LOAN AGREEMENT [FEI Space]

Exhibit 10.1

LOAN AGREEMENT

[FEI Space]

dated as of June 28, 2001

between

LAKEPOINTE ASSETS LLC,

as Borrower

and

LEGG MASON REAL ESTATE SERVICES, INC.,

as Lender

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this "LOAN AGREEMENT"), dated as of June 28, 2001, between LAKEPOINTE ASSETS LLC, a Delaware limited liability company, having an address c/o 5847 San Felipe Drive, Suite 2600, Houston, Texas 77057 ("BORROWER") and LEGG MASON REAL ESTATE SERVICES, INC., a Pennsylvania corporation, having an address at 100 Light Street, 32nd Floor, Baltimore, Maryland 21202 (the "LENDER").

 

BACKGROUND

 

A.          Reference is made to the Standard Terms and Conditions for this Loan Agreement attached as EXHIBIT A hereto (the "STANDARD TERMS AND CONDITIONS"). The terms of this Loan Agreement are set forth in the Standard Terms and

Conditions.

 

B.          Lender has made a loan to Borrower in the principal amount of ONE HUNDRED EIGHTEEN MILLION SEVEN HUNDRED THIRTY-FOUR THOUSAND EIGHT HUNDRED SIXTEEN DOLLARS AND THIRTY-FIVE CENTS ($118,734,816.35) (the "LOAN") evidenced by the Note and secured, in part, by the Security Documents.

 

C.          Borrower owns the Mortgaged Property described in the Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing, executed effective as of the date hereof, from Borrower for the benefit of Lender (the "INDENTURE").

 

D.          Borrower has leased the Mortgaged Property to Tenant pursuant to the Lease.

 

E.           Lender is willing, on the terms and subject to the conditions set forth in this Loan Agreement, to make the Loan to Borrower.

 

NOW, THEREFORE, in consideration of the premises, the agreements contained in this Loan Agreement, the making of the Loan and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

                              Section 1.         Background. The Background of this Loan Agreement is incorporated by reference.

 

                              Section 2.         Standard Terms and Conditions. The Standard Terms and Conditions are incorporated by reference.

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGES]

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

 

EXHIBIT A

[FEI SPACE]

LOAN AGREEMENT

STANDARD TERMS AND CONDITIONS

 

 

 

 

 

 

 

 

ARTICLE 1

DEFINITIONS AND RULES OF CONSTRUCTION

 

Section 1.01   Definitions. For purposes of this Loan Agreement, capitalized terms used in this Loan Agreement and not otherwise defined in the body of this Loan Agreement have the meanings ascribed to them in APPENDIX A, unless the context otherwise requires, and the rules of construction set forth in APPENDIX A shall apply thereto and hereto.

 

Section 1.02   Resolution of Drafting Ambiguities. Each of the parties hereto acknowledges that it was represented by counsel in connection with the Loan Documents to which it is a party that it and its counsel reviewed and revised the Loan Documents and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be employed in the interpretation of the Loan Documents.

 

ARTICLE 2

THE NOTE

 

Section 2.01   Form of Note. On the Closing Date, Borrower will execute and deliver the Note to Lender substantially in the form set out in EXHIBIT A.

 

Section 2.02   Payment of Debt. Borrower shall duly and punctually pay the Debt in accordance with the terms hereof and of the Note, as and when due and payable.

 

Section 2.03   [Intentionally Omitted]

 

Section 2.04   Prepayment of the Note. The Debt may be prepaid only if and as permitted by the Note and this Loan Agreement. Borrower may not prepay the Note, in whole or in part, except on or after February 8, 2021 during which period Borrower may prepay the Note in whole, but not in part, at par and without payment of the Prepayment Consideration. In addition, Borrower must prepay the Note in whole as follows if a Permitted Lease Termination Event occurs:

 

(a)    If an event of default occurs under Article 9 of the Lease that results in a Permitted Lease Termination Event, then Borrower must prepay the entire outstanding principal balance of the Note, together with accrued and unpaid interest thereon, Prepayment Consideration and all other amounts due and owing under the Note, this Loan Agreement and the Security Documents; and

 

(b)   If a Destruction occurs that results in a Permitted Lease Termination Event, then Borrower must prepay the entire outstanding principal balance of the Note, together with accrued and unpaid interest thereon, and all other amounts due and owing under the Note, this Loan Agreement and the Security Documents, and if and only if an Event of Default exists following such Destruction, such prepayment must also include the payment of Prepayment Consideration.

 

 

 

Section 2.05   Defeasance of the Note. Borrower may defease the Note in whole but not in part at any time before the Maturity Date, but only on the first day of the month after not less than sixty (60) days prior written notice to Lender, subject to the following:

 

(a)   At any time after the Lockout Period, and provided no Event of Default exists, Borrower may obtain the release of the Mortgaged Property from the Lien of the Indenture upon the satisfaction of the following conditions precedent (such release in accordance with the terms hereof is called a "DEFEASANCE"):

 

(i)             not less than sixty (60) days prior written notice to Lender of Borrower's intent to effect a Defeasance specifying a Release Date;

 

(ii)            the payment to Lender of the Monthly Payment due on the Release Date;

 

(iii)           the payment to Lender on the Release Date of all other sums, not including scheduled interest or principal payments, due under the Note, this Loan Agreement and the Security Documents the amount of which Lender shall notify Borrower of not less than 5 days before the Release Date;

 

(iv)           the payment to Lender on the Release Date of the Defeasance Deposit; and

 

(v)            the delivery to Lender on the Release Date of:

 

                                                                (A)       a pledge and security agreement, in form and substance satisfactory to Lender, creating a first priority Lien in favor of Lender on the Defeasance Deposit and the U.S. Obligations purchased on behalf of Borrower with the Defeasance Deposit in accordance with the provisions of this paragraph (the "SECURITY AGREEMENT");

 

 (B)        a release of the Mortgaged Property from the Lien of the Indenture (for execution by Lender) in a form appropriate for the jurisdiction in which the Mortgaged Property is located;

 

 (C)        a duly executed certificate of Borrower certifying that the requirements set forth in this subparagraph (a) have been satisfied;

 

 (D)       an opinion of counsel for Borrower in form satisfactory, or other documentation satisfactory, to Lender stating, among other things, that (1) Lender has a perfected first priority security interest in the Defeasance Deposit and the U.S. Obligations purchased by Lender on behalf of Borrower, (2) the Security Agreement is enforceable against Borrower in accordance with its terms, (3) there exist no material adverse tax consequences to Lender in connection with the Defeasance, and (4) the Defeasance will not violate or have any adverse consequences under any applicable federal securities laws;

 

(E)         such other certificates, documents or instruments as Lender may reasonably request; and,

 

 

 

 (F)        payment to Lender by Borrower of all reasonable third party costs and expenses incurred by Lender in connection with the Defeasance hereunder including, but not limited to, reasonable fees of attorneys and accountants.

