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Exhibit 10.58
LOAN AGREEMENT
Dated as of September 8, 2006
Between
RD WOONSOCKET ASSOCIATES LIMITED PARTNERSHIP,
as Borrower
and
MERRILL LYNCH MORTGAGE LENDING, INC.,
as Lender
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TABLE OF CONTENTS
PAGE
----
ARTICLE 1 - DEFINITIONS; PRINCIPLES OF
CONSTRUCTION...................... 1
Section 1.1 Definitions
............................................... 1
Section 1.2 Principles of Construction
................................ 13
ARTICLE 2 - GENERAL TERMS
............................................. 14
Section 2.1 Loan Commitment; Disbursement to Borrower
................. 14
Section 2.2 Interest Rate
............................................. 14
Section 2.3 Loan Payments
............................................. 14
Section 2.4 Late Payment
Charge........................................ 16
Section 2.5
Reserved................................................... 16
Section 2.6 Prepayment; Defeasance
.................................... 16
Section 2.7 Payments after
Default..................................... 20
Section 2.8 Usury Savings
............................................. 20
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
.............................. 21
Borrower represents and warrants to Lender as of the Closing
Date that:.. 21
Section 3.1
Organization............................................... 21
Section 3.2 Status of Borrower
........................................ 21
Section 3.3 Validity of
Documents...................................... 21
Section 3.4 No Conflicts
.............................................. 22
Section 3.5
Litigation................................................. 22
Section 3.6 Agreements
................................................ 22
Section 3.7
Solvency................................................... 22
Section 3.8 Full and Accurate Disclosure
.............................. 23
Section 3.9 No Plan Assets
............................................ 23
Section 3.10 Not a Foreign Person
...................................... 23
Section 3.11
Enforceability............................................. 23
Section 3.12 Business
Purposes.......................................... 23
Section 3.13 Compliance
................................................ 24
Section 3.14 Financial
Information...................................... 24
Section 3.15 Title
..................................................... 24
Section 3.16 Condemnation
.............................................. 25
Section 3.17 Utilities and Public Access;
Parking....................... 25
Section 3.18 Separate
Lots.............................................. 25
Section 3.19 Assessments
............................................... 25
Section 3.20 Insurance
................................................. 25
Section 3.21 Use of Property
........................................... 25
Section 3.22 Certificate of Occupancy;
Licenses......................... 25
Section 3.23 Flood
Zone................................................. 26
Section 3.24 Physical Condition
........................................ 26
Section 3.25 Boundaries
................................................ 26
Section 3.26 Leases and Rent Roll
...................................... 26
Section 3.27 Filing and Recording Taxes
................................ 27
Section 3.28 Intentionally Omitted
..................................... 27
Section 3.29 Illegal Activity
.......................................... 27
Section 3.30 Construction
Expenses...................................... 27
Section 3.31 Personal Property
......................................... 27
Section 3.32 Taxes
..................................................... 28
Section 3.33 Federal Reserve
Regulations................................ 28
Section 3.34 Investment Company Act
.................................... 28
Section 3.35 No Change in Facts or Circumstances;
Disclosure............ 28
Section 3.36 Intellectual
Property...................................... 28
Section 3.37 Compliance with Anti-Terrorism Laws
....................... 29
Section 3.38 Brokers and Financial
Advisors............................. 29
Section 3.39 Survival
.................................................. 29
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ARTICLE 4 - BORROWER COVENANTS
.......................................... 29
Section 4.1 Existence; Compliance with Legal Requirements
............. 29
Section 4.2 Maintenance and Use of
Property............................ 30
Section 4.3
Waste...................................................... 30
Section 4.4 Taxes and Other
Charges.................................... 30
Section 4.5
Litigation................................................. 31
Section 4.6 Access to Property
........................................ 31
Section 4.7 Notice of
Default.......................................... 31
Section 4.8 Cooperate in Legal Proceedings
............................ 32
Section 4.9 Performance by
Borrower.................................... 32
Section 4.10 Awards; Insurance Proceeds
................................ 32
Section 4.11 Financial
Reporting........................................ 32
Section 4.12 Estoppel
Statement......................................... 33
Section 4.13 Leasing
Matters............................................ 33
Section 4.14 Property
Management........................................ 35
Section 4.15
Liens...................................................... 36
Section 4.16 Debt
Cancellation.......................................... 36
Section 4.17
Zoning..................................................... 36
Section 4.18
ERISA...................................................... 36
Section 4.19 No Joint
Assessment........................................ 37
Section 4.20 Patriot
Act................................................ 37
Section 4.21
Alterations................................................ 37
Section 4.22 Parking
Re-Striping........................................ 38
Section 4.23 Utility
Easement........................................... 38
ARTICLE 5 - ENTITY
COVENANTS............................................. 38
Section 5.1 Single Purpose
Entity/Separateness......................... 38
Section 5.2 Change of Name, Identity or Structure
..................... 42
Section 5.3 Business and
Operations.................................... 42
Section 5.4 Independent Director
...................................... 42
ARTICLE 6 - NO SALE OR ENCUMBRANCE
.................................... 43
Section 6.1 Transfer
Definitions....................................... 43
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Section 6.2 No
Sale/Encumbrance........................................ 43
Section 6.3 Permitted
Transfers........................................ 44
Section 6.4 Lender's
Rights............................................ 45
Section 6.5 Assumption
................................................ 45
ARTICLE 7 - INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
............ 47
Section 7.1 Insurance
................................................. 47
Section 7.2
Casualty................................................... 51
Section 7.3
Condemnation............................................... 51
Section 7.4 Restoration
............................................... 51
ARTICLE 8 - RESERVE FUNDS
............................................... 55
Section 8.1 Required
Repairs........................................... 55
Section 8.2 Replacements
.............................................. 56
Section 8.3 Intentionally
Omitted...................................... 56
Section 8.4 Required
Work.............................................. 56
Section 8.5 Release of Reserve
Funds................................... 58
Section 8.6 Tax and Insurance Reserve Funds
........................... 59
Section 8.7 Intentionally
Omitted...................................... 60
Section 8.8 Intentionally
Omitted...................................... 60
Section 8.9 Initial Debt Service Reserve
.............................. 60
Section 8.10 Woonsocket Bowling
Reserve................................. 61
Section 8.11 Intentionally
Omitted...................................... 61
Section 8.12 Reserve Funds, Generally
.................................. 61
ARTICLE 9 - INTENTIONALLY OMITTED
....................................... 62
ARTICLE 10 - EVENTS OF DEFAULT;
REMEDIES................................. 62
Section 10.1 Event of
Default........................................... 62
Section 10.2 Remedies
.................................................. 64
ARTICLE 11 - ENVIRONMENTAL PROVISIONS
................................... 65
Section 11.1 Environmental Representations and Warranties
.............. 65
Section 11.2 Environmental
Covenants.................................... 65
Section 11.3 Lender's
Rights............................................ 66
Section 11.4 Operations and Maintenance Programs
....................... 67
ARTICLE 12 - SECONDARY MARKET
........................................... 67
Section 12.1 Transfer of Loan
.......................................... 67
Section 12.2 Delegation of Servicing
................................... 67
Section 12.3 Dissemination of
Information............................... 67
Section 12.4
Cooperation................................................ 68
Section 12.5 Intentionally
Omitted...................................... 69
ARTICLE 13 - INDEMNIFICATIONS
........................................... 69
Section 13.1 General Indemnification
................................... 69
Section 13.2 Mortgage and Intangible Tax Indemnification
............... 70
Section 13.3 ERISA Indemnification
..................................... 70
Section 13.4 Environmental Indemnity
................................... 70
Section 13.5
Survival................................................... 70
ARTICLE 14 - EXCULPATION
............................................... 71
Section 14.1 Exculpation
............................................... 71
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ARTICLE 15 - NOTICES
................................................... 73
Section 15.1 Notices
................................................... 73
ARTICLE 16 - FURTHER ASSURANCES
........................................ 74
Section 16.1 Replacement Documents
..................................... 74
Section 16.2 Recording of Mortgage,
Etc................................. 74
Section 16.3 Further Acts,
Etc.......................................... 74
Section 16.4 Changes in Tax, Debt, Credit and Documentary Stamp
Laws ... 75
Section 16.5 Expenses
.................................................. 75
ARTICLE 17 - WAIVERS
................................................... 76
Section 17.1 Remedies Cumulative;
Waivers............................... 76
Section 17.2 Modification, Waiver in Writing
........................... 76
Section 17.3 Delay Not a Waiver
........................................ 76
Section 17.4 Trial by
Jury.............................................. 77
Section 17.5 Waiver of
Notice........................................... 77
Section 17.6 Remedies of
Borrower....................................... 77
Section 17.7 Waiver of Marshalling of Assets
........................... 78
Section 17.8 Waiver of Statute of
Limitations........................... 78
Section 17.9 Waiver of
Counterclaim..................................... 78
ARTICLE 18 - GOVERNING LAW
............................................. 78
Section 18.1 Governing
Law.............................................. 78
Section 18.2 Severability
.............................................. 78
Section 18.3
Preferences................................................ 78
ARTICLE 19 - MISCELLANEOUS
............................................. 79
Section 19.1 Survival
.................................................. 79
Section 19.2 Lender's
Discretion........................................ 79
Section 19.3 Headings
.................................................. 79
Section 19.4 Schedules and Exhibits
Incorporated........................ 79
Section 19.5 Offsets, Counterclaims and Defenses
....................... 79
Section 19.6 No Joint Venture or Partnership; No Third Party
Beneficiaries
........................................................ 80
Section 19.7 Publicity
................................................. 81
Section 19.8 Conflict; Construction of Documents;
Reliance.............. 81
Section 19.9 Duplicate Originals;
Counterparts.......................... 81
Section 19.10 Entire Agreement
.......................................... 81
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of September 8, 2006 (as amended,
restated,
replaced, supplemented or otherwise modified from time to time,
this
"AGREEMENT"), between MERRILL LYNCH MORTGAGE LENDING, INC., a
Delaware
corporation having an address at 4 World Financial Center, 16th
Floor, New York,
New York 10080 (together with its successors and/or assigns,
"Lender") and RD
WOONSOCKET ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited
partnership,
having an address at c/o Acadia Realty Trust, 1311 Mamaroneck
Avenue, White
Plains, New York 10605 (together with its successors and/or
assigns,
"BORROWER").
RECITALS:
Borrower desires to obtain the Loan (defined below) from
Lender.
Lender is willing to make the Loan to Borrower, subject to and
in accordance
with the terms of this Agreement and the other Loan Documents
(defined below).
In consideration of the making of the Loan by Lender and the
covenants,
agreements, representations and warranties set forth in this
Agreement, the
parties hereto hereby covenant, agree, represent and warrant as
follows:
ARTICLE 1 - DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 DEFINITIONS
For all purposes of this Agreement, except as otherwise
expressly required or
unless the context clearly indicates a contrary intent:
"Act" shall have the meaning set forth in Section 5.1 (c)
hereof.
"AFFILIATE" shall mean, as to any Person, any other Person that,
directly or
indirectly, is in control of, is controlled by or is under
common control with
such Person or is a director or officer of such Person or of an
Affiliate of
such Person. Such term shall include Guarantor unless otherwise
specified or if
the context may otherwise require.
"AFFILIATED MANAGER" shall have the meaning set forth in Section
6.1 hereof
"ALTA" shall mean American Land Title Association, or any
successor thereto.
"ALTERATION THRESHOLD" means $750,000.00.
"Award" shall mean any compensation paid by any Governmental
Authority in
connection with a Condemnation in respect of all or any part of
the Property.
"BUSINESS DAY" shall mean any day other than Saturday, Sunday,
any other day on
which banks are required or authorized to close in New York, New
York, or the
place of business of any servicer servicing the Loan.
"Casualty" shall have the meaning set forth in Section 7.2
hereof. "CLOSING
DATE" shall mean the date of this Agreement. "CONTROL" shall
have the meaning
set forth in Section 6.1 hereof.
