasonably have been
aware of such increase; provided, however, that at such time as Lender notifies
Borrower of such increase, Lender shall be entitled to the increase for the
immediately preceding period of ninety (90) days, as applicable, regardless of
whether Lender should reasonably have been aware of such increase prior to the
date thereof.

“Residential Unit” shall have the meaning set forth in Section 8.8.1. 

“Retail Unit” shall have the meaning set forth in Section 8.8.1. 

“Retainage Release Threshold” shall have the meaning set forth in Section 6.25.5
(a). 

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

“Securities” shall have the meaning set forth in Section 11.6. 

“Securities Act” shall have the meaning set forth in Section 11.9.1. 

“Securitization” shall have the meaning set forth in Section 11.6. 

“Single Purpose Entity” shall mean an entity meeting all of the requirements of
Section 5.1.4 of this Agreement (but in the case of an entity other than
Borrower, substituting the name of such entity for the term “Borrower”
throughout Section 5.1.4 and otherwise revising such Section 5.1.4 to reflect
the purpose and business of such entity, for purposes of determining whether
such entity meets such requirements).

“Special Member” shall mean a Springing Member in a given Delaware limited
liability company who has become a member in such limited liability company to
the extent so provided in such limited liability company’s operating agreement.

“Spread” shall mean one hundred eighty five (185) basis points.

“Springing Member” shall mean a Person who has signed the limited liability
company agreement of a given Delaware limited liability company, which agreement
provides that, upon the withdrawal, dissolution or disassociation of the last
remaining member of such limited liability company, such Person shall become a
member of such limited liability company having no economic interest therein.

26

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

 

 

“Standard Form of Lease” shall have the meaning set forth in Section 8.7.2(a). 

“State” shall mean the State of New York.

“Sub‑Account(s)” shall have the meaning set forth in Section 3.1.1. 

“Substitute Rate Loan” shall mean the Loan at any time in which the Applicable
Interest Rate is calculated at the Reference Rate plus  the Spread in accordance
herewith.

“Substitute Rate Tranche” shall mean the Loan or any portion thereof at any time
in which the Applicable Interest Rate for the Loan or such portion thereof is
calculated with reference to the Reference Rate.

“Successor Borrower” shall have the meaning set forth in Section 8.5.2. 

“Survey” shall mean a survey of the Property prepared by Garden State
Engineering, Surveying & Planning of New York, P.C., or a surveyor licensed in
the State and satisfactory to Lender and the company or companies issuing the
Title Policy, and containing either a certification of such surveyor or a
certification of visual update from such surveyor, in either case reasonably
satisfactory to Lender.

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

“Tax Reserve Account” shall have the meaning set forth in Section 3.1.1(b). 

“Tax Reserve Amount” shall have the meaning set forth in Section 12.1.1. 

“Tenant” shall mean any Person leasing, subleasing or otherwise occupying any
portion of the Property other than the Manager and its employees, agents and
assigns.

“Tenant Leasing Funds” shall have the meaning set forth in Section 12.4.1.

“Termination Space” shall have the meaning set forth in Section 12.5.1. 

“Terrorism Policy” shall have the meaning set forth in Section 6.1.1(c)(iv). 

“Terrorism Premium Limit” shall mean, for each calendar year, an annual
Insurance Premium that is equal to $0.05 per $100 of the “total insured value”
of the Property, (where “total insured value” shall mean the 100% replacement
cost of the Improvements and the personal property on the Property and the
required business income value). 

27

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

 

 

 

“Threshold Amount” shall mean an amount equal to Five Million and No/100 Dollars
($5,000,000.00).

“Title Company” shall mean Stewart Title Insurance Company as lead title
insurance company along with Chicago Title insurance Company, Commonwealth Land
Title Insurance Company, Fidelity Title Insurance Company and Fist American
Title Insurance Company, as co-insurers.

“Title Policy” shall mean an ALTA mortgagee title insurance policy in a form
acceptable to Lender (or, if the Property is in a State which does not permit
the issuance of such ALTA policy, such form as shall be permitted in such State
and acceptable to Lender) issued by the Title Company on the date hereof with
respect to the Property and insuring the lien of the Mortgage.

“Total Loss” shall mean (a) a casualty, damage or destruction of the Property
which, in the reasonable judgment of Lender, (i) involves a loss of more than
forty percent (40%) of the total floor area of the Improvements at the Property,
or (ii) results in the cancellation of leases comprising more than forty
percent (40%) of the rentable area of the Property, and in either case with
respect to which Borrower is not required under the Leases to apply Proceeds to
the restoration of the Property; or (b) a permanent Taking which, in the
reasonable judgment of Lender, (i) involves an actual or constructive loss of
more than forty percent (40%) of the land constituting the Property, or
(ii) renders untenantable more than forty percent (40%) of the rentable area of
the Property; or (c) a casualty, damage, destruction or Taking that affects so
much of the Property such that it would be impracticable, in Lender’s reasonable
discretion, even after restoration, to operate the Property as an economically
viable whole.

“Transfer” shall mean to, directly or indirectly, sell, assign, convey,
mortgage, transfer, pledge, hypothecate, encumber, grant a security interest in,
exchange or otherwise dispose of any beneficial interest or grant any option or
warrant with respect to, or where used as a noun, a direct or indirect sale,
assignment, conveyance, transfer, pledge or other disposition of any beneficial
interest by any means whatsoever whether voluntary, involuntary, by operation of
law or otherwise.

“TRIA” shall mean Terrorism Risk Insurance Program Reauthorization Act of 2007
or another similar federal statute which provides that the federal government
reinsures not less than 50% of any claims made under an insurance policy
insuring against acts of terrorism (or such lower percentage of claims
acceptable to Lender in its reasonable discretion).

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State.

“Underwriter Group” shall have the meaning set forth in Section 11.9.2. 

“U.S. Obligations” shall mean obligations or securities not subject to
prepayment, call or early redemption which are direct obligations of, or
obligations fully guaranteed as to timely payment by, the United States of
America.

 “VRLP” shall mean Vornado Realty L.P., a Delaware limited partnership.

28

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

 

 

 

“Work” shall have the meaning set forth in Section 6.2.4(a). 

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 ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP.  WHEN USED HEREIN, THE TERM “FINANCIAL
STATEMENTS” SHALL INCLUDE THE NOTES AND SCHEDULES THERETO UNLESS OTHERWISE
SPECIFIED.  UNLESS OTHERWISE SPECIFIED HEREIN OR THEREIN, ALL TERMS DEFINED IN
THIS AGREEMENT SHALL HAVE THE DEFINITIONS GIVEN THEM IN THIS AGREEMENT WHEN USED
IN ANY OTHER LOAN DOCUMENT OR IN ANY CERTIFICATE OR OTHER DOCUMENT MADE OR
DELIVERED PURSUANT THERETO.  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.  ANY
REFERENCE IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT TO ANY LOAN DOCUMENT
SHALL BE DEEMED TO INCLUDE REFERENCES TO SUCH DOCUMENTS AS THE SAME MAY
HEREAFTER BE AMENDED, MODIFIED, SUPPLEMENTED, EXTENDED, CONSOLIDATED, REPLACED
AND/OR RESTATED FROM TIME TO TIME (AND, IN THE CASE OF ANY NOTE OR OTHER
INSTRUMENT, TO ANY INSTRUMENT ISSUED IN SUBSTITUTION THEREFOR).

ARTICLE II

GENERAL TERMS

SECTION 2.1  LOAN. 

2.1.1  THE LOAN.  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.

2.1.2  SINGLE DISBURSEMENT TO BORROWER.  BORROWER SHALL RECEIVE ONLY ONE
BORROWING HEREUNDER IN RESPECT OF THE LOAN AND ANY AMOUNT BORROWED AND REPAID
HEREUNDER IN RESPECT OF THE LOAN MAY NOT BE REBORROWED.

2.1.3  THE NOTE, MORTGAGE AND LOAN DOCUMENTS.  THE LOAN SHALL BE EVIDENCED BY
THE NOTE AND SECURED BY THE MORTGAGE, THE ASSIGNMENT OF LEASES, THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.

2.1.4  USE OF PROCEEDS.  BORROWER SHALL USE THE PROCEEDS OF THE LOAN TO REPAY
AND DISCHARGE ANY EXISTING MORTGAGE LOANS SECURED BY THE PROPERTY.

2.1.5  LOAN TERM.  THE TERM OF THE LOAN SHALL COMMENCE ON THE CLOSING DATE AND
SHALL END ON THE MATURITY DATE.

 

29

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

 

 

 

SECTION 2.2  INTEREST. 

2.2.1  APPLICABLE INTEREST RATE.  THE PRINCIPAL AMOUNT SHALL BEAR INTEREST, AS
PROVIDED BELOW, AT THE APPLICABLE INTEREST RATE FROM TIME TO TIME IN EFFECT
BASED UPON THE LIBOR RATE OR WHEN SPECIFICALLY SO PROVIDED IN THIS AGREEMENT,
BASED UPON THE REFERENCE RATE PLUS  THE SPREAD.

2.2.2  INTEREST CALCULATION.  INTEREST ON THE PRINCIPAL AMOUNT SHALL BE
CALCULATED BY MULTIPLYING  (A) THE ACTUAL NUMBER OF DAYS ELAPSED IN THE PERIOD
FOR WHICH THE CALCULATION IS BEING MADE BY (B) A DAILY RATE BASED ON A THREE
HUNDRED SIXTY (360) DAY YEAR (THAT IS, THE APPLICABLE INTEREST RATE OR THE
DEFAULT RATE, AS THEN APPLICABLE, EXPRESSED AS AN ANNUAL RATE DIVIDED BY 360) BY
(C) THE PRINCIPAL AMOUNT.

2.2.3  DETERMINATION OF APPLICABLE INTEREST RATE.  (A)  ANY CHANGE IN THE RATE
OF INTEREST HEREUNDER DUE TO A CHANGE IN THE APPLICABLE INTEREST RATE SHALL
BECOME EFFECTIVE AS OF THE FIRST DAY ON WHICH SUCH CHANGE IN THE APPLICABLE
INTEREST RATE SHALL BECOME EFFECTIVE.  EACH DETERMINATION BY LENDER, WHICH SHALL
OCCUR ON EACH LIBOR DETERMINATION DATE (AND TAKE EFFECT UPON THE COMMENCEMENT OF
THE INTEREST ACCRUAL PERIOD THAT IS TWO (2) LONDON BUSINESS DAYS FOLLOWING SUCH
LIBOR DETERMINATION DATE) WITH RESPECT TO A LIBOR LOAN AND SHALL OCCUR ON A
DAILY BASIS WITH RESPECT TO THE REFERENCE RATE, OF THE APPLICABLE INTEREST RATE
SHALL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES, ABSENT MANIFEST ERROR.

(B)                  IN THE EVENT THAT LENDER SHALL HAVE REASONABLY DETERMINED
(WHICH DETERMINATION SHALL BE CONCLUSIVE AND BINDING UPON BORROWER ABSENT
MANIFEST ERROR) THAT BY REASON OF CIRCUMSTANCES AFFECTING THE INTERBANK
EURODOLLAR MARKET, ADEQUATE AND REASONABLE MEANS DO NOT EXIST FOR ASCERTAINING
LIBOR, AS APPLICABLE, THEN LENDER SHALL, BY NOTICE TO BORROWER (“LENDER’S
NOTICE”), WHICH NOTICE SHALL SET FORTH IN REASONABLE DETAIL SUCH CIRCUMSTANCES,
CONVERT THE LOAN TO A SUBSTITUTE RATE LOAN AND ESTABLISH THE APPLICABLE INTEREST
RATE AT THE REFERENCE RATE PLUS  THE SPREAD.

(C)                   IF PURSUANT TO THE TERMS OF THIS AGREEMENT, THE LOAN HAS
BEEN CONVERTED TO A SUBSTITUTE RATE LOAN AND THE EVENT(S) OR CIRCUMSTANCE(S)
WHICH RESULTED IN SUCH CONVERSION SHALL NO LONGER BE APPLICABLE (AS REASONABLY
DETERMINED BY LENDER, WHICH DETERMINATION SHALL BE CONCLUSIVE AND BINDING UPON
BORROWER ABSENT MANIFEST ERROR), LENDER SHALL GIVE NOTICE THEREOF TO BORROWER,
AND THE SUBSTITUTE RATE LOAN (EXCEPT FOR SUCH PORTION THEREOF, IF ANY, AS
BORROWER SHALL ELECT TO TREAT AS A SUBSTITUTE RATE TRANCHE) SHALL AUTOMATICALLY
CONVERT TO A LIBOR LOAN ON THE EFFECTIVE DATE SET FORTH IN SUCH NOTICE AND THE
APPLICABLE INTEREST RATE FOR THE INITIAL INTEREST ACCRUAL PERIOD AFTER SUCH
CONVERSION SHALL BE THE LIBOR RATE.

(D)                  IF ANY REQUIREMENT OF LAW, OR ANY CHANGE THEREIN OR IN THE
INTERPRETATION OR APPLICATION THEREOF, SHALL HEREAFTER MAKE IT UNLAWFUL FOR
LENDER TO MAKE OR MAINTAIN A LIBOR LOAN AS CONTEMPLATED HEREUNDER, (I) THE
OBLIGATION OF LENDER HEREUNDER TO MAKE A LIBOR LOAN SHALL BE CANCELLED FORTHWITH
AND (II) LENDER MAY GIVE BORROWER A LENDER’S NOTICE, CONVERTING THE LOAN TO A
SUBSTITUTE RATE LOAN AND ESTABLISHING THE APPLICABLE INTEREST RATE AT THE
REFERENCE RATE PLUS  THE SPREAD.  IN THE EVENT THE CONDITION NECESSITATING THE
CANCELLATION OF LENDER’S OBLIGATION TO MAKE A LIBOR LOAN HEREUNDER SHALL CEASE,
LENDER SHALL PROMPTLY NOTIFY BORROWER OF SUCH CESSATION AND THE LOAN SHALL
RESUME ITS CHARACTERISTICS AS A LIBOR LOAN IN ACCORDANCE WITH THE TERMS HEREIN
FROM AND AFTER THE FIRST DAY OF THE INTEREST ACCRUAL PERIOD NEXT FOLLOWING

 

30

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

 

 

SUCH CESSATION.  BORROWER HEREBY AGREES PROMPTLY TO PAY LENDER, UPON DEMAND, ANY
ADDITIONAL AMOUNTS NECESSARY TO COMPENSATE LENDER FOR ANY REASONABLE THIRD-PARTY
OUT‑OF‑POCKET COSTS INCURRED BY LENDER IN MAKING ANY CONVERSION UNDER THIS
SUBSECTION (D) IN ACCORDANCE WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION,
ANY INTEREST OR FEES PAYABLE BY LENDER TO LENDERS OF FUNDS OBTAINED BY LENDER IN
ORDER TO MAKE OR MAINTAIN THE LIBOR LOAN HEREUNDER, PROVIDED, HOWEVER, THAT, IN
ORDER FOR ANY SUCH NOTICE TO BE EFFECTIVE TO IMPOSE ON BORROWER THE OBLIGATION
TO PAY ANY SUCH AMOUNT, SUCH NOTICE MUST BE DELIVERED BY LENDER WITHIN
THIRTY (30) DAYS AFTER LENDER SHOULD REASONABLY HAVE BEEN AWARE OF THE EVENT
GIVING RISE TO ITS ENTITLEMENT TO COMPENSATION.  LENDER’S NOTICE OF SUCH COSTS,
AS CERTIFIED TO BORROWER, SHALL BE SET FORTH IN REASONABLE DETAIL AND LENDER’S
CALCULATION SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR. LENDER ACKNOWLEDGES AND
AGREES THAT, AS OF THE DATE HEREOF, NO CONDITION EXISTS THAT WOULD PERMIT THE
CANCELLATION OF LENDER’S OBLIGATION TO MAKE A LIBOR LOAN UNDER THIS
SUBSECTION (D). 

(E)                   IN THE EVENT THAT ANY CHANGE SUBSEQUENT TO THE DATE HEREOF
IN ANY REQUIREMENT OF LAW OR IN THE INTERPRETATION OR APPLICATION THEREOF, OR
COMPLIANCE BY LENDER WITH ANY REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING THE
FORCE OF LAW) HEREAFTER ISSUED FROM ANY CENTRAL BANK OR OTHER GOVERNMENTAL
AUTHORITY:

(I)                 SHALL HEREAFTER HAVE THE EFFECT OF REDUCING THE RATE OF
RETURN ON LENDER’S CAPITAL (OTHER THAN AS A RESULT OF AN INCREASE IN TAXES) AS A
CONSEQUENCE OF ITS OBLIGATIONS HEREUNDER TO A LEVEL BELOW THAT WHICH LENDER
COULD HAVE ACHIEVED BUT FOR SUCH ADOPTION, CHANGE OR COMPLIANCE (TAKING INTO
CONSIDERATION LENDER’S CONSISTENTLY APPLIED POLICIES WITH RESPECT TO CAPITAL
ADEQUACY) BY ANY AMOUNT REASONABLY DEEMED BY LENDER TO BE MATERIAL;

(II)               SHALL HEREAFTER IMPOSE, MODIFY, INCREASE OR HOLD APPLICABLE
ANY RESERVE, SPECIAL DEPOSIT, COMPULSORY LOAN OR SIMILAR REQUIREMENT AGAINST
ASSETS HELD BY, OR DEPOSITS OR OTHER LIABILITIES IN OR FOR THE ACCOUNT OF,
ADVANCES OR LOANS BY, OR OTHER CREDIT EXTENDED BY, OR ANY OTHER ACQUISITION OF
FUNDS BY, ANY OFFICE OF LENDER WHICH IS NOT OTHERWISE INCLUDED IN THE
DETERMINATION OF THE RATE HEREUNDER (OTHER THAN AS A RESULT OF AN INCREASE IN
TAXES); OR

(III)             SHALL HEREAFTER IMPOSE ON LENDER ANY OTHER CONDITION AND THE
RESULT OF ANY OF THE FOREGOING IS TO INCREASE THE COST TO LENDER OF MAKING,
RENEWING OR MAINTAINING LOANS OR EXTENSIONS OF CREDIT OR TO REDUCE ANY AMOUNT
RECEIVABLE HEREUNDER;

then, in any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable which Lender reasonably deems to be material as
determined by Lender; provided, however, that Borrower shall not be required
under this Section 2.2.3 to pay Lender additional amounts for additional costs
or reduced amounts receivable that are attributable to an increase in taxes
imposed on Lender.  If Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.2.3, Borrower shall not be required to pay same
unless they are the result of requirements imposed generally on lenders similar
to Lender and not the result of some specific reserve or similar requirement
imposed on Lender as a result of Lender’s special circumstances.  If Lender
becomes entitled to claim any additional amounts pursuant to this Section 2.2.3,
Lender shall provide Borrower with not less than thirty (30) days’ written
notice specifying in reasonable detail the event by reason of which it has
become so entitled and the additional amount required to fully compensate Lender
for such additional cost or reduced amount.  A certificate as to any additional
costs or amounts payable pursuant to the foregoing sentence, executed by an
authorized signatory of Lender and submitted by Lender to Borrower shall be
conclusive in the absence of manifest error.  This provision shall survive
payment of the Note and the satisfaction of all other obligations of Borrower
under this Agreement and the Loan Documents.  Notwithstanding the foregoing, if
reasonably feasible, Lender shall, as promptly as practicable, designate a
different branch or lending office for the Loan if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
reasonable opinion of Lender, be materially disadvantageous to Lender.

31

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

 

 

(F)                   BORROWER AGREES TO INDEMNIFY LENDER AND TO HOLD LENDER
HARMLESS FROM ANY LOSS OR EXPENSES ARISING FROM INTEREST OR FEES PAYABLE BY
LENDER GENERALLY TO LENDERS OF FUNDS OBTAINED BY IT IN ORDER TO MAINTAIN A LIBOR
LOAN HEREUNDER (OTHER THAN CONSEQUENTIAL AND PUNITIVE DAMAGES) WHICH LENDER
SUSTAINS OR INCURS AS A CONSEQUENCE OF (I) ANY DEFAULT BY BORROWER IN PAYMENT OF
THE PRINCIPAL OF OR INTEREST ON A LIBOR LOAN, INCLUDING, WITHOUT LIMITATION, ANY
SUCH LOSS OR EXPENSE ARISING FROM INTEREST OR FEES PAYABLE BY LENDER TO LENDERS
OF FUNDS OBTAINED BY IT IN ORDER TO MAINTAIN A LIBOR LOAN HEREUNDER, (II) ANY
PREPAYMENT (WHETHER VOLUNTARY OR MANDATORY) OF THE LIBOR LOAN FOR ANY REASON
(INCLUDING, WITHOUT LIMITATION, THE ACCELERATION OF THE MATURITY OF THE LIBOR
LOAN) ON A DAY THAT IS NOT A PAYMENT DATE OR THE SCHEDULED MATURITY DATE, AND
(III) THE CONVERSION (FOR ANY REASON WHATSOEVER, WHETHER VOLUNTARY OR
INVOLUNTARY) OF THE APPLICABLE INTEREST RATE TO THE REFERENCE RATE PLUS  THE
SPREAD WITH RESPECT TO ANY PORTION OF THE PRINCIPAL AMOUNT ON A DATE OTHER THAN
THE FIRST DAY OF AN INTEREST ACCRUAL PERIOD (SUCH AMOUNTS REFERRED TO IN CLAUSES
(I) , (II) AND (III) ARE HEREIN REFERRED TO COLLECTIVELY AS THE “BREAKAGE
COSTS”).  WHENEVER IN THIS SECTION 2.2.3 THE TERM “INTEREST OR FEES PAYABLE BY
LENDER TO LENDERS OF FUNDS OBTAINED BY IT” IS USED AND NO SUCH FUNDS WERE
ACTUALLY OBTAINED FROM SUCH LENDERS, IT SHALL INCLUDE INTEREST OR FEES WHICH
WOULD HAVE BEEN PAYABLE BY LENDER IF IT HAD OBTAINED FUNDS FROM LENDERS IN ORDER
TO MAINTAIN A LIBOR LOAN HEREUNDER.  LENDER WILL PROVIDE TO BORROWER A STATEMENT
DETAILING SUCH BREAKAGE COSTS AND THE CALCULATION THEREOF, AND SUCH STATEMENT
SHALL BE FINAL ABSENT MANIFEST ERROR.  THE PARTIES HERETO ACKNOWLEDGE AND AGREE
THAT THE DAMAGES THAT LENDER WOULD SUFFER AS A RESULT OF THE LOAN BEING PREPAID
ARE DIFFICULT OR IMPOSSIBLE TO ASCERTAIN AND, THEREFORE, AGREE THAT THE
AFORESAID LOSSES, COSTS OR EXPENSES ARE A REASONABLE APPROXIMATION OF SUCH
DAMAGES AND DO NOT CONSTITUTE A PENALTY. 

(G)                  THE PROVISIONS OF THIS SECTION 2.2.3 SHALL SURVIVE PAYMENT
OF THE NOTE IN FULL AND THE SATISFACTION OF ALL OTHER OBLIGATIONS OF BORROWER
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT IF
THE ADDITIONAL COSTS SET FORTH IN THIS SECTION 2.2.3 ARE NOT CLAIMED UNTIL AFTER
THE PAYMENT OR OTHER SATISFACTION IN FULL OF THE INDEBTEDNESS, THE LIEN OF THE
MORTGAGE SHALL BE RELEASED.

(H)                  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
IF THE LOAN HAS BEEN CONVERTED TO A SUBSTITUTE RATE LOAN PURSUANT TO
SECTION 2.2.3(B), OR SECTION 2.2.3(D), OR IF PURSUANT TO SECTION 2.2.3(E),
INCREASED COSTS ARE PAYABLE BY BORROWER, BORROWER MAY, AT ITS OPTION AND UPON
FIFTEEN (15) DAYS’ PRIOR NOTICE TO LENDER (OR SUCH SHORTER PERIOD OF TIME AS MAY
BE PERMITTED BY LENDER IN ITS SOLE DISCRETION BUT SUBJECT TO THE TIMING
REQUIREMENTS SET FORTH IN SECTION 2.3.1(C)), PREPAY THE INDEBTEDNESS IN WHOLE,
BUT NOT IN PART, WITHOUT THE PAYMENT OF ANY PREPAYMENT PREMIUM OR OTHER PENALTY
BUT WITH PAYMENT OF ANY BREAKAGE COSTS.

 

32

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

 

 

 

(I)                    NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, BORROWER SHALL BE PERMITTED TO REPLACE ANY LENDER THAT IS UNABLE TO
MAINTAIN THE LOAN AS A LIBOR LOAN (EXCEPT WHEN THE LOAN IS A SUBSTITUTE RATE
LOAN PURSUANT TO THE TERMS OF THIS AGREEMENT) OR REQUESTS REIMBURSEMENT FOR
AMOUNTS OWING PURSUANT TO SECTION 2.2.3(D) AND SECTION 2.2.3(E), PROVIDED THAT
(I) SUCH REPLACEMENT DOES NOT CONFLICT WITH ANY LEGAL REQUIREMENTS, (II) NO
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AT THE TIME OF SUCH
REPLACEMENT, (III) THE REPLACEMENT FINANCIAL INSTITUTION SHALL PURCHASE, AT PAR,
SUCH LENDER’S PROPORTIONAL INTEREST AND OTHER AMOUNTS OWING TO SUCH REPLACED
LENDER ON OR PRIOR TO THE DATE OF REPLACEMENT, (IV) THE REPLACEMENT FINANCIAL
INSTITUTION, IF NOT ALREADY A LENDER, SHALL BE REASONABLY SATISFACTORY TO BOC,
(V) THE BORROWER SHALL PAY ALL INCREASED COSTS (IF ANY) REQUIRED PURSUANT TO
SECTIONS 2.2.3(D), 2.2.3(E), AND 2.2.10) IN RESPECT OF ANY PERIOD PRIOR TO THE
DATE ON WHICH SUCH REPLACEMENT SHALL BE CONSUMMATED AND FOR WHICH BORROWER
RECEIVED TIMELY NOTICE HEREOF IN ACCORDANCE WITH SAID PROVISIONS, (VI) ANY SUCH
REPLACEMENT SHALL NOT BE DEEMED TO BE A WAIVER OF ANY RIGHTS THAT THE BORROWER,
BOC OR ANY OTHER LENDER SHALL HAVE AGAINST THE REPLACED LENDER; AND (VII) IN NO
EVENT SHALL BORROWER BE PERMITTED TO REPLACE BOC.  NOTWITHSTANDING THE
FOREGOING, IN THE EVENT BORROWER IS PERMITTED TO REPLACE LENDER PURSUANT TO THE
TERMS OF THIS SECTION 2.2.3(I), BOC SHALL HAVE THE FIRST OPPORTUNITY TO ACQUIRE
THE INTERESTS OF THE LENDER BEING REPLACED.  IF BOC DOES NOT AGREE TO ACQUIRE
THE INTERESTS OF THE LENDER BEING REPLACED WITHIN 10 BUSINESS DAYS OF WRITTEN
NOTICE FROM BORROWER, BORROWER MAY FIND AN ALTERNATE REPLACEMENT FINANCIAL
INSTITUTION SUBJECT TO THE TERMS AND CONDITIONS OF THIS SECTION 2.2.3(I). 

2.2.4  PAYMENTS BEFORE MATURITY.  BORROWER SHALL PAY TO LENDER ON EACH PAYMENT
DATE BEGINNING ON DECEMBER 30, 2011 THROUGHOUT THE TERM, AN AMOUNT EQUAL TO
INTEREST ONLY COMPUTED AT THE APPLICABLE INTEREST RATE ON THE PRINCIPAL AMOUNT
FOR THE APPLICABLE INTEREST ACCRUAL PERIOD, (C) ON DECEMBER 30, 2011 AND ON EACH
PAYMENT DATE THEREAFTER, A PAYMENT OF PRINCIPAL BASED ON A THIRTY (30) YEAR
MORTGAGE STYLE AMORTIZATION SCHEDULE AND ASSUMED INTEREST RATE OF SEVEN AND ONE
HALF PERCENT (7.5%) PURSUANT TO SCHEDULE 2.2.4 AND (D) ALL AMOUNTS REQUIRED, IF
ANY, IN RESPECT OF RESERVE ACCOUNTS AS SET FORTH IN ARTICLE XII  HEREOF, IF
ANY.  IN THE EVENT OF ANY PARTIAL PREPAYMENT OF THE LOAN IN ACCORDANCE WITH
SECTION 2.3.2, THE AMORTIZATION SCHEDULE SHALL BE ADJUSTED BY LENDER BASED ON
THE THEN PRINCIPAL AMOUNT, AFTER GIVING EFFECT TO SUCH PREPAYMENT, AND BASED ON
THE REMAINING TERM OF THE ORIGINAL THIRTY (30) YEAR PERIOD AND ASSUMED INTEREST
RATE OF SEVEN AND ONE-HALF PERCENT (7.5%).

2.2.5  PAYMENTS GENERALLY.  EACH INTEREST ACCRUAL PERIOD (EACH, AN “INTEREST
ACCRUAL PERIOD”) SHALL COMMENCE ON THE THIRTIETH (30TH) DAY OF EACH CALENDAR
MONTH DURING THE TERM OF THE LOAN AND SHALL END ON AND INCLUDE THE TWENTY NINTH
(29TH) DAY OF THE SUCCEEDING CALENDAR MONTH (OR TWENTY EIGHTH (28TH) IN THE CASE
OF FEBRUARY IF NOT A LEAP YEAR).  FOR PURPOSES OF MAKING PAYMENTS HEREUNDER, BUT
NOT FOR PURPOSES OF CALCULATING ANY INTEREST ACCRUAL PERIOD, IF THE DAY ON WHICH
SUCH PAYMENT IS DUE IS NOT A BUSINESS DAY, THEN AMOUNTS DUE ON SUCH DATE SHALL
BE DUE ON THE IMMEDIATELY SUCCEEDING BUSINESS DAY.  THE MONTHLY PAYMENT DATE
SHALL NOT BE CHANGED TO A DIFFERENT CALENDAR DAY UNLESS EXPRESSLY AGREED TO BY
LENDER AND BORROWER.  ON THE MATURITY DATE, INTEREST ON THE PRINCIPAL AMOUNT
SHALL BE PAYABLE AT THE APPLICABLE INTEREST RATE OR THE DEFAULT RATE, AS THE
CASE MAY BE, THROUGH AND INCLUDING THE DAY IMMEDIATELY PRECEDING SUCH MATURITY
DATE.  ALL AMOUNTS DUE PURSUANT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE PAYABLE WITHOUT SETOFF, COUNTERCLAIM, DEFENSE (OTHER THAN PRIOR
PAYMENT) OR ANY OTHER DEDUCTION WHATSOEVER.

 

33

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

 

 

2.2.6  PAYMENT ON MATURITY DATE.  BORROWER SHALL PAY TO LENDER ON THE MATURITY
DATE THE PRINCIPAL AMOUNT, ALL ACCRUED AND UNPAID INTEREST AND ALL OTHER AMOUNTS
DUE HEREUNDER AND UNDER THE NOTE, THE MORTGAGE AND THE OTHER LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, ALL INTEREST THAT WOULD ACCRUE ON THE PRINCIPAL
AMOUNT THROUGH AND INCLUDING THE DAY IMMEDIATELY PRECEDING THE MATURITY DATE.

2.2.7  PAYMENTS AFTER DEFAULT.  UPON THE OCCURRENCE AND DURING THE CONTINUANCE
OF AN EVENT OF DEFAULT, INTEREST ON THE PRINCIPAL AMOUNT AND, TO THE EXTENT
PERMITTED BY LAW, OVERDUE INTEREST AND OTHER AMOUNTS DUE IN RESPECT OF THE LOAN,
SHALL ACCRUE AT THE DEFAULT RATE, CALCULATED FROM THE DATE SUCH PAYMENT WAS DUE
WITHOUT REGARD TO ANY GRACE OR CURE PERIODS CONTAINED HEREIN, IF ANY.  ANY AND
ALL PAYMENTS AND OTHER SUMS RECEIVED BY LENDER HEREUNDER DURING THE CONTINUANCE
OF AN EVENT OF DEFAULT MAY BE APPLIED TO THE INDEBTEDNESS IN SUCH ORDER AND
PRIORITY 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 AND DUE PURSUANT TO THIS
SECTION 2.2.7 UNTIL THE ACTUAL RECEIPT AND COLLECTION OF THE INDEBTEDNESS (OR
THAT PORTION THEREOF THAT IS THEN DUE).  TO THE EXTENT PERMITTED BY APPLICABLE
LAW, AND TO THE EXTENT NOT PAID, INTEREST AT THE DEFAULT RATE SHALL BE ADDED TO
THE INDEBTEDNESS, SHALL ITSELF ACCRUE INTEREST AT THE SAME RATE AS THE LOAN AND
SHALL BE SECURED BY THE MORTGAGE.  THIS SECTION 2.2.7 SHALL NOT BE CONSTRUED AS
AN AGREEMENT OR PRIVILEGE TO EXTEND THE DATE OF THE PAYMENT OF THE INDEBTEDNESS,
NOR AS A WAIVER OF ANY OTHER RIGHT OR REMEDY ACCRUING TO LENDER BY REASON OF THE
OCCURRENCE OF ANY EVENT OF DEFAULT. 

2.2.8  LATE PAYMENT CHARGE.  IF ANY PRINCIPAL, INTEREST OR ANY OTHER SUMS DUE
UNDER THE LOAN DOCUMENTS (OTHER THAN THE PRINCIPAL AMOUNT DUE AND PAYABLE ON THE
MATURITY DATE OR UPON AN ACCELERATION OF THE LOAN) IS NOT PAID BY BORROWER
WITHIN TEN (10) DAYS FOLLOWING THE DATE ON WHICH IT 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 LEGAL RATE (THE “LATE PAYMENT CHARGE”) 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.

2.2.9  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 AMOUNT 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 UNDER THE NOTE AT A RATE IN EXCESS OF THE MAXIMUM LEGAL RATE, THEN THE
APPLICABLE INTEREST RATE OR THE DEFAULT RATE, AS THE CASE MAY BE, SHALL BE
DEEMED TO BE IMMEDIATELY REDUCED TO THE MAXIMUM LEGAL RATE AND ALL PREVIOUS
PAYMENTS IN EXCESS OF THE MAXIMUM LEGAL RATE SHALL BE DEEMED TO HAVE BEEN
PAYMENTS IN REDUCTION OF PRINCIPAL, WITHOUT INCURRING ANY PREPAYMENT OR
PREPAYMENT PREMIUM OR PENALTY, OR ANY BREAKAGE COSTS, AND NOT ON ACCOUNT OF THE
INTEREST DUE UNDER THE NOTE.  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.

 

34

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

 

 

 

2.2.10  GROSS-UP FOR TAXES.  ALL PAYMENTS MADE BY BORROWER UNDER THIS AGREEMENT
AND THE NOTE SHALL BE MADE FREE AND CLEAR OF, AND WITHOUT DEDUCTION OR
WITHHOLDING FOR OR ON ACCOUNT OF, ANY UNITED STATES FUTURE INCOME, STAMP OR
OTHER TAXES, LEVIES, IMPOSTS, DUTIES, CHARGES, FEES, DEDUCTIONS OR WITHHOLDINGS,
HEREAFTER IMPOSED, LEVIED, COLLECTED, WITHHELD OR ASSESSED BY ANY UNITED STATES
GOVERNMENTAL AUTHORITY, EXCLUDING INCOME TAXES, BRANCH PROFITS TAX AND FRANCHISE
OR OTHER TAXES (IMPOSED IN LIEU OF INCOME TAXES) IMPOSED ON LENDER AS A RESULT
OF A PRESENT OR FORMER CONNECTION BETWEEN LENDER AND THE JURISDICTION OF THE
GOVERNMENTAL AUTHORITY IMPOSING SUCH TAX OR ANY POLITICAL SUBDIVISION OR TAXING
AUTHORITY THEREOF OR THEREIN (OTHER THAN ANY SUCH CONNECTION ARISING SOLELY FROM
LENDER HAVING EXECUTED, DELIVERED OR PERFORMED ITS OBLIGATIONS OR RECEIVED A
PAYMENT UNDER, OR ENFORCED, THIS AGREEMENT OR ITS NOTE).  IF ANY SUCH
NON-EXCLUDED TAXES, LEVIES, IMPOSTS, DUTIES, CHARGES, FEES, DEDUCTIONS OR
WITHHOLDINGS (“NON-EXCLUDED TAXES”) ARE REQUIRED TO BE WITHHELD FROM ANY AMOUNTS
PAYABLE TO LENDER HEREUNDER OR UNDER ITS NOTE, THE AMOUNTS SO PAYABLE TO LENDER
SHALL BE INCREASED TO THE EXTENT NECESSARY TO YIELD TO LENDER (AFTER PAYMENT OF
ALL NON-EXCLUDED TAXES) INTEREST OR ANY SUCH OTHER AMOUNTS PAYABLE WITH RESPECT
TO THE LOAN AT THE RATES OR IN THE AMOUNTS SPECIFIED IN THIS AGREEMENT AND ITS
NOTE; PROVIDED, HOWEVER, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS AGREEMENT, THAT BORROWER SHALL NOT BE REQUIRED TO INCREASE ANY SUCH AMOUNTS
PAYABLE TO LENDER IF (A) LENDER FAILS TO COMPLY WITH THE REQUIREMENTS OF
SECTION 2.2.3 OR (B) TO THE EXTENT ANY INCREASE IN SUCH AMOUNTS REQUIRED TO BE
WITHHELD IS NOT A RESULT OF A CHANGE IN LAW OR TREATY OR (C) TO THE EXTENT SUCH
CLAIM IS MADE FOR AN AMOUNT MORE THAN THIRTY (30) DAYS AFTER LENDER (OR ANY
ASSIGNEE OR PARTICIPANT OF LENDER) SHOULD REASONABLY HAVE BEEN AWARE OF THE
EVENT GIVING RISE TO SUCH CLAIM.  WITH RESPECT TO ANY PARTICIPANT OR ASSIGNEE OF
LENDER UNDER SECTION 2.2.3 AND THIS SECTION 2.2.10, “CHANGE IN LAW OR TREATY”
SHALL BE COMPARED TO THE LAW AT THE TIME SUCH PARTICIPANT OR ASSIGNEE ACQUIRED
AN INTEREST IN THE LOAN, AND NOT BASED ON THE LAW AS OF THE DATE HEREOF. 
WHENEVER ANY NON-EXCLUDED TAXES ARE PAYABLE BY BORROWER (FOR WHICH BORROWER IS
OBLIGATED TO PAY ADDITIONAL AMOUNTS), AS PROMPTLY AS POSSIBLE AFTER PAYMENT
THEREOF BORROWER SHALL SEND TO LENDER A CERTIFIED COPY OF AN ORIGINAL OFFICIAL
RECEIPT RECEIVED BY BORROWER SHOWING PAYMENT THEREOF.  IF BORROWER FAILS TO PAY
ANY SUCH NON-EXCLUDED TAXES WHEN DUE TO THE APPROPRIATE TAXING AUTHORITY OR
FAILS TO REMIT TO LENDER THE REQUIRED RECEIPTS OR OTHER REQUIRED DOCUMENTARY
EVIDENCE, BORROWER SHALL INDEMNIFY LENDER FOR ANY INCREMENTAL TAXES, INTEREST OR
PENALTIES THAT MAY BECOME PAYABLE BY LENDER AS A RESULT OF ANY SUCH FAILURE.

SECTION 2.3  PREPAYMENTS. 

2.3.1  VOLUNTARY PREPAYMENTS.   

(A)                LENDER WILL ACCEPT A FULL PREPAYMENT OF THE LOAN MADE DURING
THE PREPAYMENT PREMIUM PERIOD IF, CONCURRENTLY WITH, AND AS A CONDITION TO SUCH
PREPAYMENT, BORROWER PAYS TO LENDER (I) THE PREPAYMENT PREMIUM, (II) ALL ACCRUED
INTEREST AND APPLICABLE BREAKAGE COSTS, (III) ALL OTHER AMOUNTS DUE TO LENDER
UNDER THE LOAN DOCUMENTS, AND (IV) ANYAMOUNTS DUE AND PAYABLE BY BORROWER UNDER
ANY LENDER INTEREST RATE PROTECTION AGREEMENT IN CONNECTION WITH THE TERMINATION
THEREOF;

 

35

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

 

 

 

(B)               SUBSEQUENT TO THE EXPIRATION OF THE PREPAYMENT PREMIUM PERIOD,
BORROWER SHALL HAVE THE RIGHT TO PREPAY THE LOAN, IN WHOLE ONLY, AT ANY TIME
WITHOUT ANY PREMIUM OR PENALTY, IF, CONCURRENTLY WITH, AND AS A CONDITION TO
SUCH PREPAYMENT, BORROWER PAYS TO LENDER (I) ALL ACCRUED INTEREST AND APPLICABLE
BREAKAGE COSTS, (II) ALL OTHER AMOUNTS DUE TO LENDER UNDER THE LOAN DOCUMENTS,
AND (III) ANY AMOUNTS DUE AND PAYABLE BY BORROWER UNDER ANY LENDER INTEREST RATE
PROTECTION AGREEMENT IN CONNECTION WITH THE TERMINATION THEREOF;

(C)                PRIOR TO ANY PREPAYMENT OF THE LOAN IN ACCORDANCE WITH THIS
SECTION 2.3.1, BORROWER SHALL PROVIDE PRIOR WRITTEN NOTICE TO LENDER SPECIFYING
THE BUSINESS DAY UPON WHICH THE PREPAYMENT IS TO BE MADE (THE “PREPAYMENT
DATE”), WHICH NOTICE SHALL BE DELIVERED TO LENDER NOT LESS THAN FIVE (5) DAYS
PRIOR TO SUCH PREPAYMENT DATE OR SUCH SHORTER PERIOD OF TIME AS MAY BE PERMITTED
BY LENDER IN ITS SOLE DISCRETION AS LONG AS ANY SUCH NOTICE IS DELIVERED TO
LENDER AT LEAST THREE (3) BUSINESS DAYS PRIOR TO SUCH PREPAYMENT DATE; PROVIDED,
THAT, IF ANY SUCH NOTICE IS PROVIDED BY BORROWER TO LENDER PRIOR TO 10 A.M. NY
TIME, SUCH NOTICE SHALL DEEMED TO BE EFFECTIVE THE NEXT BUSINESS DAY AND IF SUCH
NOTICE IS DELIVERED ON OR AFTER 10 A.M. NY TIME, SUCH NOTICE SHALL BE DEEMED TO
BE EFFECTIVE TWO (2) BUSINESS DAYS AFTER THE DATE SENT.  BORROWER MAY RESCIND
ITS NOTICE OF PREPAYMENT AND/OR ADJOURN THE PREPAYMENT ON A DAY-TO-DAY BASIS
UPON TWO (2) BUSINESS DAYS WRITTEN NOTICE TO LENDER IF SUCH NOTICE IS RECEIVED
BY LENDER PRIOR TO 10 A.M. NY TIME AND UPON THREE (3) BUSINESS DAYS WRITTEN
NOTICE TO LENDER IF SUCH NOTICE IS RECEIVED BY LENDER ON OR AFTER 10 A.M. NY
TIME (SUBJECT TO PAYMENT OF ANY REASONABLE OUT-OF-POCKET COSTS AND EXPENSES
RESULTING FROM SUCH RESCISSION); AND

(D)               BORROWER SHALL PAY TO LENDER ANY AND ALL BREAKAGE COSTS DUE IN
CONNECTION WITH SUCH PREPAYMENT OR RESCISSION OR ADJOURNMENT THEREOF.

2.3.2  MANDATORY PREPAYMENTS.  ON ANY PAYMENT DATE IMMEDIATELY FOLLOWING THE
DATE ON WHICH BORROWER ACTUALLY RECEIVES ANY PROCEEDS, IF LENDER IS NOT
OBLIGATED TO AND DOES NOT, IN FACT, MAKE SUCH PROCEEDS AVAILABLE TO BORROWER FOR
THE RESTORATION OF THE PROPERTY (AND SUCH DETERMINATION SHALL HAVE BEEN MADE IN
ACCORDANCE HEREWITH), THEN BORROWER SHALL PREPAY THE PRINCIPAL AMOUNT (WITHOUT
THE PAYMENT OF ANY PREPAYMENT PREMIUM OR OTHER PENALTY) IN AN AMOUNT EQUAL TO
ONE HUNDRED PERCENT (100%) OF SUCH PROCEEDS, USING SUCH PROCEEDS, TOGETHER WITH
INTEREST ACCRUING ON SUCH AMOUNT CALCULATED THROUGH AND INCLUDING SUCH PAYMENT
DATE AND ANY AMOUNTS DUE AND PAYABLE BY BORROWER UNDER ANY LENDER INTEREST RATE
PROTECTION AGREEMENT IN CONNECTION WITH THE TERMINATION THEREOF

2.3.3  PREPAYMENTS AFTER DEFAULT.  IF, AFTER THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, PAYMENT OF ALL OR ANY PART OF THE
INDEBTEDNESS IS TENDERED BY BORROWER OR OTHERWISE RECOVERED BY LENDER, SUCH
TENDER OR RECOVERY SHALL BE DEEMED A VOLUNTARY PREPAYMENT BY BORROWER AND
BORROWER SHALL PAY THE INDEBTEDNESS, THE PREPAYMENT PREMIUM, IF THE SAME OCCURS
DURING THE PREPAYMENT PREMIUM PERIOD, ALL ACCRUED AND UNPAID INTEREST, PLUS 
BREAKAGE COSTS, ALL OTHER AMOUNTS PAYABLE UNDER THE LOAN DOCUMENTS, AND ANY
AMOUNTS DUE AND PAYABLE BY BORROWER UNDER ANY LENDER INTEREST RATE PROTECTION
AGREEMENT IN CONNECTION WITH THE TERMINATION THEREOF.

 

36

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

 

 

 

SECTION 2.4  INTENTIONALLY OMITTED.

SECTION 2.5  RELEASE ON PAYMENT IN FULL.  IF BORROWER SHALL PAY OR CAUSE TO BE
PAID THE PRINCIPAL AMOUNT OF, AND UNPAID INTEREST ON, AND ALL OTHER SUMS DUE
UNDER, THE NOTE, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS IN ACCORDANCE WITH
THE TERMS AND PROVISIONS THEREOF, AT THE REQUEST OF BORROWER, LENDER SHALL
(A) ASSIGN THE NOTE, THE MORTGAGE AND ALL OF THE OTHER LOAN DOCUMENTS TO ANY
PERSON DESIGNATED BY BORROWER, WHICH ASSIGNMENT DOCUMENTS SHALL BE IN RECORDABLE
FORM (BUT WITHOUT REPRESENTATION OR WARRANTY BY, OR RECOURSE TO, LENDER, EXCEPT
THAT LENDER SHALL REPRESENT THAT SUCH ASSIGNMENT(S) HAS BEEN DULY AUTHORIZED,
EXECUTED AND DELIVERED AND THAT LENDER HAS NOT ASSIGNED OR ENCUMBERED THE
MORTGAGE OR THE OTHER LOAN DOCUMENTS); PROVIDED, HOWEVER, THAT THE ASSIGNMENT
DOCUMENTS SHALL BE PREPARED BY COUNSEL TO BORROWER AND DELIVERED TO LENDER FOR
ITS REVIEW AND APPROVAL, WHICH SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED
OR DELAYED, (B) DELIVER TO OR AS DIRECTED BY BORROWER THE ORIGINALLY EXECUTED
NOTE AND ALL ORIGINALLY EXECUTED OTHER NOTES WHICH MAY HAVE BEEN CONSOLIDATED,
AMENDED AND/OR RESTATED IN CONNECTION WITH THE EXECUTION OF THE NOTE OR, WITH
RESPECT TO ANY NOTE WHERE THE ORIGINAL HAS BEEN LOST BY LENDER, DESTROYED OR
MUTILATED, A LOST NOTE AFFIDAVIT WITH INDEMNITY FOR THE BENEFIT OF THE ASSIGNEE
LENDER AND THE TITLE INSURANCE COMPANY INSURING THE MORTGAGE, AS ASSIGNED, IN
FORM SUFFICIENT TO PERMIT SUCH TITLE INSURANCE COMPANY TO INSURE THE LIEN OF THE
MORTGAGE AS ASSIGNED TO AND HELD BY THE ASSIGNEE WITHOUT EXCEPTION FOR ANY
MATTER RELATING TO THE LOST, DESTROYED OR MUTILATED NOTE, (C) EXECUTE AND
DELIVER AN ALLONGE WITH RESPECT TO THE NOTE AND ANY OTHER NOTE(S) AS DESCRIBED
IN THE PRECEDING CLAUSE (B)  ABOVE WITHOUT RECOURSE, COVENANT OR WARRANTY OF ANY
NATURE, EXPRESS OR IMPLIED (EXCEPT AS TO THE PRINCIPAL AMOUNT AND THAT LENDER
OWNS THE NOTE AND THE MORTGAGE FREE OF ANY LIENS AND ENCUMBRANCES AND HAS THE
AUTHORITY TO EXECUTE AND DELIVER THE ALLONGE), (D) DELIVER THE ORIGINAL EXECUTED
MORTGAGE OR A CERTIFIED COPY OF RECORD, AND (E) EXECUTE AND/OR DELIVER SUCH
OTHER INSTRUMENTS OF CONVEYANCE, ASSIGNMENT, TERMINATION, SEVERANCE AND RELEASE
(INCLUDING APPROPRIATE UCC‑3 TERMINATION STATEMENTS) IN RECORDABLE FORM AS MAY
REASONABLY BE REQUESTED BY BORROWER TO EVIDENCE SUCH ASSIGNMENT AND/OR
SEVERANCE.  ALL REASONABLE OUT‑OF‑POCKET COSTS AND EXPENSES INCURRED BY LENDER,
INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEY’S FEES, IN CONNECTION WITH
THE FOREGOING SHALL BE PAID BY BORROWER.  CONCURRENTLY WITH THE PAYMENT TO
LENDER OF THE PRINCIPAL AMOUNT OF, AND UNPAID INTEREST ON, AND ALL OTHER SUMS
DUE UNDER, THE NOTE, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND WHETHER OR
NOT BORROWER SHALL REQUEST AN ASSIGNMENT AS SET FORTH IN THIS 0, LENDER SHALL
DELIVER TO BORROWER (I) A PAYOFF LETTER IN CUSTOMARY FORM, (II) ALL ORIGINAL
INSURANCE POLICIES RELATING TO THE PROPERTY WHICH ARE BEING HELD BY OR ON BEHALF
OF LENDER, (III) ANY AMOUNTS HELD IN ESCROW OR IN ANY RESERVE ACCOUNT PURSUANT
TO THE LOAN DOCUMENTS OR OTHERWISE, (IV) ANY OTHER COLLATERAL THAT MAY HAVE BEEN
DELIVERED TO LENDER IN CONNECTION WITH THE LOAN, AND (V) A TERMINATION OF ANY
GUARANTIES DELIVERED TO LENDER IN CONNECTION WITH THE LOAN (EXCEPT TO THE EXTENT
THAT ANY PORTION OF SUCH GUARANTIES ARE EXPRESSLY INTENDED TO SURVIVE PURSUANT
TO THE TERMS THEREOF), DULY EXECUTED BY LENDER.

37

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

 

 

 

ARTICLE III

CASH MANAGEMENT

SECTION 3.1   CASH MANAGEMENT.   

3.1.1  ESTABLISHMENT OF ACCOUNTS.  BORROWER HEREBY CONFIRMS THAT, SIMULTANEOUSLY
WITH THE EXECUTION OF THIS AGREEMENT, PURSUANT TO THE ACCOUNT AGREEMENT, IT HAS
ESTABLISHED OR CAUSED TO BE ESTABLISHED WITH COLLECTION BANK, IN THE NAME OF
BORROWER FOR THE BENEFIT OF LENDER, AS SECURED PARTY, THE “COLLECTION ACCOUNT”
(AS SUCH TERM IS DEFINED IN THE ACCOUNT AGREEMENT), WHICH HAS BEEN ESTABLISHED
AS A NON-INTEREST‑BEARING DEPOSIT ACCOUNT.  THE COLLECTION ACCOUNT AND THE FUNDS
DEPOSITED THEREIN SHALL SERVE AS ADDITIONAL SECURITY FOR THE LOAN.  PURSUANT TO
THE ACCOUNT AGREEMENT, BORROWER SHALL IRREVOCABLY INSTRUCT AND AUTHORIZE
COLLECTION BANK TO DISREGARD ANY AND ALL ORDERS FOR WITHDRAWAL FROM THE
COLLECTION ACCOUNT MADE BY, OR AT THE DIRECTION OF, BORROWER OR MANAGER OTHER
THAN TO TRANSFER ALL AMOUNTS ON DEPOSIT IN THE COLLECTION ACCOUNT ON A DAILY
BASIS TO AN ACCOUNT ESTABLISHED BY AND UNDER THE CONTROL OF LENDER AT THE
DEPOSIT BANK (THE “DEPOSIT ACCOUNT”).  LENDER SHALL NOT COMMINGLE FUNDS IN THE
DEPOSIT ACCOUNT WITH ANY OTHER FUNDS.  BORROWER AGREES THAT, PRIOR TO THE
PAYMENT OR OTHER SATISFACTION IN FULL OF THE INDEBTEDNESS, THE TERMS AND
CONDITIONS OF THE ACCOUNT AGREEMENT SHALL NOT BE AMENDED OR MODIFIED WITHOUT THE
PRIOR WRITTEN CONSENT OF LENDER (WHICH CONSENT LENDER MAY GRANT OR WITHHOLD IN
ITS REASONABLE DISCRETION).  IN RECOGNITION OF LENDER’S SECURITY INTEREST IN THE
FUNDS DEPOSITED INTO THE COLLECTION ACCOUNT, BORROWER SHALL IDENTIFY THE
COLLECTION ACCOUNT WITH THE NAME OF LENDER, AS SECURED PARTY.  THE COLLECTION
ACCOUNT SHALL BE NAMED AS FOLLOWS:  “REGO II BORROWER LLC F/B/O BANK OF CHINA,
NEW YORK BRANCH, AS SECURED PARTY, COLLECTION ACCOUNT” (ACCOUNT NUMBER #
428107085 ‑ ABA ROUTING # 021000021).   LENDER SHALL ESTABLISH AND HOLD THE
FOLLOWING ACCOUNTS AND SUB-ACCOUNTS OF THE DEPOSIT ACCOUNT (EACH, A
“SUB‑ACCOUNT” AND, COLLECTIVELY, THE “SUB‑ACCOUNTS” AND, TOGETHER WITH THE
COLLECTION ACCOUNT, THE “COLLATERAL ACCOUNTS”), WHICH (A) MAY BE LEDGER OR BOOK
ENTRY SUB‑ACCOUNTS AND NEED NOT BE ACTUAL SUB‑ACCOUNTS, AND (B) SHALL EACH BE AN
ELIGIBLE ACCOUNT TO WHICH CERTAIN FUNDS SHALL BE ALLOCATED AND FROM WHICH
DISBURSEMENTS SHALL BE MADE PURSUANT TO THE TERMS OF THIS AGREEMENT AND THE CASH
MANAGEMENT AGREEMENT:

(A)                A SUB‑ACCOUNT FOR THE RETENTION OF ACCOUNT COLLATERAL IN
RESPECT OF DEBT SERVICE PAYMENTS DUE UNDER THE LOAN (THE “DEBT SERVICE RESERVE
ACCOUNT”); 

(B)               A SUB‑ACCOUNT FOR THE RETENTION OF ACCOUNT COLLATERAL IN
RESPECT OF IMPOSITIONS AND OTHER CHARGES FOR THE PROPERTY (THE “TAX RESERVE
ACCOUNT”); 

(C)                A SUB‑ACCOUNT FOR THE RETENTION OF ACCOUNT COLLATERAL IN
RESPECT OF INSURANCE PREMIUMS FOR THE PROPERTY (THE “INSURANCE RESERVE
ACCOUNT”);  

(D)               A SUB‑ACCOUNT FOR THE RETENTION OF ACCOUNT COLLATERAL IN
RESPECT OF LEASING EXPENSES FOR THE PROPERTY (THE “LEASING RESERVE ACCOUNT”);
AND

(E)                A SUB-ACCOUNT FOR THE RETENTION OF ACCOUNT COLLATERAL IN
RESPECT OF CAPITAL IMPROVEMENTS FOR THE PROPERTY (THE “CAPITAL EXPENDITURES
RESERVE ACCOUNT”). 

 

38

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

 

 

 

3.1.2  PLEDGE OF ACCOUNT COLLATERAL  (A) TO SECURE THE FULL AND PUNCTUAL PAYMENT
AND PERFORMANCE OF THE OBLIGATIONS, BORROWER HEREBY COLLATERALLY ASSIGNS, GRANTS
A SECURITY INTEREST IN AND PLEDGES TO LENDER, TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW, A FIRST PRIORITY CONTINUING SECURITY INTEREST IN AND TO THE
FOLLOWING PROPERTY OF BORROWER, WHETHER NOW OWNED OR EXISTING OR HEREAFTER
ACQUIRED OR ARISING AND REGARDLESS OF WHERE LOCATED (ALL OF THE SAME,
COLLECTIVELY, THE “ACCOUNT COLLATERAL”): 

(I)                 THE COLLATERAL ACCOUNTS AND ALL CASH, CHECKS, DRAFTS,
SECURITIES ENTITLEMENTS, CERTIFICATES, INSTRUMENTS AND OTHER PROPERTY,
INCLUDING, WITHOUT LIMITATION, ALL DEPOSITS AND/OR WIRE TRANSFERS FROM TIME TO
TIME DEPOSITED OR HELD IN, CREDITED TO OR MADE TO COLLATERAL ACCOUNTS;

(II)               ANY AND ALL AMOUNTS INVESTED IN PERMITTED INVESTMENTS HELD IN
THE COLLATERAL ACCOUNTS;

(III)             ALL INTEREST, DIVIDENDS, CASH, INSTRUMENTS, SECURITIES,
ENTITLEMENTS AND OTHER PROPERTY FROM TIME TO TIME RECEIVED, RECEIVABLE OR
OTHERWISE PAYABLE IN RESPECT OF, OR IN EXCHANGE FOR, ANY OR ALL OF THE FOREGOING
OR PURCHASED WITH FUNDS FROM THE COLLATERAL ACCOUNTS; AND

(IV)             TO THE EXTENT NOT COVERED BY SUB‑PARAGRAPHS (I), (II)  OR
(III)  ABOVE, ALL PROCEEDS (AS DEFINED UNDER THE UCC) OF ANY OR ALL OF THE
FOREGOING.

(B)               IN ADDITION TO THE RIGHTS AND REMEDIES HEREIN SET FORTH,
LENDER SHALL HAVE ALL OF THE RIGHTS AND REMEDIES WITH RESPECT TO THE ACCOUNT
COLLATERAL AVAILABLE TO A SECURED PARTY AT LAW OR IN EQUITY, INCLUDING, WITHOUT
LIMITATION, THE RIGHTS OF A SECURED PARTY UNDER THE UCC, AS IF SUCH RIGHTS AND
REMEDIES WERE FULLY SET FORTH HEREIN.

(C)                THIS AGREEMENT SHALL CONSTITUTE A SECURITY AGREEMENT FOR
PURPOSES OF THE UNIFORM COMMERCIAL CODE AND OTHER APPLICABLE LAW.

3.1.3  MAINTENANCE OF COLLATERAL ACCOUNTS.  BORROWER AGREES THAT THE COLLECTION
ACCOUNT IS AND SHALL BE MAINTAINED (A) AS A “DEPOSIT ACCOUNT” (AS SUCH TERM IS
DEFINED IN SECTION 9‑102(A)(29) OF THE UCC), (B) IN SUCH A MANNER THAT LENDER
SHALL HAVE CONTROL (WITHIN THE MEANING OF SECTION 9‑104(A)(2) OF THE UCC) OVER
THE COLLECTION ACCOUNT, AND (C) SUCH THAT NEITHER BORROWER NOR MANAGER SHALL
HAVE ANY RIGHT OF WITHDRAWAL FROM THE COLLECTION ACCOUNT AND, EXCEPT AS PROVIDED
HEREIN, NO ACCOUNT COLLATERAL SHALL BE RELEASED TO BORROWER OR MANAGER FROM THE
COLLECTION ACCOUNT.  WITHOUT LIMITING BORROWER’S OBLIGATIONS UNDER THE
IMMEDIATELY PRECEDING SENTENCE, BORROWER SHALL ONLY ESTABLISH AND MAINTAIN THE
COLLECTION ACCOUNT WITH A FINANCIAL INSTITUTION THAT HAS EXECUTED AN AGREEMENT
SUBSTANTIALLY IN THE FORM OF THE ACCOUNT AGREEMENT OR IN SUCH OTHER FORM
ACCEPTABLE TO LENDER IN ITS REASONABLE DISCRETION.

3.1.4  ELIGIBLE ACCOUNTS.  THE COLLATERAL ACCOUNTS SHALL BE ELIGIBLE ACCOUNTS. 
THE COLLATERAL ACCOUNTS SHALL BE SUBJECT TO SUCH APPLICABLE LAWS, AND SUCH
APPLICABLE REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
AND OF ANY OTHER BANKING OR GOVERNMENTAL AUTHORITY, AS MAY NOW OR HEREAFTER BE
IN EFFECT.  INCOME AND INTEREST ACCRUING ON THE COLLATERAL ACCOUNTS OR ANY
INVESTMENTS HELD IN SUCH ACCOUNTS SHALL BE PERIODICALLY ADDED TO

39

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

 

 

THE PRINCIPAL AMOUNT OF SUCH ACCOUNT AND SHALL BE HELD, DISBURSED AND APPLIED IN
THE SAME MANNER AS THE OTHER AMOUNTS ON DEPOSIT THEREIN IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT, THE ACCOUNT AGREEMENT AND THE CASH MANAGEMENT
AGREEMENT.  BORROWER SHALL BE THE BENEFICIAL OWNER OF THE COLLATERAL ACCOUNTS
FOR FEDERAL INCOME TAX PURPOSES AND SHALL REPORT ALL INCOME ON THE COLLATERAL
ACCOUNTS.

3.1.5  INTERIM RELEASE OF FUNDS.   PROVIDED NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND IS CONTINUING, ON THE TWENTIETH (20) DAY OF EACH CALENDAR MONTH
DURING THE TERM OF THE LOAN (OR, IF SUCH DAY IS NOT A BUSINESS DAY, ON THE NEXT
SUCCEEDING BUSINESS DAY), ANY SUMS THAT ARE ON DEPOSIT IN THE DEPOSIT ACCOUNT
(OTHER THAN SUMS ON DEPOSIT IN THE RESERVE ACCOUNTS) IN EXCESS OF THE AMOUNT
SUFFICIENT TO PAY THE ITEMS LISTED IN SECTIONS 3.1.6(A)(I)-(VI) DUE ON THE NEXT
SUCCEEDING PAYMENT DATE (COLLECTIVELY, THE “REQUIRED AMOUNT”) SHALL BE DISBURSED
BY LENDER TO THE BORROWER’S ACCOUNT.

3.1.6  PAYMENTS TO SUB‑ACCOUNTS.  (A)   PROVIDED NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND IS CONTINUING, LENDER SHALL, ON EACH PAYMENT DATE, TRANSFER, OR
SHALL CAUSE THE TRANSFER OF, AMOUNTS FROM THE DEPOSIT ACCOUNT, TO THE EXTENT
AVAILABLE THEREIN IN THE FOLLOWING AMOUNTS AND ORDER OF PRIORITY:

(I)                 FIRST, SUBJECT TO THE PROVISIONS OF SECTION 12.1.3 AND
SECTION 12.8, TO THE TAX RESERVE ACCOUNT, THE AMOUNTS, IF ANY, THEN REQUIRED TO
BE DEPOSITED PURSUANT TO SECTION 12.1.1; 

(II)               SECOND, SUBJECT TO THE PROVISIONS OF SECTIONS 12.2.2, 12.2.3,
12.2.4, AND SECTION 12.8, TO THE INSURANCE RESERVE ACCOUNT, THE AMOUNTS, IF ANY,
THEN REQUIRED TO BE DEPOSITED PURSUANT TO SECTION 12.2; 

(III)             THIRD, TO THE DEBT SERVICE RESERVE ACCOUNT FOR PAYMENT TO
LENDER, THE AMOUNT OF ALL DELINQUENT INTEREST AND PRINCIPAL ON THE LOAN, THE
SCHEDULED MONTHLY PAYMENT OF DEBT SERVICE ON THE LOAN DUE ON THE NEXT PAYMENT
DATE AND ALL OTHER AMOUNTS THEN DUE AND PAYABLE UNDER THE LOAN DOCUMENTS (WITH
ANY AMOUNTS WITH RESPECT TO PRINCIPAL PAID LAST);

(IV)             FOURTH, TO THE DEPOSIT BANK FUNDS SUFFICIENT TO PAY THE FEES
AND EXPENSES OF DEPOSIT BANK AS REQUIRED PURSUANT TO THE CASH MANAGEMENT
AGREEMENT;

(V)               FIFTH, SUBJECT TO SECTION 12.3.5, SECTION 12.3.6 AND
SECTION 12.8, TO THE CAPITAL EXPENDITURES RESERVE ACCOUNT, THE AMOUNTS, IF ANY,
THEN REQUIRED TO BE DEPOSITED PURSUANT TO SECTION 12.3.1; 

(VI)             SIXTH, SUBJECT TO SECTION 12.4.3, SECTION 12.4.4  AND
SECTION 12.8, TO THE LEASING RESERVE ACCOUNT, THE AMOUNTS, IF ANY,  THEN
REQUIRED TO BE DEPOSITED PURSUANT TO SECTION 12.4.1 AND

(VII)           SEVENTH, THE AMOUNTS REMAINING AFTER PAYMENT OF THE ITEMS SET
FORTH IN CLAUSES (I) THROUGH (VI)  ABOVE, AS APPLICABLE, TO BORROWER’S ACCOUNT.

 

40

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

 

 

(B)               WITHIN SEVEN (7) BUSINESS DAYS AFTER NOTICE FROM LENDER THAT A
DSCR COLLATERAL EVENT HAS OCCURRED, BORROWER SHALL (I) PREPAY THE LOAN, OR
(II) POST CASH WITH LENDER, OR (III) DELIVER A LETTER OF CREDIT TO LENDER (ITEMS
(II) AND (III), THE “REMARGINING COLLATERAL”), EACH, IN AN AMOUNT NECESSARY TO
REDUCE THE PRINCIPAL AMOUNT (OR, IN THE CASE OF REMARGINING COLLATERAL, ASSUMING
THE REMARGINING COLLATERAL WERE APPLIED TO REDUCE THE PRINCIPAL AMOUNT OF THE
LOAN) SUCH THAT THE DEBT SERVICE COVERAGE RATIO IS EQUAL TO AT LEAST 1.25 TO
1.00.  IF BORROWER DELIVERED REMARGINING COLLATERAL TO LENDER, THEN WITHIN SEVEN
(7) BUSINESS DAYS FOLLOWING THE WRITTEN REQUEST OF BORROWER UPON THE EXPIRATION
OF THE DSCR COLLATERAL PERIOD AND, PROVIDED  NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING UNDER THIS AGREEMENT, LENDER SHALL RELEASE SUCH
PORTION OF THE REMARGINING COLLATERAL WHICH HAS NOT BEEN PREVIOUSLY APPLIED BY
LENDER IN ACCORDANCE HEREWITH TO BORROWER.

3.1.7  COLLECTION BANK.  (A) LENDER SHALL HAVE THE RIGHT AT BORROWER’S SOLE COST
AND EXPENSE TO REPLACE THE COLLECTION BANK WITH A FINANCIAL INSTITUTION SELECTED
BY BORROWER AND REASONABLY SATISFACTORY TO LENDER IN THE EVENT THAT (I) THE
COLLECTION BANK FAILS, IN ANY MATERIAL RESPECT, TO COMPLY WITH THE ACCOUNT
AGREEMENT OR (II) THE COLLECTION BANK IS NO LONGER AN ELIGIBLE INSTITUTION, AND
LENDER SHALL CAUSE SUCH DESIGNATED REPLACEMENT COLLECTION BANK PROMPTLY TO
ASSUME THE OBLIGATIONS OF THE COLLECTION BANK UNDER THE ACCOUNT AGREEMENT AND/OR
ENTER INTO A NEW ACCOUNT AND CONTROL AGREEMENT SUBSTANTIALLY SIMILAR TO THE
ACCOUNT AGREEMENT OR IN SUCH OTHER FORM ACCEPTABLE TO BOTH LENDER AND BORROWER,
EACH IN ITS REASONABLE DISCRETION.  UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, LENDER SHALL HAVE THE RIGHT AT BORROWER’S
SOLE COST AND EXPENSE TO REPLACE THE COLLECTION BANK AT ANY TIME, WITHOUT NOTICE
TO BORROWER.  BORROWER SHALL COOPERATE WITH LENDER IN CONNECTION WITH THE
APPOINTMENT OF ANY REPLACEMENT COLLECTION BANK AND THE EXECUTION AND DELIVERY OF
SUCH ACCOUNT CONTROL AGREEMENT.