 

In connection with the conditions set forth in subparagraph (a)(v) above, Borrower hereby appoints Lender as its agent and attorney-in-fact to use the Defeasance Deposit to purchase U.S. Obligations which provide payments on or before, but as close as possible to, all successive scheduled payment dates after the Release Date upon which Monthly Payments are required under the Note (including the amounts due on the Maturity Date) and in amounts equal to the Monthly Payments due on such dates and on the assumed Maturity Date under the Note (the "SCHEDULED DEFEASANCE PAYMENTS"). Borrower, pursuant to the Security Agreement or other appropriate document, shall authorize and direct that the payments received from the U.S. Obligations must be made directly to Lender and applied to satisfy the obligations of Borrower under the Note.

 

(b)    Upon compliance with the requirements of this Section 2.05, Lender will release the Mortgaged Property from the Lien of the Indenture, and the pledged U.S. Obligations will be the sole source of collateral securing the Note. Any portion of the Defeasance Deposit in excess of the amount necessary to purchase the U.S. Obligations required by subparagraph (a) above and to satisfy Borrower's obligations under this subparagraph (b) will be remitted to Borrower with the release of the Mortgaged Property from the Lien of the Indenture. In connection with such release, Lender will establish or designate a successor entity (the "SUCCESSOR BORROWER") and Borrower must transfer and assign all obligations, rights and duties under and to the Note together with the pledged U.S. Obligations to such Successor Borrower. Such Successor Borrower must assume the obligations under the Note and the Security Agreement and upon such assumption Borrower will be relieved of its obligations thereunder. Borrower must pay $1,000 to any such Successor Borrower as consideration for assuming the obligations under the Note and the Security Agreement. No other assumption fee will be payable upon a transfer of the Note in accordance with this paragraph, but Borrower must pay all reasonable third-party costs and expenses incurred by Lender, including the reasonable expenses of Lender's attorneys, incurred in connection with this paragraph.

 

Section 2.06   Default Interest and Late Charge. If an Event of Default exists (including Borrower's failure to pay the Debt in full on the Maturity Date), Lender will be entitled to receive, and Borrower must pay, interest at the Default Rate on the entire unpaid principal sum and any other amounts due under this Loan Agreement, the Note and the Security Documents. The Default Rate will be computed from the date the default occurs until the earlier of the date the default is cured or the actual receipt and collection of the Debt. This charge will be added to the Debt, and will be deemed secured by the Indenture and other Security Documents. In addition, if any portion of the Debt is not paid within ten (10) days after it is due, Borrower must pay to Lender, upon demand, a late fee equal to four percent (4%) or the maximum amount permitted by applicable law, whichever is less) of such unpaid sum, to defray the expenses incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment and such amount will be secured by the Indenture and the other Security Documents. This paragraph, however, will not be construed as an agreement or privilege to extend the date to pay the Debt, nor as a waiver of any other right or remedy accruing to Lender by reason of the occurrence of any Event of Default.

 

 

ARTICLE 3

OBLIGATIONS SECURED/SECURITY/APPLICATION OF PAYMENTS

 

Section 3.01   Obligations Secured.

 

(a)    The Indenture and the Security Documents and the grants, assignments and transfers made thereunder to Lender are given to secure the following, in such order of priority as Lender may determine in its sole discretion (the "DEBT"):

 

(i)             the payment of the principal indebtedness evidenced by the Note in lawful money of the United States of America;

 

(ii)            the payment of interest, default interest, late charges, prepayment premiums and other sums, as provided in the Note, this Loan Agreement or the Security Documents;

 

(iii)           the payment of Prepayment Consideration;

 

(iv)           the payment of all Protective Advances;

 

(v)            the payment of all other monies agreed to or provided to be paid by Borrower in the Note, this Loan Agreement and the Security Documents; and

 

(vi)          the payment of all other sums advanced and costs and third-party expenses Lender incurs in connection with the Loan or any part thereof, any renewal, extension, modification, consolidation, change, substitution, replacement, restatement or increase of the Loan or any part thereof, or the acquisition or perfection of the security therefor, whether made or incurred at Borrower's or Lender's request.

 

(b)    The Indenture and the Security Documents and the grants, assignments and transfers made therein are also given to secure the following (the "OTHER OBLIGATIONS"):

 

(i)             the performance of all other obligations of Borrower contained herein;

 

(ii)            the performance of each obligation of Borrower contained in the Note in addition to the payment of the Debt and of Borrower contained in this Loan Agreement and the Security Documents; and

 

(iii)           the performance of each obligation of Borrower contained in any renewal, extension, modification, consolidation, change, substitution, replacement for, restatement or increase of all or any part of the Note, this Loan Agreement or the Security Documents.

 

Section 3.02   Other Security for Payment of the Note. The payment and performance of the Obligations will be secured by the Indenture and the other Security Documents.

 

 

 

Section 3.03   Application of Payments. (a) Borrower will direct Tenant to pay directly to Lender or its designee all Rents due to Borrower under the Lease when such amounts are due and payable. Lender will apply all such Rents, and other payments received by it promptly upon receipt, but not less frequently than monthly, as follows: First, to pay to the Certificate Trustee all amounts due and payable pursuant to Schedule A of the Note, default interest, late charges, prepayment premiums, Prepayment Consideration and all other amounts due on account of the Debt then due and payable under the Note, this Loan Agreement or the Security Documents other than payments for Protective Advances; Second, to reimburse Lender for any Protective Advances; Third, to deposit into the Escrow Fund, all amounts, if any, due and payable under Section 4.03 hereof; and Fourth, as long as no Event of Default exists, to pay the balance of the funds, if any, within two (2) Business Days after Lender receives good funds, to Borrower by wire transfer of immediately available funds to an account designated by Borrower, which payments to Borrower will be free of the Lien of the Indenture and Lender's rights under the Loan Documents. If Lender does not receive any payment Tenant is required to pay directly to Lender, Lender will use reasonable efforts to promptly notify Borrower of Tenant's failure to make such payment; however, Lender's failure to provide such notice shall not relieve or alter Borrower's absolute obligation to pay all amounts due hereunder and under the other Loan Documents at the time and in the manner required hereunder.

 

(a)    Notwithstanding the foregoing, any moneys Lender or its designee receives as Additional Rent shall be applied first for the purposes for which such moneys were paid pursuant thereto.

 

ARTICLE 4

COVENANTS

Section 4.01   Insurance.

 

(a)    Borrower will satisfy, or will cause Tenant or Manager to satisfy, the Insurance Requirements. During such time as Tenant or Manager satisfies the Insurance Requirements, Borrower will be deemed to be in compliance with the requirements of this Section 4.01. If at any time Tenant or Manager fails to satisfy the Insurance Requirements, then Borrower must satisfy the Insurance Requirements and make the Tax and Insurance Reserve Fund Payments required pursuant to Section 4.03 hereof.

 

(b)   Borrower acknowledges Lender's right under and pursuant to Section 9.03 hereof to obtain (either itself or by its agents, servicers, nominees or attorneys) any Policies required of Borrower should Borrower, Tenant or Manager fail to do so as required hereunder.