"CONDEMNATION" shall mean a temporary or permanent taking by any
Governmental
Authority as the result, in lieu or in anticipation, of the
exercise of the
right of condemnation or eminent domain, of all or any part of
the Property, or
any interest therein or right accruing thereto, including any
right of access
thereto or any change of grade affecting the Property or any
part thereof.
"CONDEMNATION PROCEEDS" shall have the meaning set forth in
Section 7.4(b)
hereof
"CREDITORS RIGHTS LAWS" shall mean with respect to any Person,
any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy,
insolvency, reorganization, conservatorship, arrangement,
adjustment,
winding-up, liquidation, dissolution, assignment for the benefit
of creditors,
composition or other relief with respect to its debts or
debtors.
"Debt" shall mean the outstanding principal amount set forth in,
and evidenced
by, this Agreement and the Note together with all interest
accrued and unpaid
thereon and all other sums due to Lender in respect of the Loan
under the Note,
this Agreement, the Security Instrument or any other Loan
Document.
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"DEBT SERVICE" shall mean, with respect to any particular period
of time,
scheduled principal and/or interest payments under the Note.
"DEBT SERVICE COVERAGE RATIO" shall mean, as of any date of
determination, for
the applicable period of calculation, the ratio, as determined
by Lender, of (i)
Net Operating Income to (ii) the aggregate amount of actual Debt
Service due for
the same period.
"DEFAULT" shall mean the occurrence of any event hereunder or
under any other
Loan Document which, but for the giving of notice or passage of
time, or both,
would be an Event of Default.
"DEFAULT RATE" shall mean a rate per annum equal to the lesser
of (a) four
percent (4%) plus the Interest Rate and (b) the Maximum Legal
Rate.
"DEFIANCE COLLATERAL" shall have the meaning set forth in
Section
2.6(b)(i)(D)(2) hereof.
"DEFIANCE EVENT" shall have the meaning set forth in Section
2.6(b)(i) hereof.
"DEFEASANCE SECURITY AGREEMENT" shall have the meaning set forth
in Section
2.6(b)(i)(D)(1) hereof.
"ELIGIBLE ACCOUNT" shall mean a separate and identifiable
account from all other
funds held by the holding institution that is either (a) an
account or accounts
maintained with a federal or state chartered depository
institution or trust
company which complies with the definition of Eligible
Institution or (b) a
segregated trust account or accounts maintained with a federal
or state
chartered depository institution or trust company acting in its
fiduciary
capacity which, in the case of a state chartered depository
institution or trust
company, is subject to regulations substantially similar to 12
C.F.R. Section
9.10(b), having in either case a combined capital surplus of at
least
$50,000,000 and subject to supervision or examination by federal
and state
authority. An Eligible Account will not be evidenced by a
certificate of
deposit, passbook or other instrument.
"ELIGIBLE INSTITUTION" shall mean a depository institution or
trust company
insured by the Federal Deposit Insurance Corporation, the short
term unsecured
debt obligations or commercial paper of which are rated at least
"A-l" by S&P,
"P-1" by Moody's and "F-1" by Fitch in the case of accounts in
which funds are
held for thirty (30) days or less (or, in the case of accounts
in which funds
are held for more than thirty (30) days, the long term unsecured
debt
obligations of which are rated at least "AA" by Fitch and
S&P and "Aa2" by
Moody's).
"EMBARGOED PERSON" shall mean any Person identified by OFAC or
any other Person
with whom a Person resident in the United States of America may
not conduct
business or transactions by prohibition of federal law or
Executive Order of the
President of the United States of America.
"ENVIRONMENTAL INDEMNITY" shall mean that certain Environmental
Indemnity
Agreement, dated as of the date hereof, executed by Borrower and
Guarantor in
connection with the Loan for the benefit of Lender, as the same
may be amended,
restated, replaced, supplemented or otherwise modified from time
to time.
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<PAGE>
"ENVIRONMENTAL LAW" shall mean any present and future federal,
state and local
laws, statutes, ordinances, rules, regulations, standards,
policies, orders and
other government directives or requirements, as well as common
law, including
but not limited to the Comprehensive Environmental Response,
Compensation and
Liability Act and the Resource Conservation and Recovery Act,
that apply to
Borrower or the Property and relate to Hazardous Materials or
protection of
human health or the environment.
"ENVIRONMENTAL LIENS" shall mean all Liens and other
encumbrances imposed
pursuant to any Environmental Law, whether due to any act or
omission of
Borrower or any other Person.
"ENVIRONMENTAL REPORT" shall mean that certain written report
dated August 24,
2006 and prepared by EBI Consulting and certified to Lender
resulting from the
environmental site assessments of the Property delivered to
Lender in connection
with the Loan.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as
amended from time to time, and any successor statutes thereto
and the
regulations promulgated and the rulings issued thereunder.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
10.1 hereof.
"Fitch" shall mean Fitch, Inc.
"GAAP" shall mean generally accepted accounting principles in
the United States
of
3
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America as of the date of the applicable financial report.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
department,
commission, office or other authority of any nature whatsoever
for any
governmental unit (federal, state, county, municipal, city,
town, special
district or otherwise) whether now or hereafter in
existence.
"GUARANTOR" shall mean Acadia Realty Limited Partnership, a
Delaware limited
partnership.
"GUARANTY" shall mean that certain Guaranty of Recourse
Obligations, dated as of
the date hereof, executed by Guarantor in connection with the
Loan for the
benefit of Lender, as the same may be amended, restated,
replaced, supplemented
or otherwise modified from time to time.
"HAZARDOUS MATERIALS" shall mean any petroleum and petroleum
products and
compounds containing them, including gasoline, diesel fuel and
oil; explosives,
flammable materials; radioactive materials; polychlorinated
biphenyls and
compounds containing them; lead and lead-based paint; asbestos
or
asbestos-containing materials; underground or above-ground
storage tanks,
whether empty or containing any substance; toxic mold; any
substance the
presence of which on the Property is prohibited by any federal,
state or local
authority; any substance that requires special handling; and any
other material
or substance now or in the future defined as a "hazardous
substance," "hazardous
material" "hazardous waste" "toxic substance" "toxic pollutant",
"contaminant",
or "pollutant" within the meaning of any Environmental Law.
"IMPROVEMENTS" shall have the meaning set forth in the granting
clause of the
Security Instrument.
"INDEMNIFIED PARTIES" shall mean (a) Lender, (b) any prior owner
or holder of
the Loan or Participations in the Loan, (c) any servicer or
prior servicer of
the Loan, (d) any Investor or any prior Investor in any
Securities, (e) any
trustees, custodians or other fiduciaries who hold or who have
held a full or
partial interest in the Loan for the benefit of any Investor or
other third
party, (I) any receiver or other fiduciary appointed in a
foreclosure or other
Creditors Rights Laws proceeding, (g) any officers, directors,
shareholders,
partners, members, employees, agents, servants, representatives,
contractors,
subcontractors, affiliates or subsidiaries of any and all of the
foregoing, and
(h) the heirs, legal representatives, successors and assigns of
any and all of
the foregoing (including, without limitation, any successors by
merger,
consolidation or acquisition of all or a substantial portion of
the Indemnified
Parties' assets and business.
hereof
hereof.
"INDEPENDENT DIRECTOR" shall have the meaning set forth in
Section 5.4 hereof.
"INITIAL DEBT SERVICE RESERVE ACCOUNT" shall have the meaning
set forth in
Section 8.9
"INITIAL DEBT SERVICE RESERVE FUNDS" shall have the meaning set
forth in Section
8.9
"INSOLVENCY OPINION" shall mean, that certain bankruptcy
non-consolidation
opinion
4
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letter delivered by counsel for Borrower in connection with the
Loan and
approved by Lender or the Rating Agencies, as the case may
be.
"INSURANCE PREMIUMS" shall have the meaning set forth in Section
7.1(b) hereof.
"INSURANCE PROCEEDS" shall have the meaning set forth in Section
7.4(b) hereof.
"INTEREST RATE" shall mean an interest rate equal to six and
sixty three
thousandths percent (6.063%) per annum.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as
amended, as it may be further amended from time to time, and any
successor
statutes thereto, and applicable U.S. Department of Treasury
regulations issued
pursuant thereto in temporary or final form.
"INVESTOR" shall have the meaning set forth in Section 12.3
hereof. "Lease"
shall have the meaning set forth in the Security Instrument.
"LEGAL REQUIREMENTS" shall mean all statutes, laws, rules,
orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental
Authorities
affecting the Property or any part thereof, or the construction,
use, alteration
or operation thereof, whether now or hereafter enacted and in
force, and all
permits, licenses, authorizations and regulations relating
thereto, and all
covenants, agreements, restrictions and encumbrances contained
in any
instruments, either of record or known to Borrower, at any time
in force
affecting the Property or any part thereof, including, without
limitation, any
which may (a) require repairs, modifications or alterations in
or to the
Property or any part thereof, or (b) in any way limit the use
and enjoyment
thereof.
"Lien" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation,
assignment, security interest, or any other encumbrance, charge
or transfer of,
on or affecting Borrower, the Property, any portion thereof or
any interest
therein, including, without limitation, any conditional sale or
other title
retention agreement, any financing lease having substantially
the same economic
effect as any of the foregoing, the filing of any financing
statement, and
mechanic's, materialmen's and other similar liens and
encumbrances.
"LLC AGREEMENT" shall have the meaning set forth in Section
5.1(c) hereof
"LOAN" shall mean the loan made by Lender to Borrower pursuant
to this
Agreement.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Note, the
Security Instrument, the Environmental Indemnity, the Assignment
of Management
Agreement, the Guaranty and any and all other documents,
agreements and
certificates executed and/or delivered in connection with the
Loan, as the same
may be amended, restated, replaced, supplemented or otherwise
modified from time
to time.
"LOCKOUT PERIOD" shall mean the period commencing on the Closing
Date and ending
on the day immediately prior to the Scheduled Payment Date that
is four (4)
months prior to the
5
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Maturity Date.
"Losses" shall mean any and all claims, suits, liabilities
(including, without
limitation, strict liabilities), actions, proceedings,
obligations, debts,
damages, losses, costs, expenses, fines, penalties, charges,
fees, judgments,
awards, amounts paid in settlement of whatever kind or nature
(including but not
limited to legal fees and other costs of defense).
"MAIOR LEASE" shall mean any Lease which individually or when
aggregated with
all other Leases at the Property with the same Tenant or its
Affiliates demises
more than 15,000 square feet at the Property.
"MANAGEMENT AGREEMENT" shall have the meaning set forth in
Section 4.14(a)
hereof
"Manager" shall mean any entity selected as the manager of the
Property in
accordance with the terms of this Agreement.
"MATURITY DATE" shall mean October 1, 2016 or such other date on
which the final
payment of the 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 nonusurious interest
rate, if any,
that at any time or from time to time may be contracted for,
taken, reserved,
charged or received on the indebtedness evidenced by the Note
and as provided
for herein or the other Loan Documents, under the laws of such
state or states
whose laws are held by any court of competent jurisdiction to
govern the
interest rate provisions of the Loan.
"MEMBER" shall have the meaning set forth in Section 5.1(c)
hereof.
"MONTHLY PAYMENT AMOUNT" shall have the meaning set forth in
Section 2.3(a)(ii)
hereof
"MOODY'S ' shall mean Moody's Investors Service, Inc.
"NET OPERATING INCOME" shall mean, with respect to any period of
time, the
amount obtained by subtracting Operating Expenses from Operating
Income, as such
amount may be adjusted by Lender in its good faith discretion
based on Lender's
underwriting standards, including without limitation,
adjustments for vacancy
allowance.
"NET PROCEEDS" shall have the meaning set forth in Section
7.4(b) hereof.
"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section 7.4(b)(vi)
hereof.
"NOTE" shall mean that certain promissory note of even date
herewith in the
principal amount of $23,500,000.00, made by Borrower in favor of
Lender, as the
same may be amended, restated, replaced, supplemented or
otherwise modified from
time to time.
"OFAC" shall have the meaning set forth in Section 3.37
hereof.
