Loan Agreement [Lien No. 1] - Waterford Park LLC and Sepracor Inc.
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LOAN AGREEMENT (FIRST LIEN)
between
WATERFORD PARK, LLC,
as Borrower
and
SEPRACOR, INC.
as Lender
as of January 30, 2001
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Relating to a 192,600 (+/-) square foot office building at Solomon Pond
Corporate Center, Marlborough, Massachusetts, and secured by a first leasehold
mortgage lien thereon.
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TABLE OF CONTENTS
Page
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1. DEFINITIONS AND RULES OF INTERPRETATION...................................1
1.1 Definitions..........................................................1
1.2 Rules of Interpretation..............................................9
2. AGREEMENT TO MAKE ADVANCES; LIMITATIONS...................................9
2.1 Agreement to Make Advances...........................................9
2.2 Project Budget.......................................................9
2.3 Amount of Advances..................................................10
2.4 Quality of Work.....................................................10
2.5 Cost Overruns and Savings...........................................10
2.6 Contingency Reserve.................................................11
2.7 Stored Materials....................................................11
3. MAKING THE ADVANCES......................................................12
3.1 Draw Request........................................................12
3.2 Notice and Frequency of Advance.....................................13
3.3 Payment of Funds Advanced...........................................13
3.4 Advances to Contractor to Others....................................13
3.5 Advances Do Not Constitute a Waiver.................................14
3.6 Right to Retain the Construction Inspector..........................14
4. THE NOTE; REPAYMENT OF LOAN..............................................14
4.1 The Note............................................................14
4.2 The Record..........................................................15
4.3 Interest on the Loan; Payments on the Loan..........................15
4.4 Prepayment; Refinancing.............................................16
4.5 Maturity............................................................17
5. LOAN MATURITY DATE; CONVERSION OF CONSTRUCTION LOAN......................17
5.1 Loan Maturity Date..................................................17
5.2 Extension of Maturity Date..........................................17
6. FEES; PAYMENTS AND COMPUTATIONS..........................................17
6.1 Commitment and Administration Fee...................................17
6.2 Inspection Fee. [Intentionally Omitted.]...........................17
6.3 Place of Payments...................................................17
7. COLLATERAL SECURITY AND GUARANTY.........................................18
8. REPRESENTATIONS, WARRANTIES AND COVENANTS................................18
8.1 Organization; Authority, Etc........................................18
8.2 Title to Assets.....................................................19
8.3 Financial Statements................................................19
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8.4 No Material Changes, Etc............................................19
8.5 Franchises, Patents, Copyrights, Etc................................19
8.6 Litigation..........................................................19
8.7 No Materially Adverse Contracts, Etc................................19
8.8 Compliance With Other Instruments, Laws, Etc........................19
8.9 Tax Status..........................................................20
8.10 No Event of Default.................................................20
8.11 Setoff, Etc.........................................................20
8.12 Certain Transactions................................................20
8.13 Subsidiaries........................................................20
8.14 Partners, Beneficiaries, Etc........................................20
8.15 ERISA...............................................................20
8.16 Availability of Utilities...........................................20
8.17 Access..............................................................20
8.18 Condition of Project................................................21
8.19 Compliance with Requirements........................................21
8.20 Project Approvals...................................................21
8.21 Construction Contract...............................................22
8.22 Other Contracts.....................................................22
8.23 Violations..........................................................22
8.24 Plans and Specifications............................................22
8.25 Project Budget......................................................22
8.26 Effect of Draw Request..............................................22
9. AFFIRMATIVE COVENANTS OF THE BORROWER....................................23
9.1 Punctual Payment....................................................23
9.2 Commencement, Pursuit and Completion of Construction................23
9.3 Correction of Defects...............................................23
9.4 Insurance; Bonds....................................................23
9.5 Inspection of Project and Books.....................................24
9.6 Compliance with Laws, Contracts, Licenses, and Permits..............24
9.7 Use of Proceeds.....................................................24
9.8 Project Costs.......................................................24
9.9 Laborers, Subcontractors and Materialmen............................24
9.10 Further Assurance of Title..........................................25
9.11 Further Assurances Regarding Construction...........................25
10. NEGATIVE COVENANTS OF THE BORROWER.......................................25
10.1 Restriction on Change Orders........................................25
10.2 No Amendments, Terminations or Waivers..............................26
11. CONDITIONS TO CLOSING AND INITIAL ADVANCE................................26
11.1 Loan Documents......................................................26
11.2 Construction Documents..............................................27
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11.3 Subcontracts........................................................27
11.4 Other Contracts.....................................................27
11.5 Leases..............................................................27
11.6 Certified Copies of Organization Documents..........................27
11.7 Resolutions.........................................................27
11.8 Incumbency Certificate; Authorized Signers..........................27
11.9 Validity of Liens...................................................27
11.10 Deliveries..........................................................28
11.11 Construction Inspector Report.......................................29
11.12 Legal and Other Opinions............................................29
11.13 Lien Search.........................................................29
11.14 Mechanic's Lien Law.................................................29
11.15 Notices.............................................................30
11.16 Appraisal...........................................................30
11.17 Fees................................................................30
11.18 Performance; No Default.............................................30
11.19 Representations and Warranties......................................30
11.20 Proceedings and Document............................................30
11.21 Waiver..............................................................30
11.22 Incomplete Construction Documents...................................30
12. CONDITIONS OF SUBSEQUENT ADVANCES........................................31
12.1 Prior Conditions Satisfied..........................................31
12.2 Performance; No Default.............................................31
12.3 Representations and Warranties......................................31
12.4 No Damage...........................................................31
12.5 Receipt of the Lender...............................................31
12.6 Mechanic's Lien Law.................................................32
12.7 Release of Retainage................................................33
12.8 Waiver..............................................................34
13. EVENTS OF DEFAULT AND REMEDIES...........................................34
13.1 Events of Default...................................................34
13.2 Termination of Advances and Acceleration............................38
13.3 Completion of Project...............................................38
13.4 Other Remedies......................................................39
13.5 Distribution of Collateral Proceeds.................................40
13.6 Power of Attorney...................................................40
13.7 Waivers.............................................................40
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14. SETOFF...................................................................41
15. AGREEMENTS RELATING TO TENANT LEASE. FAILURE TO FUND.....................41
16. EXPENSES.................................................................42
17. INDEMNIFICATION..........................................................42
18. LIABILITY OF THE LENDER..................................................43
19. RIGHTS OF THIRD PARTIES..................................................43
20. SURVIVAL OF COVENANTS, ETC...............................................43
21. ASSIGNMENT...............................................................44
22. RELATIONSHIP.............................................................44
23. NOTICES..................................................................44
24. GOVERNING LAW............................................................45
25. CONSENT TO JURISDICTION; WAIVERS.........................................45
26. HEADINGS.................................................................46
27. COUNTERPARTS.............................................................46
28. ENTIRE AGREEMENT, ETC....................................................46
29. CONSENTS, AMENDMENTS, WAIVERS, ETC.......................................46
30. TIME OF THE ESSENCE......................................................47
31. SEVERABILITY.............................................................47
EXHIBITS
A - Construction Schedule
B - Disbursement Schedule
C - [Reserved]
D - [Reserved]
E - Plans and Specifications
F - Project Budget
G - Borrower's Requisition
H - Contractor's Requisition Certificate
I - [Reserved]
J - Tenant Improvements Summary
K - Lien Form
L - [Reserved]
M - [Reserved]
N - [Reserved]
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SCHEDULES
8.14 - Partners, Beneficiaries, Etc.
Schedule 8.20 - Project Approvals
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LOAN AGREEMENT
This LOAN AGREEMENT (FIRST LIEN) is made as of the 30th day of January,
2001, by and among WATERFORD PARK LLC, a Massachusetts limited liability company
(the "Borrower"), having its principal place of business c/o Waterford
Development Corp., 175 Highland Avenue, Needham, Massachusetts 02494 , and
SEPRACOR, INC. (the "Lender"), having an address at 111 Locke Drive,
Marlborough, Massachusetts 01752.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1 Definitions. The following terms as used in this Agreement, any
Exhibit hereto, or in any other Loan Document (unless otherwise defined therein)
shall have the meanings set forth in this ss.1. Further, any and all terms which
are defined in the Note and not otherwise defined herein shall have the meanings
set forth therein:
Additional Project Funds. The amount of $18,443,729. Additional Project
Funds consists of: (i) Borrower equity in the amount of $2,152,866, (ii)
proceeds of the Subordinate Loan in the amount of $6,458,597, and (iii) amounts
payable by Tenant to Borrower under the Tenant Lease which are to be applied to
Project Costs, shown on the Project Budget as $9,106,671 for "Specialized Tenant
Improvements/Base Building Upgrades," and $218,623 for "Tenant Equipment and
Fixture Installation". The amount of Additional Project Funds (and the
subcategories thereof) is subject to revision as provided herein and by
agreement of the Parties hereto.
Advance. Any disbursement of the proceeds of the Loan made or to be made
by the Lender pursuant to the terms of this Agreement.
Agreement. This Loan Agreement, including the Schedules and Exhibits
hereto.
Architect. Clifford Hoffman Associates, a subcontractor under the
Construction Contract.
Borrower's Requisition. See ss.3. 1.
Business Day. A day of the year on which banks are not required or
authorized by law to close in Boston, Massachusetts or New York, New York.
Closing Date. The first date on which the conditions set forth in ss.11
have been satisfied for the initial Advance.
Code. The Internal Revenue Code of 1986 and the regulations thereunder,
all as amended and in effect from time to time.
Collateral. All of the property, rights and interests of the Borrower that
are or are intended to be subject to the security interests, assignments, and
mortgage liens created by the Security Documents, including, without limitation,
the Project.
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Construction Contract. Collectively, (i) the contract, to be entered into
between the Borrower and the Contractor, providing for the construction of the
Improvements, and (ii) the contract to be entered into among the Borrower,
Contractor and Tenant, relating to change orders initiated by Tenant. The
Construction Contract must be reasonably satisfactory to Borrower, Lender and
Tenant. Tenant, not the Borrower, shall be responsible for the selection,
ordering and purchasing of all "Tenant Equipment and Fixtures" as referred to on
the Project Budget; and Tenant shall bear the burden of, and enjoy the benefit
of, any cost overruns or savings with respect thereto.
Construction Inspector. A consulting architect, engineer or inspector
engaged by the Lender, subject to the approval of the Borrower, which approval
shall not be unreasonably withheld or delayed. The Construction Inspector's fees
and expenses shall be included in the Project Costs.
Construction Loan. The Advances made by Lender to Borrower pursuant
to ss.2.1, until converted to a Term Loan pursuant to ss.5.1 hereof.
Construction Period. The period of time during which the Project is being
constructed. The Construction Period ends on the "Commencement Date", as such
term is defined in the Tenant Lease.
Construction Schedule. The schedule, broken down by trade, job and
subcontractor, of the estimated dates of commencement and completion of
construction of the Improvements, prepared by the Contractor, approved by the
Lender and attached hereto as Exhibit A.
Contingency Reserve. The amount of $634,338 ($141,795 for Indirect Costs
and $492,543 for Direct Costs) has been allocated as contingency reserve in the
Project Budget, to be advanced only in accordance with the provisions of ss.2.6
hereof.
Contractor. Erland Construction, Inc., a corporation having a usual place
of business at 63 Second Avenue, Burlington, Massachusetts 01803.
Default. A condition or event which would, with either the giving of
notice or lapse of time or both, constitute an Event of Default.
Development Company. Waterford Development Corp., or other Person
reasonably acceptable to the Lender with whom the Borrower has, or will, enter
into an agreement to develop the Improvements.
Direct Costs. The costs of the Land, the Personal Property, and all labor,
materials, fixtures, machinery and equipment required to construct, equip and
complete the Improvements in accordance with the Plans and Specifications.
Disbursement Schedule. The schedule of the amounts of Advances anticipated
to be requisitioned by the Borrower each month during the term of the
construction of the
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Improvements (including an itemization of Direct Costs and Indirect Costs to be
included in each such requisition), approved by the Lender and attached hereto
as Exhibit B.
Drawdown Date. The date on which any Advance is made or is to be made.
Draw Request. With respect to each Advance, the Borrower's Requisition for
such Advance and all other documents required by this Agreement to be furnished
to the Lender as a condition to such Advance.
Environmental Laws. As specifically defined in the Mortgage.
ERISA Plan. Any employee benefit, employee pension, or multi-employer plan
within the meaning of the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time.
Event of Default. See ss.13.1.
Financing Statements. Uniform Commercial Code Form I Financing
Statement(s) from the Borrower in favor of the Lender.
Force Majeure. Any Act of God, war, civil commotion, embargo, flood,
unavoidable fire or other casualty, strikes, picketing or other labor
difficulties not within the reasonable control of the Borrower, governmental
restrictions or changes in law, unavailability or shortages of labor, materials
or equipment not reasonably anticipated by the Borrower, unusually severe
weather or any other cause or event which is beyond the reasonable control of
the Borrower.
GAAP. Principles that are (a) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors, as
in effect from time to time and (b) consistently applied with past financial
statements of the Borrower adopting the same principles; provided that a
certified public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified opinion
(other than a qualification regarding changes in GAAP) as to financial
statements in which such principles have been properly applied.
Governmental Authority. The United States of America, The Commonwealth of
Massachusetts, the Town of Marlborough, Massachusetts, and any political
subdivision, agency, authority, department, commission, board, bureau, or
instrumentality of any of them.
Ground Lease. The Ground Lease, dated January 30, 2001, from Hillside
School Inc. as landlord, to Borrower as tenant, relating to the Land.
Guarantors. Collectively, Richard N. Houlding, Margaret C. Houlding and
Robert E. Shapiro, including as to each of them their estates, heirs and legal
representatives.
Guaranty. The Joint and Several Guaranty Agreement, dated or to be dated
on or prior to the Closing Date, made by the Guarantors in favor of the Lender
with respect to the Loan.