 

Section 4.02   Payment of Taxes and Impositions, etc.

 

(a)    Borrower will pay and discharge, or will cause Tenant or Manager to pay and discharge, all Taxes and Impositions at the time and in the manner required by the Lease. Borrower will deliver, or will cause Tenant or Manager to deliver, to Lender, promptly upon Lender's request, receipts (or if receipts are not available, copies of cancelled checks evidencing payment with receipts to follow promptly after they become available) showing payment of Taxes and Impositions before the applicable delinquency date therefor. Borrower will not suffer and will pay within thirty (30) days of knowledge or will cause Tenant or Manager to pay within thirty (30) days of knowledge, and discharge any Lien which may be or become a Lien against the Mortgaged Property, subject to Borrower's contest rights under subsection 4.02(b) hereof.

 

 

 

(b)    After prior written notice to Lender, and provided no Default (as defined in the Lease) or Event of Default (as defined in the Lease) exists, Borrower (or, to the extent permitted under the Lease, Tenant), may contest, or permit to be contested (including through abatement proceedings), in good faith and at its sole expense, by appropriate legal proceedings, the amount or validity or application in whole or in part of any of the Taxes or Impositions, and/or any Legal Requirements affecting the Leased Property, and to postpone payment of or compliance with the same during the pendency of such contest, provided that such contest is conducted in accordance with and subject to the conditions contained in paragraph 6(d) of the Lease.

 

Section 4.03   Escrow Fund. At any time after an Event of Default (as defined in the Lease) has occurred, or if a Credit Rating Downgrade has occurred, Borrower must pay or must cause Tenant to pay to Lender the Tax and Insurance Reserve Fund Payment due under the Lease. In addition, during any period that Borrower is required to maintain Policies pursuant to Section 4.01 hereof, Borrower will also pay monthly to Lender, for deposit into the Escrow Fund, one-twelfth of an amount which would be sufficient to pay the Insurance Premiums due on such Policies. Borrower pledges to Lender any and all monies now or hereafter deposited in the Escrow Fund as additional security to pay the Debt subject to Tenant's right to such monies, if any, as set forth in subparagraph 13(e) of the Lease. Lender will apply the Escrow Fund to pay Taxes and Insurance Premiums required to be paid pursuant to Sections 4.01 and 4.02 hereof. If the amount of the Escrow Fund exceeds the amounts due for Taxes and Insurance Premiums pursuant to Sections 4.01 and 4.02 hereof, Lender will either return any excess to Borrower or credit such excess against future payments to be made to the Escrow Fund. In allocating such excess, Lender may deal with the Person shown on the records of Lender to be the owner of the Mortgaged Property. If the Escrow Fund is not sufficient, in Lender's judgment, to pay when due the Taxes and Insurance Premiums, Borrower must promptly pay, or must cause Tenant to pay promptly, to Lender, upon demand, an amount which Lender shall estimate as sufficient to make up the deficiency. Subject to Tenant's rights set forth in subparagraph 13(e) of the Lease, if an Event of Default exists, Lender may apply any sums then on deposit in the Escrow Fund to pay the following items in any order in its sole discretion:

 

(i)             Taxes and Impositions and Insurance Premiums;

 

(ii)            Interest on the unpaid principal balance of the Note;

 

(iii)           Amortization of the unpaid principal balance of the Note; or

 

(iv)           All other sums payable pursuant to the Loan Documents, including, Protective Advances made by Lender.

 

Until expended or applied as above provided, any amounts in the Escrow Fund will constitute additional security for the Debt. The Escrow Fund will not constitute a trust fund and may be commingled with other monies held by Lender. No earnings or interest on the Escrow Fund will be payable or credited to Borrower, except in the case of a Credit Rating Downgrade interest shall be disbursed according to the terms of the Lease.

 

 

 

Section 4.04   Changes in the Legal Requirements Regarding Taxation. If any Legal Requirement is enacted or adopted or amended after the Closing Date which imposes a tax, either directly or indirectly, on the Debt or Lender's interest in the Mortgaged Property, Borrower must pay such tax, with interest and penalties thereon, if any. If Lender is advised by counsel chosen by it that the payment of such tax or interest and penalties by Borrower would be unlawful or taxable to Lender or unenforceable or provide the basis for a defense of usury, then in any such event, Lender may, by written notice to Borrower of not less than ninety (90) days, declare the Debt immediately due and payable without Prepayment Consideration.

 

Section 4.05   No Credits on Account of the Debt. Borrower will not claim or demand or be entitled to any credit or credits on account of the Debt for any payment of Taxes or Impositions assessed against the Mortgaged Property and no deduction shall otherwise be made or claimed from the assessed value of the Mortgaged Property for real estate tax purposes by reason of the Loan Documents or the Debt. If such claim, credit or deduction shall be required by law, Lender may, by written notice to Borrower of not less than ninety (90) days, declare the Debt immediately due and payable.

 

Section 4.06   Documentary Stamps. If at any time any Governmental Authority requires revenue or other stamps to be affixed to the Note or the Indenture, or imposes any other tax or charge on the same, Borrower must pay for the same, with interest and penalties thereon, if any.

 

Section 4.07   Maintenance of Mortgaged Property. Borrower will maintain, or will cause Tenant and Manager to maintain, the Mortgaged Property in accordance with the requirements and subject to the conditions of (i) the Lease, and (ii) the Management Agreements. Borrower will comply with, and will cause Tenant and the case to any contest thereof conducted in accordance with the provisions of paragraph 6(d) of the Lease. Borrower will not initiate, join in, acquiesce in, or consent to any change in any Legal Requirements, limiting or defining the uses which may be made of the Mortgaged Property without the express written consent of Lender. If under applicable zoning provisions the use of all or any portion of the Mortgaged Property is or shall become a nonconforming use, Borrower will not cause or permit such nonconforming use to be discontinued or abandoned without Lender's express written consent.

 

Section 4.08   Books and Records. Borrower will keep adequate books and records of account in accordance with generally accepted accounting principles and deliver to Lender: (a) copies of all tax returns, if any, filed by Borrower within twenty (20) days after the filing thereof; (b) copies of all financial information received by Borrower under the Lease, and any lease within twenty (20) days after receipt thereof; (c) within one hundred and ten (110) days after the close of each fiscal year, an annual operating statement of the Mortgaged Property; (d) and an annual balance sheet and profit and loss statement of Borrower certified by Borrower's chief financial officer. Borrower will provide Lender with such additional financial or management information as Lender may reasonably request, provided that any such additional information with respect to Tenant or the Mortgaged Property is in Borrower's possession or is available to Borrower pursuant to the terms and provisions of the Lease.

 

 

 

Section 4.10   ERISA.