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<PAGE>
"OPERATING EXPENSES" shall mean, with respect to any period of
time, all
expenses, computed in accordance with GAAP, directly
attributable to the
operation, repair and/or maintenance of the Property including,
without
limitation, (a) Taxes and Other Charges, (b) Insurance Premiums,
(c) management
fees, whether or not actually paid, equal to the greater of the
actual
management fees and four percent (4%) of annual "base" or
"fixed" Rent due under
the Leases and (d) costs attributable to the operation, repair
and maintenance
of the systems for heating, ventilating and air conditioning the
Improvements
and actually paid for by Borrower. Operating Expenses shall not
include
interest, principal and premium, if any, due under the Note or
otherwise in
connection with the Debt, income taxes, extraordinary capital
improvement costs,
any non-cash charge or expense such as depreciation or
amortization.
"OPERATING INCOME" shall mean, with respect to any period of
time, all income,
computed in accordance with GAAP, derived from the ownership and
operation of
the Property from whatever source, including, but not limited
to, Rents, utility
charges, escalations, forfeited security deposits, interest on
credit accounts,
service fees or charges, license fees, parking fees, rent
concessions or
credits, and other required pass-throughs but excluding sales,
use and occupancy
or other taxes on receipts required to be accounted for by
Borrower to any
Governmental Authority, refunds and uncollectible accounts,
sales of furniture,
fixtures and equipment, interest income from any source other
than the escrow
accounts, Reserve Accounts or other accounts required pursuant
to the Loan
Documents, Insurance Proceeds (other than business interruption
or other loss of
income insurance), Awards, percentage rent, unforfeited security
deposits,
utility and other similar deposits, income from tenants not
paying rent, income
from tenants in bankruptcy, non-recurring or extraordinary
income, including,
without limitation lease termination payments, and any
disbursements to Borrower
from the Reserve Accounts.
"OTHER CHARGES" shall mean all ground rents, maintenance
charges, impositions
other than Taxes, and any other charges, including, without
limitation, vault
charges and license fees for the use of vaults, chutes and
similar areas
adjoining the Property, now or hereafter levied or assessed or
imposed against
the Property or any part thereof.
"PARTICIPATIONS" shall have the meaning set forth in Section
12.1 hereof.
"PATRIOT ACT" shall have the meaning set forth in Section 3.37
hereof.
"PERMITTED DEFEASANCE DATE" shall mean the date that is the
earlier of (a) three
years from the Closing Date or (b) two (2) years from the
"startup day" within
the meaning of Section 860G(a)(9) of the Internal Revenue Code
of any REMIC
Trust that holds the Note.
"PERMITTED ENCUMBRANCES" shall mean collectively, (a) the Lien
and security
interests created by the Loan Documents, (b) all Liens,
encumbrances and other
matters disclosed in the Title Insurance Policy, (c) Liens, if
any, for Taxes
imposed by any Governmental Authority not yet due or delinquent,
and (d) such
other title and survey exceptions as Lender has approved or may
approve in
writing in Lender's sole discretion.
"PERMITTED INVESTMENTS" shall mean to the extent available from
Lender or
Lender's servicer for deposits in the Reserve Accounts, any one
or more of the
following obligations or securities acquired at a purchase price
of not greater
than par, including those issued by a
7
<PAGE>
servicer of the Loan, the trustee under any securitization or
any of their
respective Affiliates, payable on demand or having a maturity
date not later
than the Business Day immediately prior to the date on which the
funds used to
acquire such investment are required to be used under this
Agreement and meeting
one of the appropriate standards set forth below:
(a) obligations of, or obligations fully guaranteed as to
payment of principal
and interest by, the United States or any agency or
instrumentality thereof
provided such obligations are backed by the full faith and
credit of the United
States of America including, without limitation, obligations o^
the U.S.
Treasury (all direct or fully guaranteed obligations), the
Farmers Home
Administration (certificates of beneficial ownership), the
General Services
Administration (participation certificates), the U.S. Maritime
Administration
(guaranteed Title XI financing), the Small Business
Administration (guaranteed
participation certificates and guaranteed pool certificates),
the U.S.
Department of Housing and Urban Development (local authority
bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed
transit bonds);
provided, however, that the investments described in this clause
must (i) have a
predetermined fixed dollar of principal due at maturity that
cannot vary or
change, (ii) be rated "AAA" or the equivalent by each of the
Rating Agencies,
(iii) if rated by S&P, must not have an "r" highlighter
affixed to their rating,
(iv) if such investments have a variable rate of interest, such
interest rate
must be tied to a single interest rate index plus a fixed spread
(if any) and
must move proportionately with that index, and (v) such
investments must not be
subject to liquidation prior to their maturity;
(b) Federal Housing Administration debentures;
(c) obligations of the following United States government
sponsored agencies:
Federal Home Loan Mortgage Corp. (debt obligations), the Farm
Credit System
(consolidated systemwide bonds and notes), the Federal Home Loan
Banks
(consolidated debt obligations), the Federal National Mortgage
Association (debt
obligations), the Financing Corp. (debt obligations), and the
Resolution Funding
Corp. (debt obligations); provided, however, that the
investments described in
this clause must (i) have a predetermined fixed dollar of
principal due at
maturity that cannot vary or change, (ii) if rated by S&P,
must not have an "r"
highlighter affixed to their rating, (iii) if such investments
have a variable
rate of interest, such interest rate must be tied to a single
interest rate
index plus a fixed spread (if any) and must move proportionately
with that
index, and (iv) such investments must not be subject to
liquidation prior to
their maturity;
(d) federal funds, unsecured certificates of deposit, time
deposits, bankers'
acceptances and repurchase agreements with maturities of not
more than 365 days
of any bank, the short term obligations of which at all times
are rated in the
highest short term rating category by each Rating Agency (or, if
not rated by
all Rating Agencies, rated by at least one Rating Agency in the
highest short
term rating category and otherwise acceptable to each other
Rating Agency, as
confirmed in writing that such investment would not, in and of
itself, result in
a downgrade, qualification or withdrawal of the initial, or, if
higher, then
current ratings assigned to the Securities); provided, however,
that the
investments described in this clause must (i) have a
predetermined fixed dollar
of principal due at maturity that cannot vary or change, (ii) if
rated by S&P,
must not have an "r" highlighter affixed to their rating, (iii)
if such
investments have a variable rate of interest, such interest rate
must be tied to
a single interest rate index plus a fixed spread (if any) and
must move
proportionately with that index, and (iv) such investments must
not be subject
to liquidation prior to their maturity;
(e) fully Federal Deposit Insurance Corporation-insured demand
and time deposits
in, or certificates of deposit of, or bankers' acceptances with
maturities of
not more than 365 days issued by, any bank or trust company,
savings and loan
association or savings bank, the short term obligations of which
at all times
are rated in the highest short term rating category by each
Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one
Rating Agency in the
highest short term rating category and otherwise acceptable to
each other Rating
Agency, as confirmed in writing that such investment would not,
in and of
itself, result in a downgrade, qualification or withdrawal of
the initial, or,
if higher, then current ratings assigned to the Securities);
provided, however,
that the investments described in this clause must (i) have a
predetermined
fixed dollar of principal due at maturity that cannot vary or
change, (ii) if
rated by S&P, must not have an "r" highlighter affixed to
their rating, (iii)
____ such investments have a
8
<PAGE>
variable rate of interest, such interest rate must be tied to a
single interest
rate index plus a fixed spread (if any) and must move
proportionately with that
index, and (iv) such investments must not be subject to
liquidation prior to
their maturity;
(f) debt obligations with maturities of not more than 365 days
and at all times
rated by each Rating Agency (or, if not rated by all Rating
Agencies, rated by
at least one Rating Agency and otherwise acceptable to each
other Rating Agency,
as confirmed in writing that such investment would not, in and
of itself, result
in a downgrade, qualification or withdrawal of the initial, or,
if higher, then
current ratings assigned to the Securities) in its highest
long-term unsecured
rating category; provided, however, that the investments
described in this
clause must (i) have a predetermined fixed dollar of principal
due at maturity
that cannot vary or change, (ii) if rated by S&P, must not
have an "r"
highlighter affixed to their rating, (iii) if such investments
have a variable
rate of interest, such interest rate must be tied to a single
interest rate
index plus a fixed spread (if any) and must move proportionately
with that
index, and (iv) such investments must not be subject to
liquidation prior to
their maturity;
(g) commercial paper (including both non-interest-bearing
discount obligations
and interest-bearing obligations payable on demand or on a
specified date not
more than one year after the date of issuance thereof) with
maturities of not
more than 365 days and that at all times is rated by each Rating
Agency (or, if
not rated by all Rating Agencies, rated by at least one Rating
Agency and
otherwise acceptable to each other Rating Agency, as confirmed
in writing that
such investment would not, in and of itself, result in a
downgrade,
qualification or withdrawal of the initial, or, if higher, then
current ratings
assigned to the Securities) in its highest short-term unsecured
debt rating;
provided, however, that the investments described in this clause
must (i) have a
predetermined fixed dollar of principal due at maturity that
cannot vary or
change, (ii) if rated by S&P, must not have an "r"
highlighter affixed to their
rating, (iii) if such investments have a variable rate of
interest, such
interest rate must be tied to a single interest rate index plus
a fixed spread
(if any) and must move proportionately with that index, and (iv)
such
investments must not be subject to liquidation prior to their
maturity;
(h) units of taxable money market funds or mutual funds with
maturities of not
more than 365 days, 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
9
<PAGE>
United States, which funds have the highest rating available
from each Rating
Agency (or, if not rated by all Rating Agencies, rated by at
least one Rating
Agency and otherwise acceptable to each other Rating Agency, as
confirmed in
writing that such investment would not, in and of itself, result
in a downgrade,
qualification or withdrawal of the initial, or, if higher, then
current ratings
assigned to the Securities) for money market funds or mutual
funds; and
(i) any other security, obligation or investment which has been
approved as a
Permitted Investment in writing by (i) Lender and (ii) each
Rating Agency, as
evidenced by a written confirmation that the designation of such
security,
obligation or investment as a Permitted Investment will not, in
and of itself,
result in a downgrade, qualification or withdrawal of the
initial, or, if
higher, then current ratings assigned to the Securities by such
Rating Agency;
provided, however, that no obligation or security shall be a
Permitted
Investment if (A) such obligation or security evidences a right
to receive only
interest payments, (B) the right to receive principal and
interest payments on
such obligation or security are derived from an underlying
investment that
provides a yield to maturity in excess of one hundred twenty
percent (120%) of
the yield to maturity at par of such underlying investment or
(C) such
obligation or security has a remaining term to maturity in
excess of one (1)
year.
"Person" shall mean any individual, corporation, partnership,
joint venture,
limited liability company, estate, trust, unincorporated
association, any
federal, state, county or municipal government or any bureau,
department or
agency thereof and any fiduciary acting in such capacity on
behalf of any of the
foregoing.
"PERSONAL PROPERTY" shall have the meaning set forth in the
granting clause of
the Security Instrument.
"Policies" shall have the meaning set forth in Section 7.1(b)
hereof.
"PROHIBITED TRANSFER" shall have the meaning set forth in
Section 6.2 hereof.
"Property" shall mean the parcel of real property, the
Improvements thereon and
all Personal Property owned by Borrower and encumbered by the
Security
Instrument, together with all rights pertaining to such property
and
Improvements, as more particularly described in the granting
clause of the
Security Instrument and referred to therein as the
"PROPERTY".
"PROPERTY CONDITION REPORT" shall mean a report prepared by a
company
satisfactory to Lender and certified to Lender regarding the
physical condition
of the Property, satisfactory in form and substance to Lender in
its sole
discretion.
"PROVIDED INFORMATION" shall have the meaning set forth in
Section 12.4 hereof.
"RATING AGENCIES" shall mean each of S&P, Moody's and Fitch,
and any other
nationally-recognized statistical rating agency which has been
approved by
Lender and has rated the Securities.
"RATINGS CONFIRMATION" shall mean a written confirmation from
each Rating Agency
rating any Securities that the subject event will not result in
a downgrade,
withdrawal, or
10
<PAGE>
qualification of any of the ratings then assigned to any of the
Securities.
"RELEASE" shall mean any release, deposit, discharge, emission,
leaking,
spilling, seeping, migrating, injecting, pumping, pouring,
emptying, escaping,
dumping, disposing or other movement of Hazardous Materials.
