Lease and development agreement



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ARTICLE 14A. PERMITTED MORTGAGES

Section 14A.l Definitions.

For the purposes of this Article 14A, the following terms shall have the respective meanings set forth below:


Construction Loan” shall mean the loan obtained to provide financing for the construction of the Project, and may include a Mortgage loan and a Mezzanine Loan.

Construction Mortgage” shall mean the Mortgage securing the Construction Loan.

Construction Loan Amount” shall mean an amount not in excess of eighty percent (80%) of Total Project Cost.

Institutional Investor” shall mean any of the following: (i) a commercial bank, a savings and loan association, a savings bank, a trust company, a national banking association, an investment bank, a real estate investment trust, a credit union or a commercial credit corporation, whether acting for its own account or in a fiduciary capacity, including as trustee in connection with a securitization of commercial mortgage loans or as a manager of any fund; (ii) an insurance company or a pension and/or annuity company, whether acting for its own account or in a fiduciary capacity; (iii) a pension, retirement or profit sharing trust, plan or fund; (iv) a public employees’ pension or retirement system; (v) a governmental agency, body or entity; (vi) a private equity fund with unfunded capital commitments equal to or in excess of $50,000,000 (measured as of the time the financing is extended); or (vii) any entity, all of the equity or beneficial owners of which are one or more of the entities listed in the preceding clauses (i) through (vi); provided, however, that any such entity other than those described in clause (v) above must have tangible net assets in excess of Three Hundred Million Dollars ($300,000,000.00) at the time it extends Mortgage or Mezzanine Loan financing to the Lessee and at least five (5) years of experience by a principal, officer or director within the firm (whether such experience was gained at the firm or in previous positions outside the firm) with respect to financing comparable development projects at such time; and provided, further, that the foregoing dollar amounts shall be increased every five (5) years after the Lease Commencement Date by the percentage increase in the Index during the preceding five (5) year period.

Mezzanine Loan” shall mean any loan obtained to provide financing for the Project (whether construction or otherwise) that is secured by direct or indirect ownership interests in the Lessee.

Mezzanine Pledge” shall mean the pledge of any direct or indirect ownership interests in the Lessee to secure a Mezzanine Loan.

Mortgage Amount” shall mean (x) in the case of the Construction Loan, the Construction Loan Amount; (y) in the case of the Permanent Loan, the Permanent Loan Amount; and (z) in the case of a Refinancing Loan, the Refinancing Loan Amount.

Permanent Loan” shall mean the loan or loans obtained to pay and satisfy the Construction Loan.

Permanent Mortgage” shall mean the Mortgage securing the Permanent Loan.

Permanent Loan Amount” shall mean the greater of (x) the amount required to pay in full the outstanding principal amount of and all interest and other amounts then due under the Construction Loan and the expenses of obtaining and closing the Permanent Loan and (y) an amount not in excess of eighty percent (80%) of the value of the leasehold estate created hereunder (assuming the leasehold estate is not encumbered by any outstanding financing) at the time the Permanent Loan is funded, as established by an appraisal approved by the Recognized Mortgagee holding the Permanent Mortgage.

Recognized Mortgagee” shall mean a holder of a Mortgage or Mezzanine Pledge with respect to which the Port Authority has given the notice provided in Section 14A.3(b), stating that the benefits of this Article 14A apply to such holder.

Refinancing Loan” shall mean any subsequent Mortgage loan and/or Mezzanine Loan obtained to refinance the Permanent Loan or to refinance any such subsequent Mortgage loan and/or Mezzanine Loan.

Refinancing Mortgage” shall mean the Mortgage securing a Refinancing Loan.

Refinancing Loan Amount” shall mean the greater of (x) the amount required to pay in full the outstanding principal amount of and all interest and other amounts then due under the Permanent Loan or existing Refinancing Loan, as the case may be, and the expenses of obtaining and closing the new Refinancing Loan and (y) an amount not in excess of eighty percent (80%) of the value of the leasehold estate (assuming that the leasehold estate is not encumbered by any outstanding financing) at the time the new Refinancing Loan is funded as established by an appraisal approved by the Recognized Mortgagee holding the new Refinancing Mortgage.


Section 14A.2 Mortgage Authorized.


(a) Mortgage Authorized. Notwithstanding the provisions of Article 14 of this Agreement, if this Agreement is then in full force and effect, the Lessee may, without the consent of the Port Authority, at any time and from time to time, obtain a Construction Loan, Permanent Loan and/or Refinancing Loan, as applicable, in an amount not in excess of the applicable Mortgage Amount, and grant security therefor, provided such Construction Loan, Permanent Loan and/or Refinancing Loan, as applicable:

(i) is made by an Institutional Investor as defined in this Article;

(ii) does not cover property other than the Premises;

(iii) is not cross-defaulted or cross—collateralized with agreements covering any other property; and

(iv) at the time such loan is closed no Event of Default shall have occurred and be continuing hereunder and no notice of termination shall have been given pursuant to Article 17 of this Agreement and be in effect.

(b) More Than One Mortgage. A loan or loans may be secured by more than one Mortgage or Mezzanine Pledge, and all such Mortgages and/or Mezzanine Pledges as shall secure such loan(s) shall collectively be referred to herein as the “Mortgage”.

(c) Mortgage Amounts. In the event the Lessee obtains a Permanent Loan with respect to the Premises, the Lessee shall first apply the proceeds of the Permanent Loan to discharge in full the Construction Loan; provided, however, that in the event the Lessee, acting diligently and in good faith, is unable to obtain a Permanent Loan in an amount at least equal to the amount of the Construction Loan or in the event that the proceeds of the Permanent Loan obtained by the Lessee are made available to the Lessee in stages so that the Lessee is unable to fully discharge the Construction Loan until the Lessee has received the full proceeds of such Permanent Loan, then, in either or both of such events only, the Lessee shall have the right to obtain a Permanent Loan without paying and satisfying the Construction Loan in full; provided, however, that the aggregate amount of any and all Mortgages at any one time outstanding shall not exceed the Permanent Loan Amount. The provisions of this paragraph shall also apply in respect of a Refinancing Loan which, for either of the reasons set forth above, does not provide proceeds sufficient to discharge the then-existing Mortgage, provided that the aggregate amount of all Mortgages at any one time outstanding in such circumstances shall not exceed the Refinancing Loan Amount.

(d) Assignment. No Mortgage shall be assigned, except to an Institutional Investor.


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