 

(a)    Throughout the term of this Loan Agreement, Borrower must not (i) become an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title 1 of ERISA; (ii) acquire assets that constitute "plan assets" of one or more plans within the meaning of 29 C.F.R. Section 2510.3-101; (iii) become a "governmental plan" within the meaning of Section 3(32) of ERISA; or (iv) enter into any transaction that is subject to state statutes regulating investments of and fiduciary obligations with respect to governmental plans.

 

(b)    Borrower will deliver to Lender such certifications or other evidence from time to time throughout the term of this Loan Agreement, as reasonably requested by Lender in its sole discretion, that (i) Borrower is not an "employee benefit plan" or a "governmental plan"; (ii) Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (iii) one or more of the following circumstances is true:

 

(a)    Borrower will comply, and will cause Tenant or Manager to comply, with all applicable Environmental Laws relating to the Mortgaged Property and the requirements of Article 9 of the Lease. Compliance by Tenant or Manager with the requirements of Article 9 of the Lease will be deemed to be compliance by Borrower with this Section 4.11(a).

 

 

 

(b)    Borrower will promptly notify Lender in writing if Borrower learns of the possible existence of any Hazardous Substances on the Mortgaged Property or if Borrower learns that the Mortgaged Property is or may be in direct or indirect violation of any Environmental Laws. Further, immediately upon receipt of the same, Borrower will deliver to Lender copies of any and all orders, notices, permits, applications, reports, and other communications, documents and instruments pertaining to the actual, alleged or potential presence or existence of any Hazardous Substances at, on, about, under, within, near or in connection with the Mortgaged Property. Subject to the rights of the Tenant under the Lease and the SNDA and the rights of tenants under the Superior Leases, Borrower grants to Lender and its agents and employees access to the Mortgaged Property and a license to remove any Hazardous Substances and to do all things Lender deems necessary to cause the Mortgaged Property to comply with Environmental Laws. Borrower will, at Borrower's sole cost and expense, indemnify, defend (at trial and appellate levels, and with attorneys, consultants and experts acceptable to Lender), and hold the Indemnified Parties harmless from and against any and all Indemnified Liabilities arising directly or indirectly from or out of: (i) the presence or release of any Hazardous Substances on, in, under or affecting all or any portion of the Mortgaged Property, or any release of Hazardous Substances emanating from the Mortgaged Property onto any contiguous property; (ii) the violation of any Environmental Laws relating to or affecting the Mortgaged Property, caused by Borrower or members of Borrower; (iii) the failure by Borrower to comply fully with the terms and conditions of this Section 4.11; (iv) the breach of any representation or warranty contained in Section 7.27 hereof; or (v) the enforcement of this Section 4.11, including, the cost to assess, contain and/or remove any Hazardous Substances from the Mortgaged Property or any surrounding areas, the cost of any actions taken in response to the presence, release or threat of release of any Hazardous Substances on, in, under or affecting the Mortgaged Property or any surrounding areas to prevent or minimize such release or threat of release so that it does not migrate or otherwise cause or threaten danger to present or future public health, safety, welfare or the environment, and the costs incurred to comply with the Environmental Laws in connection with the Mortgaged Property or any surrounding areas. This indemnity will survive payment in full of the Debt or any termination or satisfaction of the Lien of the Indenture or foreclosure of the Indenture for any Indemnified Liabilities arising or accruing on or before payment in full of the Debt or any termination or satisfaction of the Lien of the Indenture or foreclosure of the Indenture.

 

IMPORTANT - READ THIS

 

 

 

(c)    Upon Lender's request, and subject to the rights of the Tenant under the Lease and the SNDA and the rights of tenants under the Superior Leases, at any time an Event of Default exists or at such other time as Lender has reasonable grounds to believe that Hazardous Substances are or have been released, stored or disposed of on or around the Mortgaged Property or that the Mortgaged Property may violate the Environmental Laws, Borrower must provide, at Borrower's sole cost and expense, an inspection or audit of the Mortgaged Property prepared by a hydrogeologist or environmental engineer or other appropriate consultant approved by Lender indicating the presence or absence of Hazardous Substances on the Mortgaged Property or an inspection or audit of the Improvements prepared by an engineering or consulting firm approved by Lender indicating the presence or absence of friable asbestos or substances containing asbestos on the Mortgaged Property. If Borrower fails to provide such inspection or audit within thirty (30) days after such request, Lender may order the same, and Borrower hereby grants to Lender and its employees and agents access to the Mortgaged Property and an irrevocable license to undertake such inspection or audit, subject to the rights of the Tenant under the Lease and the SNDA, and the tenants under the Superior Leases. Borrower will pay immediately on demand the cost of such inspection or audit, together with interest thereon at the Default Rate from the date incurred by Lender until actually paid by Borrower, and such costs will be secured by the Indenture and by the other Security Documents securing all or any part of the Debt.

 

(d)    Without limiting the foregoing, and subject to Tenant's rights under the Lease and the tenants' rights under the Superior Leases, where recommended by a "PHASE I" or "PHASE II" assessment or otherwise required by Lender, Borrower will establish and will comply with an operations and maintenance program relative to the Mortgaged Property, in form and substance acceptable to Lender, prepared by an environmental consultant acceptable to Lender, which program will address any Hazardous Substances (including asbestos containing material or lead based paint) that may now or in the future be detected on the Mortgaged Property. Without limiting the generality of the preceding sentence, Lender may require, subject to Tenant's rights under the Lease and the SNDA and the tenants' rights under the Superior Leases, (a) periodic notices or reports to Lender in form, substance and at such intervals as Lender may specify; (b) an amendment to such operations and maintenance program to address changing circumstances, laws or other matters; (c) following any Event of Default or at such time as Lender has reasonable grounds to believe that Hazardous Substances are or have been released, stored or disposed of on or around the Mortgaged Property or that the Mortgaged Property may violate the Environmental Laws, then at Borrower's sole expense, supplemental examination of the Mortgaged Property by consultants specified by Lender; (d) access to the Mortgaged Property, by Lender, its agents or servicer, to review and assess the environmental condition of the Mortgaged Property and Borrower's compliance with any operations and maintenance program; and (e) variation of the operations and maintenance program in response to the reports provided by any such consultants.

 

 

 

ARTICLE 5

TRANSFER

 

Section 5.01   Transfer Generally.