"REMIC TRUST" shall mean a "real estate mortgage investment
conduit" (within the
meaning of Section 860D, or applicable successor provisions, of
the Internal
Revenue Code) that holds the Note or any part thereof.
"RENT ROLL" shall mean a rent roll signed and dated by Borrower
detailing the
names of all Tenants of the Improvements (including schedules
for all executed
Leases for Tenants not yet in occupancy or under which the rent
commencement
date has not occurred), the portion of Improvements (in terms of
square footage)
occupied by each Tenant, the base rent, additional rent and any
other charges
payable under each Lease (including annual store sales required
to be reported
by Tenant under any Lease), and the term of each Lease,
including the
commencement and expiration dates and any tenant extension,
expansion or renewal
options, the extent to which any Tenant is in default under any
Lease, and any
other information as is reasonably required by Lender.
"RENTS" shall have the meaning set forth in the Security
Instrument.
"REPLACEMENT RESERVE ACCOUNT" shall have the meaning set forth
in Section 8.2(b)
hereof.
"REPLACEMENT RESERVE FUNDS" shall have the meaning set forth in
Section 8.2(b)
hereof.
"REPLACEMENT RESERVE INITIAL DEPOSIT" shall have the meaning set
forth in
Section 8.2 hereof.
"REPLACEMENT RESERVE MONTHLY DEPOSIT" shall have the meaning set
forth in
Section 8.2(b) hereof.
"REPLACEMENTS" shall have the meaning set forth in Section
8.2(a) hereof.
"REQUIRED REPAIR ACCOUNT" shall have the meaning set forth in
Section 8.1(b)
hereof.
"REQUIRED REPAIR FUNDS" shall have the meaning set forth in
Section 8.1(b)
hereof.
"REQUIRED REPAIRS" shall have the meaning set forth in Section
8.1 (a) hereof.
"REQUIRED WORK" shall have the meaning set forth in Section
8.4(a) hereof.
"RESERVE ACCOUNTS" shall mean the Tax and Insurance Reserve
Account, the
Replacement Reserve Account, the Required Repair Account, the
Initial Debt
Service Reserve Account, the Woonsocket Bowling Reserve Account
or any other
escrow account established by the Loan Documents.
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<PAGE>
"RESERVE FUNDS" shall mean the Tax and Insurance Reserve Funds,
the Replacement
Reserve Funds, the Required Repair Funds, the Initial Debt
Service Reserve
Funds, the Woonsocket Bowling Reserve Funds, or any other escrow
funds
established by the Loan Documents.
"RESTORATION" shall mean, following the occurrence of a Casualty
or a
Condemnation which is of a type necessitating the repair of the
Property, the
completion of the repair and restoration of the Property as
nearly as possible
to the condition the Property was in immediately prior to such
Casualty or
Condemnation, with such alterations as may be reasonably
approved by Lender.
"RESTORATION CONSULTANT" shall have the meaning set forth in
Section 7.4(b)(iii)
hereof.
"RESTORATION RETAINAGE" shall have the meaning set forth in
Section 7.4(b)(iv)
hereof.
"RESTRICTED PARTY" shall have the meaning set forth in Section
6.1 hereof.
"SALE OR PLEDGE" shall have the meaning set forth in Section 6.1
hereof.
"SCHEDULED PAYMENT DATE" shall mean the first day of each
calendar month during
the term of the Loan.
"SECURITIES" shall have the meaning set forth in Section 12.1
hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SECURITIZATION" shall have the meaning set forth in Section
12.1 hereof.
"SECURITY INSTRUMENT" shall mean that certain first priority
mortgage/deed of
trust/deed to secure debt, assignment of leases and rents and
security
agreement, dated the date hereof, executed and delivered by
Borrower as security
for the Loan and encumbering the Property, as the same may be
amended, restated,
replaced, supplemented or otherwise modified from time to
time.
"SERVICING FEES" shall have the meaning set forth in Section
8.12 hereof.
"SPECIAL MEMBER" shall have the meaning set forth in Section
5.1(c) hereof.
"SPE COMPONENT ENTITY" shall have the meaning set forth in
Section 5.1(b)
hereof.
"SUCCESSOR BORROWER" shall have the meaning set forth in Section
2.6(b)(iii)
hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The
McGraw-Hill Companies, Inc.
"SYNDICATION" shall have the meaning set forth in Section 12.1
hereof.
"TAX AND INSURANCE RESERVE FUNDS" shall have the meaning set
forth in Section
8.6 hereof.
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<PAGE>
"TAX AND INSURANCE RESERVE ACCOUNT" shall have the meaning set
forth in Section
8.6 hereof.
"TAXES" shall mean all real estate and personal property taxes,
assessments,
water rates or sewer rents, now or hereafter levied or assessed
or imposed
against the Property or part thereof
"TENANT" shall mean any Person leasing, subleasing or otherwise
occupying any
portion of the Property under a Lease or other occupancy
agreement with
Borrower.
"TERMINATION FEE DEPOSIT" shall have the meaning set forth in
Section 8.3.
"TITLE INSURANCE POLICY" shall mean that certain ALTA (or its
equivalent)
mortgagee title insurance policy issued with respect to the
Property and
insuring the lien of the Security Instrument.
"TRANSFEREE" shall have the meaning set forth in Section 6.5
hereof
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial Code as in
effect in the State where the applicable Property is
located.
"UTILITY EASEMENT" shall have the meaning set forth in Section
4.23 hereof.
"U.S. BANKRUPTCY CODE" shall mean Title 11 U.S.C. Section 101 et
seq., and the
regulations adopted and promulgated pursuant thereto (as the
same may be amended
from time to time).
"WOONSOCKET BOWLING" shall mean Woonsocket Bowling Center,
LLC.
"WOONSOCKET BOWLING LEASE" shall mean that certain Amended and
Restated Lease
dated as of June 3, 2006 between Borrower, as landlord, and
Woonsocket Bowling,
as tenant, and any amendments, modifications or changes
thereto.
"WOONSOCKET BOWLING RESERVE ACCOUNT" shall have the meaning set
forth in Section
8.10 hereof.
"WOONSOCKET BOWLING RESERVE FUNDS" shall have the meaning set
forth in Section
8.10 hereof
Section 1.2 PRINCIPLES OF CONSTRUCTION
All references to sections and schedules are to sections and
schedules in or to
this Agreement unless otherwise specified. All uses of the word
"including"
shall mean "including, without limitation" unless the context
shall indicate
otherwise. Unless otherwise specified, the words "hereof,"
"herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this
Agreement. Unless otherwise specified, all meanings attributed
to defined terms
herein shall be
13
<PAGE>
equally applicable to both the singular and plural forms of the
terms so
defined.
ARTICLE 2 - GENERAL TERMS
Section 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER
(a) Subject to and upon the terms and conditions set forth
herein, Lender hereby
agrees to make and Borrower hereby agrees to accept the Loan on
the Closing
Date.
(b) Borrower may request and receive only one borrowing in
respect of the Loan
and any amount borrowed and repaid in respect of the Loan may
not be reborrowed.
(c) The Loan shall be evidenced by the Note and secured by the
Security
Instrument and the other Loan Documents (other than the
Environmental
Indemnity).
(d) Borrower shall use the proceeds of the Loan to (i) repay and
discharge any
existing loans relating to the Property, (ii) pay certain costs
in connection
with the financing of the Property, (iii) make deposits into the
Reserve Funds
on the Closing Date in the amounts provided herein, (iv) pay
costs and expenses
incurred in connection with the closing of the Loan, as approved
by Lender, (v)
fund any working capital requirements of the Property, and (vi)
distribute the
balance, if any, to its partners, members or shareholders, as
the case may be.
Section 2.2 INTEREST RATE
(a) Interest Rate. Interest on the outstanding principal balance
of the Loan
shall accrue at the Interest Rate or as otherwise set forth in
this Agreement
from (and including) the Closing Date to, but excluding, the
Maturity Date.
(b) Interest Calculation. Interest on the outstanding principal
balance of the
Loan 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 by (c) the outstanding
principal balance.
Borrower understands and acknowledges that such interest accrual
requirement
results in more interest accruing on the Loan than if either a
thirty (30) day
month and a three hundred sixty (360) day year or the actual
number of days and
a three hundred sixty-five (365) day year were used to compute
the accrual of
interest on the Loan. Borrower recognizes that such interest
accrual requirement
will not fully amortize the Loan within the amortization period
set forth in the
application for the Loan.
Section 2.3 LOAN PAYMENTS
(a) Monthly Payments. Borrower shall pay to Lender monthly debt
service payments
as follows:
(i) on the Closing Date, an amount equal to interest only on the
outstanding
principal balance of the Loan from the Closing Date up to and
including the last
day of the calendar month in which the Closing Date occurs;
and
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<PAGE>
(ii) on November 1, 2006 and on each Scheduled Payment Date
thereafter up to and
including October 1, 2011, Borrower shall make a payment to
Lender of interest
only (the "INTEREST ONLY MONTHLY PAYMENT AMOUNT") on the
outstanding principal
balance of the Loan; and
(iii) on November 1, 2011 and on each Scheduled Payment Date
thereafter up to
and including September 1, 2016, Borrower shall make a payment
to Lender of
principal and interest in an amount equal to $141,847.62 (the
"PRINCIPAL AND
INTEREST MONTHLY PAYMENT AMOUNT"; and together with the Interest
Only Monthly
Payment Amount, the "MONTHLY PAYMENT AMOUNT"), which payments
shall be applied
first to accrued and unpaid interest and the balance to
principal.
(b) Payment on Maturity Date. Borrower shall pay to Lender on
the Maturity Date
the outstanding principal balance of the Loan, all accrued and
unpaid interest
and all other amounts due hereunder and under the Note, the
Security Instrument
and the other Loan Documents.
(c) Interest Period. The first interest accrual period hereunder
shall commence
on and include the Closing Date and shall end on and include the
last day of the
calendar month in which the Closing Date occurs. Each interest
accrual period
thereafter shall commence on the first day of each calendar
month during the
term of this Agreement and shall end on and include the last day
of such
calendar month.
(d) Payments Generally. For purposes of making payments
hereunder, but not for
purposes of calculating interest accrual periods, 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 preceding Business Day and with respect to
payments of
principal due on the Maturity Date, interest shall be payable at
the Interest
Rate or the Default Rate, as the case may be, through and
including the day
immediately preceding such Maturity Date.
(e) Defenses. All amounts due under this Agreement and the other
Loan Documents
shall be payable without setoff, counterclaim, defense or any
other deduction
whatsoever.
(f) Method and Place of Payment. Except as otherwise
specifically provided
herein, all payments and prepayments under this Agreement and
the Note shall be
made to Lender not later than 1:00 P.M., New York City time, on
the date when
due and shall be made in lawful money of the United States of
America in
immediately available funds at Lender's office or as otherwise
directed by
Lender, and any funds received by Lender after such time shall,
for all purposes
hereof, be deemed to have been paid on the next succeeding
Business Day.
(g) Application of Payments. Prior to the occurrence of an Event
of Default, all
monthly payments made as scheduled under this Agreement and the
Note shall be
applied first to the payment of interest computed at the
Interest Rate, and the
balance toward the reduction of the principal amount of the
Note. All voluntary
and involuntary prepayments on the Note shall be applied, to the
extent thereof,
to accrued but unpaid interest on the amount prepaid, to the
remaining principal
amount, and any other sums due and unpaid to Lender in
connection with the Loan,
in such manner and order as Lender may elect in its sole and
absolute
discretion, including, but not limited to, application to
principal installments
in inverse order of maturity.
15
<PAGE>
Following the occurrence and during the continuance of an Event
of Default, any
payment made on the Note shall be applied to accrued but unpaid
interest, late
charges, accrued fees, the unpaid principal amount of the Note,
and any other
sums due and unpaid to Lender in connection with the Loan, in
such manner and
order as Lender may elect in its sole and absolute
discretion.