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Improvements. A 192,600 square foot four story office building with
parking for < > cars to be constructed on the Land in accordance with the Plans
and Specifications, together with offsite improvements as shown on "Offsite
Highway Improvement Plans for Solomon Pond Road-Goddard Road-Bearfoot Road"
prepared by Anderson-Nichols & Co., dated October 24, 2000. Some of such offsite
improvements are to be made on the "Phase II Land" and "Phase III Land" as
defined in the Tenant Lease.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with GAAP should be classified upon the Obligors' balance sheets as
liabilities, or to which reference should be made by footnotes thereto,
including in any event and whether or not so classified: (a) all debt and
similar monetary obligations, whether direct or indirect; (b) all liabilities
secured by any mortgage, pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed; (c) all liabilities
under capitalized leases; and (d) all guaranties, endorsements and other
contingent obligations whether direct or indirect in respect of indebtedness of
others, including the obligations to reimburse the issuer in respect of any
letters of credit.
Indemnity Agreement. The Indemnity Agreement Regarding Hazardous
Materials, dated or to be dated on or prior to the Closing Date, made by the
Borrower and the Guarantors in favor of the Lender.
Indirect Costs. All title insurance premiums, survey charges, engineering
fees, architectural fees, real estate taxes, appraisal costs, commitment fees,
brokers' commissions, permit fees and interest payable to the Lender under the
Loan, premiums for insurance, legal fees, accounting fees, overhead and
administrative costs, and all other expenses as shown on the Project Budget
which are expenditures relating to the Project and are not Direct Costs.
Installments. The constant monthly payments of principal and interest to
be paid by the Borrower to the Lender under the amendment and restatement of the
Note provided for in Section 5.3(a)(iv) hereof.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect to any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person.
Land. The parcel of land located at Solomon Pond Corporate Center in
Marlborough, Massachusetts which is described in Exhibit A to the Mortgage and
Schedule DL of the Tenant Lease.
Leases. Any and all leases, licenses and agreements, whether written or
oral, relating to the use or occupation of space in the Improvements or on the
Land by Persons other than the Borrower, including without limitation the Tenant
Lease.
Lender. Sepracor, Inc., a Delaware corporation, as lender under this Loan
Agreement and the other Loan Agreements.
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Lien Form. See ss.3.1.
Loan. The loan or any portion thereof which is the subject of this
Agreement.
Loan Amount. $20,860,000.
Loan Documents. This Agreement, the Note, the Indemnity Agreement, the
Guaranty, and the Security Documents, and all other agreements, documents and
instruments now or hereafter evidencing, securing or otherwise relating to the
Loan.
Maturity Date. The Maturity Date, as it may be extended in accordance
with ss.5.
Mechanic's Lien Law. See ss.3.1.
Mortgage. The Mortgage and Security Agreement, dated or to be dated on or
prior to the Closing Date, made by the Borrower in favor of the Lender, relating
to the Loan.
Non-Disturbance, Attornment and Subordination Agreement. [Intentionally
omitted because the Tenant Lease is superior to the lien of the Mortgage.]
Note. The Note, dated as of the date hereof, in the original principal
amount equal to the Loan Amount, made by the Borrower to the order of the
Lender.
Obligations. All indebtedness, obligations and liabilities of the Borrower
to the Lender, existing on the date of this Agreement or arising thereafter in
connection with the Loan, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, including,
without limitation, the Project Obligations.
Obligors. The Borrower, each Guarantor, and if the Borrower is a
partnership, each general partner of the Borrower.
Organizational Documents. For any corporation, partnership, trust, limited
liability company, limited liability partnership, unincorporated association,
business or other legal entity, the documents pursuant to which such entity has
been established or organized, as such documents may be amended from time to
time.
Other Mechanic's Lien. Any statutory lien or common law lien relating to
claims for labor, materials, or supplies, whether established under the
Mechanic's Lien Law or otherwise, except for a Section 1 Lien or Section 2 Lien.
Party(ies). Each Obligor; if the Borrower is a partnership, each partner
authorized to execute documents on behalf of the Borrower; if the Borrower is a
limited liability company,
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each manager of the Borrower or each member authorized to execute documents on
behalf of the Borrower; and if the Borrower is a trust, each trustee of the
Borrower.
Payment, Performance and Lien Bond. A payment, performance and lien bond
(or bonds) relating to the Construction Contract, in form and substance
satisfactory to Lender, issued by a surety company or companies licensed to do
business in Massachusetts and otherwise acceptable to the Lender, in an amount
not less than the full price of the Construction Contract, and recorded in the
Registry.
Payment Period Date. See ss.3.1.
Permitted Exceptions. See definition of Title Policy. The Subordinate Loan
Security Documents are Permitted Exceptions.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof
Personal Property. All materials, furnishings, fixtures, furniture,
machinery, equipment and all items of tangible or intangible personal property
now or hereafter owned or acquired by the Borrower, in which the Lender has
been, or will be granted an interest to secure the Project Obligations
specifically excluding, however, any personal property now or hereafter owned or
acquired by the Tenant.
Plans and Specifications. The plans and specifications for the
Improvements prepared by the Borrower's Architect and more particularly
identified on Exhibit E attached hereto, as the same may be amended from time to
time as provided herein.
Project. The Land, Improvements and Personal Property.
Project Approvals. All approvals, consents, waivers, orders, agreements,
acknowledgments, authorizations, permits and licenses required under applicable
Requirements or under the terms of any restriction, covenant or easement
affecting the Project, or otherwise necessary or desirable, for the ownership,
acquisition, construction, equipping, use, occupancy and operation of the
Project and the Improvements, whether obtained from a Governmental Authority or
any other Person. Project Approvals do not include any specialized permits (or
the like) relating to Tenant's activity in or on, or use of, the Project.
Project Budget. The budget for total estimated Project Costs, submitted by
the Borrower, approved by the Lender attached hereto as Exhibit F, which
includes: (a) a line item cost breakdown for Direct Costs by category; (b) a
line item cost breakdown for Indirect Costs by category; and (c) a schedule of
the sources of funds to pay Project Costs, indicating by item the portion of
Project Costs to be funded through the Loan and Additional Project Funds and as
such Project Budget may be revised from time to time as provided herein.
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Project Completion. With respect to the construction of the Improvements,
the determination by the Lender that (i) the Borrower has completed the
construction of the Improvements substantially in accordance with the Plans and
Specifications and the terms and conditions hereof, and (ii) the Borrower has
satisfied all of the conditions of ss.12.7, hereof, for the release of the
Retainage.
Project Completion Date. The "Outside Completion Date" as defined in the
Tenant Lease.
Project Costs. The sum of all Direct Costs and Indirect Costs that have
been or will be incurred by the Borrower in connection with the acquisition of
the Land, the construction, equipping and completion of the Improvements, the
marketing and leasing of leasable space in the Improvements, and the operation
and carrying of the Project through the Construction Loan Maturity Date.
Project Obligations. All indebtedness, obligations and liabilities of the
Borrower to the Lender existing on the date of this Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Agreement or any of the other Loan Documents or in respect of any of the
Advances or the Note.
Record. Any record, including computer records, maintained by the Lender
with respect to the balance due under the Loan.
Registry. The Middlesex South Registry of Deeds, located in Cambridge,
Massachusetts.
Requirements. Any law, ordinance, code, order, rule or regulation of any
Governmental Authority relating in any way to the acquisition, ownership,
construction, use, occupancy and operation of the Project and the Improvements.
Retainage. See ss.2.3.
Section 1 Lien. A lien under Section 1 of the Mechanic's Lien Law, other
than in connection with the construction of improvements on the Land containing
or designed to contain at least one, but no more than four, dwelling units.
Section 2 Lien. A lien under Section 2 of the Mechanic's Lien Law, other
than in connection with the construction of improvements on the Land containing
or designed to contain at least one, but no more than four, dwelling units.
Section 4 Lien. A lien under Section 4 of the Mechanic's Lien Law.
Security Documents. The Mortgage, the Collateral Assignment of Contracts,
Licenses, Permits, Agreements, Warranties and Approvals, dated as of the date
hereof, the Assignment of Leases and Rents dated as of the date hereof, the
Financing Statements, the Indemnity Agreement
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and the Guaranty, and any other agreement, document or instrument now or
hereafter securing the Project Obligations.
Stored Materials. See ss.2.7.
Subordinate Loan. The $6,458,597 loan by Lender to Borrower with respect
to the Project, secured by a second lien on the Project.
Subordinate Loan Documents. The loan agreement, note and other documents
relating to the Subordinate Loan, including the Subordinate Loan Security
Documents.
Subordinate Loan Security Documents. The second mortgage, assignment of
leases and rents and other documents securing the Subordinated Loan.
Subsidiary. Any corporation, partnership, association, trust, or other
business entity of which the designated parent shall at any time own directly,
or indirectly through a Subsidiary or Subsidiaries, at least a majority (by
number of votes) of the outstanding voting interests therein.
Survey. An instrument survey of the Land and the Improvements prepared in
accordance with the Lender's survey requirements, such survey to be reasonably
satisfactory to the Lender in form and substance.
Surveyor Certificate. With respect to any Survey, a certificate executed
by the surveyor who prepares such Survey dated as of a recent date and
containing such information relating to the Project as the Lender or the Title
Insurance Company may require, such certificate to be satisfactory to the Lender
in form and substance.
Taking. Any condemnation for public use of, or damage by reason of, the
action of any Governmental Authority, or any transfer by private sale in lieu
thereof, either temporarily or permanently.
Tenant. Sepracor, Inc., a Delaware corporation, as tenant under the Tenant
Lease.
Tenant Lease. The Lease, dated January 30, 2001, from Borrower as landlord
to Tenant as tenant, of the land and improvements.
Termination Date. The earlier to occur of (i) the date four months after
the Outside Completion Deadline (as defined in the Tenant Lease), or (ii) the
date of the termination of the Lender's obligations to make Advances pursuant to
ss.13.2 hereof, whichever date occurs first.
Title Insurance Company. Chicago Title Insurance Company, with a usual
place of business at 75 Federal Street, Suite 410, Boston, Massachusetts 02110.
Title Policy. An ALTA standard form title insurance policy issued by the
Title Insurance Company (with such reinsurance or co-insurance as the Lender may
require, any such reinsurance to be with direct access endorsements) in an
amount not less than the Loan Amount insuring the
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first priority of the Mortgage and that the Borrower holds a valid and
subsisting leasehold interest in the Project, under the Ground Lease, subject
only to such exceptions as the Lender may approve ("Permitted Exceptions"), and
shall contain such endorsements and affirmative insurance as the Lender in its
discretion may require provided that such endorsements and affirmative insurance
is available in The Commonwealth of Massachusetts at commercially reasonable
rates.
1.2 Rules of Interpretation.A reference to any Loan Document, agreement,
budget, document or schedule shall include such agreement, budget, document or
schedule as revised, amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.
(a) A reference to any Exhibit hereto shall be deemed to
specifically incorporate the terms and provisions of such Exhibit herein.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meaning
assigned to them by GAAP applied on a consistent basis by the accounting
entity to which they refer.
(f) The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking
approval after full and fair disclosure to the party giving approval of
the facts necessary in order to determine whether approval should be
granted.
Reference to a particular "ss." refers to that Section of this
Agreement unless otherwise indicated.
2. AGREEMENT TO MAKE ADVANCES; LIMITATIONS.
2.1 Agreement to Make Advances. Subject to the terms and conditions of
this Agreement, the Lender agrees to lend to the Borrower and the Borrower may
borrow from time to time between the Closing Date and the Termination Date, such
amounts as are requested by the Borrower up to a maximum aggregate principal
amount equal to the Loan Amount to pay for Project Costs actually incurred by
the Borrower and reflected in the Project Budget as being funded by the Loan.
2.2 Project Budget. The Project Budget reflects the purposes and the
amounts for which funds to be advanced by the Lender under this Agreement are to
be used. The Lender
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shall not be required to disburse for any category or line item more than the
amount specified therefor in the Project Budget, but Lender will not
unreasonably withhold or delay its approval of any change to any category or
line item in the Project Budget provided that (i) such change has been made in
accordance with Article IV of the Tenant Lease, and (ii) the aggregate cost of
the Project is not thereby increased, unless the increase is to be paid by
Tenant under the Tenant Lease or, alternatively, a funding source for any such
increase has been provided to Lender's satisfaction.
2.3 Amount of Advances. In no event shall the Lender be obligated to
advance more than the Construction Loan Amount, or, if less, total Project Costs
actually incurred by the Borrower less Additional Project Funds. In no event
shall any Advance for Direct Costs of constructing the Improvements exceed an
amount equal to (a) the total value (as determined by the Lender) of the labor,
materials, fixtures, machinery and equipment completed, approved and
incorporated into the Land or the Improvements prior to the date of the Draw
Request for such Advance (and which may, subject to compliance with the
requirements set forth in Section 2.7 hereof, include Stored Materials), less
(b) until construction of the Improvements shall be fifty percent (50%) complete
(as defined in Section 2.6 hereof, retainage in an amount equal to ten percent
(10%) of such total value ("Retainage"), less (c) the total amount of any
Advances previously made by the Lender for such Direct Costs. Retainage shall be
advanced by the Lender to the Borrower upon satisfaction of the conditions set
forth in ss.12.7. With respect to any other Direct Costs and all Indirect Costs,
in no event shall any Advance exceed an amount equal to the amount of such
Direct Costs and Indirect Costs approved by the Lender, incurred by the Borrower
prior to the date of the Draw Request for such Advances, and theretofore paid or
to be paid with the proceeds of such Advance, less the total amount of any
Advances previously made by the Lender for such Direct Costs and Indirect Costs.
2.4 Quality of Work. No Advance shall be due unless all work done at the
date the Draw Request for such Advance is submitted is done in a good and
workmanlike manner and without material defects, as confirmed by the report of
the Construction Inspector.