 

(a)           Except as otherwise permitted in accordance with Sections 5.02 and 5.03 hereof, Borrower shall not directly or indirectly, without the prior written consent of Lender, which consent may be withheld in Lender's sole discretion, Transfer the Mortgaged Property or any interest therein, or permit the Transfer of the Mortgaged Property or any interest therein. The Term "TRANSFER" means, for any Person, any transactions in which such Person, directly or indirectly, transfers, sells, conveys, alienates, mortgages, encumbers or pledges the Mortgaged Property or any interest therein, including;

 

(i)            an installment sales agreement wherein Borrower agrees to sell the Mortgaged Property or any part thereof for a price to be paid in installments;

 

(ii)           an agreement by Borrower leasing all or a substantial part of the Mortgaged Property for other than actual occupancy by a space lessee thereunder or sale, assignment or other transfer of, or the grant of a security interest in, Borrower's right, title and interest in and to the Lease or any Rents;

 

(iii)          any divestiture of Borrower's title to the Mortgaged Property or any interest therein in any manner or way, whether voluntary or involuntary, or Borrower's merger, consolidation, or dissolution;

 

(iv)          if Borrower is a corporation, the voluntary or involuntary sale, conveyance or transfer of any of such corporation's stock or the creation or issuance of new stock in one or a series of transactions by which an aggregate of more than 10% of such corporation's stock shall be vested in a party or parties who are not stockholders as of the Closing Date or any change in the control of such corporation directly or indirectly;

 

(v)           if Borrower or any general partner of Borrower is a limited or general partnership, joint venture or limited liability company, (A) the change, removal, resignation or addition of a general partner, managing partner or managing member, or (B) the transfer of any interests of any general partner, managing partner or managing member, or (C) the transfer of any interests of any partner, joint venturer or member of Borrower; and

 

(vi)          if Borrower is a business trust, the voluntary or involuntary conveyance or transfer of any portion of the beneficial or economic interest in Borrower.

 

 

 

 

Section 5.02   Permitted Transfer of Beneficial Interest.

 

(a)           Any Beneficial Owner may Transfer all but not less than all of the beneficial interest in Borrower to an Acceding Beneficial Owner, without Lender's consent, upon the satisfaction of each of the following terms and conditions (a "PERMITTED TRANSFER OF BENEFICIAL INTEREST"):

 

(i)             the Acceding Beneficial Owner must assume all obligations of the affected Beneficial Owner under any agreement, instrument or document executed by the Beneficial Owner on its own behalf (and not as a signatory on behalf of Borrower), which wholly or partially evidences, secures or guarantees the Debt or otherwise evidences an obligation of Beneficial Owner to Lender (including, the Guaranty Agreement) from and after the date of Transfer and must make the representations and warranties as applicable to the Acceding Beneficial Owner, under and pursuant to the Beneficial Owner Instrument of Accession and Assumption in substantially the form attached hereto as EXHIBIT C;

 

(ii)            no default or Event of Default may exist under the Loan Documents at the time of or immediately after such Transfer;

 

(iii)           the documents governing Borrower must permit such Transfer;

 

(iv)   the Acceding Beneficial Owner must provide Lender with such certificates and legal opinions which were delivered by Beneficial Owner or its counsel in connection with the closing of the Loan, as may be reasonably requested by Lender in connection with such Transfer, including, an opinion containing the same conclusions as the Non-Consolidation Opinion provided to Lender by Borrower on the Closing Date, all substantially in the same form and content as those delivered to Lender in connection with the closing of the Loan;

 

(v)            each of the provisions of Article 6 hereof are and/or continue to be satisfied;

 

(vi)           Borrower must pay Lender, concurrently with the closing of such Transfer, all of Lender's costs and expenses described in Section 5.06 hereof; and

 

(vii)          Borrower must satisfy or cause to be satisfied the provisions of Section 5.07 hereof.

 

(b)           Upon compliance with each of the terms and conditions described above, and upon the execution and delivery of the Beneficial Owner Instrument of Accession and Assumption in substantially the form attached hereto as Exhibit C, the Acceding Beneficial Owner will thereafter become the Beneficial Owner for all purposes of the Note, the Indenture and the other Security Documents, and Lender will promptly release the affected Beneficial Owner from and after the date of such Transfer of its obligations as Beneficial Owner to the extent provided in a Certificate of Compliance and Release substantially in the form attached hereto as EXHIBIT D to be delivered by Lender to Beneficial Owner; provided that in no event will any such Transfer waive or release the Beneficial Owner for fraudulent or willful misconduct engaged in by Beneficial Owner or for any liability on account of any breach by Beneficial Owner of any representation, warranty, agreement or obligation of Beneficial Owner in its own capacity set forth in this Loan Agreement or the Security Documents before or in connection with such Transfer. Other than expenses set forth in Section 5.06 hereof, no assumption fee or other fee is due or payable in connection with such Permitted Transfer of Beneficial Interest.

 

 

 

(c)            Notwithstanding the foregoing, however, (1) (x) the ownership interests in the Person which owns the beneficial or economic ownership interests in Borrower, or (y) any ownership interest, direct or indirect, in any trustee or manager of any beneficial owner of Borrower may be freely transferable without compliance with the terms of this Section 5.02 and the removal and replacement of any trustee or manager of Borrower may be accomplished, without compliance with the terms of this Section 5.02, and (2) any involuntary transfer caused by the death of any general partner, shareholder, joint venturer, trustee, manager, member, or beneficial owner of any Person holding any interest in Borrower, any beneficial owner of Borrower or any trustee or manager of Borrower, or if Borrower is a partnership, any limited partner thereof, will not require compliance with the terms of this Section 5.02 so long as Borrower is reconstituted, as required by Borrower's organizational documents, following such death and so long as those Persons responsible for the management of the Mortgaged Property remain unchanged as a result of such death or any replacement management is approved by Lender and so long as reconstituted Borrower is fully liable for all of Borrower's obligations.

 

Section 5.03   Permitted Transfer of Mortgaged Property.

 

(a)            A Transferor may Transfer the Mortgaged Property to a Transferee upon 30 days prior written notice to Lender and, without Lender's consent, upon the satisfaction of each of the following terms and conditions (a "PERMITTED TRANSFER OF MORTGAGED PROPERTY"):

 

 (i)            no default or Event of Default may exist under the Loan Documents at the time of such Transfer;

 

 (ii)           Borrower or Transferee pays or causes to be paid to Lender, concurrently with the closing of such Transfer, a non-refundable assumption fee in an amount equal to $10,000.00, together with all of Lender's costs and expenses described in Section 5.06 hereof;

 

 (iii)          Transferee, in writing, (y) assumes and agrees to pay (subject to the non-recourse provisions of Section 12.13 hereof) the Debt and to perform all Other Obligations, and (z) as of the date of Transfer makes those representations of Borrower which are applicable to Transferee as are contained in the Loan Documents (or the assumption or assignment agreements delivered with respect thereto). Before or concurrently with the closing of such Transfer, Transferee or an affiliate thereof, Transferor, Beneficial Owner and the owner of the beneficial interest in Transferee or such other new indemnitor as may be acceptable to Lender execute, without any cost or expense to Lender, a Borrower Instrument of Accession and Assumption substantially in the form thereof attached hereto as EXHIBIT E, together with such documents and agreements as Lender may reasonably require to evidence and effectuate said assumption, and deliver such legal opinions as Lender may reasonably require;

 

 (iv)         Transferor and Transferee execute, without any cost or expense to Lender, new financing statements or financing statement assignments or amendments;

 

 (v)           Transferee and Transferor execute a Lease assignment and assumption agreement reasonably acceptable to Lender;

 

 

 

 (vi)         Tenant or Transferor provides Lender with written evidence (including a legal opinion, if necessary) satisfactory to Lender in its reasonable discretion, that such Transfer is permitted under or is not prohibited by the Lease;