Section 2.4 LATE PAYMENT CHARGE
if any principal, interest or any other sums due under the Loan
Documents
(excluding the amounts due on the Maturity Date) are not paid by
Borrower prior
to the fifth day following the date on which it is due, Borrower
shall pay to
Lender upon demand an amount equal to the lesser of five percent
(5%) of such
unpaid sum or the Maximum Legal Rate 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 Security Instrument and the other Loan
Documents to the extent
permitted by applicable law.
Section 2.5 RESERVED
Section 2.6 PREPAYMENT:DEFEASANCE
Except as otherwise expressly permitted by this Section 2.6, no
voluntary
prepayments, whether in whole or in part, of the Loan or any
other amount at any
time due and owing under the Note can be made by Borrower or any
other Person
without the express written consent of Lender.
(a) Lockout Period. Borrower has no right to make, and Lender
shall have no
obligation to accept, any voluntary prepayment, whether in whole
or in part, of
the Loan during the Lockout Period. Notwithstanding the
foregoing, if either (i)
Lender, in its sole and absolute discretion, accepts a full or
partial voluntary
prepayment during the Lockout Period or (ii) there is an
involuntary prepayment
during the Lockout Period, then, in either case, Borrower shall,
in addition to
any portion of the Loan prepaid (together with all interest
accrued and unpaid
thereon), pay to Lender a prepayment premium in an amount
calculated in
accordance with Section 2.6(c) hereof.
(b) Defeasance.
(i) Notwithstanding any provisions of this Section 2.6 to the
contrary,
including, without limitation, subsection (a) of this Section
2.6, at any time
after the Permitted Defeasance Date, Borrower may cause the
release of the
Property from the lien of the Security Instrument and the other.
Loan Documents
upon the satisfaction of the following conditions (such event
being a
"DEFEASANCE EVENT"):
(A) no Event of Default shall exist under any of the Loan
Documents;
(B) not less than thirty (30) (but not more than sixty (60))
days prior written
notice shall be given to Lender specifying a date on which the
Defeasance
Collateral (as hereinafter defined) is to be delivered (the
"RELEASE DATE");
provided, however, that Borrower shall have the right (i) to
cancel such notice
by
16
<PAGE>
providing Lender with notice of cancellation ten (10) days prior
to the
scheduled Release Date, or (ii) to extend the scheduled Release
Date until the
next Scheduled Payment Date; provided that in each case,
Borrower shall pay all
of Lender's costs and expenses incurred as a result of such
cancellation or
extension;
(C) all accrued and unpaid interest and all other sums due under
the Note, this
Agreement and under the other Loan Documents up to the Release
Date, including,
without limitation, all fees, costs and expenses incurred by
Lender and its
agents in connection with such release (including, without
limitation, legal
fees and expenses for the review and preparation of the
Defeasance Security
Agreement (as hereinafter defined) and of the other materials
described in
Section 2.6(b)(i)(D) below and any related documentation, and
any servicing
fees, Rating Agency fees or other costs related to such
release), shall be paid
in full on or prior to the Release Date;
(D) Borrower shall deliver to Lender on or prior to the Release
Date:
(1) a pledge and security agreement, in form and substance
satisfactory to a
prudent lender and satisfying any requirements binding upon any
applicable REMIC
Trust, creating a first priority security interest in favor of
Lender in the
Defeasance Collateral, as defined herein (the "DEFEASANCE
SECURITY AGREEMENT"),
which shall provide, among other things, that any excess amounts
received by
Lender from the Defeasance Collateral over the amounts payable
by Borrower on a
given Scheduled Payment Date, which excess amounts are not
required to cover all
or any portion of amounts payable on a future Scheduled Payment
Date, shall be
refunded to Borrower promptly after each such Scheduled Payment
Date;
(2) direct non-callable obligations of the United States of
America or other
obligations which are "government securities" within the meaning
of Section
2(a)(16) of the Investment Company Act of 1940, to the extent
the applicable
Rating Agencies rating the Securities have confirmed in writing
will not cause a
downgrade, withdrawal or qualification of the initial, or, if
higher, then
applicable ratings of the Securities, that provide for payments
prior and as
close as possible to (but in no event later than) all successive
Scheduled
Payment Dates occurring after the Release Date, with each such
payment being
equal to or greater than the amount of the corresponding Monthly
Payment Amount
required to be paid under this Agreement and the Note (including
all amounts due
on the Maturity Date) for the balance of the term hereof (the
"DEFEASANCE
COLLATERAL"), each of which shall be duly endorsed by the holder
thereof as
directed by Lender or accompanied by a written instrument of
transfer in form
and substance wholly satisfactory to Lender in its sole
discretion (including,
without limitation, such certificates, documents and instruments
as may be
required by the depository institution holding such securities
or the issuer
thereof, as the case may be, to effectuate book-entry transfers
and pledges
through the book-entry facilities of such institution) in order
to perfect upon
the delivery of the Defeasance Security Agreement the first
priority security
interest therein in
17
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favor of Lender in conformity with all applicable state and
federal laws
governing granting of such security interests;
(3) a certificate of Borrower certifying that all of the
requirements set forth
in this Section 2.6(b)(i) have been satisfied;
(4) one or more opinions of counsel for Borrower in form and
substance and
delivered by counsel which would be satisfactory to a prudent
lender and
satisfying any requirements binding upon any applicable REMIC
Trust stating,
among other things, that (i) Lender has a perfected first
priority security
interest in the Defeasance Collateral and that the Defeasance
Security Agreement
is enforceable against Borrower in accordance with its terms,
(ii) in the event
of a bankruptcy proceeding or similar occurrence with respect to
Borrower, none
of the Defeasance Collateral nor any proceeds thereof will be
property of
Borrower's estate under Section 541 of the U.S. Bankruptcy Code
or any similar
statute and the grant of security interest therein to Lender
shall not
constitute an avoidable preference under Section 547 of the U.S.
Bankruptcy Code
or applicable state law, (iii) the release of the lien of the
Security
Instrument and the pledge of Defeasance Collateral will not
directly or
indirectly result in or cause any REMIC Trust that then holds
the Note to fail
to maintain its status as a REMIC Trust and (iv) the defeasance
will not cause
any REMIC Trust to be an "investment company" under the
Investment Company Act
of 1940;
(5) a certificate in form and scope acceptable to Lender in its
sole discretion
from an Acceptable Accountant certifying that the Defeasance
Collateral will
generate amounts sufficient to make all payments of principal
and interest due
under the Note (including the scheduled outstanding principal
balance of the
Loan due on the Maturity Date); and
(6) such other certificates, documents and instruments as Lender
may in its sole
discretion require; and
(E) in the event the Loan or any part thereof is held by a REMIC
Trust, Lender
has received a Ratings Confirmation in connection with the
substitution of the
Defeasance Collateral.
(ii) Upon compliance with the requirements of Section 2.6(b)(i),
the Property
shall be released from the lien of the Security Instrument and
the other Loan
Documents, and the Defeasance Collateral shall constitute
collateral which shall
secure the Note and all other obligations under the Loan
Documents. Lender will,
at Borrower's expense, execute and deliver any agreements
reasonably requested
by Borrower to release the lien of the Security Instrument and
the other Loan
Documents from the Property.
(iii) Upon the release of the Property in accordance with this
Section 2.6(b),
Borrower shall (at Lender's sole and absolute discretion) assign
all its
obligations and rights under the Note, together with the pledged
Defeasance
Collateral, to a successor entity designated and approved by
Lender in its sole
and absolute discretion ("SUCCESSOR
18
<PAGE>
BORROWER"). Successor Borrower shall execute an assignment and
assumption
agreement in form and substance satisfactory to Lender in its
sole and absolute
discretion pursuant to which it shall assume Borrower's
obligations under the
Note and the Defeasance Security Agreement. As conditions to
such assignment and
assumption, Borrower shall (A) deliver to Lender one or more
opinions of counsel
in form and substance and delivered by counsel which would be
satisfactory to a
prudent Lender stating, among other things, that such assignment
and assumption
agreement is enforceable against Borrower and the Successor
Borrower in
accordance with its terms and that the Note, the Defeasance
Security Agreement
and the other Loan Documents, as so assigned and assumed, are
enforceable
against the Successor Borrower in accordance with their
respective terms, and
opining to such other matters relating to Successor Borrower and
its
organizational structure as Lender may require, and (B) pay all
fees, costs and
expenses incurred by Lender or its agents in connection with
such assignment and
assumption (including, without limitation, legal fees and
expenses and for the
review of the proposed transferee and the preparation of the
assignment and
assumption agreement and related certificates, documents and
instruments and any
fees payable to any Rating Agencies and their counsel in
connection with the
issuance of the Ratings Confirmation referred to in subsection
2.6(b)(i)(E)
above). Upon such assignment and assumption, Borrower shall be
relieved of its
obligations hereunder, under the Note, under the other Loan
Documents and under
the Defeasance Security Agreement, except as expressly set forth
in the
assignment and assumption agreement.
(c) Involuntary Prepayment During the Lockout Period. If, prior
to the
expiration of the Lockout Period and if an Event of Default has
occurred and is
continuing, Borrower tenders payment of all or any part of the
Debt, or if all
or any portion of the Debt is recovered by Lender after such
Event of Default,
such tender or recovery shall be deemed a prepayment by Borrower
in violation of
the prohibition against prepayment set forth in Section 2.6(a)
hereof, and
Borrower shall pay, in addition to the Debt, (i) an amount equal
to the greater
of (a) 1% of the outstanding principal amount of the Loan and
(b) the positive
difference, if any, between (x) the present value on the date of
such
acceleration of all future installments which Borrower would
otherwise be
required to pay under the Note during the original term hereof
absent such
acceleration, including the outstanding principal amount of the
Loan which might
otherwise be due upon the scheduled Maturity Date absent such
acceleration, with
such present value being determined by the use of a discount
rate equal to the
yield to maturity (adjusted to a "Mortgage Equivalent Basis"
pursuant to the
standards and practices of the Securities Industry Association),
on the date of
such acceleration, of the United States Treasury Security having
the term to
maturity closest to what otherwise would have been the remaining
term hereof
absent such acceleration, and (y) the outstanding principal
amount of the Loan
on the date of such acceleration.
(d) Insurance and Condemnation Proceeds; Changes in Taxes;
Excess Interest.
Notwithstanding any other provision herein to the contrary,
Borrower shall not
be required to pay any prepayment premium in connection with any
prepayment
occurring solely as a result of (i) the application of Insurance
Proceeds or
Condemnation Proceeds pursuant to the terms of the Loan
Documents, provided
that, at the time of the related Casualty or Condemnation no
Event of Default
was continuing, (ii) any prepayment of the Debt following
Lender's declaring the
Debt
19
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immediately due and payable pursuant to Section 16.4 hereof, or
(ii) the
application of any interest in excess of the Maximum Legal Rate
to the reduction
of the Loan.
(e) After the Lockout Period. Commencing on the day after the
expiration of the
Lockout Period, and upon giving Lender at least thirty (30) days
(but not more
than sixty (60) days) prior written notice, Borrower may
voluntarily prepay
(without premium) the Note in whole (but not in part) on a
Scheduled Payment
Date. Lender shall accept a prepayment pursuant to this Section
2.6(e) on a day
other than a Scheduled Payment Date provided that, in addition
to payment of the
full outstanding principal balance of the Note, Borrower pays to
Lender a sum
equal to the amount of interest which would have accrued on the
Note if such
prepayment occurred on the next Scheduled Payment Date.
Section 2.7 PAYMENTS AFTER DEFAULT
Upon the occurrence and during the continuance of an Event of
Default, interest
on the outstanding principal balance of the Loan and, to the
extent permitted by
law, overdue interest and other amounts due in respect of the
Loan, (a) shall
accrue at the Default Rate, and (b) Lender shall be entitled to
receive and
Borrower shall pay to Lender all cash flow from the Property,
such amount to be
applied by Lender to the payment of the Debt in such order as
Lender shall
determine in its sole discretion, including, without limitation,
alternating
applications thereof between interest and principal. Interest at
the Default
Rate shall be computed from the date such payment was due or
other obligation
was to be performed without regard to any grace or cure periods
until the
earlier of (i) the actual receipt and collection of the Debt (or
that portion
thereof that is then due) and (ii) the cure of such Event of
Default. To the
extent permitted by applicable law, interest at the Default Rate
shall be added
to the Debt, shall itself accrue interest at the same rate as
the Loan and shall
be secured by the Security Instrument. This paragraph shall not
be construed as
an agreement or privilege to extend the date of the payment of
the Debt, nor as
a waiver of any other right or remedy accruing to Lender by
reason of the
occurrence of any Event of Default; the acceptance of any
payment from Borrower
shall not be deemed to cure or constitute a waiver of any Event
of Default; and
Lender retains its rights under this Agreement to accelerate and
to continue to
demand payment of the Debt upon the happening of and during the
continuance any
Event of Default, despite any payment by Borrower to Lender.