2.5 Cost Overruns and Savings.
(a) If the Borrower becomes aware of any change in Project Costs
which will increase or decrease a category or line item of Project Costs
reflected on the Project Budget, the Borrower shall immediately notify the
Lender in writing and promptly submit to the Lender for its approval a
revised Project Budget. Lender shall not unreasonably withhold or delay
its approval of any such revised Project Budget provided that (i) such
change has been made in accordance with Article IV of the Tenant Lease,
and (ii) the aggregate cost of the Project is not thereby increased,
unless the increase is to be paid by Tenant under the Tenant Lease or,
alternatively, a funding source for any such increase has been provided to
Lender's satisfaction.
(b) If the revised Project Budget indicates an increase in a
category or line item of Project Costs subject to the provisions of
Section 10.1 hereof, no further Advances need
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be made by the Lender unless and until the revised Project Budget so
submitted by the Borrower is approved by the Lender.
(c) If the revised Project Budget indicates a decrease in a category
or line item of Project Costs, subject to the provisions of Section 10.1
hereof, no reductions in Project Costs will be made or savings reallocated
by the Borrower unless and until (i) the revised Project Budget so
submitted by the Borrower is approved by the Lender, and (ii) in the case
of decreases in a category or line item of Direct Costs, the Borrower has
furnished the Lender and the Construction Inspector with evidence
satisfactory to them that the labor performed and materials supplied in
connection with such category or line item of Direct Costs have been
satisfactorily completed in accordance with the Plans and Specifications
and paid for in full.
2.6 Contingency Reserve. The amount of $634,338 ($141,795 for Indirect
Costs and $492,543 for Direct Costs) has been allocated as Contingency Reserve
in the Project Budget and will only be disbursed upon the prior approval of the
Lender which may be withheld by the Lender in the Lender's reasonable judgment.
The disbursement of a portion of Contingency Reserve shall in no way prejudice
the Lender from withholding disbursement of any further portion of Contingency
Reserve. Any portion of the Contingency Reserve not advanced pursuant to this
Loan Agreement upon completion of construction of the Improvements shall be
advanced to Borrower and applied as follows: (i) 75% thereof shall be applied to
the partial prepayment of principal of the Subordinate Loan pursuant to Section
4.4 of the loan agreement for the Subordinate Loan; and (ii) 25% thereof shall
be paid by Borrower to its members or otherwise as Borrower shall determine.
2.7 Stored Materials. The Lender shall not be required to disburse any
funds for any materials, furnishings, fixtures, machinery or equipment not yet
incorporated into the Land or Improvements ("Stored Materials"), however, if the
Lender elects to disburse any funds for Stored Materials, any such disbursement
shall be subject to retainage in an amount equal to ten percent (10%) and shall
be contingent upon the Lender receiving satisfactory evidence that:
(a) the Stored Materials are components in a form ready for
incorporation into the Land or the Improvements and shall be so
incorporated within a period of thirty (30) days;
(b) the Stored Materials are stored at the Land, or at such other
site as the Lender shall reasonably approve, and are protected against
theft and damage;
(c) the Stored Materials have been paid for in full or will be paid
for with the funds to be disbursed and all lien rights and claims of the
supplier have been released or will be released upon payment with
disbursed funds;
(d) the Lender has or will have upon payment with disbursed funds a
perfected, first priority security interest in the Stored Materials; and
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(e) the Stored Materials are insured for an amount equal to their
replacement cost.
3. MAKING THE ADVANCES
3.1 Draw Request. At such time as the Borrower shall desire to obtain an
Advance, the Borrower shall complete, execute and deliver to the Lender the
Borrower's Requisition in the form of Exhibit G attached hereto. Each Borrower's
Requisition shall be accompanied by:
(a) If the Borrower's Requisition includes payments for Direct
Costs, a completed and itemized Direct Cost Statement in the form of
Schedule I of Exhibit G attached hereto, executed by the Borrower,
together with invoices for all items of Direct Cost covered thereby;
(b) If the Borrower's Requisition includes amounts to be paid to the
Contractor under the Construction Contract: (i) a completed and fully
itemized Application and Certificate for Payment (AIA Document G702 or
similar form approved by the Lender) containing the certification of the
Contractor and the Borrower's Architect as to the accuracy of same; (ii) a
certificate of the Contractor in the form of Exhibit H attached hereto
(with such changes therein as the Contractor may reasonably request,
subject to the approval of the Lender which approval will not be
unreasonably delayed or denied); (iii) a certificate of the Borrower's
Architect in the form of Exhibit I attached hereto (with such changes
therein as the Borrower's Architect may reasonably request, subject to the
approval of the Lender which approval will not be unreasonably delayed or
denied); and (iv) copies of requisitions and invoices from subcontractors
and materialmen supporting all items of cost covered by such application;
(c) If the Borrower's Requisition includes payments for Indirect
Costs, it shall be accompanied by a completed and itemized Indirect Cost
Statement in the form of Schedule II of Exhibit G attached hereto,
executed by the Borrower, together with invoices for all items of Indirect
Costs covered thereby;
(d) If the Borrower's Requisition includes payments for tenant
improvements, it shall be accompanied by a completed and itemized Tenant
Improvements Summary in the form of Exhibit J attached hereto, executed by
the Borrower;
(e) If requested by the Lender or if a Section 2 Lien has been
filed, an accurately completed and valid Partial Waiver and Subordination
of Lien (hereinafter, the "Lien Form") in the form set forth in Chapter
254 of the Massachusetts General Laws, as amended (hereinafter, the
"Mechanic's Lien Law") and as annexed hereto as Exhibit K, executed by the
Contractor, such Lien Form to provide that subject to the payment of the
amount set forth in the Borrower's Requisition, the Contractor waives any
and all lien rights for labor and materials, or rental equipment,
appliances or tools, performed or furnished through the last day of the
period ending on the date designated in the Lien
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Form (hereinafter, the "Payment Period Date"), except for Retainage,
unpaid agreed or pending change orders, and disputed claims as stated in
the Lien Form;
(f) Lien waivers in form acceptable to the Lender executed by all
contractors, subcontractors, laborers and materialmen for work done and
materials supplied by them which were paid for pursuant to the next
preceding Draw Request;
(g) Copies of all change orders and construction change directives,
accompanied by a change order summary prepared by and executed by the
Borrower, copies of all subcontracts, and, to the extent requested by the
Lender, of all inspection or test reports and other documents relating to
the construction of the Improvements, not previously delivered to the
Lender;
(h) If the Borrower's Requisition includes payment for Stored
Materials, it shall be accompanied by evidence as to the satisfaction of
the requirements set forth in ss.2.7 hereof; and
(i) such other information, documentation and certification as the
Lender shall reasonably request.
Each Draw Request shall constitute a representation and warranty by the Borrower
that all of the conditions set forth in this Agreement to such Advance,
including, without limitation, ss.12, have been satisfied on the date of such
Draw Request.
3.2 Notice and Frequency of Advance. Each Draw Request shall be submitted
to the Lender at least ten (10) days prior to the date of the requested Advance,
and no more frequently than once each month. The Lender shall fund the requested
Advance within ten (10) days after the Draw Request for such Advance is made in
accordance with the requirements of Section 3.1 hereof.
3.3 Payment of Funds Advanced. The Lender shall pay the proceeds of each
Advance into a separate bank account of the Borrower established for the purpose
of funding Project Costs at an FDIC insured bank in Massachusetts selected by
the Borrower, subject to the reasonable approval of the Lender.
3.4 Advances to Contractor to Others. At its option, at any time after a
Default or Event of Default shall have occurred and be continuing hereunder and
the Lender shall have given the Borrower two (2) days' notice of its intention
to do so, the Lender may make any or all Advances (a) for Direct Costs incurred
under the Construction Contract directly to Contractor, (b) through the Title
Insurance Company, or (c) to any Person to whom the Lender in good faith
determines payment is due. Any portion of the Loan so disbursed by the Lender
shall be deemed disbursed as of the date on which the Lender makes such
disbursement and all such advances shall satisfy pro tanto the obligations of
the Lender hereunder and shall be secured by the Mortgage and the other Security
Documents as fully as if made directly to the Borrower. The execution of this
Agreement by the Borrower shall, and hereby does, constitute an irrevocable
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authorization so to advance the proceeds of the Loan. No further authorization
from the Borrower shall be necessary to warrant such advances.
3.5 Advances Do Not Constitute a Waiver. No Advance made by the Lender
shall constitute a waiver of any of the conditions to the Lender's obligation to
make further Advances nor any of the terms and conditions of this Agreement,
nor, in the event the Borrower fails to satisfy any such condition, shall any
such Advance have the effect of precluding the Lender from thereafter declaring
such failure to satisfy a condition to be an Event of Default.
3.6 Right to Retain the Construction Inspector.
(a) The Lender shall have the right to retain, at the Borrower's
cost and expense, the Construction Inspector to perform various services
on behalf of the Lender, including, without limitation, to make periodic
inspections (approximately at the date of each Draw Request) for the
purpose of assuring that construction of the Improvements to date is in
accordance with the Plans and Specifications, to advise the Lender of the
anticipated cost of and time for completion of construction of the
Improvements and the adequacy of any Contingency Reserve, and to review
the Construction Contract and subcontracts. The Construction Inspector
named herein is acceptable to Borrower, however, if Lender shall elect to
appoint a new Construction Inspector, the Lender shall appoint a
Construction Inspector that has an office located in The Commonwealth of
Massachusetts.
(b) The fees and expenses of the Construction Inspector shall be
paid by the Borrower forthwith upon billing therefor (whether the same are
charged directly to the Lender or the Borrower), and, if the Lender shall
pay any such fees and expenses, the Borrower shall reimburse the Lender
for such fees and expenses forthwith upon request therefor.
(c) Neither the Lender nor the Construction Inspector shall have any
liability to the Borrower on account of (i) the services performed by the
Construction Inspector, or (ii) any approval by the Construction Inspector
of construction of the Improvements. Neither the Lender nor the
Construction Inspector assumes any obligation to the Borrower or any other
Person concerning the quality of construction of the Improvements or the
absence therefrom of defects.
4. THE NOTE; REPAYMENT OF LOAN.
4.1 The Note. The obligation of the Borrower to pay the Loan Amount or, if
less, the aggregate unpaid principal amount of all Advances made by the Lender
hereunder plus accrued interest thereon, shall be evidenced by the Note. In the
event the Note is lost, destroyed or mutilated at any time prior to payment in
full of the indebtedness evidenced thereby, the Borrower shall execute a new
note in the form of the Note. The Note shall not be necessary to establish the
indebtedness of the Borrower to the Lender on account of Advances made under
this Agreement.
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4.2 The Record. The Borrower irrevocably authorizes the Lender to make or
cause to be made, at or about the time of the Drawdown Date of any Advance or at
the time of receipt of any payment of the principal of the Note, an appropriate
notation on the Record reflecting the making of such Advance or (as the case may
be) the receipt of such payment. The outstanding amount of the Loan set forth on
the Record shall be prima facie evidence of the principal amount thereof owing
and unpaid to the Lender, but the failure to record, or any error in so
recording, any such amount on the Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under the Note to make payments of
principal or interest on the Note when due. Further, the outstanding amount of
the Loan as reflected on the Record from time to time shall be considered
correct and binding on the Borrower unless within ten (10) Business Days after
receipt of any notice by the Borrower of such outstanding amount, the Borrower
shall notify the Lender to the contrary.
4.3 Interest on the Loan; Payments on the Loan. The Loan shall bear
interest, and be payable, as follows:
(a) the "Interest Rate" referred to in the Note shall be determined
as follows:
(i) During the Construction period, the "Interest Rate" (as
referred to in the Note) on the outstanding principal
balance of the Note shall be that rate of interest per
annum equal to LIBOR plus two and one-half percent
(2.5%). As used herein, the term "LIBOR", with respect
to the relevant Interest Period (as defined below),
shall mean the rate per annum (rounded upward, if
necessary, to the nearest one-eighth (1/8) of one
percent (1%) published on the date one "Eurodollar
Business Day" (as defined below) immediately preceding
the date of the LIBOR contract for each new Interest
Period, as reported in the section entitled "Money
Rates" in the eastern edition of the Wall Street Journal
as the one-month London Interbank Offered Rate for U.S.
dollar deposits (or if the Wall Street Journal shall
cease to be publicly available or if the information
contained in the Wall Street Journal, in Lender's
reasonable judgment, shall cease to accurately reflect
such London Interbank Offered Rate, then LIBOR shall be
as reported by any publicly available source of similar
market data selected by Lender that, in Lender's
reasonable judgment, accurately reflects such London
Interbank Offered Rate). The term "Interest Period"
shall mean each calendar month during the term of the
Loan and shall be deemed to be the respective one-month
term of a particular LIBOR contract; provided, however,
that for the month of the initial Advance, the term
"Interest Period" shall mean the period commencing with
the date of the initial Advance and ending on the last
day of the calendar month in which the initial Advance
was drawn. The term "Eurodollar Business Day" shall mean
any day that is not a Saturday, a Sunday, a day on which
Lender is closed
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for business or a day on which banks in the City of
London or the City of New York are required or permitted
to be closed for interbank or foreign exchange
transactions.
(ii) Upon the completion of the Construction Period, the
Interest Rate shall be fixed at a rate per annum equal
to the then applicable yield to maturity of 10-year U.S.
Treasury obligations as reported in the section entitled
"Money Rates" in the eastern edition of the Wall Street
Journal (or if the Wall Street Journal shall cease to be
publicly available or if the information contained in
the Wall Street Journal, in Lender's reasonable
judgment, shall cease to accurately reflect Treasury
yields, then such yields shall be as reported by any
publicly available source of similar market data
selected by Lender that, in Lender's reasonable
judgment, accurately reflects such yield), plus two and
one-half percent (2.5%).