 

 (vii)        Transferor or Transferee causes to be delivered to Lender, without any cost or expense to Lender, such endorsements to Lender's title insurance policy, hazard insurance endorsements or certificates and other similar materials as Lender may deem necessary at the time of the Transfer, all in form and substance reasonably satisfactory to Lender, including, an endorsement or endorsements to Lender's title insurance policy, insuring the Lien of the Indenture, extending the effective date of such policy to the date of execution and delivery (or, if later, of recording) of the Borrower Instrument of Accession and Assumption with no additional exceptions added to such policy not previously approved by Lender or permitted by the Lease and insuring that fee simple title to the Mortgaged Property is vested in Transferee, or, in lieu thereof, such other documents or evidence as Lender may reasonably require in order to confirm that such policy is unaffected by the Transfer;

 

 (viii)       Transferor executes and delivers to Lender, without any cost or expense to Lender, a release of Lender, its successors and assignees, their officers, directors, employees and agents, from all claims and liability relating to the transactions evidenced by the Loan Documents through and including the date of the closing of the Transfer, which agreement shall be in form and substance reasonably satisfactory to Lender and shall be binding upon the Transferee;

 

 (ix)          Lender receives such certificates and legal opinions which were delivered in connection with the closing of the Loan by Transferor or its counsel as may be reasonably requested by Lender in connection with such Transfer in substantially the same form and content as such items were delivered in connection with the closing of the Loan, including, the secretarial and officer certificates, opinions of counsel (including, local counsel) for Borrower regarding the authorization, execution and enforceability of the Loan Documents (or of the assumption or assignment agreements delivered with respect thereto) and any other documents executed by or binding upon Borrower and delivered in connection with such Transfer and a substantive non-consolidation bankruptcy opinion in substantially the same form as the Non-Consolidation Opinion; the parties intend that all such certificates and opinions delivered with respect to Borrower in connection with the making of the Loan hereunder are to be delivered, executed or otherwise provided with respect to Transferee and Lender's rights under and with respect to the Loan Documents will not to be diminished or affected by such Transfer;

 

 (x)           Transferee is a corporation, partnership, limited partnership or a limited liability company which complies with the provisions of Article 6 hereof;

 

 (xi)          Transferor and Transferee and their respective beneficial owners and Indemnitors, comply with any provisions of Section 5.02 which are applicable and are not satisfied as a result of any such Person's compliance with the provisions of this Section 5.03 at the time of the Transfer; and

 

 

 

(xii)          The RVI Policy and the "cut-through agreement", if applicable, issued with respect to the Mortgaged Property shall remain in full force and effect after giving effect to such Transfer.

 

(b)           Upon compliance with each of the terms and conditions described above, Lender will promptly release the Transferor and the Beneficial Owner of the Transferor from and after the date of such Transfer of its respective obligations as Borrower and Beneficial Owner and will deliver to such entities a Certificate of Compliance and Release substantially in the form attached hereto as EXHIBIT F; provided that in no event will any such Transfer waive or release such Transferor or the Beneficial Owner of such Transferor for any liability on account of any breach of any representation, warranty, agreement or obligation set forth in this Loan Agreement or under any Security Documents or for any fraudulent or willful misconduct, in each case which were made or occurred before or in connection with such Transfer.

 

Section 5.04   No Impairment. Lender will not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon any Transfer of the Mortgaged Property without Lender's consent or as otherwise expressly permitted herein. This provision applies to every Transfer of the Mortgaged Property regardless of whether voluntary or not, or whether or not Lender has consented to any prior Transfer of the Mortgaged Property.

 

Section 5.05   Lender Consent. Lender's consent to a Transfer of the Mortgaged Property or of any interest in Borrower in connection with a Transfer which does not comply with the terms and conditions of Sections 5.02 or 5.03, will not be deemed to be a waiver of Lender's right to require such consent to any future Transfer of the Mortgaged Property or of any interest in Borrower. Any Transfer of the Mortgaged Property or Transfer of Beneficial Interest made in contravention of this Article 5 will be null and void and of no force and effect.

 

Section 5.06   Cost of Transfer. Borrower must pay or reimburse Lender on demand for all reasonable out-of-pocket third party expenses (including, reasonable attorneys' fees and disbursements, title search costs and title insurance endorsement premiums) incurred by Lender and counsel to the Certificate Holders in connection with the review, approval and documentation of each Transfer of the Mortgaged Property or Transfer of Beneficial Interest.

 

Section 5.07   No Release of Liability. Except as provided in this Section 5.07 and in the applicable Certificate of Compliance and Release executed and delivered by Lender in connection with a Transfer, no Transfer, whether or not a Permitted Transfer, will relieve from liability the Beneficial Owner or any other Person or Persons who has provided any guaranty or indemnity or otherwise become liable for any of the obligations of Borrower under the Note, this Loan Agreement or the Security Documents (such Person a "CURRENT INDEMNITOR" and such liabilities arising or accruing before the Transfer, "INDEMNITY OBLIGATIONS"). If as a result of a Transfer, Current Indemnitor is no longer an affiliate of Borrower, Current Indemnitor may offer a new indemnitor ("NEW INDEMNITOR"), as a substitute, to assume any Indemnity Obligations of the Current Indemnitor arising after the date of the Transfer. Lender may, in its reasonable discretion, approve or disapprove such substitution. If Lender approves any such substitution, the approval will become effective upon the execution and delivery by New Indemnitor, without any cost or expense to Lender, of a guaranty substantially the same as the Guaranty Agreement executed by Beneficial Owner in connection with the Loan evidencing each New Indemnitor's agreement to be liable for the Indemnity Obligations (each a "NEW INDEMNITY AGREEMENT"), arising from and after the date of the Transfer, whereupon Lender will release the Current Indemnitor from its Indemnity Obligations arising after the date of such Transfer. Notwithstanding the foregoing, Current Indemnitor will be released from its Indemnity Obligations under the Loan upon a Permitted Transfer if the New Indemnitor enters into a New Indemnity Agreement.

 

 

ARTICLE 6

SINGLE PURPOSE ENTITY

 

Section 6.01   Separateness Representations and Covenants. Borrower represents and warrants to, and agrees with, Lender that as of the Closing Date and until such time as the Debt is paid in full:

 

(a)            Borrower does not own and will not own any asset or property other than (i) its interests in the Mortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the Mortgaged Property.

 

(b)            [Intentionally Omitted]

 

(c)            Borrower will not engage in any business other than the ownership, leasing, management and operation of the Mortgaged Property and any Replacement Property, and Borrower will conduct and operate its business as presently conducted and operated.

 

(d)            Except for the Aetna SPE Lease, MCI SPE Lease, the Management Agreements and the Multi-Party Agreement Borrower will not enter into any contract or agreement with any affiliate of Borrower or any constituent party of Borrower, the owner of any beneficial interest in Borrower or any affiliate of any constituent party (a "CONSTITUENT PARTY") or Indemnitor, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any such party.