Section 2.8 _____ SAVINGS
This Agreement and the Note are subject to the express condition
that at no time
shall Borrower be obligated or required to pay interest on the
principal balance
of the Loan at a rate which could subject Lender to either civil
or criminal
liability as a result of being in excess of the Maximum Legal
Rate. If, by the
terms of this Agreement or the other Loan Documents, Borrower is
at any time
required or obligated to pay interest on the principal balance
due hereunder at
a rate in excess of the Maximum Legal Rate, the 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
and not on
account of the interest due hereunder. All sums paid or agreed
to be paid to
Lender for the use, forbearance, or detention of the sums due
under the Loan,
shall, to the extent permitted by applicable law, be amortized,
prorated,
allocated, and spread throughout the full stated term of the
Loan until payment
in full so that the rate or amount
20
<PAGE>
of interest on account of the Loan does not exceed the Maximum
Legal Rate of
interest from time to time in effect and applicable to the Loan
for so long as
the Loan is outstanding.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as of the Closing
Date that:
Section 3.1 ORGANIZATION
Borrower (a) has been duly organized and is validly existing and
in good
standing with requisite power and authority to own the Property
and to transact
the businesses in which it is now engaged, (b) is duly qualified
to do business
and is in good standing in each jurisdiction in which the
Property is located
and each other jurisdiction where it is required to be so
qualified in
connection with its properties, businesses and operations, (c)
possesses all
rights, licenses, permits and authorizations, governmental or
otherwise,
necessary to entitle it to own its properties and to transact
the businesses in
which it is now engaged, and the sole business of Borrower is
the ownership,
management and operation of the Property, and (d) has full
power, authority and
legal right to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer
and convey the Property pursuant to the terms of the Loan
Documents, and has
full power, authority and legal right to keep and observe all of
the terms of
the Loan Documents to which it is a party. Borrower represents
and warrant that
the chart attached hereto as Exhibit A sets forth an accurate
listing of the
direct and indirect owners of the equity interests in
Borrower.
Section 3.2 STATUS OF BORROWER
Borrower's exact legal name is correctly set forth on the first
page of this
Agreement. Borrower is an organization of the type specified on
the first page
of this Agreement. Borrower is incorporated in or organized
under the laws of
the state of Delaware. Borrower's principal place of business
and chief
executive office, and the place where Borrower keeps its books
and records,
including recorded data of any kind or nature, regardless of the
medium of
recording, including software, writings, plans, specifications
and schematics,
has been for the preceding four months (or, if less, the entire
period of the
existence of Borrower) the address of Borrower set forth on the
first page of
this Agreement. Borrower's organizational identification number,
if any,
assigned by the state of incorporation or organization is
2239375. Borrower's
United States taxpayer identification number is 13-3582577.
Section 3.3 VALIDITY OF DOCUMENTS
Borrower has taken all necessary action to authorize the
execution, delivery and
performance of this Agreement and the other Loan Documents. This
Agreement and
such other Loan Documents have been duly executed and delivered
by or on behalf
of Borrower and constitute the legal, valid and binding
obligations of Borrower
enforceable against Borrower in accordance with their respective
terms, subject
only to applicable bankruptcy, insolvency 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).
21
<PAGE>
Section 3.4 NO CONFLICTS
The execution, delivery and performance of this Agreement and
the other Loan
Documents by Borrower will not conflict with or result in a
breach of any of the
terms or provisions of, or constitute a default under, or result
in the creation
or imposition of any lien, 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 agreement or instrument to which Borrower is a
party or by which
any of Borrower's property or assets is subject, nor will such
action result in
any violation of the provisions of any statute or any order,
rule or regulation
of any Governmental Authority having jurisdiction over Borrower
or any of
Borrower's properties or assets, and any consent, approval,
authorization,
order, registration or qualification of or with any Governmental
Authority
required for the execution, delivery and performance by Borrower
of this
Agreement or any of the other Loan Documents has been obtained
and is in full
force and effect.
Section 3.5 LITIGATION
There are no actions, suits or proceedings at law or in equity
by or before any
Governmental Authority or other agency now pending or, to the
best of Borrower's
knowledge, threatened against or affecting Borrower, Guarantor,
Manager or the
Property, which actions, suits or proceedings, if determined
against Borrower,
Guarantor or the Property, would materially adversely affect the
condition
(financial or otherwise) or business of Borrower or Guarantor or
the condition
or ownership of the Property.
Section 3.6 AGREEMENTS
Borrower is not a party to any agreement or instrument or
subject to any
restriction which would materially and adversely affect Borrower
or the
Property, or Borrower's business, properties or assets,
operations or condition,
financial or otherwise. Borrower is not in default in any
material respect in
the performance, observance or fulfillment of any of the
obligations, covenants
or conditions contained in any agreement or instrument to which
it is a party or
by which Borrower or the Property is bound. Borrower has no
material financial
obligation under any agreement or instrument to which Borrower
is a party or by
which Borrower or the Property is otherwise bound, other than
(a) obligations
incurred in the ordinary course of the operation of the Property
and (b)
obligations under the Loan Documents.
Section 3.7 SOLVENCY
Borrower has (a) not entered into the transaction evidenced by
this Agreement or
executed the Note, this Agreement or any other Loan Documents
with the actual
intent to hinder, delay or defraud any creditor and (b) received
reasonably
equivalent value in exchange for its obligations under such Loan
Documents.
Giving effect to the Loan, the fair saleable value of the assets
of Borrower
exceeds and will, immediately following the making of the Loan,
exceed the total
liabilities of Borrower, including, without limitation,
subordinated,
unliquidated, disputed and contingent liabilities. No petition
in bankruptcy has
been filed against Borrower, Guarantor, any SPE Component Entity
or Affiliated
Manager in the last seven (7) years, and neither Borrower nor
Guarantor, any SPE
Component Entity or Affiliated Manager in the last seven (7)
22
<PAGE>
years has taken advantage of any Creditors Rights Laws. Neither
Borrower nor
Guarantor, any SPE Component Entity or Affiliated Manager is
contemplating
either the filing of a petition by it under any Creditors Rights
Laws or the
liquidation of all or a major portion of Borrower's assets or
property, and
Borrower has no knowledge of any Person contemplating the filing
of any such
petition against Borrower or Guarantor, any SPE Component Entity
or Affiliated
Manager.
Section 3.8 FULL AND ACCURATE DISCLOSURE
No statement of fact made by or on behalf of Borrower in this
Agreement or in
any of the other Loan Documents or in any other material,
information, financial
data, document or certificate delivered by or on behalf of
Borrower contains any
untrue statement of a material fact or omits to state any
material fact
necessary to make statements contained herein or therein not
misleading. There
is no material fact presently known to Borrower which has not
been disclosed to
Lender which adversely affects, nor as far as Borrower can
reasonably foresee,
might adversely affect, the Property or the business, operations
or condition
(financial or otherwise) of Borrower.
Section 3.9 NO PLAN ASSETS
Borrower is not an "employee benefit plan," as defined in
Section 3(3) of ERISA,
subject to Title I of ERISA, and none of the assets of Borrower
constitutes or
will constitute "plan assets" of one or more such plans within
the meaning of 29
C.F.R. Section 2510.3-101. In addition, (a) Borrower is not a
"governmental
plan" within the meaning of Section 3(32) of ERISA and (b)
transactions by or
with Borrower are not subject to state statutes regulating
investment of, and
fiduciary obligations with respect to, governmental plans
similar to the
provisions of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code
currently in effect, which prohibit or otherwise restrict the
transactions
contemplated by this Agreement.
Section 3.10 NOT A FOREIGN PERSON
Neither Borrower nor Guarantor is a "foreign person" within the
meaning of
Section 1445(f)(3) of the Internal Revenue Code.
Section 3.11 ENFORCEABILITY
The Loan Documents are not subject to any right of rescission,
set-off,
counterclaim or defense by Borrower or Guarantor, including the
defense of
usury, nor would the operation of any of the terms of the Loan
Documents, or the
exercise of any right thereunder, render the Loan Documents
unenforceable, and
neither Borrower nor Guarantor has asserted any right of
rescission, set-off,
counterclaim or defense with respect thereto.
Section 3.12 BUSINESS PURPOSES
The Loan is solely for the business purpose of Borrower, and is
not for
personal, family, household, or agricultural purposes.
23
<PAGE>
Section 3.13 COMPLIANCE
Borrower and the Property, and the use and operation thereof,
comply in all
material respects with all Legal Requirements, including,
without limitation,
building and zoning ordinances and codes. To Borrower's
knowledge, Borrower is
not in default or violation of any order, writ, injunction,
decree or demand of
any Governmental Authority and Borrower has received no written
notice of any
such default or violation. There has not been committed by
Borrower or, to
Borrower's knowledge, any other Person in occupancy of or
involved with the
operation or use of the Property any act or omission affording
any Governmental
Authority the right of forfeiture as against the Property or any
part thereof or
any monies paid in performance of Borrower's obligations under
any of the Loan
Documents.
Section 3.14 FINANCIAL INFORMATION
All financial data, including, without limitation, the balance
sheets,
statements of cash flow, statements of income and operating
expense and rent
rolls, that have been delivered to Lender in respect of
Borrower, Guarantor
and/or the Property (a) are true, complete and correct in all
material respects,
(b) accurately represent the financial condition of Borrower,
Guarantor or the
Property, as applicable, as of the date of such reports, and (c)
to the extent
prepared or audited by an independent certified public
accounting firm, have
been prepared in accordance with GAAP throughout the periods
covered, except as
disclosed therein. Borrower does not have any contingent
liabilities,
liabilities for taxes, unusual forward or long-term commitments
or unrealized or
anticipated losses from any unfavorable commitments that are
known to Borrower
and reasonably likely to have a material adverse effect on the
Property or the
current and/or intended operation thereof, except as referred to
or reflected in
said financial statements. Since the date of such financial
statements, there
has been no materially adverse change in the financial
condition, operations or
business of Borrower or Guarantor from that set forth in said
financial
statements.
Section 3.15 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, free and clear of all Liens whatsoever except the
Permitted
Encumbrances, such other Liens as are permitted pursuant to the
Loan Documents
and the Liens created by the Loan Documents. The Permitted
Encumbrances in the
aggregate do not materially and adversely affect the value,
operation or use of
the Property (as currently used) or Borrower's ability to repay
the Loan. The
Security Instrument, 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
priority lien on
the Property, subject only to Permitted Encumbrances and the
Liens created by
the Loan Documents and (b) perfected security interests in and
to, and perfected
collateral assignments of, all personality (including the
Leases), all in
accordance with the terms thereof, in each case subject only to
any applicable
Permitted Encumbrances, such other Liens as are permitted
pursuant to the Loan
Documents and the Liens created by the Loan Documents. 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.
24
<PAGE>
Section 3.16 Condemnation
No Condemnation or other proceeding has been commenced or, to
Borrower's best
knowledge, is threatened or contemplated with respect to all or
any portion of
the Property or for the relocation of roadways providing access
to the Property.
Section 3.17 UTILITIES AND PUBLIC ACCESS; PARKING
The Property has adequate rights of access to public ways and is
served by
water, sewer, sanitary sewer and storm drain facilities adequate
to service the
Property for its intended uses. All public utilities necessary
to the full use
and enjoyment 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
Insurance Policy. All
roads necessary for the use of the Property for its current
purposes have been
completed and dedicated to public use and accepted by all
Governmental
Authorities. The Property has, or is served by, parking to the
extent required
to comply with all Legal Requirements.