(B)               SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, BORROWER SHALL HAVE THE RIGHT AT ITS SOLE COST AND EXPENSE TO
REPLACE THE COLLECTION BANK WITH A FINANCIAL INSTITUTION THAT IS AN ELIGIBLE
INSTITUTION; PROVIDED THAT SUCH FINANCIAL INSTITUTION ASSUMES THE OBLIGATIONS OF
THE COLLECTION BANK UNDER THE ACCOUNT AGREEMENT OR ENTERS INTO A NEW ACCOUNT AND
CONTROL AGREEMENT SUBSTANTIALLY SIMILAR TO THE ACCOUNT AGREEMENT OR IN SUCH
OTHER FORM ACCEPTABLE TO LENDER IN ITS REASONABLE DISCRETION.

3.1.8  BORROWER’S ACCOUNT REPRESENTATIONS, WARRANTIES AND COVENANTS. 
(A) BORROWER REPRESENTS, WARRANTS AND COVENANTS THAT (I) NO LATER THAN THE
SEVENTH (7TH) BUSINESS DAY AFTER THE DATE HEREOF, BORROWER WILL HAVE DIRECTED
ALL TENANTS UNDER THE LEASES TO MAIL ALL CHECKS AND WIRE ALL FUNDS WITH RESPECT
TO ANY PAYMENTS DUE UNDER SUCH LEASES DIRECTLY TO THE COLLECTION ACCOUNT
PURSUANT TO A LETTER SUBSTANTIALLY IN THE FORM OF EXHIBIT B, AND (II) BORROWER
SHALL DELIVER A LETTER SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT B 
TO TENANTS UNDER ALL LEASES ENTERED INTO AFTER THE DATE HEREOF.

(B)               BORROWER FURTHER REPRESENTS, WARRANTS AND COVENANTS THAT
(I) BORROWER SHALL CAUSE MANAGER TO DEPOSIT ALL AMOUNTS PAYABLE TO BORROWER
PURSUANT TO THE MANAGEMENT AGREEMENT DIRECTLY INTO THE COLLECTION ACCOUNT,
(II) BORROWER SHALL PAY OR CAUSE TO BE PAID ALL RENTS, CASH OR CASH EQUIVALENTS
OR OTHER ITEMS OF OPERATING INCOME NOT COVERED BY THE PRECEDING PARAGRAPH (A)
WITHIN TWO (2) BUSINESS DAYS AFTER RECEIPT THEREOF BY BORROWER OR ITS AFFILIATES
DIRECTLY INTO THE COLLECTION ACCOUNT AND, UNTIL SO DEPOSITED, ANY SUCH AMOUNTS
HELD BY BORROWER OR MANAGER SHALL BE DEEMED TO BE ACCOUNT COLLATERAL AND SHALL
BE HELD IN TRUST BY IT

41

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

 

 

FOR THE BENEFIT OF LENDER AND SHALL NOT BE COMMINGLED WITH ANY OTHER FUNDS OR
PROPERTY OF BORROWER OR MANAGER, (III) THERE ARE NO ACCOUNTS OTHER THAN THE
COLLATERAL ACCOUNTS AND THE BORROWER’S ACCOUNT OR ANY OTHER PERSON ON BEHALF OF
BORROWER WITH RESPECT TO THE PROPERTY OR THE COLLECTION OF RENTS, (IV) SO LONG
AS ANY PORTION OF THE LOAN SHALL BE OUTSTANDING, NEITHER BORROWER NOR ANY OTHER
PERSON ON BEHALF OF BORROWER SHALL OPEN ANY OTHER OPERATING ACCOUNTS WITH
RESPECT TO THE PROPERTY OR THE COLLECTION OF RENTS, EXCEPT FOR THE COLLATERAL
ACCOUNTS AND BORROWER’S ACCOUNT (EXCEPT TO HOLD FUNDS RELEASED FROM THE
COLLECTION ACCOUNT OR DEPOSIT ACCOUNT), AND (V) IN THE EVENT THAT ANY RENTS,
CASH OR CASH EQUIVALENTS OR OTHER ITEMS OF OPERATING INCOME ARE PAID INTO AN
ACCOUNT OTHER THAN THE COLLECTION ACCOUNT, BORROWER SHALL IMMEDIATELY, UPON
BECOMING AWARE OF THE SAME, CAUSE SUCH RENTS, CASH OR CASH EQUIVALENTS OR OTHER
ITEMS OF OPERATING INCOME TO BE PAID INTO THE COLLECTION ACCOUNT.

3.1.9  ACCOUNT COLLATERAL AND REMEDIES.  (A) UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, WITHOUT ADDITIONAL NOTICE FROM LENDER TO
BORROWER, ALL FUNDS TRANSFERRED TO LENDER FROM THE COLLECTION ACCOUNT MAY BE
APPLIED BY LENDER IN SUCH ORDER AND PRIORITY AS LENDER SHALL DETERMINE IN ITS
SOLE AND ABSOLUTE DISCRETION, INCLUDING, BUT NOT LIMITED TO LIQUIDATING AND
TRANSFERRING ANY AMOUNTS THEN INVESTED IN PERMITTED INVESTMENTS TO THE
COLLATERAL ACCOUNTS TO WHICH THEY RELATE OR REINVEST SUCH AMOUNTS IN OTHER
PERMITTED INVESTMENTS AS LENDER MAY DETERMINE IN ITS SOLE DISCRETION IS
NECESSARY TO PERFECT OR PROTECT ANY SECURITY INTEREST GRANTED OR PURPORTED TO BE
GRANTED HEREBY OR TO ENABLE LENDER TO EXERCISE AND ENFORCE LENDER’S RIGHTS AND
REMEDIES HEREUNDER WITH RESPECT TO ANY ACCOUNT COLLATERAL OR TO PRESERVE THE
VALUE OF THE ACCOUNT COLLATERAL.

(B)               BORROWER HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS LENDER AS
BORROWER’S TRUE AND LAWFUL ATTORNEY-IN-FACT, TO ACT WITH FULL POWER OF
SUBSTITUTION, TO, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, EXECUTE, ACKNOWLEDGE AND DELIVER ANY INSTRUMENTS AND TO EXERCISE AND
ENFORCE EVERY RIGHT, POWER, REMEDY, OPTION AND PRIVILEGE OF BORROWER WITH
RESPECT TO THE ACCOUNT COLLATERAL, AND DO IN THE NAME, PLACE AND STEAD OF
BORROWER, ALL SUCH ACTS, THINGS AND DEEDS FOR AND ON BEHALF OF AND IN THE NAME
OF BORROWER, WHICH BORROWER COULD DO OR WHICH LENDER MAY DEEM NECESSARY OR
DESIRABLE TO MORE FULLY VEST IN LENDER THE RIGHTS AND REMEDIES PROVIDED FOR
HEREIN AND TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT.  THE FOREGOING POWERS
OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN INTEREST.  UPON THE OCCURRENCE
AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, LENDER MAY PERFORM OR CAUSE
PERFORMANCE OF ANY SUCH AGREEMENT, AND ANY REASONABLE OUT-OF-POCKET EXPENSES OF
LENDER INCURRED IN CONNECTION THEREWITH SHALL BE PAID BY BORROWER AS PROVIDED IN
SECTION 5.1.16. 

(C)                BORROWER HEREBY EXPRESSLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, PRESENTMENT, DEMAND, PROTEST OR ANY NOTICE OF ANY KIND IN
CONNECTION WITH THE ACCOUNT COLLATERAL.  BORROWER ACKNOWLEDGES AND AGREES THAT
TEN (10) DAYS’ PRIOR WRITTEN NOTICE OF THE TIME AND PLACE OF ANY PUBLIC SALE OF
THE ACCOUNT COLLATERAL OR ANY OTHER INTENDED DISPOSITION THEREOF SHALL BE
REASONABLE AND SUFFICIENT NOTICE TO BORROWER WITHIN THE MEANING OF THE UCC.

3.1.10  TRANSFERS AND OTHER LIENS.  BORROWER AGREES THAT IT WILL NOT (A) SELL OR
OTHERWISE DISPOSE OF ANY OF THE ACCOUNT COLLATERAL OR (B) CREATE OR PERMIT TO
EXIST ANY LIEN UPON OR WITH RESPECT TO ALL OR ANY OF THE ACCOUNT COLLATERAL,
EXCEPT FOR THE LIEN GRANTED TO LENDER UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND PERMITTED ENCUMBRANCES

.

42

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

 

 

3.1.11  REASONABLE CARE.  BEYOND THE EXERCISE OF REASONABLE CARE IN THE CUSTODY
THEREOF, LENDER SHALL HAVE NO DUTY AS TO ANY ACCOUNT COLLATERAL IN ITS
POSSESSION OR CONTROL AS AGENT THEREFOR OR BAILEE THEREOF OR ANY INCOME THEREON
OR THE PRESERVATION OF RIGHTS AGAINST ANY PERSON OR OTHERWISE WITH RESPECT
THERETO.  LENDER SHALL BE DEEMED TO HAVE EXERCISED REASONABLE CARE IN THE
CUSTODY AND PRESERVATION OF THE ACCOUNT COLLATERAL IN ITS POSSESSION IF THE
ACCOUNT COLLATERAL IS ACCORDED TREATMENT SUBSTANTIALLY EQUAL TO THAT WHICH
LENDER ACCORDS ITS OWN PROPERTY, IT BEING UNDERSTOOD THAT LENDER SHALL NOT BE
LIABLE OR RESPONSIBLE FOR ANY LOSS OR DAMAGE TO ANY OF THE ACCOUNT COLLATERAL,
OR FOR ANY DIMINUTION IN VALUE THEREOF, BY REASON OF THE ACT OR OMISSION OF
LENDER, ITS AFFILIATES, AGENTS, EMPLOYEES OR BAILEES, EXCEPT TO THE EXTENT THAT
SUCH LOSS OR DAMAGE RESULTS FROM LENDER’S OR SUCH AFFILIATES’, AGENTS’,
EMPLOYEES’ OR BAILEES’ GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  IN NO EVENT
SHALL LENDER BE LIABLE EITHER DIRECTLY OR INDIRECTLY FOR LOSSES OR DELAYS
RESULTING FROM ANY EVENT WHICH MAY BE THE BASIS OF AN EXCUSABLE DELAY, COMPUTER
MALFUNCTIONS, INTERRUPTION OF COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR
OTHER CAUSES BEYOND LENDER’S REASONABLE CONTROL OR FOR INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES EXCEPT TO THE EXTENT OF LENDER’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.  NOTWITHSTANDING THE FOREGOING, BORROWER ACKNOWLEDGES AND
AGREES THAT (A) LENDER DOES NOT HAVE CUSTODY OF THE ACCOUNT COLLATERAL HELD IN
THE COLLECTION ACCOUNT, (B) COLLECTION BANK HAS CUSTODY OF THE ACCOUNT
COLLATERAL HELD IN THE COLLECTION ACCOUNT, (C) THE INITIAL COLLECTION BANK WAS
CHOSEN BY BORROWER AND (D) LENDER HAS NO OBLIGATION OR DUTY TO SUPERVISE
COLLECTION BANK OR TO SEE TO THE SAFE CUSTODY OF THE ACCOUNT COLLATERAL HELD IN
THE COLLECTION ACCOUNT.

3.1.12  LENDER’S LIABILITY.  (A) LENDER SHALL BE RESPONSIBLE FOR THE PERFORMANCE
ONLY OF SUCH DUTIES WITH RESPECT TO THE ACCOUNT COLLATERAL AS ARE SPECIFICALLY
SET FORTH IN THIS SECTION 3.1  OR ELSEWHERE IN THE LOAN DOCUMENTS, AND NO OTHER
DUTY SHALL BE IMPLIED FROM ANY PROVISION HEREOF.  LENDER SHALL NOT BE UNDER ANY
OBLIGATION OR DUTY TO PERFORM ANY ACT WITH RESPECT TO THE ACCOUNT COLLATERAL
WHICH WOULD CAUSE IT TO INCUR ANY 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 EMPLOYEES AND OFFICERS HARMLESS FROM AND
AGAINST ANY LOSS, COST OR DAMAGE (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS’ FEES AND DISBURSEMENTS) INCURRED BY LENDER IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY WITH RESPECT TO THE ACCOUNT COLLATERAL EXCEPT
AS SUCH MAY BE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LENDER
AND ITS EMPLOYEES, OFFICERS OR AGENTS.

(B)               LENDER SHALL BE PROTECTED IN ACTING UPON ANY NOTICE,
RESOLUTION, REQUEST, CONSENT, ORDER, CERTIFICATE, REPORT, OPINION, BOND OR OTHER
PAPER, DOCUMENT OR SIGNATURE BELIEVED BY IT IN GOOD FAITH TO BE GENUINE, AND, IN
SO ACTING, IT MAY BE ASSUMED THAT ANY PERSON PURPORTING TO GIVE ANY OF THE
FOREGOING IN CONNECTION WITH THE PROVISIONS HEREOF HAS BEEN DULY AUTHORIZED TO
DO SO.  LENDER MAY CONSULT WITH COUNSEL, AND THE OPINION OF SUCH COUNSEL SHALL
BE FULL AND COMPLETE AUTHORIZATION AND PROTECTION IN RESPECT OF ANY ACTION TAKEN
OR SUFFERED BY IT HEREUNDER AND IN GOOD FAITH IN ACCORDANCE THEREWITH.

3.1.13  CONTINUING SECURITY INTEREST.  THIS AGREEMENT SHALL CREATE A CONTINUING
SECURITY INTEREST IN THE ACCOUNT COLLATERAL AND SHALL REMAIN IN FULL FORCE AND
EFFECT UNTIL PAYMENT OR OTHER SATISFACTION IN FULL OF THE INDEBTEDNESS.  UPON
PAYMENT OR OTHER SATISFACTION IN FULL OF THE INDEBTEDNESS, THIS SECURITY
INTEREST SHALL AUTOMATICALLY TERMINATE WITHOUT FURTHER NOTICE FROM ANY PARTY AND
BORROWER SHALL BE ENTITLED TO THE RETURN, UPON ITS REQUEST, OF SUCH OF THE
ACCOUNT COLLATERAL AS SHALL NOT HAVE BEEN SOLD OR OTHERWISE APPLIED PURSUANT TO
THE TERMS HEREOF AND

43

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

 

 

LENDER SHALL EXECUTE (AT BORROWER’S EXPENSE) SUCH INSTRUMENTS AND DOCUMENTS AS
MAY BE REASONABLY REQUESTED BY BORROWER TO EVIDENCE SUCH TERMINATION AND THE
RELEASE OF THE ACCOUNT COLLATERAL.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.1  BORROWER REPRESENTATIONS.   

4.1.1  ORGANIZATION.   BORROWER REPRESENTS AND WARRANTS AS OF THE CLOSING DATE
THAT:

(A)               BORROWER IS A DELAWARE LIMITED LIABILITY COMPANY AND HAS BEEN
DULY FORMED AND IS VALIDLY EXISTING AND IN GOOD STANDING PURSUANT TO THE LAWS OF
THE STATE OF DELAWARE WITH REQUISITE POWER AND AUTHORITY TO OWN ITS PROPERTIES
AND TO TRANSACT THE BUSINESSES IN WHICH IT IS NOW ENGAGED.

(B)                BORROWER HAS DULY QUALIFIED TO DO BUSINESS AND IS IN GOOD
STANDING IN NEW YORK AND IN EACH JURISDICTION WHERE IT IS REQUIRED TO BE SO
QUALIFIED IN CONNECTION WITH ITS PROPERTIES, BUSINESSES AND OPERATIONS EXCEPT
WHERE THE FAILURE TO BE SO QUALIFIED WOULD NOT CAUSE A MATERIAL ADVERSE EFFECT. 
BORROWER POSSESSES ALL RIGHTS, LICENSES, PERMITS AND AUTHORIZATIONS,
GOVERNMENTAL OR OTHERWISE, NECESSARY TO ENTITLE IT TO OWN AND/OR LEASE ITS
PROPERTIES AND TO TRANSACT THE BUSINESSES IN WHICH IT IS NOW ENGAGED, EXCEPT
WHERE THE FAILURE TO POSSESS SUCH ITEMS WOULD NOT CAUSE A MATERIAL ADVERSE
EFFECT, AND THE SOLE BUSINESS OF BORROWER IS THE HOLDING, LEASING, FINANCING,
OPERATION AND MANAGEMENT OF THE PROPERTY.

(C)               THE ORGANIZATIONAL STRUCTURE OF BORROWER IS ACCURATELY
DEPICTED BY THE SCHEMATIC DIAGRAM ATTACHED HERETO AS SCHEDULE 4.1.1 IN ALL
MATERIAL RESPECTS.

(D)                BORROWER SHALL NOT CHANGE ITS NAME, IDENTITY, CORPORATE
STRUCTURE OR JURISDICTION OF FORMATION UNLESS IT SHALL HAVE GIVEN LENDER
FIFTEEN (15) DAYS’ PRIOR WRITTEN NOTICE OF ANY SUCH CHANGE AND SHALL HAVE TAKEN
ALL STEPS REASONABLY REQUESTED BY LENDER TO GRANT, PERFECT, PROTECT AND/OR
PRESERVE THE SECURITY INTEREST GRANTED HEREUNDER OR UNDER ANY OF THE OTHER LOAN
DOCUMENTS TO LENDER.

4.1.2  PROCEEDINGS.   BORROWER HAS FULL POWER TO AND HAS TAKEN ALL NECESSARY
ACTION TO AUTHORIZE THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS HAVE
BEEN DULY EXECUTED AND DELIVERED BY, OR ON BEHALF OF, BORROWER AND CONSTITUTE
LEGAL, VALID AND BINDING OBLIGATIONS OF BORROWER, ENFORCEABLE AGAINST BORROWER
IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, SUBJECT ONLY TO APPLICABLE
BANKRUPTCY, INSOLVENCY, MORATORIUM AND SIMILAR LAWS AFFECTING RIGHTS OF
CREDITORS GENERALLY, AND TO GENERAL PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER
ENFORCEMENT IS SOUGHT IN A PROCEEDING IN EQUITY OR AT LAW) AND AN IMPLIED
COVENANT OF GOOD FAITH AND FAIR DEALING.

4.1.3  NO CONFLICTS.  THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY BORROWER WILL NOT CONFLICT WITH OR RESULT IN A
BREACH OF ANY OF THE TERMS OR PROVISIONS OF, OR CONSTITUTE A DEFAULT UNDER, OR
RESULT IN THE CREATION OR IMPOSITION OF

44

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

 

 

ANY LIEN, CHARGE OR ENCUMBRANCE (OTHER THAN PURSUANT TO THE LOAN DOCUMENTS) UPON
ANY OF THE PROPERTY OR ASSETS OF BORROWER PURSUANT TO THE TERMS OF ANY
INDENTURE, MORTGAGE, DEED OF TRUST, LOAN AGREEMENT, PARTNERSHIP AGREEMENT OR
OTHER AGREEMENT OR INSTRUMENT TO WHICH BORROWER IS A PARTY OR BY WHICH ANY OF
BORROWER’S PROPERTY OR ASSETS IS SUBJECT (UNLESS CONSENTS FROM ALL APPLICABLE
PARTIES THERETO HAVE BEEN OBTAINED), NOR WILL SUCH ACTION RESULT IN ANY
VIOLATION OF THE PROVISIONS OF ANY STATUTE OR ANY ORDER, RULE OR REGULATION OF
ANY GOVERNMENTAL AUTHORITY IN EACH CASE WHICH WOULD REASONABLY BE EXPECTED TO
HAVE OR DOES HAVE A MATERIAL ADVERSE EFFECT, AND ANY CONSENT, APPROVAL,
AUTHORIZATION, ORDER, REGISTRATION OR QUALIFICATION OF OR WITH ANY GOVERNMENTAL
AUTHORITY REQUIRED FOR THE EXECUTION, DELIVERY AND PERFORMANCE BY BORROWER OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS (AND THE FAILURE OF WHICH TO OBTAIN
WOULD REASONABLY BE EXPECTED TO HAVE OR DOES HAVE A MATERIAL ADVERSE EFFECT) HAS
BEEN OBTAINED AND IS IN FULL FORCE AND EFFECT.

4.1.4  LITIGATION.   EXCEPT AS SET FORTH ON SCHEDULE 4.1.4 HEREOF AND MATTERS
FULLY COVERED BY INSURANCE, THERE ARE NO ARBITRATION PROCEEDINGS, GOVERNMENTAL
INVESTIGATIONS, ACTIONS, SUITS OR PROCEEDINGS, AT LAW OR IN EQUITY, OR BY OR
BEFORE ANY GOVERNMENTAL AUTHORITY WHICH ARE NOW PENDING OR, TO THE BEST OF
BORROWER’S KNOWLEDGE, THREATENED AGAINST OR AFFECTING BORROWER OR THE PROPERTY. 
NONE OF THE ACTIONS, SUITS, PROCEEDINGS AND/OR INVESTIGATIONS IDENTIFIED ON
SCHEDULE 0, IF DETERMINED AGAINST BORROWER OR THE PROPERTY, WOULD REASONABLY BE
EXPECTED TO HAVE OR DOES HAVE A MATERIAL ADVERSE EFFECT.

4.1.5  AGREEMENTS.   BORROWER IS NOT A PARTY TO ANY AGREEMENT OR INSTRUMENT OR
SUBJECT TO ANY RESTRICTION WHICH WOULD REASONABLY BE EXPECTED TO HAVE, OR DOES
HAVE, A MATERIAL ADVERSE EFFECT.  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 WHICH DEFAULT WOULD BE
REASONABLY EXPECTED TO HAVE OR DOES HAVE A MATERIAL ADVERSE EFFECT.  BORROWER
HAS NO MATERIAL FINANCIAL OBLIGATION (CONTINGENT OR OTHERWISE) UNDER ANY
INDENTURE, MORTGAGE, DEED OF TRUST, LOAN AGREEMENT OR OTHER 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, (B) OBLIGATIONS UNDER THE LOAN DOCUMENTS AND/OR
(C) PERMITTED ENCUMBRANCES.

4.1.6  TITLE.   BORROWER HAS GOOD, MARKETABLE AND INSURABLE FEE SIMPLE TITLE TO
THE REAL PROPERTY COMPRISING PART OF THE PROPERTY AND GOOD TITLE TO THE BALANCE
OF THE PROPERTY OWNED BY IT, FREE AND CLEAR OF ALL LIENS WHATSOEVER EXCEPT FOR
PERMITTED ENCUMBRANCES AND OTHER LIENS OTHERWISE PERMITTED PURSUANT TO THE LOAN
DOCUMENTS.  THE MORTGAGE, WHEN PROPERLY RECORDED IN THE APPROPRIATE RECORDS,
TOGETHER WITH ANY UNIFORM COMMERCIAL CODE FINANCING STATEMENTS REQUIRED TO BE
FILED IN CONNECTION THEREWITH, WILL CREATE (A) A VALID, PERFECTED FIRST MORTGAGE
LIEN ON THE PROPERTY AND THE IMPROVEMENTS, SUBJECT ONLY TO PERMITTED
ENCUMBRANCES AND (B) PERFECTED SECURITY INTERESTS IN AND TO, AND PERFECTED
COLLATERAL ASSIGNMENTS OF, ALL PERSONALTY (INCLUDING THE LEASES), ALL IN
ACCORDANCE WITH THE TERMS THEREOF, IN EACH CASE SUBJECT ONLY TO ANY APPLICABLE
PERMITTED ENCUMBRANCES.  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 OTHER THAN
PERMITTED ENCUMBRANCES.  BORROWER REPRESENTS AND WARRANTS THAT NONE OF THE
PERMITTED ENCUMBRANCES WILL MATERIALLY ADVERSELY AFFECT (A) THE ABILITY OF
BORROWER TO PAY ANY OF ITS OBLIGATIONS TO ANY PERSON AS AND WHEN DUE OR (B) THE

45

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

 

 

USE OR OPERATION OF THE PROPERTY AS OF THE CLOSING DATE AND THEREAFTER AS
CURRENTLY CONTEMPLATED.  BORROWER SHALL PRESERVE ITS RIGHT, TITLE AND INTEREST
IN AND TO THE PROPERTY FOR SO LONG AS THE NOTE REMAINS OUTSTANDING AND WILL
WARRANT AND DEFEND SAME AND THE VALIDITY AND PRIORITY OF THE LIEN HEREOF FROM
AND AGAINST ANY AND ALL CLAIMS WHATSOEVER OTHER THAN THE PERMITTED ENCUMBRANCES.

4.1.7  NO BANKRUPTCY FILING.  BORROWER DOES NOT CURRENTLY INTEND EITHER THE
FILING OF A PETITION BY IT UNDER ANY STATE OR FEDERAL BANKRUPTCY OR INSOLVENCY
LAWS OR THE LIQUIDATION OF ALL OR A MAJOR PORTION OF SUCH ENTITY’S ASSETS OR
PROPERTY, AND BORROWER HAS NO KNOWLEDGE OF ANY PERSON HAVING FILED OR INTENDING
TO FILE ANY SUCH PETITION AGAINST IT.

4.1.8  FULL AND ACCURATE DISCLOSURE. THERE IS NO FACT PRESENTLY KNOWN TO
BORROWER WHICH HAS NOT BEEN DISCLOSED WHICH WOULD REASONABLY BE EXPECTED TO
HAVE, OR DOES HAVE A MATERIAL ADVERSE EFFECT.

4.1.9  ALL PROPERTY.  THE PROPERTY CONSTITUTES ALL OF THE REAL PROPERTY,
PERSONAL PROPERTY, EQUIPMENT AND FIXTURES CURRENTLY (A) OWNED OR LEASED BY
BORROWER OR (B) USED BY OR ON BEHALF OF BORROWER IN THE OPERATION OF THE
BUSINESS LOCATED ON THE PROPERTY, OTHER THAN ITEMS OWNED OR LEASED BY ANY
TENANTS, MANAGER OR CONTRACTORS PROVIDING SERVICES TO THE PROPERTY.

4.1.10  ERISA.   (A)  BORROWER DOES NOT MAINTAIN AN EMPLOYEE BENEFIT PLAN AS
DEFINED BY SECTION 3(3) OF ERISA (OTHER THAN A “MULTIEMPLOYER PLAN” AS DEFINED
BY SECTION 3(37) OF ERISA) WHICH IS SUBJECT TO TITLE IV OF ERISA.  BORROWER
(I) HAS NO KNOWLEDGE OF ANY MATERIAL LIABILITY WHICH HAS BEEN INCURRED OR IS
REASONABLY EXPECTED TO BE INCURRED BY BORROWER WHICH IS OR REMAINS UNSATISFIED
FOR ANY TAXES OR PENALTIES WITH RESPECT TO ANY “EMPLOYEE BENEFIT PLAN,” WITHIN
THE MEANING OF SECTION 3(3) OF ERISA, OR ANY “PLAN,” WITHIN THE MEANING OF
SECTION 4975(E)(1) OF THE CODE OR ANY OTHER BENEFIT PLAN (OTHER THAN A
MULTIEMPLOYER PLAN) MAINTAINED, CONTRIBUTED TO, OR REQUIRED TO BE CONTRIBUTED TO
BY BORROWER OR BY ANY ENTITY THAT IS UNDER COMMON CONTROL WITH BORROWER WITHIN
THE MEANING OF ERISA SECTION 4001(A)(14) (A “PLAN”) OR ANY PLAN THAT WOULD BE A
PLAN BUT FOR THE FACT THAT IT IS A MULTIEMPLOYER PLAN WITHIN THE MEANING OF
ERISA SECTION 3(37); AND (II) HAS MADE AND SHALL CONTINUE TO MAKE WHEN DUE ALL
REQUIRED CONTRIBUTIONS TO ALL SUCH PLANS, IF ANY.  EACH SUCH PLAN HAS BEEN AND
WILL BE ADMINISTERED IN COMPLIANCE WITH ITS TERMS AND THE APPLICABLE PROVISIONS
OF ERISA, THE CODE, AND ANY OTHER APPLICABLE FEDERAL OR STATE LAW.

(B)  BORROWER IS NOT AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF
ERISA, SUBJECT TO TITLE I OF ERISA.  NONE OF THE ASSETS OF BORROWER CONSTITUTES
OR WILL, DURING THE TERM OF THIS AGREEMENT, CONSTITUTE PLAN ASSETS OF ONE OR
MORE SUCH PLANS WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3 101 (AS MODIFIED
BY SECTION 3(42) OF ERISA) AND BORROWER IS NOT A GOVERNMENTAL PLAN WITHIN THE
MEANING OF SECTION 3(32) OF ERISA.  TRANSACTIONS BY OR WITH BORROWER (EXCLUDING
TRANSACTIONS INVOLVING ANY GOVERNMENTAL PLAN OR THE ASSETS THEREOF) 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 CODE CURRENTLY IN EFFECT, WHICH PROHIBIT OR
OTHERWISE RESTRICT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

46

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

 

 

(C)  WITH RESPECT TO ANY MULTIEMPLOYER PLAN TO WHICH BORROWER OR ANY ENTITY THAT
IS UNDER COMMON CONTROL WITH BORROWER WITHIN THE MEANING OF ERISA
SECTION 4001(A)(14) IS OR HAS BEEN OBLIGATED TO CONTRIBUTE, NEITHER BORROWER
NOR, TO BORROWER’S KNOWLEDGE, ANY SUCH ENTITY HAS INCURRED ANY MATERIAL
LIABILITY UNDER ERISA SECTION 515 OR ERISA TITLE IV WHICH IS OR REMAINS
UNSATISFIED.

 

4.1.11  COMPLIANCE.   BORROWER AND THE PROPERTY AND THE USE THEREOF COMPLY WITH
ALL APPLICABLE LEGAL REQUIREMENTS CURRENTLY IN EFFECT, EXCEPT AS DISCLOSED IN
THE PHYSICAL CONDITIONS REPORT AND EXCEPT WHERE FAILURE TO COMPLY WOULD NOT
REASONABLY BE EXPECTED TO HAVE AND DOES NOT HAVE A MATERIAL ADVERSE EFFECT,
INCLUDING, WITHOUT LIMITATION, BUILDING AND ZONING ORDINANCES AND CODES. 
BORROWER AND THE PROPERTY COMPLY WITH ALL PRESCRIBED LAWS.  BORROWER IS NOT IN
DEFAULT OR IN VIOLATION OF ANY ORDER, WRIT, INJUNCTION, DECREE OR DEMAND OF ANY
GOVERNMENTAL AUTHORITY WHICH WOULD REASONABLY BE EXPECTED TO HAVE, OR DOES HAVE
A MATERIAL ADVERSE EFFECT.  THERE HAS NOT BEEN COMMITTED BY BORROWER ANY ACT OR
OMISSION AFFORDING THE FEDERAL GOVERNMENT OR ANY OTHER 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.

4.1.12  FINANCIAL INFORMATION.  THE OPERATING EXPENSE STATEMENTS COVERING THE
YEAR TO DATE PERIOD ENDED JUNE 30, 2011, THAT HAVE BEEN DELIVERED BY OR ON
BEHALF OF BORROWER TO LENDER AS OF THE CLOSING DATE IN RESPECT OF THE PROPERTY
ARE TRUE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS AND HAVE BEEN PREPARED
IN ACCORDANCE WITH GAAP THROUGHOUT THE PERIODS COVERED, EXCEPT AS DISCLOSED
THEREIN.  ALL OTHER FINANCIAL DATA INCLUDING, WITHOUT LIMITATION, THE STATEMENTS
OF CASH FLOW AND INCOME (OTHER THAN THE OPERATING EXPENSE STATEMENTS), THAT HAVE
BEEN DELIVERED BY OR ON BEHALF OF BORROWER TO LENDER IN RESPECT OF THE
PROPERTY:  (A) ARE TRUE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS;
(B) FAIRLY REPRESENT THE FINANCIAL CONDITION OF THE PROPERTY AS OF THE DATE OF
SUCH REPORTS; AND (C) 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 IN EACH CASE ARE KNOWN TO BORROWER AND WOULD REASONABLY BE EXPECTED TO
HAVE, OR DOES HAVE A MATERIAL ADVERSE EFFECT.  SINCE THE DATE OF THE FINANCIAL
STATEMENTS OF BORROWER, THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN THE
FINANCIAL CONDITION, OPERATIONS OR BUSINESS OF BORROWER FROM THAT SET FORTH IN
SAID FINANCIAL STATEMENTS.  IN ADDITION, THE GUARANTOR IS IN COMPLIANCE WITH THE
NET WORTH REQUIREMENT (AS DEFINED IN THE GUARANTY).

4.1.13  CONDEMNATION.   NO CONDEMNATION HAS BEEN COMMENCED OR, TO BORROWER’S
KNOWLEDGE, IS CONTEMPLATED WITH RESPECT TO ALL OR ANY PORTION OF THE PROPERTY OR
FOR THE RELOCATION OF ROADWAYS PROVIDING ACCESS TO THE PROPERTY.

4.1.14  FEDERAL RESERVE REGULATIONS.  NONE OF THE PROCEEDS OF THE LOAN WILL BE
USED BY BORROWER FOR THE PURPOSE OF PURCHASING OR CARRYING ANY “MARGIN STOCK” AS
DEFINED IN REGULATION U, REGULATION X OR REGULATION T OR FOR THE PURPOSE OF
REDUCING OR RETIRING ANY DEBT OF BORROWER WHICH WAS ORIGINALLY INCURRED SO THAT
BORROWER COULD PURCHASE OR CARRY “MARGIN STOCK” OR FOR ANY OTHER PURPOSE WHICH
MIGHT CONSTITUTE THIS TRANSACTION A “PURPOSE CREDIT” WITHIN THE MEANING OF
REGULATION U OR REGULATION X.  AS OF THE CLOSING DATE, BORROWER DOES NOT OWN ANY
“MARGIN STOCK.”

 

47

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

 

 

4.1.15  UTILITIES AND PUBLIC ACCESS.  THE PROPERTY HAS RIGHTS OF ACCESS TO
PUBLIC WAYS AND IS SERVED BY WATER, SEWER, SANITARY SEWER AND STORM DRAIN
FACILITIES ADEQUATE IN ALL MATERIAL RESPECTS TO SERVICE THE PROPERTY FOR ITS
INTENDED USES.  ALL UTILITIES NECESSARY FOR THE EXISTING USE OF THE PROPERTY 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 POLICY.  ALL ROADS NECESSARY FOR THE USE OF THE PROPERTY
FOR ITS CURRENT PURPOSES HAVE BEEN COMPLETED AND, IF NECESSARY, DEDICATED TO
PUBLIC USE.

4.1.16  NOT A FOREIGN PERSON.  BORROWER IS NOT A FOREIGN PERSON WITHIN THE
MEANING OF § 1445(F)(3) OF THE CODE.

4.1.17  SEPARATE LOTS.  THE PROPERTY IS COMPRISED OF ONE OR MORE CONTIGUOUS
PARCELS WHICH CONSTITUTE A SEPARATE TAX LOT OR LOTS AND DOES NOT CONSTITUTE OR
INCLUDE A PORTION OF ANY OTHER TAX LOT NOT A PART OF THE PROPERTY.

4.1.18  ASSESSMENTS.   TO THE BEST OF BORROWER’S KNOWLEDGE, THERE ARE NO PENDING
OR PROPOSED SPECIAL OR OTHER ASSESSMENTS FOR PUBLIC IMPROVEMENTS OR OTHERWISE
AFFECTING THE PROPERTY, EXCEPT AS SPECIFIED IN THE TITLE POLICY, NOR ARE THERE
ANY CONTEMPLATED IMPROVEMENTS TO THE PROPERTY THAT MAY RESULT IN SUCH SPECIAL OR
OTHER ASSESSMENTS.

4.1.19  ENFORCEABILITY.   THE LOAN DOCUMENTS ARE NOT SUBJECT TO ANY EXISTING
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 (SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY, MORATORIUM AND
SIMILAR LAWS 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) AND AN IMPLIED
COVENANT OF GOOD FAITH AND FAIR DEALING), AND BORROWER HAS NOT ASSERTED ANY
RIGHT OF RESCISSION, SET-OFF, COUNTERCLAIM OR DEFENSE WITH RESPECT THERETO.

4.1.20  NO PRIOR ASSIGNMENT.  THERE ARE NO PRIOR SALES, TRANSFERS, PLEDGES,
HYPOTHECATIONS OR ASSIGNMENTS OF THE LEASES OR ANY PORTION OF THE RENTS DUE AND
PAYABLE OR TO BECOME DUE AND PAYABLE WHICH ARE PRESENTLY OUTSTANDING FOLLOWING
THE FUNDING OF THE LOAN, OTHER THAN THOSE BEING TERMINATED OR ASSIGNED TO LENDER
CONCURRENTLY HEREWITH.

4.1.21  INSURANCE.   BORROWER HAS OBTAINED AND HAS DELIVERED TO LENDER
CERTIFICATES OF INSURANCE, REFLECTING THE INSURANCE COVERAGES, AMOUNTS AND OTHER
REQUIREMENTS SET FORTH IN THIS AGREEMENT.  BORROWER HAS NOT, AND TO THE BEST OF
BORROWER’S KNOWLEDGE, NO PERSON HAS, DONE BY ACT OR OMISSION ANYTHING WHICH
WOULD IMPAIR THE COVERAGE OF ANY SUCH POLICY IN ANY MATERIAL RESPECT.

4.1.22  USE OF PROPERTY.  THE PROPERTY IS USED EXCLUSIVELY FOR RETAIL PURPOSES,
OTHER APPURTENANT AND RELATED USES (INCLUDING PARKING) AND THE USES SPECIFIED IN
THE LEASES, AS A COMMUNITY CENTER, AND AS A PAID PARKING FACILITY.

 

48

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

 

 

4.1.23  CERTIFICATE OF OCCUPANCY; LICENSES.  EXCEPT AS OTHERWISE SPECIFICALLY
SET FORTH ON SCHEDULE 4.1.23, ALL CERTIFICATIONS, PERMITS, LICENSES AND
APPROVALS, INCLUDING WITHOUT LIMITATION, CERTIFICATES OF COMPLETION AND
OCCUPANCY PERMITS REQUIRED OF BORROWER FOR THE LEGAL USE, OCCUPANCY AND
OPERATION OF THE PROPERTY AS IT IS PRESENTLY USED (COLLECTIVELY, THE
“LICENSES”), HAVE BEEN OBTAINED AND ARE IN FULL FORCE AND EFFECT, EXCEPT FOR
THOSE THE FAILURE OF WHICH TO OBTAIN AND MAINTAIN IN FULL FORCE AND EFFECT WOULD
NOT REASONABLY BE EXPECTED TO HAVE AND DOES NOT HAVE A MATERIAL ADVERSE EFFECT. 
BORROWER SHALL KEEP AND MAINTAIN ALL LICENSES NECESSARY FOR THE OPERATION OF THE
PROPERTY AS IT IS PRESENTLY USED, EXCEPT WHERE FAILURE TO MAINTAIN A LICENSE
WOULD NOT REASONABLY BE EXPECTED TO CAUSE OR DOES NOT CAUSE A MATERIAL ADVERSE
EFFECT.  EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH ON SCHEDULE 4.1.23, THE USE
BEING MADE OF THE PROPERTY IS IN CONFORMITY WITH THE TEMPORARY CERTIFICATE OR
CERTIFICATES OF OCCUPANCY ISSUED FOR THE PROPERTY IN ALL MATERIAL RESPECTS.

4.1.24  FLOOD ZONE.  NONE OF THE IMPROVEMENTS ON THE PROPERTY ARE LOCATED IN AN
AREA AS IDENTIFIED BY THE FEDERAL EMERGENCY MANAGEMENT AGENCY AS AN AREA HAVING
SPECIAL FLOOD HAZARDS.

4.1.25 PHYSICAL CONDITION.  TO THE BEST OF BORROWER’S KNOWLEDGE AND EXCEPT AS
EXPRESSLY DISCLOSED IN THE PHYSICAL CONDITIONS REPORT, 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 (ORDINARY WEAR AND TEAR
EXCEPTED).  TO THE BEST OF BORROWER’S KNOWLEDGE AND EXCEPT AS DISCLOSED IN THE
PHYSICAL CONDITIONS REPORT, THERE EXISTS NO STRUCTURAL OR OTHER MATERIAL DEFECTS
OR DAMAGES IN OR TO THE PROPERTY, WHETHER LATENT OR OTHERWISE, AND BORROWER HAS
NOT RECEIVED ANY WRITTEN NOTICE FROM ANY INSURANCE COMPANY OR BONDING COMPANY OF
ANY DEFECTS OR INADEQUACIES IN THE PROPERTY, OR ANY PART THEREOF, WHICH WOULD
MATERIALLY 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.

4.1.26  BOUNDARIES.   TO THE BEST OF BORROWER’S KNOWLEDGE AND IN RELIANCE ON,
AND EXCEPT AS OTHERWISE SPECIFICALLY DISCLOSED IN, THE SURVEY, ALL OF THE
IMPROVEMENTS LIE WHOLLY WITHIN THE BOUNDARIES AND BUILDING RESTRICTION LINES OF
THE PROPERTY, AND NO IMPROVEMENTS ON ADJOINING PROPERTIES ENCROACH UPON THE
PROPERTY, AND NO EASEMENTS OR OTHER ENCUMBRANCES UPON THE PROPERTY ENCROACH UPON
ANY OF THE IMPROVEMENTS, WHICH WOULD REASONABLY BE EXPECTED TO HAVE, OR DOES
HAVE, A MATERIAL ADVERSE EFFECT, EXCEPT THOSE WHICH ARE INSURED AGAINST BY THE
TITLE POLICY.

4.1.27  LEASES.   (A)  THE PROPERTY IS NOT SUBJECT TO ANY LEASES OTHER THAN THE
LEASES DESCRIBED IN THE RENT ROLL DELIVERED TO LENDER AS OF THE CLOSING DATE AND
ATTACHED HERETO AS SCHEDULE 4.1.27 (THE “RENT ROLL”), OR, TO BORROWER’S
KNOWLEDGE, ANY SUBLEASE OR LICENSE GRANTED BY ANY TENANT (OR SUB‑TENANT) UNDER A
LEASE.  THE RENT ROLL IS TRUE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS AS
OF THE DATE SET FORTH THEREIN.  EXCEPT AS OTHERWISE SET FORTH ON THE RENT ROLL,
NO PERSON HAS ANY POSSESSORY INTEREST IN THE PROPERTY OR RIGHT TO OCCUPY THE
SAME EXCEPT UNDER AND PURSUANT TO THE PROVISIONS OF THE LEASES OR ANY SUBLEASE
OR LICENSE GRANTED BY ANY TENANT (OR SUBTENANT) UNDER A LEASE.  THE CURRENT
LEASES ARE IN FULL FORCE AND EFFECT AND, TO BORROWER’S KNOWLEDGE, THERE ARE NO
MATERIAL DEFAULTS THEREUNDER BY EITHER PARTY (OTHER THAN AS

49

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

 

 

EXPRESSLY DISCLOSED ON THE RENT ROLL OR THE TENANT ESTOPPEL CERTIFICATES
DELIVERED TO LENDER IN CONNECTION WITH THE CLOSING OF THE LOAN) AND THERE ARE NO
CONDITIONS THAT, WITH THE PASSAGE OF TIME OR THE GIVING OF NOTICE, OR BOTH,
WOULD CONSTITUTE MATERIAL DEFAULTS THEREUNDER (OTHER THAN AS EXPRESSLY DISCLOSED
ON THE RENT ROLL OR THE TENANT ESTOPPEL CERTIFICATES DELIVERED TO LENDER IN
CONNECTION WITH THE CLOSING OF THE LOAN).  NO TENANT UNDER ANY LEASE HAS A RIGHT
OR OPTION PURSUANT TO SUCH LEASE OR OTHERWISE TO PURCHASE ALL OR ANY PART OF THE
PROPERTY OF WHICH THE LEASED PREMISES ARE A PART, OTHER THAN AS EXPRESSLY
DISCLOSED ON THE RENT ROLL OR THE TENANT ESTOPPEL CERTIFICATES DELIVERED TO
LENDER IN CONNECTION WITH THE CLOSING OF THE LOAN.

(B)               BORROWER REPRESENTS THAT IT HAS HERETOFORE DELIVERED TO LENDER
TRUE AND COMPLETE COPIES OF ALL LEASES AND ANY AND ALL AMENDMENTS OR
MODIFICATIONS THEREOF.  EXCEPT AS OTHERWISE EXPRESSLY DISCLOSED (I) ON THE RENT
ROLL, (II) ON THE TENANT ESTOPPEL CERTIFICATES DELIVERED TO LENDER IN CONNECTION
WITH THE CLOSING OF THE LOAN, (III) TO LENDER IN WRITING, TO BORROWER’S
KNOWLEDGE, BORROWER OR ITS PREDECESSORS HAVE COMPLIED WITH AND PERFORMED ALL OF
ITS OR THEIR (I) MATERIAL CONSTRUCTION, IMPROVEMENT AND ALTERATION OBLIGATIONS
WITH RESPECT TO THE PROPERTY REQUIRED AS OF THE DATE HEREOF AND (II) OTHER
MATERIAL OBLIGATIONS UNDER THE LEASES REQUIRED AS OF THE DATE HEREOF TO BE
PERFORMED.

4.1.28  FILING AND RECORDING TAXES.  ALL TRANSFER TAXES, DEED STAMPS, INTANGIBLE
TAXES OR OTHER AMOUNTS IN THE NATURE OF TRANSFER TAXES REQUIRED TO BE PAID BY
ANY PERSON UNDER APPLICABLE LEGAL REQUIREMENTS CURRENTLY IN EFFECT IN CONNECTION
WITH THE TRANSFER OF THE PROPERTY TO BORROWER HAVE BEEN PAID AND THE GRANTING
AND RECORDING OF THE MORTGAGE AND THE UCC FINANCING STATEMENTS REQUIRED TO BE
FILED IN CONNECTION WITH THE LOAN.  ALL MORTGAGE, MORTGAGE RECORDING, STAMP,
INTANGIBLE OR OTHER SIMILAR TAX REQUIRED TO BE PAID BY ANY PERSON UNDER
APPLICABLE LEGAL REQUIREMENTS CURRENTLY IN EFFECT IN CONNECTION WITH THE
EXECUTION, DELIVERY, RECORDATION, FILING, REGISTRATION, PERFECTION OR
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE
MORTGAGE, HAVE BEEN PAID, AND, UNDER CURRENT LEGAL REQUIREMENTS, THE MORTGAGE IS
ENFORCEABLE AGAINST BORROWER IN ACCORDANCE WITH ITS TERMS BY LENDER (OR ANY
SUBSEQUENT HOLDER THEREOF) SUBJECT ONLY TO APPLICABLE BANKRUPTCY, INSOLVENCY,
MORATORIUM AND SIMILAR LAWS AFFECTING RIGHTS OF CREDITORS GENERALLY, AND TO
GENERAL PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER ENFORCEMENT IS SOUGHT IN A
PROCEEDING IN EQUITY OR AT LAW).

4.1.29  SINGLE PURPOSE ENTITY/SEPARATENESS.  BORROWER HEREBY REPRESENTS AND
WARRANTS THAT FROM THE DATE OF ITS FORMATION UNTIL THE DATE HEREOF, BORROWER HAS
COMPLIED IN ALL MATERIAL RESPECTS WITH ALL OF THE COVENANTS SET FORTH IN
SECTION 5.1.4, AS QUALIFIED THEREIN, EXCEPT TO THE EXTENT ANY SUCH COVENANT IN
SECTION 5.1.4 STATES THAT IT IS MADE FROM AND AFTER THE DATE HEREOF.

4.1.30  MANAGEMENT AGREEMENT.  THE MANAGEMENT AGREEMENT IS IN FULL FORCE AND
EFFECT AND THERE IS NO CURRENT MATERIAL DEFAULT THEREUNDER BY ANY PARTY THERETO
AND NO EVENT CURRENTLY EXISTS THAT, WITH THE PASSAGE OF TIME AND/OR THE GIVING
OF NOTICE, WOULD CONSTITUTE A MATERIAL DEFAULT THEREUNDER WHICH HAS NOT
OTHERWISE BEEN WAIVED.  THE MANAGER IS AN AFFILIATE OF BORROWER.

4.1.31  ILLEGAL ACTIVITY.  NO PORTION OF THE PROPERTY HAS BEEN OR WILL BE
PURCHASED WITH PROCEEDS OF ANY ILLEGAL ACTIVITY.

 

50

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

 

 

 

4.1.32  NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE.  THE RENT ROLL AND ALL
OTHER FINANCIAL STATEMENTS SUBMITTED BY BORROWER IN CONNECTION WITH THE LOAN ARE
ACCURATE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS.  ALL OTHER WRITTEN
INFORMATION, REPORTS, CERTIFICATES AND OTHER DOCUMENTS SUBMITTED BY BORROWER TO
LENDER IN CONNECTION WITH THE LOAN ARE, TO THE BEST OF BORROWER’S KNOWLEDGE,
ACCURATE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS.  EXCEPT WITH RESPECT TO
SUCH REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT OR IN ANY OTHER
LOAN DOCUMENT WHICH ARE QUALIFIED AS BEING MADE TO THE BEST OF BORROWER’S
KNOWLEDGE, ALL REPRESENTATIONS AND WARRANTIES 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 KNOWN TO BORROWER
IN ANY CONDITION, FACT, CIRCUMSTANCE OR EVENT (A) THAT WOULD MAKE ANY SUCH
INFORMATION INACCURATE, INCOMPLETE OR OTHERWISE MISLEADING IN ANY MATERIAL
RESPECT OR (B) WHICH WOULD REASONABLY BE EXPECTED TO HAVE OR DOES HAVE A
MATERIAL ADVERSE EFFECT.

4.1.33  TAX FILINGS.  BORROWER HAS FILED (OR HAS OBTAINED EFFECTIVE EXTENSIONS
FOR FILING) ALL FEDERAL, STATE AND LOCAL TAX RETURNS REQUIRED TO BE FILED, IT
BEING ACKNOWLEDGED THAT BORROWER IS A DISREGARDED ENTITY FOR FEDERAL INCOME TAX
PURPOSES AND DOES NOT CURRENTLY FILE ITS OWN TAX RETURNS, AND HAS PAID OR MADE
ADEQUATE PROVISION FOR THE PAYMENT OF ALL FEDERAL, STATE AND LOCAL TAXES,
CHARGES AND ASSESSMENTS PAYABLE BY BORROWER. 

4.1.34  SOLVENCY/FRAUDULENT CONVEYANCE.  BORROWER (A) HAS NOT ENTERED INTO THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT OR ANY LOAN DOCUMENT WITH THE ACTUAL
INTENT TO HINDER, DELAY, OR DEFRAUD ANY CREDITOR AND (B) HAS RECEIVED REASONABLY
EQUIVALENT VALUE IN EXCHANGE FOR ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.  THE
FAIR SALEABLE VALUE OF BORROWER’S ASSETS EXCEED AND WILL, IMMEDIATELY FOLLOWING
THE MAKING OF THE LOAN, EXCEED BORROWER’S TOTAL LIABILITIES, INCLUDING, WITHOUT
LIMITATION, SUBORDINATED, UNLIQUIDATED, DISPUTED AND CONTINGENT LIABILITIES. 
BORROWER’S ASSETS DO NOT AND, IMMEDIATELY FOLLOWING THE MAKING OF THE LOAN WILL
NOT, CONSTITUTE UNREASONABLY SMALL CAPITAL TO CARRY OUT ITS RESPECTIVE
BUSINESSES AS CONDUCTED OR AS PROPOSED TO BE CONDUCTED AND BORROWER DOES NOT
INTEND TO, AND DOES NOT BELIEVE THAT IT WILL, INCUR DEBT AND LIABILITIES
(INCLUDING CONTINGENT LIABILITIES AND OTHER COMMITMENTS) BEYOND ITS ABILITY TO
PAY SUCH DEBT AND LIABILITIES AS THEY MATURE (TAKING INTO ACCOUNT THE TIMING AND
AMOUNTS OF CASH TO BE RECEIVED BY BORROWER AND THE AMOUNTS TO BE PAYABLE ON OR
IN RESPECT OF ITS OBLIGATIONS).

4.1.35  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 OR (B) SUBJECT TO ANY OTHER FEDERAL
OR STATE LAW OR REGULATION WHICH PURPORTS TO RESTRICT OR REGULATE ITS ABILITY TO
BORROW MONEY.

4.1.36  LABOR   BORROWER (A) IS NOT INVOLVED IN OR, TO THE BEST OF BORROWER’S
KNOWLEDGE, THREATENED WITH ANY (I) LABOR DISPUTE, WORK STOPPAGE OR LABOR STRIKE
OR (II) ANY GRIEVANCE OR LITIGATION RELATING TO LABOR MATTERS INVOLVING ANY
EMPLOYEES OR OTHER LABORERS AT THE PROPERTY, INCLUDING, WITHOUT LIMITATION,
VIOLATION OF ANY FEDERAL, STATE OR LOCAL LABOR, SAFETY OR EMPLOYMENT LAWS
(DOMESTIC OR FOREIGN) AND/OR CHARGES OF UNFAIR LABOR PRACTICES OR DISCRIMINATION
COMPLAINTS WHICH, IF DETERMINED ADVERSELY TO BORROWER, WOULD RESULT IN A
MATERIAL ADVERSE EFFECT, (B) HAS NOT ENGAGED, NOR, TO THE BEST OF BORROWER’S
KNOWLEDGE, HAS THERE BEEN ANY ALLEGATIONS IN ANY PROCEEDING THAT BORROWER HAS
ENGAGED IN ANY UNFAIR LABOR PRACTICES WITHIN THE MEANING OF THE NATIONAL LABOR
RELATIONS ACT OR THE RAILWAY LABOR ACT, AND (C) IS NOT A PARTY TO,

51

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

 

 

OR BOUND BY, ANY COLLECTIVE BARGAINING AGREEMENT OR UNION CONTRACT WITH RESPECT
TO EMPLOYEES AND OTHER LABORERS AT THE PROPERTY AND NO SUCH AGREEMENT OR
CONTRACT IS CURRENTLY BEING NEGOTIATED BY BORROWER OR ANY OF ITS AFFILIATES WITH
RESPECT TO THE PROPERTY.

4.1.37  BROKERS.   BORROWER HAS NOT DEALT WITH ANY BROKER OR FINDER WITH RESPECT
TO THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS AND NEITHER PARTY HAS
DONE ANY ACTS, HAD ANY NEGOTIATIONS OR CONVERSATIONS, OR MADE ANY AGREEMENTS OR
PROMISES WHICH WILL IN ANY WAY CREATE OR GIVE RISE TO ANY OBLIGATION OR
LIABILITY FOR THE PAYMENT BY THE OTHER PARTY OF ANY BROKERAGE FEE, CHARGE,
COMMISSION OR OTHER COMPENSATION TO ANY PERSON WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS.  BORROWER SHALL INDEMNIFY AND HOLD HARMLESS
LENDER FROM AND AGAINST ANY LOSS, LIABILITY, COST OR EXPENSE, INCLUDING ANY
JUDGMENTS, ATTORNEYS’ FEES, OR COSTS OF APPEAL, INCURRED BY LENDER AND ARISING
OUT OF OR RELATING TO ANY BREACH OR DEFAULT BY THE INDEMNIFYING PARTY OF ITS
REPRESENTATIONS, WARRANTIES AND/OR AGREEMENTS SET FORTH IN THIS SECTION 4.1.37. 
THE PROVISIONS OF THIS SECTION 4.1.37 SHALL SURVIVE THE EXPIRATION AND
TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF THE INDEBTEDNESS.

4.1.38  NO OTHER DEBT.  BORROWER HAS NOT BORROWED OR RECEIVED DEBT FINANCING
THAT HAS NOT BEEN HERETOFORE REPAID IN FULL, OTHER THAN THE PERMITTED DEBT.

4.1.39 TAXPAYER IDENTIFICATION NUMBER.  BORROWER’S FEDERAL TAXPAYER
IDENTIFICATION NUMBER IS 45-2661556.

4.1.40  PATRIOT ACT COMPLIANCE. (A)  NEITHER OF BORROWER NOR ALX (I) IS LISTED
ON ANY GOVERNMENT LISTS (AS DEFINED BELOW), (II) IS A PERSON WHO HAS BEEN
DETERMINED BY COMPETENT AUTHORITY TO BE SUBJECT TO THE PROHIBITIONS CONTAINED IN
PRESIDENTIAL EXECUTIVE ORDER NO. 13224 (SEPT. 23, 2001) OR ANY OTHER SIMILAR
PROHIBITIONS CONTAINED IN THE RULES AND REGULATIONS OF OFAC (AS DEFINED BELOW)
OR IN ANY ENABLING LEGISLATION OR OTHER PRESIDENTIAL EXECUTIVE ORDERS IN RESPECT
THEREOF, OR (III) HAS BEEN PREVIOUSLY INDICTED FOR OR CONVICTED OF ANY PATRIOT
ACT OFFENSE (AS DEFINED BELOW).  FOR PURPOSES HEREOF, THE TERM “PATRIOT ACT
OFFENSE” MEANS ANY VIOLATION OF THE CRIMINAL LAWS OF THE UNITED STATES OF
AMERICA OR OF ANY OF THE SEVERAL STATES, OR THAT WOULD BE A CRIMINAL VIOLATION
IF COMMITTED WITHIN THE JURISDICTION OF THE UNITED STATES OF AMERICA OR ANY OF
THE SEVERAL STATES, RELATING TO TERRORISM OR THE LAUNDERING OF MONETARY
INSTRUMENTS, INCLUDING ANY OFFENSE UNDER (A) THE CRIMINAL LAWS AGAINST
TERRORISM, (B) THE CRIMINAL LAWS AGAINST MONEY LAUNDERING, (C) THE BANK SECRECY
ACT, AS AMENDED, (D) THE MONEY LAUNDERING CONTROL ACT OF 1986, AS AMENDED, OR
(E) THE PATRIOT ACT.  “PATRIOT ACT OFFENSE” ALSO INCLUDES THE CRIMES OF
CONSPIRACY TO COMMIT, OR AIDING AND ABETTING ANOTHER TO COMMIT, A PATRIOT ACT
OFFENSE.  FOR PURPOSES HEREOF, THE TERM “GOVERNMENT LISTS” MEANS (A) THE
SPECIALLY DESIGNATED NATIONALS AND BLOCKED PERSONS LISTS MAINTAINED BY OFFICE OF
FOREIGN ASSETS CONTROL (“OFAC”), (B) ANY OTHER LIST OF TERRORISTS, TERRORIST
ORGANIZATIONS OR NARCOTICS TRAFFICKERS MAINTAINED PURSUANT TO ANY OF THE RULES
AND REGULATIONS OF OFAC THAT LENDER NOTIFIED BORROWER IN WRITING IS NOW INCLUDED
IN “GOVERNMENTAL LISTS”, OR (C) ANY SIMILAR LISTS MAINTAINED BY THE UNITED
STATES DEPARTMENT OF STATE, THE UNITED STATES DEPARTMENT OF COMMERCE OR ANY
OTHER GOVERNMENT AUTHORITY OR PURSUANT TO ANY EXECUTIVE ORDER OF THE PRESIDENT
OF THE UNITED STATES OF AMERICA THAT LENDER NOTIFIED BORROWER IN WRITING IS NOW
INCLUDED IN “GOVERNMENTAL LISTS”.

(B)               BORROWER WILL USE ITS GOOD FAITH AND COMMERCIALLY REASONABLE
EFFORTS TO COMPLY WITH THE PATRIOT ACT AND ALL APPLICABLE REQUIREMENTS OF
GOVERNMENTAL AUTHORITIES HAVING JURISDICTION OVER BORROWER AND THE PROPERTY,
WHICH RELATE TO MONEY LAUNDERING AND TERRORISM. 

52

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

 

 

IF, AT ANY TIME, LENDER HAS A REASONABLE BELIEF THAT BORROWER IS NOT IN
COMPLIANCE WITH THE PATRIOT ACT OR ANY APPLICABLE REQUIREMENT OF GOVERNMENTAL
AUTHORITIES HAVING JURISDICTION OVER BORROWER AND THE PROPERTY WHICH RELATES TO
MONEY LAUNDERING AND/OR TERRORISM, UPON TEN (10) DAYS NOTICE TO BORROWER, LENDER
SHALL HAVE THE RIGHT TO AUDIT BORROWER’S COMPLIANCE WITH THE PATRIOT ACT AND ALL
APPLICABLE REQUIREMENTS OF GOVERNMENTAL AUTHORITIES HAVING JURISDICTION OVER
BORROWER AND THE PROPERTY, WHICH RELATE TO MONEY LAUNDERING AND TERRORISM.  IN
THE EVENT THAT BORROWER FAILS TO COMPLY WITH THE PATRIOT ACT OR ANY SUCH
REQUIREMENTS OF GOVERNMENTAL AUTHORITIES RELATING TO MONEY LAUNDERING AND
TERRORISM, THEN LENDER MAY, AT ITS OPTION, CAUSE BORROWER TO COMPLY THEREWITH
AND ANY AND ALL REASONABLE COSTS AND EXPENSES INCURRED BY LENDER IN CONNECTION
THEREWITH SHALL BE SECURED BY THE MORTGAGE AND THE OTHER LOAN DOCUMENTS AND
SHALL BE IMMEDIATELY DUE AND PAYABLE.

4.1.41  ANTI-TERRORISM COMPLIANCE.  NO PORTION OF THE PROCEEDS OF THE LOAN WILL
BE USED, ARE NEEDED, OR WILL BE INVESTED BY THE BORROWER, ANY AFFILIATES OF
BORROWER AND/OR ALX, IN ORDER TO SUPPORT INTERNATIONAL TERRORISM OR ACTIVITIES
THAT MAY CONTRAVENE U.S. FEDERAL OR STATE ANTI-MONEY LAUNDERING LAWS AND
REGULATIONS.  BORROWER UNDERSTANDS AND HEREBY ACKNOWLEDGES THAT LENDER HAS
CERTAIN ANTI-MONEY LAUNDERING RESPONSIBILITIES UNDER VARIOUS LAWS AND
REGULATIONS OF THE UNITED STATES OF AMERICA AND SHALL DELIVER TO LENDER, IN EACH
CASE, AS REASONABLY REQUESTED BY LENDER OR, TO THE EXTENT BORROWER HAS THE RIGHT
TO OBTAIN SUCH INFORMATION, AS REQUESTED BY GOVERNMENTAL ENTITIES ADMINISTERING
SUCH LAWS AND REGULATIONS, INFORMATION REGARDING BORROWER’S DIRECT AND INDIRECT
BENEFICIAL OWNERS’ IDENTITIES OR SOURCES OF FUNDS OR OTHER SIMILAR INFORMATION
AND MAY SEEK TO ENSURE THAT REPRESENTATIVES OR DIRECT OR INDIRECT BENEFICIAL
OWNERS OF BORROWER ARE NOT NAMED ON ONE OF THE GOVERNMENT LISTS.  BORROWER
AGREES, UPON THE REASONABLE REQUEST OF LENDER, TO PROVIDE LENDER ADDITIONAL
INFORMATION AS MAY BE NECESSARY OR ADVISABLE IN ORDER TO SATISFY THEIR
ANTI-MONEY LAUNDERING RESPONSIBILITIES UNDER VARIOUS LAWS AND REGULATIONS OF THE
UNITED STATES OF AMERICA.

4.1.42  NO DEFAULT.  NO DEFAULT OR EVENT OF DEFAULT UNDER THE LOAN DOCUMENTS HAS
OCCURRED OR IS CONTINUING OR WILL RESULT FROM THE ENTRY INTO OF, OR THE
PERFORMANCE OF ANY TRANSACTION CONTEMPLATED BY, ANY LOAN DOCUMENT.

4.1.43 NO REGISTRATION.  EXCEPT FOR RECORDATION OF THE MORTGAGE AND THE
ASSIGNMENT OF LEASES AND THE FILING OF ANY UNIFORM COMMERCIAL CODE FINANCING
STATEMENTS REQUIRED BY LENDER IN CONNECTION WITH THE LOAN, IT IS NOT NECESSARY
TO FILE, REGISTER OR RECORD ANY LOAN DOCUMENTS IN ANY PUBLIC PLACE OR ELSEWHERE,
EXCEPT AS MAY BE REQUIRED BY APPLICABLE SECURITIES LAWS AND REGULATIONS,
INCLUDING APPLICABLE STOCK EXCHANGE RULES.

4.1.44  NO SUBSIDIARIES.  AS OF THE CLOSING DATE, BORROWER DOES NOT HAVE ANY
SUBSIDIARIES.

4.1.45  REA.  EACH OF THE REAS IS IN FULL FORCE AND EFFECT AND NEITHER BORROWER
NOR, TO BORROWER’S KNOWLEDGE, ANY OTHER PARTY TO ANY SUCH REA, IS IN DEFAULT
THEREUNDER, THAT WOULD HAVE A MATERIAL ADVERSE EFFECT, AND TO THE BEST OF
BORROWER’S KNOWLEDGE, THERE ARE NO CONDITIONS WHICH, WITH THE PASSAGE OF TIME OR
THE GIVING OF NOTICE, OR BOTH, WOULD CONSTITUTE A DEFAULT THEREUNDER THAT WOULD
HAVE A MATERIAL ADVERSE EFFECT.

 

53

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

 

 

 

SECTION 4.2  SURVIVAL OF REPRESENTATIONS.  BORROWER AGREES THAT ALL OF THE
REPRESENTATIONS AND WARRANTIES OF BORROWER SET FORTH IN 0 AND ELSEWHERE IN THIS
AGREEMENT AND IN THE OTHER LOAN DOCUMENTS SHALL BE DEEMED GIVEN AND MADE AS OF
THE DATE HEREOF AND SURVIVE FOR SO LONG AS ANY AMOUNT REMAINS OWING TO LENDER
UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS BY BORROWER OR GUARANTOR
UNLESS A LONGER SURVIVAL PERIOD IS EXPRESSLY STATED IN A LOAN DOCUMENT WITH
RESPECT TO A SPECIFIC REPRESENTATION OR WARRANTY, IN WHICH CASE, FOR SUCH LONGER
PERIOD.

SECTION 4.3  LENDER’S REPRESENTATIONS. 

4.3.1  BROKERS.   LENDER HAS NOT DEALT WITH ANY BROKER OR FINDER WITH RESPECT TO
THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS AND LENDER HAS NOT DONE ANY
ACTS, HAD ANY NEGOTIATIONS OR CONVERSATIONS, OR MADE ANY AGREEMENTS OR PROMISES
WHICH WILL IN ANY WAY CREATE OR GIVE RISE TO ANY OBLIGATION OR LIABILITY FOR THE
PAYMENT BY BORROWER OR ANY AFFILIATE OF BORROWER OF ANY BROKERAGE FEE, CHARGE,
COMMISSION OR OTHER COMPENSATION TO ANY PERSON WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS.  LENDER SHALL INDEMNIFY AND HOLD HARMLESS
BORROWER AND ITS AFFILIATES FROM AND AGAINST ANY LOSS, LIABILITY, COST OR
EXPENSE, INCLUDING ANY JUDGMENTS, ATTORNEYS’ FEES, OR COSTS OF APPEAL, INCURRED
BY BORROWER OR ITS AFFILIATES AND ARISING OUT OF OR RELATING TO ANY BREACH OR
DEFAULT BY THE INDEMNIFYING PARTY OF ITS REPRESENTATIONS, WARRANTIES AND/OR
AGREEMENTS SET FORTH IN THIS SECTION 4.3.1.  THE PROVISIONS OF THIS
SECTION 4.3.1 SHALL SURVIVE THE EXPIRATION AND TERMINATION OF THIS AGREEMENT AND
THE PAYMENT OF THE INDEBTEDNESS.

ARTICLE V

BORROWER COVENANTS

SECTION 5.1  AFFIRMATIVE COVENANTS.  FROM THE CLOSING DATE AND UNTIL PAYMENT AND
PERFORMANCE IN FULL OF ALL OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS,
BORROWER HEREBY COVENANTS AND AGREES WITH LENDER THAT:

5.1.1  PERFORMANCE BY BORROWER.  BORROWER SHALL IN A TIMELY MANNER OBSERVE,
PERFORM AND FULFILL EACH AND EVERY COVENANT, TERM AND PROVISION OF EACH LOAN
DOCUMENT EXECUTED AND DELIVERED BY, OR APPLICABLE TO, BORROWER, AND, EXCEPT AS
PROVIDED HEREIN OR IN ANY OTHER LOAN DOCUMENT, SHALL NOT ENTER INTO OR OTHERWISE
SUFFER OR PERMIT ANY AMENDMENT, WAIVER, SUPPLEMENT, TERMINATION OR OTHER
MODIFICATION OF ANY LOAN DOCUMENT EXECUTED AND DELIVERED BY, OR APPLICABLE TO,
BORROWER, AS APPLICABLE, WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER OR AS
PERMITTED BY THE LOAN DOCUMENTS.