(b) Payments on the Note shall be as follows:
(i) During the Construction Period payments on the Note
shall be of interest only and shall be payable monthly
in arrears.
(ii) After the end of the Construction Period and upon the
resetting of the Interest Rate as provided in Section
4.3(a)(ii) above, the Note shall be payable in constant
monthly payments of principal and interest in such
amount as will fully amortize the unpaid principal
amount of the Note over a twenty-five year period. On
the first day of February, 2006, the entire unpaid
balance of the Note, unless sooner paid, shall
immediately be due and payable. All such payments on the
Note shall be applied first to accrued interest with the
balance in reduction of principal. In the event of the
extension of the Maturity Date to February 1, 2016
pursuant to Section 5.2 below, the monthly payments of
interest and principal shall not be adjusted but shall
continue to be paid as indicated.
4.4 Prepayment; Refinancing. The Borrower shall not have the right at any
time to prepay the Note on or before the Maturity Date, either in whole or in
part, except as follows:
(a) Through the end of the third Loan Year (as defined in the Note),
the Loan shall not be subject to prepayment at the option of Borrower,
except with the prior written consent of Lender, which consent may be
granted or withheld in Lender's sole discretion.
(b) During the fourth Loan Year and fifth Loan Year and thereafter
from time to time if so requested by Lender, Borrower shall use all
commercially reasonable efforts to refinance the Loan with a third-party
institutional lender (or lenders) identified by Borrower. If Borrower is
able to refinance the Loan at an interest rate not more than 50
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basis points greater than the Interest Rate on the Loan and otherwise on
terms comparable to the Loan, Lender shall either (i) allow such
refinancing, in which case the Loan shall be prepaid in whole (but not in
part) at par, or (ii) extend (if not already extended) the term of the
Loan to 15 years as provided in Section 5.2. If Borrower is able to
refinance the Loan only on terms more onerous than are specified above,
Lender may or may not permit a prepayment of the Loan so as to enable such
refinancing, in Lender's sole discretion.
(c) During (if applicable) the twelfth, thirteenth, fourteenth and
fifteenth Loan Years, Borrower shall have the right at its option to
prepay the Loan in whole (but not in part) at par, provided that the
interest rate on any refinancing incurred in connection with such
prepayment shall be equal to or less than the Interest Rate and provided
that the loan payments on such refinancing shall not be greater than
payments on the Loan would have been through what would have been the
Maturity Date of the Loan but for such prepayment.
(d) Except as provided in paragraphs (a), (b) and (c) above, the
Loan shall not be subject to prepayment at the option of Borrower, except
with the prior written consent of lender, which consent may be granted or
withheld in Lender's sole discretion.
4.5 Maturity. The Borrower promises to pay on the Maturity Date, and there
shall become absolutely due and payable on the Maturity Date, all principal of
the Loan outstanding on such date, together with any and all accrued and unpaid
interest thereon.
5. LOAN MATURITY DATE; CONVERSION OF CONSTRUCTION LOAN
5.1 Loan Maturity Date. The Loan Maturity Date shall be February 1, 2006,
subject to extension pursuant to Section 5.2.
5.2 Extension of Maturity Date. If the Loan has not been prepaid pursuant
to Section 4.4 above, and Borrower is not in default of its obligations under
Section 4.4(b) above, Lender shall, without the necessity for the consent of
Tenant or any other party, extend the Maturity Date of the Loan to February 1,
2016. Any such extension shall be made by written notice given to Borrower, with
a copy to Tenant.
6. FEES; PAYMENTS AND COMPUTATIONS
6.1 Commitment and Administration Fee. The Borrower agrees to pay to the
Lender on the Closing Date a commitment fee in the amount of $208,600.
6.2 Inspection Fee. [Intentionally Omitted.]
6.3 Place of Payments.
(a) All payments of principal, interest, fees and any other amounts
due under the Note or under any of the other Loan Documents shall be sent
to the Lender at
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SEPRACOR, INC., 111 Locke Drive, Marlborough, Massachusetts 01752, or at
such other location or bank account as the Lender may from time to time
designate, in the billing invoice or otherwise in writing, in immediately
available funds in lawful money of the United States.
(b) All payments by the Borrower under the Note and under any of the
other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such
deduction or withholding.
7. COLLATERAL SECURITY AND GUARANTY. The Obligations shall be secured by a
perfected first priority mortgage lien and security in the Collateral, whether
now owned or hereafter acquired, pursuant to the terms of the Security Documents
to which the Borrower is a party. The Obligations shall also be guarantied
pursuant to the terms of the Guaranty.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Borrower represents,
warrants, and covenants to the Lender as follows:
8.1 Organization; Authority, Etc.
(a) Organization; Good Standing. The Borrower is a limited liability
company duly organized under the laws of The Commonwealth of Massachusetts
pursuant to the Borrower's Organizational Documents, and is, and will at
all times be, validly existing and in good standing under the laws of such
State. The Borrower is, and will at all times be, duly organized and is,
and will at all times be, validly existing, in good standing, and
qualified to do business in each jurisdiction where required. The Borrower
has, and will at all times have, all requisite power to own its property
and conduct its business as now conducted and as presently contemplated.
(b) Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which any Party is or is to
become a party and the transactions contemplated hereby and thereby (i)
are within the authority of such Party, (ii) have been duly authorized by
all necessary proceedings on the part of such Party, (iii) do not conflict
with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which such Party is subject or any
judgment, order, writ, injunction, license or permit applicable to such
Party, (iv) do not conflict with any provision of the Organizational
Documents of such Party, and (v) do not require the approval or consent
of, or filing with, any governmental agency or authority other than those
already obtained and the filing of the Security Documents and the
Financing Statements in the appropriate public records with respect
thereto.
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<PAGE>
(c) Enforceability. The execution and delivery of this Agreement and
the other Loan Documents to which each Obligor is or is to become a party
will result in valid and legally binding obligations of such Obligor
enforceable against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting generally the enforcement of creditors' rights and except
to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding therefor may be brought.
(d) Limitations. The Organizational Documents of the Borrower limit
the business of the Borrower to activities relating to the ownership,
construction, operation and maintenance of the Project and all matter
incidental or accessory thereto.
8.2 Title to Assets. [Intentionally Omitted.]
8.3 Financial Statements. [Intentionally Omitted]
8.4 No Material Changes, Etc. [Intentionally Omitted.]
8.5 Franchises, Patents, Copyrights, Etc. The Borrower possesses, and will
at all times possess, all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted or as it is
intended to be conducted with respect to the Project, without known conflict
with any rights of others.
8.6 Litigation. There are no actions, suits, proceedings or investigations
of any kind pending or, to the actual knowledge of the Obligors, threatened
against any Obligor before any court, tribunal or administrative agency or board
or any mediator or arbitrator that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the business, assets
or financial condition of such Person, or result in any liability not adequately
covered by insurance, or for which adequate reserves are not maintained by such
Person, or which question the validity of this Agreement or any of the other
Loan Documents, any action taken or to be taken pursuant hereto or thereto, or
any lien or security interest created or intended to be created pursuant hereto
or thereto, or which will adversely affect the ability of the Borrower to
construct, use and occupy the Improvements or to pay and perform the Project
Obligations in the manner contemplated by this Agreement and the other Loan
Documents.
8.7 No Materially Adverse Contracts, Etc. Each Obligor is not subject to
any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
materially adverse effect on the business, assets or financial condition of such
Person. Each Obligor is not, and will not be, a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's officers,
to have any materially adverse effect on the business of such Person.
8.8 Compliance With Other Instruments, Laws, Etc. Each Party is not, and
will not at any time be, in violation of any provision of its Organizational
Documents or any agreement or
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instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could result in the
imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of such Party.
8.9 Tax Status. Each Obligor and Subsidiary thereof (a) has made or filed,
and will make or file in a timely fashion, all federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject, (b) has paid, and will pay when due, all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings, (c) if a partnership, limited partnership,
limited liability partnership, or limited liability company, has, and will
maintain, partnership tax classification under the Code, and (d) has set aside,
and will at all times set aside, on its books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the period to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers, partners or trustees of the Borrower know of no basis for any
such claim.
8.10 No Event of Default. No Default or Event of Default has occurred and
is continuing.
8.11 Setoff, Etc. The Collateral and the Lender's rights with respect to
the Collateral are not subject to any setoff, claims, withholdings or other
defenses.
8.12 Certain Transactions. [Intentionally Omitted.]
8.13 Subsidiaries. The Borrower does not, and will not have any,
Subsidiaries.
8.14 Partners, Beneficiaries, Etc. Except as set forth in Schedule 8.14,
the Borrower has no general partners, limited partners, partners, beneficiaries,
stockholders or members.
8.15 ERISA. The Borrower does not, and will not maintain or contribute to
an ERISA Plan. The Borrower is not a "party in interest" as that term is defined
in Section 3(14) of the Employee Retirement Income Security Act of 1974, as
amended, with respect to the Plumbers & Pipefitters National Pension Plan.
8.16 Availability of Utilities. All utility services necessary and
sufficient for the construction, development and operation of the Project are
presently, and will at all times be, available to the boundaries of the Land
through dedicated public rights of way or through perpetual private easements,
approved by the Lender, with respect to which the Mortgage creates a valid and
enforceable first leasehold lien. The Borrower will also promptly obtain all
utility installations and connections required for the operation and servicing
of the Project for its intended purposes, and will furnish the Lender with
evidence thereof.
8.17 Access. The rights of way for all roads necessary for the full
utilization of the Improvements for their intended purposes have either been
acquired by the appropriate
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Governmental Authority or have been dedicated to public use and accepted by such
Governmental Authority or, if any such roads have not been so acquired by the
appropriate Governmental Authority or dedicated to public use, the Borrower has
been granted an easement, insured in the Title Policy as appurtenant to the
Property as may be necessary for the full utilization of the Improvements for
their intended purposes. All such roads shall have been completed, or all
necessary steps have been taken by the Borrower and such Governmental Authority
to assure the complete construction and installation thereof prior to the date
upon which access to the Project via such roads will be necessary, and the right
to use all such roads,. or suitable substitute rights of way approved by the
Lender, shall be maintained at all times for the Project. All curb cuts,
driveways and traffic signals shown on the Plans and Specifications are existing
or have been fully approved by the appropriate Governmental Authority and after
the completion thereof, shall be maintained at all times for the Project.
8.18 Condition of Project. Neither the Project nor any part thereof is now
damaged or injured as result of any fire, explosion, accident, flood or other
casualty or has been the subject of any Taking, and to the knowledge of the
Borrower, no Taking is pending or contemplated.
8.19 Compliance with Requirements. The construction of the Improvements
and the use and occupancy of the Project contemplated thereby comply with, and
will at times comply with, all Requirements. The Borrower will give all such
notices to, and take all such other actions with respect to, such Governmental
Authority as may be required under applicable Requirements to construct the
Improvements and to use, occupy and operate the Project following Project
Completion.
8.20 Project Approvals.
(a) Except as set forth on Schedule 8.20A hereto, the Borrower has
obtained all Project Approvals. All Project Approvals obtained by the
Borrower are listed and described on Schedule 8-20B hereto, have been
validly issued and are in full force and effect. The Borrower has no
reason to believe that any of the Project Approvals not heretofore
obtained by the Borrower will not be obtained by the Borrower in the
ordinary course following Project Completion in accordance with the Plans
and Specifications. No Project Approvals will terminate, or become void or
voidable or terminable, upon any sale, transfer or other disposition of
the Project, including any transfer pursuant to foreclosure sale under the
Mortgage.
(b) The Borrower will promptly obtain all Project Approvals not
heretofore obtained by the Borrower (including those listed and described
on Schedule 8.20A hereto and any other Project Approvals which may
hereafter become required, necessary or desirable) and will furnish the
Lender with evidence that the Borrower has obtained such Project Approvals
promptly upon its request.
(c) The Borrower will duly perform and comply with all of the terms
and conditions of all Project Approvals obtained at any time, including
all Project Approvals listed and described on Schedules 8.20A and 8.20B
hereto.
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8.21 Construction Contract. The Construction Contract is in full force and
effect and each of the parties thereto are in full compliance with their
respective obligations thereunder. The work to be performed by the Contractor
under the Construction Contract is the work called for by the Plans and
Specifications, and all work required to complete the Improvements in accordance
with the Plans and Specifications is provided for under the Construction
Contract. The foregoing representations, however, shall be applicable only after
the finalization of the Plans and Specifications, and the execution and delivery
of the Construction Contract. See Section 11.22.
8.22 Other Contracts.
(a) The Borrower has not made, and will not make any, contract or
arrangement of any kind or type whatsoever (whether oral or written,
formal or informal), the performance of which by the other party thereto
could give rise to a lien or encumbrance on the Project, except as
permitted by this Agreement.
(b) The Borrower has not made, and will not make, any contract or
arrangement of any kind or type whatsoever, with any affiliate of the
Borrower unless such contract or arrangement is (x) approved in writing in
advance by the Lender, (y) on the same terms as would be generally
available to the Borrower in an arm's length contract or arrangement with
a third party, and (z) evidenced by a written agreement.
8.23 Violations. The Borrower has received no notices of, or has any
knowledge of any violations of any applicable Requirements or Project Approvals.
8.24 Plans and Specifications. The Borrower has furnished the Lender with
true and complete sets of the Plans and Specifications as they exist as of the
date hereof. The Plans and Specifications so furnished to the Lender comply with
all Requirements, all Project Approvals, and all restrictions, covenants and
easements affecting the Project, and have been approved by the Contractor, the
Borrower's Architect, the Tenant (if required by the Lease), and such
Governmental Authority as is required for construction of the Improvements. If
and to the extent the Plans and Specifications are not absolutely complete and
agreed to by Borrower and Lender as of the date hereof, Borrower and Lender
agree to work together cooperatively to the end that mutually satisfactory Plans
and Specifications are finalized as soon as possible.
8.25 Project Budget. The Project Budget accurately reflects all Project
Costs.