Section 3.18 SEPARATE LOTS
The Property is assessed for real estate tax purposes as one or
more wholly
independent tax lot or lots, separate from any adjoining land or
improvements
not constituting a part of such lot or lots, and no other land
or improvements
is assessed and taxed together with the Property or any portion
thereof.
Section 3.19 ASSESSMENTS
To Borrower's knowledge, there are no pending or proposed
special or other
assessments for public improvements or otherwise affecting the
Property, nor are
there any contemplated improvements to the Property that may
result in such
special or other assessments.
Section 3.20 INSURANCE
Borrower has obtained and has delivered to Lender certified
copies of all
Policies or, to the extent such Policies are not available as of
the Closing
Date, certificates of insurance with respect to all such
Policies reflecting the
insurance coverages, amounts and other requirements set forth in
this Agreement.
No claims have been made under any of the Policies, and to
Borrower's knowledge,
no Person, including Borrower, has done, by act or omission,
anything which
would impair the coverage of any of the Policies.
Section 3.21 USE OF PROPERTY
The Property is used exclusively for retail purposes and other
appurtenant and
related uses.
Section 3.22 CERTIFICATE OF OCCUPANCY; LICENSES
All certifications, permits, licenses and approvals, including,
without
limitation,
25
<PAGE>
certificates of completion or occupancy and any applicable
liquor license
required for the legal use, occupancy and operation of the
Property for the
purpose intended herein, have been obtained and are valid and in
full force and
effect. Borrower shall keep and maintain all licenses necessary
for the
operation of the Property for the purpose intended herein. The
use being made of
the Property is in conformity with the certificate of occupancy
issued for the
Property.
Section 3.23 FLOOD ZONE
None of the Improvements on the Property are located in an area
identified by
the Federal Emergency Management Agency as an area having
special flood hazards,
or, if any portion of the Improvements is located within such
area, Borrower has
obtained the insurance prescribed in Section 7.1(a)(i)
hereof.
Section 3.24 PHYSICAL CONDITION
Except as set forth in the Property Condition Report, (a) 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; and
(b) there exists
no structural or other material defects or damages in the
Property, as a result
of a Casualty or otherwise, and whether latent or otherwise.
Borrower has not
received notice from any insurance company or bonding company of
any defects or
inadequacies in the Property, or any part thereof, which would
adversely affect
the insurability of the same or cause the imposition of
extraordinary premiums
or charges thereon or of any termination or threatened
termination of any policy
of insurance or bond.
Section 3.25 BOUNDARIES
None of the Improvements which were included in determining the
appraised value
of the Property lie outside the boundaries and building
restriction lines of the
Property to any material extent, and (b) no improvements on
adjoining properties
encroach upon the Property and no easements or other
encumbrances upon the
Property encroach upon any of the Improvements so as to
materially affect the
value or marketability of the Property.
Section 3.26 LEASES AND RENT ROLL
Borrower has delivered to Lender a true, correct and complete
Rent Roll for the
Property which includes all Leases affecting the Property Except
as expressly
set forth in the Rent Roll and tenant estoppel certificates
delivered to Lender
on or prior to the Closing Date: (a) each Lease is in full force
and effect; (b)
the premises demised under the Leases have been completed and
the Tenants under
the Leases have accepted possession of and are in occupancy of
all of their
respective demised premises; (c) the Tenants under the Leases
have commenced the
payment of rent under the Leases, there are no offsets, claims
or defenses to
the enforcement thereof, and Borrower has no monetary
obligations to any Tenant
under any Lease; (d) all Rents due and payable under the Leases
have been paid
and no portion thereof has been paid for any period more than
thirty (30) days
in advance; (e) the rent payable under each Lease is the amount
of fixed rent
set forth in the Rent Roll, and there is no claim or basis for a
claim by the
Tenant
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thereunder for an offset or adjustment to the rent; (f) no
Tenant has made any
written claim of a material default against the landlord under
any Lease which
remains outstanding nor has Borrower or Manager received, by
telephonic,
in-person, e-mail or other communication, any notice of a
material default under
any Lease; (g) to Borrower's knowledge there is no present
material default by
the Tenant under any Lease; (h) all security deposits under the
Leases have been
collected by Borrower and are held in the amount stated in the
related Lease;
(i) Borrower is the sole owner of the entire landlord's interest
in each Lease;
(j) each Lease is the valid, binding and enforceable obligation
of Borrower and
the applicable Tenant thereunder and there are no agreements
with the Tenants
under the Leases other than as expressly set forth in the
Leases; (k) no Person
has any possessory interest in, or right to occupy, the Property
or any portion
thereof except under the terms of a Lease; (1) none of the
Leases contains any
option or offer to purchase or right of first refusal to
purchase the Property
or any part thereof; (m) neither the Leases nor the Rents have
been assigned or
pledged except to Lender, and no other Person has any interest
therein; (n) no
conditions exist which now give any Tenant or party the right to
"go dark"
pursuant to the provisions of its Lease or any reciprocal
easement agreement and
(o) none of the Leases conflict in any manner with the terms of
any reciprocal
easement agreements or other agreements to which the Property is
bound.
Section 3.27 FILING AND RECORDING TAXES
All mortgage, mortgage recording, stamp, intangible or other
similar tax
required to be paid by any Person under applicable Legal
Requirements currently
in effect in connection with the execution, delivery,
recordation, filing,
registration, perfection or enforcement of any of the Loan
Documents, including,
without limitation, the Security Instrument, have been paid.
Section 3.28 INTENTIONALLY OMITTED
Section 3.29 ILLEGAL ACTIVITY
No portion of the Property has been or will be purchased,
improved, equipped or
fixtured with proceeds of any illegal activity, and no part of
the proceeds of
the Loan will be used in connection with any illegal
activity.
Section 3.30 CONSTRUCTION EXPENSES
All costs and expenses of any and all labor, materials, supplies
and equipment
used in the construction, maintenance or repair of the
Improvements have been
paid in full. To Borrower's knowledge after due inquiry, there
are no claims for
payment for work, labor or materials affecting the Property
which are or may
become a lien prior to, or of equal priority with, the Liens
created by the Loan
Documents.
Section 3.31 PERSONAL PROPERTY
Borrower has paid in full for, and is the owner of, all Personal
Property (other
than tenants' property) used in connection with the operation of
the Property,
free and clear of any and all security interests, liens or
encumbrances, except
for Permitted Encumbrances and the Lien and security interest
created by the
Loan Documents.
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Section 3.32 TAXES
Borrower and Guarantor have filed all federal, state, county,
municipal, and
city income, personal property and other tax returns required to
have been filed
by them and have paid all taxes and related liabilities. Neither
Borrower nor
Guarantor knows of any basis for any additional assessment in
respect of any
such taxes and related liabilities for prior years.
Section 3.33 FEDERAL RESERVE REGULATIONS
No part of the proceeds of the Loan will be used for the purpose
of purchasing
or acquiring any "margin stock" within the meaning of Regulation
U of the Board
of Governors of the Federal Reserve System or for any other
purpose which would
be inconsistent with such Regulation U or any other Regulations
of such Board of
Governors, or for any purposes prohibited by Legal Requirements
or prohibited by
the terms and conditions of this Agreement or the other Loan
Documents.
Section 3.34 INVESTMENT COMPANY ACT
Borrower is not (a) an "investment company" or a company
"controlled" by an
"investment company," within the meaning of the Investment
Company Act of 1940,
as amended; (b) a "holding company" or a "subsidiary company" of
a "holding
company" or an "affiliate" of either a "holding company" or a
"subsidiary
company" within the meaning of the Public Utility Holding
Company Act of 1935,
as amended; or (c) subject to any other federal or state law or
regulation which
purports to restrict or regulate its ability to borrow
money.
Section 3.35 NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE
All information submitted by Borrower or its agents to Lender
and in all
financial statements, rent rolls, reports, certificates and
other documents
submitted in connection with the Loan or in satisfaction of the
terms thereof
and all statements of fact made by Borrower in this Agreement or
in any other
Loan Document, are accurate, complete and correct in all
material respects.
There has been no material adverse change in any condition,
fact, circumstance
or event that would make any such information inaccurate,
incomplete or
otherwise misleading in any material respect or that otherwise
materially and
adversely affects or might materially and adversely affect the
Property or the
business operations or the financial condition of Borrower.
Borrower has
disclosed to Lender all material facts and has not failed to
disclose any
material fact that could cause any representation or warranty
made herein to be
materially misleading.
Section 3.36 INTELLECTUAL PROPERTY
All trademarks, trade names and service marks necessary to the
business of
Borrower as presently conducted or as Borrower contemplates
conducting its
business are in good standing and, to the extent of Borrower's
actual knowledge,
uncontested. Borrower has not infringed, is not infringing, and
has not received
notice of infringement with respect to asserted trademarks,
trade names and
service marks of others. To Borrower's knowledge, there is no
infringement by
others of trademarks, trade names and service marks of
Borrower.
28
<PAGE>
Section 3.37 COMPLIANCE WITH ANTI-TERRORISM LAWS
None of Borrower, Guarantor or any Person who owns a direct or
indirect equity
interest in Borrower or Guarantor currently is identified by the
Office of
Foreign Assets Control, Department of the Treasury ("OFAC") or
otherwise
qualifies as a Embargoed Person, and Borrower has implemented
procedures to
ensure that no Person who now or hereafter owns a direct or
indirect equity
interest in Borrower or Guarantor is an Embargoed Person or is
Controlled by an
Embargoed Person. None of Borrower, Guarantor or any Person who
owns a direct or
indirect equity interest in Borrower or Guarantor is in
violation of any
applicable law relating to anti-money laundering or
anti-terrorism, including,
without limitation, those related to transacting business with
Embargoed Persons
or the requirements of the Uniting and Strengthening America by
Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001, U.S.
Public Law 107-56, and the related regulations issued
thereunder, including
temporary regulations (collectively, as the same may be amended
from time to
time, the "PATRIOT ACT"). To the best of Borrower's knowledge,
no Tenant at the
Property is currently identified by OFAC or otherwise qualifies
as an Embargoed
Person, or is owned or Controlled by an Embargoed Person.
Borrower has
determined that Manager has implemented procedures approved by
Borrower to
ensure that no Tenant at the Property is currently identified by
OFAC or
otherwise qualifies as an Embargoed Person, or is owned or
Controlled by an
Embargoed Person.
Section 3.38 BROKERS AND FINANCIAL ADVISORS
Borrower hereby represents that it has dealt with no financial
advisors,
brokers, underwriters, placement agents, agents or finders in
connection with
the transactions contemplated by this Agreement.
Section 3.39 SURVIVAL
Borrower agrees that, unless expressly provided otherwise, all
of the
representations and warranties of Borrower set forth in this
Article 3 and
elsewhere in this Agreement and in the other Loan Documents
shall survive for so
long as any portion of the Debt remains owing to Lender. All
representations,
warranties, covenants and agreements made in this Agreement or
in the other Loan
Documents by Borrower shall be deemed to have been relied upon
by Lender
notwithstanding any investigation heretofore or hereafter made
by Lender or on
its behalf.
ARTICLE 4 - BORROWER COVENANTS
From the date hereof and until repayment of the Debt in full and
performance in
full of all obligations of Borrower under the Loan Documents or
the earlier
release of the Lien of the Security Instrument (and all related
obligations) in
accordance with the terms of this Agreement and the other Loan
Documents,
Borrower hereby covenants and agrees with Lender that:
Section 4.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS
(a) Borrower shall do or cause to be done all things necessary
to preserve,
renew and keep in full force and effect its existence, rights,
licenses, permits
and franchises and comply with all Legal Requirements applicable
to it and the
Property. Borrower hereby covenants and
29
<PAGE>
agrees not to commit, permit or suffer to exist any act or
omission affording
any Governmental Authority the right of forfeiture as against
the Property or
any part thereof or any monies paid in performance of Borrower's
obligations
under any of the Loan Documents. Borrower shall at all times
maintain, preserve
and protect all franchises and trade names used in connection
with the operation
of the Property.