5.1.2  EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS; INSURANCE.  SUBJECT TO
BORROWER’S RIGHT OF CONTEST PURSUANT TO SECTION 7.3, BORROWER SHALL AT ALL TIMES
COMPLY AND CAUSE THE PROPERTY TO BE IN COMPLIANCE WITH ALL LEGAL REQUIREMENTS
APPLICABLE TO BORROWER AND THE PROPERTY AND THE USES PERMITTED UPON THE PROPERTY
WHERE THE FAILURE TO SO COMPLY WOULD REASONABLY BE EXPECTED TO HAVE, OR DOES
HAVE, A MATERIAL ADVERSE EFFECT.  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 NECESSARY TO COMPLY WITH ALL
LEGAL REQUIREMENTS APPLICABLE TO IT AND THE PROPERTY EXCEPT WHERE THE FAILURE TO
SO COMPLY WOULD NOT

 

54

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

 

 

REASONABLY BE EXPECTED TO HAVE AND DOES NOT HAVE A MATERIAL ADVERSE EFFECT. 
BORROWER SHALL AT ALL TIMES COMPLY WITH PRESCRIBED LAWS.  THERE SHALL NEVER BE
COMMITTED BY BORROWER, AND BORROWER SHALL NOT KNOWINGLY PERMIT ANY OTHER PERSON
IN OCCUPANCY OF OR INVOLVED WITH THE OPERATION OR USE OF THE PROPERTY TO COMMIT,
ANY ACT OR OMISSION AFFORDING THE FEDERAL GOVERNMENT OR ANY STATE OR LOCAL
GOVERNMENT THE RIGHT OF FORFEITURE AS AGAINST ANY MATERIAL PART OF THE PROPERTY
OR ANY MONIES PAID IN PERFORMANCE OF BORROWER’S OBLIGATIONS UNDER ANY OF THE
LOAN DOCUMENTS.  BORROWER HEREBY COVENANTS AND AGREES NOT TO COMMIT, KNOWINGLY
PERMIT OR SUFFER TO EXIST ANY ACT OR OMISSION AFFORDING SUCH RIGHT OF
FORFEITURE.  BORROWER SHALL AT ALL TIMES MAINTAIN, PRESERVE AND PROTECT ALL
FRANCHISES AND TRADE NAMES AND PRESERVE ALL THE REMAINDER OF ITS PROPERTY USED
IN THE CONDUCT OF ITS BUSINESS AND SHALL KEEP THE PROPERTY IN GOOD WORKING ORDER
AND REPAIR, AND FROM TIME TO TIME MAKE, OR CAUSE TO BE MADE, ALL REASONABLY
NECESSARY REPAIRS, RENEWALS, REPLACEMENTS, BETTERMENTS AND IMPROVEMENTS THERETO,
ALL AS MORE FULLY SET FORTH IN THE MORTGAGE, IN EACH CASE WHERE THE FAILURE TO
DO SO WOULD NOT REASONABLY BE EXPECTED TO RESULT IN, AND DOES NOT RESULT IN A
MATERIAL ADVERSE EFFECT.  BORROWER SHALL KEEP THE PROPERTY INSURED AT ALL TIMES
TO SUCH EXTENT AND AGAINST SUCH RISKS, AND MAINTAIN LIABILITY AND SUCH OTHER
INSURANCE, AS IS MORE FULLY SET FORTH IN THIS AGREEMENT.

5.1.3  NOTICE OF LITIGATION AND CERTAIN OCCURRENCES.  BORROWER SHALL GIVE PROMPT
WRITTEN NOTICE TO LENDER OF ANY LITIGATION OR PROCEEDING ASSERTED AGAINST
BORROWER OR THE PROPERTY OR ANY PART THEREOF WHICH WOULD REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT.

5.1.4  SINGLE PURPOSE ENTITY.  BORROWER HEREBY REPRESENTS AND WARRANTS TO, AND
COVENANTS WITH, LENDER THAT SINCE THE DATE OF ITS FORMATION (EXCEPT WITH RESPECT
TO ANY REPRESENTATION OR WARRANTY BELOW THAT IS QUALIFIED BY REFERENCE TO “FROM
AND AFTER THE DATE HEREOF”) AND AT ALL TIMES ON AND AFTER THE DATE THEREOF AND
UNTIL SUCH TIME AS THE OBLIGATIONS SHALL BE PAID AND PERFORMED OR OTHERWISE
SATISFIED IN FULL:

(A)               BORROWER HAS NOT CONDUCTED ANY BUSINESS OR OWNED, DOES NOT OWN
AND SHALL NOT OWN ANY ASSET OR PROPERTY OTHER THAN (I) THE PROPERTY AND
(II) INCIDENTAL PERSONAL PROPERTY NECESSARY OR APPROPRIATE FOR THE OPERATION OF
THE PROPERTY;

(B)                BORROWER’S PURPOSE IS SOLELY TO OWN, HOLD, LEASE, OPERATE,
FINANCE AND MANAGE THE PROPERTY, ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER
THE LOAN DOCUMENTS WITH LENDER, TO SELL, EXCHANGE, TRANSFER, REFINANCE OR
OTHERWISE DISPOSE OF THE PROPERTY TO THE EXTENT PERMITTED UNDER THE LOAN
DOCUMENTS AND TRANSACTING ANY AND ALL LAWFUL ACT OR ACTIVITY, AND TO EXERCISE
ANY POWER PERMITTED TO LIMITED LIABILITY COMPANIES ORGANIZED UNDER THE LAWS OF
THE STATE OF DELAWARE, THAT ARE RELATED OR INCIDENTAL TO AND NECESSARY,
CONVENIENT OR ADVISABLE TO THE ACCOMPLISHMENT OF THE FOREGOING;

(C)               BORROWER HAS NOT ENGAGED NOR SHALL IT ENGAGE IN ANY BUSINESS
OTHER THAN AS SET FORTH IN CLAUSES (A) AND (B); 

(D)                EXCEPT FOR (I) CAPITAL CONTRIBUTIONS AND CAPITAL
DISTRIBUTIONS, (II) THE GUARANTY, (III) ANY LETTER OF CREDIT ISSUED IN
CONNECTION WITH THE LOAN, (IV) ANY BOTTOM-UP GUARANTIES AS SET FORTH IN SECTION
15.23, (V) THE PLEDGE TO LENDER BY ALX OF ANY INTEREST RATE PROTECTION
AGREEMENT, (VI) THE ENVIRONMENTAL INDEMNITY AGREEMENT, AND (VII) CERTAIN CASH
MANAGEMENT ARRANGEMENTS AS SET FORTH IN SUB-PARAGRAPH (F) BELOW, AS APPLICABLE,
BORROWER HAS NOT ENTERED NOR SHALL IT ENTER INTO ANY TRANSACTIONS WITH ANY
AFFILIATE, ANY CONSTITUENT PARTY, ANY GUARANTOR OR INDEMNITOR UNDER ANY OF THE
LOAN DOCUMENTS OR ANY AFFILIATE OF ANY SUCH

55

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

 

 

CONSTITUENT PARTY OR GUARANTOR OR INDEMNITOR, EXCEPT UPON TERMS AND CONDITIONS
THAT ARE COMMERCIALLY REASONABLE AND SUBSTANTIALLY SIMILAR TO THOSE THAT WOULD
BE AVAILABLE ON AN ARM’S LENGTH BASIS WITH THIRD PARTIES; PROVIDED, THAT IT IS
HEREBY ACKNOWLEDGED BY LENDER THAT THE MANAGEMENT AGREEMENT IS ON TERMS AND
CONDITIONS THAT ARE COMMERCIALLY REASONABLE AND SUBSTANTIALLY SIMILAR TO THOSE
THAT WOULD BE AVAILABLE ON AN ARM’S LENGTH BASIS WITH THIRD PARTIES;

(E)                BORROWER HAS REMAINED AT ALL TIMES, AND SHALL REMAIN, SOLVENT
AND HAS PAID AND WILL PAY ITS DEBTS AND LIABILITIES (INCLUDING, AS APPLICABLE,
SHARED PERSONNEL AND OVERHEAD EXPENSES) FROM ITS ASSETS AS THE SAME SHALL BECOME
DUE AND SHALL NOT PAY ITS DEBTS AND LIABILITIES FROM THE ASSETS AND FUNDS OF ANY
OTHER ENTITY, EXCEPT FOR PAYMENTS MADE PURSUANT TO THE GUARANTY, ANY LETTER OF
CREDIT ISSUED WITH RESPECT TO THE LOAN, THE ENVIRONMENTAL INDEMNITY AGREEMENT,
ANY BOTTOM-UP GUARANTIES AS SET FORTH IN SECTION 15.23, AS APPLICABLE;

(F)               BORROWER HAS MAINTAINED AND SHALL MAINTAIN ALL OF ITS BOOKS,
RECORDS, FINANCIAL STATEMENTS AND BANK ACCOUNTS SEPARATE FROM THOSE OF ITS
AFFILIATES AND ANY OTHER PERSON; PROVIDED, HOWEVER, THAT BORROWER’S FINANCIAL
POSITION, ASSETS, RESULTS OF OPERATIONS AND CASH FLOWS MAY BE INCLUDED IN A
CONSOLIDATED FINANCIAL STATEMENT OF AN AFFILIATE OF BORROWER IN ACCORDANCE WITH
GAAP, SO LONG AS (I) ANY SUCH CONSOLIDATED FINANCIAL STATEMENT CONTAINS A NOTE
INDICATING THAT BORROWER AND ITS AFFILIATES ARE EACH SEPARATE LEGAL ENTITIES (OR
A SIMILAR STATEMENT IS CONTAINED IN SUCH AFFILIATE’S SECURITIES AND EXCHANGE
COMMISSION FORM 10‑K FILINGS AND IT IS SUCH AFFILIATE’S PRACTICE TO DELIVER ITS
FINANCIAL STATEMENTS TOGETHER WITH SUCH FILINGS) AND (II) SUCH ASSETS SHALL ALSO
BE LISTED ON BORROWER’S OWN SEPARATE BALANCE SHEET, EXCEPT THAT ALL AMOUNTS PAID
TO BORROWER (INCLUDING, WITHOUT LIMITATION, ALL AMOUNTS TRANSFERRED FROM THE
COLLECTION ACCOUNT) MAY BE DEPOSITED INTO A CENTRALIZED CASH MANAGEMENT ACCOUNT,
INCLUDING, WITHOUT LIMITATION, THE BORROWER’S ACCOUNT (CONTROLLED BY AN
AFFILIATE OF BORROWER) ON BEHALF OF BORROWER AND VARIOUS OTHER ENTITIES THAT ARE
AFFILIATES OF BORROWER, AS AND WHEN RECEIVED, PROVIDED THAT ALL AMOUNTS
DEPOSITED INTO SUCH CENTRALIZED ACCOUNT FOR THE BENEFIT OF BORROWER ARE CLEARLY
SEGREGATED, FOR ACCOUNTING PURPOSES, FROM THE REVENUES AND EXPENSES OF ALL OTHER
PERSONS.

(G)               BORROWER HAS HELD AND SHALL HOLD ITSELF OUT TO THE PUBLIC AS A
LEGAL ENTITY SEPARATE AND DISTINCT FROM ANY OTHER ENTITY (INCLUDING ANY
AFFILIATE OF BORROWER, ANY GUARANTOR OR INDEMNITOR UNDER ANY OF THE LOAN
DOCUMENTS OR ANY CONSTITUENT PARTY OF BORROWER), HAS CORRECTED AND SHALL CORRECT
ANY KNOWN MISUNDERSTANDING REGARDING ITS STATUS AS A SEPARATE ENTITY, HAS
CONDUCTED AND SHALL CONDUCT BUSINESS IN ITS OWN NAME (EXCEPT WITH RESPECT TO
ACTIONS TAKEN BY AGENTS, INCLUDING MANAGER, ON BEHALF OF BORROWER PURSUANT TO
AGREEMENTS THAT ARE ON COMMERCIALLY REASONABLE TERMS COMPARABLE TO THOSE OF AN
ARM’S-LENGTH TRANSACTION WITH AN UNRELATED THIRD PARTY AND SO LONG AS THE AGENTS
UNDER SUCH AGREEMENTS HOLD THEMSELVES OUT AS AN AGENT OF BORROWER AND CONDUCT
SUCH ACTIONS IN A MANNER THAT BORROWER CONTINUES TO BE A SINGLE PURPOSE ENTITY),
AND HAS NOT IDENTIFIED AND SHALL NOT IDENTIFY ITSELF OR ANY OF ITS AFFILIATES AS
A DIVISION OR PART OF THE OTHER;

(H)                 BORROWER HAS MAINTAINED AND SHALL MAINTAIN, TO THE EXTENT OF
CASH FLOW AVAILABLE FROM OPERATION OF THE PROPERTY, ADEQUATE CAPITAL FOR THE
NORMAL OBLIGATIONS REASONABLY FORESEEABLE IN A BUSINESS OF ITS SIZE AND
CHARACTER AND IN LIGHT OF ITS CONTEMPLATED BUSINESS OPERATIONS; PROVIDED,
HOWEVER, THAT THE FOREGOING REQUIREMENTS SHALL NOT REQUIRE ANY MEMBER OF
BORROWER TO MAKE ANY CAPITAL CONTRIBUTION TO BORROWER;

 

56

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

 

 

 

(I)                 BORROWER HAS NOT COMMINGLED NOR SHALL IT COMMINGLE ITS FUNDS
AND OTHER ASSETS, AS APPLICABLE WITH THOSE OF ANY OF ITS AFFILIATES OR
CONSTITUENT PARTIES, ANY GUARANTOR OR INDEMNITOR UNDER ANY OF THE LOAN DOCUMENTS
OR ANY OTHER PERSON, EXCEPT AS CONTEMPLATED IN SUB‑PARAGRAPH (F) ABOVE;

(J)               BORROWER HAS MAINTAINED AND SHALL MAINTAIN ITS ASSETS IN SUCH
A MANNER THAT IT SHALL NOT BE COSTLY OR DIFFICULT TO SEGREGATE, ASCERTAIN OR
IDENTIFY ITS INDIVIDUAL ASSETS FROM THOSE OF ANY OF ITS AFFILIATES OR
CONSTITUENT PARTIES, ANY GUARANTOR OR INDEMNITOR UNDER ANY OF THE LOAN DOCUMENTS
OR ANY OTHER PERSON;

(K)                 EXCEPT FOR MANAGER PURSUANT TO THE MANAGEMENT AGREEMENT,
BORROWER HAS NOT PERMITTED NOR SHALL BORROWER PERMIT ANY OF ITS AFFILIATES OR
CONSTITUENT PARTIES INDEPENDENT ACCESS TO ITS BANK ACCOUNTS, EXCEPT AS
CONTEMPLATED IN SUB‑PARAGRAPH (F) ABOVE;

(L)             BORROWER SHALL MAINTAIN A SUFFICIENT NUMBER OF EMPLOYEES, IF
ANY, IN LIGHT OF ITS CONTEMPLATED BUSINESS PURPOSE AND HAVE PAID AND SHALL PAY
THE SALARIES OF ITS OWN EMPLOYEES (IF ANY) FROM ITS OWN FUNDS;

(M)               BORROWER HAS COMPENSATED AND SHALL COMPENSATE ITS RESPECTIVE
CONSULTANTS AND AGENTS FROM ITS OWN FUNDS EXCEPT AS CONTEMPLATED IN
SUB-PARAGRAPH (F) ABOVE;

(N)               BORROWER HAS ALLOCATED AND SHALL ALLOCATE FAIRLY AND
REASONABLY SHARED EXPENSES, INCLUDING FOR SHARED OFFICE SPACE AND FOR SERVICES
PERFORMED BY AN EMPLOYEE OF AN AFFILIATE;

(O)               BORROWER HAS NOT PLEDGED AND SHALL NOT PLEDGE ANY OF ITS
ASSETS TO SECURE THE OBLIGATIONS OF ANY OTHER PERSON;

(P)               BORROWER HAS NO, AND SHALL NOT HAVE ANY, OBLIGATION TO
INDEMNIFY ITS OFFICERS, DIRECTORS, MANAGERS OR MEMBERS, AS THE CASE MAY BE,
EXCEPT TO THE EXTENT THAT SUCH OBLIGATION IS FULLY SUBORDINATED TO THE LOAN AND
SHALL NOT CONSTITUTE A CLAIM AGAINST BORROWER IF CASH FLOW (AS DISTINCT FROM
FUNDS FROM OTHER SOURCES, SUCH AS INSURANCE) IN EXCESS OF THE AMOUNT REQUIRED TO
PAY THE OBLIGATIONS IS INSUFFICIENT TO PAY SUCH OBLIGATION;

(Q)                 BORROWER HAS FILED AND SHALL FILE ITS OWN TAX RETURNS (IF
BORROWER HAS NOT ELECTED TO BE TREATED AS A DISREGARDED ENTITY FOR TAX
PURPOSES), AS HAS BEEN OR MAY BE REQUIRED UNDER APPLICABLE LAW AND PAY ANY TAXES
REQUIRED TO BE PAID UNDER APPLICABLE LAW; AND HAS MAINTAINED AND SHALL MAINTAIN
ITS BOOKS, RECORDS, RESOLUTIONS AND AGREEMENTS AS OFFICIAL RECORDS;

(R)                BORROWER HAS NOT MADE AND SHALL NOT MAKE ANY LOANS OR
ADVANCES TO ANY THIRD PARTY (INCLUDING ANY AFFILIATE OR CONSTITUENT PARTY OR
BORROWER, ANY GUARANTOR OR INDEMNITOR UNDER ANY OF THE LOAN DOCUMENTS OR ANY
AFFILIATE OF ANY SUCH CONSTITUENT PARTY OR GUARANTOR OR INDEMNITOR), OTHER THAN
IN CONNECTION WITH ANY TENANT IMPROVEMENT COSTS PROVIDED FOR UNDER THE LEASES,
NOR HAS BORROWER ACQUIRED NOR SHALL IT ACQUIRE OBLIGATIONS OR SECURITIES OF ITS
AFFILIATES OR OF ANY OF ITS MEMBERS;

 

57

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

 

 

(S)                 BORROWER HAS NOT ASSUMED, GUARANTEED OR BECOME OBLIGATED FOR
OR HELD ITSELF OUT TO BE RESPONSIBLE FOR, AND BORROWER SHALL NOT ASSUME,
GUARANTEE, BECOME OBLIGATED FOR OR HOLD ITSELF OR ITS CREDIT OR ASSETS OUT TO BE
RESPONSIBLE FOR THE DEBTS OR OBLIGATIONS OF ANY OTHER PERSON;

(T)               EXCEPT AS PROVIDED IN (I) THE GUARANTY, (II) ANY BOTTOM-UP
GUARANTIES AS SET FORTH IN SECTION 15.23, (III) THE ENVIRONMENTAL INDEMNITY
AGREEMENT, OR (IV) ANY INTEREST RATE PROTECTION AGREEMENT OBTAINED BY AN
AFFILIATE ON BEHALF OF BORROWER, HAS NOT AND SHALL NOT HAVE ANY OF ITS
OBLIGATIONS GUARANTEED BY ANY AFFILIATE;

(U)               BORROWER HAS NOT AND SHALL NOT INCUR, CREATE OR ASSUME ANY
DEBT OTHER THAN PERMITTED DEBT;

(V)             BORROWER DOES NOT OWN AND SHALL NOT OWN OR ACQUIRE ANY STOCK OR
SECURITIES OF ANY PERSON EXCEPT THAT BORROWER MAY INVEST IN THOSE INVESTMENTS
PERMITTED UNDER THE LOAN DOCUMENTS AND PERMIT THE SAME TO REMAIN OUTSTANDING IN
ACCORDANCE WITH THE APPLICABLE PROVISIONS THEREOF;

(W)               BORROWER HAS NOT FORMED, ACQUIRED OR HELD, AND SHALL NOT FORM,
ACQUIRE OR HOLD, ANY SUBSIDIARY (WHETHER CORPORATE, PARTNERSHIP, LIMITED
LIABILITY COMPANY OR OTHER);

(X)               BORROWER SHALL NOT, TO THE FULLEST EXTENT PERMITTED BY LAW,
ENGAGE IN, SEEK, OR CONSENT TO ITS DISSOLUTION, WINDING UP, LIQUIDATION,
CONSOLIDATION OR MERGER, EXCEPT AS PROVIDED IN SUB-PARAGRAPH (FF) BELOW;

(Y)                FROM AND AFTER THE DATE HEREOF, EXCEPT AS OTHERWISE PERMITTED
IN THIS AGREEMENT, BORROWER SHALL NOT ENGAGE IN, SEEK OR CONSENT TO ANY ASSET
SALE OR PERMIT ANY TRANSFER OF BENEFICIAL INTERESTS IN ITSELF;

(Z)            EXCEPT WITH RESPECT TO ACTIONS TAKEN BY AGENTS, INCLUDING THE
MANAGER ON BEHALF OF BORROWER IN WHICH SUCH AGENT IDENTIFIES ITSELF AS AN AGENT
OF BORROWER, BORROWER HAS USED AND SHALL USE SEPARATE STATIONARY, INVOICES AND
CHECKS BEARING ITS OWN NAME;

(AA)           BORROWER HAS NOT AND SHALL NOT BUY OR HOLD EVIDENCE OF
INDEBTEDNESS ISSUED BY ANY OTHER PERSON (OTHER THAN CASH OR INVESTMENT‑GRADE
SECURITIES OR PERMITTED INVESTMENTS OR TO THE EXTENT OTHERWISE PERMITTED
PURSUANT TO SUB-PARAGRAPH (V) ABOVE);

(BB)            BORROWER HAS COMPLIED AND SHALL COMPLY WITH ALL ORGANIZATIONAL
FORMALITIES NECESSARY TO MAINTAIN ITS SEPARATE EXISTENCE, AND BORROWER SHALL NOT
TERMINATE OR FAIL TO COMPLY WITH THE PROVISIONS OF SECTION 9 OF ITS OPERATING
AGREEMENT;

(CC)          BORROWER HAS, AND SHALL HAVE, NO MATERIAL CONTINGENT OR ACTUAL
OBLIGATIONS NOT RELATED TO THE PROPERTY;

 

(DD)            INTENTIONALLY OMITTED;

 

 

58

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

 

 

(EE)             FROM AND AFTER THE DATE HEREOF, BORROWER’S ORGANIZATIONAL
DOCUMENTS SHALL PROVIDE THAT THERE SHALL BE (AND BORROWER SHALL AT ALL TIMES
CAUSE THERE TO BE) AT LEAST TWO (2) DULY APPOINTED INDEPENDENT MANAGERS;

(FF)           FROM AND AFTER THE DATE HEREOF, BORROWER’S ORGANIZATIONAL
DOCUMENTS SHALL PROVIDE THAT AS LONG AS ANY PORTION OF THE OBLIGATIONS REMAINS
OUTSTANDING:

(I)                 BORROWER WILL NOT CAUSE OR ALLOW MANAGERS OF THE BORROWER TO
TAKE ANY ACTION WHICH, UNDER THE BORROWER’S CERTIFICATE OF FORMATION OR
OPERATING AGREEMENT, REQUIRES THE UNANIMOUS AFFIRMATIVE VOTE OF ONE HUNDRED
PERCENT (100%) OF THE BORROWER’S MANAGERS UNLESS AT THE TIME OF SUCH ACTION
THERE ARE AT LEAST TWO (2) INDEPENDENT MANAGERS THEN SERVING IN SUCH CAPACITY
AND EACH INDEPENDENT MANAGER HAS PARTICIPATED IN SUCH VOTE;

(II)               NO RESIGNATION OR REMOVAL OF AN INDEPENDENT MANAGER, AND NO
APPOINTMENT OF A SUCCESSOR INDEPENDENT MANAGER, SHALL BE EFFECTIVE UNTIL SUCH
SUCCESSOR SHALL HAVE EXECUTED A COUNTERPART TO THE BORROWER’S OPERATING
AGREEMENT; PROVIDED, HOWEVER, THAT NO INDEPENDENT MANAGER SHALL RESIGN OR BE
REMOVED, AND NO SUCCESSOR INDEPENDENT MANAGER SHALL BE APPOINTED, WITHOUT IN
EACH CASE AT LEAST FIVE (5) DAY’S PRIOR WRITTEN NOTICE TO THE LENDER;

(III)             IN THE EVENT OF A VACANCY IN THE POSITION OF INDEPENDENT
MANAGER, THE MEMBERS OF BORROWER SHALL, SUBJECT TO THE PRECEDING CLAUSE (II),
APPOINT A SUCCESSOR INDEPENDENT MANAGER AS SOON AS PRACTICABLE;

(IV)             TO THE FULLEST EXTENT PERMITTED BY LAW, THE INDEPENDENT
MANAGERS SHALL CONSIDER ONLY THE INTERESTS OF BORROWER, INCLUDING THE LENDER AND
ITS OTHER CREDITORS, AND NOT THE INTERESTS OF ANY MEMBER OF BORROWER OR ANY
OTHER DIRECT OR INDIRECT BENEFICIAL OWNER OF BORROWER, IN ACTING OR OTHERWISE
VOTING ON THE MATTERS REFERRED TO IN CLAUSES (HH)(V)(C) OR (HH)(V)(D)  BELOW OF
THIS SECTION 5.1.4; 

(V)               BORROWER WILL NOT:

 

(A)             DISSOLVE, MERGE, LIQUIDATE OR CONSOLIDATE, EXCEPT AS PROVIDED IN
CLAUSE (HH)(VI) BELOW;

 

(B)              EXCEPT IN CONNECTION WITH A SALE OR OTHER TRANSFER PERMITTED
UNDER THE LOAN DOCUMENTS, SELL ALL OR SUBSTANTIALLY ALL OF ITS ASSETS;

 

(C)              AMEND ITS ORGANIZATIONAL DOCUMENTS WITH RESPECT TO THE MATTERS
SET FORTH IN THIS SECTION 5.1.4 (I) WITHOUT THE AFFIRMATIVE VOTE OF ITS TWO (2)
INDEPENDENT MANAGERS AND (II) UNLESS LENDER HAS CONSENTED (IT BEING UNDERSTOOD
THAT FOLLOWING A SECURITIZATION OF THE LOAN, SUCH CONSENT MAY BE CONDITIONED ON
THE APPLICABLE RATING AGENCIES HAVING ISSUED A RATING AGENCY CONFIRMATION IN
CONNECTION THEREWITH);

 

 

59

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

 

 

(D)             WITHOUT THE AFFIRMATIVE VOTE OF ITS TWO (2) INDEPENDENT MANAGER
AND OF ALL OTHER MANAGERS OF THE BORROWER, TAKE ANY MATERIAL ACTION WITH RESPECT
TO ITSELF OR TO ANY OTHER ENTITY IN WHICH IT HAS A DIRECT OR INDIRECT LEGAL OR
BENEFICIAL OWNERSHIP INTEREST;

(VI)             BORROWER SHALL BE DISSOLVED, AND ITS AFFAIRS SHALL BE WOUND UP,
ONLY UPON THE FIRST TO OCCUR OF THE FOLLOWING: (A) THE TERMINATION OF THE LEGAL
EXISTENCE OF THE LAST REMAINING MEMBER OF BORROWER OR THE OCCURRENCE OF ANY
OTHER EVENT WHICH TERMINATES THE CONTINUED MEMBERSHIP OF THE LAST REMAINING
MEMBER OF BORROWER IN BORROWER UNLESS THE BUSINESS OF BORROWER IS CONTINUED IN A
MANNER PERMITTED BY ITS OPERATING AGREEMENT OR THE DELAWARE LIMITED LIABILITY
COMPANY ACT (THE “ACT”), OR (B) THE ENTRY OF A DECREE OF JUDICIAL DISSOLUTION
UNDER SECTION 18-802 OF THE ACT;

(VII)           UPON THE OCCURRENCE OF ANY EVENT THAT CAUSES THE LAST REMAINING
MEMBER OF BORROWER OR THE SOLE MEMBER OF BORROWER (IN EACH CASE, THE “FINAL
MEMBER”) TO CEASE TO BE A MEMBER OF BORROWER (OTHER THAN (A) UPON AN ASSIGNMENT
BY FINAL MEMBER OF ALL OF ITS LIMITED LIABILITY COMPANY INTEREST IN BORROWER AND
THE ADMISSION OF THE TRANSFEREE, IF PERMITTED PURSUANT TO THE ORGANIZATIONAL
DOCUMENTS OF BORROWER AND THE LOAN DOCUMENTS, OR (B) THE RESIGNATION OF FINAL
MEMBER AND THE ADMISSION OF AN ADDITIONAL MEMBER OF BORROWER, IF PERMITTED
PURSUANT TO THE ORGANIZATIONAL DOCUMENTS OF BORROWER AND THE LOAN DOCUMENTS), TO
THE FULLEST EXTENT PERMITTED BY LAW, THE PERSONAL REPRESENTATIVE OF SUCH LAST
REMAINING MEMBER SHALL BE AUTHORIZED TO, AND SHALL, WITHIN NINETY (90) DAYS
AFTER THE OCCURRENCE OF THE EVENT THAT TERMINATED THE CONTINUED MEMBERSHIP OF
SUCH MEMBER IN BORROWER, AGREE IN WRITING (I) TO CONTINUE THE EXISTENCE OF
BORROWER 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, EFFECTIVE
AS OF THE OCCURRENCE OF THE EVENT THAT TERMINATED THE CONTINUED MEMBERSHIP OF
SUCH MEMBER IN BORROWER;

(VIII)         THE BANKRUPTCY OF FINAL MEMBER OR A SPECIAL MEMBER OF BORROWER
SHALL NOT CAUSE FINAL MEMBER OR SUCH SPECIAL MEMBER, RESPECTIVELY, TO CEASE TO
BE A MEMBER OF BORROWER AND UPON THE OCCURRENCE OF SUCH AN EVENT, THE BUSINESS
OF BORROWER SHALL CONTINUE WITHOUT DISSOLUTION;

(IX)             IN THE EVENT OF THE DISSOLUTION OF BORROWER, BORROWER SHALL
CONDUCT ONLY SUCH ACTIVITIES AS ARE NECESSARY TO WIND UP ITS AFFAIRS (INCLUDING
THE SALE OF THE ASSETS OF BORROWER IN AN ORDERLY MANNER), AND THE ASSETS OF
BORROWER SHALL BE APPLIED IN THE MANNER, AND IN THE ORDER OF PRIORITY, SET FORTH
IN SECTION 18-804 OF THE ACT; AND

(X)               TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF FINAL MEMBER
AND THE SPECIAL MEMBERS OF BORROWER SHALL IRREVOCABLY WAIVE ANY RIGHT OR POWER
THAT THEY MIGHT HAVE TO CAUSE BORROWER OR ANY OF ITS ASSETS TO BE PARTITIONED,
TO CAUSE THE APPOINTMENT OF A RECEIVER FOR ALL OR ANY PORTION OF THE ASSETS OF
BORROWER, TO COMPEL ANY SALE OF ALL OR ANY PORTION OF THE ASSETS OF BORROWER
PURSUANT TO ANY APPLICABLE LAW OR TO FILE A COMPLAINT OR TO INSTITUTE ANY
PROCEEDING AT LAW OR IN

60

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

 

 

EQUITY TO CAUSE THE DISSOLUTION, LIQUIDATION, WINDING UP OR TERMINATION OF
BORROWER.  

5.1.5  CONSENTS.  AN AFFIRMATIVE VOTE OF ONE HUNDRED (100%) OF THE MEMBERS OF
BORROWER (AND OF THE INDEPENDENT MANAGERS) SHALL BE REQUIRED TO (A) FILE A
BANKRUPTCY OR INSOLVENCY PETITION OR OTHERWISE INSTITUTE INSOLVENCY PROCEEDINGS
OR AUTHORIZE BORROWER TO DO SO OR (B) FILE AN INVOLUNTARY BANKRUPTCY PETITION
AGAINST ANY AFFILIATE.  FURTHERMORE, BORROWER’S FORMATION DOCUMENTS SHALL
EXPRESSLY STATE THAT FOR SO LONG AS THE LOAN IS OUTSTANDING AND BORROWER IS THE
OBLIGOR UNDER THE NOTE, BORROWER SHALL NOT BE PERMITTED (I) TO THE EXTENT
PERMITTED BY LAW, DISSOLVE, LIQUIDATE, CONSOLIDATE, MERGE OR SELL ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS OTHER THAN IN CONNECTION WITH THE REPAYMENT OF
THE LOAN OR EXCEPT AS OTHERWISE PERMITTED HEREUNDER OR (II) TO ENGAGE IN ANY
OTHER BUSINESS ACTIVITY, AND SUCH RESTRICTIONS SHALL NOT BE MODIFIED OR VIOLATED
FOR SO LONG AS THE LOAN IS OUTSTANDING.

5.1.6 ACCESS TO PROPERTY.  BORROWER SHALL PERMIT AGENTS, REPRESENTATIVES AND
EMPLOYEES OF LENDER TO INSPECT THE PROPERTY OR ANY PART THEREOF DURING NORMAL
BUSINESS HOURS ON BUSINESS DAYS UPON REASONABLE ADVANCE NOTICE (WHICH MAY BE
GIVEN TELEPHONICALLY OR BY E‑MAIL), SUBJECT TO THE RIGHTS OF TENANTS UNDER THEIR
LEASES AND BORROWER’S USUAL AND CUSTOMARY SAFETY REQUIREMENTS AND ACCOMPANIED BY
A REPRESENTATIVE OF BORROWER.

5.1.7  NOTICE OF DEFAULT.  BORROWER SHALL PROMPTLY ADVISE LENDER (A) OF ANY
EVENT OR CONDITION THAT HAS OR IS REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE
EFFECT OF WHICH BORROWER HAS KNOWLEDGE AND (B) OF THE OCCURRENCE OF ANY DEFAULT
OR EVENT OF DEFAULT OF WHICH BORROWER HAS KNOWLEDGE. 

5.1.8  COOPERATE IN LEGAL PROCEEDINGS.  BORROWER SHALL COOPERATE FULLY WITH
LENDER WITH RESPECT TO ANY PROCEEDINGS BEFORE ANY COURT, BOARD OR OTHER
GOVERNMENTAL AUTHORITY WHICH WOULD REASONABLY BE EXPECTED TO HAVE, OR DOES HAVE,
A MATERIAL ADVERSE EFFECT AND, IN CONNECTION THEREWITH, PERMIT LENDER, AT ITS
ELECTION, TO PARTICIPATE IN ANY SUCH PROCEEDINGS, OTHER THAN THOSE PROCEEDINGS
WHERE BORROWER AND LENDER ARE ADVERSE PARTIES.

5.1.9  PERFORM LOAN DOCUMENTS.  BORROWER SHALL OBSERVE, PERFORM AND SATISFY ALL
THE TERMS, PROVISIONS, COVENANTS AND CONDITIONS OF, AND SHALL PAY WHEN DUE ALL
COSTS, FEES AND EXPENSES TO THE EXTENT REQUIRED, UNDER THE LOAN DOCUMENTS
EXECUTED AND DELIVERED BY, OR APPLICABLE TO, BORROWER.

5.1.10  INSURANCE.   (A) BORROWER SHALL COOPERATE WITH LENDER IN OBTAINING FOR
LENDER (TO THE EXTENT THAT THIS AGREEMENT PROVIDES THAT SUCH PROCEEDS ARE TO BE
PAID TO LENDER) THE BENEFITS OF ANY PROCEEDS LAWFULLY OR EQUITABLY PAYABLE IN
CONNECTION WITH THE PROPERTY, AND LENDER SHALL BE REIMBURSED FOR ANY EXPENSES
INCURRED IN CONNECTION THEREWITH (INCLUDING REASONABLE ATTORNEYS’ FEES AND
DISBURSEMENTS) OUT OF SUCH PROCEEDS.

(B)               BORROWER SHALL COMPLY WITH ALL INSURANCE REQUIREMENTS AND
SHALL NOT BRING OR KEEP OR PERMIT TO BE BROUGHT OR KEPT ANY ARTICLE UPON ANY OF
THE PROPERTY OR CAUSE OR PERMIT ANY CONDITION TO EXIST THEREON WHICH WOULD BE
PROHIBITED BY ANY INSURANCE REQUIREMENT, OR WOULD INVALIDATE INSURANCE COVERAGE
REQUIRED HEREUNDER TO BE MAINTAINED BY BORROWER ON OR WITH RESPECT TO ANY PART
OF THE PROPERTY PURSUANT TO SECTION 6.1. 

 

61

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

 

 

5.1.11  FURTHER ASSURANCES; SEPARATE NOTES.  (A) BORROWER SHALL EXECUTE AND
ACKNOWLEDGE (OR CAUSE TO BE EXECUTED AND ACKNOWLEDGED), AND DELIVER TO LENDER,
ALL DOCUMENTS, AND TAKE ALL ACTIONS, REASONABLY REQUIRED BY LENDER FROM TIME TO
TIME IN ORDER TO CONFIRM THE RIGHTS CREATED OR INTENDED TO BE CREATED UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY SECURITY INTEREST CREATED OR
PURPORTED TO BE CREATED THEREUNDER, TO PROTECT THE VALIDITY, PRIORITY AND
ENFORCEABILITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, TO SUBJECT TO THE
LOAN DOCUMENTS ANY PROPERTY OF BORROWER INTENDED BY THE TERMS OF ANY ONE OR MORE
OF THE LOAN DOCUMENTS TO BE ENCUMBERED BY THE LOAN DOCUMENTS, OR OTHERWISE CARRY
OUT THE PURPOSES OF THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
THEREUNDER, PROVIDED THAT THE FOREGOING SHALL NOT IMPOSE ANY ADDITIONAL MATERIAL
LIABILITY OR OBLIGATIONS ON, NOR MATERIALLY REDUCE THE RIGHTS OR REMEDIES OF,
BORROWER.  BORROWER SHALL REASONABLY PROMPTLY AFTER WRITTEN REQUEST, REASONABLY
COOPERATE WITH LENDER IN CONNECTION WITH ANY REQUEST BY LENDER TO SEVER THE NOTE
INTO TWO (2) OR MORE SEPARATE SUBSTITUTE NOTES IN ACCORDANCE WITH
SECTIONS 11.4.2 AND 11.5  OF THIS AGREEMENT, AND TO REAPPORTION THE LOAN AMONG
SUCH SEPARATE SUBSTITUTE NOTES, INCLUDING, WITHOUT LIMITATION, BY EXECUTING AND
DELIVERING TO LENDER NEW SUBSTITUTE NOTES TO REPLACE THE NOTE, AMENDMENTS TO OR
REPLACEMENTS OF EXISTING LOAN DOCUMENTS TO REFLECT SUCH SEVERANCE AND/OR
OPINIONS OF COUNSEL WITH RESPECT TO SUCH SUBSTITUTE NOTES, AMENDMENTS AND/OR
REPLACEMENTS, PROVIDED THAT BORROWER SHALL BEAR NO COSTS OR EXPENSES IN
CONNECTION THEREWITH (OTHER THAN INTERNAL ADMINISTRATIVE COSTS AND INTERNAL
EXPENSES OF BORROWER).  

(B) IN ADDITION, BORROWER SHALL, AT BORROWER’S SOLE COST AND EXPENSE (EXCEPT AS
PROVIDED IN SECTION 5.1.11(A)), AND WITHOUT MAKING ANY SO‑CALLED “BRING DOWN
REPRESENTATIONS”:

(I)                 EXECUTE AND DELIVER, FROM TIME TO TIME, SUCH FURTHER
INSTRUMENTS (INCLUDING, WITHOUT LIMITATION, DELIVERY OF ANY FINANCING STATEMENTS
UNDER THE UCC) AS MAY BE REASONABLY REQUESTED BY LENDER TO CONFIRM THE LIEN OF
THE MORTGAGE ON ANY EQUIPMENT, FIXTURES OR ANY INTANGIBLE ASSETS;

(II)               EXECUTE AND DELIVER TO LENDER SUCH DOCUMENTS, INSTRUMENTS,
CERTIFICATES, ASSIGNMENTS AND OTHER WRITINGS, AND DO SUCH OTHER ACTS AS SHALL BE
REASONABLY NECESSARY TO EVIDENCE, PRESERVE AND/OR PROTECT THE COLLATERAL AT ANY
TIME SECURING OR INTENDED TO SECURE THE OBLIGATIONS OF BORROWER UNDER THE LOAN
DOCUMENTS, AS LENDER MAY REASONABLY REQUIRE; AND

(III)             DO AND EXECUTE ALL AND SUCH FURTHER LAWFUL AND REASONABLE
ACTS, CONVEYANCES AND ASSURANCES FOR THE CARRYING OUT OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS LENDER SHALL
REASONABLY REQUIRE FROM TIME TO TIME.

5.1.12  MORTGAGE TAXES.  BORROWER SHALL PAY ALL TAXES, CHARGES, FILING,
REGISTRATION AND RECORDING FEES, EXCISES AND LEVIES PAYABLE WITH RESPECT TO THE
NOTE OR THE LIENS CREATED OR SECURED BY THE LOAN DOCUMENTS, OTHER THAN INCOME,
FRANCHISE AND DOING-BUSINESS TAXES IMPOSED ON LENDER AND OTHER THAN ANY
IMPOSITIONS THAT ARE NOT BORROWER’S RESPONSIBILITY PURSUANT TO 0  HEREOF OR ANY
IMPOSITIONS DESCRIBED IN 0  BUT APPLICABLE ON OR PRIOR TO THE DATE HEREOF.

 

62

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

 

 

5.1.13  OPERATION.   BORROWER SHALL:  (A) PROMPTLY PERFORM AND/OR OBSERVE IN ALL
MATERIAL RESPECTS AND SHALL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE MANAGER
TO PERFORM AND/OR OBSERVE IN ALL MATERIAL RESPECTS ALL OF THE COVENANTS AND
AGREEMENTS 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; (B) PROMPTLY NOTIFY LENDER OF ANY “EVENT OF DEFAULT”
UNDER THE MANAGEMENT AGREEMENT OF WHICH IT IS AWARE; (C) PROMPTLY DELIVER, AND
SHALL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE MANAGER TO DELIVER, TO
LENDER, IF MANAGER IS NOT AN AFFILIATE OF BORROWER, A COPY OF EACH FINANCIAL
STATEMENT, CAPITAL EXPENDITURES PLAN, PROPERTY IMPROVEMENT PLAN AND ANY OTHER
NOTICE, REPORT AND ESTIMATE RECEIVED BY IT UNDER THE MANAGEMENT AGREEMENT
(EXCEPT TO THE EXTENT THE SAME IS SUBSTANTIALLY EQUIVALENT TO WHAT BORROWER
OTHERWISE DELIVERS TO LENDER HEREUNDER); AND (D) ENFORCE IN A COMMERCIALLY
REASONABLE MANNER THE PERFORMANCE AND OBSERVANCE OF THE MATERIAL COVENANTS AND
AGREEMENTS REQUIRED TO BE PERFORMED AND/OR OBSERVED BY THE MANAGER UNDER THE
MANAGEMENT AGREEMENT.

5.1.14  BUSINESS AND OPERATIONS.  BORROWER SHALL CONTINUE TO ENGAGE IN THE
BUSINESSES PRESENTLY CONDUCTED BY IT AS AND TO THE EXTENT THE SAME ARE NECESSARY
FOR THE OWNERSHIP, MAINTENANCE, MANAGEMENT AND OPERATION OF THE PROPERTY. 
BORROWER SHALL QUALIFY TO DO BUSINESS AND SHALL REMAIN IN GOOD STANDING UNDER
THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED AND AS AND TO THE EXTENT
REQUIRED FOR THE OWNERSHIP, MAINTENANCE, MANAGEMENT AND OPERATION OF THE
PROPERTY.

5.1.15  TITLE TO THE PROPERTY.  BORROWER SHALL WARRANT AND DEFEND (A) ITS FEE
TITLE TO THE PROPERTY AND THE IMPROVEMENTS AND EVERY PART THEREOF, SUBJECT ONLY
TO LIENS PERMITTED HEREUNDER (INCLUDING PERMITTED ENCUMBRANCES) AND (B) THE
VALIDITY AND PRIORITY OF THE LIENS OF THE MORTGAGE, THE ASSIGNMENT OF LEASES AND
THIS AGREEMENT ON THE PROPERTY, SUBJECT ONLY TO LIENS PERMITTED HEREUNDER
(INCLUDING PERMITTED ENCUMBRANCES), IN EACH CASE AGAINST THE CLAIMS OF ALL
PERSONS WHOMSOEVER.  BORROWER SHALL REIMBURSE LENDER FOR ANY LOSSES, COSTS,
DAMAGES OR EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS)
INCURRED BY LENDER IF AN INTEREST IN THE PROPERTY, OTHER THAN AS PERMITTED
HEREUNDER, IS CLAIMED BY ANOTHER PERSON.

5.1.16  COSTS OF ENFORCEMENT.  IN THE EVENT (A) THAT THIS AGREEMENT OR THE
MORTGAGE IS FORECLOSED UPON IN WHOLE OR IN PART OR THAT THIS AGREEMENT OR THE
MORTGAGE IS PUT INTO THE HANDS OF AN ATTORNEY FOR COLLECTION, SUIT, ACTION OR
FORECLOSURE FOLLOWING AN EVENT OF DEFAULT, (B) OF THE FORECLOSURE OF ANY
SECURITY AGREEMENT PRIOR TO OR SUBORDINATE TO THIS AGREEMENT IN WHICH PROCEEDING
LENDER IS MADE A PARTY, OR A MORTGAGE PRIOR TO OR SUBORDINATE TO THE MORTGAGE IN
WHICH PROCEEDING LENDER IS MADE A PARTY, OR (C) 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, BORROWER, ITS SUCCESSORS OR ASSIGNS,
SHALL BE CHARGEABLE WITH AND AGREES TO PAY ALL COSTS OF COLLECTION AND DEFENSE,
INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS, 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.

5.1.17  ESTOPPEL STATEMENTS.   

 

63

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

 

 

(A)                BORROWER SHALL, FROM TIME TO TIME, UPON THIRTY (30) DAYS’
PRIOR WRITTEN REQUEST FROM LENDER, EXECUTE, ACKNOWLEDGE AND DELIVER TO LENDER, A
BORROWER’S CERTIFICATE, STATING THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
ARE UNMODIFIED AND, TO THE BEST OF BORROWER’S KNOWLEDGE, IN FULL FORCE AND
EFFECT (OR, IF THERE HAVE BEEN MODIFICATIONS, THAT THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS ARE IN FULL FORCE AND EFFECT AS MODIFIED AND SETTING FORTH A LIST
OF THE DOCUMENTS BY WHICH SUCH MODIFICATIONS WERE EFFECTED), STATING, TO THE
BEST OF BORROWER’S KNOWLEDGE, THE AMOUNT OF ACCRUED AND UNPAID INTEREST AND THE
PRINCIPAL AMOUNT OF THE NOTE AND CONTAINING SUCH OTHER INFORMATION WITH RESPECT
TO BORROWER, THE PROPERTY AND THE LOAN AS LENDER SHALL REASONABLY REQUEST.  THE
ESTOPPEL CERTIFICATE SHALL ALSO STATE EITHER THAT, TO BORROWER’S KNOWLEDGE, NO
DEFAULT OR EVENT OF DEFAULT EXISTS HEREUNDER OR, IF ANY DEFAULT OR EVENT OF
DEFAULT SHALL EXIST HEREUNDER, SHALL SPECIFY SUCH DEFAULT OR EVENT OF DEFAULT
AND THE STEPS BEING TAKEN TO CURE SUCH DEFAULT OR EVENT OF DEFAULT.

(B)               BORROWER SHALL USE ITS COMMERCIALLY REASONABLE EFFORTS TO
DELIVER OR CAUSE TO BE DELIVERED TO LENDER, UPON REQUEST, ESTOPPEL CERTIFICATES
FROM EACH PARTY UNDER ANY REA; PROVIDED, THAT SUCH CERTIFICATES MAY BE IN THE
FORM REQUIRED UNDER SUCH REA; AND, PROVIDED, FURTHER, THAT LENDER SHALL NOT
REQUEST SUCH CERTIFICATES MORE THAN FOUR (4) TIMES DURING THE TERM AND NOT MORE
FREQUENTLY THAN ONCE PER CALENDAR YEAR (OR TWICE DURING ANY CALENDAR YEAR IN
WHICH A SECURITIZATION OCCURS).

5.1.18  LOAN PROCEEDS.  BORROWER SHALL USE THE PROCEEDS OF THE LOAN RECEIVED BY
IT ON THE CLOSING DATE ONLY FOR THE PURPOSES SET FORTH IN SECTION 2.1.4. 

5.1.19  NO JOINT ASSESSMENT.  BORROWER SHALL NOT SUFFER, PERMIT OR INITIATE THE
JOINT ASSESSMENT OF THE PROPERTY (A) WITH ANY OTHER REAL PROPERTY CONSTITUTING A
TAX LOT SEPARATE FROM THE PROPERTY OR (B) WHICH CONSTITUTES REAL PROPERTY WITH
ANY PORTION OF THE PROPERTY WHICH MAY BE DEEMED TO CONSTITUTE PERSONAL PROPERTY,
OR ANY OTHER PROCEDURE WHEREBY THE LIEN OF ANY TAXES WHICH MAY BE LEVIED AGAINST
SUCH PERSONAL PROPERTY SHALL BE ASSESSED OR LEVIED OR CHARGED TO SUCH REAL
PROPERTY PORTION OF THE PROPERTY.

5.1.20  NO FURTHER ENCUMBRANCES.  BORROWER SHALL DO, OR CAUSE TO BE DONE, ALL
THINGS NECESSARY TO KEEP AND PROTECT THE PROPERTY AND ALL PORTIONS THEREOF
UNENCUMBERED FROM ANY LIENS, EASEMENTS OR AGREEMENTS GRANTING RIGHTS IN OR
RESTRICTING THE USE OR DEVELOPMENT OF THE PROPERTY, EXCEPT FOR (A) PERMITTED
ENCUMBRANCES, (B) LIENS PERMITTED PURSUANT TO THE LOAN DOCUMENTS, (C) LIENS FOR
IMPOSITIONS PRIOR TO THE IMPOSITION OF ANY INTEREST, CHARGES OR EXPENSES FOR THE
NON‑PAYMENT THEREOF AND (D) ANY LIENS PERMITTED PURSUANT TO LEASES.

5.1.21  INTENTIONALLY OMITTED.  

5.1.22  LEASES.   BORROWER SHALL PROMPTLY AFTER RECEIPT THEREOF DELIVER TO
LENDER A COPY OF ANY NOTICE RECEIVED WITH RESPECT TO THE LEASES CLAIMING THAT
BORROWER IS IN DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF ANY OF THE MATERIAL
TERMS, COVENANTS OR CONDITIONS OF ANY OF THE LEASES.

5.1.23  NOTICE REGARDING ERISA VIOLATION. BORROWER SHALL GIVE PROMPT WRITTEN
NOTICE TO LENDER OF ANY WRITTEN ALLEGATION THAT BORROWER IS IN VIOLATION OF THE
REQUIREMENTS OF ERISA.

64

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

 

 

5.1.24  FURTHER ASSURANCE OF TITLE.  BORROWER SHALL FURTHER ASSURE TITLE IF AT
ANY TIME LENDER HAS REASON TO BELIEVE IN ITS REASONABLE OPINION THAT THE LOAN IS
NOT SECURED OR WILL OR MAY NOT BE SECURED BY THE MORTGAGE AS A FIRST PRIORITY
LIEN OR SECURITY INTEREST ON THE IMPROVEMENTS (SUBJECT ONLY TO THE PERMITTED
ENCUMBRANCES), AND THEN BORROWER SHALL DO ALL THINGS AND MATTERS REASONABLY
NECESSARY (INCLUDING EXECUTION AND DELIVERY TO LENDER OF ALL FURTHER DOCUMENTS
AND PERFORMANCE OF ALL OTHER ACTS WHICH LENDER REASONABLY DEEMS NECESSARY OR
APPROPRIATE) TO ASSURE TO THE SATISFACTION OF LENDER THAT THE LOAN IS SECURED BY
THE MORTGAGE AS A FIRST PRIORITY LIEN OR SECURITY INTEREST ON THE IMPROVEMENTS
(SUBJECT ONLY TO THE PERMITTED ENCUMBRANCES). 

5.1.25  INTEREST RATE PROTECTION AGREEMENT. 

(A)                IF, AT ANY TIME, LIBOR SHALL BE GREATER THAN OR EQUAL TO FIVE
AND ONE-HALF PERCENT (5.5%) FOR A PERIOD OF FOUR (4) CONSECUTIVE WEEKS, BORROWER
OR AN AFFILIATE OF BORROWER SHALL ENTER INTO AN INTEREST RATE PROTECTION
AGREEMENT FOR A NOTIONAL AMOUNT EQUAL TO THE OUTSTANDING BALANCE OF THE LOAN
(TAKING INTO ACCOUNT THE AMORTIZATION SCHEDULE ATTACHED HERETO AS SCHEDULE 2.2.4
OR ANY REPLACEMENT AMORTIZATION SCHEDULE PROVIDED IN ACCORDANCE WITH SECTION
2.2.4) WITH A COUNTERPARTY HAVING A MINIMUM COUNTERPARTY RATING AND WHICH IS
OTHERWISE ACCEPTABLE TO LENDER IN ITS REASONABLE DISCRETION AND WHICH SHALL
EFFECTIVELY CAP LIBOR ON SUCH AMOUNT FOR A PERIOD UNTIL THE MATURITY DATE, OR
SUCH SHORTER TIME PERIOD IN ACCORDANCE WITH SECTION 5.1.25(A)), AT A RATE OF SIX
PERCENT (6%) PER ANNUM, CALCULATED ON AN ANNUAL BASIS.

(B)               BORROWER OR AN AFFILIATE OF BORROWER SHALL HAVE THE RIGHT TO
ENTER INTO AN INTEREST RATE PROTECTION AGREEMENT THAT EXPIRES PRIOR TO THE
MATURITY DATE; PROVIDED, THAT BORROWER OR AN AFFILIATE OF BORROWER ENTERS INTO A
REPLACEMENT INTEREST RATE PROTECTION AGREEMENT UPON THE EXPIRATION OF SUCH
EXISTING INTEREST RATE PROTECTION AGREEMENT IF LIBOR HAS EXCEEDED FIVE AND
ONE-HALF PERCENT (5.5%) FOR THE FOUR (4) CONSECUTIVE WEEKS PRIOR TO THE
EXPIRATION DATE OF SUCH INTEREST RATE PROTECTION AGREEMENT.  ANY INTEREST RATE
PROTECTION AGREEMENT ENTERED INTO IN ACCORDANCE WITH THE PROVISIONS OF THIS
AGREEMENT SHALL NOT BE SECURED BY OR ENCUMBER ANY OF THE COLLATERAL SECURING
BORROWER’S OBLIGATIONS UNDER THE LOAN DOCUMENTS UNLESS THE SAME IS A LENDER
INTEREST RATE PROTECTION AGREEMENT.  PROMPTLY UPON OBTAINING ANY INTEREST RATE
PROTECTION AGREEMENT, BORROWER SHALL DELIVER THE SAME TO LENDER.

(C)                BORROWER, OR THE APPLICABLE AFFILIATE OF BORROWER, SHALL
COMPLY WITH ALL OF ITS OBLIGATIONS UNDER THE TERMS AND PROVISIONS OF ANY
INTEREST RATE PROTECTION AGREEMENT.  BORROWER SHALL TAKE, OR CAUSE ITS AFFILIATE
THAT IS PARTY TO THE INTEREST RATE PROTECTION AGREEMENT TO TAKE, ALL ACTION
REASONABLY REQUESTED BY LENDER TO ENFORCE LENDER’S RIGHTS UNDER AN INTEREST RATE
PROTECTION AGREEMENT IN THE EVENT OF A DEFAULT BY A COUNTERPARTY AND SHALL NOT
WAIVE, AMEND OR OTHERWISE MODIFY ANY OF ITS RIGHTS THEREUNDER.  AT ANY TIME AN
INTEREST RATE PROTECTION AGREEMENT IS REQUIRED HEREUNDER, BORROWER OR THE
APPLICABLE AFFILIATE OF BORROWER SHALL NOT (I) WITHOUT THE PRIOR WRITTEN CONSENT
OF LENDER, MODIFY, AMEND OR SUPPLEMENT THE TERMS OF AN INTEREST RATE PROTECTION
AGREEMENT, (II) WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER, CAUSE THE
TERMINATION OF AN INTEREST RATE PROTECTION AGREEMENT PRIOR TO ITS STATED
MATURITY DATE; (III) WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER WAIVE OR
RELEASE ANY OBLIGATION OF A COUNTERPARTY (OR ANY SUCCESSOR OR SUBSTITUTE PARTY
TO THE INTEREST RATE PROTECTION AGREEMENT) UNDER AN INTEREST RATE PROTECTION
AGREEMENT, (IV) WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER

65

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

 

 

CONSENT OR AGREE TO ANY ACT OR OMISSION TO ACT ON THE PART OF A COUNTERPARTY (OR
ANY SUCCESSOR OR SUBSTITUTE PARTY TO AN INTEREST RATE PROTECTION AGREEMENT)
WHICH, WITHOUT SUCH CONSENT OR AGREEMENT, WOULD CONSTITUTE A DEFAULT UNDER AN
INTEREST RATE PROTECTION AGREEMENT, (V) FAIL TO EXERCISE PROMPTLY AND DILIGENTLY
EACH AND EVERY MATERIAL RIGHT WHICH IT MAY HAVE UNDER AN INTEREST RATE
PROTECTION AGREEMENT, (VI) TAKE OR OMIT TO TAKE ANY ACTION OR SUFFER OR PERMIT
ANY ACTION TO BE OMITTED OR TAKEN, THE TAKING OR OMISSION OF WHICH WOULD RESULT
IN ANY RIGHT OF OFFSET AGAINST SUMS PAYABLE UNDER AN INTEREST RATE PROTECTION
AGREEMENT OR ANY DEFENSE BY A COUNTERPARTY (OR ANY SUCCESSOR OR SUBSTITUTE PARTY
TO AN INTEREST RATE PROTECTION AGREEMENT) TO PAYMENT OR (VII) FAIL TO GIVE
PROMPT NOTICE TO LENDER OF ANY NOTICE OF DEFAULT GIVEN BY OR TO BORROWER UNDER
OR WITH RESPECT TO AN INTEREST RATE PROTECTION AGREEMENT, TOGETHER WITH A
COMPLETE COPY OF SUCH NOTICE; PROVIDED, HOWEVER, THAT FOR THE AVOIDANCE OF
DOUBT, BORROWER OR THE AFFILIATE OF BORROWER, AS APPLICABLE, SHALL BE PERMITTED
TO TERMINATE ANY ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT, AND THE
RESTRICTIONS SET FORTH IN CLAUSES (I) THROUGH (VII) ABOVE WITH RESPECT TO ANY
INTEREST RATE PROTECTION AGREEMENT SHALL NOT APPLY, AFTER THE EXPIRATION OF THE
TIME PERIOD DURING WHICH AN INTEREST RATE PROTECTION AGREEMENT IS REQUIRED TO BE
MAINTAINED PURSUANT TO THIS SECTION 5.1.25.   

(D)               BORROWER OR THE AFFILIATE OF BORROWER THAT IS PARTY TO THE
INTEREST RATE PROTECTION AGREEMENT, AS APPLICABLE, SHALL COLLATERALLY ASSIGN TO
LENDER, PURSUANT TO AN ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT, ALL OF
ITS RIGHT, TITLE AND INTEREST TO RECEIVE ANY AND ALL PAYMENTS UNDER ANY INTEREST
RATE PROTECTION AGREEMENT REQUIRED HEREUNDER AND SHALL DELIVER TO LENDER AN
EXECUTED COUNTERPART OF SUCH INTEREST RATE PROTECTION AGREEMENT, NOTIFY THE
COUNTERPARTY OF SUCH COLLATERAL ASSIGNMENT AND OBTAIN THE AGREEMENT (EITHER IN
SUCH INTEREST RATE PROTECTION AGREEMENT OR BY SEPARATE INSTRUMENT) OF SUCH
COUNTERPARTY TO MAKE ANY PAYMENTS TO BECOME PAYABLE UNDER OR PURSUANT TO THE
INTEREST RATE PROTECTION AGREEMENT DIRECTLY TO LENDER UNTIL SUCH TIME AS THE
ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT IS TERMINATED OR OTHERWISE
CANCELED.   NOTWITHSTANDING THE FOREGOING, IF THE INTEREST RATE PROTECTION
AGREEMENT BEING ASSIGNED TO LENDER IS A SWAP AGREEMENT, THE PARTIES HERETO AGREE
THAT IF ANY AMOUNTS PAYABLE TO THE BORROWER OR AN AFFILIATE OF THE BORROWER, AS
APPLICABLE, PURSUANT TO SUCH SWAP AGREEMENT ARE IN EXCESS OF THE STRIKE PRICE
REQUIRED HEREUNDER, THEN SUCH AMOUNTS SHALL BE PAYABLE TO THE BORROWER AND NOT
LENDER AND THE ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT ENTERED INTO IN
CONNECTION WITH SUCH SWAP AGREEMENT SHALL PROVIDE FOR THE SAME.   AT SUCH TIME
AS THE LOAN IS REPAID IN FULL OR A NEW INTEREST RATE PROTECTION AGREEMENT IS
REQUIRED PURSUANT TO SECTION 5.1.25(E) BELOW OR AN INTEREST RATE PROTECTION
AGREEMENT IS NO LONGER REQUIRED, ALL OF LENDER’S RIGHT, TITLE AND INTEREST IN
THE EXISTING INTEREST RATE PROTECTION AGREEMENT SHALL TERMINATE AND LENDER SHALL
EXECUTE AND DELIVER, AT BORROWER’S SOLE COST AND EXPENSE, SUCH DOCUMENTS AS MAY
BE REQUIRED TO EVIDENCE LENDER’S RELEASE OF SUCH INTEREST RATE PROTECTION
AGREEMENT AND TO NOTIFY THE COUNTERPARTY OF SUCH RELEASE.  IF LENDER RECEIVES
ANY PAYMENTS UNDER SUCH INTEREST RATE PROTECTION AGREEMENT (OTHER THAN A PAYMENT
BY REASON OF A TERMINATION EVENT OR ANY OTHER PAYMENT UPON THE OCCURRENCE AND
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT), LENDER SHALL DELIVER THE SAME TO
BORROWER BY DEPOSITING THE SAME INTO THE COLLECTION ACCOUNT OR AS OTHERWISE
INSTRUCTED BY BORROWER.  AT ANY TIME AN INTEREST RATE PROTECTION AGREEMENT IS
REQUIRED HEREUNDER, IF LENDER RECEIVES ANY PAYMENTS UNDER AN INTEREST RATE
PROTECTION AGREEMENT DURING THE CONTINUANCE OF AN EVENT OF DEFAULT OR BY REASON
OF A TERMINATION EVENT UNDER AN INTEREST RATE PROTECTION AGREEMENT, LENDER SHALL
HAVE THE RIGHT TO HOLD THE SAME, TO DEPOSIT THE SAME IN A CASH COLLATERAL
ACCOUNT AS ADDITIONAL SECURITY FOR THE LOAN OR TO APPLY SAME TO ANY PORTION OF
THE INDEBTEDNESS IN ANY ORDER IT DESIRES OR, IF AN

66

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

 

 

INTEREST RATE PROTECTION AGREEMENT HAS BEEN PARTIALLY OR WHOLLY TERMINATED,
LENDER SHALL DISBURSE ANY TERMINATION PAYMENTS TO BORROWER TO BE APPLIED TO THE
COSTS OF ACQUIRING ANOTHER INTEREST RATE PROTECTION AGREEMENT (IF THEN REQUIRED
HEREUNDER) IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO LENDER, AND FROM A
COUNTERPARTY HAVING A MINIMUM COUNTERPARTY RATING.

(E)                IF FOR ANY REASON, THE COUNTERPARTY’S RATING WITH RESPECT TO
ANY INTEREST RATE PROTECTION AGREEMENT PROVIDED BY A COUNTERPARTY OTHER THAN
LENDER SHALL FALL BELOW THE MINIMUM COUNTERPARTY RATING, BORROWER SHALL WITHIN
THIRTY (30) DAYS FOLLOWING RECEIPT OF NOTICE THEREOF FROM LENDER OR ANY OTHER
PERSON, PROCURE A NEW INTEREST RATE PROTECTION AGREEMENT FROM A COUNTERPARTY
SATISFYING THE MINIMUM COUNTERPARTY RATING REQUIREMENT, SHALL PLEDGE SAME TO
LENDER PURSUANT TO AN ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT IN THE
FORM OF THE ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT OR OTHER REASONABLE
ASSIGNMENT FORM, AND SHALL DELIVER TO LENDER A COUNTERPARTY OPINION WITH RESPECT
THERETO. 

(F)                IN THE EVENT THAT BORROWER FAILS TO PURCHASE AND DELIVER TO
LENDER THE INTEREST RATE PROTECTION AGREEMENT AS AND WHEN REQUIRED HEREUNDER,
LENDER MAY PURCHASE THE INTEREST RATE PROTECTION AGREEMENT FROM A COUNTERPARTY
HAVING A MINIMUM COUNTERPARTY RATING REQUIRED AND THE COST AND EXPENSE INCLUDING
REASONABLE ATTORNEY’S FEES AND DISBURSEMENTS INCURRED BY LENDER IN PURCHASING
THE INTEREST RATE PROTECTION AGREEMENT SHALL BE PAID BY BORROWER TO LENDER WITH
INTEREST THEREON AT THE DEFAULT RATE FROM THE DATE SUCH COST WAS INCURRED BY
LENDER UNTIL SUCH COST IS PAID TO LENDER. 

(G)               IN CONNECTION WITH ANY INTEREST RATE PROTECTION AGREEMENT
OBTAINED BY BORROWER OR AN AFFILIATE OF BORROWER PURSUANT TO THE REQUIREMENTS OF
THIS SECTION 5.1.25, IF SUCH INTEREST RATE PROTECTION AGREEMENT IS AN “INTEREST
RATE CAP”, BORROWER OR SUCH AFFILIATE OF BORROWER SHALL OBTAIN AND DELIVER TO
LENDER AN OPINION OF COUNSEL FROM COUNSEL FOR THE COUNTERPARTY THEREUNDER (UPON
WHICH LENDER AND ITS SUCCESSORS AND ASSIGNS MAY RELY) (THE “COUNTERPARTY
OPINION”), UNDER NEW YORK LAW AND, IF THE COUNTERPARTY IS A NON-U.S. ENTITY, THE
APPLICABLE FOREIGN LAW, SUBSTANTIALLY IN COMPLIANCE WITH THE REQUIREMENTS SET
FORTH BELOW:

(I)                 THE COUNTERPARTY OPINION SHALL BE ADDRESSED TO LENDER, FOR
ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND SHALL STATE THAT IT MAY BE RELIED
UPON BY (A)  ANY ASSIGNEE OF LENDER’S INTEREST IN THE LOAN, AND (B) ANY SERVICER
OF THE LOAN,

(II)               THE COUNTERPARTY OPINION SHALL BE IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO LENDER AND SHALL CONTAIN THE FOLLOWING OPINIONS:

(A)             THE COUNTERPARTY UNDER THE INTEREST RATE PROTECTION AGREEMENT IS
DULY ORGANIZED, VALIDLY EXISTING, AND IN GOOD STANDING UNDER THE LAWS OF ITS
JURISDICTION OF INCORPORATION OR FORMATION AND HAS THE ORGANIZATIONAL POWER AND
AUTHORITY TO EXECUTE AND DELIVER, AND TO PERFORM ITS OBLIGATIONS UNDER, THE
INTEREST RATE PROTECTION AGREEMENT;

(B)              THE EXECUTION AND DELIVERY OF THE INTEREST RATE PROTECTION
AGREEMENT BY THE COUNTERPARTY THEREUNDER, AND ANY OTHER AGREEMENT (INCLUDING,
WITHOUT LIMITATION, THE ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT) WHICH
SUCH COUNTERPARTY HAS EXECUTED AND DELIVERED PURSUANT

67

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

 

 

THERETO, AND THE PERFORMANCE OF ITS OBLIGATIONS THEREUNDER HAVE BEEN AND REMAIN
DULY AUTHORIZED BY ALL NECESSARY ACTION AND DO NOT CONTRAVENE ANY PROVISION OF
ITS CERTIFICATE OF INCORPORATION OR BYLAWS (OR EQUIVALENT ORGANIZATIONAL
DOCUMENTS) OR ANY LAW, REGULATION OR CONTRACTUAL RESTRICTION BINDING ON OR
AFFECTING IT OR ITS PROPERTY;

(C)              ALL CONSENTS, AUTHORIZATIONS AND APPROVALS REQUIRED FOR THE
EXECUTION AND DELIVERY BY THE COUNTERPARTY OF THE INTEREST RATE PROTECTION
AGREEMENT, AND ANY OTHER AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE
ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT) WHICH SUCH COUNTERPARTY HAS
EXECUTED AND DELIVERED PURSUANT THERETO, AND THE PERFORMANCE OF ITS OBLIGATIONS
THEREUNDER HAVE BEEN OBTAINED AND REMAIN IN FULL FORCE AND EFFECT, AND NO OTHER
ACTION BY, AND NO NOTICE TO OR FILING WITH ANY GOVERNMENTAL AUTHORITY OR
REGULATORY BODY IS REQUIRED FOR SUCH EXECUTION, DELIVERY OR PERFORMANCE; AND

(D)             THE INTEREST RATE PROTECTION AGREEMENT, AND ANY OTHER AGREEMENT
(INCLUDING, WITHOUT LIMITATION, THE ASSIGNMENT OF INTEREST RATE PROTECTION
AGREEMENT) WHICH THE COUNTERPARTY THEREUNDER HAS EXECUTED AND DELIVERED PURSUANT
THERETO, HAS BEEN DULY EXECUTED AND DELIVERED BY SUCH COUNTERPARTY AND
CONSTITUTES THE LEGAL, VALID AND BINDING OBLIGATION OF SUCH COUNTERPARTY,
ENFORCEABLE AGAINST SUCH COUNTERPARTY IN ACCORDANCE WITH ITS TERMS, SUBJECT TO
APPLICABLE BANKRUPTCY, INSOLVENCY AND SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS
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). 