 

(e)            Borrower has not incurred and will not incur any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt, and (ii) unsecured trade debt customarily payable within thirty (30) days.

 

(f)            Borrower has not made and will not make any loans or advances to any third party (including any affiliate or Constituent Party, any Indemnitor or any affiliate of any Constituent Party or Indemnitor), and shall not acquire obligations or securities of its affiliates.

 

(g)           Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, subject, however, to Borrower's contest rights under Section 4.02(b).

 

(h)            Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any Constituent Party to, amend, modify or otherwise change the articles of organization, operating agreement, partnership certificate, partnership agreement, articles of incorporation and bylaws, trust or other organizational documents of Borrower without the prior written consent of Lender, nor will Borrower permit any Constituent Party or Indemnitor to amend, modify or otherwise change the articles of organization, operating agreement, articles or organization, operating agreement, partnership certificate, partnership agreement, articles of incorporation and bylaws, trust certificate and agreement or other organizational documents of such Constituent Party or Indemnitor without consent of Lender, if any such amendment, modification or other change (i) would adversely affect the bankruptcy remote nature of Borrower; or (ii) would cause any of the assumptions upon which the Non-Consolidation Opinion is based to become inaccurate or untrue in any respect; or (iii) would adversely affect Lender's interest in the Loan.

 

 

 

(i)             Borrower will maintain books, records, financial statements and bank accounts separate from those of its affiliates and any constituent party. Borrower shall maintain its books, records, resolutions and agreements as official records.

 

(j)            Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any affiliate of Borrower or any Constituent Party of Borrower, any Indemnitor or any affiliate of any constituent party or Indemnitor), and shall conduct business in its own name and shall maintain and utilize separate invoices and checks. Borrower shall correct any known misunderstanding regarding its status as a separate entity.

 

(k)           Borrower will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.

 

(l)            Neither Borrower nor any Constituent Party will seek or effect the liquidation, dissolution, winding up, consolidation or merger, in whole or in part, of Borrower.

 

(m)           Borrower will not commingle the funds of Borrower with those of any affiliate or Constituent Party, any Indemnitor, or any affiliate of any Constituent Party or Indemnitor, or any other Person.

 

(n)           Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any affiliate or Constituent Party, any Indemnitor, or any affiliate of any Constituent Party or Indemnitor, or any other Person.

 

(o)           Borrower does not and will not hold itself out to be responsible for the debts or obligations of any other Person.

 

(p)           If Borrower is (i) a limited partnership, general partnership or limited liability company, at least one partner or manager, as the case may be, must be a Person with no interest in Borrower and which must at all times qualify as an Independent Manager or (ii) a corporation or business trust, it must have at all times a director or trustee who has no interest in Borrower and which qualifies as an Independent Manager (in either case, the "SPE MANAGER"), and such SPE Manager will at all times comply with, and SPE Manager shall not consent to or approve any action which would cause a violation of, any representations, warranties, and agreements contained in this Section 6.01 as if such representation, warranty or agreement was made directly by such SPE Manager.

 

(q)           "INDEPENDENT MANAGER" means a Person reasonably satisfactory to Lender, who shall not have been at the time of such Person's appointment, shall not have been at any time during the preceding five years, and shall not be at any time while serving as an Independent Manager, (i) a shareholder of, or an officer, director, partner or employee of, Borrower or any of its shareholders, subsidiaries or affiliates, (ii) a customer of, or supplier to, Borrower or any of its shareholders, subsidiaries or affiliates (other than a customer or supplier that does not derive more than five percent (5%) of its revenues from its activities with Borrower, its members or any affiliate thereof), (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means 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.

 

 

 

(r)             Borrower will not cause or permit the board of directors of the SPE Manager to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock, requires the vote of the board of directors of the SPE Manager, unless at the time of such action there is at least one member who is an Independent Manager.

 

(s)            Borrower will conduct its business so that the assumptions made with respect to Borrower, and its existence as a Delaware limited liability company in the Non-Consolidation Opinion are and remain true and correct in all respects for the term of the Note.

 

ARTICLE 7

 

REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants:

 

Section 7.01   Organization. Borrower (i) is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware; (ii) has the necessary power and authority, and all necessary Permits to own the Mortgaged Property and to carry on its business as now being conducted; (iii) has the necessary power, authority and legal right to acquire, own and lease the Mortgaged Property, to transact the business contemplated by this Loan Agreement, and to execute, deliver and perform its obligations under the Lease, the Aetna SPE Lease, the MCI SPE Lease, the Management Agreements, the Multi-Party Agreement, the SNDA, this Loan Agreement, the Note and the other Security Documents to which it is a party; and (iv) is duly qualified to do business in every jurisdiction where the conduct of its business requires such qualification and is duly licensed or qualified and is in good standing, as a foreign entity in each jurisdiction wherein the nature of the business transacted by it or the nature of the property owned or leased by it makes such licensing or qualification necessary.

 

Section 7.02   Authority. The signatory hereto has full power and authority to execute the Lease, the Aetna SPE Lease, the MCI SPE Lease, the Management Agreements, the Multi-Party Agreement, the SNDA and this Loan Agreement on Borrower's behalf as well as the Note and the other Security Documents. The execution and delivery by Borrower of each of the Transaction Documents to which it is a party, Borrower's performance of its obligations thereunder and the creation of the security interests and Liens provided for in the Note and the Security Documents to which it is a party have been duly authorized by all requisite action on the part of Borrower, including the consent of the holder(s) of ownership interests in Borrower where required. The Transaction Documents to which Borrower is a party have been duly authorized, executed and delivered by it. Borrower has all requisite power and authority to perform its obligations under the Transaction Documents to which it is a party.

 

Section 7.03   Consents. Borrower is not required to obtain any Permit from, or to file or register any declaration or statement with, any Governmental Authority in connection with or as a condition to the valid execution, delivery, performance or enforceability of any of the Transaction Documents, or if required the same has been duly obtained and is in full force and effect.

 

 

 

Section 7.04   No Litigation. There are no actions, suits or proceedings at law or in equity in or by or before any Governmental Authority now pending or, to Borrower's knowledge, threatened against or affecting Borrower, any member of Borrower or, to Borrower's knowledge, the Mortgaged Property or which, in any way, could adversely affect the validity or enforceability of the Lease, the Aetna SPE Lease, the Aetna Lease, the MCI SPE Lease, the MCI Lease the SNDA or any of the other Transaction Documents, or which, if decided against Borrower or any affiliate of Borrower, would have a material adverse effect on the business, operations or financial condition of Borrower.

 

 

Section 7.06   Enforceability. Each of the Transaction Documents executed by Borrower and delivered to Lender has been duly executed and delivered by Borrower, is an original, executed document, and each is the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, subject to bankruptcy, insolvency and other laws of general application affecting the rights of creditors and subject to the effect of general principles of equity regardless of whether enforcement is sought in a proceeding at law or in equity. As of the Closing Date, the Note, the Indenture and the other Transaction Documents executed by Borrower are not subject to any right of rescission, set-off, abatement, diminution, counterclaim or defense by Borrower, including the defense of usury, and Borrower has not asserted any right of rescission, set-off, abatement, diminution, counterclaim or defense with respect thereto.