8.26 Effect of Draw Request. Each Draw Request submitted to the Lender as
provided in ss.3.1 hereof shall constitute an affirmation that the
representations and warranties contained in this Agreement and in the other Loan
Documents remain true and correct as of the date thereof; and unless the Lender
is notified to the contrary, in writing, prior to the Drawdown Date of the
requested Advance or any portion thereof, shall constitute an affirmation that
the same remain true and correct on the Drawdown Date.
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9. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants and
agrees that, so long as the Loan is outstanding or the Lender has any obligation
to make any Advances:
9.1 Punctual Payment. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loan and all other amounts provided
for in the Note, this Agreement and the other Loan Documents to which the
Borrower is a party, all in accordance with the terms of the Note, this
Agreement and such other Loan Documents.
9.2 Commencement, Pursuit and Completion of Construction. The Borrower
will commence construction of the Improvements within the time period provided
therefor in the Construction Schedule delivered by the Borrower to the Lender in
connection with the closing of the Loan and will diligently pursue construction
of the Improvements in accordance with the Construction Schedule, will attain
Project Completion prior to the Project Completion Date, and will pay all sums
and perform all such acts as may be necessary or appropriate to complete such
construction, all in substantial accordance with the Plans and Specifications,
in full compliance with all restrictions, covenants and easements affecting the
Project, all Requirements, all Project Approvals, and with all terms and
conditions of the Loan Documents, and the Tenant Lease, without deviation from
the Plans and Specifications unless the Borrower obtains the prior approval of
the Lender, if required as provided herein, Tenant (if required by the Tenant
Lease) and if applicable, the surety company or companies issuing any Payment
and Performance Bonds. Such construction shall be completed free from any liens,
claims or assessments (actual or contingent) asserted against the Project for
any material, labor or other items furnished in connection therewith. The
Borrower will furnish reasonable evidence of satisfactory compliance with this
Section to the Lender on or before the Project Completion Date.
9.3 Correction of Defects. The Borrower will promptly correct or cause to
be corrected all material defects in the Improvements or any departure from the
Plans and Specifications not previously approved by the Lender.
9.4 Insurance; Bonds.
(a) The Borrower will obtain and maintain insurance with respect to
the Project and the operations of the Borrower as required by the
Mortgage.
(b) The Borrower will require the Contractor, the Architect, and any
other architect, contractor, engineer or design professional providing
design, construction, or engineering services in connection with the
construction of the Improvements to obtain and maintain at all times
during the construction of the Improvements such insurance as may be
reasonably required by the Lender, all such insurance to be in such
amounts and form, to include such coverage and endorsements, and to be
issued by such insurers as shall be approved by the Lender (which approval
shall not be unreasonably withheld or delayed) and to contain the written
agreement of the insurer to give the Lender thirty (30) days' prior
written notice of cancellation, nonrenewal, modification or expiration.
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(c) The Borrower will cause any subcontractor having a contract for
in excess of $1,000,000 designated by the Lender to obtain and provide to
the Lender such Payment and Performance Bonds, and lien bonds, as the
Lender may reasonably request.
(d) The Borrower will provide or will cause any such Person to
provide the Lender with certificates evidencing such insurance upon the
written request of the Lender.
(e) The Borrower shall pay, indemnify and hold Lender harmless from
any legal fees and legal costs incurred by Lender in suing the Title
Insurance Company in the event that suit must be brought in order to
collect proceeds under the Title Policy should the Title Insurance Company
not pay with reasonable promptness a claim properly made by Lender arising
out of the Title Policy's affirmative coverage for access to the Project,
the Lender to be represented in such suit by Nixon Peabody LLP or other
counsel selected by Lender, any such other counsel to be subject to the
reasonable approval of the Borrower.
9.5 Inspection of Project and Books. The Borrower shall permit the Lender
and the Construction Inspector, at the Borrower's expense, to visit and inspect
the Project and all materials to be used in the construction thereof and will
cooperate with the Lender and the Construction Inspector during such inspections
(including making available working drawings of the Plans and Specifications);
provided that this provision shall not be deemed to impose on the Lender or the
Construction Inspector any obligation to undertake such inspections.
9.6 Compliance with Laws, Contracts, Licenses, and Permits. The Borrower
will, or will cause each Obligor to, comply with (a) the applicable laws and
regulations wherever its business is conducted, including all Environmental Laws
and, in the case of the Borrower, all Requirements, (b) the provisions of its
Organizational Documents, (c) all agreements and instruments by which it or any
of its properties may be bound, including, in the case of the Borrower, the
Construction Contract, the Tenant Lease, and all restrictions, covenants and
easements affecting the Project, (d) all applicable decrees, orders and
judgments, and (e) all licenses and permits required by applicable laws and
regulations for the conduct of its business or the ownership, use or operation
of its properties, including, in the case of the Borrower, all Project
Approvals.
9.7 Use of Proceeds. The Borrower will use the proceeds of the Loan solely
for the purpose of paying for Project Costs in accordance with the Project
Budget.
9.8 Project Costs. The Borrower will pay when due all Project Costs in
excess of the Loan Amount, regardless of the amount.
9.9 Laborers, Subcontractors and Materialmen. The Borrower will furnish to
the Lender, upon request at any time, and from time to time, affidavits listing
all laborers, subcontractors, materialmen, and any other Persons who might or
could claim statutory or common law liens and are furnishing or have furnished
labor or material to the Project or any part thereof, together with affidavits,
or other evidence satisfactory to the Lender, showing that
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such parties have been paid all amounts for labor and materials furnished to the
Project which were due as of the date of the most recent Borrower's Requisition.
The Borrower will also furnish to the Lender, at any time and from time to time
upon demand by the Lender, lien waivers bearing a then current date and prepared
on a form satisfactory to the Lender from the Contractor and such subcontractors
or materialman as the Lender may designate.
9.10 Further Assurance of Title. If at any time the Lender or the Lender's
counsel has reason to believe that any Advance is not secured or will or may not
be secured by the Mortgage as a first lien or security interest on the Project,
then the Borrower shall, within ten (10) days after written notice from the
Lender, do all things and matters necessary, to assure to the reasonable
satisfaction of the Lender and the Lender's counsel that any Advance previously
made hereunder or to be made hereunder is secured or will be secured by the
Mortgage as a first leasehold lien or security interest on the Project, and the
Lender, at its option, may decline to make further Advances hereunder until the
Lender has received such assurance, but nothing in this Section shall limit the
Lender's right to require endorsements extending the effective date of the Title
Policy as herein set forth.
9.11 Further Assurances Regarding Construction. The Borrower will furnish
or cause to be furnished to the Lender all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and specifications,
title and other insurance, reports and agreements and each and every other
document and instrument required to be furnished by the terms of this Agreement
or the other Loan Documents, all at the Borrower's expense.
10. NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants and agrees
that, so long as the Loan is outstanding or the Lender has any obligation to
make any Advances:
10.1 Restriction on Change Orders. The Borrower will not cause, permit or
suffer to exist any deviations from the Plans and Specifications and will not
approve or consent to any change orders or construction change directives,
without the prior approval of the Lender, Tenant (if required by the Tenant
Lease) and the surety company or companies issuing any Payment and Performance
Bonds, that:
(a) result in a change in the quality or overall design of the
Improvements; or
(b) result in an increase of the original contract sum (prior to any
change orders) in an amount in excess of $100,000; or
(c) when added to all previous change orders will result in an
increase in the original contract sum (prior to any change orders) in an
amount in excess of $500,000; or
(d) when added to all previous change orders decreasing the contract
together with such additional information that the Lender may reasonably
request with respect to such proposed deviation, change order or
construction change directive and the sum will result in a decrease in the
original contract sum (prior to any change orders) in an amount in excess
of $500,000 (provided, however, that this subsection (c) shall not apply
to
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<PAGE>
change orders which do not modify the Plans and Specifications and which
reduce the contract sum as a result of the Borrower or the Contractor
rebidding and obtaining lower bids for work to be performed by
subcontractors); or
(e) which will in any way extend the contract time beyond the
Project Completion Date.
The Borrower shall submit all proposed deviations, change orders and
construction change directives, together with such additional information as the
Lender may reasonably request with respect to such proposed deviation, change
order or construction change directive, to the Lender and the Construction
Inspector simultaneously, and Lender shall give its approval or disapproval to
the Borrower within five (5) Business Days after receipt thereof by both the
Lender and the Construction Inspector.
10.2 No Amendments, Terminations or Waivers.
(a) The Borrower will not amend, supplement or otherwise modify,
whether by change order or otherwise, any of the terms and conditions of
the Construction Contract, or the Tenant Lease without in each case the
prior approval of the Lender, which consent shall not be unreasonably
withheld or delayed, and in the case of the Construction Contract, without
the prior approval of any surety or surety companies issuing any Payment,
Performance or Lien Bonds.
(b) The Borrower will not, directly or indirectly, terminate or
cancel, or cause or permit to exist any condition which would result in
the termination or cancellation of, or which would relieve the performance
of any obligations of any other party under, the Construction Contract,
the Tenant Lease or the Ground Lease.
(c) The Borrower will not, directly or indirectly, waive or agree or
consent to the waiver of, the performance of any obligations or any other
party under, the Construction Contract or the Tenant Lease.
(d) The Borrower will not, directly or indirectly, amend, or allow
the amendment of, any of the Organizational Documents of the Borrower in
any material respect, including, without limitation, any such amendment
which would allow or authorize the expansion of Borrower's activities
beyond the ownership, construction, operation and maintenance of the
Project and all matter incidental or accessory thereto.
11. CONDITIONS TO CLOSING AND INITIAL ADVANCE. The obligation of the
Lender to make the initial Advance shall be subject to the satisfaction of the
following conditions precedent:
11.1 Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to the Lender.
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11.2 Construction Documents. Except as provided in Section 11.22, the
Construction Contract shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect, and shall be in
form and substance reasonably satisfactory to the Lender. Except as provided in
Section 11.22, the Contractor shall have duly executed and delivered to the
Lender a consent to the assignment of Construction Contract not the Construction
Contract, in form and substance satisfactory to the Lender.
11.3 Subcontracts. The Borrower shall have delivered to the Lender, and
the Lender shall have approved, a list of all subcontractors and materialmen who
have been or, to the extent identified by the Borrower, will be supplying labor
or materials for the Project, and a copy of the standard form of subcontract to
be used by the Contractor.
11.4 Other Contracts. The Borrower shall have delivered to the Lender
correct and complete photocopies of all other executed contracts with
contractors, subcontractors, engineers or consultants for the Project, and of
all development, management, brokerage, sales or leasing agreements for the
Project.
11.5 Leases. The Tenant Lease shall have been duly executed by the
Borrower and Tenant and shall be in full force and effect. The Lender shall have
received a certified or fully executed copy of the Tenant Lease. The Tenant
Lease shall be superior to the Mortgage, and a notice thereof shall be recorded
prior to the Mortgage.
11.6 Certified Copies of Organization Documents. The Lender shall have
received from each of the Parties a certified copy of its Organization Documents
as in effect on such date of certification, such Organizational Documents to be
in form and substance satisfactory to the Lender.
11.7 Resolutions. All action necessary for the valid execution, delivery
and performance by each Party of this Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Lender shall have been provided to the
Lender. The Lender shall have received from each such Person true copies of the
resolutions authorizing the transactions described herein, each certified as of
a recent date to be true and complete.
11.8 Incumbency Certificate; Authorized Signers. The Lender shall have
received from each Party an incumbency certificate, dated as of the Closing
Date, giving the name and bearing a specimen signature of each individual who
shall be authorized: (a) to sign, in the name and on behalf of such Person each
of the Loan Documents to which such Person is or is to become a party; (b) in
the case of the Borrower, to make Draw Requests; and (c) to give notices and to
take other action on its behalf under the Loan Documents.
11.9 Validity of Liens. The Security Documents shall be effective to
create in favor of the Lender a legal, valid and enforceable first lien and
security interest in the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the
Lender to protect and preserve such lien and security interest shall have been
duly
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effected. The Lender shall have received evidence thereof in form and substance
satisfactory to the Lender.
11.10 Deliveries. The following items or documents shall have been
delivered to the Lender by the Borrower and shall be in form and substance
satisfactory to the Lender:
(a) Plans and Specifications. Except as provided in Section 11.22,
two complete sets of the Plans and Specifications and approval thereof by
any necessary Governmental Authority, with a certification from the
Borrower's Architect that the Improvements to be constructed comply with
all Requirements and Project Approvals and that the Construction Contract
satisfactorily provides for the construction of the Improvements.
(b) Title Policy. The Title Policy, or a commitment therefor,
together with proof of payment of all fees and premiums for such policy
and true and accurate copies of all documents listed as exceptions under
such policy.
(c) Other Insurance. Duplicate originals or certified copies of all
policies of insurance required by the Mortgage or hereunder to be obtained
and maintained during the construction of the Improvements.
(d) Evidence of Sufficiency of Funds. Evidence that the proceeds of
the Loan, together with Additional Project Funds, will be sufficient to
cover all Project Costs reasonably anticipated to be incurred to complete
the Improvements prior to the Project Completion Date, to carry the
Project through the Maturity Date, and to satisfy the obligations of the
Borrower to the Lender under this Agreement.
(e) Evidence of Access, Availability of Utilities, Project
Approvals. Evidence as to:
(i) the methods of access to and egress from the Project,
and nearby or adjoining public ways, meeting the
reasonable requirements of the Project and the status of
completion of any required improvements to such access;
(ii) the availability of water supply and storm and sanitary
sewer facilities meeting the reasonable requirements of
the Project;
(iii) the availability of all other required utilities, in
location and capacity sufficient to meet the reasonable
needs of the Project; and
(iv) the obtaining of all Project Approvals which are
required, necessary or desirable for the construction of
the Improvements and the access thereto, together with
copies of all such Project Approvals.