(III)             DEPENDING ON THE NATURE OF THE TRANSACTION, THE COUNTERPARTY
OPINION SHALL CONTAIN SUCH ADDITIONAL OPINIONS ON SUCH OTHER MATTERS RELATING TO
THE INTEREST RATE PROTECTION AGREEMENT AND/OR AND ANY OTHER AGREEMENT
(INCLUDING, WITHOUT LIMITATION, THE ASSIGNMENT OF INTEREST RATE PROTECTION
AGREEMENT) WHICH THE COUNTERPARTY THEREUNDER HAS EXECUTED AND DELIVERED PURSUANT
THERETO, AS LENDER SHALL REASONABLY REQUIRE, AND ARE CUSTOMARILY REQUIRED IN
SIMILAR TRANSACTIONS, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING ADDITIONAL
OPINIONS IF THE COUNTERPARTY IS A FOREIGN ENTITY:

(A)             THE JURISDICTION WHERE THE COUNTERPARTY IS LOCATED WILL RESPECT
AND GIVE EFFECT TO THE CHOICE OF LAW PROVISIONS OF THE INTEREST RATE PROTECTION
AGREEMENT AND ANY OTHER AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE ASSIGNMENT
OF INTEREST RATE PROTECTION AGREEMENT) WHICH THE COUNTERPARTY THEREUNDER HAS
EXECUTED AND DELIVERED PURSUANT THERETO; AND

(B)              A JUDGMENT OBTAINED IN THE COURTS OF THE STATE OF NEW YORK IS
ENFORCEABLE IN THE JURISDICTION WHERE THE COUNTERPARTY IS LOCATED. 

(H)               IN CONNECTION WITH ANY INTEREST RATE PROTECTION AGREEMENT
OBTAINED BY BORROWER OR AN AFFILIATE OF BORROWER PURSUANT TO THE REQUIREMENTS OF
THIS SECTION 5.1.25,  

68

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

 

 

BORROWER OR SUCH AFFILIATE OF BORROWER SHALL OBTAIN AND DELIVER TO LENDER AN
OPINION OF COUNSEL (UPON WHICH LENDER AND ITS SUCCESSORS AND ASSIGNS MAY RELY)
IN CONNECTION WITH THE ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT (THE
“ASSIGNMENT OPINION”), UNDER NEW YORK LAW SUBSTANTIALLY IN COMPLIANCE WITH THE
REQUIREMENTS SET FORTH BELOW AND OTHERWISE CONSISTENT WITH THE OPINIONS GIVEN BY
BORROWER’S COUNSEL AT CLOSING:

(I)                 THE ASSIGNMENT OPINION SHALL BE ADDRESSED TO LENDER, FOR
ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND SHALL STATE THAT IT MAY BE RELIED
UPON BY (A)  ANY ASSIGNEE OF LENDER’S INTEREST IN THE LOAN, AND (B) ANY SERVICER
OF THE LOAN,

(II)               THE ASSIGNMENT OPINION SHALL BE IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO LENDER AND SHALL CONTAIN THE FOLLOWING OPINIONS:

(A)             THE BORROWER (OR SUCH AFFILIATE) IS DULY ORGANIZED, VALIDLY
EXISTING, AND IN GOOD STANDING UNDER THE LAWS OF ITS JURISDICTION OF
INCORPORATION OR FORMATION AND HAS THE ORGANIZATIONAL POWER AND AUTHORITY TO
EXECUTE AND DELIVER, AND TO PERFORM ITS OBLIGATIONS UNDER, THE ASSIGNMENT OF
INTEREST RATE PROTECTION AGREEMENT;

(B)              THE EXECUTION AND DELIVERY OF THE ASSIGNMENT OF INTEREST RATE
PROTECTION AGREEMENT BY BORROWER (OR SUCH AFFILIATE), AND THE PERFORMANCE OF ITS
OBLIGATIONS THEREUNDER HAVE BEEN AND REMAIN DULY AUTHORIZED BY ALL NECESSARY
ACTION AND DO NOT CONTRAVENE ANY PROVISION OF ITS CERTIFICATE OF INCORPORATION
OR BYLAWS (OR EQUIVALENT ORGANIZATIONAL DOCUMENTS) OR ANY LAW OR REGULATION
BINDING ON OR AFFECTING IT OR ITS PROPERTY;

(C)              ALL CONSENTS, AUTHORIZATIONS AND APPROVALS REQUIRED FOR THE
EXECUTION AND DELIVERY BY BORROWER (OR SUCH AFFILIATE) OF THE ASSIGNMENT OF
INTEREST RATE PROTECTION AGREEMENT, AND THE PERFORMANCE OF ITS OBLIGATIONS
THEREUNDER HAVE BEEN OBTAINED AND REMAIN IN FULL FORCE AND EFFECT, AND NO OTHER
ACTION BY, AND NO NOTICE TO OR FILING WITH ANY GOVERNMENTAL AUTHORITY OR
REGULATORY BODY IS REQUIRED FOR SUCH EXECUTION, DELIVERY OR PERFORMANCE; AND

(D)             THE ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT HAS BEEN
DULY EXECUTED AND DELIVERED BY BORROWER (OR SUCH AFFILIATE) AND CONSTITUTES THE
LEGAL, VALID AND BINDING OBLIGATION OF BORROWER (OR SUCH AFFILIATE), ENFORCEABLE
AGAINST BORROWER (OR SUCH AFFILIATE) IN ACCORDANCE WITH ITS TERMS, SUBJECT TO
APPLICABLE BANKRUPTCY, INSOLVENCY AND SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS
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).

5.1.26  BUILDING VIOLATIONS.  BORROWER HEREBY COVENANTS THAT BORROWER SHALL TAKE
ALL COMMERCIALLY REASONABLE EFFORTS TO CAUSE THE VIOLATIONS DESCRIBED ON
SCHEDULE 5.1.26 TO BE REMOVED FROM THE PROPERTY.

 

69

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

 

 

SECTION 5.2  NEGATIVE COVENANTS.  FROM THE CLOSING DATE UNTIL PAYMENT AND
PERFORMANCE IN FULL OF ALL OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS OR
THE EARLIER RELEASE OF THE LIEN OF THIS AGREEMENT OR THE MORTGAGE IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, BORROWER
COVENANTS AND AGREES WITH LENDER THAT IT WILL NOT DO, DIRECTLY OR INDIRECTLY,
ANY OF THE FOLLOWING:

5.2.1  INCUR DEBT; TRANSFERS.  INCUR, CREATE OR ASSUME ANY DEBT OTHER THAN
PERMITTED DEBT OR TRANSFER OR LEASE ALL OR ANY PART OF THE PROPERTY OR ANY
INTEREST THEREIN, EXCEPT AS PERMITTED IN THE LOAN DOCUMENTS;

5.2.2  ENCUMBRANCES.   INCUR, CREATE OR ASSUME OR PERMIT THE INCURRENCE,
CREATION OR ASSUMPTION OF ANY DEBT SECURED BY THE PROPERTY OR A DIRECT OR
INDIRECT INTEREST IN BORROWER AND SHALL NOT TRANSFER OR PERMIT THE TRANSFER OF
ANY DIRECT OR INDIRECT INTEREST IN BORROWER EXCEPT, IN EACH CASE, AS PERMITTED
PURSUANT TO THE LOAN DOCUMENTS;

5.2.3  ENGAGE IN DIFFERENT BUSINESS.  ENGAGE, DIRECTLY OR INDIRECTLY, IN ANY
BUSINESS OTHER THAN THAT OF ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH BORROWER IS A PARTY AND THE USE, OWNERSHIP, MANAGEMENT,
LEASING, RENOVATION, FINANCING, SALE, EXCHANGE, TRANSFER OR REFINANCING,
DEVELOPMENT, OPERATION AND MAINTENANCE OF THE PROPERTY AND ACTIVITIES RELATED
THERETO (ALL SUBJECT TO THE TERMS AND CONDITIONS HEREOF AND THE OTHER LOAN
DOCUMENTS);

5.2.4  MAKE ADVANCES.  MAKE ADVANCES OR MAKE LOANS TO ANY PERSON OTHER THAN
TENANTS IN CONNECTION WITH TENANT IMPROVEMENTS REQUIRED PURSUANT TO A LEASE THAT
HAS BEEN APPROVED BY LENDER, OR FOR WHICH NO APPROVAL IS REQUIRED BY LENDER, IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, OR HOLD ANY INVESTMENTS, EXCEPT AS
EXPRESSLY PERMITTED PURSUANT TO THE TERMS OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT;

5.2.5  PARTITION.   PERMIT OR PETITION FOR THE PARTITION OF THE PROPERTY;

5.2.6  COMMINGLE.   SUBJECT TO THE PROVISIONS OF SECTION 5.1.4(J), COMMINGLE ITS
ASSETS WITH THE ASSETS OF ANY OF ITS AFFILIATES;

5.2.7  GUARANTY OBLIGATIONS.  GUARANTY ANY OBLIGATIONS OF ANY PERSON;

5.2.8  TRANSFER ASSETS.  TRANSFER ANY ASSET OTHER THAN IN THE ORDINARY COURSE OF
BUSINESS OR TRANSFER ANY INTEREST IN THE PROPERTY EXCEPT AS MAY BE PERMITTED
HEREBY OR IN THE OTHER LOAN DOCUMENTS;

5.2.9  AMEND ORGANIZATIONAL DOCUMENTS.  AMEND OR MODIFY ANY OF ITS
ORGANIZATIONAL DOCUMENTS WITHOUT LENDER’S REASONABLE CONSENT, OTHER THAN IN
CONNECTION WITH ANY TRANSFER PERMITTED PURSUANT TO ARTICLE VIII, OR TO REFLECT
ANY CHANGE IN CAPITAL ACCOUNTS, CONTRIBUTIONS, DISTRIBUTIONS, ALLOCATIONS OR TO
OTHERWISE AMEND ANY PROVISIONS IN ANY RESPECT THAT WOULD NOT REASONABLY BE
EXPECTED TO HAVE AND DOES NOT HAVE, A MATERIAL ADVERSE EFFECT, AND PROVIDED THAT
BORROWER REMAINS IN EACH CASE A SINGLE PURPOSE ENTITY;

5.2.10  DISSOLVE.   DISSOLVE, WIND UP, TERMINATE, LIQUIDATE, MERGE WITH OR
CONSOLIDATE INTO ANOTHER PERSON, EXCEPT AS EXPRESSLY PERMITTED PURSUANT TO THIS
AGREEMENT;

 

70

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

 

 

5.2.11  BANKRUPTCY.   (A) FILE A BANKRUPTCY OR INSOLVENCY PETITION OR OTHERWISE
INSTITUTE INSOLVENCY PROCEEDINGS, OR (B) FILE OR SOLICIT THE FILING OF AN
INVOLUNTARY BANKRUPTCY PETITION AGAINST BORROWER, MANAGER OR ANY AFFILIATE OF
BORROWER OR MANAGER, WITHOUT OBTAINING THE PRIOR CONSENT OF ALL OF THE MEMBERS
AND MANAGERS OF BORROWER, INCLUDING, WITHOUT LIMITATION, THE INDEPENDENT
MANAGERS;

5.2.12  ERISA.   ENGAGE IN ANY ACTIVITY THAT WOULD QUALIFY IT AS AN “EMPLOYEE
BENEFIT PLAN” (WITHIN THE MEANING OF SECTION 3(3) OF ERISA) TO WHICH ERISA
APPLIES OR WOULD CAUSE BORROWER’S ASSETS TO CONSTITUTE PLAN ASSETS WITHIN THE
MEANING OF 29 C.F.R. SECTION 2510.3‑101 (AS MODIFIED BY SECTION 3(42) OF ERISA;

5.2.13  DISTRIBUTIONS.   DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, MAKE ANY
DISTRIBUTIONS TO OR FOR THE BENEFIT OF ANY OF ITS MEMBERS OR ITS OR THEIR
AFFILIATES;

5.2.14  MANAGER.   (A) WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED, MATERIALLY
MODIFY, CHANGE, SUPPLEMENT, ALTER OR AMEND THE MANAGEMENT AGREEMENT IN ANY
MATERIAL RESPECT OR WAIVE OR RELEASE ANY OF ITS MATERIAL RIGHTS AND REMEDIES
UNDER THE MANAGEMENT AGREEMENT.  WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER,
WHICH CONSENT SHALL BE IN LENDER’S SOLE AND ABSOLUTE DISCRETION, REPLACE THE
MANAGER WITH A PERSON OTHER THAN A QUALIFIED MANAGER; PROVIDED, HOWEVER, THAT
BORROWER SHALL HAVE THE UNILATERAL RIGHT TO REPLACE THE MANAGER AS BORROWER SEES
FIT FROM TIME-TO-TIME WITH ALX, VRLP, OR AN AFFILIATE OF ALX OR VRLP; 

(B)               BORROWER SHALL NOTIFY LENDER IN WRITING (AND DELIVER A COPY OF
THE PROPOSED MANAGEMENT AGREEMENT) OF ANY ENTITY PROPOSED TO BE DESIGNATED AS A
REPLACEMENT MANAGER OF THE PROPERTY TO REPLACE MANAGER NOT LESS THAN THIRTY (30)
DAYS BEFORE SUCH REPLACEMENT MANAGER BEGINS TO MANAGE THE PROPERTY;

(C)                BORROWER SHALL, AT THE REQUEST OF LENDER, TERMINATE THE
MANAGEMENT AGREEMENT AND REPLACE THE MANAGER WITH A QUALIFIED MANAGER OR A
REPLACEMENT MANAGER OTHERWISE REASONABLY ACCEPTABLE TO LENDER, IF (AND ONLY IF)
(I) AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND THE LOAN HAS BEEN
ACCELERATED, (II) MANAGER OR ANY REPLACEMENT MANAGER OR REPLACEMENT QUALIFIED
MANAGER SHALL BECOME BANKRUPT OR INSOLVENT, OR (III) UPON THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF THE MANAGER (OTHER THAN ISOLATED INCIDENTS WHICH
MANAGER REMEDIES AND FOR WHICH MANAGER HAS COMPENSATED BORROWER AND LENDER FOR
ANY LOSSES INCURRED AS A RESULT THEREOF); PROVIDED, HOWEVER, THAT PRIOR TO
BORROWER’S BECOMING SO OBLIGATED UNDER (II) ABOVE, BORROWER SHALL HAVE TEN (10)
BUSINESS DAYS, FROM AND AFTER THE DATE OF SUCH REQUEST, WITHIN WHICH TO PROVIDE
EVIDENCE REASONABLY SATISFACTORY TO LENDER THAT MANAGER, REPLACEMENT MANAGER OR
REPLACEMENT QUALIFIED MANAGER IS NO LONGER INSOLVENT OR SUCH PROCEEDING HAS BEEN
DISMISSED, AS APPLICABLE, IN WHICH CASE BORROWER SHALL NOT BECOME SO OBLIGATED;
PROVIDED, FURTHER, THAT IN THE CASE OF (I) ABOVE, SUCH REPLACEMENT MANAGER SHALL
NOT BE AN AFFILIATE OF BORROWER AND, IN THE CASE OF (II) AND (III) ABOVE, IF THE
TERMINATED MANAGER IS AN AFFILIATE OF BORROWER, THEN THE REPLACEMENT MANAGER
SHALL NOT BE AN AFFILIATE OF MANAGER;

(D)               UPON THE RETENTION OF A REPLACEMENT MANAGER OR A REPLACEMENT
QUALIFIED MANAGER, LENDER SHALL HAVE THE RIGHT TO APPROVE ANY NEW MANAGEMENT
AGREEMENT WITH SUCH REPLACEMENT MANAGER OR A REPLACEMENT QUALIFIED MANAGER
(WHICH APPROVAL BY LENDER SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR
DELAYED); PROVIDED  HOWEVER, THAT IF SUCH REPLACEMENT

71

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

 

 

MANAGER OR REPLACEMENT QUALIFIED MANAGER IS ALX, VRLP OR AN AFFILIATE OF ALX OR
VRLP, THEN AS LONG AS SUCH NEW MANAGEMENT AGREEMENT IS ON SUBSTANTIALLY THE SAME
TERMS AND CONDITIONS AS THE MANAGEMENT AGREEMENT, LENDER’S CONSENT TO SUCH NEW
MANAGEMENT AGREEMENT SHALL NOT BE REQUIRED; AND

(E)                UPON THE TERMINATION OF THE MANAGER AND REPLACEMENT WITH A
QUALIFIED MANAGER OR A REPLACEMENT MANAGER APPROVED BY LENDER, SUCH QUALIFIED
MANAGER OR REPLACEMENT MANAGER SHALL CONSTITUTE THE MANAGER HEREUNDER AND
BORROWER AND QUALIFIED MANAGER SHALL ENTER INTO AN ASSIGNMENT OF MANAGEMENT
AGREEMENT IN FAVOR OF LENDER IN FORM AND SUBSTANCE SUBSTANTIALLY SIMILAR TO THE
ASSIGNMENT OF MANAGEMENT AGREEMENT ENTERED INTO AS OF THE DATE HEREOF;

5.2.15  MODIFY ACCOUNT AGREEMENT.  EXCEPT AS PROVIDED IN SECTION 3.1.7(B),
WITHOUT THE PRIOR CONSENT OF LENDER, WHICH SHALL NOT BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED, BORROWER SHALL NOT EXECUTE ANY MODIFICATION TO THE
ACCOUNT AGREEMENT;

5.2.16  ZONING RECLASSIFICATION.  WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER,
(A) INITIATE OR CONSENT TO ANY ZONING RECLASSIFICATION (OTHER THAN TO EXPAND THE
PERMITTED USES TO INCLUDE USES WHICH ARE CONSISTENT WITH THE CURRENT USE OF THE
PROPERTY OR THE CONDOMINIUM) OF ANY PORTION OF THE PROPERTY, (B) SEEK ANY
VARIANCE UNDER ANY EXISTING ZONING ORDINANCE THAT COULD RESULT IN THE USE OF THE
PROPERTY BECOMING A NON‑CONFORMING USE UNDER ANY ZONING ORDINANCE OR ANY OTHER
APPLICABLE LAND USE LAW, RULE OR REGULATION, OR (C) TO THE EXTENT WITHIN
BORROWER’S CONTROL, ALLOW ANY PORTION OF THE PROPERTY TO BE USED IN ANY MANNER
THAT COULD RESULT IN THE USE OF THE PROPERTY BECOMING A NON‑CONFORMING USE UNDER
ANY ZONING ORDINANCE OR ANY OTHER APPLICABLE LAND USE LAW, RULE OR REGULATION;

5.2.17  GOVERNMENT REGULATION.  (A) BE A PERSON IN RESPECT OF WHICH ANY LAW,
REGULATION, OR LIST OF ANY GOVERNMENTAL AUTHORITY (INCLUDING, WITHOUT
LIMITATION, THE U.S. OFFICE OF FOREIGN ASSET CONTROL LIST) LENDER IS PROHIBITED
FROM MAKING ANY ADVANCE OR EXTENSION OF CREDIT TO BORROWER OR FROM OTHERWISE
CONDUCTING BUSINESS WITH BORROWER, OR (B) FAIL TO PROVIDE WITHIN A REASONABLE
TIME DOCUMENTARY AND OTHER EVIDENCE OF BORROWER’S IDENTITY AS MAY BE REASONABLY
REQUESTED BY LENDER AT ANY TIME TO ENABLE LENDER TO VERIFY BORROWER’S IDENTITY
OR TO COMPLY WITH ANY APPLICABLE LAW OR REGULATION, INCLUDING, WITHOUT
LIMITATION, SECTION 326 OF THE PATRIOT ACT;

5.2.18  DEBT CANCELLATION.  CANCEL OR OTHERWISE FORGIVE OR RELEASE ANY MATERIAL
CLAIM OR DEBT OWED TO IT BY ANY PERSON, EXCEPT FOR ADEQUATE CONSIDERATION OR IN
THE ORDINARY COURSE OF ITS BUSINESS OR EXCEPT (A) IN CONNECTION WITH THE
SETTLEMENT OF CLAIMS, SUBJECT TO THE TERMS AND PROVISIONS OF SECTION 8.7,
AGAINST TENANTS OR SERVICE PROVIDERS TO THE PROPERTY IN CONNECTION WITH SUCH
PARTIES’ LEASE OR OTHER CONTRACT DEFAULTS, PROVIDED SUCH SETTLEMENTS WOULD NOT
REASONABLY BE EXPECTED TO HAVE, AND DO NOT HAVE, A MATERIAL ADVERSE EFFECT AND
(B) FOR TERMINATION OF A LEASE AS PERMITTED BY SECTION 8.7; 

5.2.19  MISAPPLICATION OF FUNDS.  DISTRIBUTE ANY REVENUE FROM THE PROPERTY OR
ANY PROCEEDS IN VIOLATION OF THE PROVISIONS OF THIS AGREEMENT, FAIL TO REMIT
AMOUNTS TO THE COLLECTION ACCOUNT OR TO LENDER, AS APPLICABLE, AS REQUIRED BY
SECTION 3.1, MISAPPROPRIATE ANY SECURITY DEPOSIT OR PORTION THEREOF OR APPLY THE
PROCEEDS OF THE LOAN IN VIOLATION OF SECTION 2.1.4; OR

 

72

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

 

 

5.2.20  SINGLE PURPOSE ENTITY.  FAIL TO BE A SINGLE PURPOSE ENTITY OR TAKE OR
SUFFER ANY ACTION OR INACTION THE RESULT OF WHICH WOULD BE TO CAUSE IT TO CEASE
TO BE A SINGLE PURPOSE ENTITY.

5.2.21  REA.  BORROWER AGREES THAT WITHOUT THE PRIOR CONSENT OF LENDER, BORROWER
WILL NOT EXECUTE MODIFICATIONS TO ANY REA IF SUCH MODIFICATIONS ARE REASONABLY
LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.

ARTICLE VI

INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

SECTION 6.1  INSURANCE COVERAGE

   

6.1.1  INSURANCE COVERAGE REQUIREMENTS.  BORROWER SHALL, AT ITS SOLE COST AND
EXPENSE, KEEP IN FULL FORCE AND EFFECT INSURANCE COVERAGE OF THE TYPES AND
MINIMUM LIMITS AS FOLLOWS DURING THE TERM OF THIS AGREEMENT:

(A)               LIABILITY INSURANCE SHALL BE MAINTAINED AT ALL TIMES DURING
THE TERM OF THE LOAN AS FOLLOWS:

(I)                 COMMERCIAL GENERAL LIABILITY INSURANCE WITH NO EXCLUSION FOR
TERRORISM APPLICABLE TO CLAIMS FOR PERSONAL INJURY AND/OR BODILY INJURY
INCLUDING DEATH OR PROPERTY DAMAGE OCCURRING UPON, IN OR ABOUT THE PROPERTY;
OCCURRING AS A RESULT OF THE CONSTRUCTION AND USE AND OCCUPANCY OF FACILITIES
LOCATED AT OR ON THE PROPERTY; OR AS A RESULT OF CONSTRUCTION THEREOF.  COVERAGE
SHALL BE PROVIDED ON AN OCCURRENCE BASIS PURSUANT TO THE ISO COMMERCIAL GENERAL
LIABILITY COVERAGE FORM (CG 00 01) OR ITS EQUIVALENT, AND FOR PERSONAL AND/OR
BODILY INJURY OR PROPERTY DAMAGE AS NOW ARE OR HEREAFTER INCORPORATED INTO SUCH
FORM AND ITS ENDORSEMENTS.  SUCH COVERAGE SHALL BE IN AMOUNTS OF NOT LESS THAN
(A) $1,000,000 PER OCCURRENCE FOR BODILY INJURY AND PROPERTY DAMAGE COMBINED,
(B) $1,000,000 PER OCCURRENCE FOR PERSONAL & ADVERTISING INJURY, (C) $2,000,000
AGGREGATE FOR PRODUCTS AND COMPLETED OPERATIONS LIABILITY, (D) $100,000 FOR FIRE
LEGAL LIABILITY AND (E) $2,000,000 FOR GENERAL AGGREGATE LIMIT PER LOCATION. 
THE POLICY SHALL BE WRITTEN ON AN OCCURRENCE BASIS WITH NO DEDUCTIBLE UNLESS
OTHERWISE APPROVED BY LENDER.  SUCH COVERAGE SHALL NAME LENDER AS AN ADDITIONAL
INSURED AND PROVIDE SUCH ADDITIONAL INSURED COVERAGE ON A PRIMARY AND
NON-CONTRIBUTORY BASIS.

(II)               IF APPLICABLE, COMMERCIAL AUTOMOBILE LIABILITY INSURANCE
PROVIDING BODILY INJURY AND PROPERTY DAMAGE COVERAGE OF NO LESS THAN $1,000,000
FOR COMBINED SINGLE LIMIT COVERING ALL OWNED, NON-OWNED AND HIRED VEHICLES. 
SUCH COVERAGE SHALL NAME LENDER AS AN ADDITIONAL INSURED AND PROVIDE SUCH
ADDITIONAL INSURED COVERAGE ON A PRIMARY AND NON-CONTRIBUTORY BASIS.

(III)             COMMERCIAL UMBRELLA/EXCESS LIABILITY COVERAGE WITH NO
EXCLUSION FOR TERRORISM IN COMBINATION NO LESS THAN $100,000,000 PER OCCURRENCE
AND IN THE

73

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

 

 

ANNUAL AGGREGATE ON PER LOCATION BASIS.  COMMERCIAL UMBRELLA/EXCESS LIABILITY
INSURANCE SHALL PROVIDE ADDITIONAL COVERAGE OVER ALL LIMITS AND COVERAGES NOTED
IN PARAGRAPH (I), (II)  AND EMPLOYERS LIABILITY PER PARAGRAPH (IV).  THIS LIMIT
SHALL BE INCREASED FROM TIME TO TIME TO REFLECT AN AMOUNT WHICH IS CUSTOMARILY
MAINTAINED AND IS GENERALLY REQUIRED BY INSTITUTIONAL LENDERS ON LOANS OF
AMOUNTS AND SECURED BY PROPERTIES COMPARABLE TO AND IN THE GENERAL VICINITY OF
THE PROPERTY.  THIS POLICY SHALL BE WRITTEN ON AN “OCCURRENCE” FORM BASIS AND
PROVIDE FOLLOW-FORM COVERAGE OR COVERAGE AS BROAD AS THE PRIMARY.

(IV)             WORKERS COMPENSATION AND DISABILITY INSURANCE TO THE FULL
EXTENT AS REQUIRED BY APPLICABLE LAW AND EMPLOYER’S LIABILITY COVERAGE SUBJECT
TO A LIMIT OF NO LESS THAN (A) $1,000,000 PER ACCIDENT, (B) $1,000,000 DISEASE
PER EMPLOYEE AND (C) $1,000,000 DISEASE POLICY LIMIT.  SUCH WORKERS COMPENSATION
AND DISABILITY AND EMPLOYER’S LIABILITY INSURANCE SHALL COVER BORROWER’S
EMPLOYEES ENGAGED IN ANY WORK FOR OR RELATED TO THE PROPERTY.

(V)               AT ANY TIME DURING WHICH ANY CONSTRUCTION WORK, STRUCTURAL
ALTERATIONS OR REPAIRS IS BEING PERFORMED AT THE PROPERTY:  BORROWER SHALL CAUSE
THE GENERAL CONTRACTOR PERFORMING WORK FOR OR RELATED TO THE PROPERTY TO OBTAIN
AND MAINTAIN COMMERCIAL GENERAL LIABILITY COVERAGE, INCLUDING, WITHOUT
LIMITATION, PRODUCTS AND COMPLETED OPERATIONS AND CONTAINING NO “X”, “C”, “U”
EXCLUSION, AND AUTOMOBILE LIABILITY INSURANCE FOR OWNED, HIRED AND NON-OWNED
AUTOMOBILES WITH NO LESS THAN $100,000,000 IN LIMITS PER OCCURRENCE AND IN THE
AGGREGATE PER PROJECT THROUGH PRIMARY AND UMBRELLA LIABILITY COVERAGES.  SUCH
INSURANCE SHALL NAME BORROWER AND LENDER AS ADDITIONAL INSUREDS AND PROVIDE SUCH
ADDITIONAL INSURED COVERAGE ON A PRIMARY AND NON-CONTRIBUTORY BASIS.  BORROWER
SHALL ALSO REQUIRE THAT ALL TRADE CONTRACTORS PERFORMING WORK FOR OR RELATED TO
THE PROPERTY TO MAINTAIN SIMILAR COVERAGE WITH LIMITS OF NO LESS THAN $3,000,000
PER OCCURRENCE AND IN THE AGGREGATE PER PROJECT.  TRADE CONTRACTORS’ LIABILITY
INSURANCE SHALL INCLUDE A WAIVER OF SUBROGATION IN FAVOR OF BORROWER AND LENDER
AND SHALL INCLUDE BORROWER AND LENDER AS ADDITIONAL INSUREDS AND PROVIDE SUCH
ADDITIONAL INSURED COVERAGE ON A PRIMARY AND NON-CONTRIBUTORY BASIS.  ALL
PERSONS ENGAGED IN WORK ON THE IMPROVEMENTS AT THE PROPERTY SHALL MAINTAIN
STATUTORY WORKERS COMPENSATION AND DISABILITY INSURANCE IN FORCE FOR ALL WORKERS
PERFORMING WORK FOR OR RELATED TO THE PROPERTY.

(VI)             THE POLICIES DESCRIBED IN PARAGRAPHS (A)(I), (II)  AND (III) 
SHALL COVER, WITHOUT LIMITATION:  ELEVATORS, ESCALATORS, CONTRACTUAL LIABILITY
(COVERING, TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER’S OBLIGATION TO
INDEMNIFY LENDER AS REQUIRED UNDER THIS AGREEMENT), PRODUCTS AND COMPLETED
OPERATIONS LIABILITY COVERAGE.

(VII)           AT ANY TIME DURING WHICH ANY CONSTRUCTION WORK, STRUCTURAL
ALTERNATIONS OR REPAIRS ARE BEING PERFORMED AT THE PROPERTY:  IN LIEU OF
PROVIDING THE COMMERCIAL GENERAL AND UMBRELLA LIABILITY AND WORKERS COMPENSATION
INSURANCE REQUIRED IN PARAGRAPHS (A)(II), (III), (IV)  AND (V)  ABOVE, BORROWER
MAY PROVIDE SUCH INSURANCE THROUGH THE PURCHASE OF A WRAP UP OR OWNER CONTROLLED
INSURANCE PROGRAM OR CONTRACTOR CONTROLLED INSURANCE PROGRAM.  THIS PROGRAM

74

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

 

 

SHALL PROVIDE COVERAGE FOR ALL PERSONS, CONTRACTORS AND SUBCONTRACTORS OF EVERY
LEVEL ENGAGED IN CONSTRUCTION OPERATIONS AT THE PROPERTY. 

(B)               SUCH OTHER TYPES AND AMOUNTS OF INSURANCE WITH RESPECT TO THE
PROPERTY AND THE OPERATION THEREOF WHICH ARE CUSTOMARILY MAINTAINED IN THE CASE
OF OTHER PROPERTY AND BUILDINGS SIMILAR TO THE PROPERTY IN NATURE, USE,
LOCATION, HEIGHT AND TYPE OF CONSTRUCTION AS MAY FROM TIME TO TIME BE REASONABLY
REQUIRED BY LENDER.

(C)                PROPERTY INSURANCE SHALL BE MAINTAINED AT ALL TIMES DURING
THE TERM OF THE LOAN AS FOLLOWS:

 

(I)                 INSURANCE AGAINST LOSS CUSTOMARILY INCLUDED UNDER STANDARD
“ALL RISK” OR “SPECIAL FORM” POLICIES INCLUDING BUT NOT LIMITED TO: FIRE, HAIL,
WINDSTORM/NAMED WINDSTORM, VANDALISM, AND MALICIOUS MISCHIEF, AND SUCH OTHER
INSURABLE HAZARDS WHICH ARE CUSTOMARILY MAINTAINED AND ARE GENERALLY REQUIRED BY
INSTITUTIONAL LENDERS ON LOANS OF SIMILAR AMOUNTS AND SECURED BY PROPERTIES
COMPARABLE TO, AND IN THE GENERAL VICINITY OF, THE PROPERTY.  THE AMOUNT OF SUCH
INSURANCE SHALL BE NOT LESS THAN ONE HUNDRED PERCENT (100%) OF THE INSURABLE
REPLACEMENT COST VALUE OF THE PROPERTY, INCLUDING IMPROVEMENTS.  EACH SUCH
INSURANCE POLICY SHALL EITHER CONTAIN AN AGREED AMOUNT ENDORSEMENT OR
CONFIRMATION THAT COINSURANCE DOES NOT APPLY AND SHALL COVER, WITHOUT
LIMITATION, ALL TENANT IMPROVEMENTS AND BETTERMENTS (EXCEPT TO THE EXTENT THAT
THE TENANT IS REQUIRED TO INSURE THE SAME PURSUANT TO THE APPLICABLE LEASE) ON A
REPLACEMENT COST BASIS.  LENDER SHALL BE NAMED MORTGAGEE ON A STANDARD MORTGAGEE
ENDORSEMENT AND LENDER LOSS PAYEE.  IF THE PROPERTY IS NOW OR AT ANY TIME DURING
THE LOAN DEEMED TO BE LOCATED IN A SPECIAL HAZARD FLOOD AREA, AND/OR AREA OF
HIGH SEISMIC/EARTHQUAKE ACTIVITY THEN FLOOD AND/OR EARTHQUAKE INSURANCE WILL BE
REQUIRED IN AMOUNTS AND WITH DEDUCTIBLES ACCEPTABLE TO LENDER.  IF THE “ALL
RISK” OR “SPECIAL FORM” POLICY EXCLUDES COVERAGE FOR WINDSTORM/NAMED WINDSTORM
PERILS THEN WINDSTORM/NAMED WINDSTORM COVERAGE SHALL BE PROVIDED ON A SEPARATE
POLICY IN AMOUNTS ACCEPTABLE TO LENDER.  WINDSTORM/NAMED WINDSTORM DEDUCTIBLES
IN HIGH HAZARD COUNTIES SHALL NOT BE GREATER THAN FIVE PERCENT (5%) OF THE TOTAL
INSURED VALUE OF THE PROPERTY.  SUCH INSURANCE POLICY SHALL ALSO INCLUDE
COVERAGE FOR:

(A)             LOSS SUFFERED WITH RESPECT TO MATERIALS, EQUIPMENT, HEATING AND
AIR CONDITIONING MACHINERY, MACHINERY, AND SUPPLIES, IN EACH CASE OWNED BY
BORROWER OR REQUIRED TO BE INSURED BY BORROWER, WHETHER ON SITE, IN TRANSIT, OR
STORED OFFSITE AND WITH RESPECT TO TEMPORARY STRUCTURES, HOISTS, SIDEWALKS,
RETAINING WALLS, AND UNDERGROUND PROPERTY IN EACH CASE OWNED BY BORROWER OR
REQUIRED TO BY INSURED BY BORROWER.

(B)              LAW & ORDINANCE COVERAGE INCLUDING COVERAGE FOR VALUE OF THE
UNDAMAGED PORTION, DEMOLITION COST, DEBRIS REMOVAL AND INCREASED COST OF
CONSTRUCTION.

(I)                Demolition Cost means the cost incurred to demolish all or
part of your covered real property, including the cost to clear the site, if any
law or ordinance that exists at the time

75

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

 

 

of loss required such demolition.  Coverage is provided in such amount as is
reasonably required by Lender;

(II)             Value of the Undamaged Portion means the cost Borrower incurs
to rebuild any undamaged part of the Property, which is required by law to be
demolished after a covered loss;

(III)          Increased Cost of Construction includes the increased cost
Borrower incurs for materials and labor required to rebuild the damaged portion
of the Property and in a manner that satisfies the minimum requirement of the
applicable law or ordinance at the time of the loss.

(C)              VALUE OF THE UNDAMAGED PORTION AND INCREASED COST OF
CONSTRUCTION ARE REQUIRED IN SUCH AMOUNTS AS MAY BE REASONABLY REQUIRED BY
LENDER.

(D)             AT ANY TIME DURING WHICH ANY CONSTRUCTION WORK, STRUCTURAL
ALTERATIONS OR REPAIRS ARE BEING PERFORMED AT THE PROPERTY, AND IF SUCH WORK IS
EXCLUDED FROM THE “ALL RISK” OR “SPECIAL FORM” POLICY, BUILDERS RISK INSURANCE,
ON AN NON-REPORTING BASIS SHALL BE PROVIDED NAMING BORROWER AS THE INSURED.  THE
POLICY SHALL ALSO NAME LENDER AS FIRST MORTGAGEE UNDER A NON-CONTRIBUTING NEW
YORK STANDARD MORTGAGEE CLAUSE OR AN EQUIVALENT ENDORSEMENT REASONABLY
SATISFACTORY TO LENDER FOR REAL PROPERTY AND IMPROVEMENTS AND AS LENDER LOSS
PAYEE FOR BUSINESS INCOME/REVENUE/RENTAL INCOME.  IF THE INSURANCE REQUIRED
UNDER CLAUSE (C)(I)  IS NOT OBTAINED UNDER AN INSURANCE POLICY CONTAINING
BLANKET LIMITS, THEN THE INSURANCE POLICY SHALL BE ENDORSED TO ALSO PROVIDE
GUARANTEED BUILDING REPLACEMENT COST TO THE IMPROVEMENTS, THE OTHER PORTIONS OF
THE IMPROVEMENTS AND SUCH TENANT IMPROVEMENTS & BETTERMENTS IN AN AMOUNT TO BE
SUBJECT TO THE CONSENT OF LENDER, WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD.

(II)               TIME ELEMENT COVERAGES, INCLUDING EXTRA EXPENSE COVERAGE, FOR
INDIRECT LOSS OR DAMAGE BY ALL RISKS COVERED BY THE INSURANCE PROVIDED FOR IN
(I)  ABOVE.  SUCH COVERAGE SHALL BE EQUAL TO AN AMOUNT NOT LESS THAN 100% OF THE
PROJECTED GROSS INCOME IN AN EIGHTEEN (18) MONTH PERIOD COMMENCING AT THE TIME
OF LOSS AND SHALL PROVIDE AN EXTENDED PERIOD OF INDEMNITY ENDORSEMENT FOR AT
LEAST SIX (6) MONTHS.  LENDER SHALL BE NAMED AS FIRST LENDER LOSS PAYEE AS
RESPECTS THIS COVERAGE.  ALL COINSURANCE PROVISIONS SHALL BE WAIVED.  THE AMOUNT
OF SUCH TIME ELEMENT COVERAGE SHALL BE DETERMINED PRIOR TO THE CLOSING DATE AND
AT LEAST ONCE EACH YEAR THEREAFTER BASED ON BORROWER’S REASONABLE ESTIMATE OF
THE ANNUAL AMOUNT OF ESTIMATED GROSS INCOME FOR THE SUCCEEDING EIGHTEEN (18)
MONTH PERIOD.  IN THE EVENT THAT ALL OR ANY PORTION OF THE PROPERTY SHALL BE
DAMAGED OR DESTROYED, BORROWER SHALL ASSIGN TO LENDER ALL CLAIMS UNDER THE
POLICIES OF SUCH INSURANCE AND ALL AMOUNTS PAYABLE AND ALL NET AMOUNTS, WHEN
COLLECTED BY BORROWER UNDER SUCH POLICIES.

 

76

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

 

 

(III)             IF APPLICABLE, BOILER AND MACHINERY COVERAGE WITH LIMITS WITH
RESPECT TO ANY ONE ACCIDENT AS MAY BE REASONABLY REQUESTED BY LENDER, BUT IN NO
EVENT LESS THAN THE FULL INSURABLE VALUE REPLACEMENT COST OF THE PROPERTY,
INCLUDING IMPROVEMENTS.  SUCH COVERAGE SHALL INSURE AGAINST DIRECT AND INDIRECT
LOSS OR DAMAGE TO ALL BUILDING AND TENANT IMPROVEMENTS AND BETTERMENTS THAT
BORROWER IS REQUIRED TO INSURE PURSUANT TO THIS AGREEMENT BY EXPLOSION OR
BREAKDOWN OF MECHANICAL AND ELECTRICAL EQUIPMENT, INCLUDING STEAM BOILER, AIR
CONDITIONING EQUIPMENT, PRESSURE VESSELS OR SIMILAR APPARATUS, WITH EXCLUSIONS
FOR TESTING REMOVED, NOW OR HEREAFTER INSTALLED ON THE PROPERTY.  COVERAGE FOR
INDIRECT LOSS/RENTAL INTERRUPTION INSURANCE FOR A PERIOD OF AT LEAST
EIGHTEEN (18) MONTHS FROM THE DATE OF LOSS AS IS REASONABLY REQUIRED BY LENDER. 

(IV)             IF THE “ALL RISK” OR “SPECIAL FORM” COMMERCIAL PROPERTY
INSURANCE REQUIRED UNDER SUBSECTION (C)(I)  ABOVE AND THE “ALL RISK BUILDERS
RISK” COMMERCIAL PROPERTY INSURANCE AND THE RENT LOSS AND/OR BUSINESS
INTERRUPTION INSURANCE POLICIES REQUIRED UNDER SUBSECTION (C)(II)  ABOVE DO NOT
COVER PERILS OF TERRORISM OR ACTS OF TERRORISM, BORROWER SHALL MAINTAIN
COMMERCIAL PROPERTY AND RENT LOSS AND/OR BUSINESS INTERRUPTION INSURANCE FOR
LOSS RESULTING FROM PERILS AND ACTS OF TERRORISM ON TERMS (INCLUDING AMOUNTS)
CONSISTENT WITH THOSE REQUIRED UNDER SUBSECTIONS  (C)(I)  AND (C)(II)  ABOVE (A
“TERRORISM POLICY”).  FOR THE PURPOSES OF THIS AGREEMENT, “TERRORISM” SHALL MEAN
THE USE OR THREATENED USE OF FORCE OR VIOLENCE AGAINST PERSON OR PROPERTY, OR
COMMISSION OF AN ACT DANGEROUS TO HUMAN LIFE OR PROPERTY, UNDERTAKEN BY ANY
PERSON OR GROUP, WHETHER OR NOT ACTING ON BEHALF OF OR IN CONNECTION WITH ANY
ORGANIZATION, GOVERNMENT, POWER, AUTHORITY OR MILITARY FORCE, WHEN THE EFFECT IS
TO INTIMIDATE, HARM OR COERCE A GOVERNMENT, THE CIVILIAN POPULATION OR ANY
SEGMENT THEREFORE, OR TO DISRUPT ANY SEGMENT OF THE ECONOMY.  TERRORISM SHALL
ALSO INCLUDE ANY ACT WHICH IS VERIFIED OR RECOGNIZED BY THE UNITED STATES
GOVERNMENT AS AN ACT OF TERRORISM.

(V)               IF APPLICABLE, INSURANCE COVERING THE DECREASE OR DIMINUTION
IN VALUE OF THE PROPERTY RESULTING FROM THE ENFORCEMENT OF ANY LAW, BUILDING
CODE, ZONING REGULATION OR OTHER LEGAL REQUIREMENT OR ACT OF ANY GOVERNMENTAL
AUTHORITY TO THE EXTENT THAT THE PROPERTY CANNOT LEGALLY BE RESTORED TO A
CONDITION THAT EXISTED PRIOR TO THE CASUALTY (WHICH INSURANCE SHALL BE IN AN
AMOUNT ACCEPTABLE TO LENDER IN ITS SOLE DISCRETION), PROVIDED  THAT SUCH
INSURANCE IS AVAILABLE TO BORROWER USING COMMERCIALLY REASONABLE EFFORTS.

(D)               SUCH OTHER TYPES AND AMOUNTS OF INSURANCE WITH RESPECT TO THE
PROPERTY AND THE OPERATION THEREOF WHICH ARE CUSTOMARILY MAINTAINED IN THE CASE
OF OTHER PROPERTY AND BUILDINGS SIMILAR TO THE PROPERTY IN NATURE, USE,
LOCATION, HEIGHT AND TYPE OF CONSTRUCTION AS MAY FROM TIME TO TIME BE REASONABLY
REQUIRED BY LENDER.

 

77

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

 

 

 

6.1.2  RATINGS OF INSURERS.  ALL INSURANCE POLICIES REQUIRED PURSUANT TO
SECTION 6.1.1  SHALL:

(A)                BE ISSUED BY COMPANIES AUTHORIZED TO DO BUSINESS IN THE STATE
WHERE THE PROPERTY IS LOCATED, WHICH COMPANIES SHALL EACH HAVE A EACH HAVE A
FINANCIAL STRENGTH AND CLAIMS PAYING ABILITY RATING OF AT LEAST “A-“ FROM S&P,
PROVIDED THAT IF SUCH INSURANCE IS PROVIDED BY A SYNDICATE OF FIVE OR MORE
INSURERS, THEN ONLY 60% OF THE MEMBERS OF THE SYNDICATE (OR 75% IF FOUR OR FEWER
INSURERS COMPRISE THE SYNDICATE) MUST HAVE THE ABOVE RATING WITH THE REMAINING
INSURERS HAVING A RATING NOT LESS THAN “BBB” FROM S&P OR A-/VIII BY A.M. BEST. 
NOTWITHSTANDING THE FOREGOING, BORROWER SHALL BE PERMITTED TO MAINTAIN THE
INSURANCE POLICIES REQUIRED HEREUNDER WITH INSURANCE COMPANIES WHICH DO NOT MEET
THE FOREGOING REQUIREMENTS (AN “OTHERWISE RATED INSURER”), PROVIDED  BORROWER
OBTAINS A “CUT THROUGH” ENDORSEMENT (THAT IS, AN ENDORSEMENT WHICH PERMITS
RECOVERY AGAINST THE PROVIDER OF SUCH ENDORSEMENT) REASONABLY ACCEPTABLE TO
LENDER WITH RESPECT TO ANY OTHERWISE RATED INSURER FROM AN INSURANCE COMPANY
WHICH MEETS THE CLAIMS PAYING ABILITY RATINGS REQUIRED ABOVE; 

(B)               WITH RESPECT TO ALL PROPERTY INSURANCE POLICIES, NAME LENDER
AND ITS SUCCESSORS AND/OR ASSIGNS AS THEIR INTEREST MAY APPEAR AS MORTGAGEE;

(C)                WITH RESPECT TO ALL PROPERTY INSURANCE POLICIES AND RENTAL
LOSS AND/OR BUSINESS INTERRUPTION INSURANCE POLICIES, CONTAIN A “STANDARD
MORTGAGEE CLAUSE” AND A “LENDER’S LOSS PAYABLE” PROVISION, OR THEIR EQUIVALENTS,
NAMING LENDER AS THE PERSON TO WHOM PAYMENTS WILL BE MADE AS ITS INTEREST SHALL
APPEAR;

(D)               WITH RESPECT TO ALL LIABILITY POLICIES, NAME LENDER AND ITS
SUCCESSORS AND/OR ASSIGNS AS AN ADDITIONAL INSURED;

(E)                CONTAIN A WAIVER OF SUBROGATION IN FAVOR OF LENDER; AND

(F)                CONTAIN SUCH PROVISIONS AS LENDER DEEMS REASONABLY NECESSARY
OR DESIRABLE TO PROTECT ITS INTEREST, INCLUDING ENDORSEMENTS IF NOT ALREADY
CONTAINED IN THE POLICY LANGUAGE PROVIDING THAT NEITHER BORROWER, LENDER NOR ANY
OTHER PARTY SHALL BE A CO‑INSURER UNDER SAID INSURANCE POLICIES.

Borrower shall pay the insurance premiums as the same become due and payable and
shall furnish to Lender evidence of the renewal of each of the insurance
policies with receipts for the payment of the insurance premiums or other
evidence of such payment reasonably satisfactory to Lender (provided, however,
that Borrower shall not be required to pay such insurance premiums nor furnish
such evidence of payment to Lender in the event that the amounts required to pay
such insurance premiums have been deposited into the Insurance Reserve Account
pursuant to Section 12.2). 

6.1.3        FORM OF INSURANCE POLICIES; ENDORSEMENTS.  ALL INSURANCE POLICIES
SHALL BE IN SUCH FORM AND WITH SUCH ENDORSEMENTS AS ARE REASONABLY SATISFACTORY
TO LENDER.  CERTIFICATES OF INSURANCE WITH RESPECT TO ALL OF THE ABOVE MENTIONED
INSURANCE POLICIES HAVE BEEN DELIVERED TO AND APPROVED BY LENDER AND COPIES OF
ALL SUCH POLICIES SHALL BE DELIVERED TO LENDER WITHIN TEN (10) DAYS OF REQUEST
BY LENDER, PROVIDED THAT IF BORROWER IS NOT YET IN RECEIPT OF SUCH POLICIES
BORROWER SHALL NOT BE OBLIGATED TO DELIVER SUCH POLICIES UNTIL FIVE (5) DAYS
AFTER ITS RECEIPT THEREOF.  ALL POLICIES (EXCEPT FOR WORKER’S COMPENSATION)
SHALL NAME LENDER AS AN ADDITIONAL

78

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

 

 

INSURED, SHALL PROVIDE THAT ALL PROCEEDS (EXCEPT PROCEEDS OF GENERAL LIABILITY,
MOTOR VEHICLE LIABILITY AND WORKERS’ COMPENSATION INSURANCE) BE PAYABLE TO
LENDER AS ITS INTERESTS MAY APPEAR.  ALL PROPERTY POLICIES SHALL CONTAIN:  (A) A
STANDARD “NON‑CONTRIBUTORY MORTGAGEE” PROVISION OR ITS EQUIVALENT RELATING,
INTER ALIA, TO RECOVERY BY LENDER NOTWITHSTANDING THE ACTS OR OMISSIONS OF
BORROWER; (B) A PROVISION PROVIDING THAT NO POLICY SHALL BE IMPAIRED OR
INVALIDATED BY VIRTUE OF ANY ACT, FAILURE TO ACT, NEGLIGENCE OF, OR VIOLATION OF
DECLARATIONS, WARRANTIES OR CONDITIONS CONTAINED IN SUCH POLICY BY BORROWER,
LENDER OR ANY OTHER NAMED INSURED, ADDITIONAL INSURED OR LOSS PAYEE, EXCEPT FOR
THE WILLFUL MISCONDUCT OF LENDER KNOWINGLY IN VIOLATION OF THE CONDITIONS OF
SUCH POLICY (A “LENDER’S LOSS PAYABLE” PROVISION SHALL BE DEEMED TO SATISFY THE
REQUIREMENTS OF THIS CLAUSE (B)); AND (C) A PROVISION THAT SUCH POLICIES SHALL
NOT BE CANCELED WITHOUT AT LEAST THIRTY (30) DAYS’ PRIOR WRITTEN NOTICE TO
LENDER, IN EACH INSTANCE (OR TEN (10) DAYS’ NOTICE, IN CASE OF CANCELLATION FOR
NONPAYMENT OF PREMIUMS).  EACH INSURANCE POLICY SHALL CONTAIN A PROVISION
WHEREBY THE INSURER:  (I) WAIVES ANY RIGHT TO CLAIM ANY PREMIUMS AND COMMISSIONS
AGAINST LENDER, PROVIDED THAT THE POLICY NEED NOT WAIVE THE REQUIREMENT THAT THE
PREMIUM BE PAID IN ORDER FOR A CLAIM TO BE PAID TO THE INSURED; AND
(II) PROVIDES THAT LENDER AT ITS OPTION, SHALL BE PERMITTED TO MAKE PAYMENTS TO
EFFECT THE CONTINUATION OF SUCH POLICY UPON NOTICE OF CANCELLATION DUE TO
NON‑PAYMENT OF PREMIUMS.  IN THE EVENT ANY INSURANCE POLICY (EXCEPT FOR GENERAL
PUBLIC AND OTHER LIABILITY AND WORKERS COMPENSATION INSURANCE) SHALL CONTAIN
BREACH OF WARRANTY PROVISIONS, SUCH POLICY SHALL PROVIDE THAT WITH RESPECT TO
THE INTEREST OF LENDER, SUCH INSURANCE POLICY SHALL NOT BE INVALIDATED BY AND
SHALL INSURE LENDER REGARDLESS OF (A) ANY ACT, UNINTENTIONAL FAILURE TO ACT,
DECLARATIONS OR CONDITIONS CONTAINED IN SUCH POLICY BY ANY NAMED INSURED EXCEPT
FOR THE WILLFUL MISCONDUCT OF LENDER COMMITTED KNOWINGLY IN VIOLATION OF THE
CONDITIONS OF SUCH POLICY, (B) THE OCCUPANCY OR USE OF THE PROPERTY FOR PURPOSES
MORE HAZARDOUS THAN PERMITTED BY THE TERMS THEREOF, OR (C) ANY FORECLOSURE OR
OTHER ACTION OR PROCEEDING TAKEN BY LENDER PURSUANT TO ANY PROVISION OF THIS
AGREEMENT.

6.1.4  POLICIES; CERTIFICATES.  BORROWER SHALL DELIVER TO LENDER COPIES OF THE
INSURANCE POLICIES REQUIRED TO BE MAINTAINED PURSUANT THIS SECTION 6.1,
PROVIDED, HOWEVER, LENDER SHALL NOT BE DEEMED BY REASON OF THE CUSTODY OF SUCH
INSURANCE POLICIES TO HAVE KNOWLEDGE OF THE CONTENTS THEREOF.  BORROWER ALSO
SHALL DELIVER TO LENDER, WITHIN TEN (10) DAYS OF LENDER'S REQUEST, A CERTIFICATE
OF INSURANCE EVIDENCING THE COVERAGES SET FORTH HEREIN TOGETHER WITH EVIDENCE
THAT ALL INSURANCE PREMIUMS DUE THEREON HAVE BEEN PAID AND THAT SUCH COVERAGES
ARE IN FULL FORCE AND EFFECT.  NOT LATER THAN THREE (3) BUSINESS DAYS PRIOR TO
THE EXPIRATION DATE OF EACH OF THE INSURANCE POLICIES, BORROWER SHALL DELIVER TO
LENDER A CERTIFICATE OF INSURANCE, EVIDENCING RENEWAL OF COVERAGE AS REQUIRED
HEREIN OF ALL SUCH RENEWAL INSURANCE POLICIES AND IF BORROWER FAILS TO PROVIDE
SUCH DOCUMENTATION TO LENDER AT LEAST THREE (3) BUSINESS DAYS PRIOR TO THE
EXPIRATION DATE OF SUCH INSURANCE POLICIES, LENDER HAS THE RIGHT, IN ITS SOLE
DISCRETION, TO FORCE PLACE SUCH INSURANCE POLICIES PROVIDED THAT LENDER SHALL
USE COMMERCIALLY REASONABLE EFFORTS TO PROVIDE IN SUCH FORCED PLACED INSURANCE
THAT THE APPLICABLE INSURANCE POLICIES WILL BE TERMINABLE AND THE PREMIUMS
THEREUNDER REFUNDABLE FOR ANY PERIOD OF TIME IN WHICH SUCH POLICIES ARE NOT IN
EFFECT.  IF LENDER RECEIVES SUCH CERTIFICATES OF INSURANCE AND INSURANCE COMPANY
ISSUED BINDERS SUBSEQUENT TO SUCH THREE (3) BUSINESS DAY PERIOD BUT PRIOR TO THE
EXPIRATION OF THE APPLICABLE INSURANCE POLICIES, THEN LENDER SHALL NOT FORCE
PLACE SUCH INSURANCE POLICIES IF IT HAS NOT ALREADY DONE SO.  BORROWER HEREBY
AGREES THAT BORROWER SHALL BE RESPONSIBLE FOR ALL COSTS AND EXPENSES INCURRED BY
LENDER IN CONNECTION WITH FORCE PLACING INSURANCE IN ACCORDANCE WITH THIS
SECTION 6.1.4 HEREOF AND THE SUBSEQUENT TERMINATION OR CANCELLATION OF ANY SUCH
FORCED PLACED INSURANCE

79

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

 

 

POLICIES.  PRIOR TO THIRTY (30) DAYS AFTER RENEWAL, BORROWER SHALL PROVIDE
EVIDENCE SATISFACTORY TO LENDER THAT THE INSURANCE POLICIES FOR SUCH RENEWAL
SHALL HAVE BEEN PAID.

6.1.5  LOSS VALUATION; DEDUCTIBLES; CO-INSURANCE; INSURABLE INTERESTS OTHER THAN
LENDER’S; SEPARATE INSURANCE.  BORROWER SHALL NOT TAKE OUT SEPARATE INSURANCE
CONTRIBUTING IN THE EVENT OF LOSS WITH THAT REQUIRED TO BE MAINTAINED PURSUANT
TO THIS SECTION 6.1.  IN ADDITION, ALL POLICIES SHALL CONTAIN COVERAGE FOR
TENANT IMPROVEMENTS AND BETTERMENTS THAT BORROWER IS REQUIRED TO INSURE PURSUANT
TO THE APPLICABLE LEASES.  ALL PROPERTY INSURANCE ALSO SHALL INCLUDE COVERAGE ON
A REPLACEMENT COST BASIS WITH A CO-INSURANCE WAIVER OR AGREED AMOUNT
ENDORSEMENT.  THE AMOUNT OF ANY DEDUCTIBLE UNDER ANY POLICY MUST BE REASONABLY
ACCEPTABLE TO LENDER.  WITHOUT LENDER’S PRIOR WRITTEN CONSENT, BORROWER SHALL
NOT NAME ANY PERSON OTHER THAN LENDER, AS MORTGAGEE, LENDER LOSS PAYEE OR LOSS
PAYEE, AS IT PERTAINS TO THE PROPERTY-RELATED FIRST PARTY INSURANCE COVERAGES;
PROVIDED, THAT, IF BLANKET POLICIES ARE OBTAINED, THIS SENTENCE SHALL NOT APPLY
TO PROPERTY COVERED BY SUCH BLANKET POLICIES OTHER THAN THE IMPROVEMENTS AND
SUCH TENANT IMPROVEMENTS AND BETTERMENTS THAT BORROWER IS REQUIRED TO INSURE
PURSUANT TO APPLICABLE LEASES.

6.1.6  BLANKET POLICIES.  ANY BLANKET INSURANCE POLICY SHALL PROVIDE THE SAME
PROTECTION AS WOULD A SEPARATE INSURANCE POLICY INSURING ONLY THE PROPERTY IN
COMPLIANCE WITH THE PROVISIONS OF THIS SECTION 6.1.  LENDER, IN ITS REASONABLE
DISCRETION, SHALL DETERMINE WHETHER SUCH BLANKET POLICIES PROVIDE SUFFICIENT
LIMITS OF INSURANCE

6.1.7  LIMITATION ON TERRORISM COVERAGES.  THE TERRORISM POLICY SHALL BE ON
TERMS CONSISTENT WITH THOSE REQUIRED UNDER SECTION 6.1.1(C)  ABOVE AT ALL TIMES
DURING THE TERM OF THE LOAN, SUBJECT TO THE ANNUAL LIMIT ON INSURANCE PREMIUMS
THEREFORE EQUAL TO THE TERRORISM PREMIUM LIMIT.

6.1.8  FORECLOSURE.   UPON WRITTEN NOTICE TO AND WRITTEN APPROVAL FROM INSURANCE
CARRIERS, 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 INDEBTEDNESS, ALL
RIGHT, TITLE AND INTEREST OF BORROWER IN AND TO THE POLICIES THAT ARE NOT
BLANKET POLICIES THEN IN FORCE CONCERNING THE PROPERTY AND ALL PROCEEDS PAYABLE
THEREUNDER SHALL THEREUPON VEST IN THE PURCHASER AT SUCH FORECLOSURE OR LENDER
OR OTHER TRANSFEREE IN THE EVENT OF SUCH OTHER TRANSFER OF TITLE.

6.1.9  CAPTIVE INSURANCE COMPANY. 

            (B)        NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN
SECTION 6.1.1, THE TERRORISM POLICY REQUIRED PURSUANT TO SECTION 6.1.1(C)(IV) 
MAY BE ISSUED BY A CAPTIVE INSURANCE COMPANY WHOLLY-OWNED AND CONTROLLED BY AN
AFFILIATE OF BORROWER (A “CAPTIVE INSURANCE COMPANY)”; PROVIDED THAT:

(I)         UNLESS LENDER AGREES OTHERWISE IN WRITING, TRIA SHALL BE IN FULL
FORCE AND EFFECT;

(II)               EXCEPT WITH RESPECT TO THE DEDUCTIBLE PERMITTED HEREUNDER,
THOSE COVERED LOSSES WHICH ARE NOT REINSURED BY THE FEDERAL GOVERNMENT UNDER
TRIA AND PAYABLE DIRECTLY TO THE INSURED SHALL BE REINSURED BY AN INSURANCE
COMPANY WHICH SATISFIES THE REQUIREMENTS OF SECTION 6.1.2; 

 

80

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

 

 

(III)             ALL RE-INSURANCE AGREEMENTS BETWEEN SUCH CAPTIVE INSURANCE
COMPANY AND ALL SUCH RE-INSURANCE COMPANIES PROVIDING THE REFERENCED
RE-INSURANCE SHALL BE REASONABLY ACCEPTABLE TO LENDER AND BORROWER SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO CAUSE SUCH RE-INSURANCE AGREEMENTS TO PROVIDE
FOR DIRECT ACCESS TO SUCH RE-INSURERS BY ALL NAMED INSUREDS, LOSS PAYEES AND
MORTGAGEES WHICH SUCH INSURANCE BENEFITS;

(IV)             SUCH CAPTIVE INSURANCE COMPANY SHALL NOT BE THE SUBJECT OF
BANKRUPTCY OR SIMILAR INSOLVENCY PROCEEDING;

(V)               SUCH CAPTIVE INSURANCE COMPANY SHALL BE PROHIBITED FROM
CONDUCTING ANY BUSINESS OTHER THAN THE ISSUANCE OF TERRORISM INSURANCE POLICIES
AND ANY OTHER CONTEMPLATED INSURANCE COVERAGE REASONABLY APPROVED BY LENDER FOR
PROPERTIES IN WHICH AFFILIATES OF GUARANTOR HAVE AN OWNERSHIP INTEREST EQUAL TO
OR GREATER THAN 50%.

(VI)             SUCH CAPTIVE INSURANCE COMPANY SHALL BE LICENSED IN THE STATE
OF VERMONT AND QUALIFIED TO ISSUE THE TERRORISM POLICY IN ACCORDANCE WITH ALL
LEGAL REQUIREMENTS;

(VII)           SUCH CAPTIVE INSURANCE COMPANY SHALL QUALIFY FOR THE REINSURANCE
AND OTHER BENEFITS AFFORDED INSURANCE COMPANIES UNDER TRIA AND SHALL MAINTAIN
MINIMUM REINSURANCE OF NOT LESS THAN FIFTEEN PERCENT (15%) OF THE INSURED RISK
TO THE EXTENT COMMERCIALLY AVAILABLE;

(VIII)         NO GOVERNMENTAL AUTHORITY SHALL HAVE ISSUED ANY STATEMENT,
OPINION, FINDING OR DECREE THAT ANY INSURANCE COMPANY WHICH IS SIMILAR TO SUCH
CAPTIVE INSURANCE COMPANY (I.E., AN INSURANCE OWNED AND/OR CONTROLLED BY A
PERSON INSURED UNDER AN APPLICABLE INSURANCE POLICY) DOES NOT QUALIFY FOR SUCH
BENEFITS;

(IX)             LENDER SHALL HAVE RECEIVED EACH OF THE FOLLOWING, EACH OF WHICH
SHALL BE ACCEPTABLE TO LENDER:

(A)             THE ORGANIZATIONAL DOCUMENTS OF SUCH CAPTIVE INSURANCE COMPANY;

(B)              ANY REGULATORY AGREEMENTS OF SUCH CAPTIVE INSURANCE COMPANY;

(C)              THE APPLICATION FOR LICENSING IN THE STATE OF VERMONT FOR SUCH
CAPTIVE INSURANCE COMPANY;

(D)             THE FORM OF THE POLICY TO BE USED BY SUCH CAPTIVE INSURANCE
COMPANY TO PROVIDE THE INSURANCE COVERAGE DESCRIBED HEREIN;

(E)              A DESCRIPTION OF THE STRUCTURE AND AMOUNT OF RESERVES AND
CAPITALIZATION OF SUCH CAPTIVE INSURANCE COMPANY;

 

81

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

 

 

(X)               THE INSURANCE PREMIUMS PAYABLE TO SUCH CAPTIVE INSURANCE
COMPANY SHALL BE BASED ON MARKET CONDITIONS BASED ON THE PREMIUMS THAT WOULD
HAVE BEEN CHARGED HAD THE COVERAGE BEEN INCLUDED IN THE ALL RISK POLICY AND SUCH
PREMIUMS SHALL BE APPROVED BY THE VERMONT INSURANCE DEPARTMENT

(XI)             THE ORGANIZATIONAL DOCUMENTS OF SUCH CAPTIVE INSURANCE COMPANY
SHALL NOT BE MATERIALLY AMENDED WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER,
WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED; AND

(XII)           EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS SECTION 6.1.9,
ALL SUCH INSURANCE PROVIDED BY SUCH CAPTIVE INSURANCE COMPANY SHALL OTHERWISE
COMPLY WITH ALL OTHER TERMS AND CONDITIONS OF SECTION 6.1.1 AND SECTION 6.1.2. 

(C)                NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN SECTION
6.1.2 OR IN THIS SECTION 6.1.9, ANY INSURANCE REQUIRED UNDER SECTION 6.1.1 MAY
BE PROVIDED BY A CAPTIVE INSURANCE COMPANY WITH THE PRIOR WRITTEN CONSENT OF
LENDER AND SUBJECT TO LENDER’S REVIEW AND APPROVAL OF POLICIES AND OTHER
DOCUMENTATION REASONABLY REQUESTED BY LENDER AND THE SATISFACTION OF SUCH OTHER
CONDITIONS AS LENDER MAY REASONABLY REQUIRE.

SECTION 6.2  CONDEMNATION AND INSURANCE PROCEEDS. 

6.2.1  NOTIFICATION.   BORROWER SHALL PROMPTLY NOTIFY LENDER IN WRITING UPON
OBTAINING KNOWLEDGE OF (A) THE INSTITUTION OF ANY PROCEEDINGS RELATING TO ANY
TAKING (WHETHER MATERIAL OR IMMATERIAL) OF, OR (B) THE OCCURRENCE OF ANY
CASUALTY, DAMAGE OR INJURY TO, THE PROPERTY OR ANY PORTION THEREOF, THE
RESTORATION OF WHICH IS ESTIMATED BY BORROWER IN GOOD FAITH TO COST MORE THAN
THE CASUALTY AMOUNT.  IN ADDITION, EACH SUCH NOTICE SHALL SET FORTH SUCH GOOD
FAITH ESTIMATE OF THE COST OF REPAIRING OR RESTORING SUCH CASUALTY, DAMAGE,
INJURY OR TAKING IN REASONABLE DETAIL IF THE SAME IS THEN AVAILABLE AND, IF NOT,
AS SOON THEREAFTER AS IT CAN REASONABLY BE PROVIDED.