(b) After prior written notice to Lender, Borrower, at its own
expense, may
contest by appropriate legal proceeding, promptly initiated and
conducted in
good faith and with due diligence, any Legal Requirement
affecting the Property,
provided that (i) no Default or Event of Default has occurred
and is continuing;
(ii) such proceeding shall be permitted under and be conducted
in accordance
with the provisions of any other instrument to which Borrower or
the Property is
subject and shall not constitute a default thereunder; (iii)
neither the
Property, any part thereof or interest therein, any of the
Tenants or occupants
thereof, nor Borrower shall be affected in any material adverse
way as a result
of such proceeding; (iv) non-compliance with the Legal
Requirement shall not
impose civil or criminal liability on Borrower or Lender; (v)
Borrower shall
have furnished the security as may be required in the proceeding
or by Lender to
ensure compliance by Borrower with the Legal Requirement; and
(vi) Borrower
shall have furnished to Lender all other items reasonably
requested by Lender.
Borrower shall cause the Property to be maintained in a good and
safe condition
and repair. The Improvements and the Personal Property shall not
be removed,
demolished or, other than in accordance with the provisions of
Section 4.21,
materially altered (except for normal replacement of the
Personal Property),
without the prior written consent of Lender. If under applicable
zoning
provisions the use of all or any portion of the Property is or
shall become a
nonconforming use, Borrower will not cause or permit the
nonconforming use to be
discontinued or the nonconforming Improvement to be abandoned
without the
express written consent of Lender.
Section 4.2
MAINTENANCE AND USE OF PROPERTY
Section 4.3 WASTE
Borrower shall not commit or suffer any waste of the Property or
make any change
in the use of the Property which will in any way materially
increase the risk of
fire or other hazard arising out of the operation of the
Property, or take any
action that might invalidate or give cause for cancellation of
any Policy, or do
or permit to be done thereon anything that may in any way impair
the value of
the Property or the security for the Loan. Borrower will not,
without the prior
written consent of Lender, permit any drilling or exploration
for or extraction,
removal, or production of any minerals from the surface or the
subsurface of the
Property, regardless of the depth thereof or the method of
mining or extraction
thereof.
Section 4.4 TAXES AND OTHER CHARGES
(a) Borrower shall pay all Taxes and Other Charges now or
hereafter levied or
assessed or imposed against the Property or any part thereof as
the same become
due and payable; provided, however, Borrower's obligation to
directly pay Taxes
shall be suspended for so long as Borrower complies with the
terms and
provisions of Section 8.6 hereof. Borrower
30
<PAGE>
shall furnish to Lender receipts for the payment of the Taxes
and the Other
Charges prior to the date the same shall become delinquent
(provided, however,
that Borrower is not required to furnish such receipts for
payment of Taxes in
the event that such Taxes have been paid by Lender pursuant to
Section 8.6
hereof). Borrower shall not suffer and shall promptly cause to
be paid and
discharged any Lien or charge whatsoever which may be or become
a Lien or charge
against the Property, and shall promptly pay for all utility
services provided
to the Property.
(b) After prior written notice to Lender, Borrower, at its own
expense, may
contest by appropriate legal proceeding, promptly initiated and
conducted in
good faith and with due diligence, the amount or validity or
application in
whole or in part of any Taxes or Other Charges, provided that
(i) no Default or
Event of Default has occurred and is continuing; (ii) such
proceeding shall be
permitted under and be conducted in accordance with the
provisions of any other
instrument to which Borrower is subject and shall not constitute
a default
thereunder and such proceeding shall be conducted in accordance
with all
applicable Legal Requirements; (iii) neither the Property nor
any part thereof
or interest therein will be in danger of being sold, forfeited,
terminated,
canceled or lost; (iv) Borrower shall promptly upon final
determination thereof
pay the amount of any such Taxes or Other Charges, together with
all costs,
interest and penalties which may be payable in connection
therewith; (v) such
proceeding shall suspend the collection of such contested Taxes
or Other Charges
from the Property; and (vi) Borrower shall furnish such security
as may be
required in the proceeding, or deliver to Lender such reserve
deposits as may be
requested by Lender, to insure the payment of any such Taxes or
Other Charges,
together with all interest and penalties thereon (unless
Borrower has paid all
of the Taxes or Other Charges under protest). Lender may pay
over any such cash
deposit or part thereof held by Lender to the claimant entitled
thereto at any
time when, in the judgment of Lender, the entitlement of such
claimant is
established or the Property (or part thereof or interest
therein) shall be in
danger of being sold, forfeited, terminated, canceled or lost or
there shall be
any danger of the Lien of the Security Instrument being primed
by any related
Lien.
Section 4.5 LITIGATION
Borrower shall give prompt written notice to Lender of any
litigation or
governmental proceedings pending or threatened in writing
against Borrower which
might materially adversely affect Borrower's condition
(financial or otherwise)
or business or the Property.
Section 4.6 ACCESS TO PROPERTY
Subject to the rights of Tenants under Leases, Borrower shall
permit agents,
representatives and employees of Lender to inspect the Property
or any part
thereof at reasonable hours upon reasonable advance notice.
Section 4.7 NOTICE OF DEFAULT
Borrower shall promptly advise Lender of any material adverse
change in the
condition (financial or otherwise) of Borrower, any Guarantor or
the Property or
of the occurrence of any Default or Event of Default of which
Borrower has
knowledge.
31
<PAGE>
Section 4.8 COOPERATE IN LEGAL PROCEEDINGS
Borrower shall at Borrower's expense cooperate fully with Lender
with respect to
any proceedings before any court, board or other Governmental
Authority which
may in any way affect the rights of Lender hereunder or any
rights obtained by
Lender under any of the other Loan Documents and, in connection
therewith,
permit Lender, at its election, to participate in any such
proceedings.
Section 4.9 PERFORMANCE BY BORROWER
Borrower shall in a timely manner observe, perform and fulfill
each and every
covenant, term and provision to be observed and performed by
Borrower under this
Agreement and the other Loan Documents and any other agreement
or instrument
affecting or pertaining to the Property and any amendments,
modifications or
changes thereto. Borrower agrees not to enter into, terminate or
modify any
reciprocal easement agreement affecting the Property without
Lender's prior
written consent, which consent shall not be unreasonably
withheld, conditioned
or delayed.
Section 4.10 AWARDS; INSURANCE PROCEEDS
Borrower shall cooperate with Lender in obtaining for Lender the
benefits of any
Awards or Insurance Proceeds lawfully or equitably payable in
connection with
the Property, and Lender shall be reimbursed for any expenses
incurred in
connection therewith (including reasonable, actual attorneys'
fees and
disbursements, and the payment by Borrower of the expense of an
appraisal on
behalf of Lender in case of a Casualty or Condemnation affecting
the Property or
any part thereof) out of such Awards or Insurance Proceeds.
Section 4.11 FINANCIAL REPORTING.
(a) Borrower shall keep adequate books and records of account in
accordance with
GAAP, or in accordance with other methods acceptable to Lender
in its sole
discretion, consistently applied and shall furnish to
Lender:
(i) quarterly and annual (and prior to a Securitization, if
requested by Lender,
monthly) certified Rent Rolls signed and dated by Borrower,
within twenty (20)
days after the end of each calendar month, thirty (30) days
after the end of
each fiscal quarter or sixty (60) days after the close of each
fiscal year of
Borrower, as applicable;
(ii) quarterly and annual (and prior to a Securitization, if
requested by
Lender, monthly) operating statements of the Property, prepared
and certified by
Borrower in the form required by Lender (or if requested by
Lender after an
Event of Default, an audited annual operating statement prepared
by an
independent certified public accounting firm acceptable to
Lender), detailing
the revenues received, the expenses incurred and the net
operating income before
and after debt service (principal and interest) and major
capital improvements
for the period of calculation and containing appropriate
year-to-date
information, within twenty (20) days after the end of each
calendar month,
thirty (30) days after the end of each fiscal quarter or sixty
(60) days after
the close of each fiscal year of Borrower, as applicable;
32
<PAGE>
(iii) annual balance sheets, profit and loss statements, and
statements of cash
flows of Borrower in the form required by Lender, prepared and
certified by
Borrower (or if requested by Lender after an Event of Default,
annual audited
financial statements prepared by an independent certified public
accounting firm
acceptable to Lender), within ninety (90) days after the close
of each fiscal
year of Borrower; and
(iv) in the event Guarantor fails to file an annual AKR form 10K
with the SEC
through EDGAR, annual balance sheets, profit and loss
statements, and statements
of cash flows of Guarantor in the form required by Lender,
prepared and
certified by Guarantor (or if requested by Lender after an Event
of Default,
annual audited financial statements prepared by an independent
certified public
accounting firm acceptable to Lender), within ninety (90) days
after the close
of each fiscal year of Guarantor.
(b) Borrower shall furnish Lender with such other additional
financial,
management or other information (including state and federal tax
returns) as
may, from time to time, be reasonably required by Lender in form
and substance
satisfactory to Lender (including, without limitation, any
financial reports
required to be delivered by any Tenant or any guarantor of any
Lease pursuant to
the terms of such Lease), and shall furnish to Lender and its
agents convenient
facilities for the examination and audit of any such books and
records.
(c) All items requiring the certification of Borrower shall,
except where
Borrower is an individual, require a certificate executed by the
general
partner, managing member or chief executive officer of Borrower,
as applicable
(and the same rules shall apply to any sole shareholder, general
partner or
managing member which is not an individual).
Section 4.12 ESTOPPEL STATEMENT
(a) After request by Lender, Borrower shall within ten (10)
Business Days
furnish Lender with a statement, duly acknowledged and
certified, setting forth
(i) the amount of the original principal amount of the Note,
(ii) the rate of
interest on the Note, (iii) the unpaid principal amount of the
Note, (iv) the
date installments of interest and/or principal were last paid,
(v) any offsets
or defenses to the payment of the Debt, if any, and (vi) that
the Note, this
Agreement, the Security Instrument and the other Loan Documents
are valid, legal
and binding obligations and have not been modified or if
modified, giving
particulars of such modification.
(b) Promptly upon notice from Lender, Borrower shall request and
thereafter use
its best efforts to promptly deliver to Lender duly executed
estoppel
certificates from any one or more Tenants as specified by Lender
in form and
substance reasonably satisfactory to Lender.
Section 4.13 LEASING MATTERS
(a) Borrower may enter into a proposed Lease (including the
renewal, extension
or modification of an existing Lease) without the prior written
consent of
Lender, provided such proposed Lease (i) provides for rental
rates and terms
comparable to existing local market rates and terms (taking into
account the
type and quality of the Tenant) as of the date such Lease is
executed by
Borrower (unless, in the case of a renewal, the rent payable
during such
renewal, or a formula or other method to compute such rent, is
provided for in
the original Lease), (ii) is an arm's-length transaction with a
bona fide,
independent third party Tenant, (iii) does not have a
33
<PAGE>
materially adverse effect on the value of the Property taken as
a whole, (iv) is
subject and subordinate to the Security Instrument and requires
the Tenant
thereunder to attorn to Lender, (v) does not contain any option,
offer, right of
first refusal, or other similar right to acquire all or any
portion of the
Property, (vi) has no rent, credits, free rents or concessions
granted
thereunder other than rent credits, free rents or concessions
that are
comparable to existing local market rates and terms (taking into
account the
type and quality of the Tenant) and which do not affect the cash
flow of the
Property in a material adverse way, (vii) obligates the Tenant
to operate its
intended business at the leased premises at all times during the
Lease term,
(viii) is written on the standard form of lease approved by
Lender and (ix) is
not a Major Lease. All proposed Leases which do not satisfy the
requirements set
forth in this subsection shall be subject to the prior approval
of Lender and
its counsel, at Borrower's expense. Borrower shall promptly
deliver to Lender
copies of all Leases which are entered into pursuant to this
subsection together
with Borrower's certification that it has satisfied all of the
conditions of
this subsection.
(b) Borrower (i) shall observe and perform all the obligations
imposed upon the
landlord under the Leases and shall not do or permit to be done
anything to
impair the value of any of the Leases as security for the Debt;
(ii) shall
promptly send copies to Lender of all notices of default which
Borrower shall
send or receive thereunder; (iii) shall enforce all of the
material terms,
covenant
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