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(f) Environmental Report. An environmental site assessment report or
reports of one or more qualified environmental engineering or similar
inspection firms approved by the Lender, which report or reports shall
indicate a condition of the Land and any existing improvements thereon in
compliance with all Requirements and in all respects satisfactory to the
Lender in its sole discretion and upon which report or reports the Lender
is expressly entitled to rely.
(g) Soils Report. [Intentionally omitted.]
(h) Survey and Taxes. A Survey of the Land (and any existing
improvements thereon) and Surveyor's Certificate, and evidence of payment
of all real estate taxes and municipal charges on the Land (and any
existing improvements thereon) which were due and payable prior to the
Closing Date.
(i) Additional Project Funds. The Borrower shall have delivered to
the Lender evidence satisfactory to the Lender, in its sole and absolute
discretion, that the Borrower has applied the Additional Project Funds to
pay Project Costs.
(j) Payment, Performance and Lien Bonds. Payment, Performance and
Lien Bonds satisfactory to the Lender shall have been delivered to the
Lender and the Lien Bond shall have been recorded in the Registry.
(k) Draw Request. A Draw Request complying with the provisions
of ss.3.1 hereof.
11.11 Construction Inspector Report. [Intentionally omitted.]
11.12 Legal and Other Opinions. The Lender shall have received favorable
opinions in form and substance satisfactory to the Lender and the Lender's
counsel, addressed to the Lender and dated as of the Closing Date, from counsel
to the Borrower and each Guarantor acceptable to the Lender, as to such matters
as the Lender shall reasonably request.
11.13 Lien Search. The Lender shall have received a certification from
Title Insurance Company or counsel satisfactory to the Lender (which shall be
updated from time to time at the Borrower's expense upon request by the Lender)
that a search of the public records disclosed no conditional sales contracts,
security agreements, chattel mortgages, leases of personalty, financing
statements or title retention agreements which affect the Collateral.
11.14 Mechanic's Lien Law.
(a) Initial Advance. In the event that for any reason the initial
Advance is not funded on the Closing Date, the terms and provisions
of ss.12.6(a) and (b) shall be applicable for the initial Advance.
(b) Lien Bond. The Borrower has provided evidence that the Borrower
has obtained and recorded with the Registry a satisfactory lien bond in an
amount equal to the
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Construction Contract, which lien bond shall be obtained by the Borrower
and relate to, and therefore dissolve, any Section 2 Lien and Section 4
Lien. The lien bond shall name the Lender as dual obligee.
11.15 Notices. All notices required by any Governmental Authority under
applicable Requirements to be filed prior to commencement of construction of the
Improvements shall have been filed.
11.16 Appraisal. [Intentionally Omitted.]
11.17 Fees. The Borrower shall have paid to the Lender the fees payable to
it pursuant to ss.6.1 and ss.6.2.
11.18 Performance; No Default. The Borrower shall have performed and
complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the Drawdown Date of the initial Advance, and
on the Drawdown Date of the initial Advance, there shall exist no Default or
Event of Default.
11.19 Representations and Warranties. The representations of warranties
made by the Obligors in the Loan Documents or otherwise made by or on behalf of
the Obligors in connection therewith or after the date thereof shall have been
true and correct in all respects when made and shall be true and correct in all
respects on the Drawdown Date of the initial Advance.
11.20 Proceedings and Document. All proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory to the Lender and the Lender's counsel in form and substance,
and the Lender shall have received all information and such counterpart
originals or certified copies of such documents and such other certificates,
opinions or documents as the Lender and the Lender's counsel may reasonably
require.
11.21 Waiver. Any waiver by the Lender of any of the conditions precedent
contained herein for the Closing and the initial Advance shall not be deemed to
be a waiver by the Lender of such conditions precedent for any subsequent
Advance or any other obligation of the Lender hereunder.
11.22 Incomplete Construction Documents. Borrower and Lender agree that
the Closing and initial Advance hereunder may take place prior to any or all of
the following: (i) the finalization of the Plans and Specifications, (ii) the
execution and delivery of the Construction Contract (and the consent of the
Contractor to the assignment of the Construction Contract pursuant to Collateral
Assignment of Contracts, Liens, Permits, Agreements, Warranties and Approvals,
dated as of the date hereof), and (iii) the issuance of a building permit for
the construction of the Project. In such event, Advances hereunder shall be
limited to matters shown on the Project Budget which are related to the Ground
Lease and pre-construction expenses and are not covered by the Construction
Contract. Lender shall not be obligated to fund any Advance relating to the
Construction Contract unless and until the matters referred to above in clauses
(i), (ii) and (iii) have been accomplished to Lender's reasonable satisfaction,
except that only a
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foundation building permit shall be required in connection with Advances
relating to site and foundation work, and ordering steel.
12. CONDITIONS OF SUBSEQUENT ADVANCES. The obligation of the Lender to
make any Advance after the initial Advance shall be subject to the satisfaction
of the following conditions precedent:
12.1 Prior Conditions Satisfied. All conditions precedent to the initial
Advance and any prior Advance shall continue to be satisfied as of the Drawdown
Date of such subsequent Advance, including but not limited to Section 11.22 if
applicable.
12.2 Performance; No Default. The Borrower shall have performed and
complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the Drawdown Date of such Advance, and on the
Drawdown Date of such Advance there shall exist no Default or Event of Default.
12.3 Representations and Warranties. Each of the representations and
warranties made by the Obligors in the Loan Documents or otherwise made by or on
behalf of the Obligors in connection therewith after the date thereof shall have
been true and correct in all respects on the date on when made and shall also be
true and correct in all material respects on the Drawdown Date of such Advance
(except to the extent of changes resulting from transactions contemplated or
permitted by the Loan Documents).
12.4 No Damage. The Improvements shall not have been materially injured or
damaged by fire, explosion, accident, flood or other casualty so that the
requirements hereof cannot be complied with.
12.5 Receipt of the Lender. The Lender shall have received:
(a) Draw Request. A Draw Request complying with the requirements
hereof, including those set forth in ss.3.1 hereof,
(b) Endorsement to Title Policy. A "date down" endorsement to the
Title Policy indicating no change in the state of title and containing no
survey exceptions not approved by the Lender;
(c) Current Survey. An updated Survey if required by the Title
Insurance Company or the Lender;
(d) Approval by Construction Inspector. Approval of the Draw Request
for such Advance by the Construction Inspector, accompanied by a
certificate or report from the Construction Inspector to the effect that
in its opinion, based on-site observations and submissions by the
Contractor, the construction of the Improvements to the date thereof was
performed in a good and workmanlike manner and in accordance with the
Plans and Specifications, stating the estimated total cost of construction
of the Improvements, stating the percentage of in-place construction of
the Improvements, and stating that the
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remaining non-disbursed portion of the Loan and Additional Project Funds
allocated for such purpose in the Project Budget is adequate to complete
the construction of the Improvements;
(e) Contracts. Evidence that one hundred percent (100%) of the cost
of the remaining construction work is covered by firm fixed price or
guaranteed maximum price contracts or subcontracts, or orders for the
supplying of materials, with contractors, subcontractors, materialmen or
suppliers reasonably satisfactory to the Lender.
12.6 Mechanic's Lien Law.
(a) Notice of Contract, Mechanic's Lien. Unless or until a lien bond
is in full force and effect which prevents or eliminates the encumbrance
of the Project by any lien under the Mechanic's Lien Law, the Lender may
withhold or refuse to fund any advance hereunder if:
(i) a Notice of Contract has been filed under Section 4 of
the Mechanic's Lien Law; or
(ii) a Notice of Contract has been filed by the Contractor
under Section 2 of the Mechanic's Lien Law, unless (x)
the Project does not involve the construction of at
least one, but not more than four, dwelling unit and (y)
with respect to the subject Borrower's Requisition, an
accurately completed and valid Lien Form has been
provided to the Lender with a Payment Period Date no
more than twenty-five days before the date of the
funding of such advance, such Lien Form to provide that
subject to the payment of the amount set forth in the
Borrower's Requisition, the Contractor waives any and
all lien rights for labor and materials, or rental
equipment, appliances or tools, performed or furnished
through the applicable Payment Period Date, except for
Retainage, unpaid agreed or pending change orders, and
disputed claims as stated in the Lien Form; or
(iii) any Other Mechanic's Lien has been filed or established.
(b) Payment Period Date. In the event that the Lender has not funded
any Borrower's Requisition within twenty-five days after the applicable
Payment Period Date as set forth in the Lien Form which was submitted with
the subject Borrower's Requisition, the Lender may, at its option,
withhold or refuse to fund the Borrower's Requisition and require the
Borrower to resubmit an updated Borrower's Requisition in accordance with
ss.3.1, above, with an updated Lien Form.
(c) Lien Bond. If requested by the Lender, at any time, the Borrower
shall provide evidence that the Borrower has obtained and recorded with
the Registry a satisfactory lien bond in an amount equal to the unpaid
construction costs, which lien
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bond shall be obtained by the Borrower and relate to, and therefore
dissolve, any Section 2 Lien and Section 4 Lien. The lien bond shall name
the Lender as dual obligee;
(d) Notice of Substantial Completion. Upon the substantial
completion of the work provided for in the Construction Contract, the
Borrower has provided evidence that the Borrower has timely obtained from
the Contractor and recorded with the Registry, a Notice of Substantial
Completion as provided for in the Mechanic's Lien Law; and
(e) Notice of Termination. In the event of the termination of the
Construction Contract, the Borrower has provided evidence that the
Borrower has timely recorded with the Registry, a Notice of Termination as
provided for in the Mechanic's Lien Law.
12.7 Release of Retainage. In addition to the conditions hereinbefore set
forth in this Article, the Lender's obligation to make any Advance of Retainage
shall be subject to receipt by the Lender of the following:
(a) Project Approvals. Evidence satisfactory to the Lender that the
Borrower has obtained all Project Approvals from, given all notices to,
and taken all such other actions with respect to, such Governmental
Authority as may be required under applicable Requirements for the
permanent use and occupancy of the Improvements for their intended uses,
together with copies of all such Project Approvals.
(b) Approval by Construction Inspector. Notification from the
Construction Inspector to the effect that the Improvements have been
completed in a good and workmanlike manner in accordance with the Plans
and Specifications.
(c) Final Survey. A final Survey reasonably acceptable to the Lender
showing the as-built location of the completed Improvements.
(d) Acceptance by Tenant. Evidence reasonably satisfactory to the
Lender that Tenant has accepted the Improvements as being in compliance
with the Tenant Lease and the Plans and Specifications.
(e) Certificate of the Borrower's Architect. A certificate of the
Borrower's Architect that the Improvements have been completed
substantially in accordance with the Plans and Specifications and that the
Improvements comply with all applicable Requirements and Project Approvals
and are in all respects (except for work to be performed by tenants) ready
for occupancy.
(f) Payment of Costs. Evidence reasonably satisfactory to the Lender
that all sums due in connection with the construction of the Improvements
have been paid in full (or will be paid out of the funds requested to be
advanced) and that no party claims or has a right to claim any statutory
or common law lien arising out of the construction of the Improvements or
the supplying of labor, material, and/or services in connection therewith.
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(g) Final Lien Waivers. Final lien waivers (on AIA Documents G706 or
other form satisfactory to the Lender) from the Contractor and such
laborers, subcontractors and materialmen as may be required by the Lender,
duly executed and notarized.
(h) Mechanic's Lien Law. If requested by the Lender or if a Section
2 Lien has been filed, an accurately completed and valid Lien Form
executed by the Contractor, such Lien Form to provide that subject to the
payment of the Retainage, the Contractor waives any and all lien rights
for labor and materials, or rental equipment, appliances or tools,
performed or furnished for the Project.
(i) Consent by Surety. Evidence satisfactory to the Lender that the
surety company or companies issuing any Payment and Performance Bonds have
consented to final payment to the Contractor or any subcontractor named as
principal therein.
(j) Warranties. Copies of the warranty issued by the Contractor to
the Borrower pursuant to the Construction Contract and of all other
warranties issued to the Borrower by subcontractors and manufacturers for
labor performed and materials supplied in connection with the construction
of the Improvements.
(k) Insurance. Duplicate original or certified copies of all
policies of insurance required by the Mortgage or hereunder to be obtained
and maintained by the Borrower following Project Completion.
(l) Management Contract. [Intentionally omitted.]
(m) Development Agreement. [Intentionally omitted.]
12.8 Waiver. Any waiver by the Lender of any of the conditions precedent
contained herein for any Advance shall not be deemed to be a waiver by the
Lender of such conditions precedent for any subsequent Advance or any other
obligation of the Lender hereunder.