6.2.2  PROCEEDS.   IN THE EVENT OF ANY TAKING OF OR ANY CASUALTY OR OTHER DAMAGE
OR INJURY TO THE PROPERTY, BORROWER’S RIGHT, TITLE AND INTEREST IN AND TO ALL
COMPENSATION, AWARDS, PROCEEDS, DAMAGES, CLAIMS, INSURANCE RECOVERIES, CAUSES
AND RIGHTS OF ACTION (WHETHER ACCRUED PRIOR TO OR AFTER THE DATE HEREOF) AND
PAYMENTS WHICH BORROWER MAY RECEIVE OR TO WHICH BORROWER MAY BECOME ENTITLED
WITH RESPECT TO THE PROPERTY OR ANY PART THEREOF OTHER THAN PAYMENTS RECEIVED IN
CONNECTION WITH ANY LIABILITY OR LOSS OF RENTAL VALUE OR BUSINESS INTERRUPTION
INSURANCE (COLLECTIVELY, “PROCEEDS”), IN CONNECTION WITH ANY SUCH TAKING OF, OR
CASUALTY OR OTHER DAMAGE OR INJURY TO, THE PROPERTY OR ANY PART THEREOF ARE,
EXCEPT AS OTHERWISE HEREIN PROVIDED, HEREBY ASSIGNED BY BORROWER TO LENDER AND
SHALL, EXCEPT AS OTHERWISE HEREIN PROVIDED, BE PAID TO LENDER.  BORROWER SHALL,
IN GOOD FAITH AND IN A COMMERCIALLY REASONABLE MANNER, FILE AND PROSECUTE THE
ADJUSTMENT, COMPROMISE OR SETTLEMENT OF ANY CLAIM FOR PROCEEDS AND, SUBJECT TO
BORROWER’S RIGHT TO RECEIVE THE DIRECT PAYMENT OF ANY PROCEEDS AS HEREIN
PROVIDED, WILL CAUSE THE SAME TO BE PAID DIRECTLY TO LENDER TO BE HELD AND
APPLIED IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT.  EXCEPT UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, BORROWER MAY
SETTLE ANY INSURANCE CLAIM WITH RESPECT TO PROCEEDS WHICH DOES NOT EXCEED THE
CASUALTY AMOUNT.  WHETHER OR NOT A MONETARY DEFAULT OR AN EVENT OF DEFAULT SHALL
HAVE OCCURRED AND BE CONTINUING, LENDER SHALL HAVE THE RIGHT TO APPROVE, SUCH
APPROVAL NOT TO BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED, ANY SETTLEMENT
WHICH WOULD IN LENDER’S

82

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

 

 

reasonable judgment result in any Proceeds in excess of the Casualty Amount and
Borrower shall deliver or cause to be delivered to Lender all instruments
reasonably requested by Lender to permit such approval.  Borrower shall pay all
reasonable out‑of‑pocket costs, fees and expenses reasonably incurred by Lender
(including all reasonable attorneys’ fees and expenses, the reasonable fees of
insurance experts and adjusters and reasonable costs incurred in any litigation
or arbitration), and interest thereon at the Default Rate to the extent not paid
within fifteen (15) Business Days after delivery of a request for reimbursement
by Lender, accompanied by reasonable back‑up documentation, in connection with
the settlement of any claim for Proceeds and the seeking and obtaining of any
payment on account thereof in accordance with the foregoing provisions.  If any
Proceeds are received by Borrower and may be retained by Borrower pursuant to
this Section 6.2, such Proceeds shall, until the completion of the related Work,
be held in trust for Lender and shall be segregated from other funds of Borrower
to be used to pay for the cost of the Work in accordance with the terms hereof,
and to the extent such Proceeds exceed the Casualty Amount, such Proceeds shall
be forthwith paid directly to and held by Lender in trust for Borrower, in each
case to be applied or disbursed in accordance with this Section 6.2.  If an
Event of Default shall have occurred and be continuing, or if Borrower fails to
file any insurance claim for a period of fifteen (15) Business Days, or to
prosecute same with commercially reasonable diligence following Borrower’s
receipt of written notice to do so from Lender, Borrower hereby irrevocably
empowers Lender, in the name of Borrower as its true and lawful
attorney-in-fact, to file and prosecute such claim (including settlement
thereof) with counsel reasonably satisfactory to Lender and to collect and to
make receipt for any such payment, all at Borrower’s expense (including payment
of interest at the Default Rate for any amounts advanced by Lender pursuant to
this sentence and reasonable attorneys’ fees and disbursements). 
Notwithstanding anything to the contrary set forth in this Agreement, but
excluding all situations requiring prepayment of the Note, to the extent any
Proceeds (either singly or when aggregated with all other then unapplied
Proceeds with respect to the Property) do not exceed the Casualty Amount,
provided no Event of Default has occurred and is continuing, such Proceeds are
to be paid directly to Borrower to be applied to restoration of the Property in
accordance with the terms hereof (except that Proceeds paid in respect of the
insurance described in Section 6.1.1(d)  shall be deposited directly to the
Collection Account as revenue of the Property).

6.2.3  LENDER TO TAKE PROCEEDS.  IF (A) NO EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING, (B) NO TOTAL LOSS WITH RESPECT TO THE PROPERTY SHALL HAVE
OCCURRED, (C) WITH RESPECT TO A CONDEMNATION, APPROPRIATE ACCESS AND EGRESS
REMAIN, (D) THE WORK IS CAPABLE OF BEING COMPLETED BEFORE THE DATE WHICH IS THE
EARLIER OF (X) NINE (9) MONTHS PRIOR TO THE MATURITY DATE, AND (Y) THE
EXPIRATION OF BORROWER’S TIME ELEMENT COVERAGE REFERRED TO IN SECTION
6.1.1(C)(II) ABOVE, (E) THE PROPERTY IS CAPABLE OF BEING RESTORED SUBSTANTIALLY
TO ITS CONDITION PRIOR TO SUCH TAKING OR CASUALTY AND (F) LENDER SHALL HAVE
RECEIVED EVIDENCE REASONABLY SATISFACTORY TO LENDER THAT UPON THE COMPLETION OF
THE RESTORATION AND EXPIRATION OF ANY EXTENDED PERIOD OF INDEMNITY PURSUANT TO
ANY BUSINESS INTERRUPTION INSURANCE, THE DEBT SERVICE COVERAGE RATIO WILL BE
EQUAL TO AT LEAST 1.25 TO 1.00, WHICH COVERAGE RATIO SHALL BE DETERMINED BY
LENDER IN ITS REASONABLE DISCRETION AND IN ACCORDANCE WITH THE DEFINITION OF
DEBT SERVICE COVERAGE RATIO SET FORTH IN SECTION 1.1 (PROVIDED THAT BORROWER
SHALL HAVE THE RIGHT TO MAKE PREPAYMENTS OR DELIVER CASH OR A LETTER OF CREDIT
TO LENDER TO ACHIEVE SUCH COVERAGE RATIO); THEN IN ANY SUCH CASE, ALL PROCEEDS
SHALL BE APPLIED TO BORROWER’S COST OF RESTORATION IN ACCORDANCE WITH
SECTION 6.2.4, AND ANY PROCEEDS REMAINING AFTER SUCH APPLICATION (INCLUDING
REIMBURSEMENT OF LENDER’S REASONABLE OUT‑OF‑POCKET COSTS AND EXPENSES ACTUALLY
INCURRED IN CONNECTION WITH RECOVERY OF SUCH PROCEEDS

83

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

 

 

and their application hereunder (including, without limitation, reasonable
out‑of‑pocket administrative costs and inspection fees and reasonable attorneys’
fees and disbursements)) shall be remitted to Borrower.  In the event that
Lender shall not be required to apply any Proceeds to Borrower’s cost of
restoration, then such Proceeds may be applied by Lender to prepay the Note, in
accordance with the provisions thereof, without any prepayment or Prepayment
Premium or penalty or similar payment, and the balance, if any shall be paid to
Borrower.  If the Proceeds so applied shall be insufficient to repay the Loan in
full, Borrower may repay all (but not less than all) of such balance of the Loan
in full without any Prepayment Premium or penalty.

6.2.4  BORROWER TO RESTORE.  (A) PROMPTLY AFTER THE OCCURRENCE OF ANY DAMAGE OR
DESTRUCTION TO ALL OR ANY PORTION OF THE PROPERTY OR A TAKING OF A PORTION OF
THE PROPERTY, BORROWER SHALL COMMENCE AND DILIGENTLY PROSECUTE, OR CAUSE TO BE
COMMENCED AND DILIGENTLY PROSECUTED, TO COMPLETION, SUBJECT TO EXCUSABLE DELAY,
AND DELAYS DIRECTLY CAUSED BY LENDER’S FAILURE TO RESPOND WITHIN A COMMERCIALLY
REASONABLE PROMPT TIME TO REQUESTS FOR APPROVAL OF PLANS OR OTHER REQUESTS FOR
APPROVALS PURSUANT TO THIS SECTION 6.2.4 FOR WHICH, IN EITHER CASE, A SPECIFIC
PERIOD OF TIME IS NOT SPECIFIED, THE REPAIR, RESTORATION AND REBUILDING OF THE
PROPERTY (IN THE CASE OF A PARTIAL TAKING, TO THE EXTENT IT IS CAPABLE OF BEING
RESTORED) SO DAMAGED, DESTROYED OR REMAINING AFTER SUCH TAKING IN FULL
COMPLIANCE WITH ALL MATERIAL LEGAL REQUIREMENTS AND FREE AND CLEAR OF ANY AND
ALL LIENS EXCEPT PERMITTED ENCUMBRANCES (SUCH REPAIR, RESTORATION AND REBUILDING
ARE SOMETIMES COLLECTIVELY REFERRED TO AS THE “WORK”).  THE PLANS AND
SPECIFICATIONS SHALL REQUIRE THAT THE WORK BE DONE IN A GOOD AND WORKMANLIKE
MANNER AT LEAST SUBSTANTIALLY EQUIVALENT TO THE QUALITY AND CHARACTER OF THE
PROPERTY AND REASONABLY EQUIVALENT TO THE VALUE OF THE PROPERTY PRIOR TO THE
DAMAGE OR DESTRUCTION, SO THAT UPON COMPLETION THEREOF, THE PROPERTY SHALL BE AT
LEAST EQUAL IN GENERAL UTILITY AND CONDITION TO THE PROPERTY PRIOR TO THE DAMAGE
OR DESTRUCTION, SUBJECT TO ANY RESTRICTIONS ON BORROWER’S ABILITY TO DO SO WHICH
MAY BE IMPOSED BY ANY APPLICABLE LEGAL REQUIREMENTS (PROVIDED, HOWEVER, THAT IN
THE CASE OF A PARTIAL TAKING, THE PROPERTY RESTORATION SHALL BE DONE TO THE
EXTENT REASONABLY PRACTICABLE AFTER TAKING INTO ACCOUNT THE CONSEQUENCES OF SUCH
PARTIAL TAKING); IT BEING UNDERSTOOD, HOWEVER, THAT BORROWER SHALL NOT BE
OBLIGATED TO RESTORE THE PROPERTY TO THE PRECISE CONDITION OF THE PROPERTY PRIOR
TO ANY PARTIAL TAKING OF, OR CASUALTY OR OTHER DAMAGE OR INJURY TO, THE
PROPERTY, IF THE WORK ACTUALLY PERFORMED, IF ANY, OR FAILED TO BE PERFORMED,
WOULD NOT REASONABLY BE EXPECTED TO HAVE, AND DOES NOT HAVE A MATERIAL ADVERSE
EFFECT ON THE VALUE OF THE PROPERTY FROM THE VALUE THAT THE PROPERTY WOULD HAVE
HAD IF THE SAME HAD BEEN RESTORED TO ITS PRECISE CONDITION IMMEDIATELY PRIOR TO
SUCH TAKING, CASUALTY OR OTHER DAMAGE OR INJURY.  BORROWER SHALL BE OBLIGATED TO
RESTORE THE PROPERTY SUFFERING A CASUALTY OR WHICH HAS BEEN SUBJECT TO A PARTIAL
TAKING IN ACCORDANCE WITH THE PROVISIONS OF THIS 0  AT BORROWER’S SOLE COST AND
EXPENSE WHETHER OR NOT THE PROCEEDS SHALL BE SUFFICIENT, PROVIDED THAT, IF
REQUIRED PURSUANT TO THIS AGREEMENT, THE PROCEEDS SHALL BE MADE AVAILABLE TO
BORROWER BY LENDER IN ACCORDANCE WITH THIS AGREEMENT;

(B)               IF PROCEEDS ARE NOT APPLIED TOWARD PAYMENT OF THE INDEBTEDNESS
PURSUANT TO THE TERMS HEREOF AND BORROWER HAS SATISFIED ALL OF THE CONDITIONS OF
SECTION 6.2.3, THEN LENDER SHALL MAKE THE PROCEEDS WHICH IT IS HOLDING PURSUANT
TO THE TERMS HEREOF (AFTER PAYMENT OF ANY REASONABLE OUT‑OF‑POCKET EXPENSES
(INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS) ACTUALLY INCURRED BY
LENDER IN CONNECTION WITH THE COLLECTION THEREOF PLUS  INTEREST THEREON AT THE
DEFAULT RATE (FROM THE DATE ADVANCED THROUGH THE DATE OF REIMBURSEMENT) TO THE
EXTENT THE SAME ARE NOT PAID WITHIN FIFTEEN (15) BUSINESS DAYS AFTER REQUEST FOR
REIMBURSEMENT BY LENDER, ACCOMPANIED BY REASONABLE BACK‑UP DOCUMENTATION)
AVAILABLE TO BORROWER FOR PAYMENT OF OR REIMBURSEMENT OF BORROWER’S EXPENSES
INCURRED WITH RESPECT TO THE WORK, UPON THE TERMS AND

84

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

 

subject to the conditions set forth in sub‑paragraphs (i), (ii), (iii)  and
(iv)  below and in Section 6.2.5: 

(I)                 AT THE TIME OF THE REQUESTED DISBURSEMENT, THERE SHALL BE NO
CONTINUING EVENT OF DEFAULT;

(II)               IF, AT ANY TIME, THE ESTIMATED COST OF THE WORK (AS ESTIMATED
BY THE INDEPENDENT ARCHITECT REFERRED TO IN SUB‑PARAGRAPH (IV) BELOW) SHALL
EXCEED THE SUM OF THE PROCEEDS BY MORE THAN THE THRESHOLD AMOUNT (THE AMOUNT OF
SUCH EXCESS OVER THE THRESHOLD AMOUNT BEING A “DEFICIENCY”) AND FOR SO LONG AS A
DEFICIENCY SHALL EXIST, LENDER SHALL NOT BE REQUIRED TO MAKE ANY PROCEEDS
DISBURSEMENT TO BORROWER UNLESS BORROWER (WITHIN A REASONABLE PERIOD OF TIME
AFTER RECEIPT OF SUCH ESTIMATE), AT ITS ELECTION, EITHER DEPOSITS WITH OR
DELIVERS TO LENDER (A) CASH OR CASH EQUIVALENTS, A LETTER OR LETTERS OF CREDIT
IN AN AMOUNT EQUAL TO THE DEFICIENCY OR (B) SUCH OTHER EVIDENCE OF BORROWER’S
ABILITY TO MEET SUCH EXCESS COSTS AS SHALL BE REASONABLY SATISFACTORY TO LENDER;

(III)             IF THE WORK SHALL CONSTITUTE AN ALTERATION THAT WOULD REQUIRE
LENDER’S CONSENT PURSUANT TO SECTION 9.2, THEN EACH OF LENDER AND THE
INDEPENDENT ARCHITECT SHALL HAVE REASONABLY APPROVED THE PLANS AND
SPECIFICATIONS FOR THE WORK AND ANY MATERIAL CHANGE ORDERS IN CONNECTION WITH
SUCH PLANS AND SPECIFICATIONS; AND

(IV)             LENDER SHALL, WITHIN A REASONABLE PERIOD OF TIME PRIOR TO
BORROWER’S REQUEST FOR INITIAL DISBURSEMENT, BE FURNISHED WITH AN ESTIMATE OF
THE COST OF THE WORK ACCOMPANIED BY AN INDEPENDENT ARCHITECT’S CERTIFICATION AS
TO SUCH COSTS.  BORROWER SHALL RESTORE ALL IMPROVEMENTS SUCH THAT WHEN THEY ARE
FULLY RESTORED AND/OR REPAIRED, SUCH IMPROVEMENTS AND THEIR CONTEMPLATED USE
FULLY COMPLY WITH ALL APPLICABLE LEGAL REQUIREMENTS INCLUDING ZONING,
ENVIRONMENTAL AND BUILDING LAWS, CODES, ORDINANCES AND REGULATIONS.

6.2.5  DISBURSEMENT OF PROCEEDS.  (A) DISBURSEMENTS OF THE PROCEEDS TO BORROWER
HEREUNDER SHALL BE MADE FROM TIME TO TIME (BUT NOT MORE FREQUENTLY THAN ONCE IN
ANY MONTH) BY LENDER BUT ONLY FOR SO LONG AS NO MONETARY DEFAULT OR EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, AS THE WORK PROGRESSES UPON
RECEIPT BY LENDER OF (I) A BORROWER’S CERTIFICATE DATED NOT MORE THAN TEN (10)
BUSINESS DAYS PRIOR TO THE APPLICATION FOR SUCH PAYMENT, REQUESTING SUCH PAYMENT
OR REIMBURSEMENT AND DESCRIBING THE WORK PERFORMED THAT IS THE SUBJECT OF SUCH
REQUEST, THE PARTIES THAT PERFORMED SUCH WORK AND THE ACTUAL COST THEREOF, AND
ALSO CERTIFYING THAT SUCH WORK AND MATERIALS ARE OR, UPON DISBURSEMENT OF THE
PAYMENT REQUESTED TO THE PARTIES ENTITLED THERETO, WILL BE FREE AND CLEAR OF
LIENS OTHER THAN PERMITTED ENCUMBRANCES, (II) EVIDENCE REASONABLY SATISFACTORY
TO LENDER THAT (A) ALL MATERIALS INSTALLED AND WORK AND LABOR PERFORMED IN
CONNECTION WITH SUCH WORK HAVE BEEN OR, UPON DISBURSEMENT OF THE PAYMENT
REQUESTED TO THE PARTIES ENTITLED THERETO, WILL BE PAID FOR IN FULL, AND
(B) THERE EXISTS NO NOTICES OF PENDENCY, STOP ORDERS, MECHANIC’S LIENS OR
NOTICES OF INTENTION TO FILE SAME (UNLESS THE SAME IS REQUIRED BY STATE LAW AS A
CONDITION TO THE PAYMENT OF A CONTRACTOR) OR ANY LIENS OR ENCUMBRANCES OF ANY
NATURE WHATSOEVER ON THE PROPERTY ARISING OUT OF THE WORK WHICH HAVE NOT BEEN
EITHER FULLY BONDED TO THE REASONABLE SATISFACTION OF LENDER OR DISCHARGED OF
RECORD OR IN THE ALTERNATIVE, FULLY INSURED TO THE REASONABLE SATISFACTION OF
LENDER BY THE TITLE COMPANY THAT ISSUED THE TITLE POLICY, AND (III) AN
INDEPENDENT ARCHITECT’S CERTIFICATE CERTIFYING PERFORMANCE OF THE WORK TOGETHER
WITH AN

85

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

 

 

estimate of the cost to complete the Work.  No payment made prior to the final
completion of the Work, as certified by the Independent Architect, except for
payment made to contractors whose Work shall have been fully completed and from
which final lien waivers have been received, shall exceed ninety percent (90%)
(the “Retainage Release Threshold”) of the value of the Work performed and
materials furnished and incorporated into the Improvements from time to time
until such time as fifty percent (50%) of such Work has been satisfactorily
completed (as certified by the Independent Architect), at which time the
Retainage Release Threshold with respect to such Work shall be increased to
ninety‑five percent (95%), and at all times the undisbursed balance of said
Proceeds together with all amounts deposited, bonded, guaranteed or otherwise
provided for pursuant to Section 6.2.4(b)(ii) above, shall be at least
sufficient to pay for the estimated cost of completion of the Work; final
payment of all Proceeds remaining with Lender shall be made upon receipt by
Lender of a certification by an Independent Architect, as to the completion of
the Work substantially in accordance with the submitted plans and specifications
and final lien releases, as certified pursuant to a Borrower’s Certificate, and
delivery of a certificate of occupancy with respect to the Work, or, if not
applicable, a Borrower’s Certificate to the effect that a certificate of
occupancy is not required.

(B)               IF, AFTER THE WORK IS COMPLETED IN ACCORDANCE WITH THE
PROVISIONS HEREOF AND LENDER RECEIVES EVIDENCE THAT ALL COSTS OF COMPLETION HAVE
BEEN PAID, THERE ARE EXCESS PROCEEDS, LENDER SHALL, PROVIDED, NO EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, (I) IN THE EVENT SUCH PROCEEDS RELATE TO
A TAKING, APPLY SUCH EXCESS PROCEEDS WITH RESPECT TO SUCH TAKING OF THE PROPERTY
TO THE PAYMENT OR PREPAYMENT OF ALL OR ANY PORTION OF THE INDEBTEDNESS SECURED
HEREBY WITHOUT ANY PREPAYMENT PREMIUM OR PENALTY, AND ANY BALANCE THEREOF, SHALL
BE PAID TO BORROWER, AND (II) IN THE EVENT SUCH PROCEEDS RELATE TO A CASUALTY TO
THE PROPERTY, REMIT TO BORROWER SUCH EXCESS PROCEEDS WITH RESPECT TO SUCH
CASUALTY TO THE PROPERTY.

ARTICLE VII

IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS

SECTION 7.1  BORROWER TO PAY IMPOSITIONS AND OTHER CHARGES.  BORROWER SHALL PAY
ALL IMPOSITIONS NOW OR HEREAFTER LEVIED OR ASSESSED OR IMPOSED AGAINST THE
PROPERTY OR ANY PART THEREOF AND ALL OTHER CHARGES PRIOR TO THE IMPOSITION OF
ANY INTEREST, CHARGES OR EXPENSES FOR THE NON‑PAYMENT THEREOF, EXCEPT TO THE
EXTENT PROVISION IS MADE FOR PAYMENT THEREOF FROM THE TAX RESERVE ACCOUNT BY
LENDER IN THIS SECTION 7.1 AND SECTION 12.1.  BORROWER SHALL DELIVER TO LENDER
ANNUALLY, NO LATER THAN FIFTEEN (15) BUSINESS DAYS AFTER EACH OF THE SAME ARE
RECEIVED, ALL BILLS FOR IMPOSITIONS AND OTHER CHARGES ATTRIBUTABLE TO OR
AFFECTING THE PROPERTY OR BORROWER.  SUBJECT TO BORROWER’S RIGHT OF CONTEST SET
FORTH IN SECTION 7.3, AND TO THE EXTENT OF FUNDS AVAILABLE IN THE TAX RESERVE
ACCOUNT, LENDER, ON BEHALF OF BORROWER, SHALL PAY ALL IMPOSITIONS AND OTHER
CHARGES WHICH ARE ATTRIBUTABLE TO OR AFFECT THE PROPERTY OR BORROWER, PRIOR TO
THE DATE SUCH IMPOSITIONS OR OTHER CHARGES SHALL BECOME DELINQUENT OR LATE
CHARGES MAY BE IMPOSED THEREON, DIRECTLY TO THE APPLICABLE TAXING AUTHORITY WITH
RESPECT THERETO.  LENDER SHALL PAY TO THE TAXING AUTHORITY SUCH AMOUNTS TO THE
EXTENT FUNDS IN THE TAX RESERVE ACCOUNT ARE SUFFICIENT TO PAY SUCH IMPOSITIONS. 
NOTHING CONTAINED IN THIS AGREEMENT OR THE MORTGAGE SHALL BE CONSTRUED TO
REQUIRE BORROWER TO PAY ANY TAX, ASSESSMENT, LEVY OR CHARGE IMPOSED ON LENDER IN
THE NATURE OF A FRANCHISE, CAPITAL LEVY, ESTATE, INHERITANCE, SUCCESSION, INCOME
OR NET REVENUE TAX.

 

86

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

 

 

SECTION 7.2  NO LIENS.  SUBJECT TO ITS RIGHT OF CONTEST SET FORTH IN SECTION
7.3, BORROWER SHALL AT ALL TIMES KEEP, OR CAUSE TO BE KEPT, THE PROPERTY FREE
FROM ALL LIENS (OTHER THAN PERMITTED ENCUMBRANCES) AND SHALL PAY WHEN DUE AND
PAYABLE (OR BOND OVER) ALL CLAIMS AND DEMANDS OF MECHANICS, MATERIALMEN,
LABORERS AND OTHERS WHICH, IF UNPAID, WOULD RESULT IN OR PERMIT THE CREATION OF
A LIEN ON THE PROPERTY OR ANY PORTION THEREOF AND SHALL IN ANY EVENT CAUSE THE
PROMPT, FULL AND UNCONDITIONAL DISCHARGE OF ALL LIENS IMPOSED ON OR AGAINST THE
PROPERTY OR ANY PORTION THEREOF WITHIN SIXTY (60) DAYS AFTER RECEIVING WRITTEN
NOTICE OF THE FILING (WHETHER FROM LENDER, THE LIENOR OR ANY OTHER PERSON)
THEREOF.  UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT
WITH RESPECT TO BORROWER’S OBLIGATIONS AS SET FORTH IN THIS ARTICLE VII, LENDER
MAY (BUT SHALL NOT BE OBLIGATED TO) MAKE SUCH PAYMENT OR DISCHARGE SUCH LIEN,
AND BORROWER SHALL REIMBURSE LENDER WITHIN TEN (10) BUSINESS DAYS AFTER DEMAND,
ACCOMPANIED BY REASONABLE BACK‑UP DOCUMENTATION, FOR ALL SUCH ADVANCES PURSUANT
TO SECTION 15.12 (TOGETHER WITH INTEREST THEREON AT THE DEFAULT RATE).

SECTION 7.3  CONTEST.  NOTHING CONTAINED HEREIN SHALL BE DEEMED TO REQUIRE
BORROWER TO PAY, OR CAUSE TO BE PAID, ANY IMPOSITION OR OTHER CHARGES, OR TO
SATISFY ANY LIEN, OR TO COMPLY WITH ANY LEGAL REQUIREMENT OR INSURANCE
REQUIREMENT, SO LONG AS BORROWER IS IN GOOD FAITH, AND BY PROPER LEGAL
PROCEEDINGS, WHERE APPROPRIATE, DILIGENTLY CONTESTING THE VALIDITY, AMOUNT OR
APPLICATION THEREOF, PROVIDED THAT IN EACH CASE, AT THE TIME OF THE COMMENCEMENT
OF ANY SUCH ACTION OR PROCEEDING, AND DURING THE PENDENCY OF SUCH ACTION OR
PROCEEDING (A) NO EVENT OF DEFAULT SHALL EXIST AND BE CONTINUING HEREUNDER,
(B) BORROWER SHALL KEEP LENDER INFORMED OF THE STATUS OF SUCH CONTEST AT
REASONABLE INTERVALS, (C) IF BORROWER IS NOT PROVIDING SECURITY AS PROVIDED IN
CLAUSE (F) BELOW, ADEQUATE RESERVES WITH RESPECT THERETO ARE MAINTAINED ON
BORROWER’S BOOKS IN ACCORDANCE WITH GAAP OR IN THE TAX RESERVE ACCOUNT OR
INSURANCE RESERVE ACCOUNT, AS APPLICABLE, (D) SUCH CONTEST OPERATES TO SUSPEND
COLLECTION OR ENFORCEMENT, AS THE CASE MAY BE, OF THE CONTESTED IMPOSITION, LIEN
OR LEGAL REQUIREMENT, AND SUCH CONTEST IS MAINTAINED AND PROSECUTED CONTINUOUSLY
AND WITH DILIGENCE, (E) IN THE CASE OF ANY INSURANCE REQUIREMENT, THE FAILURE OF
BORROWER TO COMPLY THEREWITH SHALL NOT IMPAIR THE VALIDITY OF ANY INSURANCE
REQUIRED TO BE MAINTAINED BY BORROWER UNDER SECTION 6.1 OR THE RIGHT TO FULL
PAYMENT OF ANY CLAIMS THEREUNDER, AND (F) IN THE CASE OF IMPOSITIONS AND LIENS
WHICH ARE NOT BONDED IN EXCESS OF $1,500,000.00 (THE “CONTEST THRESHOLD”)
INDIVIDUALLY OR IN THE AGGREGATE, DURING SUCH CONTEST, BORROWER SHALL DEPOSIT
WITH OR DELIVER TO LENDER EITHER CASH OR CASH EQUIVALENTS OR A LETTER OR LETTERS
OF CREDIT IN AN AMOUNT EQUAL TO THE EXCESS OF ONE HUNDRED TEN PERCENT (110%) OF
(I) THE AMOUNT OF BORROWER’S OBLIGATIONS BEING CONTESTED PLUS (II) ANY
ADDITIONAL INTEREST, CHARGE, OR PENALTY ARISING FROM SUCH CONTEST, OVER THE
CONTEST THRESHOLD, OR PROVISION REASONABLY SATISFACTORY TO LENDER FOR THE
PROTECTION OF LENDER’S INTEREST IN THE PROPERTY IS OTHERWISE MADE. 
NOTWITHSTANDING THE FOREGOING, THE CREATION OF ANY SUCH RESERVES OR THE
FURNISHING OF OTHER SECURITY, BORROWER PROMPTLY SHALL COMPLY WITH ANY CONTESTED
LEGAL REQUIREMENT OR INSURANCE REQUIREMENT OR SHALL PAY ANY CONTESTED IMPOSITION
OR LIEN, AND COMPLIANCE THEREWITH OR PAYMENT THEREOF SHALL NOT BE DEFERRED, IF,
AT ANY TIME THE PROPERTY OR ANY PORTION THEREOF SHALL BE, IN LENDER’S REASONABLE
JUDGMENT, IN IMMINENT DANGER OF BEING FORFEITED OR LOST OR LENDER IS LIKELY TO
BE SUBJECT TO CIVIL OR CRIMINAL DAMAGES AS A RESULT THEREOF.  IF SUCH ACTION OR
PROCEEDING IS TERMINATED OR DISCONTINUED ADVERSELY TO BORROWER, BORROWER SHALL
DELIVER TO LENDER REASONABLE EVIDENCE OF BORROWER’S COMPLIANCE WITH SUCH
CONTESTED IMPOSITION, LIEN, LEGAL REQUIREMENTS OR INSURANCE REQUIREMENTS, AS THE
CASE MAY BE.

87

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

 

 

 

ARTICLE VIII

TRANSFERS, INDEBTEDNESS , SUBORDINATE LIENS AND CONDOMINIUM

SECTION 8.1  RESTRICTIONS ON TRANSFERS.  UNLESS SUCH ACTION IS PERMITTED BY THE
PROVISIONS OF THIS ARTICLE VIII  OR ELSEWHERE IN THE LOAN DOCUMENTS, BORROWER
SHALL NOT PERMIT OR EFFECT ANY TRANSFER OF ALL OR ANY PORTION OF THE PROPERTY OR
DIRECT OR INDIRECT INTEREST THEREIN OR ANY DIRECT OR INDIRECT INTEREST IN
BORROWER OTHER THAN (A) PERMITTED TRANSFERS AND (C) PERMITTED ENCUMBRANCES,
PROVIDED  THAT, IN CONNECTION WITH ANY OF THE FOREGOING TRANSFERS THE PROPERTY
SHALL CONTINUE TO BE MANAGED BY THE MANAGER, A QUALIFIED MANAGER OR A
REPLACEMENT MANAGER ACCEPTABLE TO LENDER IN ITS SOLE DISCRETION.    

SECTION 8.2  SALE OF EQUIPMENT.  BORROWER MAY TRANSFER OR DISPOSE OF EQUIPMENT
WHICH IS BEING REPLACED OR WHICH IS NO LONGER NECESSARY IN CONNECTION WITH THE
OPERATION OF THE PROPERTY FREE FROM THE LIEN OF THE MORTGAGE, PROVIDED THAT SUCH
TRANSFER OR DISPOSAL WOULD NOT REASONABLY BE EXPECTED TO HAVE, AND DOES NOT
HAVE, A MATERIAL ADVERSE EFFECT AND PROVIDED, FURTHER, THAT ANY NEW EQUIPMENT
ACQUIRED BY BORROWER (AND NOT SO DISPOSED OF) SHALL BE SUBJECT TO THE LIEN OF
THE MORTGAGE.  LENDER SHALL, FROM TIME TO TIME, UPON RECEIPT OF A BORROWER’S
CERTIFICATE REQUESTING THE SAME AND CONFIRMING SATISFACTION OF THE CONDITIONS
SET FORTH ABOVE, EXECUTE A WRITTEN INSTRUMENT IN FORM REASONABLY SATISFACTORY TO
LENDER TO CONFIRM THAT SUCH EQUIPMENT WHICH IS TO BE, OR HAS BEEN, SOLD OR
DISPOSED OF IS FREE FROM THE LIEN OF THE MORTGAGE.

SECTION 8.3  IMMATERIAL TRANSFERS AND EASEMENTS, ETC.  BORROWER MAY, WITHOUT THE
CONSENT OF LENDER, (A) MAKE IMMATERIAL TRANSFERS OF PORTIONS OF THE PROPERTY TO
GOVERNMENTAL AUTHORITIES FOR DEDICATION OR PUBLIC USE OR PORTIONS OF THE
PROPERTY TO THIRD PARTIES FOR THE PURPOSE OF ERECTING AND OPERATING ADDITIONAL
STRUCTURES WHOSE USE IS INTEGRATED WITH THE USE OF THE PROPERTY, AND (B) GRANT
EASEMENTS, RESTRICTIONS, COVENANTS, RESERVATIONS AND RIGHTS‑OF‑WAY IN THE
ORDINARY COURSE OF BUSINESS FOR ACCESS, WATER AND SEWER LINES, TELEPHONE OR
OTHER FIBER OPTIC OR OTHER DATA TRANSMISSION LINES, ELECTRIC LINES OR OTHER
UTILITIES OR FOR OTHER SIMILAR PURPOSES, PROVIDED THAT NO SUCH TRANSFER,
CONVEYANCE OR ENCUMBRANCE SET FORTH IN THE FOREGOING CLAUSES (A) OR (B) SHALL
MATERIALLY IMPAIR THE UTILITY AND OPERATION OF THE PROPERTY OR BE REASONABLY
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  IN CONNECTION WITH ANY TRANSFER
PERMITTED PURSUANT TO THIS SECTION 8.3, LENDER SHALL EXECUTE AND DELIVER ANY
INSTRUMENT REASONABLY NECESSARY OR APPROPRIATE, IN THE CASE OF THE TRANSFERS
REFERRED TO IN CLAUSE (A) ABOVE, TO RELEASE THE PORTION OF THE PROPERTY AFFECTED
BY SUCH TAKING OR SUCH TRANSFER FROM THE LIEN OF THE MORTGAGE OR, IN THE CASE OF
CLAUSE (B) ABOVE, TO SUBORDINATE THE LIEN OF THE MORTGAGE TO SUCH EASEMENTS,
RESTRICTIONS, COVENANTS, RESERVATIONS AND RIGHTS‑OF‑WAY OR OTHER SIMILAR GRANTS
UPON RECEIPT BY LENDER OF:

(I)                 FIFTEEN (15) DAYS’ PRIOR WRITTEN NOTICE THEREOF;

(II)               A COPY OF THE INSTRUMENT OR INSTRUMENTS OF TRANSFER;

 

88

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

 

 

(III)             A BORROWER’S CERTIFICATE STATING (A) WITH RESPECT TO ANY
TRANSFER, THE CONSIDERATION, IF ANY, BEING PAID FOR THE TRANSFER, AND (B) THAT
SUCH TRANSFER DOES NOT MATERIALLY IMPAIR THE UTILITY AND OPERATION OF THE
PROPERTY OR WOULD REASONABLY BE EXPECTED TO HAVE OR DOES HAVE A MATERIAL ADVERSE
EFFECT; AND

(IV)             REIMBURSEMENT OF ALL OF LENDER’S REASONABLE OUT-OF-POCKET COSTS
AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS) INCURRED
IN CONNECTION WITH SUCH TRANSFER.

SECTION 8.4  DEBT.  EXCEPT FOR PERMITTED DEBT, BORROWER SHALL NOT INCUR, CREATE
OR ASSUME ANY DEBT OR INCUR ANY LIABILITIES WITHOUT THE CONSENT OF LENDER.

SECTION 8.5  INTEREST TRANSFERS; PROPERTY TRANSFERS. 

8.5.1  INTEREST TRANSFERS.  TRANSFERS OF (BUT NOT A MORTGAGE, PLEDGE,
HYPOTHECATION, ENCUMBRANCE OR GRANT OF A SECURITY INTEREST IN) UP TO SEVENTY
FIVE PERCENT (75%) OF DIRECT OR INDIRECT BENEFICIAL INTERESTS IN BORROWER SHALL
BE PERMITTED WITHOUT LENDER’S CONSENT PROVIDED: (A) LENDER RECEIVES NOT LESS
THAN THIRTY (30) DAYS PRIOR WRITTEN NOTICE THEREOF, (B) IMMEDIATELY PRIOR TO
SUCH TRANSFER OR AS A RESULT OF SUCH TRANSFER, NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING OR SHALL OCCUR, (C) SUBSEQUENT TO SUCH TRANSFER,
BORROWER WILL CONTINUE TO BE A SINGLE PURPOSE ENTITY, AND ITS ORGANIZATIONAL
DOCUMENTS AND STRUCTURE INSOFAR AS THE SAME RELATE TO ITS SINGLE PURPOSE ENTITY
STATUS SHALL BE REASONABLY ACCEPTABLE TO LENDER, (D) AFTER GIVING EFFECT TO ANY
SUCH TRANSFER, (X) ALX SHALL DIRECTLY OR INDIRECTLY OWN A MINIMUM OF TWENTY-FIVE
PERCENT (25%) OF THE DIRECT OR INDIRECT EQUITY INTERESTS IN BORROWER AND SHALL
CONTROL BORROWER, (Y) VORNADO REALTY TRUST AND/OR INTERSTATE PROPERTIES (OR
OTHER ENTITY CONTROLLED BY STEVEN ROTH) SHALL CONTINUE TO COLLECTIVELY OWN NOT
LESS THAN TWENTY-FIVE PERCENT (25%) OF THE DIRECT OR INDIRECT EQUITY INTERESTS
IN ALX, AND (Z) IF ANY PERSON (OR GROUP OF RELATED PERSONS) SHALL OWN A DIRECT
OR INDIRECT INTEREST IN BORROWER OF TEN PERCENT (10%) OR GREATER, LENDER SHALL,
TO THE EXTENT NOT PREVIOUSLY OBTAINED BY LENDER IN RESPECT OF SUCH PERSON,
OBTAIN AND BE SATISFIED WITH THE RESULTS OF BACKGROUND AND CREDIT SEARCHES IN
RESPECT OF SUCH PERSON (PROVIDED, HOWEVER, IN THE EVENT THE BACKGROUND SEARCHES
ON SUCH PERSON FAIL TO DISCLOSE ANY PRIOR HISTORY OF (1) BANKRUPTCIES OR OTHER
INSOLVENCIES, (2) FELONY CONVICTIONS, OR (3) ANY VIOLATIONS OF THE RULES AND
REGULATIONS OF PATRIOT ACT OR OFAC, THEN SUCH SEARCHES SHALL BE DEEMED TO BE
APPROVED BY LENDER), (E) SUCH TRANSFER DOES NOT RESULT IN A VIOLATION OF ANY
LEGAL REQUIREMENTS, INCLUDING, WITHOUT LIMITATION, ERISA AND PRESCRIBED LAWS,
AND (F) WITH RESPECT TO TRANSFERS (OTHER THAN A ALX TRANSFER) OF IN EXCESS OF
TWENTY-FIVE PERCENT (25%) OF THE DIRECT OR INDIRECT INTERESTS IN BORROWER WITH
RESPECT TO BORROWER, THE SAME SHALL NOT CAUSE THE PROPOSED TRANSFEREE TO EXCEED
EXPOSURE LIMITS OF LENDER (PROVIDED, HOWEVER, THAT IF LENDER SHALL DETERMINE
THAT A TRANSFER TO SUCH PROPOSED TRANSFEREE WOULD EXCEED THE EXPOSURE LIMITS OF
LENDER, THEN LENDER SHALL SO NOTIFY BORROWER WITHIN TEN (10) BUSINESS DAYS AFTER
THE PROPOSED TRANSFEREE HAS BEEN IDENTIFIED TO LENDER WITH A REQUEST FOR
APPROVAL SET FORTH IN A WRITTEN NOTICE THAT STATES CLEARLY (IN 14-POINT TYPE OR
LARGER): “THIS IS A REQUEST FOR APPROVAL OF A TRANSFEREE.  LENDER SHALL HAVE NO
RIGHT TO OBJECT TO THE TRANSFEREE BASED ON THE TRANSFEREE EXCEEDING THE EXPOSURE
LIMITS OF LENDER IF LENDER DOES NOT RESPOND TO THIS REQUEST WITHIN TEN (10)
BUSINESS DAYS”, AND IN THE EVENT LENDER FAILS TO SO NOTIFY BORROWER WITHIN SUCH
TEN (10) BUSINESS DAY PERIOD, LENDER SHALL HAVE NO RIGHT TO OBJECT TO THE
PROPOSED TRANSFEREE ON SUCH BASIS).

 

89

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

 

 

 

8.5.2  PROPERTY TRANSFERS.  TRANSFERS OF THE PROPERTY SHALL BE PERMITTED WITHOUT
LENDER’S CONSENT PROVIDED: (A) LENDER RECEIVES NOT LESS THAN THIRTY (30) DAYS
PRIOR WRITTEN NOTICE THEREOF, (B) IMMEDIATELY PRIOR TO SUCH TRANSFER OR AS A
RESULT OF SUCH TRANSFER, NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING OR SHALL OCCUR, (C) SUBSEQUENT TO SUCH TRANSFER, THE TRANSFEREE OF
THE PROPERTY (THE “SUCCESSOR BORROWER”) WILL BE A SINGLE PURPOSE ENTITY, AND ITS
ORGANIZATIONAL DOCUMENTS AND STRUCTURE INSOFAR AS THE SAME RELATE TO ITS SINGLE
PURPOSE ENTITY STATUS SHALL BE REASONABLY ACCEPTABLE TO LENDER, (D) AFTER GIVING
EFFECT TO ANY SUCH TRANSFER, (X) ALX SHALL DIRECTLY OR INDIRECTLY OWN A MINIMUM
OF TWENTY-FIVE PERCENT (25%) OF THE DIRECT OR INDIRECT EQUITY INTERESTS IN
SUCCESSOR BORROWER AND SHALL CONTROL SUCCESSOR BORROWER, (Y) VORNADO REALTY
TRUST, VRLP, AND/OR INTERSTATE PROPERTIES (OR OTHER ENTITY CONTROLLED BY STEVEN
ROTH) SHALL CONTINUE TO COLLECTIVELY OWN NOT LESS THAN TWENTY-FIVE PERCENT (25%)
OF THE DIRECT OR INDIRECT EQUITY INTERESTS IN ALX, AND (Z) IF ANY PERSON (OR
GROUP OF RELATED PERSONS) SHALL OWN A DIRECT OR INDIRECT INTEREST IN SUCCESSOR
BORROWER OF TEN PERCENT (10%) OR GREATER, LENDER SHALL, TO THE EXTENT NOT
PREVIOUSLY OBTAINED BY LENDER, OBTAIN AND BE SATISFIED WITH  THE RESULTS OF
BACKGROUND AND CREDIT SEARCHES IN RESPECT OF SUCH PERSON (PROVIDED, HOWEVER, IN
THE EVENT THE BACKGROUND SEARCHES ON SUCH PERSON FAIL TO DISCLOSE ANY PRIOR
HISTORY OF (1) BANKRUPTCIES OR OTHER INSOLVENCIES, (2) FELONY CONVICTIONS, OR
(3) ANY VIOLATIONS OF THE RULES AND REGULATIONS OF PATRIOT ACT OR OFAC, THEN
SUCH SEARCHES SHALL BE DEEMED TO BE APPROVED BY LENDER), (E) SUCH TRANSFER DOES
NOT RESULT IN A VIOLATION OF ANY LEGAL REQUIREMENTS, INCLUDING, WITHOUT
LIMITATION, ERISA AND PRESCRIBED LAWS, AND (F) SUCH TRANSFER SHALL NOT CAUSE THE
SUCCESSOR BORROWER TO EXCEED EXPOSURE LIMITS OF LENDER (PROVIDED, HOWEVER, THAT
IF LENDER SHALL DETERMINE THAT A TRANSFER TO SUCH PROPOSED TRANSFEREE WOULD
EXCEED THE EXPOSURE LIMITS OF LENDER, THEN LENDER SHALL SO NOTIFY BORROWER
WITHIN TEN (10) BUSINESS DAYS AFTER THE PROPOSED TRANSFEREE HAS BEEN IDENTIFIED
TO LENDER WITH A REQUEST FOR APPROVAL SET FORTH IN A WRITTEN NOTICE THAT STATES
CLEARLY (IN 14-POINT TYPE OR LARGER): “THIS IS A REQUEST FOR APPROVAL OF A
TRANSFEREE.  LENDER SHALL HAVE NO RIGHT TO OBJECT TO THE TRANSFEREE BASED ON THE
TRANSFEREE EXCEEDING THE EXPOSURE LIMITS OF LENDER IF LENDER DOES NOT RESPOND TO
THIS REQUEST WITHIN TEN (10) BUSINESS DAYS”, AND IN THE EVENT LENDER FAILS TO SO
NOTIFY BORROWER WITHIN SUCH TEN (10) BUSINESS DAY PERIOD, LENDER SHALL HAVE NO
RIGHT TO OBJECT TO THE PROPOSED TRANSFEREE ON SUCH BASIS).

SECTION 8.6  DELIVERIES TO LENDER.  NOT LESS THAN FIFTEEN (15) DAYS PRIOR TO THE
CLOSING OF ANY TRANSACTION WHICH, SUBJECT TO THE PROVISIONS OF THIS
ARTICLE VIII, REQUIRES PRIOR NOTICE TO LENDER, BORROWER SHALL DELIVER TO LENDER
BORROWER’S CERTIFICATE DESCRIBING THE PROPOSED TRANSACTION AND STATING THAT SUCH
TRANSACTION IS PERMITTED BY THIS ARTICLE VIII, TOGETHER WITH ANY APPRAISAL OR
OTHER DOCUMENTS UPON WHICH SUCH BORROWER’S CERTIFICATE IS BASED.  IN ADDITION,
BORROWER SHALL PROVIDE LENDER WITH COPIES OF EXECUTED DEEDS, ASSIGNMENTS AND/OR
OTHER SIMILAR CLOSING DOCUMENTS WITHIN TEN (10) BUSINESS DAYS AFTER SUCH
CLOSING.

SECTION 8.7  LEASES.   

8.7.1  NEW LEASES AND LEASE MODIFICATIONS.  EXCEPT AS OTHERWISE PROVIDED IN
SECTION 8.7.2 OR SECTION 8.7.4, BORROWER SHALL NOT (A) ENTER INTO ANY LEASE OR
RENEW OR EXTEND AN EXISTING LEASE (UNLESS REQUIRED TO DO SO BY THE TERMS OF SUCH
LEASE) (A “NEW LEASE”), (B) CONSENT TO THE ASSIGNMENT OF ANY LEASE (UNLESS
REQUIRED TO DO SO BY THE TERMS OF SUCH LEASE) THAT RELEASES THE ORIGINAL TENANT
FROM ITS OBLIGATIONS UNDER THE LEASE, (C) MODIFY ANY LEASE (INCLUDING, WITHOUT
LIMITATION, ACCEPT A SURRENDER OF ANY PORTION OF THE PROPERTY SUBJECT TO A

 

90

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

 

 

LEASE (UNLESS OTHERWISE REQUIRED BY LAW OR SUCH LEASE)), ALLOW A REDUCTION IN
THE TERM OF ANY LEASE OR A REDUCTION IN THE RENT PAYABLE UNDER ANY LEASE, CHANGE
ANY RENEWAL PROVISIONS OF ANY LEASE IN A MANNER MATERIALLY ADVERSE TO BORROWER
OR LENDER, MATERIALLY INCREASE THE OBLIGATIONS OF THE LANDLORD OR MATERIALLY
DECREASE THE OBLIGATIONS OF ANY TENANT, OR (D) TERMINATE ANY LEASE (ANY SUCH
ACTION REFERRED TO IN CLAUSES (B), (C) OR (D)  BEING REFERRED TO HEREIN AS A
“LEASE MODIFICATION”), IN EACH INSTANCE WITHOUT THE PRIOR WRITTEN CONSENT OF
LENDER (UNLESS SUCH LEASE MODIFICATION IS MADE PURSUANT TO AN EXPRESS RIGHT OF
TENANT PURSUANT TO THE TERMS OF THE RELATED LEASE), WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.  IN ADDITION, BORROWER MAY
REQUEST LENDER’S APPROVAL OF ANY MATERIAL CHANGE TO THE STANDARD FORM OF LEASE,
WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD.  EACH REQUEST FOR APPROVAL
AND CONSENT OF A NEW LEASE OR LEASE MODIFICATION OR MODIFICATION TO THE STANDARD
FORM OF LEASE SHALL CONTAIN A LEGEND IN CAPITALIZED BOLD LETTERS ON THE TOP OF
THE COVER PAGE STATING: “THIS IS A REQUEST FOR CONSENT TO A [NEW LEASE]  [LEASE
MODIFICATION]  [MODIFICATION OF STANDARD FORM OF LEASE].  LENDER’S RESPONSE IS
REQUESTED WITHIN TEN (10) BUSINESS DAYS.  LENDER’S FAILURE TO RESPOND WITHIN
SUCH TIME PERIOD SHALL RESULT IN LENDER’S CONSENT BEING DEEMED TO HAVE BEEN
GRANTED” AND BORROWER SHALL INCLUDE THE FOLLOWING DOCUMENTATION WITH SUCH
REQUEST: (A) THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, AND (B) ALL
OTHER MATERIALS REASONABLY NECESSARY IN ORDER FOR LENDER TO EVALUATE SUCH NEW
LEASE OR LEASE MODIFICATION.  IN THE EVENT THAT LENDER FAILS TO GRANT OR
WITHHOLD ITS APPROVAL AND CONSENT TO SUCH NEW LEASE, LEASE MODIFICATION, OR
MODIFICATION TO THE STANDARD FORM OF LEASE WITHIN SUCH TEN (10) BUSINESS DAY
PERIOD (AND, IN THE CASE OF A WITHHOLDING OF CONSENT, STATING THE GROUNDS
THEREFOR IN REASONABLE DETAIL), THEN LENDER’S APPROVAL AND CONSENT SHALL BE
DEEMED TO HAVE BEEN GRANTED.  IN ADDITION, BORROWER MAY, AT BORROWER’S OPTION,
PRIOR TO DELIVERING TO LENDER A DRAFT OF ANY SUCH NEW LEASE OR LEASE
MODIFICATION FOR LENDER’S APPROVAL, FIRST DELIVER TO LENDER FOR LENDER’S
APPROVAL A TERM SHEET SETTING FORTH THE MAJOR ECONOMIC AND OTHER BUSINESS TERMS
(THE “MATERIAL BUSINESS TERMS”) OF SUCH PROPOSED NEW LEASE OR LEASE
MODIFICATION, TOGETHER WITH ALL OTHER MATERIALS REASONABLY REQUESTED BY LENDER
IN ORDER TO EVALUATE SUCH MATERIAL BUSINESS TERMS.  EACH SUCH REQUEST FOR
APPROVAL AND CONSENT SHALL CONTAIN A LEGEND IN CAPITALIZED BOLD LETTERS ON THE
TOP OF THE COVER PAGE STATING: “THIS IS A REQUEST FOR CONSENT TO THE MATERIAL
BUSINESS TERMS FOR A [NEW LEASE]  [LEASE MODIFICATION].  LENDER’S RESPONSE IS
REQUESTED WITHIN TEN (10) BUSINESS DAYS.  LENDER’S FAILURE TO RESPOND WITHIN
SUCH TIME PERIOD SHALL RESULT IN LENDER’S CONSENT BEING DEEMED TO HAVE BEEN
GRANTED.” IN THE EVENT THAT LENDER FAILS TO GRANT OR WITHHOLD ITS APPROVAL AND
CONSENT TO SUCH MATERIAL BUSINESS TERMS WITHIN SUCH TEN (10) BUSINESS DAY PERIOD
(AND, IN THE CASE OF A WITHHOLDING OF CONSENT, STATING THE GROUNDS THEREFOR IN
REASONABLE DETAIL), THEN LENDER’S APPROVAL AND CONSENT SHALL BE DEEMED TO HAVE
BEEN GRANTED.  SUBJECT TO THE APPROVAL TIME PERIODS SET FORTH ABOVE WITH RESPECT
TO NEW LEASES AND LEASE MODIFICATIONS, SO LONG AS ANY NEW LEASE OR LEASE
MODIFICATION SUBMITTED TO LENDER FOR APPROVAL AND CONSENT (A) DOES NOT CONTAIN
MATERIAL BUSINESS TERMS WHICH DIFFER IN ANY MATERIAL ADVERSE RESPECT FROM THE
MATERIAL BUSINESS TERMS APPROVED BY LENDER AND (B) OTHERWISE DOES NOT CONTAIN
ANY LEASE TERMS WHICH DEVIATE MATERIALLY FROM THE TERMS OF THE STANDARD FORM OF
LEASE, LENDER’S CONSENT TO SUCH NEW LEASE OR LEASE MODIFICATION SHALL NOT BE
REQUIRED.

8.7.2  LEASING CONDITIONS.  SUBJECT TO THE TERMS OF THIS SECTION 8.7,  PROVIDED
NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, BORROWER MAY ENTER
INTO A NEW LEASE OR LEASE MODIFICATION, WITHOUT LENDER’S PRIOR WRITTEN CONSENT,
THAT SATISFIES EACH OF THE FOLLOWING

 

91

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

 

 

CONDITIONS (AS EVIDENCED BY BORROWER’S CERTIFICATE DELIVERED TO LENDER WITHIN
ONE (1) WEEK AFTER BORROWER’S ENTRY INTO SUCH NEW LEASE OR LEASE MODIFICATION):

(A)                SUCH NEW LEASE OR LEASE MODIFICATION OTHER THAN A TERMINATION
OR SURRENDER (TO THE EXTENT IT RELATES TO A PROVISION IN THE STANDARD FORM
LEASE), AS APPLICABLE, IS WRITTEN ON EITHER (I) THE STANDARD FORM OF LEASE
ATTACHED HERETO AS EXHIBIT C  (THE “STANDARD FORM OF LEASE”), OR SUBSTANTIALLY
CONFORMS IN ALL MATERIAL RESPECTS TO THE TERMS THEREOF, WITH ONLY SUCH CHANGES
AS ARE COMMERCIALLY REASONABLE GIVEN THE THEN CURRENT MARKET CONDITIONS, NONE OF
WHICH CHANGES SHALL VARY (IN A MANNER MATERIALLY ADVERSE TO LENDER) THE
SUBORDINATION, ATTORNMENT AND NON‑DISTURBANCE PROVISIONS CONTAINED IN THE
STANDARD FORM OF LEASE, (II) THE STANDARD FORM OF LEASE OF A NATIONAL RETAILER,
OR (III) THE STANDARD FORM OF BRANCH LEASE FOR A NATIONAL OR REGIONAL BANK,
WHICH FORM OF LEASE SHALL, WITH RESPECT TO THE FORMS OF LEASE SET FORTH IN
CLAUSES (II) AND (III) OF THIS SECTION 8.7.2(A) SUBSTANTIALLY CONFORM IN ALL
MATERIAL RESPECTS TO THE TERMS OF SUCH FORM, WITH ONLY SUCH CHANGES AS ARE
COMMERCIALLY REASONABLE GIVEN THE THEN CURRENT MARKET CONDITIONS, NONE OF WHICH
CHANGES SHALL VARY (IN A MANNER MATERIALLY ADVERSE TO LENDER) THE SUBORDINATION,
ATTORNMENT AND NON‑DISTURBANCE PROVISIONS CONTAINED IN THE STANDARD FORM OF
LEASE;

(B)               WITH RESPECT TO A NEW LEASE OR LEASE MODIFICATION, THE
PREMISES DEMISED THEREUNDER ARE LESS THAN 75,000 NET RENTABLE SQUARE FEET OF THE
PROPERTY; PROVIDED, HOWEVER, THAT FOR PURPOSES OF DETERMINING THE NET RENTABLE
SQUARE FOOTAGE OF THE PREMISES DEMISED, (I) A “NEW LEASE” WITH A TENANT SHALL
INCLUDE AND AGGREGATE THE SQUARE FOOTAGE DEMISED PURSUANT TO SUCH NEW LEASE AND
(A) ANY EXISTING LEASE WITH SUCH TENANT OR ANY AFFILIATE OF SUCH TENANT AND (B)
ANY LEASE MODIFICATION WITH SUCH TENANT OR ANY AFFILIATE OF SUCH TENANT, AND
(II) A “LEASE MODIFICATION” WITH A TENANT SHALL INCLUDE AND AGGREGATE THE SQUARE
FOOTAGE DEMISED PURSUANT TO (A) THE LEASE BEING MODIFIED AND ANY OTHER EXISTING
LEASE WITH SUCH TENANT OR AN AFFILIATE OF SUCH TENANT AND (B) SUCH LEASE
MODIFICATION AND ANY OTHER LEASE MODIFICATION WITH SUCH TENANT OR ANY LEASE
MODIFICATION WITH AN AFFILIATE OF SUCH TENANT;

(C)                SUCH NEW LEASE OR, IF THE LEASE MODIFICATION IMPACTS THE
RENTS PAYABLE UNDER THE MODIFIED LEASE, SUCH LEASE MODIFICATION IS ON THEN
PREVAILING MARKET-RATE RENT, TERMS AND CONDITIONS FOR SIMILAR LEASES IN SIMILAR
BUILDINGS IN THE VICINITY OF THE PROPERTY;

(D)               “FIXED” OR “BASE” RENT UNDER SUCH NEW LEASE OR LEASE
MODIFICATION (TO THE EXTENT RENT IS ADDRESSED IN SUCH LEASE MODIFICATION), AS
APPLICABLE, IS AT A SUBSTANTIALLY CONSISTENT OR RISING LEVEL THROUGHOUT THE TERM
OF THE LEASE, OTHER THAN FOR (I) MARKET RATE “FREE RENT” PERIODS OR (II) TENANT
IMPROVEMENT AND TENANT INDUCEMENTS THAT EXCEED CURRENT MARKET CONDITIONS BUT ARE
AMORTIZED OVER A SHORTER TIME PERIOD THAN THE ENTIRE INITIAL TERM OF SUCH NEW
LEASE OR LEASE MODIFICATION, AS APPLICABLE;

(E)                SUCH NEW LEASE OR LEASE MODIFICATION TO THE EXTENT “USE” IS
ADDRESSED IN SUCH LEASE MODIFICATION, AS APPLICABLE, PROVIDES THAT THE PREMISES
DEMISED THEREBY CANNOT BE USED FOR ANY OF THE FOLLOWING USES: ANY PORNOGRAPHIC
OR OBSCENE PURPOSES, ANY COMMERCIAL SEX ESTABLISHMENT, ANY PORNOGRAPHIC,
OBSCENE, NUDE OR SEMI‑NUDE PERFORMANCES, MODELING OR SEXUAL CONDUCT OR ANY OTHER
USE THAT HAS OR COULD REASONABLY BE EXPECTED TO VIOLATE APPLICABLE LEGAL
REQUIREMENTS;

 

92

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

 

 

(F)                SUCH NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, OTHER
THAN LEASE MODIFICATIONS RELATING TO LEASES IN EXISTENCE ON THE DATE HEREOF, IS
ON AN ARM’S LENGTH BASIS WITH A TENANT WHO IS NOT AN AFFILIATE OF BORROWER;

(G)               THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, SHALL NOT
ENTITLE ANY TENANT TO RECEIVE AND RETAIN PROCEEDS EXCEPT THOSE THAT MAY BE
SPECIFICALLY AWARDED TO IT IN CONDEMNATION PROCEEDINGS BECAUSE OF THE TAKING OF
ITS TRADE FIXTURES AND ITS LEASEHOLD IMPROVEMENTS WHICH HAVE NOT BECOME PART OF
THE PROPERTY AND SUCH BUSINESS LOSS AS TENANT MAY SPECIFICALLY AND SEPARATELY
ESTABLISH;

(H)               THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, SHALL NOT
CAUSE BORROWER TO BE IN DEFAULT OF ANY “CO-TENANCY”, OR OTHER RESTRICTION
CONTAINED IN ANY OTHER LEASE AT THE PROPERTY THAT PERMITS ANY TENANT TO
TERMINATE ITS LEASE OR REDUCE THE AMOUNT OF RENT PAYABLE UNDER ITS LEASE;

(I)                 THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, SHALL
NOT CONTAIN AN OPTION IN FAVOR OF TENANT TO ACQUIRE ALL OR ANY PORTION OF THE
PROPERTY; AND

(J)                 THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE,
SATISFIES THE REQUIREMENTS OF SECTIONS 8.7.7 AND 8.7.8. 

8.7.3  DELIVERY OF NEW LEASE OR LEASE MODIFICATION.  WITHIN ONE (1) WEEK
FOLLOWING THE EXECUTION OF ANY NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE,
BORROWER SHALL DELIVER TO LENDER A COPY OF THE EXECUTED LEASE AND AN ADDITIONAL
COPY MARKED TO SHOW ALL CHANGES FROM THE STANDARD FORM OF LEASE.

8.7.4  LEASE AMENDMENTS AND TERMINATIONS.   

(A)                BORROWER AGREES THAT IT SHALL NOT HAVE THE RIGHT OR POWER, AS
AGAINST LENDER WITHOUT ITS CONSENT, TO CANCEL, ABRIDGE, AMEND OR OTHERWISE
MODIFY ANY LEASE UNLESS SUCH MODIFICATION COMPLIES WITH THIS SECTION 8.7. 
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NO CONSENT OF LENDER SHALL BE
REQUIRED FOR ANY AMENDMENT REFLECTING THE TENANT’S UNILATERAL EXERCISE OF A
RENEWAL OR EXPANSION OR TERMINATION OPTION SET FORTH IN ITS LEASE AS OF THE DATE
HEREOF OR A LEASE OR LEASE MODIFICATION SUBSEQUENTLY APPROVED OR OTHERWISE
ENTERED INTO IN ACCORDANCE WITH THE TERMS HEREOF AND ANY SUCH AMENDMENT SHALL
NOT BE DEEMED A LEASE MODIFICATION FOR ANY PURPOSE HEREOF.

(B)               NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
BORROWER SHALL HAVE THE RIGHT TO TERMINATE ANY LEASE AND NO CONSENT OF LENDER
SHALL BE REQUIRED IN RESPECT OF SUCH TERMINATION, PROVIDED  THAT (I) BORROWER IS
SIMULTANEOUSLY REPLACING SUCH TERMINATED LEASE WITH A LEASE (FOR ALL OR
SUBSTANTIALLY ALL OF THE SPACE WHICH WAS COVERED BY THE LEASE BEING TERMINATED)
THAT EITHER (X) HAS BEEN APPROVED OR DEEMED APPROVED BY LENDER IF REQUIRED IN
ACCORDANCE WITH THIS SECTION 8.7  OR (Y) OTHERWISE MEETS THE REQUIREMENTS OF
THIS SECTION 8.7, OR (II) THE APPLICABLE TENANT IS IN DEFAULT THEREUNDER BEYOND
ANY APPLICABLE NOTICE AND GRACE PERIODS.

8.7.5  SECURITY DEPOSITS.  ALL SECURITY OR OTHER DEPOSITS OF TENANTS OF THE
PROPERTY SHALL BE HELD IN ACCORDANCE WITH APPLICABLE LEGAL REQUIREMENTS.  WITHIN
TEN (10) BUSINESS DAYS AFTER WRITTEN REQUEST BY LENDER, SUCH REQUEST NOT TO
OCCUR MORE THAN TWICE A YEAR IN THE ABSENCE OF AN EXISTING EVENT OF DEFAULT,
BORROWER SHALL FURNISH TO LENDER A STATEMENT OF ALL LEASE SECURITIES DEPOSITED
WITH BORROWER BY THE TENANTS AND THE LOCATION AND ACCOUNT NUMBER OF THE

93

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

 

account in which such security deposits are held.  Schedule 8.7.5 contains a
true, correct and complete list of all security deposits and the amounts
thereof, currently in Borrower’s possession and the location thereof.

8.7.6  NO DEFAULT UNDER LEASES.  BORROWER SHALL (A) PROMPTLY PERFORM AND OBSERVE
ALL OF THE MATERIAL TERMS, COVENANTS AND CONDITIONS REQUIRED TO BE PERFORMED AND
OBSERVED BY BORROWER UNDER THE LEASES, (B) EXERCISE, WITHIN FIFTEEN (15)
BUSINESS DAYS AFTER A WRITTEN REQUEST BY LENDER MADE NOT MORE THAN ONE (1) TIME
IN ANY EIGHTEEN (18) MONTH PERIOD, ANY RIGHT TO REQUEST FROM THE TENANT UNDER
ANY LEASE A CERTIFICATE WITH RESPECT TO THE STATUS THEREOF, AND (C) NOT COLLECT
ANY OF THE RENTS MORE THAN ONE (1) MONTH IN ADVANCE (EXCEPT THAT BORROWER MAY
COLLECT SUCH SECURITY DEPOSITS AND LAST MONTH’S RENTS AS ARE PERMITTED BY LEGAL
REQUIREMENTS AND ARE COMMERCIALLY REASONABLE IN THE PREVAILING MARKET AND
COLLECT OTHER CHARGES IN ACCORDANCE WITH THE TERMS OF EACH LEASE).

8.7.7  SUBORDINATION.   SUBJECT TO SECTION 8.7.9, ALL LEASE MODIFICATIONS AND
NEW LEASES ENTERED INTO BY BORROWER AFTER THE DATE HEREOF SHALL BE SUBJECT AND
SUBORDINATE TO THIS AGREEMENT AND THE MORTGAGE (THROUGH A SUBORDINATION
PROVISION CONTAINED IN SUCH LEASE OR OTHERWISE) AND SHALL PROVIDE THAT THE
PERSON HOLDING ANY RIGHTS THEREUNDER SHALL ATTORN TO LENDER OR ANY OTHER PERSON
SUCCEEDING TO THE INTERESTS OF LENDER UPON THE EXERCISE OF ITS REMEDIES
HEREUNDER OR ANY TRANSFER IN LIEU THEREOF ON THE TERMS SET FORTH IN THIS SECTION
8.7. 

8.7.8  ATTORNMENT.   SUBJECT TO SECTION 8.7.9, EACH LEASE MODIFIED BY A LEASE
MODIFICATION AND EACH NEW LEASE ENTERED INTO BY BORROWER FROM AND AFTER THE DATE
HEREOF SHALL PROVIDE THAT IN THE EVENT OF THE ENFORCEMENT BY LENDER OF ANY
REMEDY UNDER THIS AGREEMENT OR THE MORTGAGE, THE TENANT UNDER SUCH LEASE SHALL,
AT THE OPTION OF LENDER OR OF ANY OTHER PERSON SUCCEEDING TO THE INTEREST OF
LENDER AS A RESULT OF SUCH ENFORCEMENT, ATTORN TO LENDER OR TO SUCH PERSON AND
SHALL RECOGNIZE LENDER OR SUCH SUCCESSOR‑IN‑INTEREST AS LESSOR UNDER SUCH
LEASE.  EACH SUCH NEW LEASE SHALL ALSO PROVIDE THAT, UPON THE REASONABLE REQUEST
BY LENDER OR SUCH SUCCESSOR‑IN‑INTEREST, THE TENANT SHALL EXECUTE AND DELIVER AN
INSTRUMENT OR INSTRUMENTS CONFIRMING SUCH ATTORNMENT.

8.7.9  NON‑DISTURBANCE AGREEMENTS.  LENDER SHALL ENTER INTO, AND, IF REQUIRED BY
APPLICABLE LAW IN ORDER TO PROVIDE CONSTRUCTIVE NOTICE OR IF REQUESTED BY ANY
TENANT, RECORD IN THE COUNTY WHERE THE PROPERTY IS LOCATED, A SUBORDINATION,
NON‑DISTURBANCE AND ATTORNMENT AGREEMENT, IN FORM AND SUBSTANCE SUBSTANTIALLY
SIMILAR TO THE FORM ATTACHED HERETO AS EXHIBIT D  (A “NON-DISTURBANCE
AGREEMENT”), WITH ANY TENANT ENTERING INTO A NEW LEASE, OR A LEASE MODIFICATION
AND WHOSE SPACE IS NOT IRREGULAR IN ITS CONFIGURATION (I.E., THE BALANCE OF ANY
FLOOR IS REASONABLY REGULAR IN SHAPE, SUITABLE FOR NORMAL RENTAL PURPOSES AND
CONFIGURED IN A COMMERCIALLY REASONABLE MANNER TO ENABLE THE DEMISING OF SUCH
SPACE IN A MANNER WHICH SHALL NOT UNREASONABLY INHIBIT THE MARKETABILITY OF THE
LEASING OF SUCH SPACE) FOR WHICH LENDER’S PRIOR WRITTEN CONSENT HAS BEEN
OBTAINED OR DEEMED OBTAINED, OR FOR WHICH LENDER’S PRIOR WRITTEN CONSENT WAS NOT
REQUIRED, WITHIN TEN (10) BUSINESS DAYS AFTER WRITTEN REQUEST THEREFOR BY
BORROWER.  ALL REASONABLE THIRD-PARTY COSTS AND EXPENSES INCURRED BY LENDER IN
CONNECTION WITH THE NEGOTIATION, PREPARATION, EXECUTION, DELIVERY AND
RECORDATION OF ANY NON‑DISTURBANCE AGREEMENT, INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS, SHALL BE PAID BY BORROWER.

 

94

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

 

 

 

SECTION 8.8  CONDOMINIUM. 

8.8.1  CREATION OF CONDOMINIUM.  PROVIDED NO EVENT OF DEFAULT IS CONTINUING, AND
BORROWER IS OTHERWISE IN COMPLIANCE WITH THE TERMS AND COVENANTS OF THIS SECTION
8.8, BORROWER MAY CREATE A CONDOMINIUM (THE “CONDOMINIUM”) PURSUANT TO WHICH THE
PROPERTY SHALL BE DIVIDED INTO A RETAIL UNIT AND A RESIDENTIAL UNIT, BOTH AS
DEFINED BELOW.  THE “RETAIL UNIT” SHALL BE COMPRISED OF THE CURRENT IMPROVEMENTS
LESS SUCH PORTION AS IS NEEDED FOR COMMON ELEMENTS (PROVIDED THAT IN NO EVENT
SHALL SUCH COMMON ELEMENTS ENCOMPASS SPACE LEASED TO TENANTS WITHOUT LENDER’S
PRIOR WRITTEN CONSENT) (THE “COMMON ELEMENTS”).  THE “RESIDENTIAL UNIT” SHALL BE
COMPRISED OF CERTAIN DEVELOPMENT RIGHTS CURRENTLY APPURTENANT TO THE PROPERTY
AND ANY IMPROVEMENTS CONSTRUCTED USING THOSE DEVELOPMENT RIGHTS AND THE PORTION
OF THE CURRENT IMPROVEMENTS DEDICATED FOR THE RESIDENTIAL UNIT LOBBY AND
ELEVATOR CORE LESS THE COMMON ELEMENTS. 