 

Section 7.07   Disclosure. No statement of fact made by or on behalf of Borrower herein or in any of the other Transaction Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. There is no fact of which Borrower has knowledge which has not been disclosed to Lender which materially and adversely affects, or as far as Borrower reasonably foresees, would materially and adversely affect the Mortgaged Property or the business, properties, assets, operations or condition, financial or otherwise, of Borrower.

 

Section 7.08   No Default. The execution, delivery and to Borrower's knowledge, the performance of the obligations imposed on Borrower under any of the Transaction Documents will not violate any provision of any Legal Requirements, the articles of organization or operating agreement of Borrower or any indenture, agreement or other instrument to which Borrower is a party, or by which Borrower is bound, or be in conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under, or (except as may be provided in the Indenture or in any of the other Transaction Documents) result in the creation or imposition of any Lien of any nature whatsoever upon any of the property or assets of Borrower pursuant to, any Legal Requirements, articles of organization, operating agreement, indenture, agreement or instrument. No default by Borrower exists under the Transaction Documents and no act has occurred and no condition exists which, with the giving of notice or the passage of time, or both, could constitute a default under any of the Transaction Documents.

 

 

 

 

Section 7.09   Condemnation. To Borrower's knowledge, no Condemnation has been commenced or has been announced as being contemplated with respect to all or any portion of the Mortgaged Property or for the relocation of roadways providing access to the Mortgaged Property.

 

Section 7.10   Federal Reserve Regulations. The proceeds of the Loan will be used to acquire the Mortgaged Property, to pay expenses of the transaction contemplated hereby and to distribute any remaining balance to Borrower's beneficial owners. No part of the proceeds of the Loan will be used, directly or indirectly, for the purpose (whether immediate, incidental or ultimate) of buying or carrying any "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U, or used, directly or indirectly, in violation of any other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of this Loan Agreement.

 

Section 7.11   Utilities and Public Access To Borrower's knowledge, the Mortgaged Property has adequate rights of access to dedicated public ways (and the Mortgaged Property makes no material use of any means of access or egress that is not pursuant to such dedicated public ways or recorded, irrevocable rights-of-way or easements) and is served by adequate water, sewer, sanitary sewer and storm drain facilities. To Borrower's knowledge: (i) all public utilities necessary for the full use and enjoyment of the Mortgaged Property are located in the public right-of-way or in or through a recorded irrevocable easement in favor of the Mortgaged Property, and (ii) all such utilities are connected so as to serve the Mortgaged Property without passing over other property, except to the extent that such utilities are accessible to the Mortgaged Property by virtue of a recorded, irrevocable easement or similar agreement or right. To Borrower's knowledge, all roads necessary for the full utilization of the Mortgaged Property for its current purpose have been completed and Borrower has no knowledge that such roads have not been dedicated to public use and accepted by all Governmental Authorities.

 

Section 7.12   Not Foreign Person. Borrower is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code.

 

Section 7.13   Indenture Liens. The Indenture and the other Loan Documents are intended by Borrower to create a legal, valid, fully perfected and enforceable first priority Lien on the Mortgaged Property, and in any personalty owned by Borrower described in the Loan Documents, as security for the repayment of the Loan, subject only to any exceptions shown in the mortgagee title policy approved by Lender. To Borrower's knowledge, the Mortgaged Property is free and clear of any mechanics' and materialmen's Liens which are before or equal with the Lien of the Indenture, except those which are insured against in the mortgagee title policy.

 

 

 

 

Section 7.14   Assignment of Leases.

 

(a)            Assignment of Lease. Pursuant to the Indenture and the Assignment of Lease, Lender is the assignee of Borrower's interest under (i) the Lease, (ii) the Lease Guaranty, (iii) the Management Agreements, (iv) the Guaranty of Management Agreements, (v) the Multi-Party Agreement, (vi) the Guaranty of Multi-Party Agreement, and (vii) the Other Leases (the items identified at subparagraphs (i) through (vii) herein shall collectively be referred to as the "ASSIGNED DOCUMENTS"). Except as provided in paragraph 7.14(b) below, Borrower has made no prior assignments of the Assigned Documents, or otherwise assigned, pledged or hypothecated the Rents or any other income due and payable or to become due and payable with regard to the Lease or the Management Agreements. The Assignment of Lease creates a valid, collateral, first priority assignment of, and a valid first priority security interest in, Borrower's right to receive all payments due under the Lease and the Management Agreements, and no other Person owns any interest in the Lease.

 

(a)	Assignment of Aetna Lease and MCI Lease.

 

(i)             Aetna Lease. The Aetna Lease has been assigned by Borrower to the Aetna SPE.

 

(ii)            MCI Lease. The MCI Lease has been assigned by Borrower to the MCI SPE.

 

Section 7.15   No Adverse Change. There has been no material adverse change in the representations made or information heretofore supplied to Lender by or on behalf of Borrower in connection with the Transaction Documents as to (a) the composition or structure of Borrower (except as heretofore disclosed in writing to Lender) or, finances, business operations, credit, prospects or financial condition of Borrower or any owner of Borrower; (b) the rental income, condition or ownership of the Mortgaged Property; or (c) any other features of the transaction contemplated under the Transaction Documents.

 

Section 7.16   Lease and Management Agreements. (a) The Lease, the Lease Guaranty, the Management Agreements, the Guaranty of Management Agreements, the Multi-Party Agreement and the Guaranty of Multi-Party Agreement are in full force and effect; (b) a true and correct copy of the Lease, the Lease Guaranty, the Management Agreement, the Guaranty of Management Agreements, the Multi-Party Agreement and the Guaranty of Multi-Party Agreement as amended to the Closing Date have been delivered to Lender; (c) no default by Borrower and, to Borrower's knowledge, no default exists by (i) Tenant under the Lease, (ii) Manager under the Management Agreements, (iii) Lease Guarantor under the Lease Guaranty, (iv) Management Agreement Guarantor under the Guaranty of Management Agreements, (v) Tenant, the Aetna SPE or the MCI SPE under the Multi-Party Agreement, or (vi) Multi-Party Agreement Guarantor under the Guaranty of Multi-Party Agreement; (d) Borrower has not delivered or received any notice of default under the Lease, Lease Guaranty or Management Agreements or Guaranty of Management Agreements; (e) all Rents due and payable under the Lease have been paid in full and Borrower has not accepted or received any advance payments of Rent from Tenant; and (f) to Borrower's knowledge, there exist no rights of offset or defenses to pay any portion of the Rents.

 

 

 

Section 7.17   Condition, Compliance. To Borrower's knowledge, the Mortgaged Property is (a) in good condition, free of any material damage or waste that would affect the value of the Mortgaged Property and