13. EVENTS OF DEFAULT AND REMEDIES.
13.1 Events of Default. The occurrence of any one or more of the following
conditions or events shall constitute an "Event of Default":
(a) any failure by the Borrower to pay, within five (5) days of the
due date, any interest on or principal of or other sum payable under the
Note (including, without limitation, any amounts required to be paid by
the Borrower to the Lender on the Maturity Date pursuant to the provisions
of Section 5.2 hereof; or
(b) any default in the payment of any of the other Obligations
(excluding installments of interest and principal), when and as the same
shall have become due and payable as in the Note and any other Loan
Document provided, or in the performance o any of Borrower's other
obligations under any of the Loan Documents which performance consists
solely of the payment of a sum of money, (i) prior to maturity
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(whether such maturity occurs by acceleration, lapse of time or
otherwise), if such default shall have continued for a period of ten (10)
Business Days after notice thereof to Mortgagor, and (ii) upon maturity
(whether such maturity occurs by acceleration, lapse of time or
otherwise); or
(c) title to the Collateral is or becomes unsatisfactory to the
Lender by reason of any lien, charge, encumbrance, title condition or
exception (including without limitation, (x) any Other Mechanic's Lien or
(y) any Section 1 Lien or Section 2 Lien in respect of obligations
overdue) and such matter causing title to be or become unsatisfactory is
not cured or removed (including by bonding) within thirty (30) days after
notice thereof from the Lender to the Borrower; or
(d) any refusal by the Title Insurance Company to insure any Advance
as being secured by the Mortgage as a valid first lien and security
interest on the Project and continuance of such refusal for a period of
thirty (30) days after notice thereof by the Lender to the Borrower; or
(e) Project Completion shall not have been attained by the Project
Completion Date or, in the reasonable judgment of the Lender, Project
Completion cannot be attained by the Project Completion Date; or
(f) the Project or any material part thereof is subject to a
material Taking; or
(g) any cessation at any time in construction of the Improvements
for more than ten 10 consecutive business days except for strikes, acts of
God, fire or other casualty, or other causes entirely beyond the
Borrower's control, or any cessation at any time in construction of the
Improvements for more than sixty (60) consecutive days, regardless of the
cause thereof, but subject to Force Majeure; or
(h) in the reasonable judgment of the Lender, if the remaining
undisbursed portion of the Loan, together with proceeds of the Subordinate
Loan and together with amounts payable from Tenant to the Borrower under
the Tenant Lease to be applied against Project Costs, is or will be
insufficient to fully complete and equip the Improvements in accordance
with the Plans and Specifications, to operate and carry the Project after
Project Completion until payment. in full of the Loan by the Borrower, to
pay all other Project Costs, to pay all interest accrued or to accrue on
the Loan during the term of the Loan from and after the date hereof, and
to pay all other sums due or to become due under the Loan Documents (or as
to any budget category or line item), and to pay any liens for labor and
materials alleged to be due and payable at the time in connection with the
Improvements, in each case regardless of how such condition may be caused,
unless the Borrower shall within seven (7) days of written notice of the
amount required by such determination from the Lender, except otherwise as
provided in ss.13.1(i) below, deposit with the Lender such sums of money
in cash as the Lender may require, or an unconditional irrevocable standby
letter of credit in the amount required by the Lender and otherwise in
form and substance satisfactory to the Lender from a commercial bank
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acceptable to the Lender, in an amount sufficient to remedy the condition
described in such notice, and sufficient to pay any liens for labor and
materials alleged to be due and payable at the time in connection with the
Improvements; or
(i) any Guarantor denies that such Guarantor has any liability or
obligations under the Guaranty or the Indemnity Agreement, or shall notify
the Lender of such Guarantor's intention to attempt to cancel or terminate
the Guaranty or the Indemnity Agreement, or shall fail to observe or
comply with any term, covenant, condition and agreement under the Guaranty
or the Indemnity Agreement; or
(j) any representation or warranty made or deemed to be made by or
on behalf of any Obligor in this Agreement or in any of the other Loan
Documents, or in any report, certificate, financial statement, Draw
Request, document or other instrument delivered pursuant to or in
connection with this Agreement, any Advance or any of the other Loan
Documents, shall prove to have been false or incorrect in any material
respect upon the date when made or deemed to be made or repeated; or
(k) any suit or proceeding shall be filed against the Borrower or
any Guarantor or the Project which, if adversely determined, would have a
materially adverse affect on the ability of the Borrower or such Guarantor
to perform each and every one of their respective obligations under and by
virtue of the Loan Documents; or
(l) any failure by the Borrower to obtain any Project Approvals, or
the revocation or other invalidation of any Project Approvals previously
obtained, after all appeals have been exhausted; or
(m) any Obligor or Subsidiary thereof shall file a voluntary
petition in bankruptcy under Title 11 of the United States Code, or an
order for relief shall be issued against any such Person in any
involuntary petition in bankruptcy under Title 11 of the United States
Code, or any such Person shall file any petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other law or regulation relating to bankruptcy,
insolvency or other relief of debtors, or such Person shall seek or
consent to or acquiesce in the appointment of any custodian, trustee,
receiver, conservator or liquidator of such Person, or of all or any
substantial part of its respective property, or such Person shall make an
assignment for the benefit of creditors, or such Person shall give notice
to any governmental authority or body of insolvency or pending insolvency
or suspension of operation; or
(n) an involuntary petition in bankruptcy under Title 11 of the
United States Code shall be filed against any Obligor or Subsidiary
thereof and such petition shall not be dismissed within sixty (60) days of
the filing thereof, or
(o) a court of competent jurisdiction shall enter any order,
judgment or decree approving a petition filed against any Obligor or any
Subsidiary thereof seeking any
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reorganization, arrangement, composition, readjustment, liquidation or
similar relief under any present or future federal, state or other law or
regulation relating to bankruptcy, insolvency or other relief for debtors,
or appointing any custodian, trustee, receiver, conservator or liquidator
of all or any substantial part of its property; or
(p) if final judgment for the payment of money in the amount of
$100,000 or more in excess of insurance proceeds shall be rendered against
the Borrower, or final judgment for the payment of money in the amount of
$500,000 or more in excess of insurance proceeds shall be rendered against
any of the Guarantors, and the Borrower or such Guarantor shall have
failed to discharge the same or cause it to be discharged within sixty
(60) days from the entry thereof, or shall have failed to appeal therefrom
or from the order, decree or process upon which or pursuant to which said
judgment was granted, based or entered, and to have secured a stay of
execution pending such appeal; or
(q) any "Event of Default", as defined or otherwise set forth in any
of the other Loan Documents, shall occur; or
(r) if: the Ground Lease or the Tenant Lease or any material
provision thereof shall cease to be in full force and effect, for any
reason whatsoever; or
(s) any failure by any Obligor to duly observe or perform any term,
covenant, condition or agreement under this Agreement or any other Loan
Document (other than those defaults referred to or covered by paragraphs
(a) through (r) above) and continuance of such failure for a period of
thirty (30) days after notice thereof from the Lender, or, in any case
where such default is susceptible to cure but cannot with due diligence be
cured within such thirty (30) day period, such longer period (not to
exceed one hundred twenty (120) days) as is required diligently to effect
the cure of such default, but only so long as such Obligor promptly
notifies Lender of its intention to cure and commences cure of such
default within such thirty (30) day period and at all times thereafter
prosecutes such cure with all due diligence to completion.
Notwithstanding the foregoing, in the event that any Event of Default
shall occur pursuant to any of clauses (e), (g), (j), (k), or (l) for reasons of
Force Majeure, the time period set forth in such clause for curing such Event of
Default shall either be one hundred twenty (120) days or shall be extended for a
period of up to one hundred twenty (120) days, provided, however, that (i) the
Borrower shall have given written notice to the Lender within ten (10) days
after the occurrence of any event believed by the Borrower to constitute Force
Majeure, with any such notice to describe such event in reasonable detail, and
(ii) in no event shall any Default described in clause (h) above have occurred
and be continuing hereunder. Clauses (m), (n) and (o) above shall apply to the
Guarantors only during the Construction Period.
Also notwithstanding the foregoing, in no event will a failure of Borrower
or any Guarantor to perform any Borrower or Guarantor obligation hereunder or
under any other Loan Document which is a result of or caused by a Lender failure
to perform a Lender obligation hereunder constitute an Event of Default.
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13.2 Termination of Advances and Acceleration. If any one or more of the
Events of Default shall occur and be continuing, the Lender may by notice to the
Borrower declare its obligations to make Advances hereunder to be terminated,
whereupon the same shall terminate and the Lender shall be relieved of all
obligations to make Advances to the Borrower, and/or declare all unpaid
principal of and accrued interest on the Note, together with all other amounts
owing under the Loan Documents, to be immediately due and payable, whereupon
same shall become and be immediately due and payable, anything in the Loan
Documents to the contrary notwithstanding, and without presentment, protest,
demand or other notice of any kind, all of which are hereby expressly waived by
the Borrower; provided that if any one or more of the Events of Default
specified in ss.13.1(l), ss.13.1(m), or ss.13.1(n), above, shall occur with
respect to any Obligor, the Lender's obligations to make Advances hereunder
automatically shall so terminate and all unpaid principal of and accrued
interest on the Note, together with all other amounts owing under the Loan
Documents, automatically shall become and be immediately so due and payable,
without any declaration or other act on the part of the Lender.
13.3 Completion of Project. If any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Lender shall have
terminated its obligations to make Advances and accelerated the maturity of the
Loan pursuant to ss.13.2, the Lender, if the construction of the Improvements
has not been fully completed, may cause the Project to be completed and may
enter upon the Land upon two (2) Business Days' written notice to the Borrower,
and construct, equip and complete the Project in accordance with the Plans and
Specifications, with such changes therein as the Lender may, from time to time,
and in its sole discretion, deem appropriate. In connection with any
construction of the Project undertaken by the Lender pursuant to the provisions
of this Section, the Lender may:
(a) use any funds of the Borrower, including any balance which may
be held by the Lender as security or in escrow, and any funds remaining
unadvanced under the Loan;
(b) employ existing contractors, subcontractors, agents, architects,
engineers, and the like, or terminate the same and employ others;
(c) employ security watchmen to protect the Project;
(d) make such additions, changes and corrections in the Plans and
Specifications as shall, in the judgment of the Lender, be necessary or
desirable;
(e) take over and use any and all Personal Property contracted for
or purchased by the Borrower, if appropriate, or dispose of the same as
the Lender sees fit;
(f) execute all applications and certificates on behalf of the
Borrower which may be required by any Governmental Authority or
Requirements or contract documents or agreements;
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(g) pay, settle or compromise all existing or future bills and
claims which are or may be liens against the Project, or may be necessary
for the completion of the Improvements or the clearance of title to the
Project;
(h) complete the marketing and leasing of leasable space in the
Improvements, enter into new Leases, and modify or amend existing Leases,
all as the Lender shall deem to be necessary or desirable;
(i) prosecute and defend all actions and proceedings in connection
with the construction of the Improvements or in any other way affecting
the Land or the Improvements and take such action and require such
performance as the Lender deems necessary under any Payment and
Performance Bonds; and
(j) take such action hereunder, or refrain from acting hereunder, as
the Lender may, in its sole and absolute discretion, from time to time
determine, and without any limitation whatsoever, to carry out the intent
of this Section.
The Borrower shall be liable to the Lender for all costs paid or incurred for
the construction, equipping and completion of the Project, whether the same
shall be paid or incurred pursuant to the provisions of this Section or
otherwise, and all payments made or liabilities incurred by the Lender hereunder
of any kind whatsoever shall be deemed Advances made to the Borrower under this
Agreement and shall be secured by the Mortgage and the other Security Documents.
To the extent that any costs so paid or incurred by the Lender, together with
all other Advances made by the Lender hereunder, exceed the Loan Amount, the
amount of such excess costs shall be added to the Loan Amount, and the
Borrower's obligation to repay the same, together with interest thereon at the
Default Rate, shall be deemed to be evidenced by this Agreement and secured by
the Mortgage and the other Security Documents. In the event the Lender takes
possession of the Project and assumes control of such construction as aforesaid,
it shall not be obligated to continue such construction longer than it shall see
fit and may thereafter, at any time, change any course of action undertaken by
it or abandon such construction and decline to make further payments for the
account of the Borrower whether or not the Project shall have been completed.
For the purpose of this Section, the construction, equipping and completion of
the Project shall be deemed to include any action necessary to cure any Event of
Default by the Borrower under any of the terms and provisions of any of the Loan
Documents.
13.4 Other Remedies. If any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lender shall have
terminated its obligations to make Advances or accelerated the maturity of the
Loan pursuant to ss.13.2, the Lender may proceed to protect and enforce its
rights and remedies under this Agreement, the Note or any of the other Loan
Documents by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement and the other Loan Documents or any instrument pursuant to which
the Obligations are evidenced, including as permitted by applicable law the
obtaining of the ex parte appointment of a receiver, and, if any amount owed to
the Lender shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the Lender.
No remedy
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conferred upon the Lender or the holder of the Note in this Agreement or in any
of the other Loan Documents is intended to be exclusive of any other remedy and
each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or thereunder or now or hereafter existing at law
or in equity or by statute or any other provision of law.
13.5 Distribution of Collateral Proceeds. In the event that, following the
occurrence or during the continuance of any Default or Event of Default, the
Lender receives any monies in connection with the enforcement of any the
Security Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Lender for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Lender in connection with the collection of such monies
by the Lender, for the exercise, protection or enforcement by the Lender
of all or any of the rights, remedies, powers and privileges of the Lender
under this Agreement or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of adequate indemnity to the
Lender against any taxes or liens which by law shall have, or may have,
priority over the rights of the Lender to such monies;
(b) Second, to all other Obligations in such order or preference as
the Lender may determine; provided, however, that the Lender may in its
discretion make proper allowance to take into account any Obligations not
then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Lender of all of the Obligations,
to the payment of any obligations required to be paid pursuant to
ss.9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
13.6 Power of Attorney. For the purposes of carrying out the provisions
and exercising the rights, remedies, powers and privileges granted by or
referred to in this Article, the Borrower hereby irrevocably constitutes and
appoints the Lender its true and lawful attorney-in-fact after an Event of
Default, with full power of substitution, to execute, acknowledge and deliver
any instruments and do and perform any acts which are referred to in this
Article, in the name and on behalf of the Borrower. The power vested in such
attorney-in-fact is, and shall be deemed to be, coupled with an interest and
irrevocable.
13.7 Waivers. The Borrower hereby waives to the extent not prohibited by
applicable law (a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by the provisions hereof or of any
of the other Loan Documents), protests and notices of dishonor, (b) any
requirement of diligence or promptness on the Lender's part in the enforcement
of its rights (but not fulfillment of its obligations) under the provisions of
this
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Agreement or any of the other Loan Documents, and (c) any and all notices of
every kind and description which may be required to be given by any statute or
rule of law and any defense of any kind which the Borrower may now or hereafter
have with respect to its liability under this Agreement or under any of the
other Loan Documents.
14. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits (general or specific, time or
demand, provisional or final, regardless of currency, maturity, or the branch of
the Lender where such deposits are held) or other sums credited by or due from
the Lender to the Borrower and any securities or other property of the Borrower
in the possession of the Lender may be applied to or set off against the payment
of the Project Obligations and any and all other Obligations.