8.8.2  RELEASE FROM MORTGAGE. BORROWER MAY OBTAIN THE RELEASE OF THE RESIDENTIAL
UNIT (AND THE COMMON ELEMENTS) FROM THE LIEN OF THE MORTGAGE AND THE OTHER LOAN
DOCUMENTS (WITHOUT ANY REPAYMENT OF ANY PORTION OF THE LOAN OR PAYMENT OF ANY
FEES EXCEPT AS SET FORTH HEREIN), UPON SATISFACTION OF THE FOLLOWING TERMS AND
CONDITIONS: (I) NO EVENT OF DEFAULT SHALL BE CONTINUING, (II) BORROWER SHALL
DISTRIBUTE OR OTHERWISE CONVEY TO AN AFFILIATE OR ANY THIRD PARTY THE
RESIDENTIAL UNIT SO AS TO MAINTAIN BORROWER’S EXISTENCE AS A SINGLE PURPOSE
ENTITY (E.G., TO A PERSON THAT IS NOT A SUBSIDIARY OF THE BORROWER), (III) EACH
OF THE RESIDENTIAL UNIT AND RETAIL UNIT SHALL BE A SEPARATE TAX LOT AND ZONING
PARCEL, (IV) THE RETAIL UNIT SHALL BE IN COMPLIANCE IN ALL MATERIAL RESPECTS
WITH ALL APPLICABLE ZONING AND BUILDING CODES AND REGULATIONS AND ALL OTHER
LEGAL REQUIREMENTS, (V) LENDER SHALL HAVE REVIEWED AND REASONABLY APPROVED THE
DECLARATION OF CONDOMINIUM AND RELATED DOCUMENTS (COLLECTIVELY, THE “CONDO
DOCUMENTS”), WHICH CONDO DOCUMENTS SHALL BE DELIVERED TO LENDER FOR SUCH REVIEW
AND APPROVAL NOT LESS THAN THIRTY (30) DAYS PRIOR TO THE DATE SUCH RELEASE IS
SOUGHT, (VI) BORROWER SHALL HAVE EXECUTED AND DELIVERED SUCH AMENDMENTS TO THE
LOAN DOCUMENTS AS LENDER SHALL REASONABLY REQUIRE TO REFLECT SUCH CONDOMINIUM
STRUCTURE, AS WELL AS SUCH TITLE INSURANCE ENDORSEMENTS AND LEGAL OPINIONS AS
LENDER SHALL REASONABLY REQUIRE, (VII) BORROWER SHALL HAVE EXECUTED AND/OR
DELIVERED SUCH OTHER ITEMS AS LENDER SHALL REASONABLY REQUIRE IN CONNECTION
THEREWITH (PROVIDED THAT SUCH ITEMS SHALL NOT IMPAIR IN ANY MATERIAL RESPECT
BORROWER’S RIGHT TO EFFECT THE RELEASE OF THE RESIDENTIAL UNIT AND THE COMMON
ELEMENTS FROM THE LIEN OF THE MORTGAGE AND THE OTHER LOAN DOCUMENTS OR TO
ESTABLISH THE CONDOMINIUM, OR IMPOSE MATERIAL OBLIGATIONS ON BORROWER OR ANY OF
ITS AFFILIATES AS A CONDITION TO SUCH RELEASE OR ESTABLISHMENT); (VIII) THE
DEVELOPMENT AND CONSTRUCTION OF THE CONDOMINIUM SHALL AT ALL TIMES BE IN STRICT
COMPLIANCE WITH THE NOTICE OF SATISFACTION AND THE RESTRICTIVE DECLARATION
REFERENCED THEREIN; AND (IX) BORROWER SHALL HAVE PAID ALL OF LENDER’S REASONABLE
COSTS AND EXPENSES, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEY’S FEES,
IN CONNECTION WITH LENDER’S REVIEW AND APPROVAL OF EACH OF THE FOREGOING ITEMS. 
UPON SATISFACTION OF EACH OF THE FOREGOING CONDITIONS, LENDER SHALL EXECUTE AND
DELIVER TO BORROWER SUCH DOCUMENTS AS SHALL BE REASONABLY REQUIRED TO
SUBORDINATE THE LIEN OF THE MORTGAGE TO THE CONDO DOCUMENTS.

 

95

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

 

 

8.8.3  DEVELOPMENT AND CONSTRUCTION.   AT ANY TIME AFTER THE RELEASE OF THE
RESIDENTIAL UNIT IN ACCORDANCE WITH SECTION 8.8.2 ABOVE, THE OWNER THEREOF SHALL
BE PERMITTED TO CONSTRUCT AND DEVELOP THE RESIDENTIAL UNIT, PROVIDED  (A) THAT
LIABILITY AND PROPERTY INSURANCE REASONABLY REQUIRED BY LENDER SHALL BE IN PLACE
IN CONNECTION WITH SUCH CONSTRUCTION AND DEVELOPMENT, (B) LENDER SHALL RECEIVE
EVIDENCE REASONABLY SATISFACTORY TO IT THAT (1) ADEQUATE SAFETY PROTECTIONS ARE
IN PLACE FOR ANY TENANTS OF THE RETAIL UNIT, THEIR CUSTOMERS AND THE PUBLIC,
INCLUDING, IF NECESSARY, COVERED WALKWAYS, (2) CONSTRUCTION OF THE RESIDENTIAL
UNIT WILL NOT UNREASONABLY INTERFERE WITH THE USE OF THE PROPERTY, (3) THERE
SHALL NOT BE ANY MATERIAL ABATEMENT OR DIMINUTION OF RENTS PAYABLE BY TENANTS AT
THE PROPERTY AS A DIRECT RESULT OF SUCH CONSTRUCTION AND DEVELOPMENT, (4) THE
PERSON CONSTRUCTING AND DEVELOPING THE RESIDENTIAL UNIT SHALL HAVE SUFFICIENT
FUNDS (DEBT AND/OR EQUITY) TO COMPLETE SUCH CONSTRUCTION AND DEVELOPMENT, (5)
BORROWER SHALL NOT HAVE ANY OBLIGATION AS “SPONSOR” UNDER ANY OFFERING PLAN OR
SIMILAR DOCUMENT, AND (6) ADEQUATE PEDESTRIAN AND VEHICULAR INGRESS AND EGRESS
EXISTS FOR THE USE AND OPERATION OF THE RETAIL UNIT AND (C) TO THE EXTENT NOT
CONTAINED IN THE CONDO DOCUMENTS, REASONABLE AND CUSTOMARY EASEMENTS ARE IN
PLACE BETWEEN THE RESIDENTIAL UNIT AND THE RETAIL UNIT.

ARTICLE IX

MAINTENANCE OF PROPERTY; ALTERATIONS

SECTION 9.1  MAINTENANCE OF PROPERTY.  BORROWER (A) SHALL KEEP AND MAINTAIN, OR
CAUSE TO BE KEPT AND MAINTAINED, THE PROPERTY AND EVERY PART THEREOF IN GOOD
CONDITION AND REPAIR IN ACCORDANCE WITH REASONABLE MARKET PRACTICE FOR A
PROPERTY OF ITS NATURE, SUBJECT TO ORDINARY WEAR AND TEAR, AND, SUBJECT TO
EXCUSABLE DELAY AND THE PROVISIONS OF THIS AGREEMENT WITH RESPECT TO DAMAGE OR
DESTRUCTION CAUSED BY CASUALTY EVENTS OR TAKINGS AND (B) SHALL NOT PERMIT OR
COMMIT ANY INTENTIONAL WASTE, IMPAIRMENT, OR DETERIORATION OF ANY PORTION OF THE
PROPERTY IN ANY MATERIAL RESPECT.  BORROWER FURTHER COVENANTS TO DO ALL OTHER
ACTS WHICH FROM THE CHARACTER OR USE OF THE PROPERTY MAY BE REASONABLY NECESSARY
TO PROTECT THE SECURITY HEREOF IN ALL MATERIAL RESPECTS, THE SPECIFIC
ENUMERATIONS HEREIN NOT EXCLUDING THE GENERAL.  BORROWER SHALL NOT REMOVE OR
DEMOLISH ANY IMPROVEMENT ON THE PROPERTY EXCEPT AS THE SAME MAY BE NECESSARY IN
CONNECTION WITH AN ALTERATION OR A RESTORATION IN CONNECTION WITH A TAKING OR
CASUALTY, OR AS OTHERWISE PERMITTED HEREIN OR IN ANY OTHER LOAN DOCUMENT, IN
EACH CASE IN ACCORDANCE WITH THE TERMS AND CONDITIONS HEREOF.

SECTION 9.2  CONDITIONS TO ALTERATION.  LENDER’S PRIOR APPROVAL, WHICH SHALL NOT
BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED, SHALL BE REQUIRED IN
CONNECTION WITH ANY ALTERATION, IMPROVEMENT, DEMOLITION OR REMOVAL OF THE
PROPERTY OR ANY PORTION THEREOF (ANY SUCH ALTERATION, IMPROVEMENT, DEMOLITION OR
REMOVAL, AN “ALTERATION”) THAT IS A MATERIAL ALTERATION; PROVIDED THAT LENDER’S
APPROVAL SHALL NOT BE REQUIRED WITH RESPECT TO (AND THE COST OF ALTERATIONS
DESCRIBED IN EITHER OF THE FOLLOWING CLAUSE (A) OR (B) SHALL BE EXCLUDED FOR
PURPOSES OF DETERMINING WHETHER THE SAME, EITHER ALONE OR WHEN AGGREGATED WITH
OTHER ALTERATIONS, EXCEED THE THRESHOLD AMOUNT) (A) TENANT IMPROVEMENT WORK TO
BE PERFORMED PURSUANT TO ANY LEASE EXISTING AS OF THE DATE HEREOF OR ANY NEW
LEASE OR LEASE MODIFICATION ENTERED INTO IN ACCORDANCE WITH THIS AGREEMENT OR
(B) ANY ALTERATION REQUIRED BY APPLICABLE LEGAL REQUIREMENTS.  ALL ALTERATIONS
MUST BE UNDERTAKEN IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS WELL AS THE PROVISIONS OF THE
LEASES.  ANY MATERIAL ALTERATION

96

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

 

 

shall be conducted under the supervision of an Independent Architect or
Borrower’s Architect.  In connection with any Material Alteration, Borrower
shall deliver to Lender detailed plans and specifications (it being agreed that
the format and information contained in any plans and specifications submitted
to a Governmental Authority in connection with such Alteration shall be an
acceptable format and detail with respect to Lender’s approval required
hereunder and cost estimates therefor, prepared by an Independent Architect or
Borrower’s Architect, which plans and specifications (if relating to Alterations
requiring Lender’s approval hereunder) shall be approved by Lender, which
approval shall not be unreasonably withheld, conditioned or delayed.  Such plans
and specifications may be revised at any time and from time to time by an
Independent Architect or Borrower’s Architect provided that material revisions
of such plans and specifications (if relating to Alterations requiring Lender’s
approval hereunder) are filed with, and approved by, Lender, which approval
shall not be unreasonably withheld or delayed.  All work done in connection with
any Alteration shall be performed in all material respects with due diligence in
a good and workmanlike manner, all materials used in connection with any
Alteration shall not be less than the standard of quality of the materials
currently used at the Property and all materials used shall be in accordance
with all applicable material Legal Requirements and Insurance Requirements.  Any
request for approval of Lender pursuant to this Section 9.2 or Section 9.3 shall
be delivered to Lender together with all other materials reasonably requested by
Lender in order to evaluate such request and the time period specified below
shall not commence until Lender has received all of such other materials.  Each
such request for approval shall contain a legend in capitalized bold letters on
the top of the first page stating: “THIS IS A REQUEST FOR LENDER’S CONSENT. 
LENDER’S RESPONSE IS REQUESTED WITHIN TEN (10) BUSINESS DAYS.  LENDER’S FAILURE
TO RESPOND WITHIN SUCH TIME PERIOD SHALL RESULT IN LENDER’S CONSENT BEING DEEMED
TO HAVE BEEN GRANTED.”  In the event that Lender fails to grant or withhold its
approval to such request within such ten (10) Business Day period, then Lender’s
approval shall be deemed to have been granted.

SECTION 9.3  COSTS OF ALTERATION.  (A) NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS ARTICLE IX  (BUT SUBJECT TO THE PROVISO IN THE FIRST SENTENCE
OF SECTION 9.2), NO MATERIAL ALTERATION OR ALTERATION, THE UNPAID COST OF WHICH
WHEN AGGREGATED WITH THE UNPAID COST OF ALL OTHER ALTERATIONS (OTHER THAN
MATERIAL ALTERATIONS) THEN BEING UNDERTAKEN BY BORROWER (EXCLUSIVE OF
ALTERATIONS BEING DIRECTLY PAID FOR BY TENANTS AT THE PROPERTY) EXCEEDS THE
THRESHOLD AMOUNT, SHALL BE PERFORMED BY OR ON BEHALF OF BORROWER UNLESS BORROWER
SHALL HAVE DELIVERED TO LENDER CASH OR CASH EQUIVALENTS AND/OR A LETTER OF
CREDIT AS SECURITY IN ALL CASES IN AN AMOUNT NOT LESS THAN THE ESTIMATED UNPAID
COST OF (I) SUCH MATERIAL ALTERATION OR OTHER ALTERATION, AS APPLICABLE AND AS
SET FORTH IN THE INDEPENDENT ARCHITECT’S OR BORROWER’S ARCHITECT’S WRITTEN
ESTIMATE, LESS  (II) THE THRESHOLD AMOUNT AND LESS  SUCH AMOUNTS AS ARE IN THE
RESERVE ACCOUNT WHICH RELATE TO SUCH WORK (IF ANY), OR OTHER ASSURANCES
REASONABLY ACCEPTABLE TO LENDER OF BORROWER’S ABILITY TO COMPLETE AND PAY FOR
SUCH ALTERATIONS.  IN ADDITION TO PAYMENT OR REIMBURSEMENT FROM TIME TO TIME OF
BORROWER’S EXPENSES INCURRED IN CONNECTION WITH ANY MATERIAL ALTERATION OR OTHER
ALTERATION, THE AMOUNT OF SUCH SECURITY (IF ANY) SHALL BE REDUCED ON ANY GIVEN
DATE TO THE INDEPENDENT ARCHITECT’S OR BORROWER’S ARCHITECT’S WRITTEN ESTIMATE
OF THE COST TO COMPLETE SUCH MATERIAL ALTERATION OR ALTERATION (INCLUDING ANY
RETAINAGES), FREE AND CLEAR OF LIENS, OTHER THAN PERMITTED ENCUMBRANCES LESS 
THE THRESHOLD AMOUNT AND LESS  SUCH AMOUNTS AS ARE IN THE RESERVE ACCOUNT WHICH
RELATE TO SUCH WORK (IF ANY).  IN THE EVENT THAT ANY MATERIAL ALTERATION OR
ALTERATION SHALL BE MADE IN CONJUNCTION WITH ANY RESTORATION WITH RESPECT TO
WHICH BORROWER SHALL BE ENTITLED TO WITHDRAW PROCEEDS PURSUANT TO SECTION 6.2,
THE AMOUNT OF THE CASH OR CASH

97

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

 

 

EQUIVALENTS AND/OR LETTER OF CREDIT TO BE FURNISHED PURSUANT HERETO (IF ANY)
NEED NOT EXCEED THE AGGREGATE COST OF SUCH RESTORATION AND SUCH MATERIAL
ALTERATION OR ALTERATION (AS ESTIMATED BY THE INDEPENDENT ARCHITECT OR
BORROWER’S ARCHITECT), LESS  (I) THE AMOUNT OF ANY PROCEEDS WHICH BORROWER MAY
BE ENTITLED TO WITHDRAW PURSUANT TO SECTION 6.2 AND ARE HELD BY LENDER IN
ACCORDANCE WITH SECTION 6.2. AND (II) THE THRESHOLD AMOUNT.

(B)                DISBURSEMENT OF CASH OR CASH EQUIVALENTS (IF ANY) HELD BY
LENDER OR REDUCTION OF ANY LETTER OF CREDIT (IF ANY) HELD BY LENDER FOR PAYMENT
OR REIMBURSEMENT OF BORROWER’S EXPENSES INCURRED WITH RESPECT TO ANY MATERIAL
ALTERATION OR ALTERATION SHALL BE UPON THE TERMS AND SUBJECT TO THE CONDITIONS
SET FORTH IN THE SUB‑PARAGRAPHS BELOW (BUT NOT MORE FREQUENTLY THAN ONCE IN ANY
CALENDAR MONTH):

(I)                 THERE SHALL BE NO CONTINUING EVENT OF DEFAULT OR MONETARY
DEFAULT;

(II)               IF, AT ANY TIME, THE ESTIMATED REMAINING COST OF SUCH
MATERIAL ALTERATION OR ALTERATION (AS ESTIMATED BY THE INDEPENDENT ARCHITECT OR
BORROWER’S ARCHITECT REFERRED TO IN SUB‑PARAGRAPH (III) BELOW) WHICH EXCEEDS THE
THRESHOLD AMOUNT SHALL EXCEED THE SUM OF THE CASH OR CASH EQUIVALENTS AND/OR
LETTER OF CREDIT FURNISHED PURSUANT HERETO AND SUCH AMOUNTS AS ARE IN THE
RESERVE ACCOUNT WHICH RELATE TO SUCH WORK (THE AMOUNT OF SUCH EXCESS, AN
“ALTERATION DEFICIENCY”) AND FOR SO LONG AS AN ALTERATION DEFICIENCY SHALL
EXIST, LENDER SHALL NOT BE REQUIRED TO MAKE ANY DISBURSEMENT TO BORROWER UNTIL
BORROWER, AT ITS ELECTION, EITHER DEPOSITS WITH OR DELIVERS TO LENDER (A) CASH
OR CASH EQUIVALENTS AND/OR A LETTER OR LETTERS OF CREDIT IN AN AMOUNT EQUAL TO
THE ALTERATION DEFICIENCY, OR (B) SUCH OTHER EVIDENCE OF BORROWER’S ABILITY TO
MEET SUCH EXCESS COSTS AS SHALL BE REASONABLY SATISFACTORY TO LENDER;

(III)             EACH OF LENDER AND THE INDEPENDENT ARCHITECT OR BORROWER’S
ARCHITECT SHALL HAVE REASONABLY APPROVED THE PLANS AND SPECIFICATIONS FOR THE
MATERIAL ALTERATION AND ANY MATERIAL CHANGE ORDERS IN CONNECTION WITH SUCH PLANS
AND SPECIFICATIONS;

(IV)             LENDER SHALL, WITHIN A REASONABLE PERIOD OF TIME PRIOR TO
BORROWER’S REQUEST FOR DISBURSEMENT, BE FURNISHED WITH AN ESTIMATE OF THE
REMAINING COST OF THE MATERIAL ALTERATION OR ALTERATION ACCOMPANIED BY AN
INDEPENDENT ARCHITECT’S OR BORROWER’S ARCHITECT’S CERTIFICATION AS TO SUCH
REMAINING COSTS;

(V)               BORROWER SHALL DELIVER TO LENDER NOT LESS THAN FIVE (5) DAYS
PRIOR TO THE APPLICATION FOR SUCH PAYMENT A BORROWER’S CERTIFICATE REQUESTING
SUCH PAYMENT, REIMBURSEMENT OR REDUCTION AND DESCRIBING THE PORTION OF THE
MATERIAL ALTERATION OR ALTERATION PERFORMED THAT IS THE SUBJECT OF SUCH REQUEST,
THE PARTIES THAT PERFORMED SUCH PORTION OF THE MATERIAL ALTERATION OR ALTERATION
AND THE ACTUAL COST THEREOF, AND ALSO CERTIFYING THAT SUCH PORTION OF THE
MATERIAL ALTERATION OR ALTERATION AND MATERIALS ARE OR, UPON DISBURSEMENT OF THE
PAYMENT REQUESTED TO THE PARTIES ENTITLED THERETO, WILL BE FREE AND CLEAR OF
LIENS OTHER THAN PERMITTED ENCUMBRANCES; AND

 

98

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

 

 

(VI)             BORROWER SHALL ALSO DELIVER TO LENDER EVIDENCE REASONABLY
SATISFACTORY TO LENDER THAT (A) ALL MATERIALS INSTALLED AND WORK AND LABOR
PERFORMED IN CONNECTION WITH SUCH PORTION OF THE MATERIAL ALTERATION OR
ALTERATION HAVE BEEN PAID FOR IN FULL OR WILL BE PAID FOR FROM SUCH DISBURSEMENT
AND (B) THERE EXIST NO NOTICES OF PENDENCY, STOP ORDERS, MECHANIC’S LIENS OR
NOTICES OF INTENTION TO FILE SAME (UNLESS THE SAME IS REQUIRED BY STATE LAW AS A
CONDITION TO THE PAYMENT OF A CONTRACT) OR ANY LIENS OR ENCUMBRANCES OF ANY
NATURE WHATSOEVER ON THE PROPERTY ARISING OUT OF THE PORTION OF THE MATERIAL
ALTERATION OR ALTERATION, OTHER THAN PERMITTED ENCUMBRANCES.

(C)               AT ANY TIME AFTER SUBSTANTIAL COMPLETION OF ANY MATERIAL
ALTERATION OR OTHER ALTERATION IN RESPECT OF WHICH CASH OR CASH EQUIVALENTS
AND/OR A LETTER OF CREDIT IS DEPOSITED PURSUANT HERETO, THE WHOLE BALANCE OF ANY
CASH OR CASH EQUIVALENTS SO DEPOSITED BY BORROWER WITH LENDER AND THEN REMAINING
ON DEPOSIT (TOGETHER WITH EARNINGS THEREON) MAY BE WITHDRAWN BY BORROWER AND
SHALL BE PAID TO BORROWER, AND ANY OTHER CASH OR CASH EQUIVALENTS AND/OR A
LETTER OF CREDIT SO DEPOSITED OR DELIVERED SHALL, TO THE EXTENT IT HAS NOT BEEN
CALLED UPON, REDUCED OR THERETOFORE RELEASED, BE RELEASED TO BORROWER, WITHIN
FIVE (5) BUSINESS DAYS AFTER RECEIPT BY LENDER OF AN APPLICATION FOR SUCH
WITHDRAWAL AND/OR RELEASE TOGETHER WITH A BORROWER’S CERTIFICATE, AND SIGNED
ALSO (AS TO THE FOLLOWING SUB‑PARAGRAPH (I)) BY THE INDEPENDENT ARCHITECT OR
BORROWER’S ARCHITECT, SETTING FORTH IN SUBSTANCE AS FOLLOWS:

(I)                 THAT THE MATERIAL ALTERATION OR ALTERATION IN RESPECT OF
WHICH SUCH CASH OR CASH EQUIVALENTS AND/OR A LETTER OF CREDIT WAS DEPOSITED HAS
BEEN SUBSTANTIALLY COMPLETED IN ALL MATERIAL RESPECTS SUBSTANTIALLY IN
ACCORDANCE WITH ANY PLANS AND SPECIFICATIONS THEREFOR PREVIOUSLY FILED WITH
LENDER UNDER SECTION 9.2 AND THAT, IF APPLICABLE, A CERTIFICATE OF OCCUPANCY HAS
BEEN ISSUED WITH RESPECT TO SUCH MATERIAL ALTERATION OR ALTERATION BY THE
RELEVANT GOVERNMENTAL AUTHORITY(IES) OR, IF NOT APPLICABLE, THAT A CERTIFICATE
OF OCCUPANCY IS NOT REQUIRED; AND

(II)               THAT TO THE KNOWLEDGE OF THE CERTIFYING PERSON ALL AMOUNTS
WHICH BORROWER IS OR MAY BECOME LIABLE TO PAY IN RESPECT OF SUCH MATERIAL
ALTERATION OR ALTERATION THROUGH THE DATE OF THE CERTIFICATION HAVE BEEN PAID IN
FULL OR ADEQUATELY PROVIDED FOR OR ARE BEING CONTESTED IN ACCORDANCE WITH
SECTION 7.3 AND THAT LIEN WAIVERS HAVE BEEN OBTAINED FROM THE GENERAL CONTRACTOR
AND MAJOR SUBCONTRACTORS PERFORMING SUCH MATERIAL ALTERATIONS OR ALTERATIONS
SUBJECT TO THOSE AMOUNTS CONTESTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION
7.3. 

 

99

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

 

 

 

ARTICLE X

BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

SECTION 10.1  BOOKS AND RECORDS.  BORROWER SHALL KEEP AND MAINTAIN ON AN ANNUAL
BASIS PROPER BOOKS AND RECORDS SEPARATE (SUBJECT TO THE PROVISIONS OF
SECTION 5.1.4(F) FROM ANY OTHER PERSON ACCURATELY REFLECTING THE BUSINESS AND
AFFAIRS OF BORROWER RELATING TO THE PROPERTY IN ACCORDANCE WITH GAAP.  LENDER
AND ITS AUTHORIZED REPRESENTATIVES SHALL HAVE THE RIGHT AT REASONABLE TIMES
DURING NORMAL BUSINESS HOURS AND UPON REASONABLE NOTICE IN CONNECTION WITH THE
LOAN, TO EXAMINE SUCH BOOKS AND RECORDS AT THE OFFICE OF BORROWER OR SUCH OTHER
PERSON MAINTAINING THE SAME, AND TO MAKE SUCH COPIES OR EXTRACTS THEREOF AS
LENDER MAY REASONABLY REQUIRE.

SECTION 10.2  FINANCIAL STATEMENTS. 

10.2.1  BORROWER QUARTERLY REPORTS.  NOT LATER THAN FORTY‑FIVE (45) DAYS
FOLLOWING THE END OF EACH FISCAL QUARTER (COMMENCING WITH THE FOURTH QUARTER OF
2011), BORROWER SHALL DELIVER TO LENDER ITS UNAUDITED FINANCIAL STATEMENTS
INTERNALLY PREPARED ON AN ACCRUAL BASIS INCLUDING A BALANCE SHEET AND STATEMENT
OF OPERATIONS AS OF THE END OF SUCH QUARTER AND FOR THE CORRESPONDING QUARTER OF
THE PREVIOUS YEAR, A CONTINGENT LIABILITY SCHEDULE, AND BORROWER’S CALCULATION
OF THE DEBT SERVICE COVERAGE RATIO FOR SUCH QUARTER AND THE TRAILING
FOUR-QUARTER PERIOD FOR SUCH QUARTER AND YEAR-TO-DATE AND ALL BACKGROUND
INFORMATION REASONABLY REQUIRED BY LENDER, INCLUDING, WITHOUT LIMITATION, A
STATEMENT OF NET OPERATING INCOME, TO SUBSTANTIATE BORROWER’S CALCULATION OF THE
SAME.  SUCH STATEMENTS FOR EACH QUARTER SHALL BE ACCOMPANIED BY BORROWER’S
CERTIFICATE CERTIFYING TO THE BEST OF THE SIGNER’S KNOWLEDGE, (A) THAT SUCH
STATEMENTS FAIRLY REPRESENT THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
BORROWER, (B) THAT AS OF THE DATE OF SUCH BORROWER’S CERTIFICATE, NO DEFAULT
EXISTS UNDER THIS AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT OR, IF SO,
SPECIFYING THE NATURE AND STATUS OF EACH SUCH DEFAULT AND THE ACTION THEN BEING
TAKEN BY BORROWER OR PROPOSED TO BE TAKEN TO REMEDY SUCH DEFAULT, (C) THAT AS OF
THE DATE OF EACH BORROWER’S CERTIFICATE, NO LITIGATION EXISTS INVOLVING BORROWER
OR THE PROPERTY IN WHICH THE AMOUNT INVOLVED IS $1,500,000.00 (IN THE AGGREGATE)
OR MORE IN WHICH ALL OR SUBSTANTIALLY ALL OF THE POTENTIAL LIABILITY IS NOT
COVERED BY INSURANCE, OR, IF SO, SPECIFYING SUCH LITIGATION AND THE ACTIONS
BEING TAKING IN RELATION THERETO, AND (D) BORROWER’S CALCULATION OF THE DEBT
SERVICE COVERAGE RATIO FOR SUCH CALENDAR QUARTER, AND YEAR-TO-DATE. 
NOTWITHSTANDING THE FOREGOING, BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT
LENDER SHALL REASONABLY DETERMINE THE DEBT SERVICE COVERAGE RATIO FOR EACH
CALENDAR QUARTER AND FOR THE TRAILING FOUR (4) QUARTER PERIOD.  SUCH FINANCIAL
STATEMENTS SHALL CONTAIN SUCH OTHER INFORMATION AS SHALL BE REASONABLY REQUESTED
BY LENDER FOR PURPOSES OF ANY CALCULATIONS TO BE MADE BY LENDER PURSUANT TO THE
TERMS HEREOF.  ADDITIONALLY, FROM AND AFTER AND DURING THE CONTINUANCE OF A
MONETARY DEFAULT, A MATERIAL NON‑MONETARY DEFAULT OR AN EVENT OF DEFAULT,
BORROWER SHALL, AT LENDER’S REQUEST, PROVIDE SUCH FINANCIAL STATEMENTS ON A
MONTHLY BASIS (OTHER THAN THE CALCULATION OF THE DEBT SERVICE COVERAGE RATIO,
WHICH SHALL BE PROVIDED QUARTERLY), WITHIN THIRTY (30) DAYS FOLLOWING THE END OF
EACH CALENDAR MONTH.

10.2.2  BORROWER ANNUAL REPORTS.  NOT LATER THAN ONE HUNDRED TWENTY (120) DAYS
AFTER THE END OF EACH FISCAL YEAR, COMMENCING WITH THE FISCAL YEAR ENDING ON
DECEMBER 31, 2011, BORROWER SHALL DELIVER TO LENDER UNAUDITED FINANCIAL
STATEMENTS COVERING THE PROPERTY, INCLUDING

100

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

 

 

a balance sheet as of the end of such year, statements of operations and cash
flows for the year comparative with the amounts for the previous year and a
contingent liability schedule.  Borrower shall also provide copies of all of its
federal income tax returns (if any, recognizing that it is currently
contemplated that Borrower will not file its own tax returns as it is a
disregarded entity for tax purposes), within thirty (30) days after such federal
income tax returns are filed (but in no event later than thirty (30) days after
the date such federal income tax returns are required to be filed under
applicable Legal Requirements).  Such annual financial statements shall also be
accompanied by a Borrower’s Certificate in the form required pursuant to
Section 10.2.1. 

10.2.3  LEASING REPORTS.  NOT LATER THAN FORTY FIVE (45) DAYS AFTER THE END OF
EACH FISCAL QUARTER, COMMENCING WITH THE THIRD QUARTER OF 2011, BORROWER SHALL
DELIVER TO LENDER A LEASING REPORT AND RENT ROLL/OCCUPANCY SUMMARIES FOR THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, AGING SCHEDULES, SCHEDULES OF TENANT
RECEIVABLES, TENANT DEFAULTS AND TENANT SALES, AS APPLICABLE AND AVAILABLE,
DATED AS OF THE LAST MONTH OF SUCH FISCAL QUARTER.  SUCH RENT ROLL AND SCHEDULE
OF AGED RECEIVABLES SHALL BE ACCOMPANIED BY A BORROWER’S CERTIFICATE CERTIFYING
THAT SUCH RENT ROLL AND SCHEDULE OF AGED RECEIVABLES IS TRUE, CORRECT AND
COMPLETE IN ALL MATERIAL RESPECTS AS OF ITS DATE.  ADDITIONALLY, FROM AND AFTER
AND DURING THE CONTINUANCE OF A MONETARY DEFAULT, A MATERIAL NON‑MONETARY
DEFAULT OR AN EVENT OF DEFAULT, BORROWER SHALL, AT LENDER’S REQUEST, PROVIDE
SUCH RENT ROLL INFORMATION ON A MONTHLY BASIS, WITHIN THIRTY (30) DAYS FOLLOWING
THE END OF EACH CALENDAR MONTH.

10.2.4  INTENTIONALLY OMITTED.  

10.2.5  GUARANTOR ANNUAL REPORTS.  NOT LATER THAN ONE HUNDRED TWENTY (120) DAYS
AFTER THE END OF EACH FISCAL YEAR, COMMENCING WITH THE FISCAL YEAR ENDING ON
DECEMBER 31, 2011, BORROWER SHALL DELIVER TO LENDER FINANCIAL STATEMENTS WITH
RESPECT TO GUARANTOR AUDITED BY AN INDEPENDENT ACCOUNTANT IN ACCORDANCE WITH
GAAP AND INCLUDING A BALANCE SHEET AS OF THE END OF SUCH YEAR, STATEMENTS OF
OPERATIONS AND CASH FLOWS FOR THE YEAR COMPARATIVE WITH THE AMOUNTS FOR THE
PREVIOUS YEAR AND A CONTINGENT LIABILITY SCHEDULE.  SO LONG AS THE GUARANTOR IS
REQUIRED TO FILE A FORM 10-K WITH THE SECURITIES AND EXCHANGE COMMISSION,
BORROWER MAY COMPLY WITH THE REQUIREMENTS OF THIS SECTION 10.2.5 BY DELIVERING
TO LENDER A COPY OF THE ANNUAL REPORT ON FORM 10-K OF THE GUARANTOR FOR THE
RELEVANT PERIOD OR PROVIDING NOTICE TO LENDER THAT THE SAME HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION.

10.2.6  ANNUAL BUDGET.  ON OR BEFORE DECEMBER 1 OF EACH CALENDAR YEAR COMMENCING
WITH THE YEAR 2011, BORROWER SHALL DELIVER TO LENDER THE ANNUAL BUDGET IN DRAFT
FORM FOR THE SUCCEEDING CALENDAR YEAR, AND WITHIN SIXTY (30) DAYS THEREAFTER,
BORROWER SHALL DELIVER TO LENDER SAID ANNUAL BUDGET IN FINAL FORM.  IF BORROWER
OR MANAGER SHALL MATERIALLY CHANGE OR MODIFY THE ANNUAL BUDGET, BORROWER OR
MANAGER, AS THE CASE MAY BE, SHALL PROMPTLY DELIVER TO LENDER AN AMENDED ANNUAL
BUDGET REFLECTING SUCH CHANGE OR MODIFICATION.

10.2.7  TAX STATEMENTS.  ANNUALLY, IF AND WHEN REQUIRED PURSUANT TO SECTION
7.1 HEREOF, BORROWER SHALL DELIVER COPIES OF THE TAX BILLS REQUIRED TO BE
DELIVERED THEREUNDER.

10.2.8  OTHER INFORMATION.  BORROWER SHALL, PROMPTLY AFTER WRITTEN REQUEST BY
LENDER, FURNISH OR CAUSE TO BE FURNISHED TO LENDER, IN SUCH MANNER AND IN SUCH
DETAIL AS MAY BE REASONABLY REQUESTED BY LENDER, SUCH ADDITIONAL INFORMATION,
DOCUMENTATION AND/OR EVIDENCE AS MAY BE REASONABLY REQUESTED WITH RESPECT TO THE
PROPERTY.

 

101

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

 

 

 

10.2.9  UPDATED APPRAISAL.  THE LENDER RESERVES THE RIGHT AT ALL TIMES DURING
THE LOAN TERM (BUT NO MORE THAN ONCE IN ANY TWELVE (12) MONTH PERIOD) TO PROCURE
UPDATED APPRAISALS OF THE PROPERTY BY AN APPRAISER APPOINTED BY THE LENDER, AT
ITS OWN EXPENSE; PROVIDED THAT BORROWER SHALL PAY THE EXPENSE OF SUCH APPRAISAL
IF IT IS REQUIRED BY REGULATION APPLICABLE TO LENDER.

ARTICLE XI

ASSIGNMENTS AND PARTICIPATIONS; COMPONENT NOTES; SECURITIZATION

SECTION 11.1  ASSIGNMENTS.  WITHOUT IN ANY WAY LIMITING ANY RIGHTS OF LENDER
UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, LENDER MAY ASSIGN TO ONE OR
MORE PERSONS ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT
AND THE LOAN; PROVIDED, HOWEVER, THAT SO LONG AS NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, LENDER AGREES THAT NO PORTION OF THE RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT AND THE LOAN SHALL BE ASSIGNED TO AN ALX
COMPETITOR WITHOUT THE PRIOR CONSENT OF BORROWER, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD IN THE CASE OF AN ALX COMPETITOR OTHER THAN AN INITIAL ALX
COMPETITOR (PROVIDED THAT SUCH PROHIBITION ON ASSIGNMENT DOES NOT APPLY TO ANY
PERSON THAT PURCHASES OR HOLDS ANY SECURITIES PURSUANT TO A SECURITIZATION). 
UPON SUCH ASSIGNMENT, FROM AND AFTER THE EFFECTIVE DATE THEREOF, THE ASSIGNEE
THEREUNDER SHALL BE A PARTY HERETO AND HAVE THE RIGHTS AND OBLIGATIONS OF LENDER
HEREUNDER.  THE ASSIGNING LENDER SHALL PROMPTLY NOTIFY BORROWER OF THE
CONSUMMATION OF ANY SUCH ASSIGNMENT, WHICH NOTIFICATION SHALL INCLUDE THE NAME
AND NOTICE INFORMATION OF THE ASSIGNEE.  BORROWER WILL NOT IN ANY EVENT BE
REQUIRED TO INCUR, SUFFER OR ACCEPT ANY EXPENSE OR (EXCEPT TO A DE MINIMIS
EXTENT) LIABILITY IN CONNECTION WITH A LENDER ASSIGNMENT PURSUANT TO THIS
SECTION 11.1.  NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE CONTRARY
CONTAINED HEREIN, FOR SO LONG AS BOC HOLDS ALL OR ANY PORTION OF THE LOAN, THEN,
IN CONNECTION WITH THE REQUEST FOR ANY APPROVAL OR CONSENT HEREUNDER OR UNDER
THE OTHER LOAN DOCUMENTS OR IN CONNECTION WITH ANY AMENDMENT OR OTHER
MODIFICATION HEREOF OR OF THE OTHER LOAN DOCUMENTS, BORROWER SHALL BE ENTITLED
TO RELY CONCLUSIVELY ON THE APPROVAL OF, OR EXECUTION BY, BOC OF THE FOREGOING
UNLESS BOC HAS INFORMED BORROWER IN WRITING THAT THE APPROVAL OF, OR EXECUTION
BY, ANY OTHER PERSON HOLDING A DIRECT INTEREST IN THE LOAN IS ALSO REQUIRED.

SECTION 11.2  PARTICIPATIONS.  WITHOUT IN ANY WAY LIMITING ANY RIGHTS OF LENDER
OR BORROWER UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, LENDER MAY,
WITHOUT THE CONSENT OF BORROWER, SELL PARTICIPATIONS TO ONE OR MORE PERSONS IN
OR TO ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND
THE LOAN; PROVIDED, HOWEVER, THAT (A) LENDER’S OBLIGATIONS UNDER THIS AGREEMENT
SHALL REMAIN UNCHANGED, (B) LENDER SHALL REMAIN SOLELY RESPONSIBLE TO BORROWER
FOR THE PERFORMANCE OF SUCH OBLIGATIONS, (C) LENDER SHALL REMAIN THE HOLDER OF
THE NOTE FOR ALL PURPOSES OF THE NOTE, AND (D) BORROWER SHALL CONTINUE TO DEAL
SOLELY AND DIRECTLY WITH LENDER IN CONNECTION WITH LENDER’S RIGHTS AND
OBLIGATIONS UNDER AND IN RESPECT OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.  NOTWITHSTANDING THE FOREGOING, SO LONG AS NO EVENT OF DEFAULT SHALL
HAVE OCCURRED AND BE CONTINUING, LENDER AGREES THAT NO PARTICIPATION IN OR TO
ALL OR ANY PORTION OF THE RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THE
LOAN SHALL BE SOLD TO AN ALX COMPETITOR WITHOUT THE PRIOR CONSENT OF BORROWER,
WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD (PROVIDED THAT SUCH PROHIBITION
ON THE SALE OF PARTICIPATIONS DOES NOT APPLY TO ANY

102

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

 

 

Person that purchases or holds any Securities pursuant to a Securitization). 
Borrower will not in any event be required to incur, suffer or accept any
expense (except to a de minimis extent) or liability in connection with Lender
selling participations in all or any portion of its rights and obligations under
this Agreement and the Loan to any Person pursuant to this Section 11.2. 

SECTION 11.3  PLEDGE.  LENDER MAY, AT ANY TIME, PLEDGE OR ASSIGN A SECURITY
INTEREST IN ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT TO SECURE
OBLIGATIONS OF LENDER, INCLUDING, WITHOUT LIMITATION, ANY PLEDGE OR ASSIGNMENT
TO SECURE OBLIGATIONS TO A FEDERAL RESERVE BANK IN ACCORDANCE WITH APPLICABLE
LAW, AND THIS SECTION SHALL NOT APPLY TO ANY SUCH PLEDGE OR ASSIGNMENT OF A
SECURITY INTEREST; PROVIDED  THAT NO SUCH PLEDGE OR ASSIGNMENT OF A SECURITY
INTEREST SHALL RELEASE LENDER FROM ANY OF ITS OBLIGATIONS HEREUNDER OR
SUBSTITUTE ANY SUCH PLEDGEE OR ASSIGNEE FOR LENDER AS A PARTY HERETO.

SECTION 11.4  DISCLOSURE OF INFORMATION; COOPERATION; CONFIDENTIALITY. 

11.4.1  DISCLOSURE OF INFORMATION; CONFIDENTIALITY.  SUBJECT TO THE OTHER
PROVISIONS OF THIS SECTION 11.4.1, WITHOUT IN ANY WAY LIMITING ANY RIGHTS OF
LENDER OR BORROWER UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, LENDER MAY,
IN CONNECTION WITH ANY ASSIGNMENT OR PARTICIPATION OR PROPOSED ASSIGNMENT OR
PARTICIPATION PERMITTED PURSUANT TO THIS ARTICLE XI, DISCLOSE TO THE ASSIGNEE OR
PARTICIPANT OR PROPOSED ASSIGNEE OR PARTICIPANT, AS THE CASE MAY BE, ANY
INFORMATION RELATING TO BORROWER OR ANY OF ITS AFFILIATES OR TO ANY ASPECT OF
THE LOAN THAT HAS BEEN FURNISHED TO LENDER BY OR ON BEHALF OF BORROWER OR ANY OF
ITS AFFILIATES.  LENDER AND THE ASSIGNEE OR PARTICIPANT OR PROPOSED ASSIGNEE OR
PARTICIPANT, AS THE CASE MAY BE, SHALL MAINTAIN AS CONFIDENTIAL ANY AND ALL
INFORMATION OBTAINED ABOUT BORROWER OR THE PROPERTY AND SHALL NOT DISCLOSE SUCH
INFORMATION TO ANY THIRD PARTY, EXCEPT SUCH PARTY’S CONSULTANTS, LENDERS, AND
ATTORNEYS, EXCEPT AS OTHERWISE REQUIRED BY APPLICABLE LAW OR ANY GOVERNMENTAL
AUTHORITY AND EXCEPT IN CONNECTION WITH LENDER’S EXERCISE OF ITS REMEDIES UNDER
THIS AGREEMENT.  THIS PROVISION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT.

11.4.2  COOPERATION.  IN ADDITION, BORROWER HEREBY AGREES TO COOPERATE, AT NO
COST, EXPENSE OR LIABILITY TO BORROWER, GUARANTOR OR ANY OF THEIR RESPECTIVE
AFFILIATES, WITH LENDER TO SYNDICATE, ASSIGN OR PARTICIPATE THE LOAN BY USING
COMMERCIALLY REASONABLE EFFORTS TO (A) TIMELY PROVIDE INFORMATION NOT IN THE
POSSESSION OF LENDER REGARDING THE BORROWER, GUARANTOR AND PROPERTY TO LENDER,
AS MAY BE REASONABLY REQUESTED FROM TIME TO TIME BY LENDER (PROVIDED  THAT
BORROWER SHALL NOT BE REQUIRED TO PROVIDE MATERIAL NON-PUBLIC INFORMATION
REGARDING GUARANTOR), (B) REVIEW ANY INFORMATION REGARDING THE PROPERTY,
BORROWER OR GUARANTOR SET FORTH IN THE MARKETING MATERIALS PREPARED BY LENDER
AND TO BE USED IN CONNECTION WITH THE SYNDICATION OF THE LOAN, (C) EXECUTING AND
DELIVERING ONE OR MORE SUBSTITUTE NOTES OF BORROWER SUBSTANTIALLY IN THE SAME
FORM AS THE NOTE (AND AGAINST SURRENDER OF THE NOTE OR LOST NOTE AFFIDAVIT WITH
INDEMNITY FROM LENDER IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO BORROWER)
WITH APPROPRIATE INSERTIONS AS TO PAYEE AND PRINCIPAL AMOUNT, AND (D) EXECUTING
AND DELIVERING ANY AMENDMENTS, MODIFICATIONS OR SUPPLEMENTS TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT WHICH ARE REASONABLY REQUESTED BY LENDER IN CONNECTION
WITH ANY SUCH SYNDICATION, ASSIGNMENT OR PARTICIPATION AND IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO LENDER; PROVIDED  THAT SUCH DOCUMENTS AND/OR ESTOPPEL
CERTIFICATES SHALL NOT INCREASE BORROWER’S ECONOMIC OBLIGATIONS UNDER THE LOAN
DOCUMENTS OR INCREASE IN ANY MATERIAL RESPECT BORROWER’S OTHER OBLIGATIONS UNDER
THE LOAN DOCUMENTS OR REDUCE IN ANY MATERIAL RESPECT BORROWER’S RIGHTS UNDER THE
LOAN DOCUMENTS.

 

103

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

 

 

SECTION 11.5  COMPONENT NOTES.  LENDER, WITHOUT IN ANY WAY LIMITING LENDER’S OR
BORROWER’S OTHER RIGHTS HEREUNDER, IN ITS SOLE AND ABSOLUTE DISCRETION, SHALL
HAVE THE RIGHT AT ANY TIME TO REQUIRE BORROWER TO EXECUTE AND DELIVER
“COMPONENT” NOTES HAVING VARYING PRINCIPAL AMOUNTS AND ECONOMIC TERMS (INCLUDING
SENIOR AND JUNIOR NOTES), WHICH NOTES MAY BE PAID IN SUCH ORDER OF PRIORITY AS
MAY BE DESIGNATED BY LENDER; PROVIDED, HOWEVER, THAT (A) SUCH NOTES MAY NOT
EFFECTUATE A MORTGAGE/MEZZANINE LOAN STRUCTURE, (B) THE AGGREGATE PRINCIPAL
AMOUNT OF SUCH “COMPONENT” NOTES SHALL EQUAL THE PRINCIPAL AMOUNT IMMEDIATELY
PRIOR TO THE CREATION OF SUCH “COMPONENT” NOTES, (C) THE WEIGHTED AVERAGE
INTEREST RATE OF ALL SUCH “COMPONENT” NOTES SHALL ON THE DATE CREATED AND AT ALL
TIMES THEREAFTER EQUAL THE INTEREST RATE WHICH WAS APPLICABLE TO THE LOAN
IMMEDIATELY PRIOR TO THE CREATION OF SUCH “COMPONENT” NOTES (I.E., UNDER THIS
CLAUSE (C) AND THE IMMEDIATELY FOLLOWING CLAUSE (D), THE “COMPONENT” NOTES MAY
NOT EFFECTUATE A LOAN STRUCTURE THAT COULD RESULT IN “RATE CREEP”), (D) THE DEBT
SERVICE PAYMENTS ON ALL SUCH “COMPONENT” NOTES SHALL ON THE DATE CREATED AND AT
ALL TIMES THEREAFTER EQUAL THE DEBT SERVICE PAYMENT WHICH WAS DUE UNDER THE LOAN
IMMEDIATELY PRIOR TO THE CREATION OF SUCH COMPONENT NOTES (TAKING INTO ACCOUNT
ANY PREPAYMENTS OF THE PRINCIPAL AMOUNT), (E) THE OTHER TERMS AND PROVISIONS OF
EACH OF THE “COMPONENT” NOTES SHALL BE IDENTICAL IN SUBSTANCE AND SUBSTANTIALLY
SIMILAR IN FORM TO THE LOAN DOCUMENTS, (F) THE MATURITY DATE OF ANY SUCH
COMPONENT NOTE SHALL BE THE SAME AS THE SCHEDULED MATURITY DATE OF THE NOTE
IMMEDIATELY PRIOR TO THE ISSUANCE OF SUCH COMPONENT NOTES, AND (G) ANY
PREPAYMENTS IN CONNECTION WITH A CASUALTY OR CONDEMNATION SHALL BE APPLIED PRO
RATA IN ACCORDANCE WITH THEIR RESPECTIVE PRINCIPAL BALANCES TO THE PAYMENT OF
THE OUTSTANDING BALANCE OF THE COMPONENT NOTES SUCH THAT BORROWER’S ECONOMIC
POSITION SHALL REMAIN THE SAME AS IF THERE HAD BEEN NO COMPONENT NOTES. 
BORROWER, AT LENDER’S COST AND EXPENSE, SHALL (I) COOPERATE WITH ALL REASONABLE
REQUESTS OF LENDER IN ORDER TO ESTABLISH THE “COMPONENT” NOTES, AND (II) EXECUTE
AND DELIVER SUCH DOCUMENTS AS SHALL REASONABLY BE REQUIRED BY LENDER IN
CONNECTION THEREWITH, ALL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
LENDER, INCLUDING, WITHOUT LIMITATION, THE SEVERANCE OF SECURITY DOCUMENTS IF
REQUESTED.  IN THE EVENT BORROWER FAILS TO EXECUTE AND DELIVER SUCH DOCUMENTS TO
LENDER WITHIN FIVE (5) BUSINESS DAYS FOLLOWING SUCH REQUEST BY LENDER, BORROWER
HEREBY ABSOLUTELY AND IRREVOCABLY APPOINTS LENDER AS ITS TRUE AND LAWFUL
ATTORNEY, COUPLED WITH AN INTEREST, IN ITS NAME AND STEAD TO MAKE AND EXECUTE
ALL DOCUMENTS NECESSARY OR DESIRABLE TO EFFECT SUCH TRANSACTIONS, BORROWER
RATIFYING ALL THAT SUCH ATTORNEY SHALL DO BY VIRTUE THEREOF.  PROVIDED THAT
LENDER HAS COMPLIED, IN ALL MATERIAL RESPECTS, WITH ALL OF LENDER’S OBLIGATIONS
IN THIS SECTION 11.5, IT SHALL BE AN EVENT OF DEFAULT UNDER THIS AGREEMENT, THE
NOTE, THE MORTGAGE AND THE OTHER LOAN DOCUMENTS IF BORROWER FAILS TO COMPLY WITH
ANY OF THE TERMS, COVENANTS OR CONDITIONS OF THIS SECTION 11.5  AFTER EXPIRATION
OF TEN (10) BUSINESS DAYS AFTER NOTICE THEREOF, WHICH NOTICE SHALL CONTAIN A
LEGEND IN CAPITALIZED BOLD LETTERS AT THE TOP OF THE COVER PAGE STATING:  “THIS
IS A REQUEST FOR BORROWER TO EXECUTE AND DELIVER “COMPONENT” NOTES.  BORROWER’S
FAILURE TO SO EXECUTE AND DELIVER SAME WITHIN TEN (10) BUSINESS DAYS SHALL
CONSTITUTE AN EVENT OF DEFAULT UNDER THE LOAN AND SECURITY AGREEMENT EXECUTED BY
BORROWER AND LENDER”, TOGETHER WITH A COMPARISON “BLACKLINE” OF THE DOCUMENTS TO
BE EXECUTED AGAINST THE APPLICABLE DOCUMENT EXECUTED BY BORROWER ON THE CLOSING
DATE.

 

104

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

 

 

SECTION 11.6  SALE OF NOTE AND SECURITIZATION.  AT THE REQUEST OF LENDER AND, TO
THE EXTENT NOT ALREADY REQUIRED TO BE PROVIDED BY BORROWER UNDER THIS AGREEMENT,
BORROWER SHALL (AT NO COST TO BORROWER) USE REASONABLE EFFORTS TO COOPERATE WITH
LENDER IN ITS REASONABLE EFFORTS TO SATISFY THE MARKET STANDARDS WHICH MAY BE
REASONABLY REQUIRED IN THE MARKETPLACE OR BY THE RATING AGENCIES IN CONNECTION
WITH THE SALE OF THE NOTE OR PARTICIPATION THEREIN AS PART OF THE FIRST
SUCCESSFUL SECURITIZATION (SUCH SALE AND/OR SECURITIZATION, THE
“SECURITIZATION”) OF RATED SINGLE- OR MULTI-CLASS SECURITIES (THE “SECURITIES”)
SECURED BY OR EVIDENCING OWNERSHIP INTERESTS IN THE NOTE AND THIS AGREEMENT,
INCLUDING USING REASONABLE EFFORTS TO DO (OR CAUSE TO BE DONE) THE FOLLOWING
(BUT BORROWER SHALL NOT IN ANY EVENT BE REQUIRED TO INCUR, SUFFER OR ACCEPT
(EXCEPT TO A DE MINIMIS EXTENT) (A) ANY LESSER RIGHTS OR GREATER OBLIGATIONS
THAN AS CURRENTLY SET FORTH IN THE LOAN DOCUMENTS AND (B) ANY EXPENSE OR ANY
LIABILITY.

11.6.1  Provided Information.  (a) Provide, at the sole expense of the holder of
the Note, reasonably requested non-confidential financial and other information
(but not projections) with respect to the Property and Borrower and Manager to
the extent such information is reasonably available to Borrower or Manager, (b)
provide, at the sole expense of the holder of the Note, and budgets relating to
the Property, to the extent prepared by Borrower or Manager, and (c) cooperate,
at the sole cost of the holder of the Note, with the holder of the Note (and its
representatives) in obtaining, at the sole expense of the holder of the Note,
such site inspections, appraisals, market studies, environmental reviews and
reports, engineering reports and other due diligence investigations of the
Property, as may be reasonably requested by the holder of the Note or reasonably
requested by the Rating Agencies (all information provided pursuant to this
Section 11.6.1 together with all other information heretofore provided to Lender
in connection with the Loan, as such may be updated, at Borrower’s request, in
connection with a Securitization, or hereafter provided to Lender in connection
with the Loan or a Securitization, being herein collectively called the
“Provided Information”). 

11.6.2  Opinions of Counsel.  Use reasonable efforts (at Lender’s cost and
expense and at no cost to Borrower) to cause to be rendered such customary
updates or customary modifications to the Opinions of Counsel delivered at the
closing of the Loan as may be reasonably requested by the holder of the Note or
the Rating Agencies in connection with the Securitization (it being agreed that
in no event shall Borrower be obligated to deliver an Opinion of Counsel with
respect to “true sale,” “no fraudulent conveyance” matters, or “10b-5” matters).

11.6.3  Modifications to Loan Documents.  Without cost to Borrower, execute such
amendments to this Agreement, the Mortgage and the other Loan Documents as may
be reasonably requested by Lender or the Rating Agencies in order to effect the
Securitization (including, without limitation, modifying the Payment Date to a
date other than as originally set forth in the Note), provided, that nothing
contained in this Section 11.6.3 shall result in any economic or other change,
adverse in any respect, to Borrower, Guarantor or any Affiliate of any thereof,
in the transaction contemplated by this Agreement or the other Loan Documents
(unless Borrower is made whole by the holder of Note) or result in any
operational changes that are in any respect (except to a de minimis extent)
burdensome to the Property or Borrower.

SECTION 11.7  INTENTIONALLY OMITTED. 

 

105

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

 

 

SECTION 11.8  SECURITIZATION FINANCIAL STATEMENTS.  BORROWER ACKNOWLEDGES THAT
ALL SUCH FINANCIAL INFORMATION DELIVERED BY BORROWER TO LENDER PURSUANT TO
ARTICLE X MAY, AT LENDER’S OPTION, BE DELIVERED BY LENDER, AT LENDER’S SOLE
EXPENSE, TO THE RATING AGENCIES.

SECTION 11.9  SECURITIZATION INDEMNIFICATION. 

11.9.1  Disclosure Documents.  Borrower understands that certain of the Provided
Information may be included in disclosure documents in connection with the
Securitization, including a prospectus or private placement memorandum or a
public registration statement (each, a “Disclosure Document”) and may also be
included in filings with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the “Securities Act”), or the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), or provided or made
available to investors or prospective investors in the Securities, the Rating
Agencies, and service providers relating to the Securitization.  In the event
that the Disclosure Document is required to be revised prior to the sale of all
Securities, then reasonably promptly after written request, Borrower shall (at
no cost or expense to Borrower) reasonably cooperate with the holder of the
Note’s efforts to update the Provided Information for inclusion or summary in
the Disclosure Document by providing all current information pertaining to
Borrower and the Property reasonably requested by Lender (except in no event
shall Borrower be required to deliver any of the financial or other information
required under Article X within a time period shorter than that specified in
Article X). 

11.9.2  Indemnification Certificate.  In connection with each of (i) a
preliminary and final private placement memorandum, or (ii) a preliminary and
final prospectus, as applicable, Borrower agrees to provide, at Lender’s
reasonable request, an indemnification certificate (at no cost or expense to
Borrower):

(a)                certifying that Borrower has carefully examined those
portions of such memorandum or prospectus, as applicable, reasonably designated
in writing by Lender for Borrower’s review regarding Borrower, the Property,
and/or the Provided Information and insofar as such sections or portions thereof
specifically pertain to Borrower, the Property or the Provided Information (such
portions, the “Relevant Portions”), the Relevant Portions do not (except to the
extent specified by Borrower if Borrower does not agree with the statements
therein), as of the date of such certificate, to Borrower’s actual knowledge,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.

(b)               indemnifying Lender and the Affiliates of Bank of China, New
York Branch (collectively, “BOC”) that have prepared the Disclosure Document
relating to the Securitization, each of its directors, each of its officers who
have signed the Disclosure Document and each Person who controls BOC within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, the “BOC Group”), and BOC, together with the BOC Group, each of
their respective directors and each person who controls BOC or the BOC Group,
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act (collectively, the “Underwriter Group”), for any actual,
verifiable, out-of-pocket losses, third-party claims, or damages arising
therefrom (excluding lost profits, diminution in value and other consequential
damages) or liabilities arising out of third party claims (the “Liabilities”) to
which any member of the Underwriter Group is subject to the extent such
Liabilities directly result from any untrue statement of any material fact
contained in the Relevant Portions and in the Provided Information or directly
result from the omission by Borrower to state therein a material fact required
to be stated in the Relevant Portions in order to make the statements in the
Relevant Portions in light of the circumstances under which they were made, not
misleading (except that (1) Borrower’s obligation to indemnify in respect of any
information contained in the Relevant Portions or in the Provided Information
that is derived in part from information provided by Borrower and in part from
information provided by others unrelated to or not employed by Borrower shall be
limited to any untrue statement or omission of material fact therein actually
known to Borrower that results directly from an error in any information
provided (or which should have been provided) by Borrower which Borrower has
been given the opportunity to examine and reasonably and promptly approve, and
(2) Borrower shall have no responsibility for the failure of any member of the
Underwriting Group to accurately transcribe written information supplied by
Borrower or to include such portions of the Provided Information).

106

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

 

 

(c)                Borrower’s liability under paragraphs (a) and (b)  above
shall be limited to Liabilities directly resulting from any such untrue
statement or omission made in a Disclosure Document in reasonable reliance upon
and in conformity with information furnished to Lender by, or furnished at the
direction and on behalf of, Borrower in connection with the Relevant Portions or
in the Provided Information, including financial statements of Borrower and
operating statements with respect to the Property.  This indemnity agreement
will be in addition to any liability which Borrower may otherwise have under any
of the Loan Documents or at law, in equity or otherwise.

(d)               Promptly after receipt by an indemnified party under this
Section 11.9 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 11.9, 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 chosen by the
indemnifying party and reasonably satisfactory to such indemnified party.  After
notice from the indemnifying party to such indemnified party under this Section
11.9 of its assumption of such defense, the indemnifying party shall not be
liable for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof; 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 in conflict with those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel (reasonably acceptable to the indemnifying party) to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties at the expense of the
indemnifying party.  The indemnifying party shall not be liable for the expenses
of separate counsel unless an indemnified party shall have reasonably and in
good faith

107

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

 

 

concluded that there may be legal defenses available to it that are different
from or in conflict with those available to another indemnified party.

(e)                In order to provide for just and equitable contribution in
circumstances in which the indemnity provided for in this Section 11.9 is for
any reason held to be unenforceable by an indemnified party in respect of any
actual, verifiable, out-of-pocket losses, claims, damages or liabilities
relating to third-party claims (or action in respect thereof) referred to
therein which would otherwise be indemnifiable under this Section 11.9, the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such actual, verifiable out-of-pocket losses,
third party claims, damages or liabilities arising therefrom (or action in
respect thereof) (but excluding damages for lost profits, diminution in value of
the Property and consequential damages); 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 for Liabilities arising
therefrom from any person who was not guilty of such fraudulent
misrepresentation.  In addition, no right of contribution may be enforced by any
party who shall have committed gross negligence or willful misconduct in
connection with the actions or omissions that led to such liabilities.  In
determining the amount of contribution to which the respective parties are
entitled, the following factors shall be considered: (1) the BOC Group’s and
Borrower’s relative knowledge and access to information concerning the matter
with respect to which the claim was asserted; (2) the opportunity to correct and
prevent any statement or omission; (3) the limited responsibilities and
obligations of Borrower as specified herein; and (4) any other equitable
considerations appropriate in the circumstances.

SECTION 11.1.0         RETENTION OF SERVICER.  LENDER RESERVES THE RIGHT, AT
LENDER’S SOLE COST AND EXPENSE, TO RETAIN A SERVICER FOR THE LOAN.  LENDER SHALL
PROMPTLY PROVIDE BORROWER WITH NOTICE OF ITS RETENTION OF ANY SERVICER. 
BORROWER SHALL PAY ANY REASONABLE FEES AND EXPENSES OF THE SERVICER AND ANY
REASONABLE THIRD PARTY FEES AND EXPENSES, INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS, IN CONNECTION WITH (A) A
PREPAYMENT, RELEASE OF THE PROPERTY, ASSUMPTION OR MODIFICATION OF THE LOAN, IN
ANY SUCH CASE AS REQUESTED BY BORROWER, OR (B) ANY ENFORCEMENT BY LENDER OF THE
LOAN DOCUMENTS FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT
OF DEFAULT, BUT ONLY TO THE EXTENT BORROWER OWES LENDER SUCH FEES IN ACCORDANCE
WITH THE TERMS OF THE LOAN DOCUMENTS (I.E,. SERVICER CANNOT CHARGE BORROWER
SEPARATE FEES NOT PROVIDED FOR IN THE LOAN DOCUMENTS).  LENDER SHALL PAY THE
STANDARD MONTHLY SERVICING FEE OF THE SERVICER.  IF BORROWER SENDS ANY PAYMENT,
NOTICE OR OTHER REPORTS OR DOCUMENTATION REQUIRED HEREUNDER OR UNDER ANY OTHER
LOAN DOCUMENT TO A SERVICER WHO HAS BEEN REPLACED WITH A NEW SERVICER BECAUSE
BORROWER HAS NOT BEEN GIVEN PRIOR WRITTEN NOTICE OF A CHANGE IN THE SERVICER,
THEN NO DEFAULT OR EVENT OF DEFAULT SHALL OCCUR HEREUNDER OR UNDER ANY OTHER
LOAN DOCUMENT BY REASON OF THE FACT THAT SUCH PAYMENT WAS MADE OR SUCH NOTICE OR
OTHER REPORTS OR DOCUMENTATION WAS SENT BY BORROWER TO THE TERMINATED SERVICER.

108

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

 

 

 

ARTICLE XII

RESERVE ACCOUNTS

SECTION 12.1        TAX RESERVE ACCOUNT. 

12.1.1    SUBJECT TO THE PROVISIONS OF SECTION 12.1.2 AND SECTION 12.1.3,
BORROWER SHALL DEPOSIT WITH LENDER TO BE HELD IN THE TAX RESERVE ACCOUNT ON EACH
PAYMENT DATE AN AMOUNT EQUAL TO (A) ONE‑TWELFTH (1/12TH) OF THE ANNUAL
IMPOSITIONS THAT LENDER REASONABLY ESTIMATES, BASED ON THE MOST RECENT TAX BILL
FOR THE PROPERTY, WILL BE PAYABLE DURING THE NEXT ENSUING TWELVE (12) MONTHS IN
ORDER TO ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY ALL SUCH IMPOSITIONS AT
LEAST TEN (10) DAYS PRIOR TO THE IMPOSITION OF ANY INTEREST, CHARGES OR EXPENSES
FOR THE NON‑PAYMENT THEREOF, AND (B) ONE‑TWELFTH (1/12TH) OF THE ANNUAL OTHER
CHARGES THAT LENDER REASONABLY ESTIMATES WILL BE PAYABLE DURING THE NEXT ENSUING
TWELVE (12) MONTHS (SAID MONTHLY AMOUNTS IN CLAUSES (A)  AND (B) ABOVE
HEREINAFTER CALLED THE “MONTHLY TAX RESERVE AMOUNT,” AND THE AGGREGATE AMOUNT OF
FUNDS HELD IN THE TAX RESERVE ACCOUNT FROM TIME TO TIME BEING THE “TAX RESERVE
AMOUNT”).   PROVIDED NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING,
LENDER SHALL APPLY THE TAX RESERVE AMOUNT, IF ANY, TO PAYMENTS OF IMPOSITIONS
AND OTHER CHARGES REQUIRED TO BE MADE BY BORROWER PURSUANT TO ARTICLE V 
AND ARTICLE VII  AND UNDER THE MORTGAGE, SUBJECT TO BORROWER’S RIGHT TO CONTEST
IMPOSITIONS AND OTHER CHARGES IN ACCORDANCE WITH SECTION 7.3.  IN MAKING ANY
PAYMENT RELATING TO THE TAX RESERVE ACCOUNT, LENDER MAY DO SO ACCORDING TO ANY
BILL, STATEMENT OR ESTIMATE PROCURED FROM THE APPROPRIATE PUBLIC OFFICE, 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 FUNDS IN THE TAX RESERVE ACCOUNT SHALL EXCEED THE
AMOUNTS DUE FOR IMPOSITIONS AND OTHER CHARGES PURSUANT TO ARTICLE V  AND ARTICLE
VII, LENDER SHALL CREDIT SUCH EXCESS AGAINST FUTURE PAYMENTS TO BE MADE TO THE
TAX RESERVE ACCOUNT.  IF AT ANY TIME LENDER REASONABLY DETERMINES THAT THE TAX
RESERVE AMOUNT IS NOT OR WILL NOT BE SUFFICIENT TO PAY IMPOSITIONS AND OTHER
CHARGES BY THE DATES SET FORTH ABOVE, LENDER SHALL NOTIFY BORROWER OF SUCH
DETERMINATION AND BORROWER SHALL INCREASE ITS MONTHLY PAYMENTS TO LENDER BY THE
AMOUNT THAT LENDER REASONABLY ESTIMATES IS SUFFICIENT TO MAKE UP THE DEFICIENCY
AT LEAST TEN (10) DAYS PRIOR TO THE IMPOSITION OF ANY INTEREST, CHARGES OR
EXPENSES FOR THE NON‑PAYMENT OF THE IMPOSITIONS AND OTHER CHARGES.  UPON PAYMENT
OF THE IMPOSITIONS AND OTHER CHARGES, LENDER SHALL REASSESS THE AMOUNT NECESSARY
TO BE DEPOSITED IN THE TAX RESERVE ACCOUNT FOR THE SUCCEEDING PERIOD, WHICH
CALCULATION SHALL TAKE INTO ACCOUNT ANY EXCESS AMOUNTS REMAINING IN THE TAX
RESERVE ACCOUNT.

12.1.2    NOTWITHSTANDING THE FOREGOING, SO LONG AS NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, BORROWER SHALL NOT BE REQUIRED TO MAKE DEPOSITS OF
THE MONTHLY TAX RESERVE AMOUNT.  AT SUCH TIME, IF ANY, AS AN EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING BORROWER SHALL, SUBJECT TO THE TERMS AND
PROVISIONS OF SECTIONS 12.1.3 AND 12.8  HEREOF, THEREAFTER COMMENCE MAKING
DEPOSITS OF THE MONTHLY TAX RESERVE AMOUNT, TO THE EXTENT NOT OTHERWISE
TRANSFERRED FROM THE DEPOSIT ACCOUNT PURSUANT TO SECTION 3.1.16 HEREOF AND THE
CASH MANAGEMENT AGREEMENT.  FURTHERMORE, UPON THE OCCURRENCE  AND DURING THE
CONTINUATION OF AN EVENT OF DEFAULT, SUBJECT TO THE PROVISIONS OF
SECTIONS 12.1.3 AND 12.8  BORROWER SHALL DEPOSIT INTO THE TAX RESERVE ACCOUNT
WITHIN TEN (10) BUSINESS DAYS AFTER RECEIPT OF NOTICE FROM LENDER

109

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

 

 

an amount reasonably determined by Lender to be equal to all amounts which would
have been on deposit in the Tax Reserve Account as of the occurrence of such
Event of Default assuming that Borrower shall have made all deposits required to
be made pursuant to Section 12.1.1 since the Closing Date had the waiver of
deposits provided for above in this Section 12.1.2 not been in effect, giving
due consideration to all amounts that would have been payable by a disbursement
from such Tax Reserve Account since the Closing Date.

12.1.3    NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN LIEU OF
MAKING MONTHLY DEPOSITS TO THE TAX RESERVE ACCOUNT FOLLOWING THE OCCURRENCE AND
DURING THE CONTINUATION OF AN EVENT OF DEFAULT, BORROWER SHALL BE PERMITTED TO
DELIVER TO LENDER (A) CASH IN AN AMOUNT EQUAL TO TWELVE (12) MONTHS OF THE
MONTHLY TAX RESERVE AMOUNT, OR (B) A LETTER OF CREDIT IN AN AMOUNT EQUAL TO
TWELVE (12) MONTHS OF THE MONTHLY TAX RESERVE AMOUNT.

SECTION 12.2        INSURANCE RESERVE ACCOUNT. 

12.2.1    SUBJECT TO THE PROVISIONS OF SECTIONS 12.2.2, 12.2.3, AND 12.2.4,
BORROWER SHALL DEPOSIT WITH LENDER (TO BE HELD IN THE INSURANCE RESERVE ACCOUNT)
ON EACH PAYMENT DATE AN AMOUNT EQUAL TO ONE‑TWELFTH (1/12TH) OF THE INSURANCE
PREMIUMS THAT LENDER REASONABLY ESTIMATES, BASED ON THE MOST RECENT INSURANCE
BILL FOR THE PROPERTY, WILL BE PAYABLE DURING THE NEXT ENSUING TWELVE (12)
MONTHS FOR THE RENEWAL OF THE COVERAGE AFFORDED BY THE INSURANCE POLICIES UPON
THE EXPIRATION THEREOF IN ORDER TO ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO
PAY ALL SUCH INSURANCE PREMIUMS AT LEAST THIRTY (30) DAYS PRIOR TO THE
EXPIRATION OF THE POLICIES REQUIRED TO BE MAINTAINED BY BORROWER PURSUANT TO THE
TERMS HEREOF (SAID MONTHLY AMOUNTS HEREINAFTER CALLED THE “MONTHLY INSURANCE
RESERVE AMOUNT”, AND THE AGGREGATE AMOUNT OF FUNDS HELD IN THE INSURANCE RESERVE
ACCOUNT FROM TIME TO TIME BEING THE “INSURANCE RESERVE AMOUNT”).  PROVIDED  NO
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, LENDER SHALL APPLY THE
INSURANCE RESERVE AMOUNT, IF ANY, TO PAYMENTS OF INSURANCE PREMIUMS REQUIRED TO
BE MADE BY BORROWER PURSUANT TO ARTICLE VI  AND UNDER THE MORTGAGE.  IN MAKING
ANY PAYMENT RELATING TO THE INSURANCE RESERVE ACCOUNT, LENDER MAY DO SO
ACCORDING TO ANY BILL, STATEMENT OR ESTIMATE PROCURED FROM THE INSURER OR AGENT,
WITHOUT INQUIRY INTO THE ACCURACY OF SUCH BILL, STATEMENT OR ESTIMATE OR INTO
THE VALIDITY THEREOF.  IF THE AMOUNT OF FUNDS IN THE INSURANCE RESERVE ACCOUNT
SHALL EXCEED THE AMOUNTS DUE FOR INSURANCE PREMIUMS PURSUANT TO ARTICLE VI  AND
UNDER THE MORTGAGE, LENDER SHALL CREDIT SUCH EXCESS AGAINST FUTURE PAYMENTS TO
BE MADE TO THE INSURANCE RESERVE ACCOUNT.  IF AT ANY TIME LENDER REASONABLY
DETERMINES THAT THE INSURANCE RESERVE AMOUNT IS NOT OR WILL NOT BE SUFFICIENT TO
PAY INSURANCE PREMIUMS BY THE DATES SET FORTH ABOVE, LENDER SHALL NOTIFY
BORROWER OF SUCH DETERMINATION AND BORROWER SHALL INCREASE ITS MONTHLY PAYMENTS
TO LENDER BY THE AMOUNT THAT LENDER REASONABLY ESTIMATES IS SUFFICIENT TO MAKE
UP THE DEFICIENCY AT LEAST THIRTY (30) DAYS PRIOR TO EXPIRATION OF THE
APPLICABLE INSURANCE POLICIES.  UPON PAYMENT OF SUCH INSURANCE PREMIUMS, LENDER
SHALL REASSESS THE AMOUNT NECESSARY TO BE DEPOSITED IN THE INSURANCE RESERVE
ACCOUNT FOR THE SUCCEEDING PERIOD, WHICH CALCULATION SHALL TAKE INTO ACCOUNT ANY
EXCESS AMOUNTS REMAINING IN THE INSURANCE RESERVE ACCOUNT.

12.2.2    NOTWITHSTANDING THE FOREGOING, SO LONG AS NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, BORROWER SHALL NOT BE REQUIRED TO MAKE DEPOSITS OF
THE MONTHLY INSURANCE RESERVE AMOUNT.  AT SUCH TIME, IF ANY, AS AN EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, BORROWER SHALL, SUBJECT TO THE
TERMS AND PROVISIONS OF SECTIONS 12.2.3, 12.2.4  AND 12.8  HEREOF, THEREAFTER
COMMENCE MAKING DEPOSITS OF THE MONTHLY INSURANCE RESERVE AMOUNT, TO THE EXTENT
NOT OTHERWISE TRANSFERRED FROM THE DEPOSIT ACCOUNT PURSUANT TO SECTION 3.1.6
HEREOF

110

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

 

 

and the Cash Management Agreement.  Furthermore, upon the occurrence and during
the continuance of any Event of Default, Borrower shall, subject to the terms
and provisions of Sections  12.2.3, 12.2.4  and Section 12.8  hereof, deposit
into the Insurance Reserve Account within ten (10) Business Days after receipt
of notice from Lender, an amount reasonably determined by Lender to be equal to
all amounts which would have been on deposit in the Insurance Reserve Account as
of the occurrence of such Event of Default assuming that Borrower shall have
made all deposits required to be made pursuant to Section 12.2  since the
Closing Date had the waiver of deposits provided for above in this
Section 12.2.2 not been in effect, giving due consideration to all amounts that
would have been payable by a disbursement from such Insurance Reserve Account
since the Closing Date.

12.2.3    NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN LIEU OF
MAKING MONTHLY DEPOSITS TO THE INSURANCE RESERVE ACCOUNT FOLLOWING THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, BORROWER SHALL BE
PERMITTED TO DELIVER TO LENDER (A) CASH IN AN AMOUNT EQUAL TO TWELVE (12) MONTHS
OF THE MONTHLY INSURANCE RESERVE AMOUNT, OR (B) A LETTER OF CREDIT IN AN AMOUNT
EQUAL TO TWELVE (12) MONTHS OF THE MONTHLY INSURANCE RESERVE AMOUNT.

12.2.4    NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, TO THE EXTENT THAT
ANY OF THE INSURANCE REQUIRED TO BE MAINTAINED BY BORROWER IS EFFECTED UNDER A
BLANKET POLICY, BORROWER SHALL NOT BE REQUIRED TO MAKE DEPOSITS OF THE MONTHLY
INSURANCE RESERVE AMOUNT.

SECTION 12.3        CAPITAL EXPENDITURES RESERVE ACCOUNT.   

12.3.1    SUBJECT TO THE PROVISIONS OF SECTIONS 12.3.5  AND 12.3.6, BORROWER
SHALL DEPOSIT WITH LENDER, TO BE HELD IN THE CAPITAL EXPENDITURES RESERVE
ACCOUNT, ON EACH PAYMENT DATE AN AMOUNT EQUAL TO $7,000 FOR ANNUAL CAPITAL
EXPENDITURES (SAID MONTHLY AMOUNTS HEREINAFTER CALLED THE “MONTHLY CAPITAL
EXPENDITURES RESERVE AMOUNT”, AND THE AGGREGATE AMOUNT OF FUNDS HELD IN THE
CAPITAL EXPENDITURES RESERVE ACCOUNT FROM TIME TO TIME, THE “CAPITAL EXPENDITURE
FUNDS” ).   

12.3.2    LENDER SHALL DISBURSE TO BORROWER THE CAPITAL EXPENDITURE FUNDS UPON
SATISFACTION BY BORROWER OF EACH OF THE FOLLOWING CONDITIONS: (A) BORROWER SHALL
SUBMIT A REQUEST FOR PAYMENT TO LENDER AT LEAST TEN (10) DAYS PRIOR TO THE DATE
ON WHICH BORROWER REQUESTS SUCH PAYMENT BE MADE AND SPECIFIES THE CAPITAL
EXPENDITURES TO BE PAID OR REIMBURSED; (B) ON THE DATE SUCH REQUEST IS RECEIVED
BY LENDER AND ON THE DATE SUCH PAYMENT IS TO BE MADE, NO EVENT OF DEFAULT SHALL
EXIST AND REMAIN UNCURED; (C) LENDER SHALL HAVE RECEIVED A CERTIFICATE FROM
BORROWER (I) STATING THAT THE ITEMS TO BE FUNDED BY THE REQUESTED DISBURSEMENT
ARE CAPITAL EXPENDITURES, (II) STATING THAT THE WORK TO BE PAID FOR (OR
REIMBURSED TO BORROWER) BY THE REQUESTED DISBURSEMENT HAS BEEN PERFORMED IN A
GOOD AND WORKMANLIKE MANNER AND IN ACCORDANCE WITH ALL APPLICABLE LEGAL
REQUIREMENTS, AND (III) STATING THAT EACH PERSON THAT SUPPLIED MATERIALS OR
LABOR IN CONNECTION WITH THE CAPITAL EXPENDITURES TO BE FUNDED BY THE REQUESTED
DISBURSEMENT HAS BEEN PAID IN FULL OR WILL BE PAID IN FULL UPON SUCH
DISBURSEMENT, SUCH CERTIFICATE TO BE ACCOMPANIED BY LIEN WAIVERS OR OTHER
EVIDENCE OF PAYMENT SATISFACTORY TO LENDER; (D) AT LENDER’S OPTION, IN ITS
REASONABLE DISCRETION, A TITLE SEARCH FOR THE PROPERTY INDICATING THAT THE
PROPERTY IS FREE FROM ALL LIENS, CLAIMS AND OTHER ENCUMBRANCES NOT PREVIOUSLY
APPROVED BY LENDER; (E) AT LENDER’S OPTION, IN ITS REASONABLE DISCRETION, IF THE
COST OF ANY INDIVIDUAL CAPITAL EXPENDITURE EXCEEDS $250,000, LENDER SHALL HAVE
RECEIVED A REPORT SATISFACTORY TO LENDER IN ITS REASONABLE DISCRETION FROM THE
BORROWER’S ARCHITECT IN RESPECT OF

111

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

 

 

such architect’s or engineer’s inspection of the work to be paid for by the
requested disbursement of Capital Expenditure Funds; and (f) Lender shall have
received such other evidence as Lender shall reasonably request that the work to
be paid for or reimbursed by the requested disbursement has been performed and
the costs therefor are paid for or will be paid upon such disbursement to
Borrower.  Lender shall not be required to disburse Capital Expenditure Funds
more frequently than once each calendar month.

12.3.3    NOTHING IN THIS SECTION 12.3  SHALL (A) MAKE LENDER RESPONSIBLE FOR
MAKING OR COMPLETING THE CAPITAL EXPENDITURES, OR (B) REQUIRE LENDER TO EXPEND
FUNDS IN ADDITION TO THE CAPITAL EXPENDITURE FUNDS TO COMPLETE ANY CAPITAL
EXPENDITURES.

12.3.4    BORROWER SHALL PERMIT LENDER (INCLUDING, WITHOUT LIMITATION, LENDER’S
ENGINEER, ARCHITECT, OR INSPECTOR) OR THIRD PARTIES TO ENTER ONTO THE PROPERTY
DURING NORMAL BUSINESS HOURS (SUBJECT TO THE RIGHTS OF TENANTS UNDER THEIR
LEASES AND BORROWER’S USUAL AND CUSTOMARY SAFETY REQUIREMENTS AND ACCOMPANIED BY
A REPRESENTATIVE OF BORROWER) TO INSPECT THE PROGRESS OF ANY CAPITAL
EXPENDITURES AND ALL MATERIALS BEING USED IN CONNECTION THEREWITH AND TO EXAMINE
ALL PLANS AND SHOP DRAWINGS RELATING TO SUCH CAPITAL EXPENDITURES.  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 12.3.4. 

12.3.5    NOTWITHSTANDING THE FOREGOING, SO LONG AS NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, BORROWER SHALL NOT BE REQUIRED TO MAKE DEPOSITS OF
THE MONTHLY CAPITAL EXPENDITURES RESERVE AMOUNT.  AT SUCH TIME, IF ANY, AS AN
EVENT OF DEFAULT SHALL HAVE OCCURRED AND IS CONTINUING, BORROWER SHALL, SUBJECT
TO THE TERMS AND PROVISIONS OF SECTIONS 12.3.6 AND 12.8  HEREOF, THEREAFTER
COMMENCE MAKING DEPOSITS OF THE MONTHLY CAPITAL EXPENDITURES RESERVE AMOUNT, TO
THE EXTENT NOT OTHERWISE TRANSFERRED FROM THE DEPOSIT ACCOUNT PURSUANT TO
SECTION 3.1.6 HEREOF AND THE CASH MANAGEMENT AGREEMENT. 

12.3.6    NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN LIEU OF
MAKING MONTHLY DEPOSITS TO THE CAPITAL EXPENDITURES RESERVE ACCOUNT FOLLOWING
THE OCCURRENCE AND CONTINUATION OF AN EVENT OF DEFAULT, BORROWER SHALL BE
PERMITTED TO DELIVER TO LENDER (A) CASH IN AN AMOUNT EQUAL TO TWELVE (12) MONTHS
OF THE MONTHLY CAPITAL EXPENDITURES RESERVE AMOUNT, OR  (B) A LETTER OF CREDIT
IN AN AMOUNT EQUAL TO TWELVE (12) MONTHS OF THE MONTHLY CAPITAL EXPENDITURES
RESERVE AMOUNT.

SECTION 12.4        LEASING RESERVE ACCOUNT.   

12.4.1    SUBJECT TO THE PROVISIONS OF SECTION 12.4.3 AND SECTION 12.4.4,
BORROWER SHALL DEPOSIT WITH LENDER TO BE HELD IN THE LEASING RESERVE ACCOUNT ON
EACH PAYMENT DATE AN AMOUNT EQUAL TO $35,000 FOR ANNUAL LEASING EXPENSES (SAID
MONTHLY AMOUNTS HEREINAFTER CALLED THE “MONTHLY TENANT LEASING RESERVE AMOUNT”,
AND THE AGGREGATE AMOUNT OF FUNDS HELD IN THE LEASING RESERVE ACCOUNT FROM TIME
TO TIME, THE “TENANT LEASING FUNDS” ).

12.4.2    LENDER SHALL DISBURSE TO BORROWER THE TENANT LEASING FUNDS UPON
SATISFACTION BY BORROWER OF EACH OF THE FOLLOWING CONDITIONS:  (A) BORROWER
SHALL SUBMIT A REQUEST FOR PAYMENT TO LENDER AT LEAST TEN (10) DAYS PRIOR TO THE
DATE ON WHICH BORROWER REQUESTS SUCH PAYMENT BE MADE AND SPECIFIES THE TENANT
IMPROVEMENT COSTS (WHICH, AS USED HEREIN, SHALL INCLUDE TENANT ALLOWANCES BUT
NOT ANY FREE RENT PERIOD) AND LEASING COMMISSIONS TO BE PAID; (B) ON THE DATE
SUCH REQUEST IS RECEIVED BY LENDER AND ON THE DATE SUCH PAYMENT IS TO BE MADE,
NO EVENT OF

112

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

 

 

Default shall have occurred and be continuing; (c) to the extent required
hereunder, Lender shall have approved the Lease in respect of which Borrower is
obligated to pay or reimburse certain tenant improvement costs and leasing
commissions; (d) Lender shall have received a budget for tenant improvement
costs and a schedule of leasing commissions payments and the requested
disbursement will be used to pay all or a portion of such costs and payments;
(e) Lender shall have received a certificate from Borrower (i) stating that all
tenant improvements at the Property to be funded by the requested disbursement
have been completed in good and workmanlike manner and in accordance with all
applicable federal, state and local laws, rules and regulations or, if
applicable, that the tenant allowance to be funded by the requested disbursement
is due and owing under the applicable Lease, and (ii) stating that each Person
that has supplied materials or labor in connection with the tenant improvements
to be funded by the requested disbursement has been paid in full or will be paid
in full upon such disbursement, such certificate to be accompanied by lien
waivers or other evidence of payment satisfactory to Lender (if applicable);
(f) with respect to any Tenant Leasing Funds to be released by Lender, at
Lender’s option, in its reasonable discretion, a title search for the Property
indicating that the Property is free from all Liens, claims and other
encumbrances not previously approved by Lender; and (g)  Lender shall have
received such other evidence as Lender shall reasonably request that the portion
of the tenant improvements at the Property to be funded by the requested
disbursement have been performed or are otherwise due and owing under the
applicable Lease and are paid for or will be paid upon such disbursement to
Borrower with such funds.  Lender shall not be required to disburse Tenant
Leasing Funds more frequently than once each calendar month.

12.4.3    NOTWITHSTANDING THE FOREGOING, SO LONG AS NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, BORROWER SHALL NOT BE REQUIRED TO MAKE DEPOSITS OF
THE MONTHLY TENANT LEASING RESERVE AMOUNT.  AT SUCH TIME, IF ANY, AS AN EVENT OF
DEFAULT SHALL HAVE OCCURRED AND IS CONTINUING, BORROWER SHALL, SUBJECT TO THE
TERMS AND PROVISIONS OF SECTIONS 12.4.4 AND 12.8  HEREOF, THEREAFTER COMMENCE
MAKING DEPOSITS OF THE MONTHLY CAPITAL EXPENDITURES RESERVE AMOUNT, TO THE
EXTENT NOT OTHERWISE TRANSFERRED FROM THE DEPOSIT ACCOUNT PURSUANT TO THE TERMS
HEREOF AND THE CASH MANAGEMENT AGREEMENT.

12.4.4    NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN LIEU OF
MAKING MONTHLY DEPOSITS TO THE LEASING RESERVE ACCOUNT FOLLOWING THE OCCURRENCE
AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT, BORROWER SHALL BE PERMITTED
TO DELIVER TO LENDER (A) CASH IN AN AMOUNT EQUAL TO TWELVE (12) MONTHS OF THE
MONTHLY TENANT LEASING RESERVE AMOUNT, OR (B) A LETTER OF CREDIT IN AN AMOUNT
EQUAL TO TWELVE (12) MONTHS OF THE MONTHLY TENANT LEASING RESERVE AMOUNT.

SECTION 12.5        LEASE TERMINATION FEES RESERVE ACCOUNT.   

12.5.1    IN THE EVENT THAT BORROWER RECEIVES A FEE, PAYMENT OR OTHER
COMPENSATION FROM ANY TENANT RELATING TO OR IN EXCHANGE FOR THE TERMINATION OF
SUCH TENANT’S LEASE (A “LEASE TERMINATION FEE”), SUBJECT TO SECTION 12.5.3,
BORROWER SHALL IMMEDIATELY DEPOSIT SUCH LEASE TERMINATION FEE WITH LENDER (TO BE
HELD IN AN ACCOUNT ESTABLISHED FOR SUCH PURPOSE (THE “LEASE TERMINATION FEE
RESERVE ACCOUNT”), TO BE UTILIZED FOR TENANT IMPROVEMENTS (WHICH, AS USED
HEREIN, SHALL INCLUDE TENANT ALLOWANCES BUT NOT FREE RENT PERIODS) AND LEASING
COMMISSIONS THAT MAY BE INCURRED WITH RESPECT TO THE SPACE RELATING TO SUCH
LEASE TERMINATION FEE (A “TERMINATION SPACE”).  THE AGGREGATE AMOUNT OF FUNDS IN
THE LEASE TERMINATION FEE RESERVE ACCOUNT FROM TIME TO TIME ARE REFERRED TO
HEREIN AS THE “LEASE TERMINATION FUNDS.” 

 

113

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

 

 

12.5.2    LENDER SHALL DISBURSE TO BORROWER THE LEASE TERMINATION FUNDS UPON
SATISFACTION BY BORROWER OF EACH OF THE FOLLOWING CONDITIONS:  (A) BORROWER
SHALL SUBMIT A REQUEST FOR PAYMENT TO LENDER AT LEAST TEN (10) DAYS PRIOR TO THE
DATE ON WHICH BORROWER REQUESTS SUCH PAYMENT BE MADE AND SPECIFIES THE TENANT
IMPROVEMENT COSTS AND LEASING COMMISSIONS TO BE PAID FOR THE TERMINATION SPACE;
(B) ON THE DATE SUCH REQUEST IS RECEIVED BY LENDER AND ON THE DATE SUCH PAYMENT
IS TO BE MADE, NO EVENT OF DEFAULT SHALL EXIST AND REMAIN UNCURED; (C) TO THE
EXTENT REQUIRED HEREUNDER, LENDER SHALL HAVE APPROVED THE LEASE OR LEASES FOR
SUCH TERMINATION SPACE (COLLECTIVELY, THE “REPLACEMENT LEASE”) IN RESPECT OF
WHICH BORROWER IS OBLIGATED TO PAY OR REIMBURSE CERTAIN TENANT IMPROVEMENT COSTS
AND LEASING COMMISSIONS; (D) WITH RESPECT TO ANY LEASE TERMINATION FUNDS TO BE
RELEASED BY LENDER FOR TENANT IMPROVEMENTS OR LEASING COMMISSIONS PURSUANT TO A
REPLACEMENT LEASE, LENDER SHALL HAVE RECEIVED A BUDGET FOR TENANT IMPROVEMENT
COSTS AND A SCHEDULE OF LEASING COMMISSIONS PAYMENTS AND THE REQUESTED
DISBURSEMENT WILL BE USED TO PAY ALL OR A PORTION OF SUCH COSTS AND PAYMENTS;
(E) WITH RESPECT TO ANY LEASE TERMINATION FUNDS TO BE RELEASED BY LENDER FOR
TENANT IMPROVEMENTS PURSUANT TO A REPLACEMENT LEASE, LENDER SHALL HAVE RECEIVED
A CERTIFICATE FROM BORROWER (I) STATING THAT ALL TENANT IMPROVEMENTS AT THE
PROPERTY TO BE FUNDED BY THE REQUESTED DISBURSEMENT HAVE BEEN COMPLETED IN GOOD
AND WORKMANLIKE MANNER AND IN ACCORDANCE WITH ALL APPLICABLE FEDERAL, STATE AND
LOCAL LAWS, RULES AND REGULATIONS OR, IF APPLICABLE, THAT THE TENANT ALLOWANCE
TO BE FUNDED BY THE REQUESTED DISBURSEMENT IS DUE AND OWING UNDER THE
REPLACEMENT LEASE, AND (II) STATING THAT EACH PERSON THAT SUPPLIED MATERIALS OR
LABOR IN CONNECTION WITH THE TENANT IMPROVEMENTS TO BE FUNDED BY THE REQUESTED
DISBURSEMENT HAS BEEN PAID IN FULL OR WILL BE PAID IN FULL UPON SUCH
DISBURSEMENT, SUCH CERTIFICATE TO BE ACCOMPANIED BY LIEN WAIVERS OR OTHER
EVIDENCE OF PAYMENT SATISFACTORY TO LENDER; (F) WITH RESPECT TO ANY LEASE
TERMINATION FUNDS TO BE RELEASED BY LENDER FOR TENANT IMPROVEMENTS PURSUANT TO A
REPLACEMENT LEASE, AT LENDER’S OPTION, IN ITS REASONABLE DISCRETION,  A TITLE
SEARCH FOR THE PROPERTY INDICATING THAT THE PROPERTY IS FREE FROM ALL LIENS,
CLAIMS AND OTHER ENCUMBRANCES NOT PREVIOUSLY APPROVED BY LENDER; AND (G) WITH
RESPECT TO ANY LEASE TERMINATION ROLLOVER FUNDS TO BE RELEASED BY LENDER FOR
TENANT IMPROVEMENTS PURSUANT TO A REPLACEMENT LEASE, LENDER SHALL HAVE RECEIVED
SUCH OTHER EVIDENCE AS LENDER SHALL REASONABLY REQUEST THAT THE TENANT
IMPROVEMENTS AT THE PROPERTY TO BE FUNDED BY THE REQUESTED DISBURSEMENT HAVE
BEEN COMPLETED AND ARE PAID FOR OR WILL BE PAID UPON SUCH DISBURSEMENT TO
BORROWER.  LENDER SHALL NOT BE REQUIRED TO DISBURSE LEASE TERMINATION FUNDS MORE
FREQUENTLY THAN ONCE EACH CALENDAR MONTH.

12.5.3    NOTWITHSTANDING THE FOREGOING, UPON RECEIPT BY LENDER OF EVIDENCE
THAT, WITH RESPECT TO ANY NEW REPLACEMENT LEASE, ALL TENANT IMPROVEMENTS
REQUIRED TO BE COMPLETED BY BORROWER PURSUANT TO THE REPLACEMENT LEASE, IF ANY,
HAVE BEEN COMPLETED AND ALL LEASING COMMISSIONS REQUIRED TO BE PAID BY BORROWER
WITH RESPECT TO THE REPLACEMENT LEASE, IF ANY, HAVE BEEN PAID, AND PROVIDED 
THAT SUBSTANTIALLY ALL OF THE TERMINATION SPACE HAS BEEN RE-LET PURSUANT TO SUCH
REPLACEMENT LEASE AND ANY OTHER REPLACEMENT LEASE(S) AND NO EVENT OF DEFAULT
THEN EXISTS, LENDER SHALL DISBURSE TO BORROWER THE LEASE TERMINATION FUNDS ON
DEPOSIT WITH RESPECT TO SUCH TERMINATION SPACE.

SECTION 12.6        INTENTIONALLY OMITTED.

SECTION 12.7        RESERVE ACCOUNTS, GENERALLY. 

12.7.1    BORROWER GRANTS TO LENDER A FIRST‑PRIORITY PERFECTED SECURITY INTEREST
IN EACH OF THE RESERVE ACCOUNTS AND ANY AND ALL MONIES NOW OR HEREAFTER
DEPOSITED THEREIN AS ADDITIONAL SECURITY FOR PAYMENT OF THE INDEBTEDNESS.  UNTIL
EXPENDED OR APPLIED IN ACCORDANCE HEREWITH,

114

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

 

 

the Reserve Accounts shall constitute additional security for the Indebtedness. 
Upon the occurrence and during the continuance of an Event of Default, Lender
may, in addition to any and all other rights and remedies available to Lender,
apply any sums then present in any or all of the Reserve Accounts to the payment
of the Indebtedness in any order in its sole discretion.  The Reserve Accounts
shall not constitute trust funds but may not be commingled with other monies
held by Lender.  The Reserve Accounts shall be held in an Eligible Account in
Permitted Investments in accordance with the terms and provisions of this
Agreement and the Cash Management Agreement.  All interest on funds in a Reserve
Account shall be added to and become a part thereof.  Borrower shall be
responsible for payment of any federal, state or local income or other tax
applicable to the interest earned on the Reserve Accounts credited or paid to
Borrower.  Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in a Reserve
Account or the monies deposited therein or permit any lien or encumbrance to
attach thereto, or any levy to be made thereon, or any UCC‑1 Financing
Statements, except those naming Lender as the secured party, to be filed with
respect thereto.  Lender shall not be liable for any loss sustained on the
investment of any funds constituting the Reserve Accounts except for losses
sustained solely as a result of Lender’s gross negligence or willful
misconduct.  Borrower shall indemnify Lender and hold Lender harmless from and
against any and all actions, suits, claims, demands, liabilities, losses,
damages, obligations and costs and expenses (including litigation costs and
reasonable attorneys’ fees and disbursements) arising from or in any way
connected with the Reserve Accounts or the performance of the obligations for
which the Reserve Accounts were established except for Lender’s gross negligence
or willful misconduct.

SECTION 12.8        LETTERS OF CREDIT. 

12.8.1  DELIVERY OF LETTERS OF CREDIT.  (A) IN LIEU OF MAKING ALL OR ANY PORTION
OF THE REQUIRED PAYMENTS TO THE RESERVE ACCOUNTS, BORROWER MAY DELIVER TO LENDER
IN ADDITION TO, OR INSTEAD OF, THE CASH DEPOSITS, A LETTER OF CREDIT WITH
RESPECT TO ALL OR ANY PORTION OF THE AMOUNT DUE UNDER THE RESERVE ACCOUNTS, IN
ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 12.8.  ADDITIONALLY, BORROWER MAY
DELIVER TO LENDER A LETTER OF CREDIT IN ACCORDANCE WITH THE PROVISIONS OF THIS
SECTION 12.8  IN EXCHANGE FOR THE RETURN TO BORROWER OF ALL OR ANY PORTION OF
DEPOSITS PREVIOUSLY MADE TO THE RESERVE ACCOUNTS.  UPON SUCH DELIVERY OF SUCH
LETTER OF CREDIT IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 12.8, LENDER
SHALL PROMPTLY RETURN TO BORROWER SUCH DEPOSITS PREVIOUSLY MADE WHICH ARE NOT
COVERED BY THE LETTER OF CREDIT.  THE AGGREGATE AMOUNT OF ANY LETTER OF CREDIT
AND/OR CASH ON DEPOSIT WITH RESPECT TO THE RESERVE ACCOUNTS SHALL AT ALL TIMES
BE AT LEAST EQUAL TO THE AGGREGATE AMOUNT WHICH BORROWER IS REQUIRED TO HAVE ON
DEPOSIT IN SUCH RESERVE ACCOUNTS PURSUANT TO THIS AGREEMENT OR AS OTHERWISE
SPECIFIED HEREIN.

(B)                BORROWER SHALL GIVE LENDER NO LESS THAN TEN (10) DAYS’ NOTICE
OF BORROWER’S ELECTION TO DELIVER A LETTER OF CREDIT AND BORROWER SHALL PAY TO
LENDER ALL OF LENDER’S REASONABLE OUT‑OF‑POCKET COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS) IN CONNECTION THEREWITH.  BORROWER
SHALL NOT BE ENTITLED TO DRAW UPON ANY SUCH LETTER OF CREDIT.  UPON TEN (10)
DAYS’ NOTICE TO LENDER, BORROWER MAY REPLACE A LETTER OF CREDIT WITH A CASH
DEPOSIT TO ANY OF THE RESERVE ACCOUNTS.  PRIOR TO THE RETURN OF A LETTER OF
CREDIT, BORROWER SHALL DEPOSIT AN AMOUNT EQUAL TO THE AMOUNT THAT WOULD HAVE
ACCUMULATED IN THE APPLICABLE RESERVE ACCOUNT AND NOT BEEN DISBURSED IN
ACCORDANCE WITH THIS AGREEMENT IF SUCH LETTER OF CREDIT HAD NOT BEEN DELIVERED. 

 

115

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

 

 

12.8.2  SECURITY FOR INDEBTEDNESS.  EACH LETTER OF CREDIT DELIVERED UNDER THIS
AGREEMENT SHALL BE ADDITIONAL SECURITY FOR THE PAYMENT OF THE INDEBTEDNESS. 
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, LENDER SHALL HAVE THE RIGHT, AT ITS
OPTION, TO DRAW UPON ANY LETTER OF CREDIT AND TO APPLY ALL OR ANY PART THEREOF
TO THE PAYMENT OF THE ITEMS FOR WHICH SUCH LETTER OF CREDIT WAS ESTABLISHED OR
TO APPLY EACH SUCH LETTER OF CREDIT TO PAYMENT OF THE INDEBTEDNESS IN SUCH
ORDER, PROPORTION OR PRIORITY AS LENDER MAY DETERMINE.

12.8.3  ADDITIONAL RIGHTS OF LENDER.  IN ADDITION TO ANY OTHER RIGHT LENDER MAY
HAVE TO DRAW UPON A LETTER OF CREDIT PURSUANT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, LENDER SHALL HAVE THE ADDITIONAL RIGHT TO DRAW UPON ANY LETTER
OF CREDIT IN FULL:  (A) WITH RESPECT TO ANY EVERGREEN LETTER OF CREDIT, IF
LENDER HAS RECEIVED A NOTICE FROM THE ISSUING BANK THAT THE LETTER OF CREDIT
WILL NOT BE RENEWED AND A SUBSTITUTE LETTER OF CREDIT IS NOT PROVIDED AT LEAST
THIRTY (30) DAYS PRIOR TO THE DATE ON WHICH THE OUTSTANDING LETTER OF CREDIT IS
SCHEDULED TO EXPIRE; (B) WITH RESPECT TO ANY LETTER OF CREDIT WITH A STATED
EXPIRATION DATE, IF LENDER HAS NOT RECEIVED A NOTICE FROM THE ISSUING BANK THAT
IT HAS RENEWED THE LETTER OF CREDIT AT LEAST THIRTY (30) DAYS PRIOR TO THE DATE
ON WHICH SUCH LETTER OF CREDIT IS SCHEDULED TO EXPIRE AND A SUBSTITUTE LETTER OF
CREDIT IS NOT PROVIDED AT LEAST THIRTY (30) DAYS PRIOR TO THE DATE ON WHICH THE
OUTSTANDING LETTER OF CREDIT IS SCHEDULED TO EXPIRE; (C) UPON RECEIPT OF NOTICE
FROM THE ISSUING BANK THAT THE LETTER OF CREDIT WILL BE TERMINATED (EXCEPT IF
THE TERMINATION OF SUCH LETTER OF CREDIT IS PERMITTED PURSUANT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT OR A SUBSTITUTE LETTER OF CREDIT IS PROVIDED); OR
(D) IF LENDER HAS RECEIVED NOTICE THAT THE BANK ISSUING THE LETTER OF CREDIT
SHALL CEASE TO BE AN ELIGIBLE INSTITUTION AND A SUBSTITUTE LETTER OF CREDIT IS
NOT PROVIDED AT LEAST FIFTEEN (15) DAYS FROM THE DATE LENDER RECEIVES SUCH
NOTICE.  IN THE EVENT LENDER DRAWS ON THE LETTER OF CREDIT PURSUANT TO THE
FOREGOING PROVISIONS, SUCH FUNDS SHALL BE DEPOSITED INTO THE APPLICABLE RESERVE
ACCOUNTS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE ABOVE,
LENDER IS NOT OBLIGATED TO DRAW UPON ANY LETTER OF CREDIT UPON THE HAPPENING OF
AN EVENT SPECIFIED IN CLAUSES (A), (B)  , (C)  OR (D) ABOVE AND SHALL NOT BE
LIABLE FOR ANY LOSSES SUSTAINED BY BORROWER DUE TO THE INSOLVENCY OF THE BANK
ISSUING THE LETTER OF CREDIT IF LENDER HAS NOT DRAWN UPON THE LETTER OF CREDIT.

 

116

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

 

 

ARTICLE XIII

DEFAULTS

SECTION 13.1  EVENT OF DEFAULT.  (A) EACH OF THE FOLLOWING EVENTS SHALL
CONSTITUTE AN EVENT OF DEFAULT HEREUNDER (AN “EVENT OF DEFAULT”): 

(I)                 IF (A) THE INDEBTEDNESS IS NOT PAID IN FULL ON THE MATURITY
DATE, (B) ANY REGULARLY SCHEDULED MONTHLY PAYMENT OF INTEREST AND/OR PRINCIPAL
DUE UNDER THE NOTE IS NOT PAID IN FULL ON THE APPLICABLE PAYMENT DATE, WITH SUCH
FAILURE CONTINUING FOR TWO (2) BUSINE SS DAYS AFTER LENDER DELIVERS WRITTEN
NOTICE THEREOF TO BORROWER, (C) ANY DEPOSIT BY BORROWER TO THE COLLECTION
ACCOUNT IS NOT MADE WITHIN TWO (2) BUSINESS DAYS FOLLOWING THE REQUIRED DEPOSIT
DATE THEREFOR,  (D) ANY AMOUNT PAYABLE PURSUANT TO SECTION  3.1.6(B) IS NOT PAID
IN FULL WHEN DUE, OR BORROWER SHALL FAIL TO POST THE REMARGINING COLLATERAL
REQUIRED UNDER SECTION 3.1.6(B), OR (E) EXCEPT AS TO ANY AMOUNT INCLUDED IN (A),
(B), (C)  AND/OR (D)  OF THIS SUB‑PARAGRAPH (I), ANY OTHER AMOUNT PAYABLE
PURSUANT TO THIS AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT IS NOT PAID IN
FULL WHEN DUE AND PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF THE APPLICABLE
LOAN DOCUMENT, WITH SUCH FAILURE CONTINUING FOR TEN (10) BUSINESS DAYS AFTER
LENDER DELIVERS WRITTEN NOTICE THEREOF TO BORROWER;

(II)               SUBJECT TO BORROWER’S RIGHT TO CONTEST AS SET FORTH IN
SECTION 7.3, IF ANY OF THE IMPOSITIONS OR OTHER CHARGES ARE NOT PAID PRIOR TO
THE IMPOSITION OF ANY INTEREST, PENALTY, CHARGE OR EXPENSE FOR THE NON‑PAYMENT
THEREOF (EXCEPT TO THE EXTENT LENDER IS OBLIGATED TO DISBURSE FUNDS FROM THE TAX
RESERVE ACCOUNT TO PAY FOR SUCH IMPOSITIONS OR OTHER CHARGES UNDER THIS
AGREEMENT, LENDER HAS SUFFICIENT FUNDS IN SUCH TAX RESERVE ACCOUNT TO MAKE SUCH
PAYMENT AND LENDER FAILS TO MAKE SUCH PAYMENT);

(III)             (A) IF THE INSURANCE POLICIES REQUIRED BY SECTION 6.1  ARE NOT
KEPT IN FULL FORCE AND EFFECT (EXCEPT TO THE EXTENT LENDER IS OBLIGATED TO
DISBURSE FUNDS FROM THE INSURANCE RESERVE ACCOUNT TO PAY FOR SUCH INSURANCE
POLICIES UNDER THIS AGREEMENT, LENDER HAS SUFFICIENT FUNDS IN SUCH INSURANCE
RESERVE ACCOUNT TO MAKE SUCH PAYMENT AND LENDER FAILS TO MAKE SUCH PAYMENT), OR
(B) IF CERTIFICATES OF INSURANCE AND INSURANCE COMPANY-ISSUED BINDERS ARE NOT
DELIVERED TO LENDER PRIOR TO THE EXPIRATION DATE OF THE THEN CURRENT INSURANCE
POLICIES AND/OR IF ANY INSURANCE POLICY EXPIRES AND A RENEWAL POLICY HAS NOT
BEEN OBTAINED PRIOR TO SUCH EXPIRATION;

(IV)             IF, EXCEPT AS PERMITTED PURSUANT TO ARTICLE VIII, (A) ANY
TRANSFER OF ANY DIRECT OR INDIRECT LEGAL, BENEFICIAL OR EQUITABLE INTEREST IN
ALL OR ANY PORTION OF THE PROPERTY OCCURS, (B) ANY TRANSFER OF ANY DIRECT OR
INDIRECT LEGAL, BENEFICIAL OR EQUITABLE INTEREST IN BORROWER OCCURS, (C) ANY
LIEN ON ALL OR ANY PORTION OF THE PROPERTY OCCURS OTHER THAN A PERMITTED
ENCUMBRANCE, (D) ANY PLEDGE, HYPOTHECATION, CREATION OF A SECURITY INTEREST IN
OR OTHER ENCUMBRANCE OF ANY DIRECT OR INDIRECT LEGAL, BENEFICIAL OR EQUITABLE
INTERESTS IN BORROWER OCCURS OTHER THAN A PERMITTED ENCUMBRANCE, OR (E) THE
FILING OF A DECLARATION OF CONDOMINIUM WITH RESPECT TO THE PROPERTY OCCURS,
EXCEPT AS PERMITTED PURSUANT TO SECTION 8.8; 

 

117

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

 

 

(V)               IF (A) ANY REPRESENTATION OR WARRANTY MADE BY BORROWER HEREIN
OR BY BORROWER OR GUARANTOR IN ANY OTHER LOAN DOCUMENT OR FINANCIAL STATEMENT
FURNISHED TO LENDER SHALL HAVE BEEN FALSE OR MISLEADING IN ANY MATERIAL RESPECT
AS OF THE DATE THE REPRESENTATION OR WARRANTY WAS MADE, OR (B) ANY
REPRESENTATION OR WARRANTY MADE BY BORROWER OR GUARANTOR IN ANY REPORT,
CERTIFICATE OR OTHER INSTRUMENT, AGREEMENT OR DOCUMENT FURNISHED TO LENDER,
SHALL HAVE BEEN FALSE OR MISLEADING IN ANY MATERIAL RESPECT AS OF THE DATE THE
REPRESENTATION OR WARRANTY WAS MADE; PROVIDED, HOWEVER, WITH RESPECT TO ANY SUCH
BREACH IN CLAUSE (A)  OR (B)  WHICH IS NOT THE SUBJECT OF ANY OTHER SUBSECTION
OF THIS SECTION 13.1(A)(V)  AND WHICH IS CAPABLE OF BEING CURED, BORROWER FAILS
TO REMEDY SUCH CONDITION WITHIN TEN (10) DAYS FOLLOWING NOTICE TO BORROWER FROM
LENDER, IN THE CASE OF ANY SUCH BREACH WHICH CAN BE CURED BY THE PAYMENT OF A
SUM OF MONEY, OR WITHIN THIRTY (30) DAYS FOLLOWING NOTICE FROM LENDER IN THE
CASE OF ANY OTHER SUCH BREACH; PROVIDED, HOWEVER, THAT IF SUCH NON‑MONETARY
BREACH IS SUSCEPTIBLE OF CURE BUT CANNOT REASONABLY BE CURED WITHIN SUCH
THIRTY (30) DAY PERIOD AND PROVIDED  FURTHER  THAT BORROWER SHALL HAVE COMMENCED
TO CURE SUCH BREACH 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 SUCH TIME AS IS REASONABLY NECESSARY FOR BORROWER IN THE
EXERCISE OF DUE DILIGENCE TO CURE SUCH BREACH, SUCH ADDITIONAL PERIOD NOT TO
EXCEED SIXTY (60) DAYS PLUS  TIME PERMITTED FOR EXCUSABLE DELAYS;

(VI)             IF BORROWER OR GUARANTOR SHALL MAKE A GENERAL ASSIGNMENT FOR
THE BENEFIT OF CREDITORS;

(VII)           IF A RECEIVER, LIQUIDATOR OR TRUSTEE SHALL BE APPOINTED FOR
BORROWER OR GUARANTOR (OR, TO THE EXTENT IT IS PROVIDING INSURANCE TO BORROWER,
ANY CAPTIVE INSURANCE COMPANY), OR IF BORROWER OR GUARANTOR (OR, TO THE EXTENT
IT IS PROVIDING INSURANCE TO BORROWER, ANY CAPTIVE INSURANCE COMPANY) SHALL BE
ADJUDICATED A BANKRUPT OR INSOLVENT, OR IF ANY PETITION FOR BANKRUPTCY,
REORGANIZATION OR ARRANGEMENT PURSUANT TO FEDERAL BANKRUPTCY LAW, OR ANY SIMILAR
FEDERAL OR STATE LAW, SHALL BE FILED BY OR AGAINST, CONSENTED TO, OR ACQUIESCED
IN BY, BORROWER OR GUARANTOR (OR, TO THE EXTENT IT IS PROVIDING INSURANCE TO
BORROWER, ANY CAPTIVE INSURANCE COMPANY), OR IF ANY PROCEEDING FOR THE
DISSOLUTION OR LIQUIDATION OF BORROWER OR GUARANTOR SHALL BE INSTITUTED;
PROVIDED, HOWEVER, IF SUCH APPOINTMENT, ADJUDICATION, PETITION OR PROCEEDING WAS
INVOLUNTARY AND NOT CONSENTED TO BY BORROWER OR GUARANTOR (OR, TO THE EXTENT IT
IS PROVIDING INSURANCE TO BORROWER, ANY CAPTIVE INSURANCE COMPANY), UPON THE
SAME NOT BEING DISCHARGED, STAYED OR DISMISSED WITHIN ONE HUNDRED TWENTY (120)
DAYS;

(VIII)         IF BORROWER ATTEMPTS TO ASSIGN ITS RIGHTS UNDER THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR ANY INTEREST HEREIN OR THEREIN IN
CONTRAVENTION OF THE LOAN DOCUMENTS;

(IX)             WITH RESPECT TO ANY TERM, COVENANT OR PROVISION SET FORTH
HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS (OTHER THAN THE OTHER SUBSECTIONS
OF THIS SECTION 13.1(B)) WHICH SPECIFICALLY CONTAINS A NOTICE REQUIREMENT OR
GRACE PERIOD AND PROVIDES THAT FAILURE TO COMPLY ON OR BEFORE THE EXPIRATION OF
SUCH PERIOD SHALL BE AN EVENT OF DEFAULT HEREUNDER, IF BORROWER OR GUARANTOR
SHALL BE IN

118

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

 

 

DEFAULT UNDER SUCH TERM, COVENANT OR CONDITION AFTER THE GIVING OF SUCH NOTICE
OR THE EXPIRATION OF SUCH GRACE PERIOD;

(X)               IF BORROWER FAILS TO COMPLY WITH THE COVENANTS AS TO
PRESCRIBED LAWS SET FORTH IN SECTION 5.1.2 AND/OR VIOLATES THE COVENANTS WITH
RESPECT TO THE PATRIOT ACT SET FORTH IN SECTION 5.2.17; 

(XI)             IF BORROWER SHALL FAIL TO COMPLY WITH ANY COVENANTS SET FORTH
IN SECTION 5.2.19; 

(XII)           EXCEPT AS PROVIDED IN SUB‑PARAGRAPH (XI) ABOVE, IF BORROWER
SHALL FAIL TO COMPLY WITH ANY COVENANTS SET FORTH IN ARTICLE V  OR ARTICLE X 
WITH SUCH FAILURE CONTINUING FOR TEN (10) BUSINESS DAYS AFTER LENDER DELIVERS
WRITTEN NOTICE THEREOF TO BORROWER;

 

119

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

 

 

(XIII)         IF BORROWER SHALL FAIL TO COMPLY WITH ANY COVENANTS SET FORTH IN
SECTION 5.1 OR SECTION 5.2 OF THE MORTGAGE WITH SUCH FAILURE CONTINUING FOR
TEN (10) BUSINESS DAYS AFTER LENDER DELIVERS WRITTEN NOTICE THEREOF TO BORROWER;

(XIV)         SUBJECT TO THE OCCURRENCE OF A CASUALTY, (A) THE NEGLECT, FAILURE
OR REFUSAL OF BORROWER TO KEEP IN FULL FORCE AND EFFECT ANY MATERIAL PERMIT,
LICENSE, CONSENT OR APPROVAL REQUIRED FOR THE OPERATION OF THE IMPROVEMENTS THAT
IS NOT FULLY REINSTATED WITHIN THIRTY (30) DAYS AFTER LENDER GIVES BORROWER
NOTICE OF THE LAPSE OF EFFECTIVENESS OF SUCH MATERIAL PERMIT, LICENSE, CONSENT
OR APPROVAL OR (B) THE CURTAILMENT IN AVAILABILITY TO THE PROPERTY OF UTILITIES
OR OTHER PUBLIC SERVICES NECESSARY FOR THE FULL OCCUPANCY AND UTILIZATION OF THE
IMPROVEMENTS THAT IS NOT RESTORED TO FULL AVAILABILITY WITHIN THIRTY (30) DAYS
AFTER LENDER GIVES BORROWER NOTICE OF SUCH CURTAILMENT OF AVAILABILITY;
PROVIDED, HOWEVER, THAT IF BORROWER SHALL HAVE COMMENCED TO CURE ANY DEFAULT
DESCRIBED IN SUBSECTION (A) OR (B) ABOVE WITHIN SUCH THIRTY (30) DAY PERIOD AND
THEREAFTER DILIGENTLY PROCEEDS TO CURE THE SAME, SUCH THIRTY (30) DAY PERIOD
SHALL BE EXTENDED FOR SUCH TIME AS IS REASONABLY NECESSARY FOR BORROWER IN THE
EXERCISE OF DUE DILIGENCE TO CURE SUCH DEFAULT, SUCH ADDITIONAL PERIOD NOT TO
EXCEED NINETY (90) DAYS;

(XV)           IF THIS AGREEMENT, THE GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY
LIEN GRANTED HEREUNDER OR THEREUNDER, IN WHOLE OR IN PART, SHALL TERMINATE OR
SHALL CEASE TO BE EFFECTIVE OR SHALL CEASE TO BE A LEGALLY VALID, BINDING AND
ENFORCEABLE OBLIGATION OF BORROWER OR GUARANTOR, AS APPLICABLE, SUBJECT TO ANY
EXCEPTIONS AS TO ENFORCEABILITY PROVIDED IN SECTION 4.1.19, OR ANY LIEN SECURING
THE INDEBTEDNESS SHALL, IN WHOLE OR IN PART, CEASE TO BE A PERFECTED PRIORITY
LIEN, SUBJECT TO THE PERMITTED ENCUMBRANCES (EXCEPT IN ANY OF THE FOREGOING
CASES IN ACCORDANCE WITH THE TERMS HEREOF OR UNDER ANY OTHER LOAN DOCUMENT OR BY
REASON OF ANY AFFIRMATIVE ACT OF LENDER);

(XVI)         THE MANAGEMENT AGREEMENT IS TERMINATED AND A QUALIFIED MANAGER OR
REPLACEMENT MANAGER IS NOT APPOINTED PURSUANT TO THE PROVISIONS OF
SECTION 5.2.14 WITHIN SIXTY (60) DAYS AFTER SUCH TERMINATION;

(XVII)       EXCEPT AS EXPRESSLY PERMITTED PURSUANT TO THE LOAN DOCUMENTS, IF
BORROWER OR ANY OTHER PERSON GRANTS ANY EASEMENT, COVENANT OR RESTRICTION (OTHER
THAN THE PERMITTED ENCUMBRANCES) OVER THE PROPERTY;

(XVIII)     IF BORROWER SHALL DEFAULT BEYOND THE EXPIRATION OF ANY APPLICABLE
CURE PERIOD UNDER ANY EXISTING EASEMENT, COVENANT OR RESTRICTION WHICH AFFECTS
THE PROPERTY, THE DEFAULT OF WHICH WOULD REASONABLY BE EXPECTED TO HAVE OR DOES
HAVE A MATERIAL ADVERSE EFFECT;

(XIX)         IF ONE OR MORE JUDGMENTS OR DECREES SHALL BE ENTERED AGAINST
BORROWER INVOLVING IN THE AGGREGATE A LIABILITY IN EXCESS OF $1,500,000 AND
SHALL NOT HAVE BEEN PAID, VACATED OR BONDED AND STAYED WITHIN THIRTY (30) DAYS
AFTER BORROWER IS SERVED WITH SUCH JUDGMENT;

 

120

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

 

 

(XX)           IF BORROWER SHALL CONTINUE TO BE IN DEFAULT UNDER ANY OF THE
OTHER TERMS, COVENANTS OR CONDITIONS OF THIS AGREEMENT OR OF ANY LOAN DOCUMENT
NOT SPECIFIED IN SUB‑PARAGRAPHS (I) TO (XIX)  ABOVE, FOR THIRTY (30) DAYS AFTER
NOTICE FROM LENDER; PROVIDED, HOWEVER, THAT IF SUCH DEFAULT IS SUSCEPTIBLE OF
CURE BUT CANNOT REASONABLY BE CURED WITHIN SUCH THIRTY (30) DAY PERIOD AND
PROVIDED, FURTHER, THAT BORROWER SHALL HAVE COMMENCED TO CURE SUCH DEFAULT
WITHIN SUCH THIRTY (30) DAY PERIOD AND THEREAFTER DILIGENTLY PROCEEDS TO CURE
THE SAME, SUCH THIRTY (30) DAY PERIOD SHALL BE EXTENDED FOR SUCH TIME AS IS
REASONABLY NECESSARY FOR BORROWER IN THE EXERCISE OF DUE DILIGENCE TO CURE SUCH
DEFAULT, SUCH ADDITIONAL PERIOD NOT TO EXCEED NINETY (90) DAYS.  NOTWITHSTANDING
THE FOREGOING SENTENCE, THE CURE PERIOD PROVIDED HEREUNDER MAY BE EXTENDED FOR
ONE ADDITIONAL NINETY (90) DAY PERIOD IF AND ONLY IF (A) SUCH DEFAULT INVOLVES
BREACH OF A COVENANT (AS DISTINCT FROM A REPRESENTATION) AND CURE OF SUCH
DEFAULT WOULD REQUIRE PHYSICAL CONSTRUCTION OR REMEDIAL WORK, AND (B) SUCH CURE
CANNOT WITH DILIGENCE BE COMPLETED WITHIN THE INITIAL NINETY (90) DAY PERIOD
(BUT CAN WITH DILIGENCE BE COMPLETED WITHIN AN ADDITIONAL NINETY (90) DAY
PERIOD).  BORROWER SHALL PROVIDE LENDER WITH AN ADDITIONAL WRITTEN REPORT AND
EVIDENCE OF THE PROGRESS OF BORROWER’S CURE EFFORTS SIXTY (60) DAYS AFTER THE
COMMENCEMENT OF SUCH ADDITIONAL NINETY (90) DAY CURE PERIOD; OR 

(XXI)         IF GUARANTOR BREACHES THE NET WORTH REQUIREMENT (AS DEFINED IN THE
GUARANTY) INCLUDED IN THE GUARANTY.

13.1.2    UNLESS WAIVED IN WRITING BY LENDER, UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT (OTHER THAN AN EVENT OF DEFAULT DESCRIBED IN
SECTION 13.1(A)(VI)  OR SECTION 13.1(A)(VII)  ABOVE AND FOLLOWING THE EXPIRATION
OF ANY APPLICABLE CURE PERIODS OR GRACE PERIODS), LENDER MAY, WITHOUT NOTICE OR
DEMAND (EXCEPT AS REQUIRED IN SECTION 13.1(A)  ABOVE), 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 AS LENDER DEEMS ADVISABLE TO
PROTECT AND ENFORCE ITS RIGHTS AGAINST BORROWER AND IN THE PROPERTY, INCLUDING,
WITHOUT LIMITATION, (A) DECLARING IMMEDIATELY DUE AND PAYABLE THE ENTIRE
PRINCIPAL AMOUNT TOGETHER WITH INTEREST THEREON AND ALL OTHER SUMS DUE BY
BORROWER UNDER THE LOAN DOCUMENTS, (B) COLLECTING INTEREST ON THE PRINCIPAL
AMOUNT AT THE DEFAULT RATE WHETHER OR NOT LENDER ELECTS TO ACCELERATE THE NOTE
AND (C) ENFORCING OR AVAILING ITSELF OF ANY OR ALL RIGHTS OR REMEDIES SET FORTH
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 13.1(A)(VI)  OR SECTION 13.1(A)(VII) 
ABOVE, THE INDEBTEDNESS 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.  THE FOREGOING PROVISIONS SHALL NOT BE
CONSTRUED AS A WAIVER BY LENDER OF ITS RIGHT TO PURSUE ANY OTHER REMEDIES
AVAILABLE TO IT UNDER THIS AGREEMENT, THE MORTGAGE OR ANY OTHER LOAN DOCUMENT. 
ANY PAYMENT HEREUNDER MAY BE ENFORCED AND RECOVERED IN WHOLE OR IN PART AT SUCH
TIME BY ONE OR MORE OF THE REMEDIES PROVIDED TO LENDER IN THE LOAN DOCUMENTS.

 

121

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

 

 

SECTION 13.2  REMEDIES.  (A) UNLESS WAIVED IN WRITING BY LENDER, UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, AND FOLLOWING THE
EXPIRATION OF ANY APPLICABLE CURE PERIODS OR GRACE PERIODS, 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 INDEBTEDNESS SHALL BE DECLARED DUE AND PAYABLE, AND WHETHER OR NOT
LENDER SHALL HAVE COMMENCED ANY FORECLOSURE PROCEEDING OR OTHER ACTION FOR THE
ENFORCEMENT OF ITS RIGHTS AND REMEDIES UNDER ANY OF THE LOAN DOCUMENTS WITH
RESPECT TO THE PROPERTY.  ANY SUCH ACTIONS TAKEN BY LENDER SHALL BE CUMULATIVE
AND CONCURRENT AND MAY BE PURSUED INDEPENDENTLY, SINGLY, SUCCESSIVELY, TOGETHER
OR OTHERWISE, AT SUCH TIME AND IN SUCH ORDER AS LENDER MAY DETERMINE IN ITS SOLE
DISCRETION, TO THE FULLEST EXTENT PERMITTED BY LAW, WITHOUT IMPAIRING OR
OTHERWISE AFFECTING THE OTHER RIGHTS AND REMEDIES OF LENDER PERMITTED BY LAW,
EQUITY OR CONTRACT OR AS SET FORTH HEREIN OR IN THE OTHER LOAN DOCUMENTS. 
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BORROWER AGREES THAT IF AN
EVENT OF DEFAULT IS CONTINUING (I) LENDER SHALL NOT BE SUBJECT TO ANY ONE ACTION
OR ELECTION OF REMEDIES LAW OR RULE, AND (II) ALL LIENS AND OTHER RIGHTS,
REMEDIES OR PRIVILEGES PROVIDED TO LENDER SHALL REMAIN IN FULL FORCE AND EFFECT
UNTIL LENDER HAS EXHAUSTED ALL OF ITS REMEDIES AGAINST THE PROPERTY AND THE
MORTGAGE HAS BEEN FORECLOSED, SOLD AND/OR OTHERWISE REALIZED UPON IN
SATISFACTION OF THE INDEBTEDNESS OR THE INDEBTEDNESS HAS BEEN PAID IN FULL.

(B)                UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, WITH RESPECT TO THE ACCOUNT COLLATERAL, LENDER MAY, IN LENDER’S SOLE
DISCRETION:

(I)                 WITHOUT NOTICE TO BORROWER, EXCEPT AS REQUIRED BY LAW, AND
AT ANY TIME OR FROM TIME TO TIME, CHARGE, SET-OFF AND OTHERWISE APPLY ALL OR ANY
PART OF THE ACCOUNT COLLATERAL AGAINST THE OBLIGATIONS, OPERATING EXPENSES
AND/OR CAPITAL EXPENDITURES FOR THE PROPERTY OR ANY PART THEREOF;

(II)               AT ANY TIME AND FROM TIME TO TIME, EXERCISE ANY AND ALL
RIGHTS AND REMEDIES AVAILABLE TO IT UNDER THIS AGREEMENT, AND/OR AS A SECURED
PARTY UNDER THE UCC;

(III)             DEMAND, COLLECT, TAKE POSSESSION OF OR RECEIPT FOR, SETTLE,
COMPROMISE, ADJUST, SUE FOR, FORECLOSE OR REALIZE UPON THE ACCOUNT COLLATERAL
(OR ANY PORTION THEREOF); AND

(IV)             TAKE ALL OTHER ACTIONS PROVIDED IN, OR CONTEMPLATED BY, THIS
AGREEMENT.

(C)               WITH RESPECT TO BORROWER, THE ACCOUNT COLLATERAL AND THE
PROPERTY, NOTHING CONTAINED HEREIN OR IN ANY OTHER LOAN DOCUMENT SHALL BE
CONSTRUED AS REQUIRING LENDER TO RESORT TO THE PROPERTY FOR THE SATISFACTION OF
ANY OF THE INDEBTEDNESS, AND LENDER MAY SEEK SATISFACTION OUT OF THE PROPERTY OR
ANY PART THEREOF, IN ITS ABSOLUTE DISCRETION IN RESPECT OF THE INDEBTEDNESS.  IN
ADDITION, LENDER SHALL HAVE THE RIGHT FROM TIME TO TIME TO PARTIALLY FORECLOSE
THIS AGREEMENT AND THE MORTGAGE IN ANY MANNER AND FOR ANY AMOUNTS SECURED BY
THIS AGREEMENT OR THE MORTGAGE THEN DUE AND PAYABLE AS DETERMINED BY LENDER IN
ITS SOLE DISCRETION INCLUDING, WITHOUT LIMITATION, THE FOLLOWING CIRCUMSTANCES: 
(I) IN THE EVENT BORROWER DEFAULTS BEYOND ANY APPLICABLE CURE OR GRACE PERIOD IN
THE PAYMENT OF ONE OR MORE SCHEDULED PAYMENTS

122

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

 

 

OF PRINCIPAL OR INTEREST, LENDER MAY FORECLOSE THIS AGREEMENT AND THE MORTGAGE
TO RECOVER SUCH DELINQUENT PAYMENTS; OR (II) IN THE EVENT LENDER ELECTS TO
ACCELERATE LESS THAN THE ENTIRE PRINCIPAL AMOUNT, LENDER MAY FORECLOSE THIS
AGREEMENT AND THE MORTGAGE TO RECOVER SO MUCH OF THE PRINCIPAL AMOUNT AS LENDER
MAY ACCELERATE AND SUCH OTHER SUMS SECURED BY THIS AGREEMENT OR THE MORTGAGE AS
LENDER MAY ELECT.  NOTWITHSTANDING ONE OR MORE PARTIAL FORECLOSURES, THE
PROPERTY SHALL REMAIN SUBJECT TO THIS AGREEMENT AND THE MORTGAGE TO SECURE
PAYMENT OF SUMS SECURED BY THIS AGREEMENT AND THE MORTGAGE AND NOT PREVIOUSLY
RECOVERED.

SECTION 13.3  REMEDIES CUMULATIVE; WAIVERS.  THE RIGHTS, POWERS AND REMEDIES OF
LENDER UNDER THIS AGREEMENT AND THE MORTGAGE SHALL BE CUMULATIVE AND NOT
EXCLUSIVE OF ANY OTHER RIGHT, POWER OR REMEDY WHICH LENDER MAY HAVE AGAINST
BORROWER PURSUANT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR EXISTING AT
LAW OR IN EQUITY OR OTHERWISE.  LENDER’S RIGHTS, POWERS AND REMEDIES MAY BE
PURSUED SINGLY, CONCURRENTLY OR OTHERWISE, AT SUCH TIME AND IN SUCH ORDER AS
LENDER MAY DETERMINE IN LENDER’S SOLE DISCRETION.  NO DELAY OR OMISSION TO
EXERCISE ANY REMEDY, RIGHT OR POWER ACCRUING UPON AN EVENT OF DEFAULT SHALL
IMPAIR ANY SUCH REMEDY, RIGHT OR POWER OR SHALL BE CONSTRUED AS A WAIVER
THEREOF, BUT ANY SUCH REMEDY, RIGHT OR POWER MAY BE EXERCISED FROM TIME TO TIME
AND AS OFTEN AS MAY BE DEEMED EXPEDIENT.  A WAIVER OF ONE DEFAULT OR EVENT OF
DEFAULT WITH RESPECT TO 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 13.4  COSTS OF COLLECTION.  IN THE EVENT THAT AFTER AN EVENT OF DEFAULT
AND DURING THE CONTINUANCE THEREOF:  (A) THE NOTE OR ANY OF THE LOAN DOCUMENTS
IS PLACED IN THE HANDS OF AN ATTORNEY FOR COLLECTION OR ENFORCEMENT OR IS
COLLECTED OR ENFORCED THROUGH ANY LEGAL PROCEEDING; (B) AN ATTORNEY IS RETAINED
TO REPRESENT LENDER IN ANY BANKRUPTCY, REORGANIZATION, RECEIVERSHIP, OR OTHER
PROCEEDINGS AFFECTING CREDITORS’ RIGHTS AND INVOLVING A CLAIM UNDER THE NOTE OR
ANY OF THE LOAN DOCUMENTS; OR (C) AN ATTORNEY IS RETAINED TO PROTECT OR ENFORCE
THE LIEN OR ANY OF THE TERMS OF THIS AGREEMENT, THE MORTGAGE OR ANY OF THE LOAN
DOCUMENTS, THEN, IN ANY SUCH INSTANCE, BORROWER SHALL PAY TO LENDER ALL
REASONABLE ATTORNEYS’ FEES, COSTS AND EXPENSES ACTUALLY INCURRED IN CONNECTION
THEREWITH, INCLUDING COSTS OF APPEAL, TOGETHER WITH INTEREST ON ANY JUDGMENT
OBTAINED BY LENDER AT THE DEFAULT RATE.

 

123

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

 

 

ARTICLE XIV

SPECIAL PROVISIONS

SECTION 14.1        EXCULPATION. 

14.1.1  EXCULPATED PARTIES.  NO PERSONAL LIABILITY SHALL BE ASSERTED, SOUGHT OR
OBTAINED BY LENDER OR ENFORCEABLE AGAINST (A) BORROWER (EXCEPT AS SET FORTH IN
THIS SECTION 14.1), (B) MANAGER, (C) ANY AFFILIATE OF BORROWER, (D) ANY PERSON
OWNING, DIRECTLY OR INDIRECTLY, ANY LEGAL OR BENEFICIAL INTEREST IN BORROWER,
MANAGER OR ANY AFFILIATE OF BORROWER, OR (E) ANY DIRECT OR INDIRECT PARTNER,
MEMBER, PRINCIPAL, OFFICER, CONTROLLING PERSON, BENEFICIARY, TRUSTEE, ADVISOR,
SHAREHOLDER, EMPLOYEE, AGENT, AFFILIATE OR DIRECTOR OF ANY PERSONS DESCRIBED IN
CLAUSES (A)  THROUGH (E)  ABOVE (COLLECTIVELY, THE “EXCULPATED PARTIES”) AND
NONE OF THE EXCULPATED PARTIES SHALL HAVE ANY PERSONAL LIABILITY (WHETHER BY
SUIT DEFICIENCY JUDGMENT OR OTHERWISE) IN RESPECT OF THE OBLIGATIONS, THIS
AGREEMENT, THE MORTGAGE, THE NOTE, THE PROPERTY OR ANY OTHER LOAN DOCUMENT OR
OTHERWISE IN CONNECTION WITH THE LOAN, OR THE MAKING, ISSUANCE OR TRANSFER
THEREOF, ALL SUCH LIABILITY, IF ANY, BEING EXPRESSLY WAIVED BY LENDER.  THE
FOREGOING LIMITATION SHALL NOT IN ANY WAY LIMIT OR AFFECT LENDER’S RIGHT TO ANY
OF THE FOLLOWING AND LENDER SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF THE
FOLLOWING:

(I)                 ANY RIGHT OF LENDER TO FORECLOSE THE LIEN OF THIS AGREEMENT
AND THE MORTGAGE IN ACCORDANCE WITH THE TERMS AND PROVISIONS SET FORTH HEREIN
AND IN THE MORTGAGE;

(II)               ANY RIGHT OF LENDER TO TAKE ANY OTHER ACTION AGAINST ANY
OTHER SECURITY AT ANY TIME GIVEN TO SECURE THE PAYMENT OF THE NOTE AND THE OTHER
OBLIGATIONS;

(III)             ANY RIGHT OF LENDER TO EXERCISE ANY OTHER REMEDY SET FORTH IN
THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT WHICH IS NOT INCONSISTENT WITH THE
TERMS OF THIS SECTION 14.1; 

(IV)             ANY RIGHT WHICH LENDER MAY HAVE UNDER SECTIONS 506(A), 506(B),
1111(B) OR ANY OTHER PROVISIONS OF THE BANKRUPTCY CODE TO FILE A CLAIM AGAINST
BORROWER FOR THE FULL AMOUNT OF THE INDEBTEDNESS SECURED BY THIS AGREEMENT AND
MORTGAGE OR TO REQUIRE THAT ALL COLLATERAL SHALL CONTINUE TO SECURE ALL OF THE
INDEBTEDNESS OWING TO LENDER IN ACCORDANCE WITH THE LOAN DOCUMENTS; OR

(V)               THE LIABILITY OF ANY GIVEN EXCULPATED PARTY WITH RESPECT TO
ANY SEPARATE WRITTEN GUARANTY OR AGREEMENT GIVEN BY ANY SUCH EXCULPATED PARTY IN
CONNECTION WITH THE LOAN (INCLUDING, WITHOUT LIMITATION, THE GUARANTY).