15. AGREEMENTS RELATING TO TENANT LEASE. FAILURE TO FUND
(a) The parties hereto acknowledge that Sepracor, Inc. is both Lender
under the Loan and Tenant under the Tenant Lease, and each party hereto
acknowledges and agrees that the Loan is a true loan transaction and the Tenant
Lease is a true lease transaction and that each party will treat each of such
transactions as a loan or a lease, as applicable, for all purposes including
such party's tax returns and financial statements. The parties acknowledge and
agree that each of such transactions has been entered into on an arms-length
basis and on terms which are commercially reasonable under current market
conditions.
(b) If an Event of Default as set forth in Section 13.1 shall have
occurred and be continuing solely by reason of such default by Tenant under the
Tenant Lease, Lender shall forbear from foreclosing on the Mortgage or
exercising other remedies under any of the Security Documents (except as may be
required to protect the collateral covered thereby) for a period of eighteen
months provided that (i) Borrower and Guarantors are not in default under any of
the Loan Documents, and (ii) Borrower and Guarantors are using diligent efforts
to obtain a refinancing of the Loan. Such eighteen-month period shall be
extended if and to the extent that Tenant fails to vacate the Project within
ninety days after demand therefor by Borrower following the occurrence and
continuance of an Event of Default under and as defined in the Tenant Lease.
Interest on the Note shall continue to accrue during any such forbearance
period, but debt service (interest and/or principal) on the Note shall be offset
by Basic Rent (as defined in the Tenant Lease) which is owed but is not being
paid under the Tenant Lease. Such offset shall be applied first against interest
otherwise due and payable on the Note, and then to the extent unpaid Basic Rent
has not been fully offset against interest, against principal.
(c) If Lender is unable to fund any Advance on the Loan (all the
conditions therefor having been satisfied), 75% of each dollar of Borrower's
actual damages resulting therefrom, up to a maximum of $2,000,000, shall be
offset against payments due on the Subordinated Loan, as provided in the loan
agreement with respect thereto. In addition, in such event (i) Lender shall be
required to subordinate the Security Documents and the security documents with
respect to the Subordinate Loan so as to enable Borrower to obtain alternative
financing for the Project on a first lien basis, and (ii) Tenant shall have the
right to exercise its purchase option under the Tenant Lease as to the Project.
The provisions of any such subordination shall be reasonably
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satisfactory in form and substance to the lender providing such alternative
financing, and shall be such that Lender's entitlement to payment shall be
subordinate the new lender both as to current cash flow (as to payments of
interest) and in the case of a refinancing or sale (in each case as to both
principal and accrued interest), but shall not have the effect of negating
altogether Lender's entitlement to be repaid from the Project and the income
therefrom if and when possible.
16. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Lender (other than
taxes based upon the Lender's net income), including any recording, mortgage or
intangibles taxes in connection with the Mortgage, or other taxes payable on or
with respect to the transactions contemplated by this Agreement, including any
taxes payable by the Lender after the Closing Date (the Borrower hereby agreeing
to indemnify the Lender with respect thereto), (c) all title insurance premiums,
and the reasonable fees, expenses and disbursements of the Lender's counsel or
any local counsel to the Lender incurred in connection with the preparation,
administration or interpretation of the Loan and the Loan Documents and other
instruments mentioned herein, the making of each Advance hereunder, and
amendments, modifications, approvals, consents or waivers hereto or hereunder,
(d) the fees, expenses and disbursements of the Lender incurred in connection
with the preparation, administration or interpretation of the Loan and the Loan
Documents and other instruments mentioned herein, and the making of each Advance
hereunder (including all fees paid to the Construction Inspector, Appraisal
fees, and surveyor fees) (e) all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and costs, which attorneys may be employees of the
Lender) and the fees and costs of consultants, accountants, auctioneers,
receivers, brokers, property managers, appraisers, investment bankers or other
experts retained by the Lender in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against the Borrower or
any Obligor or the administration thereof after the occurrence of a Default or
Event of Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Lender's relationship with the
Borrower or any Party, and (f) all reasonable fees, expenses and disbursements
of the Lender incurred in connection with UCC searches, UCC filings, title
rundowns, title searches or mortgage recordings. The covenants of this Section
shall survive payment or satisfaction of payment of all amounts owing with
respect to the Note.
17. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Lender from and against any and all claims, actions and suits, whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Agreement
or any of the other Loan Documents or the transactions contemplated hereby and
thereby including, without limitations, (a) any brokerage, leasing, finders or
similar fees, (b) any disbursement of the proceeds of any of the Advances, (c)
any condition of the Project whether related to the quality of construction or
otherwise, (d) any actual or proposed use by the Borrower of the proceeds of any
of the Advances, (e) any actual or alleged violation of any Requirements or
Project Approvals, or (f) the Borrower or any Party entering into or performing
this Agreement or any of the other Loan Documents, in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of
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internal counsel incurred in connection with any such investigation, litigation
or other proceeding. In litigation, or the preparation therefor, the Lender
shall be entitled to select its own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses
of such counsel. The obligations of the Borrower under this Section shall
survive the repayment of the Loan and shall continue in full force and effect so
long as the possibility of such claim, action or suit exists. If, and to the
extent that the obligations of the Borrower under this Section are unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law. The foregoing indemnification shall not be applicable to any
matter arising out of the Tenant Lease or the relationship of Borrower and
Lender as landlord and tenant thereunder, as to which matters the terms and
provisions of the Tenant Lease shall govern.
18. LIABILITY OF THE LENDER; SPECIFIC PERFORMANCE. The liability of the
Lender to the Borrower for any breach of the terms of this Agreement by the
Lender shall not exceed a sum equal to (i) the amount which the Lender shall be
determined to have failed to advance in consequence of a breach by the Lender of
its obligations under this Agreement, (ii) interest thereon at the default rate
payable by the Borrower under the terms of the Note for Advances which the
Borrower is to receive hereunder, computed from the date when the Advance should
have been made by the Lender to the date when the Advance is, in fact, made by
the Lender, and, upon the making of any such payment by the Lender to the
Borrower, the same shall be treated as an Advance under this Agreement, in the
same fashion as any other Advance under the terms of this Agreement and (iii)
actual losses incurred by the Borrower as a result of Lender's breach which
reasonably could be foreseen by the Lender. The Lender acknowledges and agrees
that the Borrower shall have the remedy of specific performance by the Lender of
the Lender's obligations under this Agreement. Moreover, if Lender is unable to
fund an Advance when obligated to do so under this Agreement, Borrower shall
have certain rights of offset as to the Subordinate Loan, as set forth in
Section 15 of the Loan Agreement for the Subordinate Loan.
19. RIGHTS OF THIRD PARTIES. All conditions to the performance of the
obligations of the Lender under this Agreement, including the obligation to make
Advances, are imposed solely and exclusively for the benefit of the Lender and
no other Person shall have standing to require satisfaction of such conditions
in accordance with their terms or be entitled to assume that the Lender will
refuse to make Advances in the absence of strict compliance with any or all
thereof and no other Person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any and all of which may be freely waived in
whole or in part by the Lender at any time if in its sole discretion it deems it
desirable to do so. In particular, the Lender makes no representations and
assumes no obligations as to third parties concerning the quality of the
construction by the Borrower of the Improvements or the absence therefrom of
defects.
20. SURVIVAL OF COVENANTS, ETC. All covenants, agreements, representations
and warranties made herein, in the Note, in any of the other Loan Documents or
in any documents or other papers delivered by or on behalf of the Borrower or
any Party pursuant hereto and thereto shall be deemed to have been relied upon
by the Lender, notwithstanding any investigation heretofore or hereafter made by
it, and shall survive the making by the Lender of
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the Advances, as herein contemplated, and shall continue in full force and
effect either (i) so long as any amount due under this Agreement or the Note or
any of the other Loan Documents remains outstanding or the Lender has any
obligation to make any Advances or (ii) for such longer period as may be
provided for herein or in any other Loan Document. All statements contained in
any certificate or other paper delivered to the Lender at any time by or on
behalf of any Party or any Subsidiary thereof pursuant hereto or in connection
with the transactions contemplated hereby shall constitute representations and
warranties by such Person.
21. ASSIGNMENT. This Agreement, the Note and the other Loan Documents may
be assigned by Lender to any Tenant Affiliate after the Commencement Date (as
each such term is defined in the Lease), but not otherwise, except with the
written consent of Borrower, which consent will not be unreasonably withheld or
delayed.
22. RELATIONSHIP. The relationship between the Lender and the Borrower is
solely that of a lender and borrower, and nothing contained herein or in any of
the other Loan Documents shall in any manner be construed as making the parties
hereto partners, joint venturers or any other relationship other than lender and
borrower.
23. NOTICES. Except as otherwise provided herein or in any other Loan
Document, each notice, demand, election or request provided for or permitted to
be given pursuant to this Agreement (hereinafter in this Section referred to as
"Notice") must be in writing and shall be deemed to have been properly given or
served by personal delivery, or by sending same by nationally recognized
overnight courier or by depositing same in the United States Mail, postpaid and
registered or certified, return receipt requested, and addressed as follows:
If to the Lender,
SEPRACOR, INC.
111 Locke Drive
Marlborough, Massachusetts 01752
Attn: Vice President for Finance and Administration
with a copy to,
Nixon Peabody LLP
101 Federal Street
Boston, Massachusetts 02110
Attn: William C. Stone, PC
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if to Borrower,
Waterford Park, LLC
c/o Waterford Development Corp.
175 Highland Avenue
Needham, Massachusetts 02494
Attn: Robert E. Shapiro
with a copy to,
Garrity Levin & Muir
99 Summer Street
Boston, Massachusetts 02110
Attn: Jonathan Levin, Esq.
Each Notice shall be effective upon being personally delivered or upon being
sent by overnight courier or upon being deposited in the United States Mail as
aforesaid. The time period in which a response to such Notice must be given or
any action taken with respect thereto (if any), however, shall commence to run
from the date of receipt if personally delivered or sent by overnight courier,
or if so deposited in the United States Mail, the earlier of three (3) Business
Days following such deposit or the date of receipt as disclosed on the return
receipt. Rejection or other refusal to accept or the inability to deliver
because of changed address for which no Notice was given shall be deemed to be
receipt of the Notice sent. By giving at least thirty (30) days' prior Notice
thereof, the Borrower or the Lender shall have the right from time to time and
at any time during the term of this Agreement to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America.
24. GOVERNING LAW. This Agreement and each of the other Loan Documents,
except as otherwise specifically provided therein, are contracts under the laws
of The Commonwealth of Massachusetts and shall for all purposes be construed in
accordance with and governed by the laws of said Commonwealth (excluding the
laws applicable to conflicts or choice of law).
25. CONSENT TO JURISDICTION; WAIVERS. THE BORROWER AND EACH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE
COMMONWEALTH OF MASSACHUSETTS OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND (B) WAIVES
ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO THE RIGHT, IF
ANY, TO TRIAL BY JURY, (II) TO OBJECT TO JURISDICTION WITHIN THE COMMONWEALTH OF
MASSACHUSETTS OR VENUE IN ANY PARTICULAR FORUM WITHIN THE COMMONWEALTH OF
MASSACHUSETTS, AND (III) TO THE RIGHT, IF ANY, TO CLAIM OR RECOVER ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL
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<PAGE>
DAMAGES. THE BORROWER AND EACH PARTY AGREES THAT, IN ADDITION TO ANY METHODS OF
SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN
ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED DIRECTED TO THE BORROWER AT THE ADDRESS SET FORTH IN
ss.22 ABOVE, AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME
SHALL BE SO MAILED. NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT THE LENDER
FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST
ANY COLLATERAL AND AGAINST THE BORROWER, AND AGAINST ANY PROPERTY OF THE
BORROWER, IN ANY OTHER STATE. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR
TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE
AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE BORROWER, EACH PARTY, AND THE
LENDER HEREUNDER OR THE SUBMISSION HEREIN BY THE BORROWER AND EACH PARTY TO
PERSONAL JURISDICTION WITHIN THE COMMONWEALTH OF MASSACHUSETTS.
26. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
27. COUNTERPARTS. This Agreement and any amendment hereof may be executed
in several counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
28. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in ss.29.
29. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly set
forth in any particular provision of this Agreement, any consent or approval
required or permitted by this Agreement to be given by the Lender may be given,
and any term of this Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Lender. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No Advance made by the lender hereunder during the
continuance of any Default or Event of Default shall constitute a waiver
thereof. No notice to or demand upon the
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<PAGE>
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
30. TIME OF THE ESSENCE. Time is of the essence with respect to each and
every covenant, agreement and obligation of the Borrower under this Agreement
and the other Loan Documents.
31. SEVERABILITY. The provisions of this Agreement are severable, and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
[The remainder of this page has been left intentionally blank]
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<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
WATERFORD PARK, LLC
By: /s/ Richard N. Houlding
---------------------------------------------
Richard N. Houlding, its Manager
SEPRACOR, INC.
By: /s/ Robert F. Scumaci
---------------------------------------------
Robert F. Scumaci, Vice President of
Finance and Administration
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<PAGE>
Exhibit A
Construction Schedule
Exhibit B
Disbursement Schedule
Exhibit C
[Reserved]
Exhibit D
[Reserved]
Exhibit E
Plans and Specifications
Exhibit F
Project Budget
Exhibit G
Borrower's Requisition
Exhibit H
Contractor's Requisition Certificate
Exhibit I
[Reserved]
Exhibit J
Tenant Improvements Summary
Exhibit K
Lien Form
Exhibit L
[Reserved]
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<PAGE>
Exhibit M
[Reserved]
Exhibit N
[Reserved]
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Schedule 8.14
Partners, Beneficiaries, Etc.
Schedules 8.20S and 8.20B
Project Approvals
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