14.1.2  CARVEOUTS FROM NON‑RECOURSE LIMITATIONS.  NOTWITHSTANDING THE FOREGOING
OR ANYTHING IN THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS TO THE CONTRARY,
THERE SHALL AT NO TIME BE ANY LIMITATION ON BORROWER’S LIABILITY FOR THE PAYMENT
OF LOSSES INCURRED BY LENDER, AND ARISING FROM:

 

124

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

 

 

(A)                THE FRAUDULENT ACTS OR WILLFUL MISCONDUCT OF ANY BORROWER
RELATED PARTY IN CONNECTION WITH THE LOAN;

(B)               THE MISAPPROPRIATION OF PROCEEDS WHICH ANY BORROWER RELATED
PARTY HAS RECEIVED (IT BEING AGREED THAT NO BORROWER RELATED PARTY SHALL BE
DEEMED TO HAVE MISAPPLIED PROCEEDS UNLESS SAME ARE RECEIVED BY SUCH BORROWER
RELATED PARTY AND NOT PAID TO LENDER, IN A CIRCUMSTANCE IN WHICH LENDER IS
EXPRESSLY ENTITLED TO RECEIVE SAME PURSUANT TO THE TERMS OF THIS AGREEMENT OR
ANY OF THE LOAN DOCUMENTS TO BE APPLIED TOWARD PAYMENT OF THE INDEBTEDNESS, OR
USED FOR THE REPAIR OR REPLACEMENT OF THE PROPERTY IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT);

(C)                THE MISAPPROPRIATION OF RENTS, SECURITY DEPOSITS AND OTHER
PROPERTY REVENUE BY ANY BORROWER RELATED PARTY (PROVIDED, HOWEVER, THAT NO
BORROWER RELATED PARTY SHALL BE LIABLE FOR THE MISAPPROPRIATION OF ANY RENTS OR
OTHER ITEMS THAT ARE SENT TO THE COLLECTION ACCOUNT OR PAID DIRECTLY TO LENDER
PURSUANT TO ANY NOTICE OF DIRECTION DELIVERED TO ANY TENANT);

(D)               ANY INTENTIONAL MISREPRESENTATION OF ANY BORROWER RELATED
PARTY UNDER THE LOAN DOCUMENTS;

(E)                FAILURE TO DELIVER TO LENDER ANY SECURITY DEPOSITS, ADVANCE
DEPOSITS OR ANY OTHER DEPOSITS COLLECTED WITH RESPECT TO THE PROPERTY UPON A
FORECLOSURE OF THE PROPERTY OR ACTION IN LIEU THEREOF, EXCEPT TO THE EXTENT ANY
SUCH SECURITY DEPOSITS WERE APPLIED IN ACCORDANCE WITH THE TERMS AND CONDITIONS
OF ANY OF THE LEASES;

(F)                ALL OR ANY PART OF THE PROPERTY OR THE ACCOUNT COLLATERAL
BEING ENCUMBERED BY A LIEN VOLUNTARILY GRANTED BY BORROWER (OTHER THAN THIS
AGREEMENT, THE MORTGAGE AND THE OTHER LOAN DOCUMENTS OR PERMITTED ENCUMBRANCES)
IN VIOLATION OF THE LOAN DOCUMENTS;

(G)               AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, THE REMOVAL OR DISPOSAL BY ANY BORROWER RELATED PARTY OF ANY PORTION OF
THE PROPERTY IN A MANNER PROHIBITED BY THE LOAN DOCUMENTS;

(H)               ANY PHYSICAL DAMAGE TO THE PROPERTY FROM INTENTIONAL WASTE
COMMITTED BY ANY BORROWER RELATED PARTY (BUT EXCLUDING ANY MATTER THAT ARISES BY
REASON OF LACK OF CASH FLOW WITH RESPECT TO THE PROPERTY, EXCEPT TO THE EXTENT
THAT SUCH LACK OF CASH FLOW ARISES FROM THE MISAPPROPRIATION OF REVENUE WITH
RESPECT TO THE PROPERTY);

(I)                 THE FAILURE TO PROCURE AN INTEREST RATE PROTECTION AGREEMENT
IN ACCORDANCE WITH SECTION 5.1.25 HEREOF; OR

(J)                 THE FAILURE TO PAY FOR ITEMS WHICH RESULT IN LIENS ON THE
PROPERTY (UNLESS DUE TO LACK OF CASH FLOW FROM THE PROPERTY, EXCEPT TO THE
EXTENT THAT SUCH LACK OF CASH FLOW ARISES FROM THE MISAPPROPRIATION OF REVENUE
WITH RESPECT TO THE PROPERTY).

The term “Losses” means any and all actual losses, damages, costs, expenses,
liabilities, claims or other obligations reasonably incurred by Lender
(including reasonable attorneys’ fees and disbursements).

125

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

 

 

Notwithstanding anything to the contrary in this Agreement, the Note or any of
the Loan Documents, (1) Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Indebtedness or to require that all Collateral shall continue to secure all of
the Indebtedness owing to Lender in accordance with the Loan Documents, and
(2) the Indebtedness shall be fully recourse to Borrower in the event that: 
(A) Borrower shall incur, assume or create any Debt for borrowed money in
violation of the Loan Documents; (B) Borrower voluntarily Transfers all or
substantially all of the Property, or there is a Transfer of any direct or
indirect interests in Borrower, other than in  accordance the terms of Article
VIII hereof; (C) Borrower shall fail to comply with any of the Single Purpose
Entity requirements set forth in Section 5.1.4 of this Agreement if such failure
leads to a substantive consolidation of the assets of Borrower with the assets
of another Person; (D) Borrower files a voluntary petition under the Bankruptcy
Code or any other Federal or state bankruptcy or insolvency law; (E) an
Affiliate, officer, trustee, director, or representative which controls,
directly or indirectly, Borrower or Guarantor joins in the filing of, an
involuntary petition against Borrower under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, or solicits or causes to be
solicited petitioning creditors for any involuntary petition against Borrower or
from any Person; or (F) there is the filing of an involuntary petition against
Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law, in which Borrower colludes with, or otherwise assists such
Person, or solicits or causes to be solicited petitioning creditors for any
involuntary petition against Borrower from any Person.

ARTICLE XV

MISCELLANEOUS

SECTION 15.1  SURVIVAL.  THIS AGREEMENT AND ALL COVENANTS, INDEMNIFICATIONS,
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 INDEBTEDNESS 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 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 SUCCESSORS AND ASSIGNS OF
LENDER.  IF BORROWER CONSISTS OF MORE THAN ONE PERSON, THE OBLIGATIONS AND
LIABILITIES OF EACH SUCH PERSON HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS
SHALL BE JOINT AND SEVERAL.

SECTION 15.2  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 BE (EXCEPT AS IS OTHERWISE SPECIFICALLY HEREIN PROVIDED) IN
THE SOLE DISCRETION OF LENDER AND FINAL AND CONCLUSIVE.

SECTION 15.3  GOVERNING LAW.  (A)  THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF
NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE

126

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

 

 

UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA.  TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND LENDER EACH
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK PURSUANT TO SECTION 5‑1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.

(B)                ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO
SECTION 5‑1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER AND LENDER
EACH WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
AND LENDER EACH HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT
IN ANY SUIT, ACTION OR PROCEEDING.  BORROWER DOES HEREBY DESIGNATE AND APPOINT:

The Corporation Trust Company
111 Eighth Avenue
13th Floor
New York, New York 10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK.  BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
(II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE
SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND
(III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES
TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.

127

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

 

 

SECTION 15.4  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, OR CONSENT TO ANY DEPARTURE
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 15.5  DELAY NOT A WAIVER.  NEITHER ANY FAILURE NOR ANY DELAY ON THE PART
OF LENDER IN INSISTING UPON STRICT PERFORMANCE OF ANY TERM, CONDITION, COVENANT
OR AGREEMENT, OR EXERCISING ANY RIGHT, POWER, REMEDY OR PRIVILEGE HEREUNDER, OR
UNDER 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.

SECTION 15.6  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) EXPEDITED PREPAID DELIVERY SERVICE, EITHER COMMERCIAL OR UNITED STATES
POSTAL SERVICE, WITH PROOF OF ATTEMPTED DELIVERY, OR (B) TELECOPIER (WITH ANSWER
BACK ACKNOWLEDGED), ADDRESSED AS FOLLOWS (OR AT SUCH OTHER ADDRESS AND PERSON AS
SHALL BE DESIGNATED FROM TIME TO TIME BY ANY PARTY HERETO, AS THE CASE MAY BE,
IN A WRITTEN NOTICE TO THE OTHER PARTIES HERETO IN THE MANNER PROVIDED FOR IN
THIS SECTION 15.6): 

If to Lender:

Bank of China, New York Branch
410 Madison Avenue
New York, New York 10017
Attention:  Raymond Qiao
Facsimile No. (212) 688-0919

With a copy to:

DLA Piper LLP (US)
1251 Avenue of the Americas
New York, New York 10020
Attention:  Scott A. Weinberg, Esq.
Facsimile No.: (917) 778-8680

If to Borrower:

Rego II Borrower LLC

128

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

 

 

c/o Alexander’s, Inc.
210 Route 4 East
Paramus, New Jersey 07652
Attention:  Chief Financial Officer
Facsimile No.:  (201) 843-2198

With a copy to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York  10106
Attention: Executive Vice President - Capital Markets
Facsimile No.:  (212) 894-7073

With a copy to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York  10106

Attention:  Corporation Counsel

Facsimile No.: (212) 894-7996

With a copy to:

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Attention:  Arthur Adler, Esq.
Facsimile No.:  (212) 291-9001

All notices, elections, requests and demands under this Agreement shall be
effective and deemed received upon the earliest of (i) the actual receipt of the
same by personal delivery or otherwise, (ii) one (1) Business Day after being
deposited with a nationally recognized overnight courier service as required
above if the same is to be delivered in the United States and two (2) Business
Days after being deposited with a nationally recognized overnight courier
service as required above if the same is to be delivered outside of the United
States, provided, such courier is instructed to deliver the notice within
one (1) or two (2) Business Days, as applicable, or (iii)  on the day sent if
sent by facsimile with confirmation on or before 5:00 p.m. (New York time) on
any Business Day or on the next Business Day if so transmitted after 5:00 p.m.
(New York time) or on any day other than a Business Day.  Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given as herein required shall be deemed to be receipt of
the notice, election, request or demand sent.  Notices on behalf of Lender or
Borrower may be sent by their respective counsel, as shown above.

129

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

 

 

 

SECTION 15.7  TRIAL BY JURY.  BORROWER AND LENDER EACH, AND ALL PERSONS CLAIMING
BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT, THE MORTGAGE, THE NOTE OR ANY
OTHER LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE
MODIFICATION THEREOF, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS
AGREEMENT, THE MORTGAGE, THE NOTE OR ANY OTHER LOAN DOCUMENT (AS NOW OR
HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND BORROWER AND LENDER EACH HEREBY AGREES AND CONSENTS THAT AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY
JURY.  BORROWER AND LENDER EACH ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL
COUNSEL REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER
IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE LOAN.  THIS WAIVER SHALL
SURVIVE THE REPAYMENT OF THE LOAN.

SECTION 15.8  HEADINGS.  THE ARTICLE AND/OR SECTION HEADINGS AND THE TABLE OF
CONTENTS IN THIS AGREEMENT ARE INCLUDED HEREIN FOR CONVENIENCE OF REFERENCE ONLY
AND SHALL NOT CONSTITUTE A PART OF THIS AGREEMENT FOR ANY OTHER PURPOSE.

SECTION 15.9  SEVERABILITY.  WHEREVER POSSIBLE, EACH PROVISION OF THIS AGREEMENT
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT SHALL BE PROHIBITED BY OR
INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT
OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH
PROVISION OR THE REMAINING PROVISIONS OF THIS AGREEMENT.

SECTION 15.10  PREFERENCES.  TO THE EXTENT BORROWER MAKES A PAYMENT OR PAYMENTS
TO LENDER, WHICH PAYMENT OR PROCEEDS OR ANY PART THEREOF ARE SUBSEQUENTLY
INVALIDATED, DECLARED TO BE FRAUDULENT OR PREFERENTIAL, SET ASIDE OR REQUIRED TO
BE REPAID TO A TRUSTEE, RECEIVER OR ANY OTHER PARTY UNDER ANY BANKRUPTCY LAW,
STATE OR FEDERAL LAW, COMMON LAW OR EQUITABLE CAUSE, THEN, TO THE EXTENT OF SUCH
PAYMENT OR PROCEEDS RECEIVED, THE OBLIGATIONS HEREUNDER OR PART THEREOF INTENDED
TO BE SATISFIED SHALL BE REVIVED AND CONTINUE IN FULL FORCE AND EFFECT, AS IF
SUCH PAYMENT OR PROCEEDS HAD NOT BEEN RECEIVED BY LENDER.

130

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

 

 

 

SECTION 15.11  WAIVER OF NOTICE.  BORROWER SHALL NOT BE ENTITLED TO ANY NOTICES
OF ANY NATURE WHATSOEVER FROM LENDER EXCEPT WITH RESPECT TO MATTERS FOR WHICH
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SPECIFICALLY AND EXPRESSLY PROVIDE
FOR THE GIVING OF NOTICE BY LENDER TO BORROWER AND EXCEPT WITH RESPECT TO
MATTERS FOR WHICH BORROWER IS NOT, PURSUANT TO APPLICABLE LEGAL REQUIREMENTS,
PERMITTED TO WAIVE THE GIVING OF NOTICE.  BORROWER HEREBY EXPRESSLY WAIVES THE
RIGHT TO RECEIVE ANY NOTICE FROM LENDER WITH RESPECT TO ANY MATTER FOR WHICH
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS DO NOT SPECIFICALLY AND EXPRESSLY
PROVIDE FOR THE GIVING OF NOTICE BY LENDER TO BORROWER.

SECTION 15.12  EXPENSES; INDEMNITY.  (A) EXCEPT AS OTHERWISE SET FORTH HEREIN OR
IN ANY OTHER LOAN DOCUMENT, 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 THIRD-PARTY COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS’ FEES AND DISBURSEMENTS) INCURRED BY LENDER IN CONNECTION WITH: 
(I) 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 OF COUNSEL
REQUIRED TO BE DELIVERED ON THE DATE HEREOF OR REQUIRED TO BE DELIVERED AT
BORROWER’S EXPENSE PURSUANT TO THIS AGREEMENT (IF ANY); (II) LENDER’S ONGOING
PERFORMANCE OF 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; (III) THE NEGOTIATION, PREPARATION,
EXECUTION, DELIVERY AND ADMINISTRATION OF ANY AMENDMENTS, WAIVERS OR OTHER
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REQUESTED BY LENDER
AND ANY OTHER DOCUMENTS OR MATTERS AS REASONABLY REQUIRED HEREIN OR UNDER THE
OTHER LOAN DOCUMENTS RELATING TO SUCH AMENDMENTS, WAIVERS, AND/OR OTHER
MODIFICATIONS; (IV) SECURING BORROWER’S COMPLIANCE WITH ANY REQUESTS MADE
PURSUANT TO THE PROVISIONS OF THIS AGREEMENT; (V) THE FILING AND RECORDING FEES
AND EXPENSES, MORTGAGE RECORDING TAXES, 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; (VI) 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 ANY AND ALL ACTIONS
THAT MAY BE TAKEN BY LENDER CONNECTION WITH THE ENFORCEMENT OF THE PROVISIONS OF
THE LOAN DOCUMENTS BY REASON OF BORROWER’S DEFAULT THEREUNDER, WHETHER OR NOT
SUIT IS FILED IN CONNECTION WITH THE SAME, OR IN CONNECTION WITH BORROWER, OR
GUARANTOR BECOMING PARTY TO A VOLUNTARY OR INVOLUNTARY FEDERAL OR STATE
BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDING; (VII) 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; AND (VIII) PROCURING INSURANCE POLICIES PURSUANT TO SECTION 6.1;
 PROVIDED, HOWEVER, THAT BORROWER SHALL NOT BE LIABLE FOR THE PAYMENT OF ANY
SUCH COSTS AND EXPENSES TO THE EXTENT THE SAME ARISE (A) BY REASON OF THE GROSS
NEGLIGENCE, ILLEGAL ACTS, FRAUD OR WILLFUL MISCONDUCT OF LENDER, (B) IN ANY
OTHER INSTANCE HEREIN OR IN ANY OTHER LOAN DOCUMENT THAT PROVIDES THAT THE
MATTER IN QUESTION IS TO BE “AT LENDER’S EXPENSE” OR “AT NO COST TO BORROWER” OR
WORDS OF SIMILAR IMPORT, (C) IN CONNECTION WITH A SECURITIZATION, OR ANY OTHER
TRANSFER OF ALL OR A PORTION OF THE LOAN, OR ANY BENEFICIAL INTEREST THEREIN, BY
LENDER IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE XI OR OTHERWISE, OR (D) IN

131

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

 

 

CONNECTION WITH THE EXECUTION OF ANY NOTE TO REPLACE LOST, DESTROYED OR
MUTILATED NOTES.  FROM, AFTER AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
ANY COST AND EXPENSES DUE AND PAYABLE TO LENDER IN ACCORDANCE WITH THE LOAN
DOCUMENTS MAY BE PAID FROM ANY AMOUNTS IN THE COLLECTION ACCOUNT AND/OR THE
DEPOSIT ACCOUNT.

(B)               SUBJECT TO THE NONRECOURSE PROVISIONS OF SECTION 14.1, EXCEPT
TO THE EXTENT CAUSED BY THE ACTUAL WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE
INDEMNIFIED PARTIES, BORROWER SHALL PROTECT, INDEMNIFY AND SAVE HARMLESS LENDER
AND ALL OFFICERS, TRUSTEES, DIRECTORS, STOCKHOLDERS, MEMBERS, PARTNERS,
EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS THEREOF (COLLECTIVELY, THE
“INDEMNIFIED PARTIES”) FROM AND AGAINST ALL LIABILITIES, OBLIGATIONS, CLAIMS,
DAMAGES, PENALTIES, CAUSES OF ACTION, COSTS AND EXPENSES (INCLUDING ALL
REASONABLE OUT-OF-POCKET ATTORNEYS’ FEES AND EXPENSES ACTUALLY INCURRED) IMPOSED
UPON OR INCURRED BY OR ASSERTED AGAINST THE INDEMNIFIED PARTIES OR THE PROPERTY
OR ANY PART OF ITS INTEREST THEREIN, INCLUDING, WITHOUT LIMITATION, ANY LOSS OR
EXPENSE ON ACCOUNT OF AMOUNTS BORROWED, CONTRACTED FOR OR UTILIZED TO PAY ANY
AMOUNT PAYABLE UNDER ANY LOAN DOCUMENT OR THE LOAN (OR ANY PART THEREOF), BY
REASON OF THE OCCURRENCE OR EXISTENCE OF ANY OF THE FOLLOWING (TO THE EXTENT
PROCEEDS PAYABLE ON ACCOUNT OF THE FOLLOWING SHALL BE INADEQUATE; IT BEING
UNDERSTOOD THAT IN NO EVENT WILL THE INDEMNIFIED PARTIES BE REQUIRED TO ACTUALLY
PAY OR INCUR ANY COSTS OR EXPENSES AS A CONDITION TO THE EFFECTIVENESS OF THE
FOREGOING INDEMNITY) PRIOR TO (I) THE ACCEPTANCE BY LENDER OR ITS DESIGNEES OF A
DEED IN LIEU OF FORECLOSURE WITH RESPECT TO THE PROPERTY, (II) AN INDEMNIFIED
PARTY OR ITS DESIGNEE TAKING POSSESSION OR CONTROL OF THE PROPERTY, OR (III) THE
FORECLOSURE OF THE MORTGAGE:  (A) OWNERSHIP OF BORROWER’S INTEREST IN THE
PROPERTY, OR ANY INTEREST THEREIN, OR RECEIPT OF ANY RENTS OR OTHER SUM
THEREFROM, INCLUDING, WITHOUT LIMITATION, ANY DUE DILIGENCE COSTS (INCLUDING,
WITHOUT LIMITATION, COSTS AND EXPENSES INCURRED IN INVESTIGATING ANY DEFAULT OR
EVENT OF DEFAULT THAT LENDER BELIEVES IS A DEFAULT OR EVENT OF DEFAULT); (B) ANY
ACCIDENT, INJURY TO OR DEATH OF ANY PERSONS OR LOSS OF OR DAMAGE TO PROPERTY
OCCURRING ON OR ABOUT THE PROPERTY OR ANY APPURTENANCES THERETO; (C) ANY DESIGN,
CONSTRUCTION, OPERATION, REPAIR, MAINTENANCE, USE, NON‑USE OR CONDITION OF THE
PROPERTY OR APPURTENANCES THERETO, INCLUDING CLAIMS OR PENALTIES ARISING FROM
VIOLATION OF ANY LEGAL REQUIREMENT OR INSURANCE REQUIREMENT, AS WELL AS ANY
CLAIM BASED ON ANY PATENT OR LATENT DEFECT, WHETHER OR NOT DISCOVERABLE BY
LENDER, ANY CLAIM THE INSURANCE AS TO WHICH IS INADEQUATE; (D) ANY DEFAULT UNDER
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY FAILURE ON THE PART OF
BORROWER TO PERFORM OR COMPLY WITH ANY OF THE TERMS OF ANY LEASE WITHIN THE
APPLICABLE NOTICE OR GRACE PERIODS, ANY REPRESENTATION OR WARRANTY MADE IN ANY
LOAN DOCUMENT BEING FALSE OR MISLEADING IN ANY MATERIAL RESPECT AS OF THE DATE
SUCH REPRESENTATION OR WARRANTY WAS MADE AND/OR ANY ACT OR RELIANCE ON ANY
NOTICE THAT LENDER BELIEVES TO BE TRUE, CORRECT AND PROPERLY AUTHORIZED, AND ANY
AND ALL ACTIONS THAT MAY BE TAKEN BY LENDER OR ANY OTHER INDEMNIFIED PARTY IN
CONNECTION WITH THE ENFORCEMENT OF THE PROVISIONS OF THE LOAN DOCUMENTS, WHETHER
OR NOT SUIT IS FILED IN CONNECTION WITH THE SAME, OR IN CONNECTION WITH
BORROWER, GUARANTOR, ANY OTHER GUARANTOR OR INDEMNITOR, AND/OR ANY PARTNER,
JOINT VENTURER, MEMBER OR SHAREHOLDER THEREOF BECOMING PARTY TO A VOLUNTARY OR
INVOLUNTARY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDING;
(E) ANY PERFORMANCE OF ANY LABOR OR SERVICES OR THE FURNISHING OF ANY MATERIALS
OR OTHER PROPERTY IN RESPECT OF THE PROPERTY OR ANY PART THEREOF; (F) ANY
NEGLIGENCE OR TORTIOUS ACT OR OMISSION ON THE PART OF BORROWER OR ANY OF ITS
AGENTS, CONTRACTORS, SERVANTS, EMPLOYEES, SUBLESSEES, LICENSEES OR INVITEES;
(G) ANY CONTEST REFERRED TO IN SECTION 7.3 HEREOF; OR (H) (X) ANY OBLIGATION OR
UNDERTAKING RELATING TO THE PERFORMANCE OR DISCHARGE OF ANY OF THE TERMS,
COVENANTS AND CONDITIONS OF THE LANDLORD CONTAINED IN THE LEASES, (Y) ANY CLAIM
BY BROKERS, FINDERS OR SIMILAR PERSONS CLAIMING TO BE ENTITLED TO A COMMISSION
IN CONNECTION WITH ANY LEASE OR OTHER TRANSACTION INVOLVING THE PROPERTY OR ANY
PART THEREOF UNDER

132

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

 

 

ANY LEGAL REQUIREMENT OR ANY LIABILITY ASSERTED AGAINST LENDER WITH RESPECT
THERETO, AND (Z) THE CLAIMS OF ANY TENANT OF ALL OR ANY PORTION OF THE PROPERTY
OR ANY PERSON ACTING THROUGH OR UNDER ANY TENANT OR OTHERWISE ARISING UNDER OR
AS A CONSEQUENCE OF ANY LEASE.  ANY AMOUNTS THE INDEMNIFIED PARTIES ARE LEGALLY
ENTITLED TO RECEIVE UNDER THIS SECTION 15.12 WHICH ARE NOT PAID WITHIN
FIFTEEN (15) BUSINESS DAYS AFTER WRITTEN DEMAND THEREFOR BY THE INDEMNIFIED
PARTIES OR LENDER, SETTING FORTH IN REASONABLE DETAIL THE AMOUNT OF SUCH DEMAND
AND THE BASIS THEREFOR, SHALL BEAR INTEREST FROM THE DATE OF DEMAND AT THE
DEFAULT RATE, AND SHALL, TOGETHER WITH SUCH INTEREST, BE PART OF THE
INDEBTEDNESS AND SECURED BY THE MORTGAGE.  IN CASE ANY ACTION, SUIT OR
PROCEEDING IS BROUGHT AGAINST THE INDEMNIFIED PARTIES BY REASON OF ANY SUCH
OCCURRENCE, BORROWER SHALL AT BORROWER’S EXPENSE RESIST AND DEFEND SUCH ACTION,
SUIT OR PROCEEDING OR WILL CAUSE THE SAME TO BE RESISTED AND DEFENDED BY COUNSEL
AT BORROWER’S REASONABLE EXPENSE FOR THE INSURER OF THE LIABILITY OR BY COUNSEL
DESIGNATED BY BORROWER (UNLESS REASONABLY DISAPPROVED BY LENDER PROMPTLY AFTER
LENDER HAS BEEN NOTIFIED OF SUCH COUNSEL, IN WHICH CASE BORROWER MAY DESIGNATE
ALTERNATIVE COUNSEL REASONABLY SATISFACTORY TO LENDER); PROVIDED, HOWEVER, THAT
NOTHING HEREIN SHALL COMPROMISE THE RIGHT OF LENDER (OR ANY INDEMNIFIED PARTY)
TO APPOINT ITS OWN COUNSEL AT BORROWER’S EXPENSE FOR ITS DEFENSE WITH RESPECT TO
ANY ACTION WHICH IN ITS REASONABLE OPINION PRESENTS A CONFLICT OR POTENTIAL
CONFLICT BETWEEN LENDER AND BORROWER THAT WOULD MAKE SUCH SEPARATE
REPRESENTATION ADVISABLE; AND, PROVIDED, FURTHER, THAT IF LENDER SHALL HAVE
APPOINTED SEPARATE COUNSEL PURSUANT TO THE FOREGOING, BORROWER SHALL NOT BE
RESPONSIBLE FOR THE EXPENSE OF ADDITIONAL SEPARATE COUNSEL OF ANY INDEMNIFIED
PARTY UNLESS IN THE REASONABLE OPINION OF LENDER A CONFLICT OR POTENTIAL
CONFLICT EXISTS BETWEEN SUCH INDEMNIFIED PARTY AND LENDER.  SO LONG AS BORROWER
IS RESISTING AND DEFENDING SUCH ACTION, SUIT OR PROCEEDING AS PROVIDED ABOVE IN
A PRUDENT AND COMMERCIALLY REASONABLE MANNER, LENDER AND THE INDEMNIFIED PARTIES
SHALL NOT BE ENTITLED TO SETTLE SUCH ACTION, SUIT OR PROCEEDING WITHOUT
BORROWER’S CONSENT WHICH SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED, AND
LENDER AGREES THAT IT WILL NOT SETTLE ANY SUCH ACTION, SUIT OR PROCEEDING
WITHOUT THE CONSENT OF BORROWER; PROVIDED, HOWEVER, THAT IF BORROWER IS NOT
DILIGENTLY DEFENDING SUCH ACTION, SUIT OR PROCEEDING IN A PRUDENT AND
COMMERCIALLY REASONABLE MANNER AS PROVIDED ABOVE, AND LENDER HAS PROVIDED
BORROWER WITH THIRTY (30) DAYS’ PRIOR WRITTEN NOTICE, OR SHORTER PERIOD IF
MANDATED BY THE REQUIREMENTS OF APPLICABLE LAW, AND OPPORTUNITY TO CORRECT SUCH
DETERMINATION, LENDER MAY SETTLE SUCH ACTION, SUIT OR PROCEEDING AS TO THE CLAIM
AGAINST LENDER AND CLAIM THE BENEFIT OF THIS SECTION 15.12 WITH RESPECT TO
SETTLEMENT OF SUCH ACTION, SUIT OR PROCEEDING.  ANY INDEMNIFIED PARTY WILL GIVE
BORROWER PROMPT NOTICE AFTER SUCH INDEMNIFIED PARTY OBTAINS ACTUAL KNOWLEDGE OF
ANY POTENTIAL CLAIM BY SUCH INDEMNIFIED PARTY FOR INDEMNIFICATION HEREUNDER. 
BORROWER SHALL HAVE THE RIGHT TO SETTLE OR COMPROMISE ANY ACTION, PROCEEDING OR
CLAIM AGAINST ANY INDEMNIFIED PARTY SO LONG AS THE SAME DOES NOT INCLUDE ANY
ADMISSION OF WRONGDOING ON THE PART OF SUCH INDEMNIFIED PARTY.

SECTION 15.13  EXHIBITS AND SCHEDULES INCORPORATED.  THE EXHIBITS AND 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 15.14  OFFSETS, COUNTERCLAIMS AND DEFENSES.  BORROWER HEREBY AGREES THAT
DURING THE TERM OF THE LOAN, IT SHALL UNDER NO CIRCUMSTANCES CLAIM, AND HEREBY
WAIVES, ANY RIGHT OF OFFSET, COUNTERCLAIM OR DEFENSE AGAINST LENDER WITH RESPECT
TO THE OBLIGATIONS AND THE INDEBTEDNESS ARISING FROM, DUE TO, RELATED TO OR
CAUSED BY ANY OBLIGATIONS, LIABILITY OR OTHER MATTER OR CIRCUMSTANCE WHICH IS
UNRELATED TO THE LOAN.  IN ADDITION, ANY ASSIGNEE OF LENDER’S INTEREST IN AND TO
THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL TAKE THE SAME FREE
AND CLEAR OF ALL OFFSETS, COUNTERCLAIMS OR DEFENSES WHICH ARE UNRELATED TO SUCH
DOCUMENTS

133

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

 

 

WHICH BORROWER MAY OTHERWISE HAVE AGAINST ANY ASSIGNOR OF SUCH DOCUMENTS, AND NO
SUCH UNRELATED COUNTERCLAIM OR DEFENSE SHALL BE INTERPOSED OR ASSERTED BY
BORROWER IN ANY ACTION OR PROCEEDING BROUGHT BY ANY SUCH ASSIGNEE UPON SUCH
DOCUMENTS AND ANY SUCH RIGHT TO INTERPOSE OR ASSERT ANY SUCH UNRELATED OFFSET,
COUNTERCLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING IS HEREBY EXPRESSLY
WAIVED BY BORROWER.

SECTION 15.15  LIABILITY OF ASSIGNEES OF LENDER.  NO ASSIGNEE OF LENDER SHALL
HAVE ANY PERSONAL LIABILITY, DIRECTLY OR INDIRECTLY, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AMENDMENT OR AMENDMENTS HERETO
MADE AT ANY TIME OR TIMES, HERETOFORE OR HEREAFTER, ANY DIFFERENT THAN THE
LIABILITY OF LENDER HEREUNDER.  IN ADDITION, NO ASSIGNEE SHALL HAVE AT ANY TIME
OR TIMES HEREAFTER ANY PERSONAL LIABILITY, DIRECTLY OR INDIRECTLY, UNDER OR IN
CONNECTION WITH OR SECURED BY ANY AGREEMENT, LEASE, INSTRUMENT, ENCUMBRANCE,
CLAIM OR RIGHT AFFECTING OR RELATING TO THE PROPERTY OR TO WHICH THE PROPERTY IS
NOW OR HEREAFTER SUBJECT ANY DIFFERENT THAN THE LIABILITY OF LENDER HEREUNDER. 
THE LIMITATION OF LIABILITY PROVIDED IN THIS SECTION 15.15 IS (A) IN ADDITION
TO, AND NOT IN LIMITATION OF, ANY LIMITATION OF LIABILITY APPLICABLE TO THE
ASSIGNEE PROVIDED BY LAW OR BY ANY OTHER CONTRACT, AGREEMENT OR INSTRUMENT, AND
(B) SHALL NOT APPLY TO ANY ASSIGNEE’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

SECTION 15.16  NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY BENEFICIARIES. 
(A) BORROWER AND LENDER INTEND THAT THE RELATIONSHIPS CREATED HEREUNDER AND
UNDER THE OTHER LOAN DOCUMENTS BE SOLELY THAT OF BORROWER AND LENDER.  NOTHING
HEREIN OR THEREIN IS INTENDED TO CREATE A JOINT VENTURE, PARTNERSHIP,
TENANCY-IN-COMMON, OR JOINT TENANCY RELATIONSHIP BETWEEN BORROWER AND LENDER NOR
TO GRANT LENDER ANY INTEREST IN THE PROPERTY OTHER THAN THAT OF MORTGAGEE,
BENEFICIARY OR LENDER.

(B)               THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE SOLELY FOR THE
BENEFIT OF LENDER AND BORROWER AND NOTHING CONTAINED IN THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE DEEMED TO CONFER UPON ANYONE OTHER THAN LENDER AND
BORROWER ANY RIGHT TO INSIST UPON OR TO ENFORCE THE PERFORMANCE OR OBSERVANCE OF
ANY OF THE OBLIGATIONS CONTAINED HEREIN OR THEREIN.  ALL CONDITIONS TO THE
OBLIGATIONS OF LENDER TO MAKE THE LOAN HEREUNDER ARE IMPOSED SOLELY AND
EXCLUSIVELY FOR THE BENEFIT OF LENDER AND NO OTHER PERSON SHALL HAVE STANDING TO
REQUIRE SATISFACTION OF SUCH CONDITIONS IN ACCORDANCE WITH THEIR TERMS OR BE
ENTITLED TO ASSUME THAT LENDER WILL REFUSE TO MAKE THE LOAN IN THE ABSENCE OF
STRICT COMPLIANCE WITH ANY OR ALL THEREOF AND NO OTHER PERSON SHALL UNDER ANY
CIRCUMSTANCES BE DEEMED TO BE A BENEFICIARY OF SUCH CONDITIONS, ANY OR ALL OF
WHICH MAY BE FREELY WAIVED IN WHOLE OR IN PART BY LENDER IF, IN LENDER’S SOLE
DISCRETION, LENDER DEEMS IT ADVISABLE OR DESIRABLE TO DO SO.

SECTION 15.17  PUBLICITY.  ALL NEWS RELEASES, PUBLICITY OR ADVERTISING BY ANY
PARTY HERETO OR THEIR AFFILIATES THROUGH ANY MEDIA INTENDED TO REACH THE GENERAL
PUBLIC (BUT EXCLUDING, FOR CLARITY, ANY FILINGS OR RELEASES NECESSARY OR
APPROPRIATE UNDER APPLICABLE LAWS, INCLUDING SECURITIES LAWS, OR THE APPLICABLE
RULES OF ANY STOCK EXCHANGE) WHICH REFERS TO THE LOAN DOCUMENTS OR THE FINANCING
EVIDENCED BY THE LOAN DOCUMENTS, TO LENDER OR TO ANY OF ITS AFFILIATES SHALL BE
SUBJECT TO THE PRIOR CONSULTATION BETWEEN LENDER AND BORROWER.

 

134

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

 

 

SECTION 15.18  WAIVER OF MARSHALLING OF ASSETS.  TO THE FULLEST EXTENT PERMITTED
BY LAW, BORROWER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, WAIVES ALL RIGHTS
TO A MARSHALLING OF THE ASSETS OF BORROWER, BORROWER’S MEMBERS AND 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 INDEBTEDNESS WITHOUT ANY PRIOR OR DIFFERENT RESORT FOR COLLECTION OR OF
THE RIGHT OF LENDER TO THE PAYMENT OF THE INDEBTEDNESS OUT OF THE NET PROCEEDS
OF THE PROPERTY IN PREFERENCE TO EVERY OTHER CLAIMANT WHATSOEVER.

SECTION 15.19  WAIVER OF COUNTERCLAIM AND OTHER ACTIONS.  BORROWER HEREBY
EXPRESSLY AND UNCONDITIONALLY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING BROUGHT BY LENDER ON THIS AGREEMENT, THE NOTE, THE MORTGAGE OR ANY
LOAN DOCUMENT, ANY AND EVERY RIGHT IT MAY HAVE TO (A) INTERPOSE ANY COUNTERCLAIM
THEREIN (OTHER THAN A COUNTERCLAIM WHICH CAN ONLY BE ASSERTED IN THE SUIT,
ACTION OR PROCEEDING BROUGHT BY LENDER ON THIS AGREEMENT, THE NOTE, THE MORTGAGE
OR ANY LOAN DOCUMENT AND CANNOT BE MAINTAINED IN A SEPARATE ACTION) AND (B) HAVE
ANY SUCH SUIT, ACTION OR PROCEEDING CONSOLIDATED WITH ANY OTHER OR SEPARATE
SUIT, ACTION OR PROCEEDING.

SECTION 15.20  CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.  IN THE EVENT OF
ANY CONFLICT BETWEEN THE PROVISIONS OF THIS AGREEMENT AND ANY OF THE OTHER LOAN
DOCUMENTS, THE PROVISIONS OF THIS AGREEMENT SHALL CONTROL.  THE PARTIES HERETO
ACKNOWLEDGE THAT THEY WERE REPRESENTED BY COMPETENT COUNSEL IN CONNECTION WITH
THE NEGOTIATION, DRAFTING AND EXECUTION OF THE LOAN DOCUMENTS AND THAT SUCH LOAN
DOCUMENTS SHALL NOT BE SUBJECT TO THE PRINCIPLE OF CONSTRUING THEIR MEANING
AGAINST THE PARTY WHICH DRAFTED SAME.  BORROWER ACKNOWLEDGES THAT, WITH RESPECT
TO THE LOAN, BORROWER SHALL RELY SOLELY ON ITS OWN JUDGMENT AND ADVISORS IN
ENTERING INTO THE LOAN WITHOUT RELYING IN ANY MANNER ON ANY STATEMENTS,
REPRESENTATIONS OR RECOMMENDATIONS OF LENDER OR ANY PARENT, SUBSIDIARY OR
AFFILIATE OF LENDER.  LENDER SHALL NOT BE SUBJECT TO ANY LIMITATION WHATSOEVER
IN THE EXERCISE OF ANY RIGHTS OR REMEDIES AVAILABLE TO IT UNDER ANY OF THE LOAN
DOCUMENTS OR ANY OTHER AGREEMENTS OR INSTRUMENTS WHICH GOVERN THE LOAN BY VIRTUE
OF THE OWNERSHIP BY IT OR ANY PARENT, SUBSIDIARY OR AFFILIATE OF LENDER OF ANY
EQUITY INTEREST ANY OF THEM MAY ACQUIRE IN BORROWER, AND BORROWER HEREBY
IRREVOCABLY WAIVES THE RIGHT TO RAISE ANY DEFENSE OR TAKE ANY ACTION ON THE
BASIS OF THE FOREGOING WITH RESPECT TO LENDER’S EXERCISE OF ANY SUCH RIGHTS OR
REMEDIES.  BORROWER ACKNOWLEDGES THAT LENDER ENGAGES IN THE BUSINESS OF REAL
ESTATE FINANCINGS AND OTHER REAL ESTATE TRANSACTIONS AND INVESTMENTS WHICH MAY
BE VIEWED AS ADVERSE TO OR COMPETITIVE WITH THE BUSINESS OF BORROWER OR ITS
AFFILIATES.

SECTION 15.21  PRIOR AGREEMENTS.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONTAIN THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND THERETO IN RESPECT OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND ALL PRIOR AGREEMENTS AMONG OR
BETWEEN SUCH PARTIES, WHETHER ORAL OR WRITTEN, ARE SUPERSEDED BY THE TERMS OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND UNLESS SPECIFICALLY SET FORTH IN
A WRITING CONTEMPORANEOUS HEREWITH THE TERMS, CONDITIONS AND PROVISIONS OF ANY
AND ALL SUCH PRIOR AGREEMENTS DO NOT SURVIVE EXECUTION OF THIS AGREEMENT.

135

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

 

 

 

SECTION 15.22  COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN MULTIPLE
COUNTERPARTS, EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL, BUT ALL OF WHICH SHALL
CONSTITUTE ONE DOCUMENT.  MANUALLY EXECUTED COUNTERPARTS OF THIS AGREEMENT SHALL
BE DELIVERED TO ALL PARTIES HERETO; PROVIDED, THAT DELIVERY OF A SIGNATURE OF
THIS AGREEMENT BY FACSIMILE TRANSMISSION OR BY .PDF, .JPEG, .TIFF OR OTHER FORM
OF ELECTRONIC MAIL ATTACHMENT SHALL BE EFFECTIVE AS DELIVERY OF A MANUALLY
EXECUTED COUNTERPART HEREOF PRIOR TO AND IN THE ABSENCE OF MANUAL DELIVERY.

SECTION 15.23  BOTTOM-UP GUARANTIES.   AT THE OPTION OF BORROWER FROM TIME TO
TIME EXERCISED DURING THE TERM OF THE LOAN, LENDER SHALL ACCEPT SO-CALLED
“BOTTOM-UP” GUARANTIES FROM ONE OR MORE HOLDERS OF INDIRECT INTERESTS IN
BORROWER OR GUARANTOR, OF ALL OR ANY PORTION OF THE LOAN AS DETERMINED BY
BORROWER.  THE FORM OF GUARANTY SHALL BE PREPARED BY BORROWER AND REASONABLY
ACCEPTABLE TO LENDER.  BORROWER SHALL PAY ALL ACTUAL OUT OF POCKET COSTS AND
EXPENSES REASONABLY INCURRED BY LENDER IN CONNECTION WITH THE EXECUTION,
DELIVERY AND ACCEPTANCE OF ANY SUCH GUARANTY.  LENDER EXPRESSLY ACKNOWLEDGES AND
AGREES THAT ANY DEFAULT BY A GUARANTOR UNDER A “BOTTOM-UP” GUARANTY SHALL NOT BE
A DEFAULT OR EVENT OF DEFAULT HEREUNDER.

SECTION 15.24  WAIVER OF SPECIAL DAMAGES.  TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF BORROWER AND LENDER SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM
AGAINST ANY OTHER PARTY ON ANY THEORY OF LIABILITY FOR SPECIAL INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES)
ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF THIS AGREEMENT OR ANY
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS, THE LOAN OR THE
USE OF PROCEEDS THEREOF.

SECTION 15.25  USA PATRIOT ACT NOTIFICATION.  LENDER HEREBY NOTIFIES BORROWER
THAT PURSUANT TO THE REQUIREMENTS OF THE PATRIOT ACT, IT IS REQUIRED TO OBTAIN,
VERIFY AND RECORD INFORMATION THAT IDENTIFIES BORROWER, WHICH INFORMATION
INCLUDES THE NAME AND ADDRESS OF BORROWER AND OTHER INFORMATION THAT WILL ALLOW
LENDER TO IDENTIFY BORROWER IN ACCORDANCE WITH THE PATRIOT ACT.

[SIGNATURE PAGES TO FOLLOW]

136

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

 

 

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

BORROWER: 

REGO II BORROWER LLC

 

By:

/s/ Alan J. Rice

Name:

Alan J. Rice

Title:

Secretary

             

 

LENDER: 

 

BANK OF CHINA, NEW YORK BRANCH

 

By:

/s/ Ted Louie

Name:

Ted Louie

Title:

Assistant Vice President

 

By:

/s/ Shiqiang Wu

Name:

Shiqiang Wu

Title:

General Manager, U.S.A.

 

 

137

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

 

 

 

SCHEDULE 1

 

REA’S

 

 

1)                  Terms, Covenants, Restrictions, Provisions and Easements
contained in Declaration made by Alexander’s, Inc. David Muss and S. Joseph
Tankoos, Jr. dated as of May 12, 1976 and recorded August 10, 1976 in Reel 926
Page 1291, as amended by Declaration made by Alexander’s, Inc. dated as of
December 29, 1986 and recorded April 13, 1987 in Reel 2341 Page 1794, as
modified by Modification to Declaration made by Alexander’s of Rego Park II,
Inc. dated as of July 25, 2005 and recorded November 7, 2005 in
CRFN2005000622959, as further modified by Second Modification to Declaration
made by Alexander’s of Rego Park II, Inc. dated as of August 13, 2007 and
recorded August 23, 2007 in CRFN2007000438068.

 

2)                  Parking Easement Agreement made between Alexander’s of Rego
Park II, Inc. and Alexander’s, Inc., dated March 29, 1995 and recorded March 30,
1995 in Reel 4097 Page 818.

 

3)                  Terms, Covenants, Restrictions and Provisions contained in
Declaration made by Alexander’s of Rego Park II, Inc. dated as of February 24,
2005 and recorded 03/03/2005 in CRFN2005000126643.

 

SCHEDULE   1

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

 

 

 

 

SCHEDULE 2.4

 

AMORTIZATION SCHEDULE

 

Principal Amortization Schedule

 

 

 

Loan Amount

$275,000,000

 

Amortization Term

30

Years

Amortization Interest Rate

7.5%

Annually

 

 

 

 

PRINCIPAL

ENDING PRINCIPAL

PAYMENT

PAYMENT

BALANCE

 

 

 

1

$ 204,089.90

$ 274,795,910.10

2

205,365.46

274,590,544.64

3

206,648.99

274,383,895.65

4

207,940.55

274,175,955.10

5

209,240.18

273,966,714.92

6

210,547.93

273,756,166.99

7

211,863.85

273,544,303.13

8

213,188.00

273,331,115.13

9

214,520.43

273,116,594.70

10

215,861.18

272,900,733.52

11

217,210.31

272,683,523.20

12

218,567.88

272,464,955.32

13

219,933.93

272,245,021.40

14

221,308.51

272,023,712.88

15

222,691.69

271,801,021.19

16

224,083.52

271,576,937.67

17

225,484.04

271,351,453.63

18

226,893.31

271,124,560.32

19

228,311.40

270,896,248.92

20

229,738.34

270,666,510.58

21

231,174.21

270,435,336.37

22

232,619.05

270,202,717.33

23

234,072.92

269,968,644.41

24

235,535.87

269,733,108.54

25

237,007.97

269,496,100.57

26

238,489.27

269,257,611.30

27

239,979.83

269,017,631.47

28

241,479.70

268,776,151.77

29

242,988.95

268,533,162.82

30

244,507.63

268,288,655.19

31

246,035.80

268,042,619.39

32

247,573.53

267,795,045.86

33

249,120.86

267,545,925.00

34

250,677.87

267,295,247.13

35

252,244.60

267,043,002.53

36

253,821.13

266,789,181.40

37

255,407.51

266,533,773.88

38

257,003.81

266,276,770.07

39

258,610.09

266,018,159.98

40

260,226.40

265,757,933.58

41

261,852.81

265,496,080.77

42

263,489.39

265,232,591.38

43

265,136.20

264,967,455.17

44

266,793.30

264,700,661.87

45

268,460.76

264,432,201.11

46

270,138.64

264,162,062.47

47

271,827.01

263,890,235.46

48

273,525.93

263,616,709.53

49

275,235.46

263,341,474.07

50

276,955.69

263,064,518.38

51

278,686.66

262,785,831.72

52

280,428.45

262,505,403.27

53

282,181.13

262,223,222.15

54

283,944.76

261,939,277.39

55

285,719.41

261,653,557.97

56

287,505.16

261,366,052.81

57

289,302.07

261,076,750.74

58

291,110.21

260,785,640.54

59

292,929.65

260,492,710.89

60

294,760.46

260,197,950.43

61

296,602.71

259,901,347.73

62

298,456.48

259,602,891.25

63

300,321.83

259,302,569.42

64

302,198.84

259,000,370.58

65

304,087.58

258,696,283.00

66

305,988.13

258,390,294.87

67

307,900.56

258,082,394.32

68

309,824.93

257,772,569.38

69

311,761.34

257,460,808.04

70

313,709.85

257,147,098.19

71

315,670.53

256,831,427.66

72

317,643.48

256,513,784.18

73

319,628.75

256,194,155.44

74

321,626.43

255,872,529.01

75

323,636.59

255,548,892.42

76

325,659.32

255,223,233.10

77

327,694.69

254,895,538.40

78

329,742.78

254,565,795.62

79

331,803.68

254,233,991.94

80

333,877.45

253,900,114.50

81

335,964.18

253,564,150.31

82

338,063.96

253,226,086.35

83

340,176.86

252,885,909.49

84

342,302.96

252,543,606.53

SCHEDULE 2.4

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

 

 

 

SCHEDULE 4.1.1

BORROWER ORGANIZATIONAL STRUCTURE CHART

(ATTACHED HERETO)

 

 

SCHEDULE 4.1.1

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

 

 

SCHEDULE 4.1.4

PENDING ARBITRATION, PROCEEDINGS, GOVERNMENTAL
INVESTIGATIONS, ACTIONS, SUITS OR PROCEEDINGS

 

None.

 

 

SCHEDULE 4.1.4

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

 

 

SCHEDULE 4.1.23

MISSING LICENSES AND/OR PERMITS

 

None.

 

SCHEDULE 4.1.23

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

 

 

SCHEDULE 4.1.27

RENT ROLL

(ATTACHED HERETO)

 

SCHEDULE 4.1.27

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

 

 

SCHEDULE 5.1.26

VIOLATIONS

 

 

SCHEDULE 5.1.26

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

 

 

 

 

SCHEDULE 8.7.5

SECURITY DEPOSITS

(ATTACHED HERETO)

 

 

SCHEDULE 8.7.5

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

 

 

 

 

EXHIBIT A

FORM OF ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT

 

 

EXHIBIT A

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

 

 

EXHIBIT B

 

TENANT NOTIFICATION LETTER

_________________________
c/o Vornado Realty Trust
888 Seventh Avenue

New York, New York  10106

___________, 2011

CERTIFIED MAIL
RETURN RECEIPT REQUESTED

1.                  [Tenants under Leases] 
[_________________] 
[_________________] 

Re:       Rego Park II, Queens, New York

Dear Tenant:

With reference to your lease of space in the above-referenced premises (as same
may have been, or from time to time may be amended, restated, modified, extended
or assigned, the “Lease”), please be advised that Rego II Borrower LLC
(“Borrower”) has obtained a secured loan on the above-referenced premises from
Bank of China, New York Branch (together with its successors and assigns,
“Lender”).  The Federal Tax Identification Number for Rego II Borrower LLC is
___________ (a copy of the W-9 Form is attached hereto).  In connection with
such loan, from and after the date hereof and until notified otherwise by
written instruction from Lender, all payments pursuant to the Lease should be
made payable to:

“_________________________ f/b/o Bank of China, New York Branch, as secured
party, Collection Account” and, if payment is by check, should be sent to:

_________________________ f/b/o Bank of China, New York Branch, as secured
party, Collection Account

 

[Bank of New York Mellon

P.O. Box 11534

New York, New York 10286-1534]

EXHIBIT B

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

 

 

and, if payment is made by wire or ACH transfer, it should be sent to:

[Bank: Bank of New York Mellon

Account Name:           _________________________ f/b/o Bank of China, New York
Branch, as secured party, Collection Account

Account No.:              6302752328

Wire / ACH ABA No.:           021000018

Reference Tenant Name and Tenant ID#]

In addition, all notices given pursuant to your lease should be directed as
follows:

Rego II Borrower LLC

                                    c/o Vornado Realty Trust

                                    888 Seventh Avenue

                                    New York, NY  10106

Attn:    Benjamin Schall, Senior Vice President

 

With a copy to:          

Rego II Borrower LLC

c/o Vornado Realty Trust

210 Route 4 East

Paramus, NJ  07652

                                    Attn:    Joseph Macnow,

                                                CFO and Executive Vice President

 

If you have any questions regarding this letter, please contact Borrower at c/o
Vornado Realty Trust, 210 Route 4 East, Paramus, New Jersey  07652, Attn: Betty
Sobers, telephone number (201) 587-1000 ext. 2139.

 

Please be aware that Lender is the holder of a mortgage dated as of November
___, 2011, from Borrower to Lender (“Mortgage”) pursuant to a certain Loan and
Security Agreement, dated as of November __, 2011 (the “Loan Agreement”). 

EXHIBIT B - PAGE 2

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

 

 

Subject to certain circumstances and under certain conditions more particularly
detailed in certain portions of the Loan Agreement, pursuant to Section 291-f of
the Real Property Law of the State of New York, Borrower agreed with Lender not
to, without the consent of Borrower, (i) amend, modify or waive the provisions
of any Lease or terminate, reduce rents under or shorten the term of any Lease,
except pursuant to and in accordance with the provisions of the Note, the Loan
Agreement, this Mortgage and the other Loan Documents, or (ii) collect any Rents
(exclusive of security deposits, Impositions and other pass-throughs of
Operating Expenses) more than thirty (30) days in advance of the time when the
same shall become due.  A copy of the text of those parts of the Mortgage and
the Loan Agreement containing such agreement of the Borrower is annexed hereto
as Exhibit A.  By the service of this notice upon you, Borrower’s agreement as
landlord under the Lease has become binding upon you pursuant to the aforesaid
Section 291-f. 

BORROWER:

REGO II BORROWER LLC

                                                             

By:

/s/ Alan J. Rice

Name:

Alan J. Rice

Title:

Secretary

 

cc:        Lender

EXHIBIT B - PAGE 3

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

 

 

EXHIBIT A

 

 

Section 16.2(d) of the Mortgage and

Sections 8.7.1, 8.7.2 and 8.7.4 of the Loan Agreement

 

Section 16.2(d)           Section 291-f Agreement.  This Mortgage is intended to
be, and shall operate as, the agreement described in Section 291-f of the Real
Property Law of the State of New York and shall be entitled to the benefits
afforded thereby.  Mortgagor hereby covenants and agrees that Mortgagor shall
not, without the consent of Mortgagee, (i) amend, modify or waive the provisions
of any Lease or terminate, reduce rents under or shorten the term of any Lease,
except pursuant to and in accordance with the provisions of the Note, the Loan
Agreement, this Mortgage and the other Loan Documents, or (ii) collect any Rents
(exclusive of security deposits, Impositions and other pass-throughs of
Operating Expenses) more than thirty (30) days in advance of the time when the
same shall become due.  Mortgagor shall (unless such notice is contained in the
Lease) deliver notice of this Mortgage in form and substance reasonably
acceptable to Mortgagee, to all present and future holders of any interest in
any Lease, by assignment or otherwise, and shall take such other action as may
now or hereafter be reasonably required to afford Mortgagee the full protections
and benefits of Section 291-f.

 

SECTION 8.7.1   NEW LEASES AND LEASE MODIFICATIONS.  EXCEPT AS OTHERWISE
PROVIDED IN SECTION 8.7.2  OR SECTION 8.7.4, BORROWER SHALL NOT (A) ENTER INTO
ANY LEASE OR RENEW OR EXTEND AN EXISTING LEASE (UNLESS REQUIRED TO DO SO BY THE
TERMS OF SUCH LEASE) (A “NEW LEASE”), (B) CONSENT TO THE ASSIGNMENT OF ANY LEASE
(UNLESS REQUIRED TO DO SO BY THE TERMS OF SUCH LEASE) THAT RELEASES THE ORIGINAL
TENANT FROM ITS OBLIGATIONS UNDER THE LEASE, (C) MODIFY ANY LEASE (INCLUDING,
WITHOUT LIMITATION, ACCEPT A SURRENDER OF ANY PORTION OF THE PROPERTY SUBJECT TO
A LEASE (UNLESS OTHERWISE REQUIRED BY LAW OR SUCH LEASE)), ALLOW A REDUCTION IN
THE TERM OF ANY LEASE OR A REDUCTION IN THE RENT PAYABLE UNDER ANY LEASE, CHANGE
ANY RENEWAL PROVISIONS OF ANY LEASE IN A MANNER MATERIALLY ADVERSE TO BORROWER
OR LENDER, MATERIALLY INCREASE THE OBLIGATIONS OF THE LANDLORD OR MATERIALLY
DECREASE THE OBLIGATIONS OF ANY TENANT), OR (D) TERMINATE ANY LEASE (ANY SUCH
ACTION REFERRED TO IN CLAUSES (B), (C) OR (D)  BEING REFERRED TO HEREIN AS A
“LEASE MODIFICATION”), IN EACH INSTANCE WITHOUT THE PRIOR WRITTEN CONSENT OF
LENDER (UNLESS SUCH LEASE MODIFICATION IS MADE PURSUANT TO AN EXPRESS RIGHT OF
TENANT PURSUANT TO THE TERMS OF THE RELATED LEASE), WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.  IN ADDITION, BORROWER MAY
REQUEST LENDER’S APPROVAL OF ANY MATERIAL CHANGE TO THE STANDARD FORM OF LEASE,
WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD.  EACH REQUEST FOR APPROVAL
AND CONSENT OF A NEW LEASE OR LEASE MODIFICATION OR MODIFICATION TO THE STANDARD
FORM OF LEASE SHALL CONTAIN A LEGEND IN CAPITALIZED BOLD LETTERS ON THE TOP OF
THE COVER PAGE STATING: “THIS IS A REQUEST FOR CONSENT TO A [NEW LEASE]  [LEASE
MODIFICATION]  [MODIFICATION OF STANDARD FORM OF LEASE].  LENDER’S RESPONSE IS
REQUESTED WITHIN TEN (10) BUSINESS DAYS.  LENDER’S FAILURE TO RESPOND WITHIN
SUCH TIME PERIOD SHALL RESULT IN LENDER’S CONSENT BEING DEEMED TO HAVE BEEN
GRANTED” AND BORROWER SHALL INCLUDE THE FOLLOWING DOCUMENTATION WITH SUCH
REQUEST: (A) THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, AND (B) ALL
OTHER MATERIALS REASONABLY NECESSARY IN ORDER FOR LENDER TO EVALUATE SUCH NEW
LEASE OR LEASE MODIFICATION.  IN THE EVENT THAT LENDER FAILS TO GRANT OR
WITHHOLD ITS APPROVAL AND CONSENT TO SUCH NEW LEASE, LEASE MODIFICATION, OR

EXHIBIT A

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

 

 

MODIFICATION TO THE STANDARD FORM OF LEASE WITHIN SUCH TEN (10) BUSINESS DAY
PERIOD (AND, IN THE CASE OF A WITHHOLDING OF CONSENT, STATING THE GROUNDS
THEREFOR IN REASONABLE DETAIL), THEN LENDER’S APPROVAL AND CONSENT SHALL BE
DEEMED TO HAVE BEEN GRANTED.  IN ADDITION, BORROWER MAY, AT BORROWER’S OPTION,
PRIOR TO DELIVERING TO LENDER A DRAFT OF ANY SUCH NEW LEASE OR LEASE
MODIFICATION FOR LENDER’S APPROVAL, FIRST DELIVER TO LENDER FOR LENDER’S
APPROVAL A TERM SHEET SETTING FORTH THE MAJOR ECONOMIC AND OTHER BUSINESS TERMS
(THE “MATERIAL BUSINESS TERMS”) OF SUCH PROPOSED NEW LEASE OR LEASE
MODIFICATION, TOGETHER WITH ALL OTHER MATERIALS REASONABLY REQUESTED BY LENDER
IN ORDER TO EVALUATE SUCH MATERIAL BUSINESS TERMS.  EACH SUCH REQUEST FOR
APPROVAL AND CONSENT SHALL CONTAIN A LEGEND IN CAPITALIZED BOLD LETTERS ON THE
TOP OF THE COVER PAGE STATING: “THIS IS A REQUEST FOR CONSENT TO THE MATERIAL
BUSINESS TERMS FOR A [NEW LEASE]  [LEASE MODIFICATION].  LENDER’S RESPONSE IS
REQUESTED WITHIN TEN (10) BUSINESS DAYS.  LENDER’S FAILURE TO RESPOND WITHIN
SUCH TIME PERIOD SHALL RESULT IN LENDER’S CONSENT BEING DEEMED TO HAVE BEEN
GRANTED.” IN THE EVENT THAT LENDER FAILS TO GRANT OR WITHHOLD ITS APPROVAL AND
CONSENT TO SUCH MATERIAL BUSINESS TERMS WITHIN SUCH TEN (10) BUSINESS DAY PERIOD
(AND, IN THE CASE OF A WITHHOLDING OF CONSENT, STATING THE GROUNDS THEREFOR IN
REASONABLE DETAIL), THEN LENDER’S APPROVAL AND CONSENT SHALL BE DEEMED TO HAVE
BEEN GRANTED.  SUBJECT TO THE APPROVAL TIME PERIODS SET FORTH ABOVE WITH RESPECT
TO NEW LEASES AND LEASE MODIFICATIONS, SO LONG AS ANY NEW LEASE OR LEASE
MODIFICATION SUBMITTED TO LENDER FOR APPROVAL AND CONSENT (A) DOES NOT CONTAIN
MATERIAL BUSINESS TERMS WHICH DIFFER IN ANY MATERIAL ADVERSE RESPECT FROM THE
MATERIAL BUSINESS TERMS APPROVED BY LENDER AND (B) OTHERWISE DOES NOT CONTAIN
ANY LEASE TERMS WHICH DEVIATE MATERIALLY FROM THE TERMS OF THE STANDARD FORM OF
LEASE, LENDER’S CONSENT TO SUCH NEW LEASE OR LEASE MODIFICATION SHALL NOT BE
REQUIRED.

SECTION 8.7.2   LEASING CONDITIONS.  SUBJECT TO THE TERMS OF THIS SECTION 8.7,
 PROVIDED NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, BORROWER
MAY ENTER INTO A NEW LEASE OR LEASE MODIFICATION, WITHOUT LENDER’S PRIOR WRITTEN
CONSENT, THAT SATISFIES EACH OF THE FOLLOWING CONDITIONS (AS EVIDENCED BY
BORROWER’S CERTIFICATE DELIVERED TO LENDER WITHIN ONE (1) WEEK AFTER BORROWER’S
ENTRY INTO SUCH NEW LEASE OR LEASE MODIFICATION):

(A)                SUCH NEW LEASE OR LEASE MODIFICATION OTHER THAN A TERMINATION
OR SURRENDER (TO THE EXTENT IT RELATES TO A PROVISION IN THE STANDARD FORM
LEASE), AS APPLICABLE, IS WRITTEN ON EITHER (I) THE STANDARD FORM OF LEASE
ATTACHED HERETO AS EXHIBIT C  (THE “STANDARD FORM OF LEASE”), OR SUBSTANTIALLY
CONFORMS IN ALL MATERIAL RESPECTS TO THE TERMS THEREOF, WITH ONLY SUCH CHANGES
AS ARE COMMERCIALLY REASONABLE GIVEN THE THEN CURRENT MARKET CONDITIONS, NONE OF
WHICH CHANGES SHALL VARY (IN A MANNER MATERIALLY ADVERSE TO LENDER) THE
SUBORDINATION, ATTORNMENT AND NON‑DISTURBANCE PROVISIONS CONTAINED IN THE
STANDARD FORM OF LEASE, (II) THE STANDARD FORM OF LEASE OF A NATIONAL RETAILER,
OR (III) THE STANDARD FORM OF BRANCH LEASE FOR A NATIONAL OR REGIONAL BANK,
WHICH FORM OF LEASE SHALL, WITH RESPECT TO THE FORMS OF LEASE SET FORTH IN
CLAUSES (II) AND (III) OF THIS SECTION 8.7.2(A) SUBSTANTIALLY CONFORM IN ALL
MATERIAL RESPECTS TO THE TERMS OF SUCH FORM, WITH ONLY SUCH CHANGES AS ARE
COMMERCIALLY REASONABLE GIVEN THE THEN CURRENT MARKET CONDITIONS, NONE OF WHICH
CHANGES SHALL VARY (IN A MANNER MATERIALLY ADVERSE TO LENDER) THE SUBORDINATION,
ATTORNMENT AND NON‑DISTURBANCE PROVISIONS CONTAINED IN THE STANDARD FORM OF
LEASE;

(B)               WITH RESPECT TO A NEW LEASE OR LEASE MODIFICATION, THE
PREMISES DEMISED THEREUNDER ARE LESS THAN 75,000 NET RENTABLE SQUARE FEET OF THE
PROPERTY; PROVIDED, HOWEVER, THAT

EXHIBIT A – Page 2

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

 

 

for purposes of determining the net rentable square footage of the premises
demised, (i) a “New Lease” with a Tenant shall include and aggregate the square
footage demised pursuant to such New Lease and (A) any existing Lease with such
Tenant or any Affiliate of such Tenant and (B) any Lease Modification with such
Tenant or any Affiliate of such Tenant, and (ii) a “Lease Modification” with a
Tenant shall include and aggregate the square footage demised pursuant to (A)
the Lease being modified and any other existing Lease with such Tenant or an
Affiliate of such Tenant and (B) such Lease Modification and any other Lease
Modification with such Tenant or any Lease Modification with an Affiliate of
such Tenant;

(C)                SUCH NEW LEASE OR, IF THE LEASE MODIFICATION IMPACTS THE
RENTS PAYABLE UNDER THE MODIFIED LEASE, SUCH LEASE MODIFICATION IS ON THEN
PREVAILING MARKET-RATE RENT, TERMS AND CONDITIONS FOR SIMILAR LEASES IN SIMILAR
BUILDINGS IN THE VICINITY OF THE PROPERTY;

(D)                “FIXED” OR “BASE” RENT UNDER SUCH NEW LEASE OR LEASE
MODIFICATION (TO THE EXTENT RENT IS ADDRESSED IN SUCH LEASE MODIFICATION), AS
APPLICABLE, IS AT A SUBSTANTIALLY CONSISTENT OR RISING LEVEL THROUGHOUT THE TERM
OF THE LEASE, OTHER THAN FOR (I) MARKET RATE “FREE RENT” PERIODS OR (II) TENANT
IMPROVEMENT AND TENANT INDUCEMENTS THAT EXCEED CURRENT MARKET CONDITIONS BUT ARE
AMORTIZED OVER A SHORTER TIME PERIOD THAN THE ENTIRE INITIAL TERM OF SUCH NEW
LEASE OR LEASE MODIFICATION, AS APPLICABLE;

(E)               SUCH NEW LEASE OR LEASE MODIFICATION TO THE EXTENT “USE” IS
ADDRESSED IN SUCH LEASE MODIFICATION, AS APPLICABLE, PROVIDES THAT THE PREMISES
DEMISED THEREBY CANNOT BE USED FOR ANY OF THE FOLLOWING USES: ANY PORNOGRAPHIC
OR OBSCENE PURPOSES, ANY COMMERCIAL SEX ESTABLISHMENT, ANY PORNOGRAPHIC,
OBSCENE, NUDE OR SEMI‑NUDE PERFORMANCES, MODELING OR SEXUAL CONDUCT OR ANY OTHER
USE THAT HAS OR COULD REASONABLY BE EXPECTED TO VIOLATE APPLICABLE LEGAL
REQUIREMENTS;

(F)               SUCH NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, OTHER
THAN LEASE MODIFICATIONS RELATING TO LEASES IN EXISTENCE ON THE DATE HEREOF, IS
ON AN ARM’S LENGTH BASIS WITH A TENANT WHO IS NOT AN AFFILIATE OF BORROWER;

(G)                 THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, SHALL
NOT ENTITLE ANY TENANT TO RECEIVE AND RETAIN PROCEEDS EXCEPT THOSE THAT MAY BE
SPECIFICALLY AWARDED TO IT IN CONDEMNATION PROCEEDINGS BECAUSE OF THE TAKING OF
ITS TRADE FIXTURES AND ITS LEASEHOLD IMPROVEMENTS WHICH HAVE NOT BECOME PART OF
THE PROPERTY AND SUCH BUSINESS LOSS AS TENANT MAY SPECIFICALLY AND SEPARATELY
ESTABLISH;

(H)                 THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, SHALL
NOT CONTAIN AN OPTION IN FAVOR OF TENANT TO ACQUIRE ALL OR ANY PORTION OF THE
PROPERTY; AND

(I)               THE NEW LEASE OR LEASE MODIFICATION, AS APPLICABLE, SATISFIES
THE REQUIREMENTS OF SECTIONS 8.7.7  AND 8.7.8. 

SECTION 8.7.4   LEASE AMENDMENTS AND TERMINATIONS.   

(A)                BORROWER AGREES THAT IT SHALL NOT HAVE THE RIGHT OR POWER, AS
AGAINST LENDER WITHOUT ITS CONSENT, TO CANCEL, ABRIDGE, AMEND OR OTHERWISE
MODIFY ANY LEASE UNLESS SUCH MODIFICATION COMPLIES WITH THIS SECTION 8.7. 
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NO CONSENT OF LENDER SHALL BE
REQUIRED FOR ANY AMENDMENT REFLECTING THE TENANT’S UNILATERAL EXERCISE OF A
RENEWAL OR EXPANSION OR TERMINATION OPTION SET

EXHIBIT A - Page 3

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

 

 

forth in its Lease as of the date hereof or a Lease or Lease Modification
subsequently approved or otherwise entered into in accordance with the terms
hereof and any such amendment shall not be deemed a Lease Modification for any
purpose hereof.

(B)               NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
BORROWER SHALL HAVE THE RIGHT TO TERMINATE ANY LEASE AND NO CONSENT OF LENDER
SHALL BE REQUIRED IN RESPECT OF SUCH TERMINATION, PROVIDED  THAT (I) BORROWER IS
SIMULTANEOUSLY REPLACING SUCH TERMINATED LEASE WITH A LEASE (FOR ALL OR
SUBSTANTIALLY ALL OF THE SPACE WHICH WAS COVERED BY THE LEASE BEING TERMINATED)
THAT EITHER (X) HAS BEEN APPROVED OR DEEMED APPROVED BY LENDER IF REQUIRED IN
ACCORDANCE WITH THIS SECTION 8.7 OR (Y) OTHERWISE MEETS THE REQUIREMENTS OF THIS
SECTION 8.7, OR (II) THE APPLICABLE TENANT IS IN DEFAULT THEREUNDER BEYOND ANY
APPLICABLE NOTICE AND GRACE PERIODS.

 

 

EXHIBIT A – Page 4

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

 

 

EXHIBIT C

STANDARD FORM OF LEASE

(ATTACHED HERETO)

 

 

EXHIBIT C

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

 

 

EXHIBIT D

FORM OF NON DISTURBANCE AGREEMENT

(ATTACHED HERETO)

 

 

EXHIBIT D